Short answer
MERCURY SYSTEMS INC (MRCY) filed its fiscal 2026 10-K annual report with the SEC on Aug 18, 2026. It reported revenue of $984M (+7.9% year over year) and net income of −$30M.
- Top risk flagged: Regulatory risk: Compliance with FAR and CAS cost accounting standards, with $0.4M billing withheld due to disapproved CAS system, pending DCAA approval in fiscal 2027
FY2026 key financial metrics · XBRL
- Revenue
- $984M
- +7.9% YoY
- Net income
- −$30M
- +21.7% YoY
- Operating margin
- 0.0%
- +2.2 pp YoY
- Gross margin
- 28.6%
- +0.7 pp YoY
- EPS (diluted)
- −$0.50
- +23.1% YoY
- ROE
- -2.0%
- +0.6 pp YoY
- Operating cash flow
- $102M
- −26.3% YoY
Source: XBRL data from the MERCURY SYSTEMS INC (MRCY) FY2026 10-K on SEC EDGAR. USD.
MERCURY SYSTEMS INC FY2026 10-K analysis
AI summary of each section, grounded in the filing text
Business Overview
- Core business: aerospace and defense electronics providing mission-critical signal and data processing solutions via Mercury Processing Platform
- New emphasis on AI-ready edge processing technologies with integrated GPUs, FPGAs, and low power processors for real-time intelligent sensor data interpretation
- Strategic focus on expanding secure, domestically sourced microelectronics manufacturing, including Phoenix campus expansion (+50,000 sq ft) and European local production partnership
- Backlog growth to $1.9B from $1.4B prior year; R&D spend declined to $59.7M from $67.6M in 2025; employee count steady at 2,102, with 518 in R&D
- Increased adoption of AI and automation internally to improve efficiency and reduce cycle times, piloting automation in test, production and planning processes
Management Discussion & Analysis
- Revenue $983.6M, up 7.9% YoY from $912.0M; modules and sub-assemblies up $43.5M, components up $15.1M, integrated solutions up $13.0M
- Gross margin 28.6% vs 27.9% YoY; operating expenses 28.6% of revenue vs 30.0%, operating loss $(19.6)M vs $(42.7)M adjusted from prior year
- Best segment growth: Land platform +$53.7M; worst: Airborne platform down $38.1M
- Cash flow: operating cash flow $102.4M vs $138.9M; $150M debt repayment on Revolver, $15.0M stock repurchase (222 shares at $67.70 avg), capex $34.3M
- Forward outlook risks: supply chain disruptions, geopolitical volatility, cost increases, and integration risks; new share repurchase authorization $200M with $185M remaining
Risk Factors
- Regulatory risk: Compliance with FAR and CAS cost accounting standards, with $0.4M billing withheld due to disapproved CAS system, pending DCAA approval in fiscal 2027
- Geopolitical risk: Dependence on U.S. Government defense spending with 97% of net revenues in 2026; risk of funding delays, reductions, or government shutdowns affecting contracts
- Operational risk: Sole-source supplier dependency for critical components like FPGAs and ASICs, risking production delays or cancellations if disrupted
- Competitive risk: New low-cost modular system entrants and commercial server manufacturers may reduce demand; limited engagement with labs like DARPA restricts design influence
- Financial risk: $441.5M drawn on $850M revolving credit facility; interest rate exposure could increase annual interest expense by $1M per 100 bps rise
Generated from the filing text; verify against the original. How to read a 10-K
Other MERCURY SYSTEMS INC annual reports
Ask about this 10-K
Compare years, dig into a risk factor or check the numbers against insider trades and fund holders.