Mercury Systems reported record fiscal Q4 2026 bookings of $660 million, up 93.1% year over year, pushing quarterly book-to-bill to 2.28 and driving the defense technology company’s backlog above $1.9 billion.
Order intake nearly doubled Mercury’s previous quarterly bookings record and substantially exceeded the $290 million of Q4 revenue recognized during the period. Revenue itself increased 6.1% from approximately $273 million and also reached a quarterly record.
The result widened the company’s backlog considerably. Backlog increased by approximately $540 million from a year earlier, or 38.4%, to more than $1.9 billion.
Of that amount, the company expects to recognize approximately $1 billion as revenue within the next 12 months. That near-term backlog alone is slightly larger than Mercury’s entire $984 million of fiscal 2026 revenue, providing significant visibility entering the new fiscal year.
The fourth quarter was not an isolated booking event. Full-year fiscal 2026 bookings reached $1.5 billion, producing a 1.57 annual book-to-bill ratio. Full-year revenue increased to $984 million from $912 million.
Profitability improved on an adjusted full-year basis. Fiscal 2026 adjusted EBITDA increased to $150.2 million from $119.4 million, an increase of roughly 26%. Adjusted EPS improved to $1.06 from an adjusted loss of $0.64 per share.
Q4 adjusted EBITDA was $49 million, representing a 16.7% margin, compared with $51 million a year earlier. GAAP net income, however, declined to approximately $1 million from $16 million, while adjusted EPS fell to $0.37 from $0.47.
Cash flow was positive during the quarter. Operating activities generated $42 million compared with $38 million, while free cash flow reached $29 million versus $34 million in the prior-year quarter. Full-year operating cash flow was $102 million and free cash flow was $68 million.
Mercury also reduced leverage during fiscal 2026. Long-term debt declined to $441.5 million from $591.5 million, a $150 million reduction, while cash and equivalents fell to $214.3 million from $309.1 million.
The company’s deferred revenue and customer advances increased to approximately $149.6 million from $126.8 million, adding another indication of customer commitments entering future periods.
Management said the combination of record bookings, record backlog and stronger demand signals gives Mercury greater visibility entering fiscal 2027 and supports a higher outlook for organic growth.
The principal distinction in the quarter is therefore the magnitude of demand relative to recognized revenue. A 2.28 book-to-bill ratio means new orders arrived at more than twice the pace of quarterly sales, leaving Mercury with a much larger contracted base from which to generate future revenue.
KEY QUOTES:
“We delivered fourth quarter fiscal 2026 results that were ahead of our expectations, with record bookings, record backlog, record revenue, the highest EBITDA margin of the year, and robust free cash flow. Based on our solid execution and strong demand signals, we enter fiscal year 2027 with enhanced visibility and are increasing our outlook for organic growth.”
“In the fourth quarter we delivered record bookings of $660 million, up 93% year-over-year and nearly double our previous record bookings quarter; a 2.3 book-to-bill, resulting in a record backlog of approximately $1.9 billion; record revenue of $290 million, up 6.1% year-over-year; GAAP net income of $1 million; adjusted EBITDA of $49 million; adjusted EBITDA margin of 16.7%; cash flows provided by operating activities of $42 million; and free cash flow of $29 million.”
Bill Ballhaus, Chairman and CEO of Mercury Systems
