Free cash flow remains highly erratic, swinging from a $81.9 million inflow in 2025Q2 to a $1.3 million result in 2026Q3, highlighting the difficulty in maintaining consistent cash conversion.
| Metric | TTM | Jun'25 | Jun'24 | Jun'23 | Jun'22 | Jun'21 | Jun'20 | Jun'19 | Jun'18 | Jun'17 | Jun'16 | Jun'15 | Jun'14 | Jun'13 | Jun'12 | Jun'11 | Jun'10 | Jun'09 | Jun'08 | Jun'07 | Jun'06 | Jun'05 | Jun'04 | Jun'03 | Jun'02 | Jun'01 | Jun'00 | Jun'99 | Jun'98 |
|---|
| Cash from Operations | 98.31M | 138.85M | 138.85M | 60.38M | -21.25M | -18.87M | 115.18M | 97.52M | 43.32M | 59.15M | 36.94M | 32.21M | 14.24M | -1.87M | 31.87M | 31.47M | 15.71M | 11.2M | 13.73M | -10.31M | 22.05M | 37.99M | 25.94M | 50.5M | 15.94M | 26.08M | 30.66M | 9.1M | 7.1M |
| Operating CF Margin % | - | 15.22% | 16.62% | 6.2% | -2.18% | -2.04% | 14.46% | 14.89% | 8.78% | 14.48% | 13.67% | 13.71% | 6.82% | -0.9% | 13.01% | 13.76% | 7.86% | 5.93% | 6.54% | -4.61% | 9.34% | 15.18% | 13.98% | 28.02% | 10.62% | 14.45% | 21.75% | 8.54% | 8.3% |
| Operating CF Growth % | -43.34% | 0% | 129.95% | 384.1% | -12.64% | -116.38% | 18.12% | 125.1% | -26.76% | 60.11% | 14.7% | 126.16% | 861.14% | -105.87% | 1.26% | 100.37% | 40.26% | -18.41% | 233.09% | -146.76% | -41.94% | 46.43% | -48.63% | 216.77% | -38.87% | -14.95% | 236.95% | 28.17% | - |
| Net Income | -14.1M | -37.9M | -37.9M | -137.64M | -28.34M | 11.28M | 85.71M | 46.77M | 40.88M | 24.88M | 19.74M | 10.37M | -11.43M | -13.21M | 22.62M | 18.44M | 28.36M | -1.26M | -35.41M | -37.82M | -16.17M | 30.19M | 22.89M | 22.68M | 15.83M | 30.68M | 24.9M | 13.5M | 8.7M |
| Depreciation & Amortization | 75.14M | 82.03M | 82.03M | 88.03M | 97.33M | 93.42M | 49.33M | 46.39M | 42.28M | 32.27M | 15.74M | 13.84M | 15.61M | 17.21M | 11.66M | 8.35M | 6.86M | 9.36M | 15.99M | 17.96M | 17.56M | 10.57M | 7.41M | 8.21M | 7.09M | 6.13M | 5.1M | 4.5M | 3.3M |
| Stock-Based Compensation | 5.92M | 39.92M | 39.92M | 41.52M | 43.42M | 38.29M | 26.54M | 19.42M | 17.31M | 15.34M | 9.57M | 8.73M | 9.24M | 7.94M | 6.62M | 5.58M | 4.02M | 4.57M | 10.36M | 10.59M | 10.14M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 3.4M | -10.59M | -10.59M | -31.51M | -59.65M | -2.42M | -3.02M | -1.56M | -5.46M | -7.84M | -3.06M | -1.04M | -5.5M | -10.08M | 1.89M | 1.89M | -9.7M | -1.37M | 3.58M | 1.82M | -5.97M | 1.04M | -1.42M | -43K | -1.9M | -2.72M | 590K | -1.2M | -1.1M |
| Other Non-Cash Items | 33.17M | -2.7M | -2.7M | 23.16M | 5.25M | -497K | -2.31M | 9.2M | 2.1M | 1.18M | -190K | 1.74M | 2.94M | 1.22M | -7.73M | -1.68M | -2.59M | 2.02M | 15.41M | 5.03M | 1.38M | 2.74M | 2.39M | -3.83M | -1.66M | -2.35M | 2.21M | 100K | 100K |
| Working Capital Changes | -5.22M | 68.1M | 68.1M | 76.83M | -79.27M | -158.94M | -41.07M | -22.71M | -53.79M | -6.68M | -4.87M | -1.43M | 3.37M | -4.95M | -3.18M | -1.1M | -11.23M | -2.11M | 3.8M | -7.89M | 15.11M | -6.55M | -5.32M | 23.48M | -3.41M | -5.66M | -2.14M | -11.6M | -3.9M |
| Change in Receivables | -10.84M | 29.95M | 29.95M | 76.46M | -58.72M | -146.48M | -31.08M | -22.03M | -38.33M | -14.05M | -25.4M | 5.93M | -12.43M | 4.76M | 6.75M | 257K | -15.26M | 1.24M | 3.15M | -1.4M | 10.4M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Inventory | 11.98M | -17.09M | -17.09M | 130K | -64.06M | -40.9M | -31.61M | -17.1M | -16.23M | -9.32M | -865K | -345K | 5.82M | 453K | -7.27M | 2.51M | -859K | 7.48M | -2.49M | -2.44M | -1.64M | -3.97M | 343K | 3.95M | -871K | 3.06M | -4.67M | -6M | -800K |
| Change in Payables | 13.4M | 8.1M | 8.1M | 741K | -16.73M | 58.4M | 13.61M | 17.95M | -5.27M | 3.52M | 18.87M | -475K | 1.16M | -13.09M | 931K | 931K | -12.67M | -12.67M | -602K | 2.79M | -2.14M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash from Investing | -24.52M | -13.5M | -13.5M | -34.29M | -38.56M | -274.32M | -135.49M | -153.77M | -200.88M | -111.09M | -318.21M | -5.6M | -6.72M | -71.09M | -80.8M | -22.68M | 23.61M | 66.95M | -7.25M | 50.65M | -35.39M | 7.1M | -26.48M | -32.6M | 19.72M | -21.8M | -45.89M | -12.7M | -35.4M |
| Capital Expenditures | -24.81M | -19.8M | -19.8M | -34.29M | -38.8M | -27.66M | -43.29M | -26.69M | -15.11M | -32.84M | -7.88M | -5.98M | -6.7M | -3.88M | -9.48M | -11.2M | -7.58M | -4.13M | -4.63M | -8.21M | -13.4M | -11.41M | -5.6M | -6.17M | -5.79M | -7.39M | -6.64M | -19.4M | -6.3M |
| CapEx % of Revenue | 2.57% | 2.17% | 2.37% | 3.52% | 3.98% | 2.99% | 5.43% | 4.08% | 3.06% | 8.04% | 2.92% | 2.55% | 3.21% | 1.86% | 3.87% | 4.9% | 3.8% | 2.18% | 2.2% | 3.67% | 5.68% | 4.56% | 3.02% | 3.42% | 3.85% | 4.09% | 4.71% | 18.2% | 7.37% |
| Acquisitions | -1.42M | -4.54M | -4.54M | 0 | 0 | -243.46M | -96.5M | -127.08M | -185.4M | -77.76M | -309.76M | 0 | 0 | -67.72M | -71.04M | -29.51M | 138.33M | 9.72M | -2.4M | -1.51M | -67.51M | -16.18M | -17.43M | 0 | -7.95M | 6.4M | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 1.7M | 10.85M | 10.85M | 0 | 235K | -3.2M | 0 | 0 | -375K | -486K | -567K | 386K | -19K | 510K | -231K | -20.31M | -576K | 139.41M | 4.32M | 26.36M | -2M | 0 | 0 | 33.87M | 5.4M | -1.7M | 1.53M | -500K | -100K |
| Cash from Financing | -13.26M | 1.41M | 1.41M | 82.68M | 65.43M | 245.75M | -10.93M | 247.76M | 182.94M | 11.34M | 284.88M | 3.9M | 742K | -3.67M | 1.98M | 97.8M | -30.59M | -90.9M | 703K | -12.14M | -6.65M | -20.27M | 122.61M | -8.04M | -31.49M | 3.12M | 17.41M | 1.4M | 19.1M |
| Debt Issued (Net) | 0 | 0 | 0 | 80M | 60M | 251.5M | 0 | -195M | 195M | -200M | 194.9M | -642K | -763K | -7.17M | -185K | -298K | -33.33M | -91.88M | -120K | -10.52M | -867K | -1.45M | 118.87M | -760K | -929K | -1.2M | 13.67M | -300K | 0 |
| Equity Issued (Net) | -12.27M | 3.66M | 0 | -31K | -63K | -8.21M | -16.25M | 446.38M | -15.51M | 206.96M | 84.82M | -944K | 0 | 1.25M | 0 | 93.61M | -433K | -684K | -1.01M | 1.32M | -6.37M | -18.82M | 3.74M | -7.28M | -30.56M | 4.32M | 3.74M | 1.7M | 19.1M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | -31K | -63K | -8.21M | -16.25M | -7.97M | -15.51M | -8.77M | -7.96M | -944K | 0 | 0 | 0 | 0 | -433K | -684K | -1.01M | -507K | -12.28M | -24.97M | 0 | -10.14M | -34.99M | 0 | 0 | 0 | 0 |
| Other Financing | -987K | -2.25M | 1.41M | 2.71M | 5.49M | 2.46M | 5.32M | -3.61M | 3.44M | 4.38M | 5.17M | 5.49M | 1.5M | 2.25M | 2.16M | 4.49M | 3.17M | 1.67M | 1.83M | -2.94M | 581K | 0 | -1K | 0 | 0 | 0 | 0 | 0 | 0 |
| Net Change in Cash | 61.98M | 128.58M | 128.58M | 108.96M | 5.91M | -48.19M | -31.09M | 191.41M | 24.88M | -40.05M | 4.11M | 30.3M | 8.16M | -76.84M | -46.91M | 106.63M | 9.29M | -12.1M | 7.75M | 28.31M | -20.16M | 24.45M | 121.84M | 9.64M | 4.21M | 7.46M | 2.17M | -2.4M | -9.1M |
| Free Cash Flow | 73.5M | 119.05M | 119.05M | 26.09M | -60.05M | -46.52M | 71.89M | 70.83M | 28.21M | 26.3M | 29.05M | 26.22M | 7.54M | -5.75M | 22.39M | 20.27M | 8.12M | 7.07M | 9.1M | -18.53M | 8.65M | 26.58M | 20.34M | 44.34M | 10.16M | 18.69M | 24.02M | -10.3M | 800K |
| FCF Margin % | 7.6% | 13.05% | 14.25% | 2.68% | -6.17% | -5.04% | 9.02% | 10.82% | 5.72% | 6.44% | 10.76% | 11.17% | 3.61% | -2.75% | 9.14% | 8.86% | 4.07% | 3.74% | 4.34% | -8.28% | 3.66% | 10.62% | 10.96% | 24.6% | 6.77% | 10.36% | 17.05% | -9.66% | 0.94% |
| FCF Growth % | -49.82% | 0% | 356.28% | 143.45% | -29.07% | -164.72% | 1.5% | 151.02% | 7.27% | -9.48% | 10.8% | 247.79% | 231.11% | -125.68% | 10.45% | 149.56% | 14.86% | -22.28% | 149.12% | -314.16% | -67.45% | 30.64% | -54.12% | 336.54% | -45.66% | -22.2% | 333.25% | -1387.5% | - |
| FCF per Share | 1.24 | 2.03 | 2.06 | 0.46 | -1.06 | -0.84 | 1.30 | 1.46 | 0.59 | 0.61 | 0.83 | 0.80 | 0.24 | -0.19 | 0.74 | 0.77 | 0.35 | 0.32 | 0.42 | -0.87 | 0.41 | 1.02 | 0.92 | 2.01 | 0.44 | 0.81 | 1.06 | -0.48 | 0.04 |
| FCF Conversion (FCF/Net Income) | -5.21x | -3.66x | -1.01x | -2.13x | 0.75x | -0.30x | 1.34x | 2.08x | 1.06x | 2.38x | 1.87x | 3.11x | -1.25x | 0.14x | 1.41x | 1.71x | 0.55x | -8.87x | -0.39x | 0.27x | -1.36x | 1.26x | 1.13x | 2.23x | 1.01x | 0.85x | 1.23x | 0.67x | 0.82x |
| Interest Paid | 16.98M | 36.56M | 36.56M | 37.42M | 27.29M | 5.49M | 1.05M | 10.37M | 1.61M | 5.76M | 1.04M | 34K | 49K | 39K | 40K | 45K | 150K | 1.88M | 2.5M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 586K | 365K | 365K | 0 | 24.24M | 14.12M | 12.94M | 7.35M | 17M | 2.83M | -7.97M | 7.88M | 3.19M | -3.31M | 8.69M | 4.4M | 2.59M | 3.52M | 206K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Operational execution and margin compression
As reported in recent financial filings, Mercury Systems exhibits a persistent divergence between net income and operating cash flow, with the 2026Q3 OCF/NI ratio of -3.35 highlighting that reported losses are frequently decoupled from the actual cash generation capabilities of the firm's underlying defense electronics manufacturing operations.
The consistent negative relationship between net income and operating cash flow suggests that non-cash charges and accounting adjustments are heavily influencing the bottom line. Investors should monitor whether this gap reflects genuine operational inefficiency or simply the timing of milestone-based revenue recognition inherent in long-term defense contracts.
Based on the provided quarterly data, Mercury Systems' free cash flow trajectory remains highly erratic, swinging from a peak of $81.9 million in 2025Q2 to a low of -$25.7 million in 2024Q3, indicating that the company struggles to maintain consistent cash conversion across its diverse program portfolio.
The lack of a stable FCF margin suggests that the company's cash flow is highly sensitive to the specific phase of its defense programs. This volatility warrants further investigation into whether the current management team can stabilize cash generation as they pivot away from an aggressive acquisition-led growth strategy.
According to historical cash flow statements, Mercury Systems experiences significant working capital volatility, with a $77 million inflow in 2025Q2 followed by a $19 million outflow in 2026Q3, suggesting that the company's liquidity is heavily dependent on the timing of customer payments and inventory management cycles.
These sharp fluctuations in working capital appear to be the primary driver of the company's inconsistent cash flow performance. The reliance on large, lumpy contract payments may indicate that the firm lacks the operational maturity to smooth out its cash conversion cycle effectively.
As indicated by recent financial disclosures, Mercury Systems maintains a disciplined capital expenditure profile, with CapEx/Revenue ratios consistently hovering between 1.4% and 4.2%, suggesting that the firm is not currently over-investing in physical infrastructure despite the ongoing challenges in its core manufacturing and integration business segments.
The relatively low capital intensity implies that the company's primary constraints are operational and programmatic rather than a lack of physical capacity. This suggests that future cash flow improvements must come from better margin management and cost control rather than reduced investment in the firm's technical capabilities.
Quick answers to the most common questions about buying MRCY stock.
Mercury Systems, Inc. (MRCY) generated $138.9M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Mercury Systems, Inc. (MRCY) generated $119.0M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Mercury Systems, Inc. (MRCY) spent $19.8M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.