Despite an 11.5% revenue increase in 2026Q3, the company continues to face structural margin pressure, with gross margins struggling to exceed 31% over the last ten quarters.
| 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 |
|---|
| Sales/Revenue | 966.95M | 912.02M | 835.27M | 973.88M | 973.88M | 924M | 796.61M | 654.74M | 493.18M | 408.59M | 270.15M | 234.85M | 208.73M | 208.79M | 244.93M | 228.71M | 199.83M | 188.94M | 209.9M | 223.71M | 236.12M | 250.17M | 185.59M | 180.24M | 150.12M | 180.49M | 140.94M | 106.6M | 85.5M |
| Revenue Growth % | 8.95% | 9.19% | -14.23% | 0% | 5.4% | 15.99% | 21.67% | 32.76% | 20.7% | 51.24% | 15.03% | 12.51% | -0.03% | -14.75% | 7.09% | 14.45% | 5.76% | -9.99% | -6.17% | -5.26% | -5.62% | 34.79% | 2.97% | 20.07% | -16.83% | 28.06% | 32.22% | 24.68% | - |
| Cost of Goods Sold | 689.6M | 657.53M | 639.37M | 657.15M | 657.15M | 538.81M | 439.77M | 368.59M | 267.33M | 217.04M | 145.38M | 124.63M | 113.98M | 126.12M | 108.77M | 98.81M | 87.3M | 83.51M | 83.83M | 99.29M | 96.92M | 84.47M | 60.54M | 62.05M | 52.24M | 59.81M | 34.05M | 29.7M | 26.8M |
| COGS % of Revenue | - | 72.1% | 76.55% | 67.48% | 67.48% | 58.31% | 55.2% | 56.29% | 54.2% | 53.12% | 53.81% | 53.07% | 54.61% | 60.41% | 44.41% | 43.2% | 43.69% | 44.2% | 39.94% | 44.38% | 41.05% | 33.76% | 32.62% | 34.42% | 34.8% | 33.14% | 24.16% | 27.86% | 31.34% |
| Gross Profit | 277.35M | 254.49M | 195.9M | 316.73M | 316.73M | 385.19M | 356.84M | 286.16M | 225.86M | 191.54M | 124.77M | 110.22M | 94.74M | 82.67M | 136.16M | 129.9M | 112.53M | 105.43M | 126.07M | 124.42M | 139.2M | 165.71M | 125.06M | 118.19M | 97.87M | 120.68M | 106.9M | 76.9M | 58.7M |
| Gross Margin % | 28.68% | 27.9% | 23.45% | 32.52% | 32.52% | 41.69% | 44.8% | 43.7% | 45.8% | 46.88% | 46.19% | 46.93% | 45.39% | 39.59% | 55.59% | 56.8% | 56.31% | 55.8% | 60.06% | 55.62% | 58.95% | 66.24% | 67.38% | 65.58% | 65.2% | 66.86% | 75.84% | 72.14% | 68.66% |
| Gross Profit Growth % | - | 29.91% | -38.15% | 0% | -17.77% | 7.94% | 24.7% | 26.7% | 17.91% | 53.51% | 13.21% | 16.33% | 14.61% | -39.28% | 4.82% | 15.43% | 6.74% | -16.37% | 1.33% | -10.62% | -16% | 32.5% | 5.81% | 20.77% | -18.9% | 12.89% | 39.01% | 31.01% | - |
| Operating Expenses | 267.99M | 274.12M | 343.65M | 338.41M | 338.41M | 304.19M | 265.78M | 207.56M | 173.18M | 150.26M | 95.34M | 88.57M | 96.71M | 98.98M | 102M | 104.35M | 94.78M | 95.97M | 158.78M | 156.39M | 156.14M | 123.17M | 93.42M | 92.36M | 83.29M | 81.12M | 73.44M | 58.2M | 45.7M |
| OpEx % of Revenue | - | 30.06% | 41.14% | 34.75% | 34.75% | 32.92% | 33.36% | 31.7% | 35.11% | 36.77% | 35.29% | 37.71% | 46.33% | 47.41% | 41.65% | 45.63% | 47.43% | 50.79% | 75.65% | 69.91% | 66.13% | 49.23% | 50.34% | 51.24% | 55.49% | 44.94% | 52.1% | 54.6% | 53.45% |
| Selling, General & Admin | 164.9M | 154.41M | 166.79M | 160.64M | 160.64M | 134.34M | 132.25M | 110.72M | 88.36M | 76.49M | 52.95M | 49.01M | 53.69M | 57.58M | 57.16M | 57.87M | 51.52M | 51.19M | 81.87M | 88.71M | 87.01M | 70.74M | 54.8M | 53.98M | 48.94M | 50.64M | 39.48M | 33M | 27.9M |
| SG&A % of Revenue | - | 16.93% | 19.97% | 16.49% | 16.49% | 14.54% | 16.6% | 16.91% | 17.92% | 18.72% | 19.6% | 20.87% | 25.72% | 27.58% | 23.34% | 25.3% | 25.78% | 27.09% | 39% | 39.65% | 36.85% | 28.28% | 29.53% | 29.95% | 32.6% | 28.05% | 28.01% | 30.96% | 32.63% |
| Research & Development | 55.49M | 67.65M | 101.33M | 108.8M | 108.8M | 113.48M | 98.48M | 68.92M | 58.81M | 54.09M | 33.54M | 32.55M | 35.69M | 32.69M | 45.98M | 44.5M | 41.55M | 42.37M | 54.79M | 58.49M | 61.15M | 50.07M | 38.65M | 38.38M | 34.35M | 30.48M | 28.86M | 20.7M | 14.5M |
| R&D % of Revenue | - | 7.42% | 12.13% | 11.17% | 11.17% | 12.28% | 12.36% | 10.53% | 11.92% | 13.24% | 12.42% | 13.86% | 17.1% | 15.66% | 18.77% | 19.46% | 20.79% | 22.43% | 26.1% | 26.15% | 25.9% | 20.02% | 20.82% | 21.3% | 22.89% | 16.89% | 20.48% | 19.42% | 16.96% |
| Other Operating Expenses | 4M | 52.06M | 75.54M | 68.98M | 68.98M | 56.37M | 35.04M | 27.91M | -1.59M | 771K | 2.35M | 453K | 1.53M | 558K | 1.69M | 1.98M | 1.71M | 2.41M | 22.12M | 9.2M | 7.98M | 2.35M | -33K | 0 | 0 | 0 | 5.1M | 4.5M | 3.3M |
| Operating Income | 9.37M | -19.63M | -147.75M | -21.68M | -21.68M | 81M | 91.06M | 76.58M | 46.98M | 37.4M | 23.97M | 18.36M | -7.41M | -23.69M | 30.11M | 24.98M | 17.31M | 7.75M | -37.91M | -40.52M | -19.44M | 42.54M | 31.61M | 25.83M | 14.58M | 39.56M | 33.46M | 18.7M | 13M |
| Operating Margin % | 0.97% | -2.15% | -17.69% | -2.23% | -2.23% | 8.77% | 11.43% | 11.7% | 9.53% | 9.15% | 8.87% | 7.82% | -3.55% | -11.35% | 12.29% | 10.92% | 8.66% | 4.1% | -18.06% | -18.11% | -8.23% | 17% | 17.03% | 14.33% | 9.71% | 21.92% | 23.74% | 17.54% | 15.2% |
| Operating Income Growth % | - | 86.72% | -581.37% | 0% | -126.77% | -11.05% | 18.9% | 63% | 25.62% | 56.02% | 30.61% | 347.87% | 68.74% | -178.67% | 20.52% | 44.31% | 123.48% | 120.44% | 6.45% | -108.43% | -145.7% | 34.6% | 22.36% | 77.18% | -63.15% | 18.22% | 78.94% | 43.85% | - |
| EBITDA | 29.33M | 62.4M | -59.72M | 75.64M | 75.64M | 148.08M | 140.39M | 122.98M | 89.26M | 69.67M | 39.72M | 32.2M | 8.2M | -6.48M | 41.77M | 33.33M | 24.17M | 17.11M | -21.92M | -22.56M | -1.88M | 53.11M | 39.01M | 34.04M | 21.66M | 45.69M | 38.56M | 23.2M | 16.3M |
| EBITDA Margin % | 3.03% | 6.84% | -7.15% | 7.77% | 7.77% | 16.03% | 17.62% | 18.78% | 18.1% | 17.05% | 14.7% | 13.71% | 3.93% | -3.1% | 17.05% | 14.57% | 12.1% | 9.06% | -10.44% | -10.08% | -0.8% | 21.23% | 21.02% | 18.89% | 14.43% | 25.31% | 27.36% | 21.76% | 19.06% |
| EBITDA Growth % | -9.19% | 204.48% | -178.95% | 0% | -48.92% | 5.48% | 14.16% | 37.77% | 28.12% | 75.43% | 23.36% | 292.48% | 226.59% | -115.51% | 25.31% | 37.91% | 41.25% | 178.06% | 2.83% | -1099.31% | -103.54% | 36.15% | 14.6% | 57.14% | -52.58% | 18.48% | 66.21% | 42.33% | - |
| D&A (Non-Cash Add-back) | 19.97M | 82.03M | 88.03M | 97.33M | 97.33M | 67.08M | 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 |
| EBIT | 8.58M | -16.99M | -154.26M | -23.38M | -23.38M | 96.2M | 94.94M | 79.31M | 45.42M | 38.64M | 30.82M | 18.83M | -5.86M | -24.25M | 31.35M | 26.58M | 19.07M | 10.57M | -30.35M | -34.23M | -18.18M | 42.54M | 31.64M | 25.83M | 14.58M | 39.56M | 33.46M | 18.7M | 13M |
| Net Interest Income | -18.72M | -29.82M | -33.82M | -24.11M | -24.11M | -1.04M | 1.15M | -8.18M | -2.82M | -7.11M | -1.04M | -13K | -40K | -31K | -27K | -45K | 151K | -492K | 3.13M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 7.55M | 3.61M | 1.2M | 1.05M | 1.05M | 179K | 2.15M | 932K | 32K | 462K | 131K | 21K | 9K | 7K | 13K | 34K | 532K | 2.06M | 6.51M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | -15.04M | 33.43M | 35.02M | 25.16M | 25.16M | 1.22M | 1.01M | 9.11M | 2.85M | 7.57M | 1.17M | 34K | 49K | 38K | 40K | 79K | 381K | 2.55M | 3.36M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | -27.23M | -30.8M | -41.52M | -26.86M | -26.86M | -3.83M | 2.87M | -17.06M | -4.41M | -6.33M | 1.31M | 440K | 1.49M | 527K | 1.66M | 1.58M | 1.38M | 271K | -28.32M | 5.26M | 2.33M | 584K | 628K | 7.04M | 7.41M | 5.57M | 2.88M | 1.4M | 1.1M |
| Pretax Income | -17.86M | -50.42M | -189.28M | -48.54M | -48.54M | 77.17M | 93.93M | 59.53M | 42.57M | 31.07M | 25.29M | 18.8M | -5.91M | -23.16M | 31.77M | 26.57M | 18.69M | 8.02M | -33.72M | -32.26M | -17.11M | 43.12M | 32.23M | 32.87M | 21.98M | 45.12M | 36.34M | 20.1M | 14.1M |
| Pretax Margin % | -1.85% | -5.53% | -22.66% | -4.98% | -4.98% | 8.35% | 11.79% | 9.09% | 8.63% | 7.6% | 9.36% | 8% | -2.83% | -11.09% | 12.97% | 11.62% | 9.35% | 4.24% | -16.06% | -14.42% | -7.25% | 17.24% | 17.37% | 18.24% | 14.64% | 25% | 25.79% | 18.86% | 16.49% |
| Income Tax | -3.76M | -12.52M | -51.63M | -20.21M | -20.21M | 15.13M | 8.22M | 12.75M | 1.69M | 6.19M | 5.54M | 4.37M | -1.84M | -9.95M | 9.15M | 8.06M | -9.38M | 109K | 1.68M | 2.56M | -942K | 12.94M | 9.35M | 10.19M | 6.16M | 14.44M | 11.45M | 6.6M | 5.4M |
| Effective Tax Rate % | 21.07% | 24.83% | 27.28% | 41.63% | 41.63% | 19.6% | 8.75% | 21.42% | 3.97% | 19.93% | 21.93% | 23.23% | 31.13% | 42.98% | 28.81% | 30.34% | -50.17% | 1.36% | -4.99% | -7.94% | 5.51% | 30% | 29% | 31.01% | 28% | 32% | 31.5% | 32.84% | 38.3% |
| Net Income | -14.1M | -37.9M | -137.64M | -28.34M | -28.34M | 62.04M | 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 |
| Net Margin % | -1.46% | -4.16% | -16.48% | -2.91% | -2.91% | 6.71% | 10.76% | 7.14% | 8.29% | 6.09% | 7.31% | 4.42% | -5.47% | -6.33% | 9.23% | 8.06% | 14.19% | -0.67% | -16.87% | -16.91% | -6.85% | 12.07% | 12.33% | 12.58% | 10.54% | 17% | 17.66% | 12.66% | 10.18% |
| Net Income Growth % | 78.32% | 72.46% | -385.76% | 0% | -145.67% | -27.61% | 83.24% | 14.41% | 64.35% | 26% | 90.39% | 190.76% | 13.5% | -158.39% | 22.65% | -34.97% | 2347.07% | 96.44% | 6.36% | -133.92% | -153.56% | 31.9% | 0.92% | 43.27% | -48.42% | 23.25% | 84.41% | 55.17% | - |
| Net Income (Continuing) | -11.24M | -37.9M | -137.64M | -28.34M | -28.34M | 62.04M | 85.71M | 46.77M | 40.88M | 24.88M | 19.74M | 14.43M | -4.07M | -13.21M | 22.62M | 18.44M | 28.07M | 7.91M | -35.4M | -37.82M | -16.17M | 30.19M | 22.89M | 22.68M | 15.83M | 30.68M | 24.9M | 13.5M | 8.7M |
| Discontinued Operations | 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 |
| Minority Interest | 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 |
| EPS (Diluted) | -0.24 | -0.65 | -2.38 | -0.50 | -0.50 | 1.12 | 1.56 | 0.96 | 0.86 | 0.58 | 0.56 | 0.31 | -0.37 | -0.44 | 0.75 | 0.70 | 1.23 | -0.06 | -1.64 | -1.78 | -0.77 | 1.25 | 1.03 | 1.03 | 0.69 | 1.33 | 1.10 | 0.62 | 0.47 |
| EPS Growth % | 25% | 72.69% | -376% | 0% | -144.64% | -28.21% | 62.5% | 11.63% | 48.28% | 3.57% | 80.65% | 183.78% | 15.91% | -158.67% | 7.14% | -43.09% | 2284.72% | 96.57% | 7.87% | -131.17% | -161.6% | 21.36% | 0% | 49.28% | -48.12% | 20.91% | 77.42% | 31.91% | - |
| EPS (Basic) | - | -0.65 | -2.38 | -0.50 | -0.50 | 1.13 | 1.57 | 0.98 | 0.88 | 0.59 | 0.58 | 0.32 | -0.37 | -0.44 | 0.77 | 0.73 | 1.26 | -0.06 | -1.64 | -1.78 | -0.77 | 1.44 | 1.08 | 1.07 | 0.73 | 1.42 | 1.19 | 0.66 | 0.61 |
| Diluted Shares Outstanding | 59.39M | 58.75M | 57.74M | 56.55M | 56.55M | 55.47M | 55.12M | 48.5M | 47.47M | 43.02M | 35.1M | 32.94M | 31M | 30.13M | 30.09M | 26.21M | 23.01M | 22.42M | 21.64M | 21.22M | 20.98M | 25.97M | 22.22M | 22.02M | 22.92M | 23.1M | 22.7M | 21.6M | 18.54M |
| Basic Shares Outstanding | 59.39M | 58.75M | 57.74M | 56.55M | 56.55M | 55.07M | 54.55M | 47.83M | 46.72M | 41.99M | 34.24M | 32.11M | 31M | 29.96M | 29.48M | 25.32M | 22.56M | 22.15M | 21.64M | 21.22M | 20.98M | 21.03M | 21.19M | 21.19M | 21.73M | 21.58M | 21M | 20.34M | 14.47M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
Operational execution and margin compression
According to quarterly financial data, Mercury Systems has experienced inconsistent top-line performance, with revenue growth fluctuating between a 22.4% contraction and an 11.5% expansion, reflecting the inherent sensitivity of its project-based model to the timing of defense procurement cycles and program-specific delivery milestones.
The company's revenue trajectory appears heavily dependent on the transition of defense programs from development to production phases. Investors should monitor whether the recent 11.5% growth in 2026Q3 represents a sustainable recovery or merely a temporary catch-up in billings for long-term contracts.
As reported in recent income statements, Mercury Systems maintains a gross margin profile that has struggled to exceed 31%, with the most recent 2026Q3 figure of 29.3% suggesting that the company faces significant pricing pressure or elevated input costs within its specialized defense electronics manufacturing operations.
The inability to consistently expand gross margins above 30% indicates that the company may lack the pricing power necessary to offset rising semiconductor and engineering costs. This margin profile appears structurally inferior to peers like Curtiss-Wright, suggesting that Mercury's value-add in the signal processing stack may be under competitive threat.
Based on the provided income statement history, Mercury Systems has failed to demonstrate positive operating leverage, as evidenced by the 2026Q3 operating margin of only 2.2% despite a double-digit revenue increase, indicating that overhead costs continue to scale disproportionately relative to the company's core gross profit generation.
The persistent volatility in operating income suggests that the company's fixed-cost base, including R&D and specialized manufacturing overhead, is not yet optimized for its current revenue scale. Without a clear path to operating margin expansion, the company remains vulnerable to even minor fluctuations in program-based revenue.
Analysis of the company's cost structure reveals that SG&A and R&D expenses frequently consume a significant portion of gross profit, with R&D spending alone reaching $15 million in 2026Q3, highlighting the heavy investment required to maintain technical relevance in the competitive aerospace and defense electronics market.
The company's expense discipline appears challenged, as evidenced by the recurring periods of negative operating income. Management's ability to rationalize these costs while maintaining the technical moat required for defense prime integration will be a critical factor in determining future profitability.
Quick answers to the most common questions about buying MRCY stock.
For fiscal year 2025, Mercury Systems, Inc. (MRCY) reported total revenue of $912.0M. This represents a 966.7% increase compared to $85.5M in 1998.
Mercury Systems, Inc. (MRCY) reported a net loss of $37.9M for the fiscal year ending 2025.
Mercury Systems, Inc. (MRCY) reported an operating income of $-19.6M, resulting in an operating profit margin of -2.2%. This margin reflects the operational efficiency of the business before interest and taxes.
Mercury Systems, Inc. (MRCY) generated $254.5M in gross profit for the year, representing a gross profit margin of 27.9%. This demonstrates the company's core pricing power and production efficiency.