Mercury Systems' Q3 Earnings Meet Estimates, Revenues Rise Y/Y

Mercury Systems MRCY reported third-quarter fiscal 2025 results, wherein earnings were in line with the Zacks Consensus Estimate and revenues beat the same.The aerospace and defence technology provider reported non-GAAP earnings of 6 cents per share, in line with the Zacks Consensus Estimate. The company had incurred a loss of 26 cents in the year-ago quarter.Mercury’s non-GAAP revenues increased 1.5% year over year to $211.4 million. The top line beat the consensus mark by 4.07%.MRCY shares were more or less unchanged in pre-market trading, despite solid progress in each of the priority focus areas, driven by solid execution across a broad portfolio of production and development programs. Mercury Systems Inc Price, Consensus and EPS Surprise Mercury Systems Inc price-consensus-eps-surprise-chart | Mercury Systems Inc QuoteMercury shares have outperformed the Zacks Aerospace sector and peers, including  Spirit Aerosystems SPR and CAE CAE year to date (YTD). MRCY shares have gained 20% YTD compared with the sector, Spirit Aerosystems and CAE’s growth of 8.1%, 4.9% and 0.2%, respectively.MRCY's Q3 Operating DetailsMercury’s total bookings were $200.4 million, yielding a book-to-bill ratio of 0.95 for the reported quarter. MRCY’s total backlog as of March 28, 2025, was $1.34 billion, reflecting an increase of $51 million from the year-ago quarter. As of March 28, 2025, total backlog of $787.6 million represented orders expected to be recognized as revenues within the next 12 months.Mercury’s gross profit was $57.1 million, up 40.5% year over year. The company’s gross margin expanded from 19.5% in the year-ago quarter to 27%.Research and development (R&D) expenses decreased 25.9% year over year to $16 million. As a percentage of revenues, R&D expenses decreased 280 basis points (bps) year over year to 7.56%. Selling, general and administrative (SG&A) expenses decreased 0.3% year over year to $43 million. As a percentage of revenues, SG&A expenses decreased 40 bps year over year to 20.4%.Total operating expenses decreased 13.7% to $74.5 million. As a percentage of revenues, operating expenses decreased 620 bps on a year-over-year basis to 35.3%.Mercury reported an adjusted EBITDA of $24.7 million against a negative EBITDA of $2.397 million in the year-ago quarter.MRCY’s Balance Sheet & Cash FlowAs of March 28, 2025, MRCY’s cash and cash equivalents were $269.8 million compared with $242.6 million as of Dec. 27, 2024. The long-term debt as of March 27, 2025, was $591.5 million.Cash flows provided by operating activities in the third quarter of fiscal 2025 were $30 million compared with $85.5 million in the second quarter of fiscal 2025.The free cash flow was $24.1 million for the third quarter of fiscal 2025 compared with $81.9 million in the second quarter of fiscal 2025.Estimates for Q4 FY25The Zacks Consensus Estimate for fourth-quarter fiscal 2025 revenues is pegged at $248.11 million, indicating a year-over-year decline of 0.18%. The consensus mark for earnings is pegged at 21 cents per share, which remained unchanged over the past 30 days. The figure indicates a decline of 8.7% from the year-ago quarter’s reported figure. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)Zacks Rank & Stocks to ConsiderCurrently, Mercury carries a Zacks Rank #4 (Sell).A better-ranked stock from the broader sector is StandardAero SARO, carrying a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Shares of StandardAero have risen 10.1% year to date. SARO is set to report first-quarter 2025 results on May 12.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Spirit Aerosystems Holdings, Inc. (SPR): Free Stock Analysis Report CAE Inc (CAE): Free Stock Analysis Report Mercury Systems Inc (MRCY): Free Stock Analysis Report StandardAero, Inc. (SARO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks