Q4 2026 Mercury Systems Inc Earnings Call

August 18, 2026

Operator 2: Welcome to the Mercury Systems Fourth Quarter Fiscal 2026 conference call. Today's call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to the company's Vice President of Investor Relations, Tyler Hojo. Please go ahead, Mr. Hojo.

Operator: Welcome to the Mercury Systems Fourth Quarter Fiscal 2026 conference call. Today's call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to the company's Vice President of Investor Relations, Tyler Hojo. Please go ahead, Mr. Hojo.

Speaker #1: Please go ahead, Mr. Hojo.

Speaker #2: Good afternoon, and thank you for joining us. With me today are our Chairman and Chief Executive Officer, Bill Ballhaus, and our Executive Vice President and CFO, Dave Farnsworth.

Tyler Hojo: Good afternoon, and thank you for joining us. With me today is our Chairman and Chief Executive Officer, Bill Ballhaus, and our Executive Vice President and CFO, Dave Farnsworth. If you have not received a copy of the earnings press release we issued earlier this afternoon, you can find it on our website at mrcy.com. The slide presentation that we will be referencing to is posted on the investor relations section of the website under events and presentations. Turning to slide 2 in the presentation, I would like to remind you that today's presentation includes forward-looking statements, including information regarding Mercury's financial outlook, future plans, objectives, business prospects, and anticipated financial performance. These forward-looking statements are subject to future risks and uncertainties that could cause our actual results or performance to differ materially.

Speaker #2: If you have not received a copy of the earnings press release we issued earlier this afternoon, you can find it on our website at mrcy.com.

Speaker #2: The slide presentation that we will be referencing is posted on the Investor Relations section of the website, under Events and Presentations. Turning to the slide in the presentation.

Speaker #2: I'd like to remind you that today's presentation includes forward-looking statements, including information regarding Mercury's financial outlook, future plans, objectives, business prospects, and anticipated financial performance.

Speaker #2: These forward-looking statements are subject to future risks and uncertainties that could cause our actual results or performance to differ materially. All forward-looking statements should be considered in conjunction with the cautionary statements on slide 2 in the earnings press release and the risk factors included in Mercury's SEC filings.

Tyler Hojo: All forward-looking statements should be considered in conjunction with the cautionary statements on slide 2 in the earnings press release and the risk factors included in Mercury's SEC filings. We will also be providing FY28 reference points today, which along with our target profile should not be construed as financial guidance and speak only as of today. They illustrate the financial profile the business could achieve based on the factors referenced above, including our ability to convert backlog to revenue and gain additional orders beyond current backlog. These factors may materially affect whether we reach these reference points or target profile. I would also like to mention that in addition to reporting financial results in accordance with generally accepted accounting principles or GAAP, during our call, we will also discuss several non-GAAP financial measures, specifically adjusted income, adjusted earnings per share, adjusted EBITDA, and free cash flow.

Speaker #2: We will also be providing fiscal year '28 reference points today, which, along with our target profile, should not be construed as financial guidance and speak only as of today.

Speaker #2: They illustrate the financial profile the business could achieve based on the factors referenced above, including our ability to convert backlog to revenue and gain additional orders beyond current backlog.

Speaker #2: These factors may materially affect whether we reach these reference points or our target profile. I'd also like to mention that, in addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, during our call we will also discuss several non-GAAP financial measures—specifically, adjusted income, adjusted earnings per share, adjusted EBITDA, and free cash flow.

Speaker #2: A reconciliation of these non-GAAP metrics is included as an appendix to today's slide presentation and in the earnings press release. I'll now turn the call over to Mercury's Chairman and CEO, Bill Ballhaus.

Tyler Hojo: A reconciliation of these non-GAAP metrics is included as an appendix to today's slide presentation and in the earnings press release. I'll now turn the call over to Mercury's Chairman and CEO, Bill Ballhaus. Please turn to slide 3.

Speaker #2: Please turn to slide 3.

Speaker #3: Thanks, Tyler. Good afternoon, and thank you for joining our FY26 Q4 and full-year earnings call. We delivered Q4 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.

William L. Ballhaus: Thanks, Tyler. Good afternoon. Thank you for joining our FY26 Q4 and full-year earnings call. We delivered Q4 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 FY27 with enhanced visibility and are increasing our outlook for organic growth. Today I'll cover three topics. First, some introductory comments on our business and results. Second, an update on our four priorities: performance excellence, growth, margin expansion, and free cash flow. Third, expectations for FY27 and longer term. Then I'll turn it over to Dave, who will walk through our financial results in more detail. Before jumping in, I'd like to thank our customers for their collaborative partnership and the trust they put in Mercury to support their most critical programs.

Bill Ballhaus: Thanks, Tyler. Good afternoon. Thank you for joining our FY26 Q4 and full-year earnings call. We delivered Q4 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 FY27 with enhanced visibility and are increasing our outlook for organic growth. Today I'll cover three topics. First, some introductory comments on our business and results. Second, an update on our four priorities: performance excellence, growth, margin expansion, and free cash flow. Third, expectations for FY27 and longer term. Then I'll turn it over to Dave, who will walk through our financial results in more detail. Before jumping in, I'd like to thank our customers for their collaborative partnership and the trust they put in Mercury to support their most critical programs.

Speaker #3: Based on our solid execution and strong demand signals, we end our FY27 with enhanced visibility and are increasing our outlook for organic growth. Today, I'll cover three topics: first, some introductory comments on our business and results; second, an update on our four priorities—performance excellence, growth, margin expansion, and free cash flow; and third, expectations for FY27 and the longer term.

Speaker #3: Then I'll turn it over to Dave, who will walk through our financial results in more detail. Before jumping in, I'd like to thank our customers for their collaborative partnership and the trust they put in Mercury to support their most critical programs.

Speaker #3: I'd also like to thank our Mercury team for their dedication and commitment to delivering high-performance processing and enabling mission dominance for the warfighter at the edge.

William L. Ballhaus: I'd also like to thank our Mercury team for their dedication and commitment to delivering high-performance processing and enabling mission dominance for the warfighter at the edge. Please turn to slide 4. Our Q4 results reflected robust organic growth and margin expansion, record bookings of $660 million, up 93.1% year over year, and nearly double our previous record bookings quarter, a 2.3 book-to-bill, record backlog of over $1.9 billion, and record next 12-month backlog of $1 billion, record revenue of $290 million, adjusted EBITDA of $49 million, and adjusted EBITDA margin of 16.7%, and free cash flow of $29 million. We ended Q4 with $227 million of net debt, down 19.5% year over year.

Bill Ballhaus: I'd also like to thank our Mercury team for their dedication and commitment to delivering high-performance processing and enabling mission dominance for the warfighter at the edge. Please turn to slide 4. Our Q4 results reflected robust organic growth and margin expansion, record bookings of $660 million, up 93.1% year over year, and nearly double our previous record bookings quarter, a 2.3 book-to-bill, record backlog of over $1.9 billion, and record next 12-month backlog of $1 billion, record revenue of $290 million, adjusted EBITDA of $49 million, and adjusted EBITDA margin of 16.7%, and free cash flow of $29 million. We ended Q4 with $227 million of net debt, down 19.5% year over year.

Speaker #3: Please turn to Slide 4. Our Q4 results reflected robust organic growth and margin expansion. Record bookings of $660 million, up 93.1% year over year, and nearly double our previous record bookings quarter.

Speaker #3: A 2.3 book-to-bill ratio. Record backlog of over $1.9 billion, and record next 12-month backlog of $1 billion. Record revenue of $290 million. Adjusted EBITDA of $49 million, and adjusted EBITDA margin of 16.7%.

Speaker #3: And free cash flow of $29 million. We ended Q4 with $227 million of net debt, down 19.5% year over year. These results reflect our ongoing focus on our four priority areas, with highlights that include: solid execution across our broad portfolio, leading to FY26 organic revenue growth of 7.9% and adjusted EBITDA growth of 25.7%.

William L. Ballhaus: These results reflect ongoing focus on our four priority areas, with highlights that include solid execution across our broad portfolio, leading to FY26 organic revenue growth of 7.9% and adjusted EBITDA growth of 25.7%, year over year growth in backlog and next 12-month backlog of 38.4% and 23.3% respectively, an increase of 217 basis points year over year in full-year adjusted EBITDA margin, and continued progress on free cash flow drivers with net working capital down 4% year over year, while revenue grew 7.9%. Please turn to slide 5. Starting with our four priorities and priority one, performance excellence, where we are focused on sound execution on development programs, delivering for our customers across our portfolio, and scaling efficiently on numerous programs transitioning to higher volume production. In Q4, we ramped up across a number of programs and generated record quarterly revenue.

Bill Ballhaus: These results reflect ongoing focus on our four priority areas, with highlights that include solid execution across our broad portfolio, leading to FY26 organic revenue growth of 7.9% and adjusted EBITDA growth of 25.7%, year over year growth in backlog and next 12-month backlog of 38.4% and 23.3% respectively, an increase of 217 basis points year over year in full-year adjusted EBITDA margin, and continued progress on free cash flow drivers with net working capital down 4% year over year, while revenue grew 7.9%. Please turn to slide 5. Starting with our four priorities and priority one, performance excellence, where we are focused on sound execution on development programs, delivering for our customers across our portfolio, and scaling efficiently on numerous programs transitioning to higher volume production. In Q4, we ramped up across a number of programs and generated record quarterly revenue.

Speaker #3: Year-over-year growth and backlog, and next 12-month backlog of 38.4% and 23.3%, respectively. An increase of 217 basis points year-over-year in full-year adjusted EBITDA margin.

Speaker #3: And continued progress on free cash flow drivers, with net working capital down 4% year over year, while revenue grew 7.9%. Please turn to slide 5.

Speaker #3: Starting with our four priorities, and priority one: performance excellence, where we are focused on sound execution on development programs, delivering for our customers across our portfolio, and scaling efficiently on numerous programs transitioning to higher-volume production.

Speaker #3: In Q4, we ramped up across a number of programs and generated record quarterly revenue. Our overtime revenue, up 23.6% year over year, was the highest in 15 quarters, driven largely by the receipt of material—which we believe is an indicator that we are better aligning our supply chain with the increased organic growth we are seeing in several areas across the business.

William L. Ballhaus: Our overtime revenue of 23.6% year over year was the highest in 15 quarters, driven largely by the receipt of material, which we believe is an indicator that we are better aligning our supply chain with the increased organic growth we are seeing in several areas across the business. Notably, our domestic revenue, representing approximately 85.8% of our FY26 revenue, grew 13% organically year over year. Our strong bookings and record backlog, combined with progress in scaling efficiently, have resulted in organic growth above our prior expectation for FY26 and an outlook for increased growth, which I will speak to shortly. Beyond the solid performance, we continue efforts to expand capacity, increase automation, and consolidate subscale sites in our ongoing efforts to drive scalability and efficiency.

Bill Ballhaus: Our overtime revenue of 23.6% year over year was the highest in 15 quarters, driven largely by the receipt of material, which we believe is an indicator that we are better aligning our supply chain with the increased organic growth we are seeing in several areas across the business. Notably, our domestic revenue, representing approximately 85.8% of our FY26 revenue, grew 13% organically year over year. Our strong bookings and record backlog, combined with progress in scaling efficiently, have resulted in organic growth above our prior expectation for FY26 and an outlook for increased growth, which I will speak to shortly. Beyond the solid performance, we continue efforts to expand capacity, increase automation, and consolidate subscale sites in our ongoing efforts to drive scalability and efficiency.

Speaker #3: Notably, our domestic revenue, representing approximately 85.8% of our FY26 revenue, grew 13% organically year over year. Our strong bookings and record backlog, combined with progress in scaling efficiently, have resulted in organic growth above our prior expectations for FY26 and an outlook for increased growth, which I'll speak to shortly.

Speaker #3: Beyond the solid performance, we continue efforts to expand capacity, increase automation, and consolidate sub-scale sites in our ongoing efforts to drive scalability and efficiency.

Speaker #3: Of note, we recently announced a strategic agreement with Palantir to leverage AI software to enhance material planning and factory operations, in an effort to improve backlog conversion and deliver critical technologies to the warfighter.

William L. Ballhaus: Of note, we recently announced a strategic agreement with Palantir to leverage AI software to enhance material planning and factory operations in an effort to improve backlog conversion and deliver critical technologies to the warfighter. This is among many actions we have taken, along with prior investments across a number of critical technology developments designed to scale our ability to rapidly deliver vital capabilities for our customers. Please turn to slide 6. Moving on to priority 2, driving organic growth. We believe that our near-term organic growth will be driven by increased volume on existing production programs and the ongoing transition of a number of development programs to production. Additionally, we see possible upside tied to potential tailwinds from increased customer demand and quantities across a broad set of production programs in our portfolio.

Bill Ballhaus: Of note, we recently announced a strategic agreement with Palantir to leverage AI software to enhance material planning and factory operations in an effort to improve backlog conversion and deliver critical technologies to the warfighter. This is among many actions we have taken, along with prior investments across a number of critical technology developments designed to scale our ability to rapidly deliver vital capabilities for our customers. Please turn to slide 6. Moving on to priority 2, driving organic growth. We believe that our near-term organic growth will be driven by increased volume on existing production programs and the ongoing transition of a number of development programs to production. Additionally, we see possible upside tied to potential tailwinds from increased customer demand and quantities across a broad set of production programs in our portfolio.

Speaker #3: This is among many actions we have taken, along with prior investments across a number of critical technology developments, designed to scale our ability to rapidly deliver vital capabilities for our customers.

Speaker #3: Please turn to slide 6. Moving on to priority two: driving organic growth. We believe that our near-term organic growth will be driven by increased volume on existing production programs and the ongoing transition of a number of development programs to production.

Speaker #3: Additionally, we see possible upside tied to potential tailwinds from increased customer demand and quantities across a broad set of production programs in our portfolio.

Speaker #3: Lastly, we are excited about new development programs and the potential of the production volume associated with those wins. In Q4, we delivered a record quarter with $660 million of bookings, resulting in record fiscal year bookings of $1.5 billion, up 49.8% year over year, and a book-to-bill of 1.57 for the year.

William L. Ballhaus: Lastly, we are excited about new development programs and the potential of the production volume associated with those wins. In Q4, we delivered a record quarter with $660 million of bookings, resulting in record fiscal year bookings of $1.5 billion, up 49.8% year over year, and a book-to-bill of 1.57 for the year. Our record total backlog approaching $2 billion is also providing enhanced visibility as we enter FY27 and into FY28. Notably, our next 12-month backlog revenue coverage is higher than typical because a few of our recent larger orders included consolidated quantities that otherwise would have manifested in bookings and revenue recognized in FY27. The strength in Q4 bookings was broad-based, with significant production awards across our products and solutions in Common Processing Architecture, effectors, airborne applications, space, and missile defense.

Bill Ballhaus: Lastly, we are excited about new development programs and the potential of the production volume associated with those wins. In Q4, we delivered a record quarter with $660 million of bookings, resulting in record fiscal year bookings of $1.5 billion, up 49.8% year over year, and a book-to-bill of 1.57 for the year. Our record total backlog approaching $2 billion is also providing enhanced visibility as we enter FY27 and into FY28. Notably, our next 12-month backlog revenue coverage is higher than typical because a few of our recent larger orders included consolidated quantities that otherwise would have manifested in bookings and revenue recognized in FY27. The strength in Q4 bookings was broad-based, with significant production awards across our products and solutions in Common Processing Architecture, effectors, airborne applications, space, and missile defense.

Speaker #3: Our record total backlog, approaching $2 billion, is also providing enhanced visibility as we enter FY27 and into FY28. Notably, our next 12-month backlog revenue coverage is higher than typical because a few of our recent larger orders included consolidated quantities that otherwise would have manifested in bookings and revenue recognized in FY27.

Speaker #3: The strength in Q4 bookings was broad-based, with significant production awards across our products and solutions, in common processing architecture, effectors, airborne applications, space, and missile defense.

Speaker #3: Most notably, we had our largest quarter ever for CPA bookings, which we believe reflects the differentiation of our CPA solutions and reinforces our confidence in the growth prospects of this area.

William L. Ballhaus: Most notably, we had our largest quarter ever for CPA bookings, which we believe reflects the differentiation of our CPA solutions and reinforces our confidence in the growth prospects of this area. The quarter also included significant bookings related to securing memory to support future production requirements across a number of advanced defense platforms. We are also beginning to see the favorable impacts of the defense budgetary environment, leading to a number of multiyear customer commitments. Driven by increased defense budgets globally and domestic priorities, we continue to see the potential for higher demand on multiple programs across our portfolio, including space, munitions, missile defense, and our Common Processing Architecture. I remain optimistic that these potential market tailwinds may have a positive impact on our demand environment if funding is allocated across certain program priorities to our customers over the next several quarters and beyond. Please turn to slide 7.

Bill Ballhaus: Most notably, we had our largest quarter ever for CPA bookings, which we believe reflects the differentiation of our CPA solutions and reinforces our confidence in the growth prospects of this area. The quarter also included significant bookings related to securing memory to support future production requirements across a number of advanced defense platforms. We are also beginning to see the favorable impacts of the defense budgetary environment, leading to a number of multiyear customer commitments. Driven by increased defense budgets globally and domestic priorities, we continue to see the potential for higher demand on multiple programs across our portfolio, including space, munitions, missile defense, and our Common Processing Architecture. I remain optimistic that these potential market tailwinds may have a positive impact on our demand environment if funding is allocated across certain program priorities to our customers over the next several quarters and beyond. Please turn to slide 7.

Speaker #3: The quarter also included significant bookings related to securing memory to support future production requirements across a number of advanced defense platforms. We are also beginning to see the favorable impacts of the defense budgetary environment, leading to a number of multi-year customer commitments.

Speaker #3: Driven by increased defense budgets globally and domestic priorities, we continue to see the potential for higher demand on multiple programs across our portfolio, including space, munitions, missile defense, and our common processing architecture.

Speaker #3: I remain optimistic that these potential market tailwinds may have a positive impact on our demand environment if funding is allocated across certain program priorities to our customers over the next several quarters and beyond.

Speaker #3: Please turn to slide 7. Now, turning to priority three: margin expansion. In our efforts to progress toward our targeted adjusted EBITDA margin profile in the low to mid-20s, we are focused on the following drivers: backlog margin expansion as we convert lower margin backlog and add new bookings aligned with our target margin profile; ongoing initiatives to further simplify, automate, and optimize our operations; and driving organic growth to increase positive operating leverage.

William L. Ballhaus: Now turning to priority 3, margin expansion. In our efforts to progress toward our targeted adjusted EBITDA margin profile in the low to mid-20s, we are focused on the following drivers: backlog margin expansion as we convert lower-margin backlog and add new bookings aligned with our target margin profile, ongoing initiatives to further simplify, automate, and optimize our operations, and driving organic growth to increase positive operating leverage. Gross margin for FY26 of 28.6% was up 70 basis points year over year, consistent with our expectation that average backlog margin will continue to increase as we convert legacy lower-margin backlog and bring in new bookings that we believe will be in line with our targeted margin profile. FY26 operating expenses are down year over year as a percent of revenue, reflecting our ongoing focus to drive efficiencies and enable positive operating leverage as we accelerate organic growth.

Bill Ballhaus: Now turning to priority 3, margin expansion. In our efforts to progress toward our targeted adjusted EBITDA margin profile in the low to mid-20s, we are focused on the following drivers: backlog margin expansion as we convert lower-margin backlog and add new bookings aligned with our target margin profile, ongoing initiatives to further simplify, automate, and optimize our operations, and driving organic growth to increase positive operating leverage. Gross margin for FY26 of 28.6% was up 70 basis points year over year, consistent with our expectation that average backlog margin will continue to increase as we convert legacy lower-margin backlog and bring in new bookings that we believe will be in line with our targeted margin profile. FY26 operating expenses are down year over year as a percent of revenue, reflecting our ongoing focus to drive efficiencies and enable positive operating leverage as we accelerate organic growth.

Speaker #3: Gross margin for FY26 of 28.6% was up 70 basis points year over year, consistent with our expectation that average backlog margin will continue to increase as we convert legacy lower-margin backlog and bring in new bookings that we believe will be in line with our targeted margin profile.

Speaker #3: FY26 operating expenses are down year over year as a percent of revenue, reflecting our ongoing focus to drive efficiencies and enable positive operating leverage as we accelerate organic growth.

Speaker #3: Full-year adjusted EBITDA margin of 15.3% was in line with our expectations and up 217 basis points year over year. Please forward to slide 8.

William L. Ballhaus: Full-year adjusted EBITDA margin of 15.3% was in line with our expectations and up 217 basis points year over year. Please forward to slide 8. Finally, turning to priority 4, free cash flow conversion. We continue to make progress on the drivers of free cash flow, and in particular, networking capital, which at approximately $431 million, is down $18 million year over year. Full-year free cash flow of $68 million led to net debt of $227 million at the end of Q4, which we reduced by $55 million year over year. We believe our continuous improvement related to program execution, demand planning, and supply chain management, along with strong balance sheet flexibility, positions us well to drive organic growth and capitalize on any additional potential market tailwinds. Please refer to slides 9 and 10. We are entering FY27 with a record backlog in what we believe is enhanced multi-year visibility.

Bill Ballhaus: Full-year adjusted EBITDA margin of 15.3% was in line with our expectations and up 217 basis points year over year. Please forward to slide 8. Finally, turning to priority 4, free cash flow conversion. We continue to make progress on the drivers of free cash flow, and in particular, networking capital, which at approximately $431 million, is down $18 million year over year. Full-year free cash flow of $68 million led to net debt of $227 million at the end of Q4, which we reduced by $55 million year over year. We believe our continuous improvement related to program execution, demand planning, and supply chain management, along with strong balance sheet flexibility, positions us well to drive organic growth and capitalize on any additional potential market tailwinds. Please refer to slides 9 and 10. We are entering FY27 with a record backlog in what we believe is enhanced multi-year visibility.

Speaker #3: Finally, turning to priority four, free cash flow conversion. We continue to make progress on the drivers of free cash flow, and in particular, net working capital, which at approximately $431 million is down $18 million year over year.

Speaker #3: Full-year free cash flow of $68 million led to net debt of $227 million at the end of Q4, which we reduced by $55 million year over year.

Speaker #3: We believe our continuous improvement in program execution, demand planning, and supply chain management, along with strong balance sheet flexibility, positions us well to drive organic growth and capitalize on any additional potential market tailwinds.

Speaker #3: Please refer to slides 9 and 10. We are entering FY27 with a record backlog and what we believe is enhanced multi-year visibility. We have increased organic growth expectations, underpinned by our team's demonstrated strong performance, our strategic positioning—which we believe is closely aligned with critical global defense priorities—and a favorable market backdrop with an anticipated 9.9% addressable market compound annual growth rate, as spelled out in more detail in our Form 10-K filing.

William L. Ballhaus: We have increased organic growth expectations underpinned by our team's demonstrated strong performance, our strategic positioning, which we believe is closely aligned with critical global defense priorities, and a favorable market backdrop with an anticipated 9.9% addressable market compound annual growth rate spelled out in more detail in our Form 10-K filing. Looking ahead, aligned with our target profile of achieving above-market organic growth and in recognition of the favorable market outlook, we are increasing targeted organic revenue growth to low double digits while maintaining targeted adjusted EBITDA margin in the low to mid-20s and targeted free cash flow conversion of 50%. We believe our strong FY26 performance positions us well to perform in line with this target increase over time. For FY27, we expect revenue growth approaching double digits year over year with total revenue approaching $1.1 billion.

Bill Ballhaus: We have increased organic growth expectations underpinned by our team's demonstrated strong performance, our strategic positioning, which we believe is closely aligned with critical global defense priorities, and a favorable market backdrop with an anticipated 9.9% addressable market compound annual growth rate spelled out in more detail in our Form 10-K filing. Looking ahead, aligned with our target profile of achieving above-market organic growth and in recognition of the favorable market outlook, we are increasing targeted organic revenue growth to low double digits while maintaining targeted adjusted EBITDA margin in the low to mid-20s and targeted free cash flow conversion of 50%. We believe our strong FY26 performance positions us well to perform in line with this target increase over time. For FY27, we expect revenue growth approaching double digits year over year with total revenue approaching $1.1 billion.

Speaker #3: Looking ahead, aligned with our target profile of achieving above-market organic growth and in recognition of the favorable market outlook, we are increasing targeted organic revenue growth to low double digits, while maintaining targeted adjusted EBITDA margin in the low to mid-20s and targeted free cash flow conversion of 50%.

Speaker #3: We believe our strong FY26 performance positions us well to perform in line with this target increase over time. For FY27, we expect revenue growth approaching double digits year over year, with total revenue approaching $1.1 billion.

Speaker #3: We anticipate Q1 revenue to be the lowest of the year and up high single digits year over year, with revenue increasing through the balance of the year.

William L. Ballhaus: We anticipate Q1 revenue to be the lowest of the year and up high single digits year over year, with revenue increasing through the balance of the year. We expect adjusted EBITDA margin in the high teens and adjusted EBITDA approaching $200 million for the full year, reflecting nearly 30% year over year growth. We expect adjusted EBITDA margin to generally increase through the year with Q1 adjusted EBITDA margin expected to be in line with Q1 FY26. Amidst increased demand, we plan to make targeted investments in inventory, automation, and factory optimization to drive organic growth. For the full year, we are anticipating FY27 free cash flow conversion beneath our 50% target, approaching 35%, with free cash flow in the H2 expected to be higher than in the H1.

Bill Ballhaus: We anticipate Q1 revenue to be the lowest of the year and up high single digits year over year, with revenue increasing through the balance of the year. We expect adjusted EBITDA margin in the high teens and adjusted EBITDA approaching $200 million for the full year, reflecting nearly 30% year over year growth. We expect adjusted EBITDA margin to generally increase through the year with Q1 adjusted EBITDA margin expected to be in line with Q1 FY26. Amidst increased demand, we plan to make targeted investments in inventory, automation, and factory optimization to drive organic growth. For the full year, we are anticipating FY27 free cash flow conversion beneath our 50% target, approaching 35%, with free cash flow in the H2 expected to be higher than in the H1.

Speaker #3: We expect adjusted EBITDA margin in the high teens and adjusted EBITDA approaching $200 million for the full year, reflecting nearly 30% year-over-year growth.

Speaker #3: We expect adjusted EBITDA margin to generally increase throughout the year, with Q1 adjusted EBITDA margin expected to be in line with Q1 FY26. Amidst increased demand, we plan to make targeted investments in inventory automation and factory optimization to drive organic growth.

Speaker #3: For the full year, we are anticipating FY27 free cash flow conversion beneath our 50% target, approaching 35%, with free cash flow in the second half expected to be higher than in the first half.

Speaker #3: We expect Q1, which, due to timing, is typically our weakest cash flow quarter, to be a larger outflow than normal, primarily reflecting the receipt of materials to support our growth outlook and the defense spending tailwinds we see ahead.

William L. Ballhaus: We expect Q1, which due to timing, is typically our weakest cash flow quarter, to be a larger outflow than normal, primarily reflecting the receipt of materials to support our growth outlook and the defense spending tailwinds we see ahead. Given our record backlog and what we believe is enhanced multi-year visibility into scenarios beyond FY27, we are providing additional reference points for FY28. In our initial view of FY28, our reference point for top-line organic growth is in the low double digits. For adjusted EBITDA margin, in line with the low end of our target margin profile, and for free cash flow, a return towards conversion in line with our target.

Bill Ballhaus: We expect Q1, which due to timing, is typically our weakest cash flow quarter, to be a larger outflow than normal, primarily reflecting the receipt of materials to support our growth outlook and the defense spending tailwinds we see ahead. Given our record backlog and what we believe is enhanced multi-year visibility into scenarios beyond FY27, we are providing additional reference points for FY28. In our initial view of FY28, our reference point for top-line organic growth is in the low double digits. For adjusted EBITDA margin, in line with the low end of our target margin profile, and for free cash flow, a return towards conversion in line with our target.

Speaker #3: Given our record backlog, and what we believe is enhanced multi-year visibility into scenarios beyond FY27, we are providing additional reference points for FY28. In our initial view of FY28, our reference point for top-line organic growth is in the low double digits.

Speaker #3: For adjusted EBITDA margin, in line with the low end of our target margin profile, and for free cash flow, a return towards conversion in line with our target.

Speaker #3: Further, although this outlook for FY27 and FY28 incorporates a limited set of tailwinds that have materialized in firm bookings, it does not incorporate the benefit of potential additional tailwinds that could occur on a number of production programs across our portfolio, including our common processing architecture, effectors, airborne applications, space, and missile defense.

William L. Ballhaus: Further, although this outlook for FY27 and FY28 incorporates a limited set of tailwinds that have materialized in firm bookings, it does not incorporate the benefit of potential additional tailwinds that could occur on a number of production programs across our portfolio, including our Common Processing Architecture, effectors, airborne applications, space, and missile defense. Additionally, this outlook does not incorporate any benefit from the Palantir partnership mentioned earlier or other automation efforts across our organization to improve backlog conversion. We believe any such improvements may translate into higher organic growth and adjusted EBITDA margin, representing potential upside to our outlook.

Bill Ballhaus: Further, although this outlook for FY27 and FY28 incorporates a limited set of tailwinds that have materialized in firm bookings, it does not incorporate the benefit of potential additional tailwinds that could occur on a number of production programs across our portfolio, including our Common Processing Architecture, effectors, airborne applications, space, and missile defense. Additionally, this outlook does not incorporate any benefit from the Palantir partnership mentioned earlier or other automation efforts across our organization to improve backlog conversion. We believe any such improvements may translate into higher organic growth and adjusted EBITDA margin, representing potential upside to our outlook.

Speaker #3: Additionally, this outlook does not incorporate any benefit from the Palantir partnership mentioned earlier or other automation efforts across our organization to improve backlog conversion.

Speaker #3: We believe any such improvements may translate into higher organic growth in adjusted EBITDA margin, representing potential upside to our outlook. In summary, with our positive momentum, record backlog, and improved visibility coming out of a strong FY26, we look forward to executing well for our customers, enabling high-performance processing and mission dominance for the warfighter at the edge, and delivering on what we believe is a significant value creation opportunity in front of us.

William L. Ballhaus: In summary, with our positive momentum, record backlog, and improved visibility coming out of a strong FY26, we look forward to executing well for our customers, enabling high-performance processing and mission dominance for the war fighter at the edge, and delivering on what we believe is a significant value creation opportunity in front of us. With that, I will turn it over to Dave to walk through the financial results for the quarter and fiscal year, and I look forward to your questions. Dave?

Bill Ballhaus: In summary, with our positive momentum, record backlog, and improved visibility coming out of a strong FY26, we look forward to executing well for our customers, enabling high-performance processing and mission dominance for the war fighter at the edge, and delivering on what we believe is a significant value creation opportunity in front of us. With that, I will turn it over to Dave to walk through the financial results for the quarter and fiscal year, and I look forward to your questions. Dave?

Speaker #3: With that, I'll turn it over to Dave to walk through the financial results for the quarter and fiscal year, and I look forward to your questions.

Speaker #3: Dave?

Speaker #1: Thank you, Bill. Our fourth quarter results reflect continued progress toward our goal of delivering organic growth and expanding margins. We still have work to do to reach our targeted profile, but we are encouraged by the progress we have made and expect to continue this momentum going forward.

David Farnsworth: Thank you, Bill. Our Q4 results reflect continued progress toward our goal of delivering organic growth and expanding margins. We still have work to do to reach our targeted profile, but we are encouraged by the progress we have made and expect to continue this momentum going forward. With that, please turn to slide 11, which details our Q4 results. Our record bookings for the quarter were approximately $660 million, with a book-to-bill of 2.28. Our record backlog of over $1.9 billion is up $540 million, or 38.4% year over year. Revenues for the Q4 were a record of nearly $290 million, up approximately $17 million, or 6.1% organically compared to the prior year. Gross margin for the Q4 was 30.6% as compared to 31.0% for the same quarter last year.

Dave Farnsworth: Thank you, Bill. Our Q4 results reflect continued progress toward our goal of delivering organic growth and expanding margins. We still have work to do to reach our targeted profile, but we are encouraged by the progress we have made and expect to continue this momentum going forward. With that, please turn to slide 11, which details our Q4 results. Our record bookings for the quarter were approximately $660 million, with a book-to-bill of 2.28. Our record backlog of over $1.9 billion is up $540 million, or 38.4% year over year. Revenues for the Q4 were a record of nearly $290 million, up approximately $17 million, or 6.1% organically compared to the prior year. Gross margin for the Q4 was 30.6% as compared to 31.0% for the same quarter last year.

Speaker #1: With that, please turn to slide 11, which details our fourth quarter results. Our record bookings for the quarter were approximately $660 million, with a book-to-bill of 2.28.

Speaker #1: Our record backlog of over $1.9 billion is up $540 million, or 38.4%, year over year. Revenues for the fourth quarter were a record of nearly $290 million, up approximately $17 million, or 6.1% organically, compared to the prior year.

Speaker #1: Gross margin for the fourth quarter was 30.6%, as compared to 31.0% for the same quarter last year. The gross margin during the fourth quarter was primarily driven by our program mix, and higher net EAC change impacts of approximately $4 million as compared to the prior year.

David Farnsworth: The gross margin during Q4 was primarily driven by our program mix and higher net EAC change impacts of approximately $4 million as compared to the prior year. Net EAC change impacts were lower for the fiscal year as compared to the prior fiscal year. As we previously noted, we expect to see an improvement in our gross margin performance over time as the average margin in our backlog improves and through our continued focus on simplifying, automating, and optimizing our operations. We expect average backlog margin to continue to increase as we convert lower margin backlog and bring in new bookings that we believe will be in line with our targeted margin profile. Operating expenses increased approximately $13 million year-over-year.

Dave Farnsworth: The gross margin during Q4 was primarily driven by our program mix and higher net EAC change impacts of approximately $4 million as compared to the prior year. Net EAC change impacts were lower for the fiscal year as compared to the prior fiscal year. As we previously noted, we expect to see an improvement in our gross margin performance over time as the average margin in our backlog improves and through our continued focus on simplifying, automating, and optimizing our operations. We expect average backlog margin to continue to increase as we convert lower margin backlog and bring in new bookings that we believe will be in line with our targeted margin profile. Operating expenses increased approximately $13 million year-over-year.

Speaker #1: Net EAC change impacts were lower for the fiscal year as compared to the prior fiscal year. As we previously noted, we expect to see an improvement in our gross margin performance over time as the average margin in our backlog improves, and through our continued focus on simplifying, automating, and optimizing our operations.

Speaker #1: We expect average backlog margin to continue to increase as we convert lower-margin backlog and bring in new bookings that we believe will be in line with our targeted margin profile.

Speaker #1: Operating expenses increased approximately $13 million year over year. The increase in operating expenses was driven primarily by higher selling, general, and administrative expenses and research and development costs of approximately $10 million and $4 million, respectively.

David Farnsworth: The increase in operating expenses was driven primarily by higher selling, general, and administrative expenses and research and development costs of approximately $10 million and $4 million respectively. These increases were primarily driven by compensation-related expenses, including stock-based compensation. These increases were partially offset by lower acquisition costs and other related expenses and amortization of intangible assets totaling approximately $2 million. GAAP net income and earnings per share in Q4 were approximately $1 million and $0.01 respectively, as compared to GAAP net income and earnings per share of approximately $16 million and $0.27 respectively in the same quarter last year. Adjusted EBITDA for Q4 was approximately $49 million as compared to $51 million in the same quarter last year. Our adjusted EBITDA as a percentage of revenue was 16.7% as compared to 18.8% for the same quarter last year.

Dave Farnsworth: The increase in operating expenses was driven primarily by higher selling, general, and administrative expenses and research and development costs of approximately $10 million and $4 million respectively. These increases were primarily driven by compensation-related expenses, including stock-based compensation. These increases were partially offset by lower acquisition costs and other related expenses and amortization of intangible assets totaling approximately $2 million. GAAP net income and earnings per share in Q4 were approximately $1 million and $0.01 respectively, as compared to GAAP net income and earnings per share of approximately $16 million and $0.27 respectively in the same quarter last year. Adjusted EBITDA for Q4 was approximately $49 million as compared to $51 million in the same quarter last year. Our adjusted EBITDA as a percentage of revenue was 16.7% as compared to 18.8% for the same quarter last year.

Speaker #1: These increases were primarily driven by compensation-related expenses, including stock-based compensation. These increases were partially offset by lower acquisition costs and other related expenses, and amortization of intangible assets totaling approximately $2 million.

Speaker #1: GAAP net income and earnings per share in the fourth quarter were approximately $1 million and $0.01, respectively, as compared to GAAP net income and earnings per share of approximately $16 million and $0.27, respectively, in the same quarter last year.

Speaker #1: Adjusted EBITDA for the fourth quarter was approximately $49 million, as compared to $51 million in the same quarter last year. Our adjusted EBITDA as a percentage of revenue was 16.7%, as compared to 18.8% for the same quarter last year.

Speaker #1: Adjusted earnings per share for the fourth quarter was $0.37, as compared to $0.47 in the prior year. Free cash flow for the fourth quarter was approximately $29 million, as compared to $34 million in the prior year.

David Farnsworth: Adjusted earnings per share for Q4 was $0.37 as compared to $0.47 in the prior year. Free cash flow for Q4 was approximately $29 million as compared to $34 million in the prior year. Turning to our full-year results on slide 12. Our bookings for fiscal 2026 were approximately $1.5 billion, up $514 million or nearly 49.8%, marking a record year of bookings. Our book-to-bill was 1.57, yielding record backlog of over $1.9 billion, which is up 38.4% from fiscal 2025. Fiscal 2026 revenues were $984 million, up approximately $72 million or 7.9% compared to the prior fiscal year. Gross margin was 28.6% for fiscal 2026, an increase of approximately 70 basis points from the 27.9% gross margin realized during fiscal 2025.

Dave Farnsworth: Adjusted earnings per share for Q4 was $0.37 as compared to $0.47 in the prior year. Free cash flow for Q4 was approximately $29 million as compared to $34 million in the prior year. Turning to our full-year results on slide 12. Our bookings for fiscal 2026 were approximately $1.5 billion, up $514 million or nearly 49.8%, marking a record year of bookings. Our book-to-bill was 1.57, yielding record backlog of over $1.9 billion, which is up 38.4% from fiscal 2025. Fiscal 2026 revenues were $984 million, up approximately $72 million or 7.9% compared to the prior fiscal year. Gross margin was 28.6% for fiscal 2026, an increase of approximately 70 basis points from the 27.9% gross margin realized during fiscal 2025.

Speaker #1: Turning to our full-year results on slide 12. Our bookings for fiscal 2026 were approximately $1.5 billion, up $514 million, or nearly 49.8%, marking a record year of bookings.

Speaker #1: Our book-to-bill was 1.57, yielding a record backlog of over $1.9 billion, which is up 38.4% from fiscal 2025. Fiscal 2026 revenues were $984 million, up approximately $72 million, or 7.9%, compared to the prior fiscal year.

Speaker #1: Gross margin was 28.6% for fiscal 2026, an increase of approximately 70 basis points from the 27.9% gross margin realized during fiscal 2025. Our gross margin improvement in fiscal 2026 was primarily driven by lower manufacturing adjustments and reduced net EAC change impacts as compared to the prior year.

David Farnsworth: Our gross margin improvement in fiscal 2026 was primarily driven by lower manufacturing adjustments and reduced net EAC change impacts as compared to the prior year. Operating expenses increased approximately $7 million or 2.5% in fiscal 2026 as compared to the prior year. The increase was primarily due to additional selling, general, and administrative expenses of approximately $21 million. The increase was primarily driven by higher compensation expense, of which $10 million was related to stock compensation. This increase was partially offset by decreases in research and development expenses and amortization of intangible assets of $8 million and $4 million respectively. Our operating expenses as a percentage of revenue decreased by 150 basis points as compared to the prior year, which reflects the efficiency improvements in headcount reductions we previously discussed to align our team composition with our increased production mix, driving improved operating leverage.

Dave Farnsworth: Our gross margin improvement in fiscal 2026 was primarily driven by lower manufacturing adjustments and reduced net EAC change impacts as compared to the prior year. Operating expenses increased approximately $7 million or 2.5% in fiscal 2026 as compared to the prior year. The increase was primarily due to additional selling, general, and administrative expenses of approximately $21 million. The increase was primarily driven by higher compensation expense, of which $10 million was related to stock compensation. This increase was partially offset by decreases in research and development expenses and amortization of intangible assets of $8 million and $4 million respectively. Our operating expenses as a percentage of revenue decreased by 150 basis points as compared to the prior year, which reflects the efficiency improvements in headcount reductions we previously discussed to align our team composition with our increased production mix, driving improved operating leverage.

Speaker #1: Operating expenses increased approximately $7 million, or 2.5%, in fiscal 2026 as compared to the prior year. The increase was primarily due to additional selling, general, and administrative expenses of approximately $21 million.

Speaker #1: The increase was primarily driven by higher compensation expense, of which $10 million was related to stock compensation. This increase was partially offset by decreases in research and development expenses and amortization of intangible assets of $8 million and $4 million, respectively.

Speaker #1: Our operating expenses as a percentage of revenue decreased by 150 basis points compared to the prior year, which reflects the efficiency improvements from headcount reductions we previously discussed to align our team composition with our increased production mix, driving improved operating leverage.

Speaker #1: GAAP net loss and loss per share in fiscal 2026 were approximately $30 million and $0.50, respectively, as compared to GAAP net loss and loss per share of approximately $38 million and $0.65, respectively, in the prior year.

David Farnsworth: GAAP net loss and loss per share in fiscal 2026 were approximately $30 million and $0.50 respectively, as compared to GAAP net loss and loss per share of approximately $38 million and $0.65 respectively in the prior year. The improvement in year-over-year earnings is primarily a result of increased gross margins, partially offset by increased operating expenses. Adjusted EBITDA for fiscal 2026 was $150 million, up $31 million or 25.7% as compared to the prior year. Our adjusted EBITDA as a percentage of revenue was 15.3%, up 217 basis points as compared to the prior year. This increase illustrates our improved execution and increased operating leverage in the current period as compared to the prior year. Adjusted earnings per share for the fiscal year was $1.06 as compared to $0.64 in the prior fiscal year.

Dave Farnsworth: GAAP net loss and loss per share in fiscal 2026 were approximately $30 million and $0.50 respectively, as compared to GAAP net loss and loss per share of approximately $38 million and $0.65 respectively in the prior year. The improvement in year-over-year earnings is primarily a result of increased gross margins, partially offset by increased operating expenses. Adjusted EBITDA for fiscal 2026 was $150 million, up $31 million or 25.7% as compared to the prior year. Our adjusted EBITDA as a percentage of revenue was 15.3%, up 217 basis points as compared to the prior year. This increase illustrates our improved execution and increased operating leverage in the current period as compared to the prior year. Adjusted earnings per share for the fiscal year was $1.06 as compared to $0.64 in the prior fiscal year.

Speaker #1: The improvement in year-over-year earnings is primarily a result of increased gross margins, partially offset by increased operating expenses. Adjusted EBITDA for fiscal 2026 was $150 million, up $31 million, or 25.7%, as compared to the prior year.

Speaker #1: Our adjusted EBITDA as a percentage of revenue was 15.3%, up 217 basis points compared to the prior year. This increase illustrates our improved execution and increased operating leverage in the current period compared to the prior year.

Speaker #1: Adjusted earnings per share for the fiscal year was $1.06, as compared to $0.64 in the prior fiscal year. Free cash flow for fiscal 2026 was approximately $68 million, as compared to $119 million in the prior year.

David Farnsworth: Free cash flow for fiscal 2026 was approximately $68 million as compared to $119 million in the prior year. Slide 13 presents Mercury's balance sheet for the last five quarters. We ended the Q4 with cash and cash equivalents of $214 million. This represents a decrease of approximately $95 million from the same period in the prior year. This decrease was primarily driven by a $150 million payment against our revolving credit facility. The decrease was partially offset by free cash flow of $68 million generated this fiscal year. Billed receivables decreased sequentially by approximately $26 million, or 27.6%, while unbilled receivables increased by $16 million during the Q4. The net decrease in our total receivables balance reflects the incremental progress we continue to make by delivering on programs to our customers, which drove our cash flow performance during fiscal 2026. Inventory increased sequentially by approximately $5 million.

Dave Farnsworth: Free cash flow for fiscal 2026 was approximately $68 million as compared to $119 million in the prior year. Slide 13 presents Mercury's balance sheet for the last five quarters. We ended the Q4 with cash and cash equivalents of $214 million. This represents a decrease of approximately $95 million from the same period in the prior year. This decrease was primarily driven by a $150 million payment against our revolving credit facility. The decrease was partially offset by free cash flow of $68 million generated this fiscal year. Billed receivables decreased sequentially by approximately $26 million, or 27.6%, while unbilled receivables increased by $16 million during the Q4. The net decrease in our total receivables balance reflects the incremental progress we continue to make by delivering on programs to our customers, which drove our cash flow performance during fiscal 2026. Inventory increased sequentially by approximately $5 million.

Speaker #1: Slide 13 presents Mercury's balance sheet for the last five quarters. We ended the fourth quarter with cash and cash equivalents of $214 million. This represents a decrease of approximately $95 million from the same period in the prior year.

Speaker #1: This decrease was primarily driven by a $150 million payment against our revolving credit facility. The decrease was partially offset by free cash flow of $68 million generated this fiscal year.

Speaker #1: Bill receivables decreased sequentially by approximately $26 million, or 27.6%, while unbilled receivables increased by $16 million during the fourth quarter. The net decrease in our total receivables balance reflects the incremental progress we continue to make by delivering on programs to our customers, which drove our cash flow performance during fiscal 2026.

Speaker #1: Inventory increased sequentially by approximately $5 million. The increase was driven primarily by raw materials, as we received material at our facilities to support our increased point-in-time revenue on many of the company's production programs.

David Farnsworth: The increase was driven primarily by raw materials as we received material at our facilities to support our increased point-in-time revenue on many of the company's production programs. Prepaid expenses and other current assets decreased sequentially by approximately $22 million, primarily due to our shareholder settlement, which was approved and finalized in the Q4, partially offset by normal operating expenses. Accounts payable decreased sequentially by approximately $13 million, primarily driven by the timing of payments to our suppliers. Accrued expenses decreased approximately $36 million sequentially, primarily due to our shareholder settlement, which was approved and finalized in the Q4. The amount due to our factoring facility decreased sequentially by approximately $14 million, primarily due to the timing of payments from our customers due back to our counterparties. Accrued compensation increased approximately $18 million sequentially, primarily due to our incentive compensation plans.

Dave Farnsworth: The increase was driven primarily by raw materials as we received material at our facilities to support our increased point-in-time revenue on many of the company's production programs. Prepaid expenses and other current assets decreased sequentially by approximately $22 million, primarily due to our shareholder settlement, which was approved and finalized in the Q4, partially offset by normal operating expenses. Accounts payable decreased sequentially by approximately $13 million, primarily driven by the timing of payments to our suppliers. Accrued expenses decreased approximately $36 million sequentially, primarily due to our shareholder settlement, which was approved and finalized in the Q4. The amount due to our factoring facility decreased sequentially by approximately $14 million, primarily due to the timing of payments from our customers due back to our counterparties. Accrued compensation increased approximately $18 million sequentially, primarily due to our incentive compensation plans.

Speaker #1: Prepaid expenses and other current assets decreased sequentially by approximately $22 million, primarily due to our shareholder settlement, which was approved and finalized in the fourth quarter, partially offset by normal operating expenses.

Speaker #1: Accounts payable decreased sequentially by approximately $13 million, primarily driven by the timing of payments to our suppliers. Accrued expenses decreased approximately $36 million sequentially, primarily due to our shareholder settlement, which was approved and finalized in the fourth quarter.

Speaker #1: The amount due to our factoring facility decreased sequentially by approximately $14 million, primarily due to the timing of payments from our customers due back to our counterparty. Accrued compensation increased approximately $18 million sequentially, primarily due to our incentive compensation plans. Deferred revenues increased sequentially by approximately $23 million, primarily driven by additional milestone billing events achieved during the period.

David Farnsworth: Deferred revenues increased sequentially by approximately $23 million, primarily driven by additional milestone billing events achieved during the period. Net working capital decreased approximately $18 million year over year, or 4%. As we have previously discussed, our continued net working capital improvement year over year enabled us to make $150 million payment against our revolver during the Q4. This continues to demonstrate the progress we've made in reversing the multi-year trend of growth in net working capital, resulting in a reduction of approximately $229 million or 34.8% from the peak net working capital in Q1 fiscal 2024. We believe our strong balance sheet provides sufficient flexibility for us to pursue and capture potential market tailwinds. Turning to cash flow on slide 14. Free cash flow for the Q4 was approximately $29 million as compared to $34 million in the prior year.

Dave Farnsworth: Deferred revenues increased sequentially by approximately $23 million, primarily driven by additional milestone billing events achieved during the period. Net working capital decreased approximately $18 million year over year, or 4%. As we have previously discussed, our continued net working capital improvement year over year enabled us to make $150 million payment against our revolver during the Q4. This continues to demonstrate the progress we've made in reversing the multi-year trend of growth in net working capital, resulting in a reduction of approximately $229 million or 34.8% from the peak net working capital in Q1 fiscal 2024. We believe our strong balance sheet provides sufficient flexibility for us to pursue and capture potential market tailwinds. Turning to cash flow on slide 14. Free cash flow for the Q4 was approximately $29 million as compared to $34 million in the prior year.

Speaker #1: Net working capital decreased approximately $18 million year over year, or 4%, as we have previously discussed. Our continued net working capital improvement year over year enabled us to make a $150 million payment against our revolver during the fourth quarter.

Speaker #1: This continues to demonstrate the progress we've made in reversing the multi-year trend of growth in net working capital, resulting in a reduction of approximately $229 million, or 34.8%, from the peak net working capital in Q1 fiscal '24.

Speaker #1: We believe our strong balance sheet provides sufficient flexibility for us to pursue and capture potential market tailwinds. Turning to cash flow on slide 14.

Speaker #1: Free cash flow for the fourth quarter was approximately $29 million, as compared to $34 million in the prior year. We believe our continuous improvement in program execution, hardware deliveries, and appropriately timed payment terms will lead to continued reduction in working capital.

David Farnsworth: We believe our continuous improvement in program execution, hardware deliveries, and appropriately timed payment terms will lead to continued reduction in working capital. In closing, we are pleased with the performance in Q4 and fiscal 2026 and the higher level of predictability in the business. We believe continuing to execute on our four priority focus areas will not only drive revenue growth and profitability, but will also result in further margin expansion and cash conversion, demonstrating the long-term value creation potential of our business. With that, I will now turn the call back over to Bill.

Dave Farnsworth: We believe our continuous improvement in program execution, hardware deliveries, and appropriately timed payment terms will lead to continued reduction in working capital. In closing, we are pleased with the performance in Q4 and fiscal 2026 and the higher level of predictability in the business. We believe continuing to execute on our four priority focus areas will not only drive revenue growth and profitability, but will also result in further margin expansion and cash conversion, demonstrating the long-term value creation potential of our business. With that, I will now turn the call back over to Bill.

Speaker #1: In closing , we are pleased with the performance in the fourth quarter and fiscal 26 , and the higher level of predictability in the business , we believe continuing to execute on our four priority focus areas will not only drive revenue growth and profitability , but will also result in further margin expansion and cash conversion , demonstrating the long term value creation potential of our business .

Speaker #1: With that, I'll now turn the call back over to Bill.

Speaker #2: Thanks, Dave. With that operator, please proceed with the Q&A.

William L. Ballhaus: Thanks, Dave. With that, operator, please proceed with the Q&A.

Bill Ballhaus: Thanks, Dave. With that, operator, please proceed with the Q&A.

Speaker #3: We will now begin the question and answer session . Please limit yourself to one question and one follow up . If you would like to ask a question , please press star one to raise your hand .

Operator 2: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. The first question comes from the line of Peter Arment with Baird. Peter, your line is now open.

Operator: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. The first question comes from the line of Peter Arment with Baird. Peter, your line is now open.

Speaker #3: To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality.

Speaker #3: If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. The first question comes from the line of Peter Arment with Baird.

Speaker #3: Peter, your line is now open.

Speaker #4: Hey , thanks , Bill . Dave . Tyler . Nice results . Strong outlook . Thanks , Hey . So maybe just . Bill , if you could give a little comment on your .

Peter Arment: Hey, thanks, Bill, Dave, Tyler. Nice results. Strong outlook.

David Farnsworth: Thanks, Peter.

Bill Ballhaus: Thanks, Peter.

Peter Arment: Hey, so maybe just Bill, if you could give a little comment on basically the way 2027 sets up is you're going to continue to see an improvement in margins throughout the year and obviously much stronger in the second half of the year. Is it just the pricing in backlog? Is it mix? Is it just volume leverage? How would you kind of characterize what you're seeing in the margin expansion side?

Speaker #4: Basically, the way '27 sets up is you're going to continue to see an improvement in margins throughout the year, and obviously much stronger in the second half of the year.

Speaker #4: You know, is it just the pricing and backlog? Is it mix? Is it just volume leverage? How would you characterize what you're seeing on the margin expansion side?

Speaker #2: Yeah . And thanks , Peter , for the comments . I think it's a continuation of what we've been discussing around the progression of our backlog margin as we've continued .

William L. Ballhaus: Yeah. And thanks, Peter, for the comments. I think it's a continuation of what we've been discussing around the progression of our backlog margin as we've continued, and for the most part, and we've said this all along, that as we work our way through FY27, we're not going to be talking about this dynamic anymore. We see in the first part of the year burning down lower margin backlog and margins increasing as we move our way through the year, such that by the time we get to the end of the fiscal year, we expect to be operating in line with our target profile. So, if you put the whole picture together and look at how we exited the quarter with a really strong quarter, we set ourselves up with great visibility for 2027. We increased our target outlook.

Bill Ballhaus: Yeah. And thanks, Peter, for the comments. I think it's a continuation of what we've been discussing around the progression of our backlog margin as we've continued, and for the most part, and we've said this all along, that as we work our way through FY27, we're not going to be talking about this dynamic anymore. We see in the first part of the year burning down lower margin backlog and margins increasing as we move our way through the year, such that by the time we get to the end of the fiscal year, we expect to be operating in line with our target profile. So, if you put the whole picture together and look at how we exited the quarter with a really strong quarter, we set ourselves up with great visibility for 2027. We increased our target outlook.

Speaker #2: And for the most part , and we've said this all along , that as we work our way through FY 27 , we're not going to be talking about this dynamic anymore We see in the first part of the year burning down lower margin backlog and margins increasing as we move our way through the year such that by the time we get to the end of the fiscal year , we expect to be operating in line with our target profile .

Speaker #2: So if you kind of put the whole picture together and look at how we exited the quarter with a really strong quarter, we set ourselves up with great visibility for '27.

Speaker #2: We increased our target outlook. We've now got increased line of sight to getting to our target profile, and we talked about how we expect to get there through FY27.

William L. Ballhaus: We've got increased line of sight now to getting to our target profile, and we talked about how we expect to get there through FY27 and FY28. And I think it's just a continuation of the positive story that we've been communicating.

Bill Ballhaus: We've got increased line of sight now to getting to our target profile, and we talked about how we expect to get there through FY27 and FY28. And I think it's just a continuation of the positive story that we've been communicating.

Speaker #2: And FY28. And you know, I think it's just a continuation of the positive story that we've been communicating.

Speaker #4: Got it . And just quickly on follow up on the bookings , you had a largest single award in the quarter . I'm just curious if there's any customer program that that is now kind of 10% of backlog and any comments that you'd make on kind of how CPA bookings finished , I guess in total for the year .

Peter Arment: Got it. Just quickly, I will follow up on the bookings. You had the largest single award in the quarter. I am just curious if there is any customer program that is now kind of 10% of backlog, and any comments that you would make on how CPA bookings finished, I guess, in total for the year. Thanks.

Speaker #4: Thanks

Speaker #2: Yeah . No CPA finished very strong . We had a record year for CPA bookings . And again , that that is following the progression that we outlined .

William L. Ballhaus: Yeah, CPA finished very strong. We had a record year for CPA bookings. Again, that is following the progression that we outlined going back a couple of years where we talked about getting back to production, getting to full rate of production. As we did that and executed well, it would open up a full set of opportunities, and we are seeing that right now. To summarize the bookings performance for the year, I would not pin it on one area or one program. It was broad-based across the business. We had a record quarter. It was nearly double our prior record quarter, the quarter prior. It just really reflects the strong outlook that we have across the business for strong organic growth. So really broad-based, and we are excited to see that kind of demand signals across our entire portfolio.

Bill Ballhaus: Yeah, CPA finished very strong. We had a record year for CPA bookings. Again, that is following the progression that we outlined going back a couple of years where we talked about getting back to production, getting to full rate of production. As we did that and executed well, it would open up a full set of opportunities, and we are seeing that right now. To summarize the bookings performance for the year, I would not pin it on one area or one program. It was broad-based across the business. We had a record quarter. It was nearly double our prior record quarter, the quarter prior. It just really reflects the strong outlook that we have across the business for strong organic growth. So really broad-based, and we are excited to see that kind of demand signals across our entire portfolio.

Speaker #2: Going back a couple of years where we talked about getting back to production , getting to full rate production . And as we did that and executed well , it would open up a full set of opportunities .

Speaker #2: And we're seeing that right now. But to summarize, the bookings performance for the year—I wouldn't pin it on one area or one program.

Speaker #2: It was broad based across the business . And , you know , we had a record quarter . It was nearly double our prior record quarter .

Speaker #2: The quarter prior, and just really reflects the strong outlook that we have across the business for strong organic growth. So, really broad-based, and we're excited to see that kind of demand signals across our entire portfolio.

Speaker #4: Got it. I'll jump back into the queue. Thanks, guys. Thanks.

Peter Arment: Got it. I will jump back in the queue. Thanks, guys.

William L. Ballhaus: Thanks.

Bill Ballhaus: Thanks.

Speaker #3: The next question comes from the line of Ken Herbert with RBC Capital Markets. Your line is now open.

Operator 2: The next question comes from the line of Ken Herbert with RBC Capital Markets. Your line is now open.

Operator: The next question comes from the line of Ken Herbert with RBC Capital Markets. Your line is now open.

Speaker #5: Yeah . Hi . Good afternoon Bill . Dave and Tyler . I wanted to follow up on the fiscal 27 . Revenue outlook .

Ken Herbert: Yeah. Hi, good afternoon, Bill, Dave, and Tyler. I wanted to follow up on the fiscal 2027 revenue outlook. It stepped up over what you've certainly implied as your normalized organic growth outlook. Can you just maybe talk, Bill, about how we think about this reflecting some of the recent large framework agreements, UCA agreements we've seen put in place on the missile side, maybe the European defense? How much does it contemplate growth in some of these other areas versus just maybe better outlook on the core business?

Speaker #5: I mean , it's it's stepped up over what you've certainly sort of implied as your sort of normalized organic growth outlook . Can you just maybe talk , Bill , about how we think about this reflecting some of the recent , you know , large framework agreements , UK agreements we've seen put in place on the missile side , maybe the European defense .

Speaker #5: I mean, how much does it contemplate growth in some of these other areas versus just maybe a better outlook on the core business?

Speaker #2: Yeah , I think it's the latter . I mean , what again , we've seen increased demand , you know , record bookings and backlog .

William L. Ballhaus: Yeah, I think it's the latter. Again, we've seen increased demand, record bookings and backlog, and it's a reflection of what we're seeing broad-based across the portfolio. We've been discussing the tailwinds that we see in the market, and very few of those tailwinds are reflected in our outlook right now. If you kind of piece together what's behind our outlook, one of the biggest jumps we saw this quarter was the increase in our next 12 months backlog. It's about USD 1 billion. The visibility that we have on FY27 and going into FY28 is really high. The coverage that we have on FY27 is really high. There's a lot that we haven't folded into that outlook.

Bill Ballhaus: Yeah, I think it's the latter. Again, we've seen increased demand, record bookings and backlog, and it's a reflection of what we're seeing broad-based across the portfolio. We've been discussing the tailwinds that we see in the market, and very few of those tailwinds are reflected in our outlook right now. If you kind of piece together what's behind our outlook, one of the biggest jumps we saw this quarter was the increase in our next 12 months backlog. It's about USD 1 billion. The visibility that we have on FY27 and going into FY28 is really high. The coverage that we have on FY27 is really high. There's a lot that we haven't folded into that outlook.

Speaker #2: And it's a reflection of what we're seeing broad-based across the portfolio. And, you know, we've been discussing the tailwinds that we see in the market, and very few of those tailwinds are reflected in our outlook right now.

Speaker #2: So, if you kind of piece together what's behind our outlook, one of the biggest jumps we saw this quarter was the increase in our next 12 months backlog.

Speaker #2: It's about a billion . So the visibility that we have on FY 27 and going into FY 28 is really high . The coverage that we have on FY 27 is really high , but there's a lot that we haven't folded into that outlook .

Speaker #2: So the tailwinds that we talked about in terms of increased production quantities , etc. , that we have in our pipeline , reflecting conversations that we're having with multiple customers in areas like CPA , effectors , munitions space , missile defense .

William L. Ballhaus: The tailwinds that we talked about in terms of increased production quantities, et cetera, that we have in our pipeline reflecting conversations that we're having with multiple customers in areas like CPA, effectors, munitions, space, missile defense, none of that is reflected in our outlook. We still see significant potential in those areas. As we said before, if any of those were to materialize in terms of firm bookings, it could have a significant impact on our outlook. None of that is factored in so far. Also, we haven't factored in any improvements in our backlog conversion, and we have a lot of things that we have in work right now across the enterprise to improve our backlog conversion. You've seen over the last year, in particular, how against our outlook, we've been able to improve backlog conversion and exceed our outlook.

Bill Ballhaus: The tailwinds that we talked about in terms of increased production quantities, et cetera, that we have in our pipeline reflecting conversations that we're having with multiple customers in areas like CPA, effectors, munitions, space, missile defense, none of that is reflected in our outlook. We still see significant potential in those areas. As we said before, if any of those were to materialize in terms of firm bookings, it could have a significant impact on our outlook. None of that is factored in so far. Also, we haven't factored in any improvements in our backlog conversion, and we have a lot of things that we have in work right now across the enterprise to improve our backlog conversion. You've seen over the last year, in particular, how against our outlook, we've been able to improve backlog conversion and exceed our outlook.

Speaker #2: None of that is reflected in our outlook . And we still see significant potential in those areas . And , you know , as we said before , if any of those were to materialize in terms of firm bookings , it could have a significant impact on our outlook .

Speaker #2: But none of that is factored in so far. Also, we haven't factored in any improvements in our backlog conversion, and we have a lot of things that we have in work right now across the enterprise to improve our backlog conversion.

Speaker #2: Now, you've seen over the last year in particular how, against our outlook, we've been able to improve backlog conversion and exceed our outlook.

Speaker #2: And we have a lot in work right now that's not incorporated into our outlook, to include the Palantir agreement that we announced and a number of automation efforts that we've put in place so that we can, you know, increase our scale and scale efficiently.

William L. Ballhaus: We have a lot in work right now that's not incorporated into our outlook to include the Palantir agreement that we announced and a number of automation efforts that we put in place so that we can increase our scale and scale efficiently. I'd say that there's very little of the tailwinds that we've talked about that's incorporated into our current outlook.

Bill Ballhaus: We have a lot in work right now that's not incorporated into our outlook to include the Palantir agreement that we announced and a number of automation efforts that we put in place so that we can increase our scale and scale efficiently. I'd say that there's very little of the tailwinds that we've talked about that's incorporated into our current outlook.

Speaker #2: So, I'd say that there's very little of the tailwinds that we've talked about that's incorporated into our current outlook.

Speaker #5: Yeah . I wanted to follow up , Bill , if I could , on the Palantir agreement . Is it is it appropriate to think of that as more of a sort of a EBITDA enhancement or real opportunity ?

Ken Herbert: Yeah. I wanted to follow up, Bill, if I could, on the Palantir agreement. Is it appropriate to think of that as more of a sort of an EBITDA enhancement or real opportunity, or is it impactful potentially for the top line as well? If you can give any more detail and timing in how that sort of layers into the business and how we should think about the impact of that on the financials.

Speaker #5: Or is it potentially impactful for the top line as well? If you can give any more detail and timing that sort of layers into the business, and how we should think about the impact of that on the financials?

Speaker #2: Yeah . So so we're early into it , but what we've seen so far based on what we've seen so far , I think there's a lot of potential in terms of the that we can drive , leveraging their technology .

William L. Ballhaus: Yeah. So we are early into it, but based on what we have seen so far, I think there is a lot of potential in terms of the improvements that we can drive leveraging their technology. Now, the sole focus of this DoD-sponsored initiative is to get the benefits of our technology and capabilities into the hands of the war fighter and do it faster. That is the focus of the initiative. Naturally, with that, we would see potentially an increase in revenue, tied to the deliveries. And with that, an increase in margin, and we have talked about the positive operating leverage that we get as we increase top line and accelerate the top line. And then again, with that, improvements in cash. Those are the primary KPIs that we think have the potential to be positively impacted by the relationship with Palantir.

Bill Ballhaus: Yeah. So we are early into it, but based on what we have seen so far, I think there is a lot of potential in terms of the improvements that we can drive leveraging their technology. Now, the sole focus of this DoD-sponsored initiative is to get the benefits of our technology and capabilities into the hands of the war fighter and do it faster. That is the focus of the initiative. Naturally, with that, we would see potentially an increase in revenue, tied to the deliveries. And with that, an increase in margin, and we have talked about the positive operating leverage that we get as we increase top line and accelerate the top line. And then again, with that, improvements in cash. Those are the primary KPIs that we think have the potential to be positively impacted by the relationship with Palantir.

Speaker #2: Now, the sole focus of this DOW-sponsored initiative is to get the benefits of our technology and capabilities into the hands of the warfighter, and do it faster.

Speaker #2: That's the focus of the initiative. Naturally, with that, we would see potentially an increase in revenue, and with that tied to the deliveries.

Speaker #2: And with that, an increase in margin. And we've talked about the positive operating leverage that we get as we increase the top line.

Speaker #2: In and accelerate the top line . And then again , with that , improvements in cash , those are the primary KPIs that we think have the potential to be positively impacted by the relationship with Palantir .

Speaker #2: But we're early into it, and as we see the results, we'll be sure to provide updates as we see them.

William L. Ballhaus: But we are early into it, and as we see the results, we will be sure to provide updates as we see them.

Bill Ballhaus: But we are early into it, and as we see the results, we will be sure to provide updates as we see them.

Speaker #5: Great . Thanks , Bill

Ken Herbert: Great. Thanks, Bill.

Speaker #3: The next question comes from the line of Jonathan Ho with William Blair. Your line is now open.

Operator 2: The next question comes from the line of Jonathan Ho with William Blair. Your line is now open.

Operator: The next question comes from the line of Jonathan Ho with William Blair. Your line is now open.

Speaker #6: Hi . Good afternoon . And let me echo my congratulations as well . On a record bookings quarter . I wanted to better understand how having this level of backlog coverage and visibility affects your ability to manage production efficiency , supply chain and facilities utilization

Jonathan Ho: Hi, good afternoon, and let me echo my congratulations as well on a record bookings quarter. I wanted to better understand how having this level of backlog coverage and visibility affects your ability to manage production efficiency, supply chain, and facilities utilization.

Speaker #2: Yeah , it it's it's a tremendous benefit . And , you know , I think the , the impact of our bookings during the year .

William L. Ballhaus: Well, it is a tremendous benefit. I think the impact of our bookings performance during the year, there is a couple elements to it. Obviously, based on the increase in our next 12-month backlog, and the visibility that comes with it gives us really good confidence in terms of our outlook and ability to execute against the outlook. If you look at the increase in the backlog year over year, there is an even bigger increase in our backlog that is outside the next 12 months. It gives us a great ability to look forward, to plan, to work with our supply chain, to try and optimize across the full life cycle. There is just a number of degrees of freedom that it gives us to try and optimize and drive improvements in terms of our performance.

Bill Ballhaus: Well, it is a tremendous benefit. I think the impact of our bookings performance during the year, there is a couple elements to it. Obviously, based on the increase in our next 12-month backlog, and the visibility that comes with it gives us really good confidence in terms of our outlook and ability to execute against the outlook. If you look at the increase in the backlog year over year, there is an even bigger increase in our backlog that is outside the next 12 months. It gives us a great ability to look forward, to plan, to work with our supply chain, to try and optimize across the full life cycle. There is just a number of degrees of freedom that it gives us to try and optimize and drive improvements in terms of our performance.

Speaker #2: There's a couple elements to it . So obviously , based on the increase in our in our next 12 month backlog and the visibility that comes with it , it gives us really good confidence in terms of our outlook and ability to execute against the outlook .

Speaker #2: But if you look at the increase in the backlog year over year, there's an even bigger increase in our backlog that's outside the next 12 months.

Speaker #2: And so it gives us a great ability to look forward, to plan, to work with our supply chain, to try and optimize across the full life cycle.

Speaker #2: There are just a number of degrees of freedom that it gives us to try and optimize and drive improvements in terms of our performance.

Speaker #2: So, we feel really good about the strong foundation that we have, the ability to increase our outlook for organic growth, and the enhanced visibility that we have in the business over the next few years.

William L. Ballhaus: We feel really good about the strong foundation that we have, the ability to increase our outlook for organic growth, and the enhanced visibility that we have in the business over the next few years.

Bill Ballhaus: We feel really good about the strong foundation that we have, the ability to increase our outlook for organic growth, and the enhanced visibility that we have in the business over the next few years.

Speaker #6: Got it , got it . And just in terms of sort of the capital priorities , I know you paid down some of the revolver .

Jonathan Ho: Got it. Just in terms of the capital priorities, I know you paid down some of the revolver. You've done a better job of freeing up working capital. What are the higher free cash flow priorities for you this quarter as well, or this upcoming year as well? Thank you.

Speaker #6: You've done a better job of freeing up working capital. What are sort of the higher free cash flow priorities for you this quarter as well?

Speaker #6: Or this upcoming year as well? Thank you.

Speaker #2: Yeah. I mean, our focus, as it has been, is to continue to drive down net debt and continue to drive down our leverage.

William L. Ballhaus: Yeah. Our focus as it has been, is to continue to drive down net debt, continue to drive down our leverage. Jonathan, as you've heard me say many times, we are 99.99% focused on the organic value creation opportunity in front of us. To that end, because of the strong signals that we see, we will make some targeted investments in inventory, in facilities, in CapEx, that will help us scale, increase, and accelerate organic growth. Our primary focus right now in terms of creating value, is to capture the tailwinds that we see in the market.

Bill Ballhaus: Yeah. Our focus as it has been, is to continue to drive down net debt, continue to drive down our leverage. Jonathan, as you've heard me say many times, we are 99.99% focused on the organic value creation opportunity in front of us. To that end, because of the strong signals that we see, we will make some targeted investments in inventory, in facilities, in CapEx, that will help us scale, increase, and accelerate organic growth. Our primary focus right now in terms of creating value, is to capture the tailwinds that we see in the market.

Speaker #2: And as you drive and as you've heard me say , many times , we are 99.99% focused on the organic value creation opportunity in front of us And to that end , because of the strong signals that that we see , we will make some targeted investments in inventory in facilities , in CapEx that will that will help us scale Increase in accelerate organic growth But our primary focus right now in terms of creating value is to capture the tailwinds that we see in the market

Speaker #7: Thank you .

Jonathan Ho: Thank you.

Speaker #3: The next question comes from the line of Sheila Kahyaoglu with Jefferies. Your line is now open.

Operator 2: The next question comes from the line of Sheila Kahyaoglu with Jefferies. Your line is now open.

Operator: The next question comes from the line of Sheila Kahyaoglu with Jefferies. Your line is now open.

Speaker #8: Hi , guys . This is Kyle on for Sheila . Thanks for taking my question and congrats on a great quarter . It's great to see the bookings come through .

[Analyst] (Jefferies): Hi, guys. This is Kyle on for Sheila. Thanks for taking my question, and congrats on a great quarter. It is great to see the bookings come through.

William L. Ballhaus: Thank you.

Bill Ballhaus: Thank you.

Speaker #8: I was just looking through the 10-K and you know , it's really interesting that kind of five year market outlook . You guys are offering up there .

[Analyst] (Jefferies): I was just looking through the 10-K, and it is really interesting the kind of five-year market outlook you guys are offering up there. I am just curious, related to the growth outlook for 2027 and 2028, whether there is anything kind of limiting growth, whether that is budget certainty. You made some comments around strategic inventories, or anything else. Just trying to gauge your level of whether that is conservatism or if there is something in the near term that is kind of limiting what growth could look like over a multi-year period.

Speaker #8: And I'm just curious , you know related to the growth outlook for 27 and 28 , whether there's anything kind of limiting growth , whether that's , you know , budget certainty , you know , you made some comments around strategic inventories or anything else or , or , you know , just trying to gauge your level of whether that's conservatism there's something in the near term that's kind of limiting what growth could look like over a multiyear period

Speaker #2: Yeah . You know , we're , I think we think about it less in terms of constraints and more around the natural progression in our as we've moved from a high concentration of development programs to low rate production , medium rate production , and higher rate production .

William L. Ballhaus: Yeah. I think we think about it less in terms of constraint and more around the natural progression in our portfolio as we have moved from a high concentration of development programs to low-rate production, medium-rate production, and higher-rate production. With that, seeing the increase in the organic growth of the business that you would expect to see from low single digits to mid-single digits, approaching double digits, and then into double digits. At the same time as we have been going through that progression, we are also looking at improving our backlog conversion so that we can overdrive our performance outlook. On top of that, we have got a number of tailwinds that we are focused on the market that also are not included in that outlook.

Bill Ballhaus: Yeah. I think we think about it less in terms of constraint and more around the natural progression in our portfolio as we have moved from a high concentration of development programs to low-rate production, medium-rate production, and higher-rate production. With that, seeing the increase in the organic growth of the business that you would expect to see from low single digits to mid-single digits, approaching double digits, and then into double digits. At the same time as we have been going through that progression, we are also looking at improving our backlog conversion so that we can overdrive our performance outlook. On top of that, we have got a number of tailwinds that we are focused on the market that also are not included in that outlook.

Speaker #2: And with that , seeing the increase in the organic growth of the business that you would expect to see from low single digits to mid-single digits approaching double digits , and then into double digits , and at the same time as we've been going through that progression , we're also looking at improving our backlog conversion so that we can overdrive our performance outlook .

Speaker #2: And then, on top of that, we've got a number of tailwinds that we're focused on in the market that also aren't included in that outlook.

Speaker #2: So, you know, we believe that our outlook is consistent with the progression that we've seen in the portfolio. And I think there are a number of opportunities for us to outperform.

William L. Ballhaus: So, we believe that our outlook is consistent with the progression that we've seen in the portfolio. I think there are a number of opportunities for us to outperform and overdrive that outlook.

Bill Ballhaus: So, we believe that our outlook is consistent with the progression that we've seen in the portfolio. I think there are a number of opportunities for us to outperform and overdrive that outlook.

Speaker #2: And overdrive that outlook

Speaker #8: Okay, that's helpful. And then maybe just a follow-up on what you're embedding in the free cash flow guide for next year.

[Analyst] (Jefferies): Okay. That's helpful. Then maybe just to follow up on what you're embedding in the free cash flow guide for next year in terms of maybe both working capital and CapEx, given there's a tick up in Q4. It was noted in the release about spending some incremental money there. Maybe as a follow-on to that, if you could just comment on the health of the supply chain, which resulted in a really strong overtime revenue this quarter. Thanks, guys.

Speaker #8: In terms of maybe both working capital and CapEx , given there's , you know , a tick up in the fourth quarter . And it was it was noted in the release about spending some incremental money there .

Speaker #8: And maybe as a follow on to that , if you could just comment on the health of the supply chain , which resulted in a really strong overtime revenue this quarter .

Speaker #8: Thanks , guys .

Speaker #2: I'll let I'll let Dave speak to the CapEx . I will say , and I appreciate you noting the step up in our overtime revenue .

William L. Ballhaus: I'll let Dave speak to the CapEx. I will say, and I appreciate you noting the step-up in our overtime revenue. We've been discussing for several quarters now how we've been working to align our supply chain with margin to our deliveries, so that we have more and more degrees of freedom to be able to optimize across our factories and increase our backlog conversion. We've really seen strong progress on that over the last couple of quarters, and expect that to continue. Dave, do you want to comment on the CapEx piece?

Bill Ballhaus: I'll let Dave speak to the CapEx. I will say, and I appreciate you noting the step-up in our overtime revenue. We've been discussing for several quarters now how we've been working to align our supply chain with margin to our deliveries, so that we have more and more degrees of freedom to be able to optimize across our factories and increase our backlog conversion. We've really seen strong progress on that over the last couple of quarters, and expect that to continue. Dave, do you want to comment on the CapEx piece?

Speaker #2: We've been discussing for several quarters now how we've been working to align our supply chain with margin to our deliveries, so that we have more and more degrees of freedom to be able to optimize across our factories and increase our backlog conversion.

Speaker #2: And we've really seen strong progress on that over the last couple of quarters, and expect that to continue. Dave, do you want to comment on the CapEx piece?

Speaker #9: Yeah , I you know , I think the the expectation ought to be that our CapEx is going to be flat year over year .

David Farnsworth: Yeah. I think the expectation ought to be that our CapEx is going to be flat year over year. The areas that we're focused on are the areas that Bill's brought up in his discussion earlier, and has brought up in prior quarters. It is really optimizing our operations from both a capacity and a footprint standpoint, and at the same time, to increase our level of automation as we go forward. One of the things that we've talked about for the last two quarters, and you've seen, and we feel good about where the balance sheet is and feel like we've got the capacity to lean a little into our supply base, and be able to bring in material earlier so that we can reduce what's the normal lead time for some of that activity.

Dave Farnsworth: Yeah. I think the expectation ought to be that our CapEx is going to be flat year over year. The areas that we're focused on are the areas that Bill's brought up in his discussion earlier, and has brought up in prior quarters. It is really optimizing our operations from both a capacity and a footprint standpoint, and at the same time, to increase our level of automation as we go forward. One of the things that we've talked about for the last two quarters, and you've seen, and we feel good about where the balance sheet is and feel like we've got the capacity to lean a little into our supply base, and be able to bring in material earlier so that we can reduce what's the normal lead time for some of that activity.

Speaker #9: The areas that we're focused on are the areas that Bill brought up . You know , in in his discussion earlier and has brought up in prior quarters , you know , is really optimizing our our operations from both a capacity and a footprint standpoint .

Speaker #9: And at the same time , to increase our level of automation as we go forward . And , and one of the things that we've talked about for the last two quarters and , and you , you've seen and , you know , we feel good about where the balance sheet is and feel like we've got the capacity to lean a little into our supply base and , and be able to bring in material earlier so that we can reduce what's the normal lead time for , for some of that activity .

Speaker #9: And , you know , with the visibility we have , we feel like , you know , with the backlog that exists , that's a really good use of our capital

David Farnsworth: With the visibility we have, we feel like, with the backlog that exists, that's a really good use of our capital.

Dave Farnsworth: With the visibility we have, we feel like, with the backlog that exists, that's a really good use of our capital.

Speaker #3: The next question comes from the line of Seth Seifman with J.P. Morgan. Your line is now open.

Operator 2: The next question comes from the line of Seth Seifman with JPMorgan. Your line is now open.

Operator: The next question comes from the line of Seth Seifman with JPMorgan. Your line is now open.

Speaker #10: Hey , good evening guys . This is Rocco on for Seth . Hey , Rob Domestic sales . Domestic sales grew nicely in the year , up 13% .

[Analyst] (JPMorgan): Hey, good evening, guys. This is Rocco on for Seth.

David Farnsworth: Hey, Rocco.

Dave Farnsworth: Hey, Rocco.

[Analyst] (JPMorgan): Domestic sales grew nicely in the year, up 13%. However, the international sales were down around 15%. Are there any kind of headwinds to call out in the international market, or did domestic demand just take up more capacity this year?

Speaker #10: However, the international sales were down around 15%. Are there any kinds of headwinds to call out in the international market, or did domestic demand just take up more capacity this year?

Speaker #2: Yeah, thanks very much for the question. First of all, I think it's a really powerful signal that 86% of our business is domestic.

William L. Ballhaus: Yeah. Thanks very much for the question. First of all, I think it is a really powerful signal that 86% of our business, our domestic business, is growing at 13%. I think it reflects underneath the hood, the kind of growth tailwinds that we are seeing in the business, and our ability to execute at that level. As we have discussed in prior calls, over the last year, we have outsourced our manufacturing in our international business to a contract manufacturer, and we have seen a slowdown in deliveries as we have ramped up that contract manufacturer. These are issues that are natural, common in moving to a relationship like that, and we expect to have them worked out over the next couple of quarters. I think it is just a temporary slowdown in deliveries. The business is strong. The demand tailwinds are really strong, and our backlog is really strong internationally.

Bill Ballhaus: Yeah. Thanks very much for the question. First of all, I think it is a really powerful signal that 86% of our business, our domestic business, is growing at 13%. I think it reflects underneath the hood, the kind of growth tailwinds that we are seeing in the business, and our ability to execute at that level. As we have discussed in prior calls, over the last year, we have outsourced our manufacturing in our international business to a contract manufacturer, and we have seen a slowdown in deliveries as we have ramped up that contract manufacturer. These are issues that are natural, common in moving to a relationship like that, and we expect to have them worked out over the next couple of quarters. I think it is just a temporary slowdown in deliveries. The business is strong. The demand tailwinds are really strong, and our backlog is really strong internationally.

Speaker #2: Business is growing at 13%. And I think it just reflects, underneath the hood, the kind of growth tailwinds that we're seeing in the business.

Speaker #2: And our ability to execute at that level . As we've discussed in prior calls over the last year , we have outsourced our manufacturing in our international business to a contract manufacturer , and we've seen a slowdown in in deliveries as we've ramped up that contract manufacturer .

Speaker #2: These are issues that are, you know, natural and common in moving to a relationship like that. And we expect to have them worked out over the next couple of quarters.

Speaker #2: So, I think it's just a temporary slowdown in deliveries. The business is strong. The demand tailwinds are really strong. And our backlog is really strong internationally.

Speaker #2: So, I see this as just a temporary slowdown in our deliveries that we expect to unwind over the next couple of quarters.

William L. Ballhaus: I see this as just a temporary slowdown in our deliveries that we expect to unwind over the next couple of quarters.

Bill Ballhaus: I see this as just a temporary slowdown in our deliveries that we expect to unwind over the next couple of quarters.

Speaker #10: All right. That makes sense. And then, can you guys provide any color on the drivers of the strong growth in EW this year?

[Analyst] (JPMorgan): Right. That makes sense. Can you guys provide any color on the drivers of the strong growth in EW this year? Should we think about the focus kind of more broad-based on COAS or any other systems as being kind of primary growth drivers?

Speaker #10: Should we think about the focus as kind of more broad, based on COAs or any other systems being kind of primary growth drivers?

Speaker #2: I mean , as we said earlier , we're seeing growth in increased demand . It's really broad based . I mean , it is literally across our portfolio .

William L. Ballhaus: As we said earlier, we're seeing growth and increased demand. It's really broad based. It is literally across our portfolio, we're seeing increased demand. I wouldn't limit my comments to any one particular area. We're seeing strong demand signals across the board.

Bill Ballhaus: As we said earlier, we're seeing growth and increased demand. It's really broad based. It is literally across our portfolio, we're seeing increased demand. I wouldn't limit my comments to any one particular area. We're seeing strong demand signals across the board.

Speaker #2: We're seeing increased demand, so I wouldn't limit my comments to any one particular area. We're seeing strong demand signals across the board.

Speaker #10: Great . Thanks guys

[Analyst] (JPMorgan): Great. Thanks, guys.

Speaker #3: The next question comes from the line of Austin Moeller with Canaccord Genuity. Your line is now open.

Operator 2: The next question comes from the line of Austin Moeller with Canaccord Genuity. Your line is now open.

Operator: The next question comes from the line of Austin Moeller with Canaccord Genuity. Your line is now open.

Speaker #11: Hi . Good afternoon . Great quarter So I was wondering if there was a way that you could give us your view on the revenue opportunity for CPA based ruggedized servers in terms of either the growth rate or your target share , the total revenue mix and are those ruggedized servers either higher or lower margin than some of the other weapon systems or programs

Austin Moeller: Hi, good afternoon. Great quarter. I was wondering if there was a way that you could give us your view on the revenue opportunity for CPA-based ruggedized servers in terms of either the growth rate or your target share of the total revenue mix. Are those ruggedized servers either higher or lower margin than some of the other weapon systems or programs?

Speaker #9: Yeah , I don't think we've dimensioned , you know , specifically what we see there . What I would say I would reiterate Bill's comment , you know , we've seen over the course of the last year very strong demand .

David Farnsworth: Yeah. I don't think we dimension specifically what we see there. What I would say, I would reiterate Bill's comment. We've seen over the course of the last year, very strong demand. We've talked about some of the larger awards and activities we have there. We talked about that earlier in the quarter with the CTG activity that we announced. It is growing well and ahead of what we expected at this point, when we slowed down for a while to get this right, and then really started ramping up. You can look at the kind of the spread of activity. We've talked in the past that a significant piece of that would be in the radar line item. We've talked about that, so you can look at the radar line item, the growth there, and think that a lot of that is in accordance with that.

Dave Farnsworth: Yeah. I don't think we dimension specifically what we see there. What I would say, I would reiterate Bill's comment. We've seen over the course of the last year, very strong demand. We've talked about some of the larger awards and activities we have there. We talked about that earlier in the quarter with the CTG activity that we announced. It is growing well and ahead of what we expected at this point, when we slowed down for a while to get this right, and then really started ramping up. You can look at the kind of the spread of activity. We've talked in the past that a significant piece of that would be in the radar line item. We've talked about that, so you can look at the radar line item, the growth there, and think that a lot of that is in accordance with that.

Speaker #1: We've talked about some of the larger awards and activities we have there. You know, we talked about that earlier in the quarter with the CTG activity that we announced.

Speaker #1: You know , it it is growing well and ahead of what we expected at this point . You know , when we when we slowed down for a while to get this right and then really started ramping up and , you know , you can , you can look at the , you know , kind of the spread of activity .

Speaker #1: We've talked in the past that a significant piece of that would be in the radar line item . We've talked about that . So you can look at the radar line item , the growth there , and think that a lot of that is in accordance with that .

Speaker #1: But we don't talk about the individual profile of any of the products.

David Farnsworth: But we don't talk about the individual margin profile of any of the products.

Dave Farnsworth: But we don't talk about the individual margin profile of any of the products.

Speaker #2: I will say, though, that it's pretty exciting for us to see that as we're increasing our deliveries, we're also increasing the pipeline.

William L. Ballhaus: I will say, though, that it's pretty exciting for us to see that as we're increasing our deliveries, we're also increasing the pipeline.

Bill Ballhaus: I will say, though, that it's pretty exciting for us to see that as we're increasing our deliveries, we're also increasing the pipeline.

Speaker #2: So we're seeing a number of new program opportunities, some of which could be fairly near-term. That is very exciting in the CPA area.

David Farnsworth: Yeah.

Dave Farnsworth: Yeah.

William L. Ballhaus: We're seeing a number of new program opportunities, some of which could be fairly near term, that is very exciting in the CPA area. Again, this is just one area in which we see potential tailwinds that would enable performance that's above the outlook that we've provided. The one other comment I'll make on CPA, we've talked about, over time, our technology focus on increasing performance and driving those smaller form factors. We're now starting to see some customer interest in the smaller form factors. We're early into it, but it's pretty exciting to see that start to materialize, because I think that opens up a whole new additional TAM in terms of smaller form factors that could fit on different platforms, that could be another accelerator for our CPA area. That's pretty exciting to see.

Bill Ballhaus: We're seeing a number of new program opportunities, some of which could be fairly near term, that is very exciting in the CPA area. Again, this is just one area in which we see potential tailwinds that would enable performance that's above the outlook that we've provided. The one other comment I'll make on CPA, we've talked about, over time, our technology focus on increasing performance and driving those smaller form factors. We're now starting to see some customer interest in the smaller form factors. We're early into it, but it's pretty exciting to see that start to materialize, because I think that opens up a whole new additional TAM in terms of smaller form factors that could fit on different platforms, that could be another accelerator for our CPA area. That's pretty exciting to see.

Speaker #2: And again, this is just one area in which we see potential tailwinds that would enable performance that's above the outlook that we provided. One other comment I'll make on CPA.

Speaker #2: We've talked about over time , our technology focus on increasing performance and driving the smaller form factors . We're now starting to see some customer interest in the smaller form factors , and we're early into it , but it's pretty exciting to see that start to materialize , because I think that opens up a whole new additional Tam in terms of smaller form factors that could fit on different platforms .

Speaker #2: That could be another accelerator for our CPA area, and that's pretty exciting to see.

Speaker #11: And just on those smaller form factors , if you can put those onto a mobile platform , like a like an armored ground vehicle or an unmanned surface vessel , or do you see an opportunity there to take share from some of the other network computing manufacturers , like a DRS ?

Austin Moeller: And just on those smaller form factors, if you can put those onto a mobile platform like an armored ground vehicle or an unmanned surface vessel, do you see an opportunity there to take share from some of the other network computing manufacturers like a Leonardo DRS?

Speaker #2: I think it's an opportunity for us to take share in areas where the security requirements are necessary. And given that we've been the only provider of the CPA technology and the security apparatus that's included in it, I think that gives us a lot of optimism for being able to penetrate new markets in smaller form factors and get.

William L. Ballhaus: I think it is an opportunity for us to take share in areas where the security requirements are necessary. Given that we have been the only provider of the CPA technology and the security apparatus that is included in it, I think that gives us a lot of optimism for being able to penetrate new markets in smaller form factors and get on additional platforms.

Bill Ballhaus: I think it is an opportunity for us to take share in areas where the security requirements are necessary. Given that we have been the only provider of the CPA technology and the security apparatus that is included in it, I think that gives us a lot of optimism for being able to penetrate new markets in smaller form factors and get on additional platforms.

Speaker #2: On additional platforms .

Speaker #11: Thanks for the deep dive there. I appreciate it.

Austin Moeller: Thanks for the deep dive there. I appreciate it.

Speaker #2: Yeah , thanks , Austin

William L. Ballhaus: Yeah. Thanks, Austin.

Bill Ballhaus: Yeah. Thanks, Austin.

Speaker #3: The next question comes from the line of Clark Jefferies with Piper Sandler. Your line is now open.

Operator 2: The next question comes from the line of Clarke Jeffries with Piper Sandler. Your line is now open.

Operator: The next question comes from the line of Clarke Jeffries with Piper Sandler. Your line is now open.

Speaker #12: Hello . Thank you for taking the question . I was wondering if you could give a little bit more detail on the agreement related to securing memory , how how significant was that to the bookings ?

Clarke Jeffries: Hello. Thank you for taking the question. I was wondering if you could give a little bit more detail on the agreement related to securing memory. How significant was that to the bookings, and does that agreement fall within a typical margin of the rest of the backlog?

Speaker #12: And does that agreement fall within a typical margin for the rest of the backlog?

Speaker #2: Yeah, I don't think we've dimensioned any of the bookings. I would say that it was one of our more significant bookings for the year.

William L. Ballhaus: Yeah. I don't think we've dimensioned any of the bookings. I would say that it was one of our more significant bookings for the year, a quarter, a multi-year booking. I would say that that part of our business tends to run at the higher end of our margin profile, but I think I would leave it at that.

Bill Ballhaus: Yeah. I don't think we've dimensioned any of the bookings. I would say that it was one of our more significant bookings for the year, a quarter, a multi-year booking. I would say that that part of our business tends to run at the higher end of our margin profile, but I think I would leave it at that.

Speaker #2: A quarter, a multiyear booking. And I would say that that part of our business tends to run at the higher end of our margin profile.

Speaker #2: But I think I will leave it at that.

Speaker #1: Yeah . And the I would add , Bill , is that this is a case , obviously , because it's it's in our bookings where the customer is leaning in with us .

David Farnsworth: Yeah. The only thing I would add, Bill, is that this is a case, obviously, because it's in our bookings, where the customer is leaning in with us.

Dave Farnsworth: Yeah. The only thing I would add, Bill, is that this is a case, obviously, because it's in our bookings, where the customer is leaning in with us.

Speaker #1: Where the customer is , is , you know , recognition of , hey , we want to go out and get this early .

David Farnsworth: Yeah.

Bill Ballhaus: Yeah.

David Farnsworth: Where the customer is recognition of, "Hey, we want to go out and get this early. We want to lock this up. Hey, we want to work with you, Mercury, to go get this done.

Dave Farnsworth: Where the customer is recognition of, "Hey, we want to go out and get this early. We want to lock this up. Hey, we want to work with you, Mercury, to go get this done.

Speaker #1: We want to lock this up . Hey , we want to work with you , Mercury , to go get , get this done .

Speaker #1: So I think that's, you know, a critical kind of a view—that it wasn't us doing it on our own. That was working with the customer set to get that done.

David Farnsworth: Yeah.

Bill Ballhaus: Yeah.

David Farnsworth: I think that's a critical kind of view that wasn't us doing it on our own. That was working with the customer set to get that done.

Dave Farnsworth: I think that's a critical kind of view that wasn't us doing it on our own. That was working with the customer set to get that done.

Speaker #12: Understood . And then just , you know , I know that you've made the comment around the broad based health of the bookings , but wondering if there's any segments or in markets that are outsized contributors to the duration of these agreements , extending and the sort of the confidence in the multi-year partnership increasing is you know , space or is it any other sector that that you think is some of the duration benefit here as well

Clarke Jeffries: Understood. Just, I know that you've made a comment around the broad-based health of the bookings, but wondering if there's any segments or end markets that are outsized contributors to the duration of these agreements extending and the sort of the confidence in the multi-year partnership increasing. Is that space or is it any other sector that you think is some of the duration benefit here as well?

Speaker #2: Yeah , I'd say we've seen a small number of orders that are multiyear related across the business , but in terms of the , the munitions agreements and the multiyear strategic frameworks , those are still potential tailwinds where we're in numerous conversations with customers where their agreements are in place is starting to be put in place .

William L. Ballhaus: Yeah. I'd say we've seen a small number of orders that are multi-year related across the business. But in terms of the munitions agreements and the multi-year strategic frameworks, those are still potential tailwinds, where we're in numerous conversations with customers where their agreements are in place, funding is starting to be put in place, and it's in our pipeline, but yet to materialize in bookings. We've characterized those kinds of situations as potential tailwinds that if they were to land, they would have potentially a meaningful impact on our outlook. But none of those so far have materialized.

Bill Ballhaus: Yeah. I'd say we've seen a small number of orders that are multi-year related across the business. But in terms of the munitions agreements and the multi-year strategic frameworks, those are still potential tailwinds, where we're in numerous conversations with customers where their agreements are in place, funding is starting to be put in place, and it's in our pipeline, but yet to materialize in bookings. We've characterized those kinds of situations as potential tailwinds that if they were to land, they would have potentially a meaningful impact on our outlook. But none of those so far have materialized.

Speaker #2: And it's in our pipeline, but yet to materialize in bookings. And we've characterized those kinds of situations as potential tailwinds that, if they were to land, they would have a meaningful impact on our outlook.

Speaker #2: But none of those so far have materialized.

Speaker #1: Yeah . And I think the way to think about it is , you know , for those kinds of activities , as we've been , we've always said that , hey , likelihood would that we that would be later in the calendar year .

David Farnsworth: Yeah. I think the way to think about it is for those kinds of activities as we've been, we've always said that, "Hey, likelihood that would be later in the calendar year." So, as we get to what's our, this first quarter and the second quarter is when we expect to get more clarity around that. And to Bill's point, right now, we consider tailwinds. Haven't included any of that in our outlook.

Dave Farnsworth: Yeah. I think the way to think about it is for those kinds of activities as we've been, we've always said that, "Hey, likelihood that would be later in the calendar year." So, as we get to what's our, this first quarter and the second quarter is when we expect to get more clarity around that. And to Bill's point, right now, we consider tailwinds. Haven't included any of that in our outlook.

Speaker #1: So , you know , as we get to what's our , you know , this first quarter and the second quarter is when we expect to get more clarity around that .

Speaker #1: And to Bill's point right now , we we consider tailwinds haven't included any of that in our outlook . Because there's still a little bit of an uncertainty as to the exact timing on some of those things .

William L. Ballhaus: Right

Bill Ballhaus: Right

David Farnsworth: because there's still a little bit of an uncertainty as to the exact timing on some of those things. And then on top of that, is it going to be a year at a time? Is it going to be a multi-year agreement? And we've proposed all of those things at our customer's request, and we're just working with them to get to what the conclusions will be on those things.

Dave Farnsworth: because there's still a little bit of an uncertainty as to the exact timing on some of those things. And then on top of that, is it going to be a year at a time? Is it going to be a multi-year agreement? And we've proposed all of those things at our customer's request, and we're just working with them to get to what the conclusions will be on those things.

Speaker #1: And then, on top of that, is it going to be a year at a time? Is it going to be a multi-year agreement?

Speaker #1: And we proposed all of those things at our customer's request, and we're just working with them to get to what the conclusions will be on those things.

Speaker #12: Really appreciate the color. Thank you.

Clarke Jeffries: Really appreciate the color. Thank you.

William L. Ballhaus: Yep.

Bill Ballhaus: Yep.

Speaker #3: Mr. Ballhaus, it appears there are no further questions. Therefore, I would like to turn the call back over to you for any closing remarks.

Operator 2: Mr. Ballhaus, it appears there are no further questions. Therefore, I would like to turn the call back over to you for any closing remarks.

Operator: Mr. Ballhaus, it appears there are no further questions. Therefore, I would like to turn the call back over to you for any closing remarks.

Speaker #2: Okay . Thanks . Thanks , Percy . I think with that , we'll go ahead and end the call . I appreciate everybody's time .

William L. Ballhaus: Okay. Thanks, Percy. I think with that, we will go ahead and end the call. I appreciate everybody's time this evening and look forward to getting together next quarter.

Bill Ballhaus: Okay. Thanks, Percy. I think with that, we will go ahead and end the call. I appreciate everybody's time this evening and look forward to getting together next quarter.

Speaker #2: this evening, and look forward to getting together next quarter.

Operator 2: This concludes today's call. Thank you for attending. You may now disconnect.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

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Q4 2026 Mercury Systems Inc Earnings Call

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Mercury Systems

MRCY

Earnings

Q4 2026 Mercury Systems Inc Earnings Call

Tuesday, August 18th, 2026 at 9:00 PM

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Mercury Systems

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