Mercury Shares Rise as Q2 Earnings & Revenues Beat Estimates

Mercury Systems MRCY reported second-quarter fiscal 2025 results, wherein the top and bottom lines beat the Zacks Consensus Estimate.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.The aerospace and defense tech firm reported non-GAAP earnings of 7 cents per share, surpassing the Zacks Consensus Estimate of a loss of 8 cents. The bottom line skyrocketed 116.7% year over year.Mercury Systems’ non-GAAP revenues increased 13% year over year to $223.1 million. The top line beat the consensus mark by 23.60%.Mercury Systems Inc Price, Consensus and EPS Surprise  Mercury Systems Inc price-consensus-eps-surprise-chart | Mercury Systems Inc QuoteMRCY shares rose 18.75% in the after-hours trading, following solid progress in each of the priority focus areas, highlighted by solid execution across a broad portfolio of production and development programs, and a record backlog that helped drive positive operating leverage.MRCY's Operating DetailsMercury Systems’ total bookings were $242.4 million, yielding a book-to-bill ratio of 1.09 for the quarter.MRCY’s total backlog as of Dec. 27, 2024, was $1.4 billion, reflecting an increase of $80 million from the year-ago quarter. As of Dec. 28, 2024, a total backlog of $789.9 million represented orders expected to be recognized as revenues within the next 12 months.Mercury Systems’ gross profit was $60.8 million, up 93% year over year. Its gross margin expanded from 16% in the prior-year period to 27.3%.Research and development (R&D) expenses decreased 25% year over year to $21.4 million. As a percentage of revenues, R&D expenses decreased 480 bps year over year to 9.6%.Selling, general and administrative (SG&A) expenses decreased 8.9% year over year to $40.5 million. As a percentage of revenues, SG&A expenses decreased 440 bps year over year to 18.2%.Total operating expenses decreased 14.3% to $73.2 million. As a percentage of revenues, operating expenses decreased by 1040 basis points to 32.8%.The company reported an adjusted EBITDA of $22 million, up 203.4% year over year. The margin expanded 2070 basis points to 9.9%.MRCY’s Balance Sheet & Cash FlowAs of Dec. 27, 2024, the company’s cash and cash equivalents were $242.6 million compared with $158.1 million as of Sept. 27, 2024. The long-term debt as of Dec. 27, 2024, was $591.5 million.Cash flows provided by operating activities in the second quarter of fiscal 2025 were $85.5 million compared with $45.5 million in the year-ago quarter.The free cash flow was $81.9 million for the second quarter of fiscal 2025 compared with $37.5 million in the year-ago period.Zacks Rank & Stocks to ConsiderCurrently, Mercury Systems carries a Zacks Rank #3 (Hold).Some better-ranked stocks from the broader Computer and Technology sector are InterDigital IDCC, Lumentum LITE and Quantum QCOM, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Shares of InterDigital have surged 79.4% over the past year. IDCC is set to report fourth-quarter 2024 results on Feb. 6.Shares of Lumentum have gained 58.9% over the past year. LITE is slated to report second-quarter fiscal 2025 results on Feb. 6.Shares of Quantum have returned 20.7% over the past year. QCOM is set to report third-quarter fiscal 2025 results on Feb. 12.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report QUALCOMM Incorporated (QCOM): Free Stock Analysis Report InterDigital, Inc. (IDCC): Free Stock Analysis Report Mercury Systems Inc (MRCY): Free Stock Analysis Report Lumentum Holdings Inc. (LITE): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks