Tuesday witnessed a sharp rise in Mercury Systems, Inc. (NASDAQ: MRCY) shares after the company’s first-quarter 2025 earnings were released. Following a little 2.83% rise at $34.19 at the end of the regular trading session, MRCY saw a 14.07% increase in after-hours trading to $39.00, indicating increased investor confidence.
Financial Highlights of Q1 2025 and Growth Prospect
Mercury Systems’ image as a dependable growing firm was strengthened when it released profits that mostly matched market forecasts. Several important measures showed significant year-over-year growth with revenue climbed 13% to $204.4 million, and bookings hit $247.7 million, up 29% with a book-to-bill ratio of 1.21.
At $21.5 million and an EBITDA margin of 10.5%, adjusted EBITDA also increased, indicating notable gains over the prior year. In order to attract long-term investors, Mercury Systems expects to maintain organic growth while also achieving strong free cash flow and growing profit margins.
Growing Backlog and Major U.S. Navy Contract
As of September 27, 2024, Mercury Systems reported a total backlog of $1.34 billion, an increase of $187.8 million from the previous year. Of this backlog, $777 million is anticipated to convert to revenue within the next 12 months. This robust backlog was strengthened by a significant new contract with the U.S. Naval Air Systems Command (NAVAIR). The five-year, $131.3 million contract will see MRCY continue supplying secure data transfer systems for naval aircraft.
Enhanced Data Transfer Systems for Navy Operations
Since 2017, Mercury Systems has been supplying Advanced Data Transfer Systems (ADTS) to the Navy, designed to enhance data security for both rotary-wing and fixed-wing aircraft. The recent contract will allow MRCY to provide updated, power-efficient ADTS units featuring JDAR encryption modules, reinforcing its role in securing critical government data.
This expanded contract is a testament to MRCY’s longstanding relationship with the Navy, underpinned by its reliable solutions for data storage, video recording, mission computers, and cockpit displays. Mercury Systems’ latest financial performance and strategic contracts reinforce its growth trajectory, positioning it as a vital partner in defense technology.