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Jun 30, 2023
Mercury Q4 2023 Earnings Report
Reported fourth quarter and fiscal year 2023 results, showing revenue decrease and net loss, while implementing an enhanced execution plan.
Key Takeaways
Mercury Systems reported a decrease in Q4 revenue to $253.2 million compared to $289.7 million in the same period last year. The company experienced a net loss of $8.2 million, or $0.15 per share, a significant shift from the net income of $16.9 million, or $0.30 per share, in Q4 2022. Management is focused on enhanced execution of challenged programs, building a thriving organic growth engine, addressing cost structure, and accelerating free cash flow conversion.
Q4 revenues were $253.2 million, compared to $289.7 million in Q4 2022.
Q4 GAAP net loss was $8.2 million, or $0.15 per share, compared to net income of $16.9 million, or $0.30 per share, in Q4 2022.
Q4 adjusted EPS was $0.11, compared to $0.81 in Q4 2022.
Total backlog at June 30, 2023, was $1.14 billion, an increase of $102.1 million from a year ago.
Mercury
Mercury
Forward Guidance
For the full fiscal year 2024, revenues are forecasted to be in the range of $950.0 million to $1.00 billion, and GAAP net loss of $13.7 million to $5.9 million, or $0.24 to $0.10 loss per share.
Positive Outlook
- Revenues are forecasted to be in the range of $950.0 million to $1.00 billion.
- Adjusted EBITDA for the full fiscal year is expected to be approximately $160.0 million to $185.0 million.
- Adjusted EPS for the full fiscal year is expected to be approximately $1.14 to $1.48 per share.
- Initial cost actions result in approximately $20 million to $22 million of net savings in fiscal 2024
- Strong demand environment supports long-term outlook
Challenges Ahead
- GAAP net loss of $13.7 million to $5.9 million
- Execution challenges on approximately 20 programs drove approximately $56 million of impact and forecasting volatility in the fiscal year.
- Working capital has grown from approximately 35% of revenue to approximately 65% of revenue in fiscal 2023
- A larger than normal mix of development programs and outsized costs associated with a handful of challenged programs have added variability and pressured fiscal 2023 results
- Despite strong demand, a small number of our programs are facing short-term execution challenges, which have obscured the underlying strength of our core business.