> ## Content Index > Fetch the complete content index at: https://www.bullished.co/llms.txt > Use this file to discover other available public pages before exploring further. # Mercury Systems CEO Says Earlier Buying Delays Held Up Deliveries — Its Factories Have Room - URL: https://www.bullished.co/mercury-systems-ceo-says-earlier-buying-delays-held-up-deliveries-its-factories-have-room-9c82e9a9/ - Published: 2026-11-10T23:16:16.000Z - Updated: 2026-11-10T23:16:16.000Z - Description: Management raised its fiscal 2027 outlook but has yet to include potential delivery gains from automation and its Palantir partnership. - Author: Matteo Parrino - Tags: Earnings, MRCY, Industry: Technology [Mercury Systems](https://www.bullished.co/tag/mrcy/), which makes processing electronics for aerospace and defense, is delivering orders faster by reversing purchasing delays it imposed to free up cash, Chairman and Chief Executive Officer Bill Ballhaus said on the company's earnings call Tuesday. The improvement helped first-quarter revenue rise [12.4% to $253 million](https://www.sec.gov/Archives/edgar/data/0001049521/000104952126000096/a2027q1earningsreleaseex.htm?ref=bullished.co), according to its results release. ## Buying Earlier To Ship Faster Asked by an RBC Capital Markets analyst what could accelerate growth, Ballhaus pointed to materials procurement. Mercury had postponed buying components when too much money was tied up in operations; bringing purchases forward is now helping it turn outstanding orders into shipments. Ballhaus described the origin of the constraint as "What we self-inflicted about three years ago". He said component availability generally was not the problem, apart from a possible exception for memory. The purchasing change accompanies a shift in Mercury's business: programs once concentrated in development are moving into production, from initial batches to higher volumes. Mercury supplies signal- and data-processing components, modules and subsystems for radar, electronic warfare, avionics and weapons to U.S. and European defense contractors, the U.S. government and commercial aerospace equipment makers. Dave Farnsworth attributed the quarter's cash outflow to growth-supporting inventory purchases. Inventory increased about $32 million from the prior quarter. Free cash outflow reached [$24 million](https://www.globenewswire.com/news-release/2026/11/10/3400183/18849/en/mercury-systems-reports-first-quarter-results.html?ref=bullished.co), versus $4 million a year earlier, while operating activities used $14 million, compared with generating $2 million. ## More Orders, Higher Earnings, Cash Costs First-quarter bookings climbed 48% to [$370 million](https://www.sec.gov/Archives/edgar/data/0001049521/000104952126000096/a2027q1earningsreleaseex.htm?ref=bullished.co), and backlog approached $2.1 billion, up 44.7% from a year earlier. More than $1 billion of those orders is expected to become revenue within the next 12 months. Mercury earned [$13 million](https://www.globenewswire.com/news-release/2026/11/10/3400183/18849/en/mercury-systems-reports-first-quarter-results.html?ref=bullished.co), or $0.21 per diluted share, reversing a year-earlier loss of the same amounts. Adjusted earnings per share reached $0.52, from $0.26; adjusted earnings before interest, taxes, depreciation and amortization rose 58.6% to $56 million, with a 22.3% margin. Management attributed the margin performance partly to the programs delivered in the quarter. Farnsworth said that mix leaned toward higher-margin work and is expected to normalize over the rest of the year. Moving development programs into production also improves backlog margins, management said. Orders included advanced weapons production, missile defense, radar and satellite programs. Mercury won electronic-warfare work on the F-35 from a competitor, which Ballhaus partly attributed to better execution. He described Golden Dome-related missile-tracking work as relatively small and at an early development stage. Mercury repaid $100 million of debt during the quarter, bringing repayments over the last two quarters to $250 million. Net debt ended the quarter at $232 million, down $55 million from a year earlier. ## Another Shift Before Another Factory A Jefferies analyst asked how quickly Mercury could meet higher demand. Ballhaus said factories primarily run one shift and could move to two if demand materializes: "That wouldn't require any additional capital." Mercury has already brought about 50,000 square feet of additional space online in Phoenix. Ballhaus said the existing footprint leaves room to expand production efficiently. Management now expects fiscal 2027 revenue to approach $1.1 billion, with double-digit growth rather than growth approaching double digits. It expects adjusted earnings before interest, taxes, depreciation and amortization around $210 million, versus approaching $200 million previously, and free cash flow conversion approaching 40%, up from approaching 35%. The outlook excludes potential delivery improvements from automation, including Mercury's Palantir partnership. Ballhaus said: "We haven't quantified it yet or reflected any of the potential benefits in our outlook". Farnsworth also said the outlook excludes potential benefits from funded framework agreements with prime contractors because the timing of orders reaching suppliers remains uncertain. Management expects to revisit its fiscal 2028 reference points in the second half of fiscal 2027\. Those figures illustrate a possible financial profile; they are not guidance. Learn - [How To Read An Earnings Call Transcript: Start With Guidance, Then Find What's Missing →](https://www.bullished.co/learn/how-to-read-an-earnings-call/) How to read an earnings call transcript: check guidance first, look for dropped metrics, compare growth with last quarter, and watch hedged wording. ### Sources - [Mercury Systems results release (Form 8-K, EX-99.1)](https://www.sec.gov/Archives/edgar/data/0001049521/000104952126000096/a2027q1earningsreleaseex.htm?ref=bullished.co) — SEC EDGAR - [Mercury Systems: Fiscal Q1 Earnings Snapshot | wusa9.com](https://www.wusa9.com/article/syndication/associatedpress/mercury-systems-fiscal-q1-earnings-snapshot/616-bc26e3cb-a7fe-411d-b666-e72c96585d8a?ref=bullished.co) — Associated Press - [Mercury Systems Reports First Quarter Results](https://www.globenewswire.com/news-release/2026/11/10/3400183/18849/en/mercury-systems-reports-first-quarter-results.html?ref=bullished.co) — globenewswire.com ### More on Mercury Systems - [Mercury Systems Orders Soar 48% As It Raises Its Annual Sales Outlook](https://www.bullished.co/mercury-systems-orders-soar-48-as-it-raises-its-annual-sales-outlook-c304d51e/) - [Mercury Systems Stock Plunges 10%, Erasing $491 Million, A Day After Board Shuffle](https://www.bullished.co/mercury-systems-stock-plunges-10-erasing-491-million-a-day-after-board-shuffle-1adb4acf/) - [Mercury Systems Names William Ballhaus Chairman And Barry Nearhos Lead Independent Director](https://www.bullished.co/mercury-systems-names-william-ballhaus-chairman-and-barry-nearhos-lead-independent-63ad9092/) [All Mercury Systems (MRCY) coverage →](https://www.bullished.co/tag/mrcy/)