ANDOVER, Mass. - Mercury Systems Inc. (NASDAQ:MRCY) announced today it has been awarded a contract by the U.S. Naval Air Systems Command (NAVAIR) potentially worth $131.3 million to continue supplying secure data transfer systems for naval aircraft. The five-year indefinite delivery/indefinite quantity contract will support the enhancement of operational readiness for both rotary-wing and fixed-wing aircraft fleets.
Since 2017, Mercury Systems has provided the Navy with Advanced Data Transfer Systems (ADTS) that facilitate the secure movement of data between ground planners and aircraft. These systems are known for their ruggedness and flexibility, and the new contract will allow for the delivery of upgraded ADTS units featuring the company's JDAR encryption module.
The ADTS units are equipped with up to 3 terabytes of solid-state memory, optional crash survivable memory modules, and a variety of interfaces including MIL-STD-1553B and Gigabit ethernet. They also boast manual zeroize capabilities for information assurance.
Roya Montakhab, Mercury’s SVP of Integrated Processing Solutions, expressed pride in the company’s continued partnership with the Navy and its role in safeguarding critical government data.
Mercury Systems, headquartered in Andover, Massachusetts, operates on a global scale, with its products and solutions deployed in over 300 programs across 35 countries. The company's processing platforms are utilized in a wide range of aerospace and defense applications, including mission computing and sensor processing.
The announcement of this new contract reflects the company's ongoing commitment to supporting the U.S. military and its operational capabilities. The information provided in this article is based on a press release statement from Mercury Systems Inc.
In other recent news, Mercury Systems Inc., a critical processing solution provider, has secured a contract to supply Boeing (NYSE:BA) with advanced FPGA processor boards for the U.S. Air Force's KC-46A tanker aircraft fleet. The boards are set to enhance the fleet's refueling system, improving operational efficiency and safety. The contract includes the delivery of approximately 1,500 production boards for the KC-46A's Remote Vision System (RVS) 2.0.
Further, Mercury Systems has reported significant financial developments. In the fourth quarter of fiscal year 2024, the company achieved record quarterly bookings of $284 million, contributing to annual bookings of $1.02 billion. The company's revenue for the quarter was $249 million, which led to a full-year revenue of $835 million.
Additionally, the company reported a record free cash flow of $61 million for the fourth quarter. The backlog experienced a 16% year-over-year increase, reaching a new high of $1.3 billion. In terms of future expectations, Mercury Systems anticipates flat top-line growth in FY '25 with an increase in run rate during the second half of the year. These are recent developments reflecting the company's ongoing efforts to drive organic growth and secure multiple production orders.
InvestingPro Insights
The recent $131.3 million contract awarded to Mercury Systems Inc. (NASDAQ:MRCY) by NAVAIR underscores the company's strong position in the aerospace and defense sector. However, investors should consider both the opportunities and challenges facing MRCY.
According to InvestingPro data, Mercury Systems has a market capitalization of $2.05 billion, reflecting its significant presence in the industry. The company's revenue for the last twelve months stands at $835.27 million, although it has experienced a revenue decline of 14.23% over this period.
InvestingPro Tips highlight that Mercury Systems is expected to return to profitability this year, which could be a positive sign for investors considering the recent contract win. This expectation aligns with the company's ongoing projects and potential for growth in the defense sector.
It's worth noting that Mercury Systems operates with a moderate level of debt and its liquid assets exceed short-term obligations, suggesting a stable financial position. This financial stability could be crucial for executing large-scale contracts like the one with NAVAIR.
However, investors should be aware that the company was not profitable over the last twelve months, with a negative operating income of $119.87 million. This context makes the new contract even more significant for Mercury's financial outlook.
For those seeking a more comprehensive analysis, InvestingPro offers additional insights, with 7 more tips available for Mercury Systems. These tips could provide valuable context for understanding the company's position in light of this new contract and its broader market performance.
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