What changed in this filing

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Item 1. Business

2022-08-16 compared with 2021-08-17 · 171 added, 138 removed, 357 unchanged (46% of the section changed)

Mercury Systems, Inc.

is a leading technology company serving the aerospace and defense industry, positioned at the intersection of high-tech and defense.

Headquartered in Andover, Massachusetts, we deliver products and solutions that enable a broad range of aerospace and defense programs, optimized for mission success in some of the most challenging and demanding environments.

We envision, create and deliver innovative technology solutions that are open, purpose-built and uncompromised to meet our customers’ most-pressing high-tech needs, including those specific to the defense community.

is a technology company that delivers commercial innovation to rapidly transform the global aerospace and defense industry.

Headquartered in Andover, Massachusetts, our end-to-end processing platform enables a broad range of aerospace and defense programs, optimized for mission success in some of the most challenging and demanding environments.

Processing technologies that comprise our platform include signal solutions, display, software applications, networking, storage and secure processing.

Our innovative solutions are mission-ready, software-defined and open and modular, to meet our customers’ high-tech needs.

Customers access our solutions via the Mercury platform, which encompasses the broad scope of our investments in technologies, companies, products, services and the expertise of our people.

Ultimately, we connect our customers to what matters most to them.

We connect commercial technology to defense, people to data, partners to opportunities and the present to the future.

At the most human level, we connect what we do to our customers’ missions;

supporting the people for whom safety, security and protecting freedom are of paramount importance.

As a leading manufacturer of essential components, products, modules and subsystems, we sell to defense prime contractors, the U.S.

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Customers add their own applications and algorithms to our specialized, secure and innovative products and pre-integrated solutions.

This allows them to complete their full system by integrating with their platform, the sensor technology and, in some cases, the processing from Mercury.

This allows them to complete their full system by integrating with their platform, the sensor technology and, increasingly, the processing from Mercury.

Our products and solutions are deployed in more than 300 programs with over 25 different defense prime contractors and commercial aviation customers.

Mercury’s transformational business model accelerates the process of making new technology profoundly more accessible to our customers by bridging the gap between commercial technology and aerospace and defense applications.

Our long-standing deep relationships with leading high-tech companies, coupled with our high level of research and development (“R&D”) investments and industry-leading trusted and secure design and manufacturing capabilities, are the foundational tenets of this highly successful model.

Our long-standing deep relationships with leading high-tech and other commercial companies, coupled with our high level of research and development (“R&D”) investments on a percentage basis and industry-leading trusted and secure design and manufacturing capabilities, are the foundational tenets of this highly successful model.

We are leading the development and adaptation of commercial technology for aerospace and defense solutions.

From chip-scale to system scale and from radio frequency (“RF”) to digital, we make mission-critical technologies safe, secure, affordable and relevant for our customers.

Our capabilities, technology and R&D investment strategy combine to differentiate Mercury in our industry.

Our technologies and capabilities include secure embedded processing modules and subsystems, mission computers, secure and rugged rack-mount servers, safety-critical avionics, components, multi-function assemblies, subsystems and custom microelectronics.

We maintain our technological edge by investing in critical capabilities and intellectual property (“IP” or “building blocks”) in processing and RF, leveraging open standards and open architectures to adapt quickly those building blocks into solutions for highly data-intensive applications, including emerging needs in areas such as artificial intelligence (“AI”).

Our mission critical solutions are deployed by our customers for a variety of applications including command, control, communications, computers, intelligence, surveillance and reconnaissance (“C4ISR”), electronic intelligence, avionics, electro-optical/infrared (“EO/IR”), electronic warfare, weapons and missile defense, hypersonics and radar.

From chip-scale to system scale and from data, including radio frequency (“RF”) to digital to decision, we make mission-critical technologies safe, secure, affordable and relevant for our customers.

Our capabilities, technology, people and R&D investment strategy combine to differentiate Mercury in our industry.

We maintain our technological edge by investing in critical capabilities and intellectual property (“IP” or “building blocks”) in processing, leveraging open standards and open architectures to adapt quickly those building blocks into solutions for highly data-intensive applications, including emerging needs in areas such as artificial intelligence (“AI”).

Our mission critical solutions are deployed by our customers for a variety of applications including command, control, communications, computers, intelligence, surveillance and reconnaissance (“C4ISR”), electronic intelligence, mission computing avionics, electro-optical/infrared (“EO/IR”), electronic warfare, weapons and missile defense, hypersonics and radar.

Our consolidated revenues, acquired revenues, net income, diluted earnings per share (“EPS”), adjusted earnings per share (“adjusted EPS”) and adjusted EBITDA for fiscal 2022 were $988.2 million, $117.8 million, $11.3 million, $0.20, $2.19 and $200.5 million, respectively.

Our consolidated revenues, acquired revenues, net income, EPS, adjusted EPS and adjusted EBITDA for fiscal 2020 were $796.6 million, $0.9 million, $85.7 million, $1.56, $2.30 and $176.2 million, respectively.

Our consolidated revenues, acquired revenues, net income, EPS, adjusted EPS and adjusted

EBITDA for fiscal 2021 were $924.0 million, $3.4 million, $62.0 million, $1.12, $2.42 and $201.9 million, respectively.

See the Non-GAAP Financial Measures section of this annual report for a reconciliation of our acquired revenues, adjusted EPS and adjusted EBITDA to the most directly comparable GAAP measures.

On August 3, 2021, Mercury announced a companywide effort, called 1MPACT, to lay the foundation for the next phase of the Company’s value creation at scale.

The goal of 1MPACT is to achieve Mercury’s full growth, margin expansion and adjusted EBITDA potential over the next five years.

The goal of 1MPACT is to achieve Mercury’s full growth, margin expansion, adjusted EBITDA and free cash flow potential over the next five years.

Since fiscal year 2014, Mercury has completed 15 acquisitions, deploying $1.4 billion of capital and, as a result, dramatically scaled and transformed the business.

Over this time, the Company has extracted substantial revenue and cost synergies from each of these individual acquisitions.

Now, as Mercury approaches the milestone of $1 billion of revenue, management believes there is significant opportunity to realize further scale through consolidating and streamlining the Company’s organizational structure which will improve visibility, speed of decision making and accountability.

1MPACT will be led by a new Chief Transformation Officer, and will focus on six major areas:

organization efficiency and scalability;

As we approach the milestone of $1 billion of revenue, we have identified significant opportunity to realize further scale through consolidating and streamlining our internal organizational structure which will improve visibility, speed of decision making and accountability.

1MPACT is led by our Chief Transformation Officer, Thomas Huber, and focuses on the following major areas:

organizational efficiency and scalability;

procurement and supply chain;

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R&D investment;

capital and asset efficiency;

and scalable common processes and systems.

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we make trusted, secure, mission critical technologies profoundly more accessible to the aerospace and defense industry.

We leverage cutting edge commercial technology innovations to develop complex, secure and reliable product solutions and subsystems, purpose built for aerospace and defense.

We create leading-edge technologies customized for aerospace and defense applications, through above average industry investment on a percentage basis in R&D.

Our strategy is built to meet the aerospace and defense market’s need for speed.

The Mercury Processing Platform serves customers with cutting-edge commercial technology innovations, purpose built and mission-ready for aerospace and defense applications, through above average industry investment on a percentage basis in R&D.

Our strategy is built to meet the aerospace and defense market’s need for speed and affordability.

Our strategies for growth are as follows:

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Mercury develops leading edge technologies, customized for aerospace and defense applications, through above-average industry investment on a percentage basis in R&D.

Recently our investments have been centered on trusted, secure Innovation that Matters®.

Continuously improve operational capability and scalability :

We drive transformational and sustainable business improvement and value creation across the enterprise.

Attract and retain the right talent :

We strive to continuously improve operational capability and scalability by attracting, retaining and engaging the right talent and supporting and promoting our culture and values.

Our strategies are built around our key strengths as a leading technology company serving the aerospace and defense industry.

Attract and retain top talent :

We strive to continuously improve operational capability and scalability by attracting, retaining and engaging top talent and supporting and promoting our culture and values.

Our strategies are built around our key strengths as a leading commercial technology company serving the aerospace and defense industry.

Our strategies include innovation and investment in scaling existing capabilities, as well as augmenting our capabilities through an acquisition strategy designed to focus on adjacent technologies.

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Our consistent strategies allow us to assist our customers, mostly defense prime contractors, to reduce program cost, minimize technical risk, stay on schedule and on budget and ensure trust and security in the supply chain.

As a result we have successfully penetrated strategic programs including Aegis, Patriot, Lower Tier Air & Missile Defense Sensor ("LTAMDS"), Surface Electronic Warfare Improvement Program (“SEWIP”), Gorgon Stare, Predator, F-35, Reaper, F-16 SABR, E2-D Hawkeye, Paveway, Filthy Buzzard, PGK, P-8, Advanced Integrated Defensive Electronic Warfare Suite (“AIDEWS”), Common Display System (“CDS”) and WIN-T.

We are committed to continued investment and innovation in advanced new products and solutions development to maintain our competitive advantage, including in the fields of RF, analog-to-digital and digital-to-analog conversion, advanced multi- and many-core sensor processing systems including graphics processing units (“GPUs”), safety-critical design and engineering, processing for AI, embedded security, digital storage, and digital radio frequency memory (“DRFM”) solutions, software defined communications capabilities, and advanced security technologies and capabilities.

As a result, we have successfully penetrated strategic programs including Aegis, Patriot, Lower Tier Air & Missile Defense Sensor ("LTAMDS"), Surface Electronic Warfare Improvement Program (“SEWIP”), Terminal High Altitude Area Defense ("THAAD"), Predator, F-35, Reaper, F-18, F-16 SABR, E2-D Hawkeye, Paveway, Filthy Buzzard, PGK, P-8, Advanced Integrated Defensive Electronic Warfare Suite (“AIDEWS”), Common Display System (“CDS”), Aviation Mission Common Server ("AMCS") and WIN-T.

We are committed to continued investment and innovation in advanced new products and solutions development to maintain our competitive advantage, including in the fields of RF, analog-to-digital and digital-to-analog conversion, advanced multi- and many-core sensor processing systems including graphics processing units (“GPUs”), safety-critical design and engineering, processing for AI, embedded security, digital storage, digital radio frequency memory (“DRFM”) solutions, software-defined communications capabilities and advanced security technologies and capabilities.

Concurrently, we leverage our engineering and development capabilities, including systems integration, to accelerate our strategy to become a commercial outsourcing partner to the large defense prime contractors as they seek the more rapid design, development and delivery of affordable, commercially-developed, open architecture solutions within the markets we serve.

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Our commercial business model positions us to be compensated for non-recurring engineering which supplements our own internal R&D investment.

We typically team concurrently with multiple defense prime contractors as they pursue new

business with solutions they develop and market to the government, and engage with our customers early in the design cycle.

We typically team concurrently with multiple defense prime contractors as they pursue new business with solutions they develop and market to the government, and engage with our customers early in the design cycle.

Our engagement model can lead to long-term production revenue that continues after the initial services are delivered.

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• Second, expansion into new submarkets:

Within the major markets Mercury serves we have moved, for example, into electronic warfare, weapons systems, acoustics submarkets and C4I.

Within the major markets Mercury serves we have moved, for example, into electronic warfare, weapons systems, acoustics submarkets, C4I and mission computing.

• Third, vertical expansion:

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(“LIT”), custom microelectronics, RF and microwave solutions and embedded security, with the carve-out acquisition from Microsemi Corporation (the “Carve-Out Business”), The Athena Group, Inc.

(“Athena”), Delta Microwave, LLC (“Delta”), Syntonic Microwave LLC (“Syntonic”), and Pentek Technologies, LLC and Pentek Systems, Inc.

(collectively, "Pentek");

(“Athena”), Delta Microwave, LLC (“Delta”), Syntonic Microwave LLC (“Syntonic”), Pentek Technologies, LLC and Pentek Systems, Inc.

(collectively, "Pentek") and Atlanta Micro, Inc.

("Atlanta Micro");

mission computing, safety-critical avionics and platform management and large area display technology with the CES Creative Electronic Systems, S.A.

(“CES”), Richland Technologies, L.L.C.

(“RTL”), GECO Avionics, LLC (“GECO”), American Panel Corporation (“APC”) and Physical Optics Corporation ("POC") acquisitions;

(“RTL”), GECO Avionics, LLC (“GECO”), American Panel Corporation (“APC”), Physical Optics Corporation ("POC") and Avalex Technologies, LLC.

("Avalex") acquisitions;

and rugged servers, computers and storage systems with the acquisitions of Themis Computer (“Themis”) and Germane Systems, LC (“Germane”).

We believe we have built the most trusted, proven, contemporary portfolio of solutions and sub-systems that are purpose-built to meet or exceed our customers’ most pressing high-tech needs.

We are investing in six highly differentiated capabilities embedded into our pre-integrated subsystem solutions and products.

We adapt commercial Silicon Valley technology specifically for the aerospace and defense industry bringing cutting-edge commercial silicon technology to the Department of Defense (“DoD”) and our commercial customers, across platforms and programs, fast and affordably, from chip-scale to systems.

We believe we have the highest performance and densest processing solutions available onboard military platforms.

We also have some of the highest performing broadband RF capability targeting electronic warfare applications.

We have some of the best size, weight, power and cooling capabilities that ensure that our technology is able to run at the highest performance as well as the advanced ruggedization that is required to ensure that these technologies are able to operate consistently and effectively in the harsh environments in which they are required to operate.

We have some of the most advanced open middleware and software that allows customers to port their applications on top of open mission systems architecture.

We have industry-leading embedded security capabilities.

We design, market and sell products intended to protect electronic systems that are critical to national security.

We design safety-certifiable processing systems up to the highest design assurance levels.

Our products are certifiable to the highest levels of software critically recognized by the Federal Aviation Administration (“FAA”), European Union Aviation Safety Agency (“EASA”), Transport Canada and Joint Aviation Authorities (“JAA”).

We are investing in mission-critical processing technologies embedded into our Processing Platform:

Industry-leading embedded security capabilities, secure supply chain, U.S.

manufacturing facilities and data management practices for highly sensitive missions.

Broadband microwave technology, high-speed digitization, low-latency processing, purpose-built for mission-critical applications.

Smart, rugged, interactive, high-definition display technology optimized for the low-light, multi-angle viewing requirements of cockpits and armored vehicles.

The most advanced open middleware and software facilitates rapid application porting on top of open mission systems architecture.

• Networking .

Open, interoperable and secure networking based on widely adopted commercial protocols and standards to enable connectivity from data to decision.

Fast, radiation-tolerant and encrypted data-at-rest solutions to securely store the vast amounts of data produced by sophisticated edge sensors.

High-performance, highly reliable, safe, secure and resilient computing leveraging the latest in commercial innovation from edge to cloud, ground to space.

Our Solutions and Products

We deliver technology at the intersection of the high-tech and defense industries.

The Mercury difference is driven by three key factors we promise to deliver to all of our customers:

Trusted, Secure and Performance.

A trusted partner to aerospace and defense, delivering the most advanced and secure solutions to address accelerating global security challenges.

Advanced embedded security capabilities – built-in, not bolted on – delivering uncompromised solutions in the face of growing cyber threats, and manufactured in Mercury facilities with superior ratings in industrial security.

• High Performance :

Solutions that are among the highest performing available and optimized to meet the most rigorous demands of defense and commercial customers.

We offer a broad family of products designed to meet the full range of requirements in compute-intensive, signal processing, image processing and command and control applications.

To maintain a competitive advantage, we seek to leverage

technology investments across multiple product lines and product solutions.

The Mercury difference is driven by key "differentiators" we promise to deliver to all of our customers:

Mission-Ready;

Trusted and Secure;

Software-Defined;

and Open and Modular.

• Mission-Ready:

Fit for purpose to meet the demanding needs of our customers' missions.

Advanced thermal management and rugged packaging technology ensures optimal performance and reliable operation in the most challenging environments on earth and beyond.

We deliver extended reliability and dependability through thermal management, component selection, environmental protection and testing.

• Trusted and Secure :

A trusted supply chain, with products designed and manufactured onshore.

Advanced cryptography, secure boot and physical protection technologies like our BuiltSECURE technology can mitigate reverse

engineering, deliver cyber resiliency and safeguard confidential data and IP against adversarial threats, even when a system has been compromised.

We also design safety-certifiable BuiltSAFE processing systems up to the highest design assurance levels.

• Software-Defined :

Software enabled hardware for futureproofing, rapid scaling, ease of maintenance and affordability.

Flexible hardware architectures that are reconfigurable and upgradeable with software to extend the life of our systems and the platforms they are deployed on.

Our model-based systems engineering ("MBSE") design approach aims to significantly decrease the time and cost involved in developing and deploying Military and Aerospace platforms.

• Open and Modular :

"Plug and play", upgradeable and scalable.

A modular, open, systems architecture ("MOSA") approach to system design maximizes technology reuse to dramatically reduce development time and cost.

This open systems approach mitigates obsolescence risk while emphasizing commonality, interoperability and sustainability across platforms and domains.

The Mercury Processing Platform is designed to meet the full range of requirements in compute-intensive, signal processing, image processing and command and control applications.

To maintain a competitive advantage, we seek to leverage technology investments across multiple product lines and product solutions.

Examples of hardware products include small, custom microelectronics, embedded sensor processing subsystems, RF and microwave components, modules and subsystems, rugged servers and avionics mission computers.

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• Components .

Components include technology elements typically performing a single, discrete technological function, which when physically combined with other components may be used to create a module or subassembly.

Examples include but are not limited to power amplifiers and limiters, switches, oscillators, filters, equalizers, digital and analog converters, chips, MMICs (monolithic microwave integrated circuits), and memory and storage devices.

Components represent the basic building blocks of an electronic system.

They generally perform a single function such as switching, storing or converting electronic signals.

Some examples include power amplifiers and limiters, switches, oscillators, filters, equalizers, digital and analog converters, chips, MMICs (monolithic microwave integrated circuits) and memory and storage devices.

• Modules and Subassemblies .

Modules and subassemblies include combinations of multiple functional technology elements and/or components that work together to perform multiple functions but are typically resident on or within a single board or housing.

Modules and subassemblies may in turn be combined to form an integrated subsystem.

Examples of modules and subassemblies include but are not limited to embedded processing modules, embedded processing boards, switch fabric boards, digital receiver boards, graphics and video processing and Ethernet and input/output boards, multi-chip modules, integrated radio frequency and microwave multi-function assemblies, tuners and transceivers.

Modules and sub-assemblies combine multiple components to serve a range of complex functions, including processing, networking and graphics display.

Typically delivered as computer boards or other packaging, modules and sub-assemblies are usually designed using open standards to provide interoperability when integrated in a subsystem.

Examples of modules and sub-assemblies include embedded processing boards, switched fabrics and boards for high-speed input/output, digital receivers, graphics and video, along with multi-chip modules, integrated radio frequency and microwave multi-function assemblies and radio frequency tuners and transceivers.

• Integrated Subsystems .

Integrated subsystems include multiple modules and/or subassemblies combined with a backplane or similar functional element and software to enable a solution.

These are typically but not always integrated within a chassis and with cooling, power and other elements to address various requirements and are also often combined with additional technologies for interaction with other parts of a complete system or platform.

Integrated subsystems also include spare and replacement modules and subassemblies sold as part of the same program for use in or with integrated subsystems sold by us.

Integrated subsystems bring components, modules and/or sub-assemblies into one system, enabled with software.

Subsystems are typically, but not always, integrated within an open standards-based chassis and often feature interconnect technologies to enable communication between disparate systems.

Spares and replacement modules and sub-assemblies are provided for use with subsystems sold by us.

Our subsystems are deployed in sensor processing, aviation and mission computing and C4I applications.

By providing pre-integrated subsystems to our customers, we enable them to rapidly and cost-effectively port and adapt their applications to changing threats.

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We work continuously to improve our hardware technology with an eye toward optimization of SWaP demands.

Mercury partners with global tech leaders to align technology roadmaps and deliver cutting-edge computing in scalable, field-deployable form factors that are fully configurable to each unique workload.

We partner with global tech leaders to align technology roadmaps and deliver cutting-edge computing in scalable, field-deployable form factors that are fully configurable to each unique workload.

We use the latest Intel® server-class processing products, Xilinx Field Programmable Gate Arrays (“FPGA”), as well as NVIDIA GPU products in our embedded high-performance processing technologies.

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Mercury has a long history of driving modular open systems architectures and has remained committed to creating, advancing and adopting open standards for all our products, from our smallest components and connectors to our largest, high-performance, integrated multi-computer systems.

With thirty-five years of technology leadership within the high-performance embedded computing industry, we have pioneered or contributed to the development of many of the defense industry’s current and emerging open standards, including standards such as RACEway, RapidIO, VXS, VPX, REDI and notably OpenVPX.

With forty years of technology leadership within the high-performance embedded computing industry, we have pioneered or contributed to the development of many of the defense industry’s current and emerging open standards, including standards such as RACEway, RapidIO, VXS, VPX, REDI and notably OpenVPX.

These open standards allow system integrators to benefit from the interoperability of modules produced by multiple vendors.

We also continue to be influential in the industry-standards organizations associated with our market segments.

As a member of the VMEbus International Trade Association (“VITA”), the Sensor Open Systems Architecture (“SOSA”) initiative, the Future Airborne Capability Environment (“FACE”) consortium, and the Vehicular Integration for C4ISR/EW Interoperability (“VICTORY”) consortium, among other standards bodies, Mercury is helping to guide the aerospace and defense industry toward greater openness and vendor interoperability, consistent with the DoD’s focus on using modular open systems architectures (“MOSA”) in major programs.

As a member of the VMEbus International Trade Association (“VITA”), the Sensor Open Systems Architecture (“SOSA”) initiative, the Future Airborne Capability Environment (“FACE”) consortium and the Vehicular Integration for C4ISR/EW Interoperability (“VICTORY”) consortium, among other standards bodies, Mercury is helping to guide the aerospace and defense industry toward greater openness and vendor interoperability, consistent with the DoD’s focus on using MOSA in major programs.

Our software is based on open standards and includes heterogeneous processor support with extensive highly-optimized math libraries, multi-computing switch fabric support, net-centric and system management enabling services, extended operating system services, board support packages and development tools.

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Physical Optics Corporation December 30, 2020

Pentek May 27, 2021

Pentek Systems, Inc.

and Pentek Technologies, LLC May 27, 2021

Avalex Technologies, LLC November 5, 2021

Atlanta Micro, Inc.

November 29, 2021

Our Market Opportunity

Our market opportunity is defined by the growing demand for domestically designed and manufactured secure sensor and safety-critical mission processing capabilities for critical aerospace, defense and intelligence applications.

Our primary market positioning is centered on making commercially available technologies profoundly more accessible to the aerospace and defense sector, specifically C4I systems, sensor processing and electronic warfare systems;

and commercial markets, which include commercial aerospace communications and other commercial computing applications.

Our market opportunity is defined by the growing demand for domestically designed, sourced and manufactured electronics for critical aerospace, defense and intelligence applications.

Our primary market positioning is centered on making commercially available technologies profoundly more accessible to the aerospace and defense sector, specifically as it relates to command, control, communications, computers and intelligence (C4I) systems, sensors and electronic warfare (EW);

and commercial markets, which include aerospace communications and other computing applications.

We believe we are well-positioned in growing sustainable market segments of the aerospace and defense sector that rely on advanced technologies to improve warfighter capability and provide enhanced force protection capabilities.

The acquisitions of the Carve-Out Business, Delta, Syntonic and Pentek further improved our ability to compete successfully in these market segments by allowing us to offer an even more comprehensive set of closely related capabilities.

The CES, RTL, GECO, APC, and POC acquisitions provided us new capabilities that substantially expanded our addressable market into defense platform management, mission computing and commercial aerospace markets that are aligned to our existing market focus.

The additions of Themis and Germane provided us with new capabilities and positioned us with a significant footprint within the C2I rugged server business.

The acquisitions of the Carve-Out Business, Delta, Syntonic, Pentek and Atlanta Micro further improved our ability to compete successfully in these market segments by allowing us to offer an even more comprehensive set of closely related capabilities.

The CES, RTL, GECO, APC, POC and Avalex acquisitions provided us new capabilities that substantially expanded our addressable market into defense platform management, mission computing and commercial aerospace markets that are aligned to our existing market focus.

The additions of Themis and Germane provided us with new capabilities and positioned us with a significant footprint within the rugged server business.

Our organic investments as well as the acquisitions of LIT, the Carve-Out Business and Athena added to our portfolio of embedded security products that can be leveraged across our business.

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• The aerospace and defense electronics market is expected to grow in 2022 and beyond.

According to Renaissance Strategic Advisors (“RSA”), as of August 2021, the global aerospace and defense electronics market is estimated to be $129 billion in 2021, growing to $148 billion by 2025.

Within this global market, RSA estimates that the U.S.

defense electronics market will be approximately $72 billion in 2021, growing to $78 billion in 2025.

According to Renaissance Strategic Advisors (“RSA”), as of September 2021, the global aerospace and defense electronics market is estimated to be $130 billion in 2021, growing to $155 billion by 2026.

Within this global market, RSA estimates that the total Tier 2 defense electronics market, which Mercury participates in, was approximately $40 billion in 2021, and will grow to $52 billion in 2026.

The aerospace and defense electronics marketplace consists of two primary subsegments:

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C4I encompasses platform and mission management, which include avionics and vetronics, C2I, which includes command and control and intelligence, and dedicated communications processing.

Sensor and effector mission systems are primarily different types of sensor modalities such as electronic warfare, radar, EO/IR, and acoustics as well as weapons systems such as missiles and munitions.

Within the global Tier 2 C4I market in which we participate, RSA estimates the market for 2021 to be $6.7 billion for platform and mission management, $8.3 billion for C2I, and $8.9 billion for dedicated communications.

Sensor and effector mission systems are primarily different types of sensor modalities such as EW, radar, EO/IR and acoustics as well as weapons systems such as missiles and munitions.

Within the global Tier 2 C4I market in which we participate, RSA estimated the market for 2021 to be $6.7 billion for platform and mission management, $8.3 billion for C2I and $8.9 billion for dedicated communications.

RSA estimates the compound annual growth rate (“CAGR”) from 2021-2026 for these markets to be 6.3% for platform and mission management, 4.5% for C2I and 3.7% for dedicated communications.

Within the global Tier 2 sensor and effector mission systems market in which we participate, RSA estimates the market for 2021 to be $5.7 billion for electronic warfare, $5.8 billion for radar, $2.0 billion for EO/IR, $1.2 billion for acoustics, and $3.4 billion for weapons systems.

RSA estimates the 2021-2025

CAGR for these markets to be 3.1% for electronic warfare, 2.9% for radar, 4.0% for EO/IR, 4.4% for acoustics, and 3.3% for weapons systems.

Within the global Tier 2 sensor and effector mission systems market in which we

participate, RSA estimated the market for 2021 to be $5.8 billion for EW, $5.8 billion for radar, $2.1 billion for EO/IR, $1.2 billion for acoustics and $3.4 billion for weapons systems.

RSA estimates the 2021-2026 CAGR for these markets to be 2.6% for electronic warfare, 2.6% for radar, 3.4% for EO/IR, 3.7% for acoustics and 4.1% for weapons systems.

Within the context of the overall U.S.

defense budget and spending for defense electronics specifically, we believe the C4ISR, electronic warfare, guided missiles and precision munitions, and ballistic missile defense market segments have a high priority for future DoD spending.

defense budget and spending for defense electronics specifically, we believe the C4ISR, EW, guided missiles and precision munitions and ballistic missile defense market segments have a high priority for future DoD spending.

We continue to build on our strengths in the design and development of performance optimized electronic subsystems for these markets, and often team with multiple defense prime contractors as they bid for projects, thereby increasing our chance of a successful outcome.

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• The rapidly expanding demand for tactical ISR is leading to significant growth in sensor data being generated, leading to even greater demand for the capability of our products to securely store and process data onboard platforms .

An increase in the prevalence and resolution of ISR sensors is generating significant growth in the associated data that needs to be stored and turned into information for the warfighter in a timely manner.

An increase in the prevalence and resolution of ISR is generating significant growth in the associated data that needs to be stored and turned into information for the warfighter in a timely manner.

In addition, several factors are driving the defense and intelligence industries to demand greater capability to collect, store and process data onboard the aircraft, UAVs, ships and other vehicles, which we refer to collectively as platforms.

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Standard computing architectures and computing platforms currently do not offer the level of performance needed to optimize existing AI algorithms, creating an additional opportunity for advanced processing capabilities onboard the platform.

• Rogue nations’ missile programs and threats from peer nations are causing greater investment in advanced new radar, electronic warfare and ballistic missile defense capabilities .

There are a number of new and emerging threats, such as peer nations developing stealth technologies, including stealth aircraft, new anti-ship ballistic missiles and a variety of other advanced missile capabilities.

Additionally, U.S.

armed forces require enhanced signals intelligence and jamming capabilities.

In response to these emerging threats, we have participated in key DoD programs, including Aegis, Patriot, SEWIP, LTAMDS, F-22 Raptor, F-35 Joint Strike Fighter and upgrade programs for the F-15, F-16, V-22 and F/A-18.

• The long-term DoD budget pressure is pushing more dollars toward upgrades of the electronic subsystems on existing platforms, which may increase demand for our products .

The DoD is moving from major new weapons systems developments to upgrades of the electronic subsystems on existing platforms.

These upgrades are expected to include more sensors, signal processing, ISR algorithms, multi-intelligence fusion and exploitation, computing and communications.

We believe that upgrades to provide new urgent war fighting capability, driven by combatant commanders, are occurring more rapidly than traditional defense prime contractors can easily react to.

We believe these trends will cause defense prime contractors to increasingly seek out our high-performance, cost-effective open architecture products.

• Russia’s invasion of Ukraine, rising tensions in the Asia-Pacific and continued threats from rogue states and violent extremists are contributing to the most challenging global threat environment since the Cold War.

This will likely result in a sea change in defense spending domestically and internationally.

Our advisors estimate that U.S.

growth, combined with increases in NATO defense budgets, could drive up to $1.5 trillion of additional spending over the next decade.

This should lead to higher bookings for Mercury in the electronic systems associated with missiles, munitions and missile defense systems, unmanned systems, fixed wing and rotorcraft, ground vehicles and EW.

• A greater percentage of the value associated with future defense platforms will be driven by electronic systems content, and upgrades to existing platforms will focus on sensors, signal processing, sensor algorithms, multi-intelligence fusion and exploitation and computing and communications capability– all areas where Mercury participates.

These trends remain favorable in our view and the demand environment is improving due to urgent needs for warfighting capability at a more rapid pace than traditional defense prime contractors can easily react to, as demonstrated by our strong bookings and design wins, both in fiscal 2022.

We believe that our addressable market continues to increase, driven in large part by our strategic move into mission systems and potential to deliver innovative processing solutions at chip scale, and that primes will increasingly seek out our high-performance, cost-effective open architecture products.

• Defense procurement reform is causing the defense prime contractors to outsource more work to commercial companies and we believe that prime contractor outsourcing is our largest secular growth opportunity .

RSA estimates that in 2021 the U.S.

defense Tier 2 embedded computing and RF market addressable by suppliers such as Mercury is approximately $24 billion.

defense Tier 2 embedded computing and RF market addressable by suppliers such as Mercury was approximately $24 billion.

RSA estimates that the U.S.

defense prime contractors currently outsource only a small percentage of their work.

On a global basis the Tier 2 embedded computing and RF market in 2021 is estimated by RSA to be $42 billion.

On a global basis the Tier 2 embedded computing and RF market in 2021 was estimated by RSA to be $42 billion.

government is intensely focused on making systems more affordable and shortening their development time.

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government is focused on ensuring that the U.S.

military protects its defense electronic systems and the information held within them from nefarious activities such as tampering, reverse engineering and other forms of advanced attacks, including cyber.

The requirement to add security comes at a time when the commercial technology world continues to offshore more of the design, development, manufacturing

and support of such capabilities, making it more difficult to protect against embedded vulnerabilities, tampering, reverse engineering and other undesired activities.

military protects its defense electronic systems and the information held within them from nefarious activities such as tampering,

reverse engineering and other forms of advanced attacks, including cyber.

The requirement to add security comes at a time when the commercial technology world continues to offshore more of the design, development, manufacturing and support of such capabilities, making it more difficult to protect against embedded vulnerabilities, tampering, reverse engineering and other undesired activities.

The DoD has a mandate to ensure both the provenance and integrity of the technology and its associated supply chain.

These factors have created a unique opportunity for us to expand beyond sensor processing into the provision of technologies ranging from advanced secure processing subsystems to miniaturized custom microelectronics devices and capabilities for other on board critical computing applications designed, developed, manufactured and supported in the U.S.A.

In addition, advanced systems sold to foreign military buyers also require protection so that the technologies, techniques and data associated with them do not become more widely available, which further enhances our market opportunity.

These factors have created a unique opportunity for us to expand beyond sensor processing into the provision of technologies ranging from advanced secure processing subsystems to miniaturized custom microelectronics devices and capabilities for other onboard critical computing applications designed, developed, manufactured and supported in the U.S.A.

In addition, advanced systems sold to foreign military buyers also require protection so that the technologies, techniques and data associated with them do not proliferate, which further enhances our market opportunity.

• Mercury is well-positioned to help address the need for DoD to access the latest commercial silicon, combined with the desire to ensure a trusted domestic supply of silicon technologies .

In June 2020, DoD elevated microelectronics to its number one technology priority.

This decision was based primarily on the proliferation and advances in commercial silicon but also the realization that DoD needs to be able to access these technologies in a trusted, secure and domestic manner.

We believe Mercury is the leading provider of commercially-developed silicon purpose-built for the specific requirements of aerospace & defense.

In February 2022, DoD’s Research & Engineering (R&E) organization listed microelectronics among its top technology investment priorities and reiterated its need for secure microelectronics sources which leverage state-of-the-art commercial development and production.

DoD’s FY23 budget requested $989 million in funding for basic research in microelectronics – the largest increase among R&E’s investment priorities and 40% of the total basic research budget.

Congress’ passage of the Creating Helpful Incentives to Produce Semiconductors ("CHIPS") act in August 2022, which will provide $2 billion for defense microelectronics, further amplifies the U.S.

government’s commitment to reinforcing the U.S.

semiconductor supply chain.

We believe Mercury is the leading provider of commercially developed silicon purpose-built for the specific requirements of aerospace and defense customers.

This capability began with our 2016 acquisition of the Carve-Out Business, which included capabilities in trusted and secure microelectronics.

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Our solutions are specifically designed for flexibility and interoperability, allowing our products to be easily integrated into larger system-level solutions.

Our ability to integrate subsystem-level capabilities allows us to provide solutions that most effectively address the mission-critical challenges within the C4ISR market, including multi-intelligence data fusion and AI processing onboard the platform.

Our ability to integrate subsystem-level capabilities allows us to provide solutions that effectively address the mission-critical challenges within the C4ISR market, including multi-intelligence data fusion and AI processing onboard the platform.

We leverage our deep expertise in embedded multicomputing, embedded sensor processing, with the addition of our RF microwave and millimeter subsystems and components, along with strategic investments in research and development to provide solutions across the sensor processing chain.

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Our pre-integrated subsystems improve affordability by substantially reducing customer system integration costs and time-to-market for our solutions.

System integration costs are one of the more substantial costs our customers bear in developing and deploying technologies in defense programs and platforms.

System integration costs are one of the more substantial costs our customers bear in developing and deploying

technologies in defense programs and platforms.

Our pre-integrated solutions approach allows for more rapid and affordable modernization of existing platforms and faster deployment of new platforms.

Our strengths in this area include our position as an early and leading advocate for OSA in defense, offering Intel® server class processing form factors across 3/6U OpenVPX, ATCA and rack-mount architectures and high density, secure solutions across multiple hardware architectures to seamlessly scale to meet our customers’ SWaP requirements.

In addition, we have a 30-year legacy of system management and system integration expertise that allows us to reduce technical risk, while

improving affordability and interoperability.

In addition, we have a 30-year legacy of system management and system integration expertise that allows us to reduce technical risk, while improving affordability and interoperability.

Our system integration expertise is a cornerstone in helping us support our customers in deploying pre-integrated, OSA subsystems.

As more commercial technology companies move the design, development, manufacturing and support of their technologies offshore, the DoD is looking to domestic technology providers to develop a sustainable, U.S.-based trusted supply chain.

As commercial technology companies have moved the design, development, manufacturing and support of their technologies offshore, the DoD is looking to domestic technology providers to develop a sustainable, U.S.-based trusted supply chain.

Over several years we have been building out our capacity for domestic manufacturing through our Advanced Microelectronics Centers (“AMCs”).

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• Delivery of Platform-Ready Solutions for Classified Programs .

We believe our integration work through our Cypress, California facility provides us with critical insights as we implement and incorporate key classified government intellectual property, including critical intelligence and signal processing algorithms, into advanced systems.

This integration work provides us the opportunity to combine directly and integrate our technology building blocks along with our intellectual property into our existing embedded processing products and solutions, enabling us to deliver more affordable, platform-ready integrated ISR subsystems that leverage our OSA and address key government technology and procurement concerns.

We believe our integration work provides us with critical insights as we implement and incorporate key classified government intellectual property, including critical intelligence and signal processing algorithms, into advanced systems.

This integration work provides us the opportunity to combine directly and integrate our technology building blocks along with our intellectual property into

our existing embedded processing products and solutions, enabling us to deliver more affordable, platform-ready integrated ISR subsystems that leverage our OSA and address key government technology and procurement concerns.

Our operations in this environment also help us identify emerging needs and opportunities to influence our future product development, so that critical future needs can be met in a timely manner with commercially-developed products and solutions.

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Our USMO is built around scalable, repeatable, secure, affordable and predictable manufacturing.

The USMO is a DMEA certified secure trusted site, certified to AS9100 quality standards and it utilizes Lean Six Sigma methodologies throughout manufacturing.

The USMO is a IPC1791 certified secure trusted site, certified to AS9100 quality standards and it utilizes Lean Six Sigma methodologies throughout manufacturing.

The USMO is designed for efficient manufacturing, enabling our customers to access the best proven technology and high performing, secure processing solutions.

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government and other key organizations in the defense industry over our 30 years in the defense electronics industry.

Our customers include Airbus, BAE Systems, Boeing, General Atomics, General Dynamics, L3Harris Technologies, Leonardo, Lockheed Martin Corporation, Northrop Grumman Corporation, and Raytheon Technologies.

Our top customers include Airbus, BAE Systems, Boeing, General Atomics, General Dynamics, L3Harris Technologies, Leonardo, Lockheed Martin Corporation, Northrop Grumman Corporation, Raytheon Technologies and the U.S.

Over this period, we have become recognized for our ability to develop new technologies and meet stringent program requirements.

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We have a proven ability to execute numerous transactions simultaneously effectively and efficiently.

• 1MPACT Value Creation Plan .

Our 1MPACT effort is designed to lay the foundation for the next phase of our value creation at scale.

Led by our Chief Transformation Officer, 1MPACT focuses on the following major areas:

organizational efficiency and scalability;

procurement and supply chain;

facilities optimization;

R&D investment;

and scalable common processes and systems.

• Proven M&A Integration Capability.

We have developed the internal processes and capability to integrate acquired businesses to deliver value through revenue and cost synergies.

We have developed the internal processes and capability, enhanced by 1MPACT, to integrate acquired businesses to deliver value through revenue and cost synergies.

We leverage our common cultures and values as well as common processes, business systems, tools, channels and manufacturing infrastructure to accelerate growth and improve profitability in our acquired businesses.

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Our R&D goal is to fully exploit and maintain our technological lead in the high-performance, real-time sensor processing industry and in mission computing, platform management and other safety-critical applications.

Expenditures for research and development amounted to $113.5 million, $98.5 million and $68.9 million in fiscal years 2021, 2020 and 2019, respectively.

As of July 2, 2021, we had 791 employees, including hardware and software architects and design engineers, primarily engaged in engineering and research and product development activities.

Total expenditures for research and development amounted to $107.2 million, $113.5 million and $98.5 million in fiscal years 2022, 2021 and 2020, respectively.

As of July 1, 2022, we had 853 employees, including systems engineers, hardware and software architects and design engineers, primarily engaged in engineering and research and product development activities.

These individuals, in conjunction with our sales team, also devote a portion of their time to assisting customers in utilizing our products, developing new uses for these products and anticipating customer requirements for new products.

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Our Phoenix, Arizona AMC manufactures our custom microelectronics products in an AS9100 quality system-certified facility.

Our Phoenix, Arizona facility also contains our USMO, which is an IPC1791 and DMEA-certified trusted manufacturing facility and is primarily focused on advanced secure system-on-chip design, assembly, packaging and test.

Our Phoenix, Arizona facility also contains our USMO, which is an IPC1791 certified and DMEA-certified trusted manufacturing facility and is primarily focused on advanced secure system-on-chip design, assembly, packaging and test.

Our Oxnard, California facility manufactures radio frequency and microwave products in an AS9100 quality system-certified facility.

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We manage supplier performance and capability through quality audits and stringent source, incoming and/or first article inspection processes.

We have a comprehensive quality and process control plan for each of our products, which include an effective supply chain management program and the use of automated inspection and test equipment to assure the quality and reliability of our products.

We have a comprehensive quality and process control plan for each of our products, which include a supply chain management

program and the use of automated inspection and test equipment to assure the quality and reliability of our products.

We perform most post sales service obligations (both warranty and other lifecycle support) in-house through a dedicated service and repair operation.

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The high mix, low volume and high complexity/density nature of our products require speed and seamless interaction with all internal functions (as opposed to with an external contract manufacturer) which is a key value proposition of the USMO.

The USMO is also designed for efficient showcasing to customers who at any point wish to access the best proven technology and

high performing, secure electronics and processing manufacturing solutions within a broader product company such as Mercury.

The USMO is also designed for efficient showcasing to customers who at any point wish to access the best proven technology and high performing, secure electronics and processing manufacturing solutions within a broader product company such as Mercury.

Proximity and interaction with our internal engineering organization is a significant benefit.

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Our Alpharetta, Georgia facility offers active matrix liquid crystal display systems which enhances the highly sophisticated man/machine interface.

Our recent acquisition of POC in Torrance, CA is an AS9100 facility that offers Avionics Safety-Certifiable subsystems.

Our facility in Torrance, California is an AS9100 and AS9110C facility that offers Avionics Safety-Certifiable subsystems.

Our recently acquired facility in Upper Saddle River, New Jersey is AS9100 certified and offers digital signal processing products.

Our recently acquired facility in Gulf Breeze, Florida is AS9100 certified and offers rugged avionics and electronics.

Our recently acquired facility in Norcross, Georgia is AS9100 certified and offers RF and microwave products.

Although we generally use standard parts and components for our products, certain components, including custom designed ASICs, static random access memory, FPGAs, microprocessors and other third-party chassis peripherals (single board computers, power supplies, blowers, etc.), are currently available only from a single source or from limited sources.

Prior to the global COVID-19 pandemic, we launched efforts to increase our spend under long-term procurement agreements.

This has proven very beneficial during the severe supply constraints we have faced, which have driven significant price increases across the industry.

We have generally been able to obtain adequate supplies of components in a timely manner from current vendors or, when necessary to meet production needs, from alternate vendors.

This has proven beneficial during the severe supply constraints we have faced, which have driven significant price increases across the industry.

We have recently experienced challenges obtaining adequate supplies of components in a timely manner from current vendors or, when necessary to meet production needs, from alternate vendors.

We believe that, in most cases, alternate vendors can be identified if current vendors are unable to fulfill needs.

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At July 1, 2022, we employed a total of 2,386 people excluding contractors, including 853 in research and development, 149 in sales and marketing, 1,026 in manufacturing and customer support and 358 in general and administrative functions.

We have 141 employees located in Europe, six located in Canada, and one located in Japan, and 2,236 located in the United States.

We do not have any employees represented by a labor organization, and we believe that our relations with our employees are good.

We have 145 employees located in Europe, seven located in Canada, one located in Japan and 2,233 located in the United States.

We also use contractors on an as-needed basis.

Human Capital

At Mercury, our people are at the center of everything we do in driving Innovation That Matters® for our customers.

We recognize that Mercury will succeed only if our employees are engaged, given an opportunity to develop and provided with a safe workplace that values diverse perspectives.

Our Board of Directors provides oversight of our people practices, including regularly reviewing workforce metrics, including the metrics described below.

At Mercury, our people are at the center of everything we do in driving Innovation That Matters® by and for People Who Matter.

We recognize that Mercury will succeed only if our employees are engaged, given an opportunity to develop and provided with a safe workplace that values diverse perspectives from a population that represents our communities.

Our Board of Directors provides oversight of our people practices, including regularly reviewing workforce metrics such as those described below.

Additional data related to these metrics can be found on our website at www.mrcy.com under the Company – Environmental, Social and Governance tab (our “Website”).

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We believe our workplace culture drives engagement that turns ideas into action, delivering trusted and secure solutions at the speed of innovation.

During the past fiscal year, five of our products were recognized among the most innovative solutions in aerospace and defense products and systems by the judges of the 2021 Military & Aerospace Electronics Innovators Awards program, marking the sixth consecutive year in which we have been recognized.

Our investment in our employees extends to our workplaces.

Over the last fiscal year, Mercury’s Phoenix, Arizona, facility, our largest manufacturing facility, was recognized as Medium Manufacturer of the Year by the Arizona Manufacturers Council for its accomplishments in championing innovation, excellence, sustainability and leadership in the manufacturing sector.

For fiscal 2022, we invested over $27.7 million to upgrade our locations to world-class facilities.

We also encourage employees to give back to our communities.

During the pandemic, Mercury and its employees contributed over $100,000 to a fund used to thank healthcare workers in our communities with gift cards.

The Boston Globe also ranked Mercury for 2020 one of the Top Places to Work in Massachusetts, where we are headquartered with over 300 employees as of July 2, 2021.

Mercury regularly seeks employee input through engagement surveys, the results of which drive meaningful and timely action, as appropriate, from our leadership team.

We regularly seek employee input through engagement surveys, the results of which drive meaningful and timely action, as appropriate, from our leadership team and people leaders across the Company.

Participation in our most recent employee engagement survey in April 2022 remained strong at 70%.

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Life-long learning is encouraged at Mercury through our offering of LinkedIn Learning, tuition reimbursement and other employee development opportunities.

We are deeply invested in building the next generation of engineers and scientists, with our internship and co-op programs, as well as through our new partnership with Udacity which fosters upskilling in the areas of AI, machine learning and data science.

Mercury also has formal leadership development programs for high-potential employees:

We are deeply invested in building the next generation of engineers and scientists, with our internship and co-op programs, as well as through our partnership with Udacity which fosters upskilling in the areas of AI, machine learning and data science.

Mercury also has formal programs to further develop our leaders, at various levels:

Leadership Edge (director and above);

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• Pay and Benefits:

The Company seeks competitiveness and fairness in total compensation with reference to peer comparisons and internal equity.

Mercury also offers a variety of well-being programs to support our employees and their families with healthy living.

We seek competitiveness and fairness in total compensation with reference to peer comparisons and internal equity.

We also offer a variety of well-being programs to support our employees and their families with healthy living.

These programs include paid time off, paid parental leave, health insurance coverage, company contributions to retirement savings and employee assistance and work-life programs.

In addition, Mercury offers employees less traditional benefits to support employee well-being such as access to fitness and meditation apps, as well as an online platform through which employees participate in health living challenges and earn financial rewards.

In addition, We offer employees less traditional benefits to support employee well-being such as access to fitness and meditation apps, as well as an online platform through which employees participate in healthy living challenges and earn financial rewards.

• Health and Safety:

On our Website, we disclose quality and safety information, including OSHA injury data.

Over the last fiscal year, Mercury expended $9.9 million for COVID testing, sick pay and other efforts to keep our employees and their families, as well as our facilities, safe during the global pandemic.

Mercury also established a $1 million relief fund, which was fully utilized, for employees to access during the pandemic for family needs (e.g., acquiring personal protective equipment) and hardships.

Our CEO was also recognized by Glassdoor as the top rated CEO in the U.S.

During the pandemic, we expended $10.6 million for COVID testing, sick pay and other efforts to keep our employees and their families, as well as our facilities, safe during the global pandemic.

Our CEO has also been recognized by Glassdoor as a top-rated CEO in the U.S.

for his leadership during the pandemic.

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As of July 1, 2022, women and racially/ethnically diverse employees represented 29% and 42%, respectively, of Mercury’s workforce.

Development of a diverse talent pipeline is a

business imperative at Mercury and critical to our ability to drive innovation and improve long-term results.

Development of a diverse talent pipeline is a business imperative at Mercury and critical to our ability to drive innovation and improve long-term results.

We have established relationships with job networks and educational institutions to proactively attract a diverse pool of talent.

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For example, Mercury sponsors, and our leaders participate in, the annual Simmons Women’s Leadership Conference which has the goal of preparing the next generation of female leaders and furthering equality in the workplace .

Mercury has also conducted gender pay equity assessments and made adjustments to women’s pay levels, as appropriate, as a result of such assessments.

Mercury has also conducted pay equity assessments and made adjustments to pay levels for protected classes, as appropriate, as a result of such assessments.

Lockheed Martin Corporation and Raytheon Technologies comprised an aggregate of 24%, 34% and 32% of our revenues in each of the fiscal years 2022, 2021 and 2020, respectively.

The United States Navy comprised 12% of our revenues in fiscal year 2021.

The United States Navy comprised 14% and 12% of our revenues in fiscal years 2022 and 2021, respectively.

While sales to each of these customers comprise 10% or more of our annual revenue, the sales to these customers are spread across multiple programs and platforms.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business