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Item 1. Business

2024-08-13 compared with 2023-08-15 · 128 added, 223 removed, 275 unchanged (56% of the section changed)

Mercury Systems, Inc.

is a technology company that delivers processing power for the most demanding aerospace and defense missions.

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, meeting our customers’ cost and schedule needs today by allowing them to use or modify our products to suit their mission.

Customers access our solutions via the Mercury Processing 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 and partners to opportunities.

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.

Mercury Systems is a technology company that delivers mission-critical processing power to the edge - where signals and data are collected - to solve the most pressing aerospace and defense challenges.

Mercury’s products and solutions are deployed in more than 300 programs and across 35 countries.

The Company is headquartered in Andover, Massachusetts, and has over 20 locations worldwide.

The Mercury Processing Platform is the unique advantage we provide to our customers.

It comprises the innovative technologies we’ve developed and acquired for more than 40 years that bring integrated, mission-critical processing capabilities to the edge.

Our processing platform spans the full breadth of signal processing—from radio frequency (“RF”) front end to the human-machine interface—to rapidly convert meaningful data, gathered in the most remote and hostile environments, into critical decisions.

It allows us to offer standard products and custom solutions from silicon to system scale, including components, modules, subsystems, and systems and it embodies the customer-centric approach we take to delivering capabilities that are mission-ready, trusted and secure, software-defined, and open and modular.

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

government and original equipment manufacturers (“OEM”) commercial aerospace companies.

Mercury has built a trusted, robust portfolio of proven product solutions, leveraging the most advanced commercial silicon technologies and purpose-built to exceed the performance needs of our defense and commercial customers.

Our mission-critical products and solutions are deployed by our customers for a variety of applications including sensor and radar processing, electronic warfare, avionics, weapons, and command, control, communications, and intelligence (“C4I”).

Mercury has built a trusted, robust portfolio of proven capabilities, leveraging the most advanced commercial silicon technologies and purpose-built to exceed the performance needs of our defense and commercial customers.

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, 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 on time constraints that matter.

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 of sales and industry-leading trusted and secure design and manufacturing capabilities, are the foundational tenets of this highly successful model.

Our deep, long-standing relationships with leading high-tech and other commercial companies, coupled with our targeted 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.

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

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.

From chip-scale to system scale and from data, including 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 loss, diluted loss per share, adjusted earnings per share (“adjusted EPS”) and adjusted EBITDA for fiscal 2023 were $973.9 million, $25.1 million, $(28.3) million, $(0.50), $1.00 and $132.3 million, respectively.

Our consolidated revenues, acquired revenues, net income, earnings per share ("EPS"), adjusted EPS and adjusted EBITDA for fiscal 2022 were $988.2 million, $6.0 million, $11.3 million, $0.20, $2.19 and $200.5 million,

respectively.

Our consolidated revenues, net loss, diluted loss per share, adjusted loss per share, and adjusted EBITDA for fiscal 2024 were $835.3 million, $(137.6) million, $(2.38), $(0.69) and $9.4 million, respectively.

Our consolidated revenues, net loss, diluted loss per share, adjusted earnings per share, and adjusted EBITDA for fiscal 2023 were $973.9 million, $(28.3) million, $(0.50), $1.00 and $132.3 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.

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.

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.

1MPACT was always intended to be a multi-year journey where Mercury builds on its operational competence until the behaviors and practices that came with 1MPACT simply become the way Mercury operates.

On July 18, 2023, Mercury executed the planned evolution of our 1MPACT value creation initiative, embedding the processes and execution of 1MPACT into our Execution Excellence organization.

The 1MPACT office has concluded its responsibilities, having successfully incorporated the principles behind 1MPACT into how Mercury thinks about continuous improvement at all levels of the organization.

Our Business Strategy

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

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 ability to continue to improve our performance and deliver results demands we all align around the few actions that unlock the intrinsic value in the business.

As such, we will focus on four areas that unlock our capacity to create value and reinvest for growth:

Delivering Predictable Results – Continuous improvement in the performance of our programs, transition our challenged development programs into production and mature our management systems and processes.

The Mercury Processing Platform serves customers with cutting-edge commercial technology innovations, purpose built and mission-ready for aerospace and defense applications.

We have two models within the business:

a product model and a solutions model, which have different approaches for innovation and go-to-market.

In our product businesses, we invest in internal R&D to develop new capabilities that can be leveraged by multiple customers and support a wide variety of mission areas and applications.

In our solutions business, we engage with customers to develop capabilities that meet exacting mission requirements and retire risk in a development phase before entering a production phase that can last many years and include numerous technological evolutions.

Our businesses are complementary and synergistic, as they are organized within a single integrated operating unit, leverage common human and capital resources, and share IP to accelerate innovation across our offerings.

Our structure is now aligned and optimized to execute against these different business models.

In 2024, we reorganized to streamline and simplify operations, consolidating two divisions into a single integrated structure that unified all lines of business and matrixed business functions under a Chief Operating Officer.

Our U.S.-based businesses are aligned into two product-oriented business units – Signal Technologies and Processing Technologies –and a third business unit focused on more comprehensive solutions – Integrated Processing Solutions.

A fourth business unit is dedicated to bringing our advanced edge processing capabilities to the international market, with facilities in the U.K., Spain, and Switzerland.

Our Engineering, Operations, Mission Assurance, and Advanced Concepts functions are also centralized under our Chief Operating Officer, driving innovation, execution, and growth across of all our businesses.

We are focused on delivering industry-leading organic growth, adjusted EBITDA margins, and cash flow through the execution of our strategy to innovate and advance our processing platform, expand our content across A&D platforms, and deliver uncompromising performance for all of our stakeholders.

Our ability to continue to improve our performance and deliver results demands we all align around the few actions that unlock the intrinsic value in our business.

As such, our focus is on four areas that unlock our capacity to create value and reinvest for growth:

Delivering Predictable Results – Continuous improvement in the performance of our programs, transition our development programs into production and mature our management systems and processes.

Building a Thriving Organic Growth Engine – Create a growth engine that is consistently bidding and winning new contracts to drive industry leading organic growth.

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Driving Cash Release – Enhance our cash flow conversion, including improvements in delivery and collection.

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.

We believe our investment in R&D is more than double that of our competitors on a percentage of sales.

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”), 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.

We invest in scalable manufacturing operations in the U.S.

to enable rapid, cost-effective deployment of our microelectronics and secure processing solutions to our customers.

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.

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

We have added capabilities, through both M&A and investment in organic growth, both horizontally – in adjacent markets – and vertically – adding more content.

• First, transition to pre-integrated subsystems:

Mercury has expanded capabilities, particularly in integrated subsystems related to defense threats and increased system complexity, which in turn has driven greater outsourcing to us from our prime defense contractor and OEM customers.

• Second, expansion into new submarkets:

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:

As we continue to add content, we seek to apply technology to all computers on aerospace and defense platforms that require trusted, safe and secure processing.

• Fourth, microelectronics:

Our investment domestically in next-generation chiplet technology, from chip-scale to system scale.

Since July 2015, we have added substantial capabilities to our technology portfolio including:

embedded security, with the acquisitions of Lewis Innovative Technologies Inc.

(“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”), 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”), 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 mission-critical processing technologies embedded into the Mercury 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.

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 key “differentiators” we promise to deliver to all of our customers:

Since 2015, we have acquired and fully or partially integrated 15 businesses, which have added substantial capabilities to our technology portfolio including:

Lewis Innovative Technologies Inc., a carve-out acquisition from Microsemi Corporation, The Athena Group, Inc., Delta Microwave LLC, Syntonic Microwave LLC, Pentek Technologies, LLC and Pentek Systems, Inc., Atlanta Micro, Inc., CES Creative Electronic Systems, S.A., Richland Technologies, LLC, GECO Avionics LLC, American Panel Corporation, Physical Optics Corporation, Avalex Technologies LLC, Themis Computer and Germane Systems LC.

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.

The Mercury Processing Platform now has an end-to-end suite of mission-critical processing technologies, comprising:

Microwave and mixed-signal technology for analog and digital signal processing, including frequency conversion, signal conditioning/routing, digitization, and low-latency FPGA processing.

State-of-the-art digital data processing to ensure decision advantage, ranging from general purpose to tailored coprocessors, with high-performance CPU and GPU architectures.

Data Management:

Data and video recording, storage, and encryption to mitigate cyber vulnerability;

connectivity and communications control to securely and efficiently share mission data.

Products and technologies that integrate the human and machine to speed decision-making for mission execution.

Security engineering to ensure systemwide integrity and protect Critical Program Information, IP and sensitive data–including securing boot, key management, attack countermeasures, and memory management.

We deliver technology at the intersection of the high-tech and defense industries, underpinned by key differentiators that set us apart in the market:

Mission-Ready;

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

Additional examples include integrated radio frequency and microwave multi-function assemblies and radio frequency tuners and transceivers.

• Integrated Solutions .

Integrated solutions 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.

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We believe this is a better business and technology model to operate within, as it continues to provide value and benefits to us and our customers over time.

To address the current challenges facing the warfighter, our government and defense prime contractors, we have developed a new product architecture that supports a more dynamic, iterative, spiral development process by leveraging open architecture standards and leading-edge commercial technologies and products.

Our open architecture is carried throughout our entire product line from the very small form-factor subsystems to the high-end, where ultimate processing power and reliability is of paramount importance to the mission.

Our commercially-developed product capabilities cover the entire intelligence, surveillance and reconnaissance (“ISR”) spectrum from acquisition and digitization of the signal, to processing of the signal, through the exploitation and dissemination of the information.

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

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 engage 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

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Embedded systems security has become a requirement for new and emerging military programs and our security solutions are a critical differentiator from our traditional competition.

These security solutions, combined with our next-generation secure Intel® server-class product line, together with increasingly frequent mandates from the government to secure electronic systems for domestic and foreign military sales, position us well to capitalize on DoD program protection security requirements.

Department of Defense (“DoD”) program protection security requirements.

Finally, our built-in security framework creates higher product differentiation, and drives greater program velocity, while lowering risk.

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We are investing in digital transformation, insider trust, cybersecurity, supply chain management and trusted microelectronics, all integral to our commitment to being a leader in delivering uncompromised solutions to our customers.

Recent Acquisitions

Since 2015 we have acquired and integrated 15 businesses.

These acquisitions have expanded Mercury’s technology portfolio with capabilities such as digital signal processing products, high-performance RF modules and components, rugged avionics and electronics, and safety-certifiable subsystems.

The five acquisitions completed since July 1, 2019 are shown below.

Name of Acquired Entities Date of Acquisition

American Panel Corporation September 23, 2019

Physical Optics Corporation December 30, 2020

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

Market Opportunity

Mercury serves a large and growing global defense technology market with strong tailwinds from the current defense super-cycle and secular growth targets.

We are focused on the Tier 2 and Tier 3 defense technology market, which continues to grow while the total U.S.

defense spending is expected to flatten over the next five years.

The primary demand drivers for our unique capabilities include:

an increased commitment to defense spending by U.S.

allies in light of the dynamic threat environment in Europe and Asia;

ongoing modernization of legacy defense platforms to maintain relevance in the current near-peer threat environment;

increasing electronification of next-generation defense systems, where electronics are driving capability enhancements on next-gen programs;

outsourcing and delayering from the government and prime customers seeking to access innovation from smaller players like Mercury;

and a focus on open systems, which allow customers to upgrade capabilities more rapidly and efficiently and better leverage advances in commercial technology such as AI-powered processing.

The market can be segmented into verticals aligned with mission capabilities, and a value chain that consists of prime integrators that contract directly with the government and deliver large scale platforms.

Supporting the primes is a multi-tiered supplier base that delivers components and modules through standalone subsystems and integrated subsystems.

Mercury spans several levels of this supply chain, typically working directly with the government or primes in our program business, while selling our products into third- and fourth-tier suppliers.

Because of the broad demand for high-performance processing at the edge across defense missions, we operate in a number of the larger, faster growing parts of the market, from C4I to sensor processing, and spanning all operational domains—air, land, sea, space, and cyber.

The breadth and depth of our Processing Platform enables us to play vertically from components, or chip-scale, all the way to integrated processing solutions, in all of these markets.

This ability to grow horizontally and vertically within this broad market provides a number of vectors for growth, evidenced by our recent significant design wins and bookings in our record backlog.

We are well positioned on a number of significant and enduring defense programs, with a diverse portfolio of contracts with blue-chip customers, a large installed base, and the sole source for many unique capabilities.

In some cases, we are a directed source to the primes by the U.S.

government, reflecting the differentiation of our processing platform.

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

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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, 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 acquisitions of the carve-out business from Microsemi Corporation, Delta Microwave LLC, Syntonic Microwave LLC, Pentek Technologies LLC, and Atlanta Micro, Inc., 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 Creative Electronic Systems, S.A., Richland Technologies, LLC, GECO Avionics LLC, American Panel Corporation, Physical Optics Corporation, and Avalex Technologies LLC 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.

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

Finally, our CES addition, due to its location in Geneva, Switzerland is helping to open more opportunities in international markets.

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• The aerospace and defense electronics market is expected to grow in 2024 and beyond.

According to Renaissance Strategic Advisors (“RSA”), as of June 2023, the global aerospace and defense electronics market is estimated to be $148 billion in 2023, growing to $199 billion by 2028.

According to Renaissance Strategic Advisors (“RSA”), as of May 2024, the global aerospace and defense electronics market is estimated to be $154 billion in 2024, growing to $197 billion by 2029.

Within this global market, RSA estimates that the total Tier 2 defense electronics market, which Mercury participates in, was approximately $50 billion in 2024, and will grow to $66 billion in 2029.

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RSA estimates the compound annual growth rate (“CAGR”) from 2024-2029 for these markets to be 5.5% for platform and mission management, 5.5% for C2I and 6.1% for dedicated communications.

Within the global Tier 2 sensor and effector mission systems market in which we participate, RSA estimated the market for 2023 to be $6.0 billion for EW, $6.6 billion for radar, $2.7 billion for EO/IR, $1.4 billion for acoustics and $3.9 billion for weapons systems.

Within the global Tier 2 sensor and effector mission systems market in which we participate, RSA estimated the market for 2024 to be $6.2 billion for EW, $7.0 billion for radar, $2.8 billion for EO/IR,

$1.4 billion for acoustics and $4.1 billion for weapons systems.

RSA estimates the 2024-2029 CAGR for these markets to be 6.0% for EW, 5.5% for radar, 5.4% for EO/IR, 7.0% for acoustics and 6.6% for weapons systems.

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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 .

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.

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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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.

We believe that this could 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.

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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 2023 was estimated by RSA to be $48 billion.

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

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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 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.

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DoD’s FY23 budget requested $3.3 billion to fund microelectronics research and development initiatives, a historically large increase in funding.

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.

DoD's FY24 budget requested $2.6 billion to fund microelectronic initiatives, and the FY25 President's Budget request includes $2.5 billion to fund microelectronics initiatives.

Along with Congress' passage of the Creating Helpful Incentives to Produce Semiconductors ("CHIPS") act in August 2022, DoD's investments in microelectronics further amplify the U.S.

government's commitment to reinforcing the U.S.

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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.

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

Since the acquisition, we have made additional investments in security and advanced packaging, most notably our announced $15 million capital investment in fiscal year 2020 to expand our trusted custom microelectronics business in Phoenix, Arizona, to bring cutting-edge commercial silicon to the DoD.

This initiative is specifically intended to bridge DoD technologies from monolithic ASIC designs, which are purpose-built for DoD but are deployed on legacy silicon designs, to heterogeneous “chiplet” architectures, which leverage best-of-breed silicon from commercial providers and packages the silicon for defense-specific applications, including the ability to embed security into the device itself.

Our Competitive Strengths

We believe the following competitive strengths will allow us to take advantage of the evolving trends in our industry and successfully pursue our business strategy:

• Subsystem Solutions Provider for the C4ISR and Electronic Warfare Markets .

Through our commercially developed, specialized processing subsystem solutions, we address the challenges associated with the collection and processing of massive, continuous streams of data and dramatically shorten the time that it takes to give information to U.S.

armed forces at the tactical edge.

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 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.

• Diverse Mix of Stable, Growth Programs Aligned with DoD Funding Priorities .

Our products and solutions have been deployed on more than 300 different programs and over 25 different defense prime contractors.

We serve high priority markets for the DoD and foreign militaries, such as UAVs, ballistic missile defense, guided missiles and precision munitions, airborne reconnaissance, electronic warfare and have secured positions on mission-critical programs including Aegis, Predator and Reaper UAVs, F-35 Joint Strike Fighter, LTAMDS, Patriot missile, SEWIP and Paveway.

In addition, we consistently leverage our technology and capabilities across multiple programs, providing significant operating leverage and cost savings.

Our acquisitions allow us to participate in a broader array of programs, many with key strategic customers of ours.

• We are a leading technology company serving the aerospace and defense industry.

We have a portfolio of Open Standards Architecture (“OSA”) technology building blocks across the entire sensor processing chain.

We offer embedded secure processing capabilities with advanced packaging and cooling technologies that ruggedize commercial technologies while allowing them to stay cool for reliable operation.

These capabilities allow us to help our customers meet the demanding SWaP requirements of today’s defense platforms.

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.

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.

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

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”).

These facilities provide significant scale and capacity for our defense prime customers, who have been increasingly willing to outsource to partners with the scale needed to meet large program production requirements.

In addition, our Phoenix, Arizona AMC is a Defense Microelectronics Activity (“DMEA”)-certified, trusted manufacturing facility, which represents a significant competitive advantage.

Our Phoenix AMC also includes a surface mount technology manufacturing capability which we refer to as our U.S.

Manufacturing Operations (“USMO”).

• We provide advanced, integrated security features for our products and subsystems, addressing an increasingly prevalent requirement for DoD program security .

We offer secure processing expertise that is built-in to our pre-integrated subsystems.

By doing this we are able to provide secure building blocks that allow our customers to also incorporate their own security capabilities.

This assists our customers in ensuring program protection as they deploy critical platforms and programs, all in support of DoD missions.

The acquisition of the Carve-Out Business brought us new security technologies and also allowed us to provide enhanced security capabilities in areas such as memory and storage devices.

Our acquisitions of the Carve-Out Business, LIT and Athena also added to our portfolio of sophisticated firmware and software specifically designed to secure microelectronic devices that can be leveraged across our product portfolio.

• We are pioneering a next generation defense business model .

The DoD and the defense industrial base is currently undergoing a major transformation.

Domestic political and budget uncertainty, geopolitical instability and evolving global threats have become constants.

The defense budget remains under pressure and R&D and technology spending are often in budgetary competition with the increasing costs of military personnel requirements, health care costs and other important elements within the DoD and the federal budget generally.

Finally, defense acquisition reform calls for the continued drive for innovation and competition within the defense industrial base, while also driving down acquisition costs.

Our approach is built around a few key pillars:

• The mission-ready products in our portfolio can be incorporated into aerospace and defense platforms in their standard commercial forms or customized to meet unique program requirements.

• We continue to leverage our expertise in building pre-integrated subsystems in support of critical defense programs, driving out procurement costs by lowering integration expenses of our customers.

• We have been a pioneer in driving OSA for both embedded computing and RF.

• The DoD has asked defense industry participants to invest their own resources into R&D.

This approach is a pillar of our business model.

• Security and program protection are now critical considerations for both program modernizations as well as for new program deployment.

We are now in our fourth generation of building secure embedded processing solutions.

We have a next generation business model built to meet the emerging needs of the DoD.

• Value-Added Subsystem Solution Provider for Defense Prime Contractors .

Because of the DoD’s continuing shift toward a firm fixed price contract procurement model, an increasingly uncertain budgetary and procurement environment, and increased budget pressures from both the U.S.

and allied governments, defense prime contractors are accelerating their move toward outsourcing opportunities to help mitigate the increased program and financial risk.

Our differentiated secure sensor and safety-critical processing solutions offer meaningful capabilities upgrades for our customers and enable the rapid, cost-effective deployment of systems to the end customer.

We believe our open architecture subsystems offer differentiated sensor processing and data analytics capabilities that cannot be easily replicated.

Our solutions minimize program risk, maximize application portability and accelerate customers’ time to market, all within a fixed-pricing contracting environment.

• Delivery of Platform-Ready Solutions for Classified Programs .

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.

• We have invested in advanced, domestic design and manufacturing capabilities.

We have prioritized investments to build our internal capabilities and capacity for defense electronics design and manufacturing in the U.S.

These investments include the consolidation of a number of sub-scale microelectronics manufacturing facilities into our modern AMCs as well as the establishment of our USMO in Phoenix, Arizona.

In addition to the consolidation of

facilities into scalable engineering and manufacturing centers of excellence, we have made the necessary investments to outfit these facilities with modern, scalable and redundant tools and equipment to promote quality, efficiency, throughput and redundancy.

These investments include the consolidation of a number of sub-scale microelectronics manufacturing facilities into our modern advanced microelectronics centers (“AMCs”) as well as the establishment of our operations facility in Phoenix, Arizona.

In addition to the consolidation of facilities into scalable engineering and manufacturing centers of excellence, we have made the necessary investments to outfit these facilities with modern, scalable and redundant tools and equipment to promote quality, efficiency, throughput and redundancy.

In addition we invested in our information technology (“IT”) infrastructure and business systems to meet Defense Federal Acquisition Regulation Supplement (“DFARS”) requirements for cybersecurity.

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Our AMCs in Hudson, New Hampshire, West Caldwell, New Jersey, Oxnard, California, Huntsville, Alabama, Phoenix, Arizona and Torrance, California are strategically located near key customers and are purpose-built for the design, build and test of RF components and subsystems in support of a variety of key customer programs.

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

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

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

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

This allows for the most repeatable product performance, while optimizing affordability and production responsiveness.

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They also bring experience in effectively implementing operational transformations that deliver strong results and drive long-term value creation.

Our leadership team is focused on operational execution, including setting clear priorities, developing the appropriate processes and systems, and delivering results.

Our leadership team is focused on operational execution, including setting clear priorities, developing

the appropriate processes and systems, and delivering results.

We are focused on four priorities to unlock capacity to create value and reinvest for growth.

They include:

delivering predictable results, build a thriving growth engine, expanding margins, and driving cash release.

delivering predictable results, building a thriving growth engine, expanding margins, and driving cash release.

Our ability to make progress in each of these areas is predicated upon having the highest performing team in our industry, which is the thrust of several significant workforce development initiatives.

We are confident that we have assembled the necessary expertise to continue to grow and scale our business.

• Mature M&A Origination and Execution Capability .

We have a strong track-record of identifying and executing strategic acquisitions.

Since July 1, 2015 we have acquired 15 businesses, which are strategically aligned with Mercury, successfully completing integration of the earlier acquired businesses with the integration of the more recent acquisitions progressing well.

We have established an internal team that brings decades of experience across more than 100 transactions.

We have developed internal processes to identify and source strategic acquisitions on a proprietary basis and negotiated directly with owners on a number of acquisitions.

Our internal capabilities include financial, legal and other transaction diligence, deal valuation and deal negotiations.

• 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.

Overseen by our Execution Excellence organization, 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.

Overseen by our operations organization, 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.

We operate in a highly competitive marketplace characterized by rapidly changing technology, frequent product performance improvements, increasing speed of deployment to align with warfighters’ needs and evolving industry standards and requirements coming from our customers or the DoD.

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Some of these competitors are larger and have greater resources than us.

Some of these competitors compete against us at purely a

component or board-level, others at a subsystem level.

Some of these competitors compete against us at purely a component or board-level, others at a subsystem level.

We also compete with in-house design teams at our customers.

The DoD as well as the defense prime contractors are pushing for more outsourcing of subsystem designs to mitigate risk and to enable concurrent design of the platform which ultimately leads to faster time to deployment.

We have aligned our strategy to capitalize on that trend and are leveraging our long standing subsystem expertise to provide this value to our customers.

We have aligned our strategy to capitalize on that trend and are leveraging our longstanding subsystem expertise to provide this value to our customers.

Research and Product Development

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Total expenditures for research and development amounted to $101.3 million, $108.8 million and $107.2 million in fiscal years 2024, 2023 and 2022, respectively.

As of June 30, 2023, we had 918 employees, including hardware and software architects and design engineers, primarily engaged in engineering and research and product development activities.

As of June 28, 2024, we had 790 employees, including hardware and software architects and design engineers, primarily engaged in engineering, 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.

Manufacturing

The majority of our sales are produced in AS9100 quality system-certified facilities.

The majority of our products and solutions are produced in AS9100 quality system-certified facilities.

The current scope of delivered hardware products includes commercial and industrial class printed circuit board assemblies (modules), complex chassis subsystems, rugged display system and servers and RF and microwave components and subsystems.

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

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

Our Cypress, California, West Lafayette, Indiana, and Huntsville, Alabama facilities are AS9100 quality systems-certified facilities as well.

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Our Andover, Massachusetts facility is also a DMEA-certified trusted design facility and is primarily focused on advanced security features for the processing product line.

Our Geneva, Switzerland facility, the headquarters of Mercury's European operations, provides electronic design and manufacturing, maintenance and support services and is AS9100 and EASA Part 145 quality systems-certified.

Our Geneva, Switzerland facility, the headquarters of our international operations, provides electronic design and manufacturing, maintenance and support services and is AS9100 and EASA Part 145 quality systems-certified.

Our Silchester, England facility provides engineering, development and integration services and is AS9100 quality systems-certified.

We rely on both vertical integration and subcontracting to contract manufacturers to meet our manufacturing needs.

Our USMO and Geneva facilities have the manufacturing capabilities to complete the assembly and testing for certain of our embedded multi-computing products.

Our Phoenix and Geneva facilities have the manufacturing capabilities to complete the assembly and testing for certain of our embedded multi-computing products.

We subcontract as needed a portion of the assembly and testing for our other embedded multi-computing products to contract manufacturers in the U.S.

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We periodically review our contract manufacturing capabilities to ensure we are optimized for the right mix of quality, affordability, performance and on-time delivery.

Our AMC in Phoenix, Arizona is built around scalable, repeatable, secure, affordable and predictable manufacturing.

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.

Our advanced microelectronics center in Phoenix, Arizona is built around scalable, repeatable, secure, affordable and predictable manufacturing.

Phoenix 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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The Hudson, New Hampshire, West Caldwell, New Jersey and Oxnard, California facilities are specifically aimed at providing scalable manufacturing within our critical businesses.

We leverage best practices in design, development,

manufacturing and materials handling at these production and subsystems integration facilities.

We leverage best practices in design, development, manufacturing and materials handling at these production and subsystems integration facilities.

These facilities include the design, build and test of both RF and microwave components and subsystems in support of a variety of key customer programs.

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

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

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

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Our 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.

We also design, develop and manufacture DRFM units for a variety of modern electronic warfare applications, as well as radar environment simulation and test systems for defense and intelligence applications.

Although we generally use standard parts and components for our products, certain components, including custom designed Application-Specific Integrated Circuits ("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.

We also design, develop and manufacture digital radio frequency memory units for a variety of modern electronic warfare applications, as well as radar environment simulation and test systems for defense and intelligence applications.

We develop high performance signals intelligence payloads and EO/IR technologies for small UAV platforms as well as powerful onboard UAV processor systems for real-time wide area motion imagery.

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We believe the duration of our intellectual property rights is adequate relative to the expected lives of our products, processes and services.

As of June 30, 2023, we had a backlog of orders aggregating approximately $1,139.8 million, of which $716.4 million is expected to be recognized as revenue within the next twelve months.

As of July 1, 2022, backlog was approximately $1,037.7 million.

As of June 28, 2024, we had a backlog of orders aggregating approximately $1.3 billion, of which $758.9 million is expected to be recognized as revenue within the next twelve months.

As of June 30, 2023, backlog was approximately $1.1 billion.

Our backlog is comprised of accepted purchase orders for which a majority are fully funded.

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At June 28, 2024, we employed a total of 2,364 people excluding contractors, including 790 in research and development, 126 in sales and marketing, 1,160 in manufacturing and customer support and 288 in general and administrative functions.

We have 140 employees located in Europe and 2,456 located in the United States.

We have 137 employees located outside of the United States and 2,227 located in the United States.

We also use contractors on an as-needed basis.

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with 2,227 employees and we operate offices in 11 states.

Mercury also has operations in Europe and Canada.

Outside the U.S., we had 137 employees, and operate from locations in Canada, Spain, Switzerland, and the United Kingdom.

No employees are covered by any collective bargaining or similar agreements.

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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, four of our products were recognized among the most innovative solutions in aerospace and defense products and systems by the judges of the 2022 Military & Aerospace Electronics Innovators Awards program, marking the seventh consecutive year in which we have been recognized.

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 October 2023 remained strong at 75%.

Our investment in our employees extends to our workplaces.

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We also encourage employees to give back to our communities.

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 2023 remained strong at 76%.

Mercury sponsors and participates in a number of philanthropic events in our communities, such as Run to Home Base, an annual event that funds clinical care and support for veterans and their families who are impacted by the invisible wounds of war.

• Training and Development:

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During the program, employees gain insight and experience rotating through multiple business units and engineering disciplines and upon program completion are matched with a position.

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

Mentor Programs, Mercury Managers Matter (for manager- and director-level employees);

and Managing at Mercury (for supervisors, team leaders and new managers)

We also have formal programs to further develop our leaders, at various levels:

leadership cohorts, mentor programs, team excellence discussions, training programs for new managers and regular engagement with our executive leadership team.

• Pay and Benefits:

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

We received a AAA MSCI ESG during 2021 and 2022, placing us in the top 3% of their ratings group for aerospace and defense.

We received an Environment, Social, and Governance ("ESG") score

of AAA on the Morgan Stanley Capital International ("MSCI") ESG Rating scale during 2024, placing us in the top 5% of their ratings group for aerospace and defense.

• Diversity, Equity & Inclusion:

Our Website discloses detailed workplace data surrounding our gender diversity, racial/ethnic diversity and turnover data.

As of June 30, 2023, women and racially/ethnically diverse employees represented 29% and 43%, 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.

Our Website discloses detailed workplace data surrounding our gender composition, racial/ethnic representation and turnover data.

As of June 28, 2024, women and racially/ethnically diverse employees represented 30% and 44%, respectively, of our workforce.

Development of a broad 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.

Our employees are afforded opportunities to cultivate diversity, equity, and inclusion both within Mercury and our industry.

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

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

For example, we sponsor, and our leaders participate in, the annual Simmons Leadership Conference which has the goal of preparing the next generation of female leaders and furthering equality in the workplace.

We also regularly conduct pay equity assessments and makes adjustments to pay levels for employees in protected classes, as appropriate, as a result of such assessments.

L3Harris comprised 12% of our revenues in fiscal 2024, and accounted for less than 10% of our revenues in fiscal 2023 and 2022.

RTX Corporation comprised 10%, 14%, and 14% of our revenues in each of the fiscal years 2024, 2023 and 2022, respectively.

Lockheed Martin comprised 11%, 13%, and 10% of our revenues in each of the fiscal years 2024, 2023 and 2022, respectively.

The United States Navy comprised less than 10%, 14% and 12% of our revenues in fiscal years 2023, 2022 and 2021, respectively.

Northrop Grumman accounted for 11% of our revenues in fiscal 2023 and less than 10% 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.

The United States Navy accounted for less than 10% of our revenues in fiscal 2024 and 2023, and comprised 14% of our revenues in fiscal year 2022.

Northrop Grumman accounted for less than 10% of our revenues in fiscal 2024, 11% in fiscal 2023, and less than 10% in fiscal year 2022.

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

For the fiscal years ended 2024, 2023 and 2022, we had no single program that represented 10% or more of our revenues.

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Information about revenue we receive within and outside the U.S.

can be found in Note Q - Operating Segment, Geographic Information and Significant Customers - to the accompanying Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

can be found in Note P - Operating Segment, Geographic Information and Significant Customers - to the accompanying Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

We maintain a website at www.mrcy.com .

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Our reports filed with, or furnished to, the SEC are also available on the SEC’s website at www.sec.gov .

Investors and others should note that we announce material financial information using our website ( www.mrcy.com ), SEC filings, press releases, public conference calls, webcasts, and social media, including Twitter ( twitter.com/mrcy and twitter.com/mrcy_CEO ) and LinkedIn ( www.linkedin.com/company/mercury-systems ).

Investors and others should note that we announce material financial information using our website ( www.mrcy.com ), SEC filings, press releases, public conference calls, webcasts, and social media, including X (formerly Twitter) ( X.com/mrcy ) and LinkedIn ( www.linkedin.com/company/mercury-systems ).

Therefore, we encourage investors and others interested in Mercury to review the information we post on the social media and other communication channels listed on our website.

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