What changed in this filing

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Item 1. Financial Statements

2025-11-04 compared with 2025-05-06 · 225 added, 257 removed, 518 unchanged (48% of the section changed)

3 unchanged sentences

(In thousands, except share and per share data)

March 28, 2025 June 28, 2024

September 26, 2025 June 27, 2025

Current assets:

Cash and cash equivalents $ 304,716 $ 309,099

Accounts receivable, net of allowance for credit losses of $ 1,765 and $ 2,020 at March 28, 2025 and June 28, 2024, respectively

Accounts receivable, net of allowance for credit losses of $ 1,832 and $ 1,767 at September 26, 2025 and June 27, 2025, respectively

92,648 109,588

Unbilled receivables and costs in excess of billings, net of allowance for credit losses of $ 5,311 and $ 6,340 at March 28, 2025 and June 28, 2024, respectively

Unbilled receivables and costs in excess of billings, net of allowance for credit losses of $ 5,311 for both September 26, 2025 and June 27, 2025

274,835 278,475

15 unchanged sentences

Accrued compensation 23,540 51,321

Income taxes payable — 109

Deferred revenues and customer advances 125,498 126,797

5 unchanged sentences

Total liabilities 982,583 961,303

Commitments and contingencies (Note L)

Commitments and contingencies (Note M)

Shareholders’ equity:

4 unchanged sentences

85,000,000 shares authorized;

58,852,270 and 58,093,528 shares issued and outstanding at March 28, 2025 and June 28, 2024, respectively

59,426,779 and 59,003,174 shares issued and outstanding at September 26, 2025 and June 27, 2025, respectively

Additional paid-in capital 1,301,397 1,287,478

7 unchanged sentences

(In thousands, except per share data)

Third Quarters Ended Nine Months Ended

March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024

First Quarters Ended

September 26, 2025 September 27, 2024

Net revenues $ 225,209 $ 204,431

11 unchanged sentences

Interest expense ( 7,886 ) ( 8,906 )

Other income (expense), net 2,304 ( 2,784 ) ( 2,900 ) ( 5,706 )

Other expense, net ( 2,080 ) ( 1,339 )

Loss before income tax benefit ( 16,536 ) ( 23,119 )

11 unchanged sentences

Deferred compensation and pension benefit plan, net of tax ( 41 ) ( 54 )

Total other comprehensive (loss) income, net of tax ( 2,211 ) 2,549 ( 4,136 ) ( 857 )

Total other comprehensive income (loss), net of tax 140 ( 6,259 )

Total comprehensive loss $ ( 12,375 ) $ ( 23,784 )

3 unchanged sentences

(In thousands)

For the Third Quarter Ended March 28, 2025

Common Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Shareholders’

Shares Amount

Balance at December 27, 2024 58,660 $ 587 $ 1,266,926 $ 184,695 $ 8,068 $ 1,460,276

Issuance of common stock under employee stock incentive plans 102 1 ( 1 ) — — —

Issuance of common stock under defined contribution plan 90 1 3,794 — — 3,795

Stock-based compensation — — 8,399 — — 8,399

Net loss — — — ( 19,170 ) — ( 19,170 )

Other comprehensive loss — — — — ( 2,211 ) ( 2,211 )

Balance at March 28, 2025 58,852 $ 589 $ 1,279,118 $ 165,525 $ 5,857 $ 1,451,089

For the Third Quarter Ended March 29, 2024

For the First Quarter Ended September 26, 2025

Common Stock Additional

4 unchanged sentences

Shares Amount

Balance at December 29, 2023 57,564 $ 576 $ 1,220,343 $ 275,150 $ 8,423 $ 1,504,492

Balance at June 27, 2025 59,003 $ 590 $ 1,287,478 $ 181,895 $ 3,498 $ 1,473,461

Issuance of common stock under employee stock incentive plans 345 3 ( 3 ) — — —

3 unchanged sentences

Other comprehensive income — — — — 140 140

Balance at March 29, 2024 57,869 $ 579 $ 1,230,666 $ 230,576 $ 10,972 $ 1,472,793

For the Nine Months Ended March 28, 2025

Balance at September 26, 2025 59,427 $ 594 $ 1,301,397 $ 169,380 $ 3,638 $ 1,475,009

For the First Quarter Ended September 27, 2024

Common Stock Additional

6 unchanged sentences

Issuance of common stock under employee stock incentive plans 235 2 ( 2 ) — — —

Issuance of common stock under employee stock purchase plan 60 1 1,491 — — 1,492

Issuance of common stock under defined contribution plan 126 1 4,511 — — 4,512

2 unchanged sentences

Other comprehensive loss — — — — ( 6,259 ) ( 6,259 )

Balance at March 28, 2025 58,852 $ 589 $ 1,279,118 $ 165,525 $ 5,857 $ 1,451,089

For the Nine Months Ended March 29, 2024

Common Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive Income Total

Shareholders’

Shares Amount

Balance at June 30, 2023 56,962 $ 570 $ 1,196,847 $ 357,439 $ 11,829 $ 1,566,685

Issuance of common stock under employee stock incentive plans 435 4 ( 4 ) — — —

Issuance of common stock under employee stock purchase plan 107 1 3,162 — — 3,163

Issuance of common stock under defined contribution plan 365 4 12,435 — — 12,439

Retirement of common stock — — ( 15 ) — — ( 15 )

Stock-based compensation — — 18,241 — — 18,241

Net loss — — — ( 126,863 ) — ( 126,863 )

Other comprehensive loss — — — — ( 857 ) ( 857 )

Balance at March 29, 2024 57,869 $ 579 $ 1,230,666 $ 230,576 $ 10,972 $ 1,472,793

Balance at September 27, 2024 58,455 $ 584 $ 1,253,249 $ 202,274 $ 3,734 $ 1,459,841

The accompanying notes are an integral part of the consolidated financial statements.

2 unchanged sentences

(In thousands)

Nine Months Ended

March 28, 2025 March 29, 2024

First Quarters Ended

September 26, 2025 September 27, 2024

Cash flows from operating activities:

7 unchanged sentences

Other non-cash items 288 2,707

Cash settlement for termination of interest rate swap — 7,403

Changes in operating assets and liabilities:

11 unchanged sentences

Purchases of property and equipment ( 6,548 ) ( 6,236 )

Other investing activities 4,600 —

Net cash used in investing activities ( 6,548 ) ( 6,236 )

Cash flows from financing activities:

Proceeds from employee stock plans 1,492 3,163

Borrowings under credit facilities — 105,000

Purchase and retirement of common stock — ( 15 )

Payments of deferred financing and offering costs — ( 2,249 )

Net cash (used in) provided by financing activities ( 757 ) 106,217

Net cash used in financing activities — ( 2,249 )

Effect of exchange rate changes on cash and cash equivalents ( 17 ) 747

Net increase in cash and cash equivalents 89,301 71,082

Net decrease in cash and cash equivalents ( 4,383 ) ( 22,398 )

Cash and cash equivalents at beginning of period 309,099 180,521

Cash and cash equivalents at end of period $ 304,716 $ 158,123

Cash paid during the period for:

Cash paid (refunded) during the period for:

Interest $ 8,523 $ 8,898

Income taxes paid, net $ 265 $ 14,451

Income taxes paid (refunded), net $ 486 $ ( 923 )

Supplemental disclosures—non-cash activities:

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Mercury Systems, Inc.

(the Company) is a technology company that delivers mission-critical processing power to the edge to solve the most pressing aerospace and defense challenges.

Combining technologies and expertise developed for more than 40 years, the Mercury Processing Platform offers customers a unique advantage to unleash breakthrough capabilities.

It spans the full breadth of signal processing - from RF front end to the human-machine interface - to rapidly convert meaningful data, gathered in the most remote and hostile environments, into critical decisions.

The Processing Platform allows Mercury to offer standard products and custom integrated solutions from silicon to system scale, including components, modules, subsystems, and systems.

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

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

(the Company) is a global technology company that delivers mission-critical processing 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 the Company provides to its customers.

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

The Company's 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 the Company 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 the Company takes to delivering capabilities that are mission-ready, trusted and secure, software-defined, and open and modular.

Summary of Significant Accounting Policies

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These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the fiscal year ended June 27, 2025, which are contained in the Company’s Annual Report on Form 10-K filed with the SEC on August 11, 2025.

The results for the third quarter and nine months ended March 28, 2025 are not necessarily indicative of the results to be expected for the full fiscal year.

The results for the first quarter ended September 26, 2025 are not necessarily indicative of the results to be expected for the full fiscal year.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.

All intercompany transactions and balances have been eliminated in consolidation.

All references to the third quarter of fiscal 2025 are to the quarter ended March 28, 2025.

There were 13 weeks during the third quarters ended March 28, 2025 and March 29, 2024, respectively.

There were 39 weeks during the nine months ended March 28, 2025 and March 29, 2024, respectively.

All references to the first quarter of fiscal 2026 are to the quarter ended September 26, 2025.

There were 13 weeks during the first quarters ended September 26, 2025 and September 27, 2024, respectively.

U SE OF E STIMATES

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A CCOUNTS R ECEIVABLES F ACTORING

On September 27, 2022, the Company executed an uncommitted receivables purchase agreement (“RPA”), pursuant to which the Company may offer to sell certain customer receivables, subject to the terms and conditions of the RPA.

The RPA was an uncommitted arrangement such that the Company was not obligated to sell any receivables and the party had no obligation to purchase any receivables from the Company.

Pursuant to the RPA, the party may purchase certain of the Company's customer receivables at a discounted rate, subject to a limit that as of any date, the total amount of purchased receivables held by the party, less the amount of all collections received on such receivables, may not exceed $ 20,000 .

The RPA had an indefinite term, with the agreement remaining in effect until termination by either party.

Factoring under the RPA was treated as a true sale of accounts receivable by the Company.

The Company had continued involvement in servicing accounts receivable under the RPA, but no retained interests related to the factored accounts receivable.

On March 14, 2023, the Company amended the RPA to increase the capacity from $ 20,000 to $ 30,600 .

On June 21, 2023, the Company further amended the RPA to increase the capacity from $ 30,600 to $ 60,000 .

On August 13, 2024, the Company terminated the RPA in conjunction with entering into a new receivables purchase and service agreement.

On August 13, 2024, the Company entered into a $ 60,000 committed receivables purchase and servicing agreement (“RPSA”) with a new party.

On August 13, 2024, the Company entered into a $ 60,000 committed receivables purchase and servicing agreement (“RPSA”).

The RPSA has an initial term of two years .

Pursuant to the RPSA, the new party has committed to purchase receivables from a certain number of agreed upon customers, maintaining a balance of purchased receivables at or below $ 60,000 .

Pursuant to the RPSA, the counterparty has committed to purchase receivables from a certain number of agreed upon customers, maintaining a balance of purchased receivables at or below $ 60,000 .

Under the RPSA, a portion of the factored receivables is paid by the counterparty in cash and classified as a deferred purchase price receivable, which is paid as receivables are collected by the Company.

1 unchanged sentence

Cash flows attributable to factored receivables are reflected as cash flows from operating activities in the Company's Consolidated Statements of Cash Flow s.

Factor ing fees are included as Selling, general and administrative expenses in the Company's Consolidated Statements of Operations and Comprehensive Loss.

The Company had $ 55,139 factored accounts receivables as of March 28, 2025 and incurred factoring fees of approximately $ 467 and $ 1,288 for the third quarter and nine months ended March 28, 2025.

The Company had $ 44,229 factored accounts receivables as of March 29, 2024 and incurred factoring fees of approximately $ 375 and $ 1,636 for the third quarter and nine months ended March 29, 2024.

Factor ing fees are included as Selling, general and administrative expe nses in the Company's Consolidated Statements of Operations and Comprehensive Loss.

The Company had $ 45,468 and $ 419 of factored accounts receivables and factoring fees, respectively, for the first quarter ended September 26, 2025.

The Company had $ 43,659 and $ 362 of factored accounts receivables and factoring fees, respectively, for the first quarter ended September 27, 2024.

The Company records the fair value of its derivative financial instruments in its consolidated financial statements in Other non-current assets, or Other non-current liabilities depending on their net position, regardless of the purpose or intent for holding the derivative contract.

2 unchanged sentences

Changes in the fair values of derivatives not qualifying for hedge accounting are reported in earnings as they occur.

All derivatives for the Company qualified for hedge accounting as of March 28, 2025.

All derivatives for the Company qualified for hedge accounting as of September 26, 2025.

R EVENUE R ECOGNITION

9 unchanged sentences

Revenue recognized at a point in time generally relates to contracts that include a combination of components, modules and sub-assemblies, integrated solutions and related system integration or other services.

Contracts with distinct performance obligations recognized at a point in time, with or without an allocation of the transaction price, to taled 53 % and 51 % of revenues for the third quarter and nine months ended March 28, 2025, respectively.

Contracts with distinct performance obligations recognized at a point in time, with or without an allocation of the transaction price, totaled 42 % and 44 % of revenues for the third quarters and nine months ended March 29, 2024, respectively.

Contr acts with distinct performance obligations recognized at a point in time, with or without an allocation of the transaction price, totaled 52 % and 45 % of revenues for the first quarters ended September 26, 2025 and September 27, 2024, respectively.

The Company also engages in contracts for development, production and service activities and recognizes revenue for performance obligations over time.

2 unchanged sentences

The Company’s cost reimbursable contracts typically include cost-plus fixed fee and time and material contracts.

Total revenue recognized over time was 47 % and 49 % of total revenues for the third quarter and nine months ended March 28, 2025, respectively.

Total revenue recognized over time was 58 % and 56 % of total revenues for the third quarter and nine months ended March 29, 2024 , respectively.

Total revenue recognized over time was 48 % and 55 % of total revenues for the first quarters ended September 26, 2025 and September 27, 2024 , respectively.

Accounting for contracts recognized over time requires significant judgment relative to estimating total contract revenues and costs.

1 unchanged sentence

The Company's estimates are based upon the professional knowledge and experience of its engineers, operations, program managers and other personnel, who review each over time contract monthly to assess the contract’s schedule, performance, technical matters and estimated cost at completion.

Changes in estimates are applied retrospectively and when adjustments in estimated contract costs are identified, such revisions may result in current period adjustments to earnings applicable to performance in prior periods.

Changes in estimates are applied retrospectively and when adjustments in estimated contract costs are identified, such revisions may result in current period adjustments to earnings

applicable to performance in prior periods.

The aggregate effects of these favorable and unfavorable changes across the Company’s portfolio of programs can have a significant effect upon its reported Loss from operations, Net loss and Diluted net loss per share in each of the reporting periods.

The net impact of changes in estimates had the following impact on the Company’s operating results:

Third Quarters Ended Nine Months Ended

(In thousands, except per share data) March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024

First Quarters Ended

(In thousands, except per share data) September 26, 2025 September 27, 2024

Loss from operations $ ( 4,050 ) $ ( 8,293 )

13 unchanged sentences

All revenues are reported net of government assessed taxes (e.g., sales taxes or value-added taxes).

Refer to Note K for disaggregation of revenue for the period.

Refer to Note L for disaggregation of revenue for the period.

C ONTRACT B ALANCES

10 unchanged sentences

Contract balances are reported in a net position on a contract-by-contract basis.

The contract asset b alances were $ 271,293 and $ 304,029 as of March 28, 2025 and June 28, 2024, respectively.

The contract asset balance decreased due to $ 344,605 of billings, offset by revenue recognized under over time contracts of $ 311,869 during the nine months ended March 28, 2025.

The contract liability balances were $ 142,801 and $ 74,367 as of March 28, 2025 and June 28, 2024, respectively.

The contract li ability increased due to a higher volume of milestone billing events as well as timing of revenue recognized across multiple programs.

Revenue recognized for the third quarter and nine months ended March 28, 2025 that was included in the contract liability balance at June 28, 2024 was $ 8,563 and $ 50,310 , r espectively.

Revenue recognized for the third quarter and nine months ended March 29, 2024 that was included in the contract liability balance at June 30, 2023 was $ 10,170 and $ 41,413 , respectively.

The contract asset b alances were $ 274,835 and $ 278,475 as of September 26, 2025 and June 27, 2025, respectively.

The contract asset balance decreased due to $ 111,295 of billings, partially offset by revenue recognized under over time contracts of $ 107,655 during the first quarter ended September 26, 2025.

The contract liability balances were $ 125,871 and $ 127,605 as of September 26, 2025 and June 27, 2025, respectively.

The contract li ability decreased due to the timing of revenue recognized across multiple programs.

Revenue recognized for the first quarter ended September 26, 2025 that was included in the contract liability balance at June 27, 2025 was $ 39,642 .

Revenue recognized for the first quarter ended September 27, 2024 that was included in the contract liability balance at June 28, 2024 was $ 26,411 .

R EMAINING P ERFORMANCE O BLIGATIONS

1 unchanged sentence

The definition of remaining performance obligations excludes contracts with original expected durations of less than one year, as well as those contracts that provide the customer with the right to cancel or terminate the order with no substantial penalty, even if the Company’s historical experience indicates the likelihood of cancellation or termination is remote.

As of March 28, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 722,977 .

As of September 26, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 782,643 .

The Company expects to recognize approximately 54 % of its remaining performance obligations as revenue in the next 12 months and the balance thereafter.

6 unchanged sentences

G OODWILL AND I NTANGIBLE A SSETS

Goodwill is the amount by which the purchase price of a business acquisition exceeded the fair values of the net identifiable assets on the date of purchase (see Note E).

Goodwill is the amount by which the purchase price of a business acquisition exceeded the fair values of the net identifiable assets on the date of purchase (see Note F).

In accordance with the requirements of Intangibles-Goodwill and Other (“ASC 350”), goodwill is not amortized.

13 unchanged sentences

Settlements made during the period ( 897 )

Balance at March 28, 2025 $ 3,550

Balance at September 26, 2025 $ 2,752

W EIGHTED -A VERAGE S HARES

Weighted-average shares were calculated as follows:

Third Quarters Ended Nine Months Ended

March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024

First Quarters Ended

September 26, 2025 September 27, 2024

Basic weighted-average shares outstanding 59,191 58,260

1 unchanged sentence

Diluted weighted-average shares outstanding 59,191 58,260

Equity instruments to purchase 2,901 and 2,859 shares of common stock were not included in the calculation of diluted net loss per share for the third quarter and nine months ended March 28, 2025, respectively, because the equity instruments were anti-dilutive.

Equity instruments to purchase 2,711 and 2,551 shares of common stock were not included in the calculation of diluted net loss per share for the third quarter and nine months ended March 29, 2024, respectively, because the equity instruments were anti-dilutive.

Equity instruments to purchase 2,590 and 2,694 shares of common stock were not included in the calculation of diluted net loss per share for the first quarters ended September 26, 2025 and September 27, 2024, respectively, because the equity instruments were anti-dilutive.

R ECENTLY I SSUED A CCOUNTING P RONOUNCEMENTS

In November 2024, the FASB issued ASU No.

2023-07, Segment Reporting (ASC 280):

Improvements to Reportable Segment Disclosures , an amendment of the FASB Accounting Standards Codification.

The amendments in this ASU address improvements to reportable segment disclosure requirements, specifically requiring disclosure of significant segment expenses.

The amendment also extends certain annual disclosures to interim periods, and clarifies that single reportable segment entities must apply ASC 280 in its entirety, inclusive of this update.

This ASU is effective for fiscal years beginning after December 15, 2023, as well as all interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted, including adoption in an interim period.

The Company is currently evaluating the effect that this standard will have on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No.

2023-09, Improvement to Income Tax Disclosures , an amendment of the FASB Accounting Standards Codification.

The amendments in this ASU enact new income tax disclosure requirements in addition to modifying existing requirements.

The amendment requires entities to categorize and provide greater disaggregation of information in the rate reconciliation and income taxes paid disclosures.

This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the effect that this standard will have on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures , an amendment of the FASB Accounting Standard Codification.

1 unchanged sentence

Any expenses remaining in relevant expense captions that are not disaggregated should be accompanied with a qualitative disclosure as to their nature.

This ASU is effective for fiscal years beginning after December 15,

2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

This ASU is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the effect that this standard will have on its consolidated financial statements and related disclosures.

In May 2025, the FASB issued ASU No.

2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810):

Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, an amendment of the FASB Accounting Standards Codification.

The amendments in this ASU are intended to clarify guidance surrounding who the accounting acquirer is in a business combination, specifically when a Variable Interest Entity ("VIE") is involved.

The ASU is effective for fiscal years beginning after December 15, 2026, and all interim periods within applicable annual periods, with early adoption permitted.

The Company is currently evaluating the effect that this standard will have on its consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU No.

2025-05, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets, an amendment of the FASB Accounting Standards Codification.

The amendments in this ASU affect entities that apply the practical expedient and accounting policy election (if applicable) when estimating expected credit losses on current accounts receivable and/or current contract assets arising from transactions under Topic 606, including those assets acquired in a transaction accounted for under Topic 805, Business Combinations.

The ASU is effective for fiscal years beginning after December 15, 2025, and all interim periods within applicable annual periods, with early adoption permitted.

The Company is currently evaluating the effect that this standard will have on its consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU No.

2025-06, Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal Use Software, an amendment of the FASB Accounting Standards Codification.

The amendments in this ASU apply to all entities subject to the internal-use software guidance in Subtopic 350-40.

The main provisions are improving operability of the guidance and removing references of different software development stages to remain neutral to different methods.

The ASU is effective for fiscal years beginning after December 15, 2027, and all interim periods within applicable annual periods, with early adoption permitted at beginning of annual reporting period.

The Company is currently evaluating the effect that this standard will have on its consolidated financial statements and related disclosures.

R ECENTLY A DOPTED A CCOUNTING P RONOUNCEMENTS

The Company has evaluated all issued accounting pronouncements and determined there were no recently adopted accounting pronouncements.

Effective June 28, 2025, the company adopted ASU No.

2023-09, Improvement to Income Tax Disclosures , an amendment of the FASB Accounting Standards Codification.

The amendments in this ASU enact new income tax disclosure requirements in addition to modifying existing requirements.

The amendment requires entities to categorize and provide greater disaggregation of information in the rate reconciliation and income taxes paid disclosures.

The adoption of this update did not have a material impact on the Company's consolidated financial statements but will result in expanded income tax disclosures in the Company's annual financial statements for the fiscal period ending July 3, 2026.

Fair Value of Financial Instruments

The following table summarizes the Companies' financial instruments measured at fair value on a recurring basis as of March 28, 2025:

The following table summarizes the Companies' financial instruments measured at fair value on a recurring basis as of September 26, 2025:

Fair Value Measurements

March 28, 2025 Level 1 Level 2 Level 3

September 26, 2025 Level 1 Level 2 Level 3

Interest rate swap $ 4,778 $ — $ 4,778 $ —

Total $ 5,355 $ — $ 5,355 $ —

Total measured at fair value $ 4,778 $ — $ 4,778 $ —

The carrying values of cash and cash equivalents, including money market funds, restricted cash, accounts receivable and payable, contract assets and liabilities and accrued liabilities approximate fair value due to the short-term maturities of these assets and liabilities.

2 unchanged sentences

The fair value of the September 2023 Swap is estimated using a discounted cash flow analysis based on the contractual terms of the derivative, leveraging observable inputs other than quoted prices, such as interest rates.

As of March 28, 2025, the fair value of the September 2023 Swap was a liability of $ 5,355 a nd is included within Other non-current liabilities in the Company's Consolidated Balance Sheets.

As of June 28, 2024, the fair value of the September 2023 Swap was a liability of $ 2,436 and was included within Other non-current liabilities in the Company's Consolidated Balance Sheets.

As of September 26, 2025, the fair value of the September 2023 Swap was a liability of $ 4,778 a nd is included within Other non-current liabilities in the Company's Consolidated Balance Sheets.

The following table summarizes the Companies' financial instruments measured at fair value on a recurring basis as of June 27, 2025:

2 unchanged sentences

Interest rate swap $ 5,391 $ — $ 5,391 $ —

Total assets measured at fair value $ 2,436 $ — $ 2,436 $ —

Total measured at fair value $ 5,391 $ — $ 5,391 $ —

Refer to Note M for further information regarding the September 2023 Swap .

As of June 27, 2025, the fair value of the September 2023 Swap was a liability of $ 5,391 and was included within Other non-current liabilities in the Company's Consolidated Balance Sheets.

Refer to Note N for further information regarding the September 2023 Swap .

Inventory is stated at the lower of cost (first-in, first-out) or net realizable value, and consists of materials, labor and overhead.

3 unchanged sentences

The excess and obsolete inventory evaluation is based upon assumptions about future demand, historical usage, product mix and possible alternative uses.

During the nine months ended March 28, 2025, the Company reclassified $ 12,675 of work in process inventory to Property and equipment, net to support broader customer outreach for its technologies and to meet anticipated production demands for its solutions through additional testing capabilities.

During the first quarter ended September 26, 2025, the Company reclassified $ 4,444 of work in process inventory to property and equipment, net to support a test lab and demonstration room for its technologies and to meet anticipated production demands for its solutions through additional testing capabilities.

Inventory was comprised of the following:

March 28, 2025 June 28, 2024

September 26, 2025 June 27, 2025

Raw materials $ 191,876 $ 195,496

2 unchanged sentences

Total $ 340,246 $ 332,920

Property and Equipment

Property and equipment, net consisted of the following:

Estimated Useful Lives

(Years) As of

September 26, 2025 June 27, 2025

Computer equipment and software 3 - 4

$ 150,827 $ 149,342

Furniture and fixtures 5 24,086 23,176

Leasehold improvements lesser of estimated useful life or lease term 72,581 74,278

Machinery and equipment 5 - 10

177,676 168,412

425,170 415,208

accumulated depreciation ( 322,536 ) ( 313,768 )

Property and equipment, net $ 102,634 $ 101,440

The $ 1,194 increase in property and equipment, net was primarily due to capital expenditures of $ 6,548 and the reclassification of work in process inventory to property and equipment of $ 4,444 , partially offset by depreciation expense.

There was no retirements of property and equipment during the first quarters ended September 26, 2025 and September 27, 2024.

Depreciation expense related to property and equipment for the first quarters ended September 26, 2025 and September 27, 2024 was $ 8,654 and $ 9,985 , respectively.

In accordance with FASB ASC 350, Intangibles-Goodwill and Other (“ASC 350”), the Company determines its reporting units based upon whether discrete financial information is available, if management regularly reviews the operating results of the component, the nature of the products offered to customers and the market characteristics of each reporting unit.

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The Company performs its annual goodwil l impairment test in the fourth quarter of each fiscal year.

The Company estimates its fair value and compares the fair value with the carrying value of its reporting units, including goodwill using an income approach based upon a discounted cash flow (“DCF”) model to calculate the present value of cash flows to estimate its implied fair value.

The future cash flows for the Company’s reporting units are projected based on the Company’s estimates, at that time, of future revenues, expenses, capital expenditures, and working capital.

The discount rates used in the Company’s DCF model were based on a weighted-average cost of capital (“WACC”) determined from relevant market comparisons, adjusted upward for specific reporting unit risks (primarily the uncertainty of achieving projected operating cash flows).

A terminal value growth rate is applied to the final year of the projected period, which reflects the Company’s estimate of stable, perpetual growth.

The Company then calculated a present value of the respective cash flows for each reporting unit to arrive at an estimate of fair value under the income approach.

In addition, the Company uses the market approach, which compares the reporting unit to publicly traded companies and transactions involving similar businesses, to support the conclusions of the income approach.

Finally, the Company compared its estimates of fair values to its total market capitalization to assess the reasonableness of the reporting units combined determined fair value.

The Company also assesses potential triggering events during interim reporting periods.

During the third quarter ended March 28, 2025, the Company assessed events and circumstances to consider its reporting units for a potential triggering event, including:

During the first quarter ended September 26, 2025, the Company assessed events and circumstances to consider its reporting units for a potential triggering event, including:

macroeconomic conditions, industry and market considerations, financial performance and expectations of projected financial performance and cash flows, changes in the Company's stock price in relation to the carrying value of its reporting units, among other relevant factors.

The Company concluded that there were no triggering events during the period that would require an interim impairment test.

There has been no change to the carrying amount of goodwill during the first quarter ended September 26, 2025.

Restructuring

On January 29, 2025, the Company approved and initiated workforce reductions that eliminated approximately 145 positions resulting in an additional $ 4,931 of severance costs for the three months ended March 28, 2025.

During the nine months ended March 28, 2025, the Company incurred $ 7,231 of severance costs.

The Company incurs restructuring and other charges in connection with management's decision to undertake certain actions to realign operating expenses through workforce reductions and the closure of certain Company facilities, businesses and product lines.

During the first quarter ended September 26, 2025, the Company approved and initiated a workforce reduction that eliminated approximately 40 positions, resulting in $ 1,584 of severance costs.

All of the restructuring and other charges are classified as Operating expenses in the Consolidated Statements of Operations and Comprehensive Loss and any remaining restructuring obligations are expected to be paid within the next twelve months.

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Cash paid ( 1,233 )

Balance at March 28, 2025 $ 3,076

The Company recorded an income tax benefit of $ 2,648 and $ 12,643 on a loss before income taxes of $ 21,818 and $ 57,217 for the third quarters ended March 28, 2025 and March 29, 2024, respectively.

The Company recorded an income tax benefit of $ 14,967 and $ 43,811 on a loss before income taxes of $ 69,241 and $ 170,674 for the nine months ended March 28, 2025, and March 29, 2024, respectively.

The effective tax rate for the third quarter and nine months ended March 28, 2025 differed from the federal statutory rate primarily due to federal and state research and development credits, return to provision adjustments, non-deductible compensation, and state taxes.

The effective tax rate for the third quarter and nine months ended March 29, 2024 differed from the federal statutory rate primarily due to federal and state research and development credits, non-deductible compensation, stock compensation shortfalls, and state taxes.

The Company continues to maintain a valuation allowance on the majority of its foreign net operating loss carryforwards and state research and developmental tax credit carryforwards.

Balance at September 26, 2025 $ 1,557

The Company recorded an income tax benefit of $ 4,021 and $ 5,594 on a loss before income taxes of $ 16,536 and $ 23,119 for the first quarters ended September 26, 2025 and September 27, 2024, respectively.

During the first quarters ended September 26, 2025 and September 27, 2024, the Company recognized a tax benefit of $ 1,120 related to stock compensation windfalls and a tax provision of $ 219 related to stock compensation shortfalls, respectively.

The effective tax rate for the first quarters ended September 26, 2025 and September 27, 2024 differed from the federal statutory rate primarily due to federal and state research and development credits, non-deductible compensation, and state taxes.

The Company continues to maintain a valuation allowance on all of its foreign net operating loss carryforwards and the majority of its state research and developmental tax credit carryforwards.

Based on forecasted taxable income and the scheduled reversal of the remaining deferred tax assets, the Company believes it is more likely than not that all other deferred tax assets will be recognized.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, which includes a broad range of tax provisions and extended and modified certain provisions of the Tax Cuts and Jobs Act ("TCJA"), including, but not limited to, restoration of 100% bonus depreciation, EBITDA-based interest expense limitation and immediate expensing of domestic research and development expenditures.

The Company has evaluated the potential impact of this legislation and expects it to result primarily in a timing difference, with no material impact on the Company's effective tax rate.

R EVOLVING C REDIT F ACILITY

The Company maintains a 5 -year revolving credit facility (the "Revolver") with a maturity extended to February 28, 2027.

As of March 28, 2025, the Company's outstanding balance of unamortized deferred financing costs was $ 4,051 , which is being amortized to Other income (expense), net in the Consolidated Statements of Operations and Comprehensive Loss on a straight line basis over the term of the Revolver and includes the costs incurred in conjunction with the August 2024 amendment to the Revolver.

On November 7, 2023, due to the uncertainty surrounding a government shutdown or prolonged continuing resolution and the potential impact on the second quarter and fiscal 2024 results, the Company proactively executed Amendment No.

5 to the Revolver, as amended to date, with a syndicate of commercial banks and Bank of America, N.A acting as the administrative agent allowing for a temporary increase in the Consolidated Total Net Leverage Ratio covenant requirement from 4.50 to 5.25 for the second quarter ended December 29, 2023.

In conjunction with Amendment No.

5 to the Revolver, the Company incurred $ 1,931 of new deferred financing costs that will be amortized over the remaining term of the Revolver.

Refer to exhibit 10.1 on Form 8-K filed by the Company with the SEC on November 7, 2023.

The Company has a 5 -year revolving credit facility (the "Revolver") with a maturity extended to February 28, 2027.

The borrowing capacity as defined under the Revolver as of September 26, 2025 is approximately $ 900,000 less outstanding borrowings of $ 591,500 .

There were outstanding letters of credit of $ 5,883 as of September 26, 2025.

During the first quarter ended September 26, 2025, the Company made no borrowings or repayments.

As of September 26, 2025, the Company was in compliance with all covenants and conditions under the Revolver.

The Company incurred interest expense of $ 7,886 for the first quarter ended September 26, 2025.

As of September 26, 2025, the Company's outstanding balance of unamortized deferred financing costs was $ 2,994 , which is being amortized to Other expense, net in the Consolidated Statements of Operations and Comprehensive Loss on a straight line basis over the term of the Revolver and includes the costs incurred in conjunction with the August 2024 amendment to the Revolver.

On August 13, 2024, the Company executed Amendment No.

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Refer to exhibit 10.7.6 on Form 10-K filed by the Company with the SEC on August 11, 2025.

During the third quarter and nine months ended March 28, 2025, the Company made no borrowings or repayments.

As of March 28, 2025, the Company was in compliance with all covenants and conditions under the Revolver and there were outstanding borrowings of $ 591,500 against the Revolver, resulting in interest expense of $ 8,068 and $ 25,404 for the third quarter and nine months ended March 28, 2025.

The borrowing capacity as defined under the Revolver as of March 28, 2025 is approximately $ 900,000 less outstanding borrowings of $ 591,500 .

There were outstanding letters of credit of $ 7,640 as of March 28, 2025.

Refer to Note O for further information regarding Amendment No.

7 to the Revolver entered into on November 4, 2025.

Employee Benefit Plan

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The funded status may vary from year to year due to changes in the fair value of the Plan’s assets and variations on the underlying assumptions of the projected benefit obligation of the Plan.

The Plan's funded status at March 28, 2025 was a net liability of $ 5,254 , which is recorded in Other non-current liabilities on the Consolidated Balance Sheet.

The Company recognized net periodic benefit costs of $ 227 and $ 213 associated with the Plan and a net loss of $ 51 and $ 56 in AOCI during the third quarters ended March 28, 2025 and March 29, 2024, respectively.

The Company recognized net periodic benefit costs of $ 691 and $ 628 associated with the Plan and a net loss of $ 156 and $ 169 in AOCI during the nine months ended March 28, 2025 and March 29, 2024, respectively.

The Plan's funded status at September 26, 2025 was a net liability of $ 5,342 , which is recorded in Other non-current liabilities on the Consolidated Balance Sheet.

The Company recognized net periodic benefit costs of $ 167 and $ 232 associated with the Plan and a net loss of $ 57 and $ 54 in AOCI during the first quarters ended September 26, 2025 and September 27, 2024, respectively.

The Company's total expected employer contributions to the Plan during fiscal 2026 are $ 706 .

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The Company may also make optional contributions to the plan for any plan year at its discretion.

The Company had $ 3,184 and $ 2,901 of capitalized stock-based 401(k) matching compensation expense on the Consolidated Balance Sheets at March 28, 2025 and June 28, 2024, respectively.

Stock-based 401(k) matching compensation cost is measured based on the value of the matching amount and is recognized as expense as incurred.

During the third quarter and nine months ended March 28, 2025, the Company recognized share-based matching contributions related to the 401(k) plan of $ 3,533 and $ 11,393 , as compared to $ 4,528 and $ 12,180 during the third quarter and nine months ended March 29, 2024.

During the first quarters ended September 26, 2025 and September 27, 2024, the Company recognized share-based matching contributions related to the 401(k) plan of $ 6,750 and $ 4,432 , respectively.

Deferred Compensation Plan

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All deferrals or employer contributions under the plan, and all earnings thereon, are fully vested as and when made or credited to plan participants.

As of March 28, 2025, the Company held assets under the rabbi trust of $ 212 , and was subject to liabilities for amounts payable under the plan to participants (including accrued employer matching contributions not yet credited to plan participants) of $ 212 .

As of September 26, 2025, the Company held assets under the rabbi trust of $ 657 , and was subject to liabilities for amounts payable under the plan to participants (including accrued employer matching contributions not yet credited to plan participants) of $ 657 .

Assets related to this plan are included in Other assets, and liabilities related to this plan are included in Other long-term liabilities in the Consolidated Balance Sheets.

During the third quarters ended March 28, 2025 and March 29, 2024, the Company recognized an immaterial value of compensation expense as a result of changes in the value of notional investments selected by plan participants for the investment of their plan account balances, with the same amount being recorded as other income attributable to changes in the market value of the assets held by the rabbi trust.

During the first quarters ended September 26, 2025 and September 27, 2024, the Company recognized an immaterial value of compensation expense as a result of changes in the value of notional investments selected by plan participants for the investment of their plan account balances, with the same amount being recorded as other income attributable to changes in the market value of the assets held by the rabbi trust.

Stock-Based Compensation

S TOCK I NCENTIVE P LANS

At March 28, 2025, the aggregate number of shares authorized for issuance under the Company’s Amended and Restated 2018 Stock Incentive Plan (the “2018 Plan”) is 7,862 shares, including 3,000 shares approved by the Company's shareholders on October 28, 2020 and 2,000 shares approved for future grant under the 2018 Plan by the Company's shareholders on October 26, 2022.

At September 26, 2025, the aggregate number of shares authorized for issuance under the Company’s Amended and Restated 2018 Stock Incentive Plan (the “2018 Plan”) is 7,862 shares, including 3,000 shares approved by the Company's shareholders on October 28, 2020 and 2,000 shares approved for future grant under the 2018 Plan by the Company's shareholders on October 26, 2022.

On October 25, 2023, the Company's shareholders approved an additional 3,450 shares to be added to the 2018 plan.

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Stock options must be granted with an exercise price of not less than 100 % of the fair value of the Company’s common stock on the date of grant and the options generally have a term of seven years .

There were 3,132 available shares for future grant under the 2018 Plan at March 28, 2025.

There were 2,774 available shares for future grant under the 2018 Plan at September 26, 2025.

As part of the Company's ongoing annual equity grant program for employees, the Company grants performance-based restricted stock awards to certain executives and employees pursuant to the 2018 Plan.

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Based on the performance targets, some of these awards require graded vesting which results in more rapid expense recognition compared to traditional time-based vesting over the same vesting period.

The Company monitors the probability of achieving the performance targets on a quarterly basis and may adjust periodic stock compensation expense accordingly based on its determination of the likelihood for reaching targets.

The Company monitors the probability of achieving the performance targets on a

quarterly basis and may adjust periodic stock compensation expense accordingly based on its determination of the likelihood for reaching targets.

The performance targets generally include the achievement of financial performance goals, either on an absolute basis or relative to a peer group of companies.

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The 1997 ESPP permitted employees to purchase common stock through payroll deductions, which may not have exceeded 10 % of an employee’s compensation as defined in the 1997 ESPP.

There were no shares and 107 shares issued under the 1997 ESPP during the nine months ended March 28, 2025 and March 29, 2024, respectively.

There were an immaterial amount of shares related to the 1997 Plan issued and returned to the reserve during the nine months ended March 28, 2025.

There were no shares issued under the 1997 ESPP during the first quarters ended September 26, 2025 and September 27, 2024, respectively.

The Company adopted a new employee stock purchase plan (the “2024 ESPP”) in April 2024.

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The 2024 ESPP permits employees to purchase common stock through payroll deductions, which may not exceed 10 % of an employee’s compensation as defined in the 2024 ESPP.

There were 65 shares and no shares issued under the 2024 ESPP during the nine months ended March 28, 2025 and March 29, 2024, respectively.

Shares available for future purchase under the 2024 ESPP totaled 935 at March 28, 2025.

There were no shares issued under the 2024 ESPP during the first quarters ended September 26, 2025 and September 27, 2024, respectively.

Shares available for future purchase under the 2024 ESPP totaled 870 at September 26, 2025.

S TOCK O PTION A ND A WARD A CTIVITY

On August 15, 2023, the Company announced that William L.

Ballhaus was appointed as the Company’s President and Chief Executive Officer.

Ballhaus received an onboarding grant of premium-priced stock options ("New Hire Option") under the 2018 Plan.

The Company and Mr.

Ballhaus are parties to an employment agreement, which is included in exhibit 10.1 on Form 8-K filed by the Company with the SEC on August 15, 2023.

The following table summarizes activity with respect to Company-issued stock options since June 27, 2025:

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(Years) Aggregate

Intrinsic Value as of March 28, 2025

Intrinsic Value as of September 26, 2025

Outstanding at June 27, 2025 934 $ 12.71 $ 45.00 —

Exercised — —

Outstanding at March 28, 2025 934 12.71 45.00 2.98 years —

Exercisable at March 28, 2025 — $ — $ — — —

There were no options vested or exercised during the nine months ended March 28, 2025.

Outstanding at September 26, 2025 934 12.71 45.00 2.53 years —

Exercisable at September 26, 2025 — $ — $ — — —

There were no options vested or exercised during the first quarter ended September 26, 2025.

Non-vested stock options are subject to the risk of forfeiture until the fulfillment of specified conditions.

As of March 28, 2025, there was $ 6,685 of total unrecognized compensation cost related to non-vested options granted that is expected to be recognized over a weighted-average period of 1.98 years from March 28, 2025.

As of September 26, 2025, there was $ 4,943 of total unrecognized compensation cost related to non-vested options granted that is expected to be recognized over a weighted-average period of 1.53 years from September 26, 2025.

The following table summarizes the status of the Company’s non-vested restricted stock awards and deferred stock awards since June 27, 2025:

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Forfeited ( 45 ) 42.58

Outstanding at March 28, 2025 1,870 $ 39.36

Outstanding at September 26, 2025 1,895 $ 48.00

S TOCK -B ASED C OMPENSATION E XPENSE

The Company recognizes expense for its share-based payment plans in the Consolidated Statements of Operations and Comprehensive Loss in accordance with ASC 718, Compensation - Stock Compensation (“ASC 718”).

The Company had $ 1,410 and $ 456 of capitalized stock-based compensation expense on the Consolidated Balance Sheets for the periods ended March 28, 2025 and June 28, 2024, respectively.

Under the fair value recognition provisions of ASC 718, stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the service period, net of estimated forfeitures.

The following table presents share-based compensation expenses included in the Company’s Consolidated Statements of Operations and Comprehensive Loss:

Third Quarters Ended Nine Months Ended

March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024

First Quarters Ended

September 26, 2025 September 27, 2024

Cost of revenues $ 1,760 $ 113

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Operating Segment, Geographic Information and Significant Customers

Operating segments are defined as components of an enterprise evaluated regularly by the Company's chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance.

Operating segments are defined as components of an enterprise evaluated regularly by the Company's chief executive officer who acts as its Chief Operating Decision Maker ("CODM") in deciding how to allocate resources and assess performance.

The Company evaluated its internal organization under FASB ASC 280, Segment Reporting (“ASC 280”) to determine whether there has been a change to its conclusion of a single operating and reportable segment.

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The Company utilized the management approach for determining its operating segment in accordance with ASC 280.

The CODM utilizes Net loss that is reported on the Consolidated Statement of Operations and Comprehensive Loss to assess operating performance and make decisions related to resource allocation.

The Company's significant segment expenses include stock-based compensation and depreciation which are disclosed in Note K and Note E, respectively.

Any other significant segment expenses which are regularly provided to the CODM are provided on the Consolidated Statement of Operations and Comprehensive Loss.

The Company's segment assets are reported on the Consolidated Balance Sheets as Total Assets and its segment purchase of property plant and equipment are disclosed in Note E.

The geographic distribution of the Company’s revenues as determined by country in which the Company's legal subsidiary is domiciled is summarized as follows:

Europe Asia Pacific Eliminations Total

THIRD QUARTER ENDED MARCH 28, 2025

Net revenues to unaffiliated customers $ 200,241 $ 11,117 $ — $ — $ 211,358

Inter-geographic revenues 1,539 2,577 — ( 4,116 ) —

Net revenues $ 201,780 $ 13,694 $ — $ ( 4,116 ) $ 211,358

THIRD QUARTER ENDED MARCH 29, 2024

Net revenues to unaffiliated customers $ 199,834 $ 8,418 $ 6 $ — $ 208,258

Inter-geographic revenues 1,248 211 — ( 1,459 ) —

Net revenues $ 201,082 $ 8,629 $ 6 $ ( 1,459 ) $ 208,258

NINE MONTHS ENDED MARCH 28, 2025

Europe Eliminations Total

FIRST QUARTER ENDED SEPTEMBER 26, 2025

Net revenues to unaffiliated customers $ 211,998 $ 13,211 $ — $ 225,209

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Net revenues $ 214,299 $ 15,697 $ ( 4,787 ) $ 225,209

NINE MONTHS ENDED MARCH 29, 2024

FIRST QUARTER ENDED SEPTEMBER 27, 2024

Net revenues to unaffiliated customers $ 192,660 $ 11,771 $ — $ 204,431

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Net revenues $ 194,715 $ 14,590 $ ( 4,874 ) $ 204,431

The geographic distribution of the Company’s identifiable long-lived assets is summarized as follows:

September 26, 2025 $ 101,658 $ 976 $ 102,634

June 27, 2025 $ 100,484 $ 956 $ 101,440

Identifiable long-lived assets exclude right-of-use assets, goodwill, and intangible assets.

The Company offers a broad family of products and processing solutions 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, the Company seeks to leverage technology investments across multiple product lines and product solutions.

To maintain a competitive advantage, the Company seeks to leverage technology investments across multiple lines of business and product solutions.

The Company’s products are typically compute-intensive and require extremely high bandwidth and high throughput.

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The following table presents the Company's net revenue by end user for the periods presented:

Third Quarters Ended Nine Months Ended

March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024

First Quarters Ended

September 26, 2025 September 27, 2024

$ 187,923 $ 161,194

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The following table presents the Company's net revenue by end application for the periods presented:

Third Quarters Ended Nine Months Ended

March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024

First Quarters Ended

September 26, 2025 September 27, 2024

$ 30,190 $ 33,749

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The following table presents the Company's net revenue by product grouping for the periods presented:

Third Quarters Ended Nine Months Ended

March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024

First Quarters Ended

September 26, 2025 September 27, 2024

Components (1)

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The following table presents the Company's net revenue by platform for the periods presented:

Third Quarters Ended Nine Months Ended

March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024

First Quarters Ended

September 26, 2025 September 27, 2024

$ 94,688 $ 90,490

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(5) All platforms other than Airborne, Land, Naval, or Space.

The geographic distribution of the Company’s identifiable long-lived assets is summarized as follows:

March 28, 2025 $ 104,924 $ 2,553 $ 107,477

June 28, 2024 $ 107,655 $ 2,698 $ 110,353

Identifiable long-lived assets exclude right-of-use assets, goodwill, and intangible assets.

Customers comprising 10% or more of the Company’s revenues for the periods shown are as follows:

Third Quarters Ended Nine Months Ended

March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024

Navy 14 % * 11 % *

RTX Corporation 11 % 11 % 11 % 10 %

First Quarters Ended

September 26, 2025 September 27, 2024

Lockheed Martin Corporation 13 % 11 %

L3Harris * 13 % * 11 %

RTX Corporation 10 % *

Northrop Grumman 10 % *

36 % 49 % 32 % 32 %

L3Harris * 12 %

* Indicates that the amount is less than 10% of the Company's revenue for the respective period.

While the Company typically has customers from which it derives 10% or more of its revenue, the sales to each of these customers are spread across multiple programs and platforms.

There were no programs comprising 10% or more of the Company's revenues for the third quarters and nine months ended March 28, 2025 and March 29, 2024.

There were no programs comprising 10% or more of the Company's revenues for the first quarters ended September 26, 2025 and September 27, 2024.

Commitments and Contingencies

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NTS received a Notice of Responsibility from the Massachusetts Department of Environmental Protection (“MassDEP”) alleging trichloroethene, Freon and 1,4-dioxane contamination in the groundwater emanating from NTS’s former site.

NTS alleges in its demand letter that the operations of a predecessor company to the Company that was acquired in the Company's acquisition of the Microsemi Carve-Out Business that once owned and operated a facility at 531 Main Street, Acton, Massachusetts contributed to the groundwater contamination.

NTS is seeking payment from the Company of NTS’s costs for any required environmental remediation.

In April 2022, the Company engaged in a meet and confer session with NTS pursuant to Massachusetts General Laws Chapter

21E, Section 4A to discuss the status of the environmental review performed by NTS and its licensed site professional.

The Company subsequently delivered a letter to NTS outlining the deficiencies in their claim and reiterated that the Company is not obligated to tender a substantive response to their demand without first having received the responsive information requested in connection with the meet and confer session.

In April 2024, counsel for NTS sent additional communications on their demand that the Company participate in their environmental monitoring and remediation planning, and in May 2024, the Company responded with a rebuttal of the allegations.

NTS alleges that the operations of a predecessor company to Mercury that was acquired in the Company's acquisition of the Microsemi Carve-Out Business that once owned and operated a facility at 531 Main Street, Acton, Massachusetts (the “Site”) contributed to the groundwater contamination, and NTS is seeking payment from the Company of NTS’s costs for any required environmental remediation.

The Company believes the NTS claims are without merit and intends to defend itself vigorously.

In addition, in November 2021, the Company responded to a request for information from MassDEP regarding the detection of PFAS (per- and polyfluoroakyl substances) in the Acton, Massachusetts Water District’s Conant public water supply wells near the former facility at 531 Main Street, Acton, Massachusetts at a level above the standard that MassDEP published for PFAS in October 2020.

The Company has not been contacted by MassDEP since the Company's response was provided in November 2021.

In November 2021, the Company responded to a request for information from MassDEP regarding the detection of PFAS (per- and polyfluoroakyl substances) in the Acton, Massachusetts Water District’s Conant public water supply wells near the Site at a level above the standard that MassDEP published for PFAS in October 2020.

The Company has not been contacted by MassDEP regarding PFAS since the response was provided in November 2021.

On October 30, 2025, MassDEP sent a Notice of Responsibility to the Company reporting that the Company, as successor to a former owner and operator of the Site, and Laine Realty Trust, the current owner of the Site, are responsible parties related to alleged releases of waste wave solder and Freon at the Site.

The Company is engaging a licensed site professional and will respond to the notice from MassDEP.

It is too early to determine what responsibility, if any, the Company may have for these environmental matters.

On June 19, 2023, the Board of Directors received notice of the Company’s former CEO’s resignation from the positions of President and Chief Executive Officer.

On June 19, 2023, the Board of Directors received notice of the Company’s former CEO’s resignation from his positions of President and Chief Executive Officer.

The Board accepted his resignation effective June 24, 2023.

In the notice, the former CEO claimed he was entitled to certain benefits, including equity vesting, severance, and other benefits, under the change in control severance agreement (the “CIC Agreement”) because the former CEO had resigned with good reason during a potential change in control period.

In his notice, the former CEO claimed he was entitled to certain benefits, including equity vesting, severance, and other benefits, under his change in control severance agreement (the “CIC Agreement”) because the former CEO had resigned with good reason during a potential change in control period.

The Company disputes these claims and maintains that the former CEO resigned without good reason.

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An arbitration hearing was conducted from March 31, 2025 through April 9, 2025.

In connection with the hearing, the arbitrator and the parties agreed to a post-hearing briefing schedule with initial briefs due May 16, 2025, response briefs due June 13, 2025 and oral arguments on June 30, 2025.

The Company continues to contest vigorously the claims under the CIC Agreement and believes that the Company has strong arguments that the former CEO’s claims lack merit.

If the arbitrator rules in the Company’s favor, the Company may still need to pay the former CEO’s reasonable legal fees, interest, and compensation during the dispute.

If instead the arbitrator rules for the former CEO, the Company could be liable for up to approximately $ 14,100 , based on the closing price of the Company's common stock on June 26, 2023, for accelerated equity vesting, severance, and other benefits under the CIC Agreement, plus interest, legal fees and expenses and compensation during dispute, which could include Mr.

Aslett's base salary and other amounts based on the compensation, benefit and insurance plans in which he participated.

The Company categorically denies any wrongdoing or liability under the CIC Agreement, but the outcome of potential arbitration is inherently uncertain.

Accordingly, it is reasonably possible that the Company will incur a liability in this matter, and the Company estimates the potential range of exposure from $ 0 to $ 14,100 , plus costs and attorneys’ fees, interest and compensation to the former CEO during the dispute.

Following the arbitration hearing, the parties filed post-hearing briefs on May 16, 2025, response briefs on June 13, 2025 and conducted oral arguments on June 30, 2025.

On August 13, 2025, the arbitrator issued an interim award finding that the former CEO did not have good reason for termination under the CIC Agreement, rejecting the former CEO's claims for enhanced severance payments and accelerated stock vesting.

However, the arbitrator found that the former CEO is entitled to compensation during the dispute under the agreement.

The arbitrator awarded the former CEO cash compensation including base salary, interest, and bonus, but the arbitrator declined to award the former CEO shares of Mercury stock (or the value thereof) because the arbitrator determined it was unclear whether he had jurisdiction to review the effect of Mercury's Human Capital and Compensation Committee decision to rescind and cancel such stock awards.

The arbitrator also awarded the former CEO all reasonable legal fees and expenses incurred in the arbitration per the CIC Agreement, finding no bad faith in his pursuit of the claims, and rejected the Company's counterclaims.

The total amount of the Company's obligation to the former CEO is still to be determined, as the calculation of his legal fees and interest remains to be considered by the arbitrator, but the Company expects the total final award to be approximately $ 3,000 .

On September 12, 2025, the former CEO filed a complaint in Massachusetts state court seeking to vacate the interim arbitration award in part, as to the shares of Mercury's stock the arbitrator declined to award.

The Company believes that it has valid defenses to the claims asserted by the former CEO and intends to contest the claims vigorously.

It is reasonably possible that the Company will incur a liability in this matter, and it estimates the potential range of exposure from $ 3,000 to $ 12,000 , plus costs and attorneys’ fees for our former CEO during the Massachusetts state court dispute and further arbitration.

On December 13, 2023, a securities class action complaint was filed against the Company, Mark Aslett, and Michael Ruppert in the U.S.

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The plaintiffs filed for leave to amend their complaint on August 23, 2024, the Company filed its opposition motion on September 6th, the plaintiffs filed their response brief on September 17, 2024, and the Company filed its reply on September 30, 2024.

On October 17, 2024, the Company received a shareholder derivative demand alleging the same claims as those covered in the federal securities class action.

On November 14, 2024, the Company and the shareholder entered into a tolling agreement on this derivative demand.

On February 20, 2025, the Court issued an order that dismissed claims relating to 14 of 17 challenged statements and that allowed the remaining three challenged statements to proceed.

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Ruppert and Farnsworth from the lawsuit.

The parties are beginning the discovery process.

On March 4, 2025, the Company received an additional derivative demand from another shareholder alleging the same claims as those covered in the federal securities class action and the first derivative demand.

Subject to the terms of the Company's by-laws and applicable Massachusetts law, Mr.

Aslett, the Company's former Chief Executive Officer, and Mr.

Ballhaus, the Company's current Chief Executive Officer, are indemnified by the Company for this matter.

The Company believes the claims in the complaint and derivative demands are without merit and intends to defend itself vigorously.

Aslett and Mr.

indemnified by the Company for the federal securities class action.

While in discovery, the parties participated in a mediation on September 11, 2025.

After the mediation, all parties to the securities class action lawsuit agreed to a settlement in principle to resolve the litigation for $ 32,500 , which settlement in principle is subject to a final settlement agreement and review and approval by the court.

As of September 26, 2025, a $ 32,500 receivable and payable were included within prepaid expenses and other current assets and accrued expenses in the Company's Consolidated Balance Sheet, respectively.

The increase and decrease in the receivable and payable were reflected within the changes in operating assets and liabilities within the Company's Consolidated Statement of Cash Flows for the first quarter ended September 26, 2025.

On October 11, 2024, the Company received a shareholder derivative demand on behalf of Robert Sawyer alleging substantially the same claims as those covered in the federal securities class action.

On November 14, 2024, the Company entered into a tolling agreement on this derivative demand.

On February 28, 2025, the Company received a derivative demand on behalf of James Jones alleging substantially the same claims as those covered in the federal securities class action and the Robert Sawyer derivative demand.

On May 20, 2025, the Board of Directors formed a Special Investigation Committee of independent directors to investigate the subject matters of the demand letters.

On June 6, 2025, James Jones, on behalf of nominal defendant Mercury Systems, Inc., filed a derivative complaint in Massachusetts Superior Court in Essex County against Mark Aslett, Michael Ruppert, William Ballhaus, David Farnsworth, Orlando Carvalho, Lisa Disbrow, Barry Nearhos, Howard Lance, Debora Plunkett, Gerard DeMuro, Scott Ostfeld, Roger Krone, William O’Brien, Vincent Vitto, James Bass, Michael Daniels, and Mary Louise Krakauer, all current or former Mercury officers or directors.

This derivative action has been stayed while the Special Investigation Committee conducts its investigation.

On July 17, 2025, the Company received a derivative demand on behalf of Pauline McKinnon alleging substantially the same claims as those covered in the federal securities class action and the James Jones and Robert Sawyer derivative demands.

The Company believes the claims in the derivative demands and derivative action are without merit and intends to defend itself vigorously.

It is too early to determine what responsibility, if any, the Company will have for this matter.

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On December 21, 2024, the Company reached an agreement in principle to settle these wage and hour class action claims for $ 450 , which settlement in principle is subject to a final settlement agreement and review and approval by the court.

In September 2025, an internal investigation was initiated, with the assistance of outside counsel, in connection with what the Company preliminarily believes may be inaccurately reported test results and certifications of conformance with certain product performance specifications under subcontracts involving approximately $ 15,000 in total revenue over approximately 20 years in support of a government program.

The Company has no evidence that the product has not been effective in its intended use or function, nor has it encountered reported safety issues.

The Company has reported the matter to the customer and, in an abundance of caution, to the government.

The Company cannot currently estimate the amount or range of cost or any loss associated with this matter.

Any determination that the Company’s operations were not in compliance with laws or regulations such as the False Claims Act could result in the imposition of civil or criminal fines, penalties, disgorgement, restitution, equitable relief, or other losses or conduct restrictions, and could be material to the Company’s financial results or business operations.

I NDEMNIFICATION O BLIGATIONS

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P URCHASE C OMMITMENTS

As of March 28, 2025, the Company has entered into non-cancelable purchase commitments for certain inventory components and services used in its normal operations.

The purchase commitments covered by these agreements are for less than one year and aggregate to $ 156,759 .

As of September 26, 2025, the Company has entered into non-cancelable purchase commitments for certain inventory components and services used in its normal operations.

The purchase commitments covered by these agreements aggregate to $ 209,466 .

As part of the Company's strategy for growth, the Company continues to explore acquisitions or strategic alliances.

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The Company utilizes interest rate derivatives to mitigate interest rate exposure with respect to its financing arrangements.

On September 29, 2022, the Company entered into the Swap with JP Morgan Chase Bank, N.A.

("JPMorgan") for a notional amount of $ 300,000 in order to fix the interest rate associated with a portion of the total $ 511,500 existing borrowings on the Revolver at the time of the Swap.

The Swap agreement was designated and qualified for hedge accounting treatment as a cash flow hedge.

The Swap was scheduled to mature on February 28, 2027, coterminous with the maturity of the Revolver.

The Swap established a fixed interest rate on the first $ 300,000 of the Company's outstanding borrowings against the Revolver obligation at 3.79 %.

On September 28, 2023, the Company terminated the Swap.

At the time of termination, the fair value of the Swap was an asset of $ 7,403 .

The Company received the cash settlement of $ 7,403 and these proceeds are classified within Operating Activities of the Consolidated Statements of Cash Flows.

Following the termination of the Swap, the Company entered into the September 2023 Swap agreement on September 28, 2023 with JPMorgan for a notional amount of $ 300,000 in order to fix the interest rate associated with a portion of the total $ 576,500 existing borrowings on Company's Revolver at the time of the Swap at 4.66 %.

The September 2023 Swap agreement was designated and qualified for hedge accounting treatment as a cash flow hedge.

The September 2023 Swap matures on February 28, 2027, coterminous with the maturity of the Revolver.

As of March 28, 2025, the fair value of the September 2023 Swap was a liability o f $ 5,355 a nd is included within Other non-current liabilities in the Company's Consolidated Balance Sheets.

During the third quarter and nine months ended March 28, 2025, the Company amortized a total of $ 881 and $ 2,643 , respectively, of the gain associated with the interest swaps terminated on September 29, 2022 and September 28, 2023, which is included within Other comprehensive loss.

As of the reporting date, the Company entered into interest rate swaps with a total notional amount of $ 300,000 to fix the interest rate associated with a portion of the $ 591,500 existing borrowings on Company’s Revolver.

The Swap agreement is designated and qualified for hedge accounting treatment as a cash flow hedge and is scheduled to mature on February 28, 2027, coterminous with the maturity of the Revolver.

As of September 26, 2025, the fair value of the Swap was a liability of $ 4,778 and is included within Other non-current liabilities in the Company's Consolidated Balance Sheet.

On September 29, 2022 and on September 28, 2023 the Company terminated previous Swap agreements and entered into new agreements with the same maturity February 28, 2027.

The fair market values of the Swaps at the time of termination are amortized until the maturity date (February 28, 2027).

During the first quarter ended September 26, 2025, the Company amortized a total of $ 881 of the gain associated with the previously disclosed interest swaps terminated on September 29, 2022 and September 28, 2023, as disclosed in Note Q of Form 10-K filed with the SEC on August 11, 2025, which is included within Other comprehensive income (loss).

The market risk associated with the Company’s derivative instrument is the result of interest rate movements that are expected to offset the market risk of the underlying arrangement.

The counterparty to the September 2023 Swap is JPMorgan.

Based on the credit ratings of the Company’s counterparty as of March 28, 2025, nonperformance is not perceived to be a material risk.

Based on the credit ratings of the Company’s counterparty as of September 26, 2025, nonperformance is not perceived to be a material risk.

Furthermore, none of the Company’s derivatives are subject to collateral or other security arrangements and none contain provisions that are dependent on the Company’s credit ratings from any credit rating agency.

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Subsequent Events

The Company has evaluated subsequent events from the date of the Consolidated Balance Sheet through the date the consolidated financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosures.

The Company has evaluated subsequent events from the date of the Consolidated Balance Sheet through the date the consolidated financial statements were issued.

On October 22, 2025, at the Company's Annual Meeting, shareholders approved the Company's new 2025 Long Term Incentive Plan, which replaces the Company's 2018 Stock Incentive Plan.

On November 3, 2025, the Board of Directors authorized a new share repurchase program for the purchase of up to $ 200,000 of the Company’s outstanding common stock.

The program has no expiration date and repurchases may be made through open market or privately negotiated transactions from time to time at prevailing market prices.

The timing and amount of repurchases will depend on market conditions and other factors.

On November 4, 2025, the Company entered into Amendment No.

7 to the Revolver.

This amendment extends the maturity date of the Revolver by five years to November 4, 2030 with a facility size of $ 850,000 .

As of the effective date of the amendment, the outstanding balance on the Revolver was $ 591,500 .

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-Q

Item 1. Financial Statements