What changed in this filing

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Item 1. Financial Statements

2026-05-05 compared with 2026-02-03 · 173 added, 162 removed, 665 unchanged (34% of the section changed)

3 unchanged sentences

(In thousands, except share and per share data)

December 26, 2025 June 27, 2025

March 27, 2026 June 27, 2025

Current assets:

Cash and cash equivalents $ 331,800 $ 309,099

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

Accounts receivable, net of allowance for credit losses of $ 112 and $ 1,767 at March 27, 2026 and June 27, 2025, respectively

95,547 109,588

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

Unbilled receivables and costs in excess of billings, net of allowance for credit losses of $ 5,311 for both March 27, 2026 and June 27, 2025

269,498 278,475

30 unchanged sentences

85,000,000 shares authorized;

59,376,887 and 59,003,174 shares issued and outstanding at December 26, 2025 and June 27, 2025, respectively

59,498,806 and 59,003,174 shares issued and outstanding at March 27, 2026 and June 27, 2025, respectively

Additional paid-in capital 1,314,770 1,287,478

5 unchanged sentences

MERCURY SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share data)

Second Quarters Ended Six Months Ended

December 26, 2025 December 27, 2024 December 26, 2025 December 27, 2024

Third Quarters Ended Nine Months Ended

March 27, 2026 March 28, 2025 March 27, 2026 March 28, 2025

Net revenues $ 235,759 $ 211,358 $ 693,840 $ 638,914

8 unchanged sentences

Total operating expenses 63,820 74,454 206,767 212,903

Loss from operations ( 10,818 ) ( 12,415 ) ( 19,415 ) ( 25,833 )

Income (loss) from operations 5,230 ( 17,344 ) ( 14,185 ) ( 43,177 )

Interest income 2,507 1,290 6,182 2,240

Interest expense ( 7,331 ) ( 8,068 ) ( 23,066 ) ( 25,404 )

Other expense, net ( 440 ) ( 3,865 ) ( 2,520 ) ( 5,204 )

Loss before income tax benefit ( 17,459 ) ( 24,304 ) ( 33,995 ) ( 47,423 )

Income tax benefit ( 2,364 ) ( 6,725 ) ( 6,385 ) ( 12,319 )

Other (expense) income, net ( 3,093 ) 2,304 ( 5,613 ) ( 2,900 )

Loss before income tax provision (benefit) ( 2,687 ) ( 21,818 ) ( 36,682 ) ( 69,241 )

Income tax provision (benefit) 174 ( 2,648 ) ( 6,211 ) ( 14,967 )

Net loss $ ( 2,861 ) $ ( 19,170 ) $ ( 30,471 ) $ ( 54,274 )

4 unchanged sentences

Diluted 59,422 58,749 59,386 58,614

Comprehensive loss:

Comprehensive income (loss):

Net loss $ ( 2,861 ) $ ( 19,170 ) $ ( 30,471 ) $ ( 54,274 )

2 unchanged sentences

Deferred compensation and pension benefit plan, net of tax ( 228 ) ( 79 ) ( 304 ) ( 172 )

Total other comprehensive (loss) income, net of tax ( 549 ) 4,334 ( 409 ) ( 1,925 )

Total comprehensive loss $ ( 15,644 ) $ ( 13,245 ) $ ( 28,019 ) $ ( 37,029 )

Total other comprehensive income (loss), net of tax 7,794 ( 2,211 ) 7,385 ( 4,136 )

Total comprehensive income (loss) $ 4,933 $ ( 21,381 ) $ ( 23,086 ) $ ( 58,410 )

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

2 unchanged sentences

(In thousands)

For the Second Quarter Ended December 26, 2025

For the Third Quarter Ended March 27, 2026

Common Stock Additional

4 unchanged sentences

Shares Amount

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

Balance at December 26, 2025 59,377 $ 594 $ 1,302,020 $ 154,285 $ 3,089 $ 1,459,988

Issuance of common stock under employee stock incentive plans 76 1 ( 1 ) — — —

Issuance of common stock under employee stock purchase plan 70 1 2,727 — — 2,728

Issuance of common stock under defined contribution plan 46 — 3,697 — — 3,697

Retirement of common stock ( 222 ) ( 2 ) ( 14,999 ) — — ( 15,001 )

Stock-based compensation — — 9,054 — — 9,054

Net loss — — — ( 2,861 ) — ( 2,861 )

Other comprehensive loss — — — — ( 549 ) ( 549 )

Balance at December 26, 2025 59,377 $ 594 $ 1,302,020 $ 154,285 $ 3,089 $ 1,459,988

For the Second Quarter Ended December 27, 2024

Other comprehensive income — — — — 7,794 7,794

Balance at March 27, 2026 59,499 $ 595 $ 1,314,770 $ 151,424 $ 10,883 $ 1,477,672

For the Third Quarter Ended March 28, 2025

Common Stock Additional

4 unchanged sentences

Shares Amount

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

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 employee stock purchase plan 60 1 1,491 — — 1,492

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

1 unchanged sentence

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

Other comprehensive income — — — — 4,334 4,334

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

For the Six Months Ended December 26, 2025

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 Nine Months Ended March 27, 2026

Common Stock Additional

11 unchanged sentences

Net loss — — — ( 30,471 ) — ( 30,471 )

Other comprehensive loss — — — — ( 409 ) ( 409 )

Balance at December 26, 2025 59,377 $ 594 $ 1,302,020 $ 154,285 $ 3,089 $ 1,459,988

For the Six Months Ended December 27, 2024

Other comprehensive income — — — — 7,385 7,385

Balance at March 27, 2026 59,499 $ 595 $ 1,314,770 $ 151,424 $ 10,883 $ 1,477,672

For the Nine Months Ended March 28, 2025

Common Stock Additional

11 unchanged sentences

Other comprehensive loss — — — — ( 4,136 ) ( 4,136 )

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

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

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

2 unchanged sentences

(In thousands)

Six Months Ended

December 26, 2025 December 27, 2024

Nine Months Ended

March 27, 2026 March 28, 2025

Cash flows from operating activities:

19 unchanged sentences

Cash flows from investing activities:

Acquisition of assets and businesses, net of cash acquired ( 1,415 ) —

Purchases of property and equipment ( 20,713 ) ( 15,705 )

10 unchanged sentences

Cash and cash equivalents at end of period $ 331,800 $ 269,822

Cash paid (refunded) during the period for:

Cash paid during the period for:

Interest $ 23,998 $ 28,105

Income taxes paid (refunded), net $ 1,370 $ ( 398 )

Income taxes paid, net $ 1,374 $ 265

Supplemental disclosures—non-cash activities:

22 unchanged sentences

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 second quarter and six months ended December 26, 2025 are not necessarily indicative of the results to be expected for the full fiscal year.

The results for the third quarter and nine months ended March 27, 2026 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 second quarter of fiscal 2026 are to the quarter ended December 26, 2025.

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

There were 26 weeks during the six months ended December 26, 2025 and December 27, 2024, respectively.

All references to the third quarter of fiscal 2026 are to the quarter ended March 27, 2026.

There were 13 weeks during the third quarters ended March 27, 2026 and March 28, 2025, respectively.

There were 39 weeks during the nine months ended March 27, 2026 and March 28, 2025, respectively.

U SE OF E STIMATES

3 unchanged sentences

Local currencies are the functional currency for the Company’s subsidiaries in Switzerland, the United Kingdom, and Spain.

The accounts of foreign subsidiaries are translated using exchange rates in effect at period-end for assets and liabilities and at average exchange rates during the period for results of operations.

The accounts o f foreign subsidiaries are translated using exchange rates in effect at period-end for assets and liabilities and at average exchange rates during the period for results of operations.

The related translation adjustments are reported in Accumulated other comprehensive income (“AOCI”) in shareholders’ equity.

Gains (losses) resulting from non-U.S.

currency transactions are included in Other expense, net in the Consolidated Statements of Operations and Comprehensive Loss and were immaterial for all periods presented.

currency transactions are included in Other (expense) income, net in the Consolidated Statements of Operations and Comprehensive Income (Loss) and were immaterial fo r all periods presented.

A CCOUNTS R ECEIVABLE

15 unchanged sentences

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 ad ministrative expenses in the Company's Consolidated Statements of Operations and Comprehensive Loss.

Factor ing fees are included as Selling, general and ad ministrative expenses in the Company's Consolidated Statements of Operations and Comprehensive Income (Loss).

The Company is responsible for collecting customer payments related to factored receivables and will remit these payments to the counterparty.

From time to time, the Company will collect customer payments related to factored receivables, which are not remitted to the counterparty prior to the end of the period due to the timing of receiving funds from the customer.

As of December 26, 2025 and June 27, 2025, the Company had collected $ 32,255 and $ 7,879 , respectively, that was not remitted to the counterparty by quarter end.

As of March 27, 2026 and June 27, 2025, the Company h ad collected $ 14,107 and $ 7,879 , respectively, that was not remitted to the counterparty by quarter end.

These collected balances are reflected as Cash and cash equivalents and the related obligation to remit the cash to the counterparty is recorded in Due to factoring facility on the Company's Consolidated Balance Sheet.

The decrease in the receivable for these collections is reflected within the change in operating assets and liabilities within the Company's Consolidated Statement of Cash Flows for the six months ended December 26, 2025.

The Company had $ 75,000 of factored accounts receivable, of which $ 42,745 was included as a contra account within Accounts receivable, net of allowance for credit losses on the Company's Consolidated Balance Sheet and $ 32,255 was recorded in Due to factoring facility on the Company's Consolidated Balance Sheet as of December 26, 2025.

The Company incurred factoring fees of approximately $ 542 and $ 961 for the second quarter and six months ended December 26, 2025.

The Company had $ 59,977 of factored accounts receivable, of which $ 58,120 was included as a contra account within Accounts receivable, net of allowance for credit losses on the Company's Consolidated Balance Sheet and $ 1,857 was recorded in Due to factoring facility on the Company's Consolidated Balance Sheet as of December 27, 2024.

The Company incurred factoring fees of approximately $ 459 and $ 821 for the second quarter and six months ended December 27, 2024.

The Company had $ 75,000 of factored accounts receivable, of which $ 60,893 was included as a contra account within Accounts receivable, net of allowance for credit losses on the Company's Consolidated Balance Sheet and $ 14,107 was recorded in Due to factoring facility on the Company's Consolidated Balance Sheet as of March 27, 2026.

The Company incurred factoring fees of approximately $ 447 and $ 1,408 for the third quarter and nine months ended March 27, 2026.

The Company had $ 59,999 of factored accounts receivable, of which $ 55,139 was included as a contra account within Accounts receivable, net of allowance for credit losses on the Company's Consolidated Balance Sheet and $ 4,860 was recorded in Due to factoring facility on the Company's Consolidated Balance Sheet as of March 28, 2025.

The Company incurred factoring fees of approximately $ 467 and $ 1,288 for the third quarter and nine months ended March 28, 2025.

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.

Changes in the fair value of the derivative financial instruments are either recognized periodically in earnings or in shareholders’ equity as a component of Other comprehensive income (loss) (“OCI”).

Changes in the fair value of cash flow hedges that qualify for hedge accounting treatment are recorded in OCI and reclassified into earnings in the same line item on the Consolidated Statements of Operations and Comprehensive Loss as the impact of the hedged transaction when the underlying contract matures and, for interest rate exposure derivatives, over the term of the corresponding debt instrument.

Changes in the fair value of cash flow hedges that qualify for hedge accounting treatment are recorded in OCI and reclassified into earnings in the same line item on the Consolidated Statements of Operations and Comprehensive Income (Loss) as the impact of the hedged transaction when the underlying contract matures and, for interest rate exposure derivatives, over the term of the corresponding debt instrument.

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 December 26, 2025.

All derivatives for the Company qualified for hedge accounting as of March 27, 2026.

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.

Contr acts with distinct performance obligations recognized at a point in time, with or without an allocation of the transaction price, totaled 55 % and 54 % of revenues for the second quarter and six months ended December 26, 2025, respectively.

Contracts with distinct performance obligations recognized at a point in time, with or without an allocation of the transaction price, totaled 55 % and 50 % of revenues for the second quarter and six months ended December 27, 2024, respectively.

C ontracts with distinct performance obligations recognized at a point in time, with or without an allocation of the transaction price, totaled 52 % and 53 % of revenues for the third quarter and nine months ended March 27, 2026, respectively.

Contracts with distinct performance obligations recognized at a point in time, with or without an allocation of the transaction price, totaled 53 % and 51 % of revenues for the third quarter and nine months ended March 28, 2025, 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 45 % and 46 % of total revenues for the second quarter and six months ended December 26, 2025, respectively.

Total revenue recognized over time was 45 % and 50 % of total revenues for the second quarter and six months ended December 27, 2024, respectively.

Total revenue recognized over time was 48 % and 47 % of total revenues for the third quarter and nine months ended March 27, 2026, respectively.

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

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

4 unchanged sentences

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

Second Quarters Ended Six Months Ended

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

Third Quarters Ended Nine Months Ended

(In thousands, except per share data) March 27, 2026 March 28, 2025 March 27, 2026 March 28, 2025

Loss from operations $ ( 2,095 ) $ ( 3,653 ) $ ( 9,624 ) $ ( 16,354 )

26 unchanged sentences

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

The contract asset balance s were $ 273,938 and $ 278,475 as of December 26, 2025 and June 27, 2025, respectively.

The contract asset balance decrease d due to $ 216,232 of billings, partially offset by revenue recognized under over time contracts of $ 211,695 during the six months ended December 26, 2025.

Th e contract liability balances were $ 137,278 and $ 127,605 as of December 26, 2025 and June 27, 2025, respectively.

The contract liability increased due to the timing of revenue recognized across multiple programs.

Revenue recognized for the second quarter and six months ended December 26, 2025 that was included in the contract liability balance at June 27, 2025 was $ 18,256 and $ 57,898 , respectively.

Revenue recognized for the second quarter and six months ended December 27, 2024 that was included in the contract liability balance at June 28, 2024 was $ 15,336 and $ 41,747 , respectively.

The co ntract asset balances were $ 269,498 and $ 278,475 as of March 27, 2026 and June 27, 2025, respectively.

The contract asset balance decreased due to $ 334,274 of billings, partially offset by revenue recognized under over time contracts of $ 325,297 during the nine months ended March 27, 2026.

Th e contract liability balances were $ 127,594 and $ 127,605 as of March 27, 2026 and June 27, 2025, respectively.

The contract liability remained relatively unchanged due to the volume of milestone billing events and the timing of revenue recognized across multiple programs.

Revenue recognized for the third quarter and nine months ended March 27, 2026 that was included in the contract liability balance at June 27, 2025 was $ 21,533 and $ 79,411 , respectively.

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 , respectively.

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 December 26, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 823,523 .

As of March 27, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 859,764 .

The Company expects to recognize approximately 50 % of its remaining performance obligations as revenue in the next 12 months and the balance thereafter.

13 unchanged sentences

Intangible assets are reported at cost, net of accumulated amortization and are either amortized on a straight-line basis over their estimated useful lives of up to 12.5 years or over the period the economic benefits of the intangible asset are consumed.

During the three months ended March 27, 2026, the Company acquired completed technologies of $ 1,540 with a useful life of 5.0 years in connection with the Company's asset acquisition of a provider of specialized manufacturing processes .

P RODUCT W ARRANTY A CCRUAL

7 unchanged sentences

Settlements made during the period ( 2,348 )

Balance at December 26, 2025 $ 2,886

Balance at March 27, 2026 $ 3,412

W EIGHTED -A VERAGE S HARES

Weighted-average shares were calculated as follows:

Second Quarters Ended Six Months Ended

December 26, 2025 December 27, 2024 December 26, 2025 December 27, 2024

Third Quarters Ended Nine Months Ended

March 27, 2026 March 28, 2025 March 27, 2026 March 28, 2025

Basic weighted-average shares outstanding 59,422 58,749 59,386 58,614

1 unchanged sentence

Diluted weighted-average shares outstanding 59,422 58,749 59,386 58,614

Equity instruments to purchase 2,633 and 2,610 shares of common stock were not included in the calculation of diluted net loss per share for the second quarter and six months ended December 26, 2025, respectively, because the equity instruments were anti-dilutive.

Equity instruments to purchase 2,993 and 2,840 shares of common stock were not included in the calculation of diluted net loss per share for the second quarter and six months ended December 27, 2024, respectively, because the equity instruments were anti-dilutive.

Equity instruments to purchase 2,548 and 2,591 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 27, 2026, respectively, because the equity instruments were anti-dilutive.

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.

R ETIREMENT OF C OMMON S TOCK

47 unchanged sentences

Fair Value of Financial Instruments

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

The following table summarizes the Companies' financial instruments measured at fair value on a recurring basis as of March 27, 2026:

Fair Value Measurements

December 26, 2025 Level 1 Level 2 Level 3

March 27, 2026 Level 1 Level 2 Level 3

Interest rate swap $ 2,522 $ — $ 2,522 $ —

4 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 December 26, 2025, the fair value of the September 2023 Swap was a liability of $ 4,453 a nd is included within Other non-current liabilities in the Company's Consolidated Balance Sheets.

As of March 27, 2026, the fair value of the September 2023 Swap was a liability of $ 2,522 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:

13 unchanged sentences

Inventory was comprised of the following:

December 26, 2025 June 27, 2025

March 27, 2026 June 27, 2025

Raw materials $ 193,298 $ 195,496

6 unchanged sentences

(Years) As of

December 26, 2025 June 27, 2025

March 27, 2026 June 27, 2025

Computer equipment and software 3 - 4

7 unchanged sentences

Property and equipment, net $ 102,592 $ 101,440

The $ 579 increase in property and equipment, net was primarily due to capital expenditures of $ 12,450 and the reclassification of work in process inventory to property and equipment of $ 4,444 , partially offset by depreciation expense.

There was $ 12,450 and $ 9,791 of capital expenditures during the six months ended December 26, 2025 and December 27, 2024, respectively.

There was $ 161 and $ 97 retirements of property and equipment during the six months ended December 26, 2025 and December 27, 2024, respectively.

Depreciation expense related to property and equipment for the second quarter and six months ended December 26, 2025 was $ 8,606 and $ 17,260 , respectively.

Depreciation expense related to property and equipment for the second quarter and six months ended December 27, 2024 was $ 9,768 and $ 19,753 , respectively.

There was $ 20,713 and $ 15,705 of capital expenditures during the nine months ended March 27, 2026 and March 28, 2025, respectively.

The nine months ended March 27, 2026 also includes the reclassification of work in process inventory to property and equipment of $ 4,444 .

Depreciation expense related to property and equipment for the third quarter and nine months ended March 27, 2026 was $ 8,395 and $ 25,655 , respectively.

Depreciation expense related to property and equipment for the third quarter and nine months ended March 28, 2025 was $ 9,731 and $ 29,484 , respectively.

In the second quarter ended December 26, 2025, the Company completed its internal reorganization, which changed how segment management reviewed discrete financial information, by consolidating two divisions into a single integrated structure that unified all lines of business and matrixed business functions.

The Company's U.S.-based businesses are now aligned into two product-oriented reporting units, Signal Technologies and Processing Technologies, a third reporting unit focused on more comprehensive solutions, Integrated Processing Solutions, and a fourth reporting unit is dedicated to bringing its advanced edge processing capabilities to the international market, Europe, the Middle East and Africa ("EMEA").

The Company concluded that the internal reorganization and change in reporting units qualified as a triggering event and required goodwill to be tested for impairment.

As required by ASC 350, the Company tested goodwill for impairment immediately before and after the reorganization.

The testing indicated that the fair values of the Company's reporting units each had an estimated fair value substantially in excess of their carrying values.

As a result of these analyses, it was determined that goodwill was not impaired before or after the reorganization.

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.

1 unchanged sentence

Component level financial information is reviewed by management across four business units:

Signal Technologies, Processing Technologies, Integrated Processing Solutions, and EMEA.

Signal Technologies, Processing Technologies, Integrated Processing Solutions, and Europe, the Middle East and Africa ("EMEA").

Accordingly, these were determined to be the Company's reporting units.

1 unchanged sentence

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

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

During the third quarter ended March 27, 2026, 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 the internal reorganization and change in reporting units qualified as a triggering event and required goodwill to be tested for impairment.

As required by ASC 350, the Company tested goodwill for impairment immediately before and after the reorganization.

The testing indicated that the fair values of the Company's reporting units each had an estimated fair value substantially in excess of their carrying values.

As a result of these analyses, it was determined that goodwill was not impaired before or after the reorganization.

In the second quarter ended December 26, 2025, the Company assigned goodwill to the new reporting units based on the relative fair value of transferred operations.

There has been no change to the carrying amount of goodwill during the second quarter and six months ended December 26, 2025.

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

The following table sets forth the changes in the carrying amount of goodwill for the nine months ended March 27, 2026:

Balance at June 27, 2025 $ 938,093

Foreign currency translation adjustments 4,521

Balance at March 27, 2026 $ 942,614

Restructuring

During the six months ended December 26, 2025, the Company approved and initiated workforce reductions that eliminated approximately 100 positions, resulting in $ 5,639 of severance costs.

During the nine months ended March 27, 2026, the Company approved and initiated workforce reductions that eliminated approximately 100 positions, resulting in $ 5,591 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 lines of business.

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.

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

The restructuring liability is classified as Accrued expenses in the Consolidated Balance Sheets.

4 unchanged sentences

Cash paid ( 4,216 )

Balance at December 26, 2025 $ 4,298

The Company recorded an income tax benefit of $ 2,364 and $ 6,725 on a loss before income taxes of $ 17,459 and $ 24,304 for the second quarters ended December 26, 2025 and December 27, 2024, respectively.

The Company recorded an income tax benefit of $ 6,385 and $ 12,319 on a loss before income taxes of $ 33,995 and $ 47,423 for the six months ended December 26, 2025 and December 27, 2024, respectively.

During the second quarter and six months ended December 26, 2025, the Company recognized a tax benefit of $ 1,002 and $ 2,122 related to stock compensation windfalls, respectively, and during the second quarter and six months ended December 27, 2024, the Company recognized a tax provision of $ 138 and $ 357 related to stock compensation shortfalls, respectively.

The effective tax rate for the second quarter and six months ended December 26, 2025 differed from the federal statutory rate primarily due to federal and state research and development credits, non-deductible compensation, stock compensation windfalls, and state taxes.

The effective tax rate for the second quarter and six months ended December 27, 2024 differed from the federal statutory rate primarily due to federal and state research and development credits, non-deductible compensation, and state taxes.

Balance at March 27, 2026 $ 2,581

The Company recorded an income tax provision of $ 174 and an income tax benefit $ 2,648 on losses before income taxes of $ 2,687 and $ 21,818 for the third quarters ended March 27, 2026 and March 28, 2025, respectively.

The Company recorded income tax benefits of $ 6,211 and $ 14,967 on a loss before income taxes of $ 36,682 and $ 69,241 for the nine months ended March 27, 2026 and March 28, 2025, respectively.

During the third quarter and nine months ended March 27, 2026, the Company recognized a tax benefit of $ 314 and $ 2,436 related to stock compensation windfalls, respectively, and during the third quarter and nine months ended March 28, 2025, the Company recognized a tax provision of $ 48 and $ 406 related to stock compensation shortfalls, respectively.

The effective tax rate for the third quarter and nine months ended March 27, 2026 differed from the federal statutory rate primarily due to federal and state research and development credits, non-deductible compensation, stock compensation windfalls, and state taxes.

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 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.

4 unchanged sentences

The Company has a 5 -year revolving credit facility (the "Revolver") with a maturity extended to November 4, 2030.

The borrowing capacity as defined under the Revolver as of December 26, 2025 is $ 850,000 less outstanding borrowings of $ 591,500 .

There were outstanding letters of credit of $ 5,878 as of December 26, 2025.

During the second quarter and six months ended December 26, 2025, the Company made no borrowings or repayments.

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

The Company incurred interest expense of $ 7,849 and $ 15,735 for the second quarter and six months ended December 26, 2025, respectively.

The borrowing capacity as defined under the Revolver as of March 27, 2026 is $ 850,000 less outstanding borrowings of $ 591,500 .

There were outstanding letters of credit of $ 4,214 as of March 27, 2026.

During the third quarter and nine months ended March 27, 2026, the Company made no borrowings or repayments.

As of March 27, 2026, the Company was in compliance with all covenants and conditions under the Revolver.

The Company incurred interest expense of $ 7,331 and $ 23,066 for the third quarter and nine months ended March 27, 2026, respectively.

The Company incurred interest expense of $ 8,068 and $ 25,404 for the third quarter and nine months ended March 28, 2025, respectively.

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

4 unchanged sentences

As part of the amendment, the Company wrote off $ 845 of previously deferred financing costs associated with the line of credit facility prior to the amendment.

This write-off is included in Other expense, net in the Consolidated Statements of Operations and Comprehensive Loss.

This write-off is included in Other expense, net in the Consolidated Statements of Operations and Comprehensive Income (Loss).

Refer to Exhibit 10.1 on Form 8-K filed by the Company with the SEC on November 4, 2025.

As of December 26, 2025, the Company's outstanding balance of unamortized deferred financing costs was $ 4,961 , 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 and November 2025 amendments to the Revolver.

As of March 27, 2026, the Company's outstanding balance of unamortized deferred financing costs was $ 4,709 , which is being amortized to Other (expense) income, net in the Consolidated Statements of Operations and Comprehensive Income (Loss) on a straight line basis over the term of the Revolver and includes the costs incurred in conjunction with the August 2024 and November 2025 amendments to the Revolver.

Employee Benefit Plan

5 unchanged sentences

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 December 26, 2025 was a net liability of $ 5,458 , which is recorded in Other non-current liabilities on the Consolidated Balance Sheet.

The Company recognized net periodic benefit costs of $ 167 and $ 231 associated with the Plan and a net loss of $ 56 and $ 51 in AOCI during the second quarters ended December 26, 2025 and December 27, 2024, respectively.

The Company recognized net periodic benefit costs of $ 334 and $ 463 associated with the Plan and a net loss of $ 113 and $ 105 in AOCI during the six months ended December 26, 2025 and December 27, 2024, respectively.

The Plan's funded status at March 27, 2026 was a net liability of $ 3,513 , which is recorded in Other non-current liabilities on the Consolidated Balance Sheet.

During the third quarter ended March 27, 2026, due to a reduction in force that impacted 20 employees, there was a $ 1,915 plan curtailment gain recorded in the Consolidated Statements of Operations and Comprehensive Income (Loss), with a corresponding reduction to the net liability within Other non-current liabilities on the Consolidated Balance Sheet.

The Company recognized net periodic (benefit) costs of $( 1,943 ) and $ 227 associated with the Plan and a net loss of $ 163 and $ 51 in AOCI during the third quarters ended March 27, 2026 and March 28, 2025, respectively.

The Company recognized net periodic (benefit) costs of $( 1,587 ) and $ 691 associated with the Plan and a net loss of $ 276 and $ 156 in AOCI during the nine months ended March 27, 2026 and March 28, 2025, respectively.

The Company's total expected employer contributions to the Plan during fiscal 2026 are $ 557 .

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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 second quarter and six months ended December 26, 2025, the Company recognized share-based matching contributions related to the 401(k) plan of $ 4,694 and $ 11,444 , as compared to $ 3,428 and $ 7,860 during the second quarter and six months ended December 27, 2024.

During the third quarter and nine months ended March 27, 2026, the Company recognized share-based matching contributions related to the 401(k) plan of $ 3,703 and $ 15,146 , as compared to $ 3,533 and $ 11,393 during the third quarter and nine months ended March 28, 2025.

Deferred Compensation Plan

The Company implemented a nonqualified deferred compensation plan as of January 1, 2024, under which eligible employees may defer up to 50 % of their base salaries and up to 100 % of their annual incentive bonuses.

The Company may also make employer contributions to participant accounts in its sole discretion, and currently matches participants’ deferrals under the plan of up to 6% of their eligible annual compensation in the form of deferred stock units (or at the Company’s election, a cash deferral credited to participants’ account balances).

The Company’s matching obligations for participant deferrals made during each calendar year are subject to a financial performance condition for the Company's four fiscal quarters corresponding to such calendar year.

In the case of the Company's matching obligations for participant deferrals made during calendar year 2024, the financial performance condition was fully satisfied, and the deferred stock units issued in respect of the Company's matching obligations vested accordingly.

The Company may also make employer contributions to participant accounts in its sole discretion, and currently matches participants’ deferrals under the plan of up to 6 % of their eligible annual compensation in the form of deferred stock units (or at the Company’s election, a cash-based deferral credited to participants’ account balances).

The Company’s matching obligations for participant deferrals made during calendar 2024 and 2025 were subject to a financial performance condition for the Company's four fiscal quarters corresponding to the respective calendar year.

Each of these financial performance conditions was subsequently determined to have been fully satisfied, and the deferred stock units issued in respect of the Company's matching obligations vested accordingly.

Participant deferrals under the plan are held in a rabbi trust and are subject to the claims of the Company’s creditors.

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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 December 26, 2025, the Company held assets under the rabbi trust of $ 714 , 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 $ 714 .

As of March 27, 2026, the Company held assets under the rabbi trust of $ 746 , 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 $ 746 .

Assets related to this plan are included in Other assets, and liabilities related to this plan are included in Accrued compensation in the Consolidated Balance Sheets.

During the second quarters ended December 26, 2025 and December 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.

During the third quarters and nine months ended March 27, 2026 and March 28, 2025, 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

1 unchanged sentence

The Company’s 2025 Long Term Incentive Plan (as amended from time to time, the “2025 Plan”) was adopted by the Company’s Board of Directors in July 2025 and approved by the Company’s shareholders on October 22, 2025.

At December 26, 2025, the aggregate number of shares authorized for issuance under the 2025 Plan is 1,954 shares, including 1,900 shares approved by the Company’s shareholders on October 22, 2025 and 54 shares by virtue of awards forfeited from and after October 22, 2025 under a predecessor stock incentive plan, the Company’s Amended and Restated 2018 Stock Incentive Plan (the “2018 Plan”).

2026, the aggregate number of shares authorized for issuance under the 2025 Plan is 1,998 shares, including 1,900 shares approved by the Company’s shareholders on October 22, 2025 and 98 shares by virtue of awards forfeited from and after October 22, 2025 under a predecessor stock incentive plan, the Company’s Amended and Restated 2018 Stock Incentive Plan (the “2018 Plan”).

The shares authorized for issuance under the 2025 Plan will continue to be increased to the extent that any award previously granted under the 2018 Plan is forfeited, terminates, expires, lapses without being exercised or is settled for cash in the future.

The 2025 Plan provides for the grant to employees and non-employees of non-qualified and incentive stock options, stock appreciation rights, time-based and performance-based restricted stock awards or units, and deferred stock awards or units.

1 unchanged sentence

Under the share counting rules applicable to the 2025 Plan, each share issued pursuant to a stock option or stock appreciation right counts as 0.5 shares against the available share reserve, and each share issued pursuant to any other award (a “full value” award) counts as one share against the available reserve.

Accordingly, at December 26, 2025, a maximum of 3,859 shares underlying future awards of stock options and stock appreciation rights are issuable under the 2025 Plan, and a maximum of 1,929 shares underlying future full value awards are issuable under the 2025 Plan.

Accordingly, at March 27, 2026, a maximum of 3,913 shares underlying future awards of stock options and stock appreciation rights are issuable under the 2025 Plan, and a maximum of 1,956 shares underlying future full value awards are issuable under the 2025 Plan.

As part of the Company's ongoing annual equity grant program for employees, the Company grants performance-based restricted stock unit awards to certain executives and employees pursuant to the 2025 Plan (and prior to October 22, 2025, the 2018 Plan).

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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.

Payouts under performance-based restricted stock unit awards may also be subject to modification based on Mercury’s total shareholder return relative to the component companies within the Spade Defense Index.

The performance targets generally include the achievement of financial performance goals.

Payouts under performance-based restricted stock unit awards may also be subject to modification based on market conditions, including Mercury’s total shareholder return relative to the component companies within the Spade Defense Index.

E MPLOYEE S TOCK P URCHASE P LAN

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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 issued under the 1997 ESPP during the six months ended December 26, 2025 and December 27, 2024, respectively.

There were an immaterial amount of shares related to the 1997 Plan issued and returned to the reserve during the six months ended December 27, 2024.

There were no shares issued under the 1997 ESPP during the nine months ended March 27, 2026 and March 28, 2025, 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.

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 70 and 65 shares issued under the 2024 ESPP during the six months ended December 26, 2025 and December 27, 2024, respectively.

Shares available for future purchase under the 2024 ESPP totaled 800 at December 26, 2025.

There were 70 shares and 65 shares issued under the 2024 ESPP during the nine months ended March 27, 2026 and March 28, 2025, respectively.

Shares available for future purchase under the 2024 ESPP totaled 800 at March 27, 2026.

S TOCK O PTION A ND A WARD A CTIVITY

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(Years) Aggregate

Intrinsic Value as of December 26, 2025

Intrinsic Value as of March 27, 2026

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

Exercised — —

Outstanding at December 26, 2025 934 12.71 45.00 2.32 years —

Exercisable at December 26, 2025 — $ — $ — — —

There were no options vested or exercised during the six months ended December 26, 2025.

Outstanding at March 27, 2026 934 12.71 45.00 2.14 years —

Exercisable at March 27, 2026 — $ — $ — — —

There were no options vested or exercised during the nine months ended March 27, 2026.

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

As of December 26, 2025, there was $ 4,046 of total unrecognized compensation cost related to non-vested options granted that is expected to be recognized over a weighted-average period of 1.32 years from December 26, 2025.

As of March 27, 2026, there was $ 3,131 of total unrecognized compensation cost related to non-vested options granted that is expected to be recognized over a weighted-average period of 1.14 years from March 27, 2026.

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

5 unchanged sentences

Forfeited ( 131 ) 48.52

Non-vested at December 26, 2025 1,802 $ 48.45

Non-vested at March 27, 2026 1,700 $ 49.36

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

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:

Second Quarters Ended Six Months Ended

December 26, 2025 December 27, 2024 December 26, 2025 December 27, 2024

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

Third Quarters Ended Nine Months Ended

March 27, 2026 March 28, 2025 March 27, 2026 March 28, 2025

Cost of revenues $ 950 $ 813 $ 4,573 $ 759

11 unchanged sentences

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 CODM utilizes Net loss that is reported on the Consolidated Statements of Operations and Comprehensive Income (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.

Any other significant segment expenses which are regularly provided to the CODM are provided on the Consolidated Statements of Operations and Comprehensive Income (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.

1 unchanged sentence

Europe Eliminations Total

SECOND QUARTER ENDED DECEMBER 26, 2025

THIRD QUARTER ENDED MARCH 27, 2026

Net revenues to unaffiliated customers $ 229,427 $ 6,332 $ — $ 235,759

1 unchanged sentence

Net revenues $ 239,753 $ 11,772 $ ( 15,766 ) $ 235,759

SECOND QUARTER ENDED DECEMBER 27, 2024

THIRD QUARTER ENDED MARCH 28, 2025

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

1 unchanged sentence

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

SIX MONTHS ENDED DECEMBER 26, 2025

NINE MONTHS ENDED MARCH 27, 2026

Net revenues to unaffiliated customers $ 662,435 $ 31,405 $ — $ 693,840

1 unchanged sentence

Net revenues $ 676,937 $ 43,821 $ ( 26,918 ) $ 693,840

SIX MONTHS ENDED DECEMBER 27, 2024

NINE MONTHS ENDED MARCH 28, 2025

Net revenues to unaffiliated customers $ 597,955 $ 40,959 $ — $ 638,914

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

December 26, 2025 $ 101,154 $ 865 $ 102,019

March 27, 2026 $ 98,894 $ 3,698 $ 102,592

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

13 unchanged sentences

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

Second Quarters Ended Six Months Ended

December 26, 2025 December 27, 2024 December 26, 2025 December 27, 2024

Third Quarters Ended Nine Months Ended

March 27, 2026 March 28, 2025 March 27, 2026 March 28, 2025

$ 206,497 $ 176,203 $ 588,900 $ 513,688

8 unchanged sentences

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

Second Quarters Ended Six Months Ended

December 26, 2025 December 27, 2024 December 26, 2025 December 27, 2024

Third Quarters Ended Nine Months Ended

March 27, 2026 March 28, 2025 March 27, 2026 March 28, 2025

$ 44,844 $ 35,921 $ 128,758 $ 116,780

13 unchanged sentences

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

Second Quarters Ended Six Months Ended

December 26, 2025 December 27, 2024 December 26, 2025 December 27, 2024

Third Quarters Ended Nine Months Ended

March 27, 2026 March 28, 2025 March 27, 2026 March 28, 2025

Components (1)

16 unchanged sentences

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

Second Quarters Ended Six Months Ended

December 26, 2025 December 27, 2024 December 26, 2025 December 27, 2024

Third Quarters Ended Nine Months Ended

March 27, 2026 March 28, 2025 March 27, 2026 March 28, 2025

$ 83,801 $ 101,548 $ 262,688 $ 288,252

10 unchanged sentences

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

Second Quarters Ended Six Months Ended

December 26, 2025 December 27, 2024 December 26, 2025 December 27, 2024

Third Quarters Ended Nine Months Ended

March 27, 2026 March 28, 2025 March 27, 2026 March 28, 2025

RTX Corporation 17 % 11 % 16 % 11 %

Northrop Grumman 12 % * 11 % *

Lockheed Martin Corporation 11 % 11 % 12 % 10 %

Northrop Grumman * * 10 % *

Navy * 14 % * 11 %

L3Harris * * * 10 %

28 % 36 % 38 % 32 %

1 unchanged sentence

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 second quarters and six months ended December 26, 2025 and December 27, 2024.

There were no programs comprising 10% or more of the Company's revenues for the third quarters and nine months ended March 27, 2026 and March 28, 2025.

Commitments and Contingencies

11 unchanged sentences

The Company had not been contacted by MassDEP regarding PFAS since the response was provided in November 2021 until October 30, 2025, when 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 has engaged a licensed site professional and responded to the notice from MassDEP.

The Company has engaged a licensed site professional, responded to the notice from MassDEP, and has negotiated a site access agreement with the current owner to begin limited testing in May 2026.

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

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

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 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.

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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 December 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 six months ended December 26, 2025.

The Court scheduled a hearing to be held on May 19, 2026 to discuss finalization of the settlement.

On April 21, 2026, five funds associated with Starboard Value LP ("Starboard"), representing approximately 14 % of the class, requested exclusion from the class by sending notice to the settlement administrator.

Starboard has indicated that it is planning to pursue a separate legal action against the Company.

As of March 27, 2026, 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, with respect to the settlement.

The increases 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 nine months ended March 27, 2026.

In connection with Starboard's potential claims, the Company may incur substantial legal fees and liabilities which may not be covered by the Company’s applicable directors’ and officers’ liability insurance.

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.

9 unchanged sentences

On October 1, 2024, a second former employee at our Torrance location filed a PAGA notice to act in a representative capacity on allegations of a range of violations of California wage and hour regulations.

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.

approval by the Court.

On March 4, 2026, the Court granted final approval of the settlement.

On April 1, 2026, the class administrator determined that the final payment amount would include $ 5 for employer tax obligations, bringing the final settlement amount to $ 455 .

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.

9 unchanged sentences

P URCHASE C OMMITMENTS

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

As of March 27, 2026, 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 $ 224,180 .

6 unchanged sentences

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 December 26, 2025, the fair value of the Swap was a liability of $ 4,453 and is included within Other non-current liabilities in the Company's Consolidated Balance Sheet.

As of March 27, 2026, the fair value of the Swap was a liability of $ 2,522 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 second quarter and six months ended December 26, 2025, the Company amortized a total of $ 881 and $ 1,762 , respectively, 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 AOCI.

During the third quarter and nine months ended March 27, 2026, the Company amortized a total of $ 881 and $ 2,643 , respectively, 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 AOCI.

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 December 26, 2025, nonperformance is not perceived to be a material risk.

Based on the credit ratings of the Company’s counterparty as of March 27, 2026, 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.

7 unchanged sentences

All share repurchases are made in accordance with Rule 10b-18.

During the second quarter and six months ended December 26, 2025, 221,510 shares of the Company's common stock were repurchased and immediately retired under the share repurchase program at an average cost of $ 67.70 per share.

As of December 26, 2025, there was $ 185,003 available for future share repurchases under this share repurchase program.

During the third quarter ended March 27, 2026, no shares of the Company's common stock were repurchased.

During the nine months ended March 27, 2026, 221,510 shares of the Company's common stock were repurchased and immediately retired under the share repurchase program at an average cost of $ 67.70 per share.

As of March 27, 2026, there was $ 185,003 available for future share repurchases under this share repurchase program.

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.

On April 30, 2026, the Company repaid $ 150,000 of the Revolver, leaving $ 441,500 drawn on the Revolver as of that date.

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