What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-08-18 compared with 2025-08-11 · 316 added, 278 removed, 905 unchanged (40% of the section changed)

3 unchanged sentences

(In thousands, except share and per share data)

June 27, 2025 June 28, 2024

July 3, 2026 June 27, 2025

Current assets:

Cash and cash equivalents $ 214,306 $ 309,099

Accounts receivable, net of allowance for credit losses of $ 1,767 and $ 2,020 at June 27, 2025 and June 28, 2024, respectively

Accounts receivable, net of allowance for credit losses of $ 162 and $ 1,767 at July 3, 2026 and June 27, 2025, respectively

69,222 109,588

Unbilled receivables and costs in excess of billings, net of allowance for credit losses of $ 5,311 and $ 6,340 at June 27, 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 July 3, 2026 and June 27, 2025

285,760 278,475

14 unchanged sentences

Accrued expenses 32,991 35,264

Due to factoring facility 391 7,879

Accrued compensation 54,537 51,321

Income taxes payable — 109

Deferred revenues and customer advances 149,565 126,797

12 unchanged sentences

85,000,000 shares authorized;

59,003,174 and 58,093,528 shares issued and outstanding at June 27, 2025 and June 28, 2024, respectively

59,600,732 and 59,003,174 shares issued and outstanding at July 3, 2026 and June 27, 2025, respectively

Additional paid-in capital 1,333,410 1,287,478

8 unchanged sentences

For the Fiscal Years Ended

June 27, 2025 June 28, 2024 June 30, 2023

July 3, 2026 June 27, 2025 June 28, 2024

Net revenues $ 983,622 $ 912,020 $ 835,275

8 unchanged sentences

Total operating expenses 280,885 274,121 343,655

Loss from operations ( 19,627 ) ( 147,754 ) ( 21,685 )

Income (loss) from operations 280 ( 19,627 ) ( 147,754 )

Interest income 7,723 3,607 1,199

2 unchanged sentences

Loss before income taxes ( 28,889 ) ( 50,424 ) ( 189,275 )

Income tax benefit ( 12,520 ) ( 51,635 ) ( 20,207 )

Income tax expense (benefit) 784 ( 12,520 ) ( 51,635 )

Net loss $ ( 29,673 ) $ ( 37,904 ) $ ( 137,640 )

9 unchanged sentences

Deferred compensation and pension benefit plan, net of tax ( 984 ) ( 1,809 ) ( 1,383 )

Total other comprehensive (loss) income, net of tax ( 6,495 ) ( 1,836 ) 6,298

Total other comprehensive income (loss), net of tax 7,732 ( 6,495 ) ( 1,836 )

Total comprehensive loss $ ( 21,941 ) $ ( 44,399 ) $ ( 139,476 )

2 unchanged sentences

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the Fiscal Years Ended June 27, 2025, June 28, 2024 and June 30, 2023

For the Fiscal Years Ended July 3, 2026, June 27, 2025 and June 28, 2024

(In thousands)

5 unchanged sentences

Shares Amount

Balance at July 1, 2022 55,680 557 1,145,323 385,774 5,531 1,537,185

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 476 5 ( 5 ) — — —

4 unchanged sentences

Net loss — — — ( 137,640 ) — ( 137,640 )

Other comprehensive income — — — — 6,298 6,298

Other comprehensive loss — — — — ( 1,836 ) ( 1,836 )

Balance at June 28, 2024 58,094 $ 581 $ 1,242,402 $ 219,799 $ 9,993 $ 1,472,775

2 unchanged sentences

Issuance of common stock under defined contribution plan 375 4 15,144 — — 15,148

Retirement of common stock ( 1 ) ( 1 ) ( 30 ) — — ( 31 )

Stock-based compensation — — 26,276 — — 26,276

5 unchanged sentences

Issuance of common stock under defined contribution plan 209 2 16,100 — — 16,102

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

Stock-based compensation — — 39,419 — — 39,419

Net loss — — — ( 29,673 ) — ( 29,673 )

Other comprehensive loss — — — — ( 6,495 ) ( 6,495 )

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

Other comprehensive income — — — — 7,732 7,732

Balance at July 3, 2026 59,601 $ 596 $ 1,333,410 $ 152,222 $ 11,230 $ 1,497,458

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

3 unchanged sentences

For the Fiscal Years Ended

June 27, 2025 June 28, 2024 June 30, 2023

July 3, 2026 June 27, 2025 June 28, 2024

Cash flows from operating activities:

Net loss $ ( 29,673 ) $ ( 37,904 ) $ ( 137,640 )

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization expense 72,683 82,027 88,030

1 unchanged sentence

Stock-based matching contributions on defined contribution plan 19,181 14,900 15,853

Benefit for deferred income taxes ( 10,591 ) ( 31,511 ) ( 59,647 )

Provision (benefit) for deferred income taxes 1,834 ( 10,591 ) ( 31,511 )

Provisions for bad debt 20 876 15,301

7 unchanged sentences

Other non-current assets 2,131 8,217 148

Accounts payable, accrued expenses and accrued compensation 8,103 741 ( 16,732 )

Accounts payable, accrued expenses, accrued compensation, and due to factoring 3,772 8,103 741

Deferred revenues and customer advances 23,846 49,890 17,307

1 unchanged sentence

Other non-current liabilities ( 10,912 ) ( 12,122 ) ( 5,049 )

Net cash provided by (used in) operating activities 138,851 60,382 ( 21,254 )

Net cash provided by operating activities 102,388 138,851 60,382

Cash flows from investing activities:

10 unchanged sentences

Payments of deferred financing and offering costs ( 3,156 ) ( 2,249 ) ( 1,931 )

Net cash provided by financing activities 1,412 82,680 65,429

Net cash (used in) provided by financing activities ( 162,739 ) 1,412 82,680

Effect of exchange rate changes on cash and cash equivalents 1,274 1,815 187

Net increase in cash and cash equivalents 128,578 108,958 5,909

Net (decrease) increase in cash and cash equivalents ( 94,793 ) 128,578 108,958

Cash and cash equivalents at beginning of year 309,099 180,521 71,563

14 unchanged sentences

Mercury Systems, Inc.

(the Company) is a 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.

(the Company) is a global leader in aerospace and defense electronics, providing breakthrough capabilities in signal and data processing.

With a four-decade legacy of innovation that spans silicon to systems and radio frequency front ends to effectors, the Company accelerates commercial technology adoption to deliver powerful and secure mission-critical processing solutions to the edge.

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

The Company's end-to-end processing ecosystem, the Mercury Processing Platform, is built on technologies the Company has developed and acquired over 40 years.

The Company's technologies are available as standard products or custom solutions from silicon to system scale to ensure interoperability, reduced complexity, optimized performance, and speed development.

Summary of Significant Accounting Policies

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B ASIS OF P RESENTATION

All references to fiscal 2026 are to the 53-week period from June 28, 2025 to July 3, 2026.

All references to fiscal 2025 are to the 52-week period from June 29, 2024 to June 27, 2025.

All references to fiscal 2024 are to the 52-week period from July 1, 2023 to June 28, 2024.

All references to fiscal 2023 are to the 52-week period from July 2, 2022 to June 30, 2023.

U SE OF E STIMATES

14 unchanged sentences

The Company has arrangements involving the lease of facilities.

Under ASC 842, at inception of the arrangement, the Company determines whether the contract is or contains a lease and whether the lease should be classified as an operating or a financing lease.

Under ASC 842, at inception of the arrangement, the Company determines whether the contract is or contains a lease and whether the lease should be classified as an operating or a

financing lease.

This determination, among other considerations, involves an assessment of whether the Company can control the underlying asset and have the right to obtain substantially all of the economic benefits or outputs from the asset.

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In most instances, contract modifications are accounted for as part of the existing contract.

Certain contracts with customers have options for the customer

to acquire additional goods or services.

Certain contracts with customers have options for the customer to acquire additional goods or services.

In most cases the pricing of these options are reflective of the standalone selling price of the good or service.

1 unchanged sentence

If the option on the customer contract was not indicative of the standalone selling price of the good or service, the material right would be accounted for as a separate performance obligation.

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

Revenues are derived from the sales of products that are grouped into one of the following three categories:

21 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, totaled 53 %, 45 % and 44 % of revenues in the fiscal years ended June 27, 2025, June 28, 2024 and June 30, 2023, respectively.

Contracts with distinct performance obligations recognized at a point in time, with or without an allocation of the transaction price, totaled 53 %, 53 % and 45 % of revenues in the fiscal years ended July 3, 2026, June 27, 2025 and June 28, 2024, respectively.

Revenue is recognized at a point in time for these products and services (versus over time recognition) due to the following:

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The Company considers the nature of these contracts and the types of products and services provided when determining the proper accounting for a particular contract.

These contracts

include both fixed-price and cost reimbursable contracts.

These contracts include both fixed-price and cost reimbursable contracts.

The Company’s cost reimbursable contracts typically include cost-plus fixed fee and Time and Material (“T&M”) contracts.

6 unchanged sentences

the availability of subcontractor services and materials;

and the availability and timing of funding from the customer.

and the availability and timing of funding from

the customer.

The Company bears the risk of changes in estimates to complete on a fixed-price contract which may cause profit levels to vary from period to period.

3 unchanged sentences

For over time contracts, the Company recognizes anticipated contract losses as soon as they become known and estimable.

Total revenue recognized under over time contracts was 47 %, 55 % and 56 % of revenues in the fiscal years ended June 27, 2025, June 28, 2024 and June 30, 2023, respectively.

Total revenue recognized under over time contracts was 47 %, 47 % and 55 % of revenues in the fiscal years ended July 3, 2026, June 27, 2025 and June 28, 2024, respectively.

Accounting for contracts recognized over time requires significant judgment relative to estimating total contract revenues and costs, in particular, assumptions relative to the amount of time to complete the contract, including the assessment of the nature and complexity of the work to be performed and the impact of contract amendments which may result in cumulative adjustments.

1 unchanged sentence

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 aggregate effects of these favorable and unfavorable changes across the Company’s portfolio of programs can have a significant effect upon its reported Income (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:

For the Fiscal Years Ended

(In thousands, except per share data) June 27, 2025 June 28, 2024 June 30, 2023

(In thousands, except per share data) July 3, 2026 June 27, 2025 June 28, 2024

Loss from operations $ ( 18,742 ) $ ( 21,070 ) $ ( 73,245 )

14 unchanged sentences

The Company expenses sales commissions as incurred for contracts where the amortization period would have been one year or less.

The Company had $ 627 and $ 837 of deferred sales commissions for contracts where the amortization period is greater than one year as of June 27, 2025 and June 28, 2024, respectively.

The Company had $ 1,143 and $ 627 of deferred sales commissions for contracts where the amortization period is greater than one year as of July 3, 2026 and June 27, 2025, respectively.

The Company has elected to treat shipping and handling activities performed after the customer has obtained control of the related goods as a fulfillment cost.

Such costs are accrued for in conjunction with the recording of revenue for the goods and are classified as cost of revenues.

Such costs are accrued for in conjunction with the recognition of revenue for the goods and are classified as cost of revenues.

C ONTRACT B ALANCES

9 unchanged sentences

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

The contract asset balances were $ 278,475 and $ 304,029 as of June 27, 2025 and June 28, 2024, respectively.

The contract asset balance decreased due to $ 452,171 of billings, offset by revenue recognized under over time contracts of $ 426,617 during the fiscal year ended June 27, 2025.

The contract liability balances were $ 127,605 and $ 74,367 as of June 27, 2025 and June 28, 2024, respectively.

The contract asset balances were $ 285,760 and $ 278,475 as of July 3, 2026 and June 27, 2025, respectively.

The contract asset balance increased due to revenue recognized under over time contracts of $ 467,131 , offset by $ 459,846 of billings during the fiscal year ended July 3, 2026.

The contract liability balances were $ 151,055 and $ 127,605 as of July 3, 2026 and June 27, 2025, respectively.

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

3 unchanged sentences

The definition of remaining performance obligations excludes 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 June 27, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 787,926 .

As of July 3, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 1,082 .

The Company expects to recognize approximately 46 % of its remaining performance obligations as revenue in the next 12 months and the balance thereafter.

12 unchanged sentences

A CCOUNTS R ECEIVABLES F ACTORING

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

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 at a discount from a list of certain of the Company’s customers, maintaining a balance of purchased receivables at or below $ 60,000 .

Pursuant to the RPSA, the counterparty has committed to purchase receivables at a discount from a list of certain of the Company’s 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.

On December 10, 2025, the Company amended the RPSA to increase the facility from $ 60,000 to $ 75,000 .

On June 4, 2026, the Company terminated the RPSA in conjunction with entering into a new receivables purchase agreement.

On June 1, 2026, the Company entered into a $ 100,000 committed Receivables Purchase Agreement ("RPA") with a new party.

The RPA has an initial term of one year .

Pursuant to the RPA, the new party committed to purchase receivables at a discount from a list of certain of the Company's customers, maintaining a balance of purchased receivables at or below $ 100,000 .

Proceeds for amounts factored by the Company are recorded as an incr ease to cash and a reduction to accounts receivable outstanding in the Consolidated Balance Sheets.

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

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

The Company had $ 52,164 and $ 33,777 of factored accounts receivables as of June 27, 2025 and June 28, 2024, respectively.

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 fe es are included as Selling, general and administrative expenses in the Company's Consolidated Statements of Operations and Comprehensive 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 July 3, 2026 and June 27, 2025, the Company had collected $ 391 and $ 7,835 , respectively, that was not remitted to the counterparty by period 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 fiscal year ended July 3, 2026.

The Company had $ 72,313 of factored accounts receivable, of which $ 71,922 was included within Accounts receivable, net of allowance for credit losses on the Company's Consolidated Balance Sheet and $ 391 was recorded in Due to factoring facility on the Company's Consolidated Balance Sheet as of July 3, 2026.

The Company had $ 59,999 of factored accounts receivable, of which $ 52,164 was included within Accounts receivable, net of allowance for credit losses on the Company's Consolidated Balance Sheet and $ 7,835 was recorded in Due to factoring facility on the Company's Consolidated Balance Sheet as of June 27, 2025.

The Company incurred factoring fees of approximately $ 1,709 and $ 1,758 for fiscal years 2026 and 2025, respectively.

10 unchanged sentences

The Company places its cash and cash equivalents with financial institutions of high credit quality.

As of June 27, 2025 and June 28, 2024, the Company had $ 309,099 and $ 180,521 , respectively, of cash and cash equivalents on deposit or invested with its financial and lending institutions.

As of July 3, 2026 and June 27, 2025, the Company had $ 214,306 and $ 309,099 , respectively, of cash and cash equivalents on deposit or invested with its financial and lending institutions.

The Company provides credit to customers in the normal course of business.

The Company performs ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed necessary.

As of June 27, 2025, five customers accounted for 48 % of the Company's accounts receivable, unbilled receivables and costs in excess of billings.

As of July 3, 2026, five customers accounted for 54 % of the Company's accounts receivable, unbilled receivables and costs in excess of billings.

As of June 27, 2025, five customers accounted for 48 % of the Company’s accounts receivable, unbilled receivables and costs in excess of billings.

12 unchanged sentences

The Company uses the management approach for segment disclosure, which designates the internal organization that is used by management for making operating decisions and assessing performance as the source of its reportable segments.

The Company manages its business on the basis of one reportable segment, as a leading technology company serving the aerospace and defense industry.

The Company manages its business on the basis of one reportable segment, as a global leader in aerospace and defense electronics, providing breakthrough capabilities in signal and data processing.

See Note Q for additional information.

G OODWILL AND I NTANGIBLE A SSETS

62 unchanged sentences

Diluted weighted-average shares outstanding 59,460 58,746 57,738

Equity instruments to purchase 2,594 , 2,501 and 1,852 shares of common stock were not included in the calculation of diluted net earnings per share for the fiscal years ended June 27, 2025, June 28, 2024 and June 30, 2023, respectively, because the equity instruments were anti-dilutive.

A CCUMULATED O THER C OMPREHENSIVE ( L OSS) I NCOME

Accumulated other comprehensive (loss) income (“AOCI”) includes changes in fair value of derivative instruments, foreign currency translation adjustments and pension benefit plan adjustments.

The components of AOCI included the change in fair value of derivative instruments, net of tax adjustments and totaled $( 4,666 ), $( 833 ), and $ 5,856 for the fiscal years ended June 27, 2025, June 28, 2024, and June 30, 2023, respectively.

Also included are $( 20 ), $ 380 and $ 300 of foreign currency translation adjustments for the fiscal years ended June 27, 2025, June 28, 2024 and June 30, 2023, respectively, and pension benefit plan adjustments totaled $( 1,809 ), $( 1,383 ) and $ 142 for the fiscal years ended June 27, 2025, June 28, 2024 and June 30, 2023, respectively.

Equity instruments to purchase or receive, via restricted stock awards and deferred stock awards, 2,738 , 2,594 and 2,501 shares of common stock were not included in the calculation of diluted net earnings per share for the fiscal years ended July 3, 2026, June 27, 2025 and June 28, 2024, respectively, because the equity instruments were anti-dilutive.

A CCUMULATED O THER C OMPREHENSIVE I NCOME ( L OSS)

Accumulated other comprehensive income (loss) (“AOCI”) includes changes in fair value of derivative instruments, foreign currency translation adjustments and pension benefit plan adjustments.

The components of AOCI included the change in fair value of derivative instruments, net of tax adjustments and totaled $ 134 , $( 4,666 ), and $( 833 ) for the fiscal years ended July 3, 2026, June 27, 2025, and June 28, 2024, respectively.

Also included are $ 8,582 , $( 20 ) and $ 380 of foreign currency translation adjustments for the fiscal years ended July 3, 2026, June 27, 2025 and June 28, 2024, respectively, and pension benefit plan adjustments totaled $( 984 ), $( 1,809 ) and $( 1,383 ) for the fiscal years ended July 3, 2026, June 27, 2025 and June 28, 2024, respectively.

A summary of the change in component of Accumulated other comprehensive income, net of tax is provided below:

Foreign currency translation adjustments, net of tax Deferred compensation and pension benefit plan, net of tax Change in fair of derivative instruments, net of tax Accumulated Other Comprehensive Income

Balance at July 1, 2022 $ 1,051 $ 4,480 $ — $ 5,531

Other comprehensive income, net of tax 300 142 5,856 6,298

Balance at June 30, 2023 $ 1,351 $ 4,622 $ 5,856 $ 11,829

3 unchanged sentences

Balance at June 27, 2025 1,711 1,430 357 3,498

Other comprehensive income (loss), net of tax 8,582 ( 984 ) 134 7,732

Balance at July 3, 2026 $ 10,293 $ 446 $ 491 $ 11,230

F OREIGN C URRENCY

5 unchanged sentences

R ECENTLY I SSUED A CCOUNTING P RONOUNCEMENTS

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 March 2024, the FASB issued ASU No.

2024-02, Codification Improvements - Amendments to Remove References to the Concepts Statements , an amendment of the FASB Accounting Standards Codification.

The amendments in this ASU are related to the removal of various references to FASB Concept Statements from the codification to make clear distinctions between authoritative and non-authoritative literature in the codification.

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

The Company does not believe this standard will have an impact on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No.

9 unchanged sentences

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 does not believe this standard will have an impact on its consolidated financial statements and related disclosures.

The Company does not expect the adoption of ASU 2025-03 to have a material impact on its Consolidated financial statements.

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.

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 does not expect the adoption of ASU 2025-05 to have a material impact on its Consolidated financial statements.

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.

In November 2025, the FASB issued ASU No.

2025-09, Derivatives and Hedging (Topic 815):

Hedge Accounting Improvements , an amendment of the FASB Accounting Standards Codification.

The amendments in this ASU address several

hedge accounting improvements and clarifies guidance for cash flow hedges, hedging forecasted interest payments, net written options as instruments, and foreign-currency-denominated debt instruments as a dual hedge.

This 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 December 2025, the FASB issued ASU No.

2025-11, Interim Reporting (Topic 270):

Narrow Scope Improvements , an amendment of the FASB Accounting Standards Codification.

The amendments in this ASU primarily provide clarification on interim reporting requirements and enhanced disclosure requirements.

The amendments also include a disclosure principle to disclose all events since the end of the last annual reporting period that have a material impact on the Company.

The ASU is effective for fiscal years beginning after December 15, 2027, and all interim reporting 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.

R ECENTLY A DOPTED A CCOUNTING P RONOUNCEMENTS

Effective March 29, 2025, the company adopted 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 adoption resulted in the Company disclosing it continues to be one reportable segment where the CEO is the Chief Operating Decision Maker ("CODM"), the selected profitability measure is consolidated net income (loss), and a reference that significant segment expenses 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 the Notes to Consolidated Financial Statements.

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 resulted in expanded disclosure in the Notes to the Consolidated Financial Statements.

Fair Value of Financial Instruments

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

The following table summarizes the Company's financial instruments measured at fair value on a recurring basis as of July 3, 2026:

Fair Value Measurements

June 27, 2025 Level 1 Level 2 Level 3

July 3, 2026 Level 1 Level 2 Level 3

Interest rate swap $ 1,576 $ — $ 1,576 $ —

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

As of July 3, 2026, the fair value of the September 2023 Swap was a liability of $ 1,576 and is included within Accrued expenses in the Company's Consolidated Balance Sheets.

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

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

The fair value of interest rate hedging agreement entered on September 29, 2022 ("the September 2022 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 June 27, 2025, the fair value of the September 2023 Swap was a liability of $ 5,391 and included within Other non-current liabilities in the Company's Consolidated Balance Sheets.

The Company terminated the September 2022 Swap during the first quarter ended September 29, 2023.

Refer to Note Q for further information regarding the September 2023 Swap and the termination of the September 2022 Swap.

During fiscal 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.

Fiscal 2025 includes the impact of $ 10,579 of inventory sold in connection to the sale of manufacturing operations to Cicor Group.

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

During fiscal 2026, 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:

June 27, 2025 June 28, 2024

July 3, 2026 June 27, 2025

Raw materials $ 210,538 $ 195,496

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(Years) As of

June 27, 2025 June 28, 2024

July 3, 2026 June 27, 2025

Computer equipment and software 3 - 4

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Property and equipment, net $ 108,413 $ 101,440

The $ 8,913 decrease in Property and equipment, net was primarily due to depreciation expense and was partially offset by current year additions of $ 19,803 .

The $ 6,973 increase in Property and equipment, net was primarily due to capital expenditures of $ 34,301 and the reclassification of work in process inventory to equipment of $ 4,444 , partially offset by depreciation expense.

During fiscal 2026 and 2025, the Company retired $ 161 and $ 991 , respectively, of computer equipment and software, furniture and fixtures, leasehold improvements, and machinery and equipment that were no longer in use by the Company.

Depreciation expense related to property and equipment for the fiscal years ended June 27, 2025, June 28, 2024 and June 30, 2023 was $ 39,178 , $ 40,369 and $ 43,777 , respectively.

Depreciation expense related to property and equipment for the fiscal years ended July 3, 2026, June 27, 2025 and June 28, 2024 was $ 33,779 , $ 39,178 and $ 40,369 , respectively.

In fiscal 2026, 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").

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.

A reporting unit is considered to be an operating segment or one level below an operating segment also known as a component.

Component level financial information is reviewed by management across two reporting units:

Mission Systems and Microelectronics.

Accordingly, these were determined to be the Company's reporting units which is consistent with the prior period.

There were no adjustments to the carrying value of Goodwill during fiscal 2025 and 2024.

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

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

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

The Company 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:

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.

The Company performed its annual goodwill impairment test in the fourth quarter of fiscal 2026.

Based on the quantitative evaluation, the Company determined that the Mission Systems and Microelectronics reporting units had estimated fair values that substantially exceeded their carrying values.

Based on the quantitative evaluation, the Company determined that the Signal Technologies, Processing Technologies, Integrated Processing Solutions, and EMEA reporting units had estimated fair values that substantially exceeded their carrying values.

The Company concluded that its goodwill was not impaired.

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Adverse changes to the underlying information assumptions used in its assessment of potential triggering events could require the Company to perform an interim impairment test.

If assumed revenue growth rate and cash flow projections are not achieved in future periods or the Company’s common stock price significantly declines from current levels, among other factors, its Mission Systems and Microelectronics reporting units could be at risk of failing the quantitative assessment and goodwill assigned to the respective reporting units could be impaired.

If assumed revenue growth rate and cash flow projections are not achieved in future periods or the Company’s common stock price significantly declines from current levels, among other factors, its Signal Technologies, Processing Technologies, Integrated Processing Solutions, and EMEA reporting units could be at risk of failing the quantitative assessment and goodwill assigned to the respective reporting units could be impaired.

Any impairment charges that the Company may record in the future could be material to its results of operations and financial condition.

In fiscal 2026, the Company assigned goodwill to the new reporting units based on the relative fair value of transferred operations.

The following table sets forth the changes in the carrying amount of goodwill for the twelve months ended July 3, 2026:

Balance at June 27, 2025 $ 938,093

Foreign currency translation adjustments 4,326

Balance at July 3, 2026 $ 942,419

Intangible Assets

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Amortization Net

Amount Weighted

June 27, 2025

Amount Remaining Weighted

Customer relationships $ 305,551 $ ( 173,162 ) $ 132,389 12.6 years

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Completed technologies 125,586 ( 73,505 ) 52,081 9.4 years

Other 3,238 ( 1,046 ) 2,192 5.0 years

$ 469,858 $ ( 259,247 ) $ 210,611

Estimated future amortization expense for intangible assets remaining at June 27, 2025 is as follows:

Estimated future amortization expense for intangible assets remaining at July 3, 2026 is as follows:

Fiscal Year Totals

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The Company reviews net intangible assets with finite lives for impairment when an event occurs indicating the potential for impairment.

Based on the Company’s last assessment, the Company believes that the carrying values of net intangible assets were recoverable as of June 27, 2025.

However, if business conditions deteriorate, the Company may be required to record impairment losses, and or increase the amortization of intangibles in the future.

Based on the Company’s last assessment, the Company believes that the carrying values of net intangible assets were recoverable as of July 3, 2026.

However, if business conditions deteriorate, the Company may be required to record

impairment losses, and or increase the amortization of intangibles in the future.

Any impairment charges that the Company may record in the future could be material to the results of operations and financial condition.

During fiscal 2026, the Company acquired completed technologies of $ 1,540 with a useful life of 5 years in connection with the Company's asset acquisition of a provider of specialized manufacturing processes.

During fiscal 2025, the Company acquired completed technologies of $ 4,866 with a useful life of 7.5 years in connection with the Company's asset acquisition of Star Lab.

Restructuring

During fiscal 2025, the Company incurred $ 7,216 of restructuring charges in connection with workforce reductions that eliminated approximately 145 positions.

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.

The Company's adjustments reflected in restructuring and other charges are typically related to organizational redesign programs or discrete post-acquisition integration activities initiated as part of discrete post acquisition integration activities.

During fiscal 2024, the Company initiated several immediate cost savings measures that simplify the Company’s organizational structure, facilitate clearer accountability, and align to the Company’s priorities, including:

(i) embedding the 1MPACT value creation initiatives and execution into the Company’s operations;

(ii) streamlining organizational structure and removing areas of redundancy between corporate and divisional organizations;

and (iii) reducing selling, general, and administrative headcount and rebalancing discretionary and third party spending to better align with the Company’s priority areas.

On July 20, 2023, the Company executed the plan to embed the 1MPACT value creation initiatives into operations.

On August 9, 2023, the Company approved and initiated a workforce reduction that, together with the 1MPACT related action, eliminated approximately 150 positions resulting in $ 9,548 of severance costs during fiscal 2024.

On January 12, 2024, the Company approved and initiated workforce reductions that eliminated approximately 100 positions resulting in an additional $ 9,841 of severance costs during fiscal 2024.

On June 17, 2024, the Company approved and initiated workforce reductions that eliminated an additional 100 positions, resulting in an additional $ 6,781 of severance costs in fiscal 2024.

The workforce reductions that eliminated approximately 350 positions in fiscal 2024 were across manufacturing, SG&A and R&D based on ongoing talent and workforce optimization efforts.

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

During fiscal 2026, the Company incurred $ 5,939 of restructuring charges in connection with workforce reductions that eliminated approximately 100 positions, predominantly in selling, general and administrative, research and development, and manufacturing.

During fiscal 2025, the Company incurred $ 7,216 of restructuring charges in connection with workforce reductions that eliminated approximately 145 positions, predominantly in research and development.

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

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

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Cash paid ( 6,101 )

Restructuring liability at June 27, 2025 $ 1,206

Restructuring liability at July 3, 2026 $ 1,044

The Company enters into lease arrangements to facilitate its operations, including manufacturing, storage, as well as engineering, sales, marketing and administration resources.

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Supplemental operating lease balance sheet information is summarized as follows:

June 27, 2025 June 28, 2024

July 3, 2026 June 27, 2025

Operating lease right-of-use assets, net $ 47,713 $ 52,264

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For the Fiscal Year Ended

June 27, 2025 June 28, 2024

July 3, 2026 June 27, 2025

Cash paid for amounts included in the measurement of operating lease liabilities $ 10,952 $ 11,401

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M ATURITIES OF L EASE C OMMITMENTS

Maturities of operating lease commitments as of June 27, 2025 were as follows:

Maturities of operating lease commitments as of July 3, 2026 were as follows:

Fiscal Year Totals

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During fiscal 2026, 2025 and 2024 the Company recognized operating lease expense of $ 15,157 , $ 14,587 , and $ 13,775 , respectively.

There were no material restrictions, covenants, sale and leaseback transactions, variable lease payments or residual value guarantees imposed by the Company's leases at June 27, 2025.

The components of (loss) income before income taxes and income tax (benefit) provision were as follows:

There were no material restrictions, covenants, sale and leaseback transactions, variable lease payments or residual value guarantees imposed by the Company's leases at July 3, 2026.

The components of (loss) income before income taxes and income tax provision (benefit) were as follows:

2026 2025 2024

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$ 784 $ ( 12,520 ) $ ( 51,635 )

The following is the reconciliation between the federal statutory income tax rate and the Company’s effective income tax rate:

2025 2024 2023

The Company's income tax payments, net of tax refunds by jurisdiction were as follows:

Year Ended July 3, 2026

United States federal $ 500

United States state and local:

New Hampshire 212

United States state and local 490

United Kingdom 179

Total cash paid for income taxes, net of refunds $ 1,174

Cash paid for income taxes, net of refunds, was $ 365 and $( 9,315 ) in fiscal 2025 and 2024, respectively (as previously disclosed, prior to the adoption of ASU 2023-09).

The following is the reconciliation between the federal statutory income tax rate and the Company’s effective income tax rate for fiscal 2026, after the adoption of ASU 2023-09:

Year Ended July 3, 2026

Amount Percentage

United States federal statutory income tax rate $ ( 6,078 ) ( 21.0 ) %

State income tax, net of federal tax benefit ( 434 ) ( 1.5 )

Foreign tax effects

Changes in valuation allowance 2,992 10.3

Rate differential 1,654 5.7

Other foreign jurisdictions 60 0.3

Research and development tax credits ( 75 ) ( 0.3 )

Non-taxable or non-deductible items

Non-deductible compensation 5,698 19.7

Excess tax benefit related to stock compensation ( 2,542 ) ( 8.8 )

Changes in unrecognized tax benefits ( 558 ) ( 1.9 )

Effective tax rate $ 784 2.7 %

The following is the reconciliation between the federal statutory income tax rate and the Company’s effective income tax rate for fiscal 2025 and fiscal 2024, prior to the adoption of ASU 2023-09:

Tax benefit at federal statutory rates ( 21.0 ) % ( 21.0 ) %

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Global intangible low-taxed income 1.3 —

Other 1.4 — 1.3

( 24.8 ) % ( 27.3 ) %

The effective tax rate for fiscal 2026 differed from the federal statutory rate primarily due to nondeductible compensation and valuation allowances recorded, partially offset by tax benefits related to stock compensation.

The effective tax rate for fiscal 2025 differed from the federal statutory rate primarily due to federal and state research and development tax credits, releases to reserves for unrecognized income tax benefits and state taxes, partially offset by tax provisions related to stock compensation.

The effective tax rate for fiscal 2024 differed from the federal statutory rate primarily due to federal and state research and development tax credits and state taxes, partially offset by tax provisions related to stock compensation.

The effective tax rate for fiscal 2023 differed from the federal statutory rate primarily due to federal and state research and development tax credits, releases to reserves for unrecognized income tax benefits and state taxes, partially offset by valuation allowances recorded and tax provisions related to stock compensation.

The components of the Company’s net deferred tax assets (liabilities) were as follows:

June 27, 2025 June 28, 2024

July 3, 2026 June 27, 2025

Deferred tax assets:

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Net deferred tax assets $ 67,188 $ 69,016

At June 27, 2025, the Company has gross state research and development tax credit carryforwards of $ 16,443 , $ 12,990 net of federal benefit, of which a portion will expire each fiscal year through fiscal year 2040.

At July 3, 2026, the Company has gross state research and development tax credit carryforwards of $ 15,435 , $ 12,193 net of federal benefit, of which a portion will expire each fiscal year through fiscal year 2041.

The Company maintains a valuation allowance on the majority of the Company’s state research and development tax credit carryforwards.

The Company has gross federal research and development tax credit carryforwards of $ 6,067 , of which a portion will expire starting in fiscal year 2043.

At June 27, 2025, the Company has gross interest expense carryforwards of $ 42,877 , which have an indefinite life, gross state net operating loss carryforwards of $ 47,591 , which will expire starting in fiscal year 2040 and gross foreign net operating loss carryforwards of $ 21,226 which will expire starting in fiscal year 2028.

At July 3, 2026, the Company has gross interest expense carryforwards of $ 31,269 , which have an indefinite life, gross state net operating loss carryforwards of $ 129,229 , which will expire starting in fiscal year 2040 and gross foreign net operating loss carryforwards of $ 42,737 which will expire starting in fiscal year 2029.

The Company maintains a valuation allowance on all foreign net operating loss carryforwards.

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Unrecognized tax benefits, beginning of period $ 4,046 $ 7,713

Increases for tax positions taken related to a prior period — 3,371

Increases for tax positions taken during the current period 280 518

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Unrecognized tax benefits, end of period $ 3,487 $ 4,046

The Company has $ 4,046 of unrecognized tax benefits as of June 27, 2025.

The Company has $ 3,487 of unrecognized income tax benefits as of July 3, 2026.

If released, all $ 3,487 of these unrecognized income tax benefits would reduce the Company’s income tax provision.

The Company includes interest and penalties related to unrecognized tax benefits within the provision for income taxes.

The total amount of interest and penalties accrued was $ 878 and $ 1,374 as of June 27, 2025 and June 28, 2024, respectively, and the amount of interest and penalties (released) accrued and recognized was $( 496 ) and $ 791 during June 27, 2025 and June 28, 2024, respectively.

The total amount of interest and penalties accrued was $ 887 and $ 878 as of July 3, 2026 and June 27, 2025, respectively, and the amount of interest and penalties accrued (released) and recognized was $ 9 and $( 496 ) during July 3, 2026 and June 27, 2025, respectively.

The Company’s major tax jurisdiction is the U.S.

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The Company is subject to litigation, claims, investigations and audits arising from time to time in the ordinary course of business.

Although legal proceedings are inherently unpredictable, the Company believes that it has valid defenses with respect to any matters currently pending against the Company and intends to defend itself vigorously.

Although legal proceedings are inherently unpredictable, the Company believes that it has valid defenses with respect to those matters currently pending against the Company and intends to defend itself vigorously.

The outcome of these matters, individually and in the aggregate, is not expected to have a material impact on the Company’s cash flows, results of operations or financial position.

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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 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 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 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 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 Freon at the Site.

The Company engaged a licensed site professional, responded to the notice from MassDEP, and negotiated a site access agreement with the current owner for soil testing.

The soil test results did not detect reportable levels of the contaminants cited in the MassDEP notice, and the licensed site professional is preparing a report to close out the Notice of Responsibility that the Company received in October 2025.

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

While the Company has not received any communications on these environmental matters in over a year, the Company assesses them each quarter and plans to only continue reporting updates in the Company's quarterly reports only when there is an update on the claims.

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 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 he had resigned with good reason during a potential change in control period.

The Company disputes these claims and maintains that he resigned without good reason.

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.

On September 19, 2023, the former CEO filed for binding arbitration under the employment rules of the American Arbitration Association (“AAA”).

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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.

Unless the arbitrator requests additional time, and the parties' consent to such request, the arbitrator is expected to deliver a ruling on the claims no than August 14, 2025.

The Company continue 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 the former CEO'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 and compensation to the former CEO during the dispute.

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.

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.

On December 30, 2025, the parties executed a settlement agreement resolving the claims in both the arbitration proceeding and the Massachusetts state court lawsuit in exchange for a payment of $ 5,000 from the Company to the former CEO.

The payment was completed on December 30, 2025, the arbitration proceeding has been closed, and the Massachusetts state court lawsuit has been dismissed.

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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Ruppert and Farnsworth from the lawsuit.

The parties are in the discovery process.

Subject to the terms of our by-laws and applicable Massachusetts law, Mr.

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

Aslett and Mr.

Ballhaus are 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 was subject to a final settlement agreement and review and approval by the Court.

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.

The Court approved the settlement on June 5, 2026.

The Company’s directors’ and officers’ liability insurers have funded the $ 32,500 settlement escrow account for distribution by the settlement administrator.

On June 8, 2026, Starboard sued the Company, Mark Aslett and Michael Ruppert in Massachusetts Superior Court in Essex County with claims based on the federal securities class action lawsuit and separate claims arising from Starboard’s ownership of Company stock and a related standstill agreement signed in June 2022.

On July 30, 2026, the Company filed a motion to dismiss the lawsuit.

The Company believes the Starboard claims 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.

In connection with Starboard’s 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.

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.

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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.

This derivative action was stayed while the Special Investigation Committee conducted 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 federal securities class action, derivative demands, and derivative action are without merit and intend to defend itself vigorously.

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

The Company and the shareholder derivative claimants have agreed to a settlement of $ 600 with certain corporate governance reforms, subject to Court approval.

As of July 3, 2026, a $ 600 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 fiscal 2026.

On January 31, 2024, a former employee at the Company's Torrance, California location, filed a wage and hour class action lawsuit in California state court in Los Angeles County, along with a companion Private Attorneys General Act (“PAGA”) lawsuit, to act in a representative capacity for other Mercury Mission Systems, LLC employees in California, alleging a range of violations of California wage and hour regulations.

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.

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 was subject to a final settlement agreement and review and 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 .

On April 30, 2026, the Company paid the settlement amount.

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’s customer has notified the Company that there is no impact to system performance resulting from the reported deviations from specifications, and that such deviations are within tolerances.

The Company’s customer has agreed to modify the specifications so that the Company can continue producing the product.

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

Any determination that the Company’s previous 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

The Company's standard product sales and license agreements entered into in the ordinary course of business typically contain an indemnification provision pursuant to which the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with any patent, copyright or other intellectual property infringement claim by any third party with respect to the Company's products.

The Company's standard product sales and license agreements entered into in the ordinary course of business typically contain an indemnification provision pursuant to which the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with any patent, copyright or other IP infringement claim by any third party with respect to the Company's products.

Such provisions generally survive termination or expiration of the agreements.

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P URCHASE C OMMITMENTS

As of June 27, 2025, the Company has entered into non-cancelable purchase commitments for certain inventory components and services used in its normal operations.

As of July 3, 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 $ 269,211 .

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Revolving Credit Facilities

On February 28, 2022, the Company amended the Revolver to increase and extend the borrowing capacity to a $ 1,100,000 , 5-year revolving credit line, with the maturity extended to February 28, 2027.

As of June 27, 2025, the Company's outstanding balance of unamortized deferred financing costs was $ 3,523 , which is being amortized to Other expense, net in the Consolidated Statements of Operations and Comprehensive Loss over the term of the Revolver and includes the costs incurred in conjunction with the November 2023 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 10.7.5 included herein.

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 13, 2024.

The Revolver has a 5-year maturity and will mature on February 28, 2027.

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

7 to the Revolver.

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

In conjunction with Amendment No.

7 to the Revolver, the Company incurred $ 3,156 of new deferred financing costs that will be amortized over the remaining term of the Revolver.

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.

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

The Revolver has a 5-year maturity and will mature on November 4, 2030.

Interest Rates and Fees

Borrowings under the Revolver bear interest, at the Company’s option, at floating rates tied to Secured Overnight Financing Rate ("SOFR") or the prime rate plus an applicable percentage in the case of dollar denominated loans or, in the case of certain other currencies, such alternative floating rates as agreed.

Borrowings under the Revolver bear interest at floating rates tied to Secured Overnight Financing Rate (“SOFR”) plus an applicable percentage in the case of dollar denominated loans or, in the case of certain other currencies, such alternative floating

rates as agreed.

The interest rate applicable to outstanding loans has initially been set at SOFR plus 1.25 % and in future fiscal quarters will be established pursuant to a pricing grid based on the Company’s total net leverage ratio.

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The Revolver also provides for customary representations and warranties, affirmative covenants and events of default (including, among others, the failure to make required payments of principal and interest, certain insolvency events and an event of default upon a change of control).

If an event of default occurs, the lenders under the Revolver will be entitled to take

various actions, including the termination of unutilized commitments, the acceleration of amounts outstanding under the Revolver and all actions permitted to be taken by a secured creditor.

If an event of default occurs, the lenders under the Revolver will be entitled to take various actions, including the termination of unutilized commitments, the acceleration of amounts outstanding under the Revolver and all actions permitted to be taken by a secured creditor.

Guarantees and Security

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The obligations of both the Company and the Guarantors are secured by a perfected security interest in substantially all of the assets of the Company and the Guarantors, in each case, now owned or later acquired, including a pledge of all of the capital stock of substantially all of the Company’s domestic wholly-owned restricted subsidiaries and 65 % of the capital stock of certain of its foreign restricted subsidiaries, subject in each case to the exclusion of certain assets and additional exceptions.

As of June 27, 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 for the fiscal years ended June 27, 2025 and June 28, 2024, respectively.

The Company incurred interest expense of $ 33,430 and $ 35,015 for fiscal years ended June 27, 2025 and June 28, 2024, respectively.

The current borrowing capacity as defined under the Revolver as of June 27, 2025 is approximately $ 900,000 , of which we had outstanding borrowings against of $ 591,500 .

There were outstanding letters of credit of $ 7,740 as of June 27, 2025.

As of July 3, 2026, the Company was in compliance with all covenants and conditions under the Revolver and there were outstanding borrowings of $ 441,500 and $ 591,500 against the Revolver for the fiscal years ended July 3, 2026 and June 27, 2025, respectively.

The Company incurred interest expense of $ 29,590 and $ 33,430 for fiscal years ended July 3, 2026 and June 27, 2025, respectively.

The current borrowing capacity as defined under the Revolver as of July 3, 2026 is approximately $ 850,000 , of which we had outstanding borrowings against of $ 441,500 .

There were outstanding letters of credit of $ 4,154 as of July 3, 2026.

Employee Benefit Plans

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These prior service costs are amortized from AOCI to net periodic benefit costs over approximately nine years .

At June 27, 2025, the accumulated benefit obligation of the Plan equals the fair value of the Plan's assets.

The Plan's funded status at June 27, 2025 and June 28, 2024 was a net liability of $ 5,282 and $ 5,005 , respectively, which is recorded in other non-current liabilities on the Consolidated Balance Sheets.

The Company recognized net periodic benefit (gain) costs of $( 1,233 ) and $ 471 associated with the Plan and a net loss of $ 1,809 and 1,383 in AOCI during the fiscal years ended June 27, 2025 and June 28, 2024, respectively.

Total employer contributions to the Plan were $ 978 during the year ended June 27, 2025, and the Company's total expected employer contributions to the Plan during fiscal 2026 are $ 704 .

At July 3, 2026, the accumulated benefit obligation of the Plan equals the fair value of the Plan's assets.

The Plan's funded status at July 3, 2026 and June 27, 2025 was a net liability of $ 3,053 and $ 5,282 , respectively, which is recorded in Other non-current liabilities on the Consolidated Balance Sheets.

The Company recognized net periodic benefit gains of $ 2,675 and $ 1,233 associated with the Plan and a net loss of $ 984 and 1,809 in AOCI during the fiscal years ended July 3, 2026 and June

27, 2025, respectively.

Total employer contributions to the Plan were $ 598 during the year ended July 3, 2026, and the Company's total expected employer contributions to the Plan during fiscal 2027 are $ 412 .

The following table reflects the total pension benefits expected to be paid from the Plan, which is funded from contributions by participants and the Company.

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Total $ 5,942

The following table outlines the components of net periodic benefit cost of the Plan for the fiscal years ended June 27, 2025 and June 28, 2024:

The following table outlines the components of net periodic benefit cost of the Plan for the fiscal years ended July 3, 2026 and June 27, 2025:

Fiscal Years Ended

June 27, 2025 June 28, 2024

July 3, 2026 June 27, 2025

Service cost $ 833 $ 1,164

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Amortization of prior service cost ( 225 ) ( 227 )

Amortization net of loss — ( 18 )

Settlement gain recognized 179 ( 181 )

Curtailment gain recognized ( 3,518 ) ( 2,062 )

Net periodic benefit (gain) cost $ ( 1,233 ) $ 471

During fiscal year 2025, due to the sale of manufacturing operations to Cicor Group, there was a $ 2,062 plan curtailment.

The following table reflects the related actuarial assumptions used to determine net periodic benefit cost of the Plan for the fiscal years ended June 27, 2025 and June 28, 2024:

Net periodic benefit gain $ ( 2,675 ) $ ( 1,233 )

During fiscal year 2026, due to a reduction in force that impacted 39 employees, there was a $ 3,518 plan curtailment.

The following table reflects the related actuarial assumptions used to determine net periodic benefit cost of the Plan for the fiscal years ended July 3, 2026 and June 27, 2025:

Fiscal Years Ended

June 27, 2025 June 28, 2024

July 3, 2026 June 27, 2025

Discount rate 1.25 % 1.20 %

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Fiscal Years Ended

June 27, 2025 June 28, 2024

July 3, 2026 June 27, 2025

Projected benefit obligation, beginning $ 17,722 $ 21,878

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Actuarial gain 593 2,046

Benefits paid 557 ( 881 )

Benefits (received) paid ( 217 ) 557

Settlements ( 9,026 ) ( 10,299 )

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Curtailment ( 3,205 ) ( 1,750 )

Foreign exchange loss (gain) 2,722 ( 42 )

Foreign exchange loss 122 2,722

Projected benefit obligation at end of year $ 10,788 $ 17,722

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Fiscal Years Ended

June 27, 2025 June 28, 2024

July 3, 2026 June 27, 2025

Fair value of Plan assets, beginning $ 12,440 $ 16,873

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Employee contributions 3,755 1,106

Benefits paid 557 ( 881 )

Benefits (received) paid ( 217 ) 557

Settlements ( 9,026 ) ( 10,299 )

Foreign exchange gain (loss) 2,100 ( 35 )

Foreign exchange gain 137 2,100

Fair value of Plan assets at end of year $ 7,735 $ 12,440

The following table presents the Company's reconciliation of funded status for the period presented:

June 27, 2025 June 28, 2024

July 3, 2026 June 27, 2025

Projected benefit obligation at end of year $ 10,788 $ 17,722

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Funded status $ ( 3,053 ) $ ( 5,282 )

The fair value of Plan assets was $ 12,440 at June 27, 2025.

The fair value of Plan assets was $ 7,735 at July 3, 2026.

The Plan is denominated in a foreign currency, the Swiss Franc, which can have an impact on the fair value of Plan assets.

The Plan was not subject to material fluctuations during the years ended June 27, 2025 or June 28, 2024.

The Plan was not subject to material fluctuations during the years ended July 3, 2026 or June 27, 2025.

The Plan’s assets are administered by an independent pension fund foundation (the “foundation”).

As of June 27, 2025, the foundation has invested the assets of the Plan in various investments vehicles, including cash, real estate, equity securities, and bonds.

As of July 3, 2026, the foundation has invested the assets of the Plan in various investments vehicles, including cash, real estate, equity securities, and bonds.

The investments are measured at fair value using a mix of Level 1, Level 2 and Level 3 inputs.

The Company maintains a qualified 401(k) plan (the “401(k) Plan”) for its U.S.

Effective in the first quarter of fiscal 2023, the Company increased the rate of its matching contributions from 3 % to 6 % of participants' eligible annual compensation and changed the form of these contributions from cash to Company stock.

employees and matches participants' contributions to the plan and/or qualified student loan payments of up to 6 % of their eligible annual compensation in Company stock.

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

The Company had $ 3,068 and $ 2,901 of capitalized stock-based 401(k) matching compensation expense on the Consolidated Balance Sheet as of June 27, 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.

Expense recognized by the Company for matching contributions related to the 401(k) plan was $ 14,900 , $ 15,853 , and $ 15,665 during the fiscal years ended June 27, 2025, June 28, 2024, and June 30, 2023, respectively.

Expense recognized by the Company for matching contributions related to the 401(k) plan was $ 19,181 , $ 14,900 , and $ 15,853 during the fiscal years ended July 3, 2026, June 27, 2025, and June 28, 2024, respectively.

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 year 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 June 27, 2025, the Company held assets under the rabbi trust of $ 268 , was subject to liabilities for amounts payable under the plan to participants (including accrued employer matching contributions not yet credited to plan participants) of $ 268 .

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 fiscal year ended June 27, 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.

As of July 3, 2026, the Company held assets under the rabbi trust of $ 983 , was subject to liabilities for amounts payable under the plan to participants (including accrued employer matching contributions not yet credited to plan participants) of $ 983 .

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 fiscal years ended July 3, 2026 and June 27, 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.

Shareholders’ Equity

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The Company has an unlimited amount available under the shelf registration statement.

S TOCKHOLDER R IGHTS P LAN

On December 27, 2021, the Company's Board of Directors authorized and declared a dividend of one preferred share purchase right (a “Right”), payable on January 10, 2022, for each outstanding share of common stock par value $ 0.01 per share to the stockholders of record on that date.

Each Right entitled the registered holder to purchase from the Company a unit of Series A Junior Preferred Stock, par value $ 0.01 per share, of the Company at a designated price per unit, subject to adjustment.

The Rights initially trade with, and are inseparable from, the shares of common stock.

On June 24, 2022, the Company amended the Rights Agreement, dated as of December 27, 2021, to increase the ownership threshold for a person to be an “Acquiring Person” (as defined in the Rights Agreement) from 7.5 % of common stock to 10 % of common stock ( 10 % of common stock to 20 % of common stock in the case of a passive institutional investor).

Additional details about the Rights Agreement are contained in the Current Reports on Form 8-K filed by the Company with the SEC on December 29, 2021 and June 24, 2022.

On October 26, 2022 the Stockholder Rights Plan and the Rights thereunder expired.

Share Repurchase Program

On November 3, 2025, the Board of Directors authorized a 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.

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

During the fiscal year ended July 3, 2026, 222 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 July 3, 2026, there was $ 185,003 available for future share repurchases under this share repurchase program.

Stock-Based Compensation

S TOCK I NCENTIVE P LANS

At June 27, 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.

The 2018 Plan shares available for issuance also include 948 shares rolled into the 2018 Plan that were available for future grant under the Company’s 2005 Stock Incentive Plan, as amended and restated (the “2005 Plan”).

The 2018 Plan replaced the 2005 Plan.

The 2018 Plan provides for the grant of non-qualified and incentive stock options, restricted stock, stock appreciation rights and deferred stock awards to employees and non-employees.

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 3,810 shares available for future grant under the 2018 Plan at June 27, 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.

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 July 3, 2026, the aggregate number of shares authorized for issuance under the 2025 Plan is 2,003 shares, including 1,900 shares approved by the Company’s shareholders on October 22, 2025 and 103 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.

Stock options and stock appreciation rights 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 have a maximum exercisable term of ten years .

Under the share counting rules applicable to the 2025 Plan, each share issued pursuant to a stock option or stock appreciation right counts as half a share 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 July 3, 2026, a maximum of 3,916 shares underlying future

awards of stock options and stock appreciation rights are issuable under the 2025 Plan, and a maximum of 1,958 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).

Performance awards vest based on the requisite service period subject to the achievement of specific financial performance targets.

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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 awards may also be subject to modification based on Mercury's total shareholder return relative to the component companies within the Spade Defensive 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 adjustment based on Mercury's total shareholder return.

E MPLOYEE S TOCK P URCHASE P LAN

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There were an immaterial amount of shares related to the 1997 Plan issued and returned to the reserve during fiscal 2025.

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

The Company's shareholders approved the plan at the Company’s 2024 annual meeting of shareholders, the number of shares authorized for issuance under the 2024 ESPP is 1,000 shares.

The Company adopted a new employee stock purchase plan (the “2024 ESPP”) in April 2024, which was approved by the Company's shareholders on October 23, 2024.

The number of shares authorized for issuance under the 2024 ESPP is 1,000 shares.

Under the 2024 ESPP, rights are granted to purchase shares of common stock at 85 % of the lesser of the market value of such shares at either the beginning or the end of each six-month offering period.

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.

As of June 27, 2025, 130 shares have been issued under the 2024 ESPP.

Shares available for future purchase under the 2024 ESPP totaled 870 as of June 27, 2025.

During 2026, 116 shares were issued under the 2024 ESPP.

Shares available for future purchase under the 2024 ESPP totaled 754 as of July 3, 2026.

S TOCK O PTION A ND A WARD A CTIVITY

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Intrinsic Value as of 6/28/2024

Outstanding at June 30, 2023 — — $ — — —

Outstanding at June 28, 2024 934 12.71 $ 45.00 3.69 years —

Granted — $ —

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Cancelled — $ —

Outstanding at June 27, 2025 934 $ 12.71 $ 45.00 2.75 years $ —

Exercisable at June 27, 2025 — $ — $ — — $ —

Outstanding at July 3, 2026 934 $ 12.71 $ 45.00 2.04 years $ —

Exercisable at July 3, 2026 — $ — $ — — $ —

There were no options vested or exercised during fiscal year 2026.

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

As of June 27, 2025, there was $ 5,822 of total unrecognized compensation cost related to non-vested options granted that is expected to be recognized over a weighted-average period 1.75 years from June 27, 2025.

As of July 3, 2026, there was $ 2,126 of total unrecognized compensation cost related to non-vested options granted that is expected to be recognized over a weighted-average period 1.04 years from July 3, 2026.

The Company uses the Black-Scholes valuation model for estimating the fair value on the date of grant of stock options.

The Company calculated the fair values of the options grants using the following weighted-average assumptions:

Fiscal Year Ended

June 27, 2025

Expected volatility 45 %

Expected term 4 years

Risk-free interest rate 4.44 %

Expected dividend yield — %

Weighted-average grant date fair value per share $ 12.71

The expected volatility of options granted has been determined using a weighted average of the historical volatility of the Company’s stock for a period equal to the expected term of the option.

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Forfeited ( 148 ) 48.23

Outstanding at June 27, 2025 1,742 $ 40.37

Outstanding at July 3, 2026 1,672 $ 45.50

The total fair value of restricted stock awards vested during fiscal years 2026, 2025 and 2024 was $ 33,549 , $ 16,643 and $ 15,994 , respectively.

S TOCK - BASED C OMPENSATION E XPENSE

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

The Company had $ 1,712 and $ 456 of capitalized stock-based compensation expense on the Consolidated Balance Sheets as of June 27, 2025 and June 28, 2024, respectively.

The Company recognizes expense for its share-based payment plans in the Consolidated Statements of Operations and Comprehensive Loss in accordance with 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.

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

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

Fiscal Years Ended

June 27, 2025 June 28, 2024 June 30, 2023

July 3, 2026 June 27, 2025 June 28, 2024

Cost of revenues $ 5,584 $ 1,205 $ 2,919

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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 executive officer who acts as its 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 Company adopted Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures , as of March 29, 2025.

See the section Recently Adopted Accounting Pronouncements in Note B for more information.

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 deprecation which are disclosed in Note O 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 adopted ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures , as of March 29, 2025.

The CODM utilizes Net loss that is reported on the Consolidated Statements 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 P and Note E, respectively.

Any other significant segment expenses which are regularly provided to the CODM are provided on the Consolidated Statements 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.

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Europe Asia Pacific Eliminations Total

YEAR ENDED JUNE 27, 2025

YEAR ENDED JULY 3, 2026

Net revenues to unaffiliated customers $ 944,339 $ 39,283 $ — $ — $ 983,622

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Fiscal Years Ended

June 27, 2025 June 28, 2024 June 30, 2023

July 3, 2026 June 27, 2025 June 28, 2024

Domestic (1) $ 843,653 $ 746,306 $ 704,115

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Fiscal Years Ended

June 27, 2025 June 28, 2024 June 30, 2023

July 3, 2026 June 27, 2025 June 28, 2024

Radar (1) $ 188,819 $ 169,738 $ 102,084

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Fiscal Years Ended

June 27, 2025 June 28, 2024 June 30, 2023

July 3, 2026 June 27, 2025 June 28, 2024

Components (1) $ 205,127 $ 189,983 $ 192,473

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Fiscal Years Ended

June 27, 2025 June 28, 2024 June 30, 2023

July 3, 2026 June 27, 2025 June 28, 2024

Airborne (1) $ 372,538 $ 410,677 $ 431,277

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Fiscal Years Ended

June 27, 2025 June 28, 2024 June 30, 2023

July 3, 2026 June 27, 2025 June 28, 2024

RTX Corporation 15 % 13 % 10 %

Lockheed Martin Corporation 11 % 10 % 11 %

Northrop Grumman 10 % * *

Navy * 10 % *

L3Harris * * 12 %

Northrop Grumman * * 11 %

36 % 33 % 33 %

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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 years ended June 27, 2025, June 28, 2024 and June 30, 2023.

There were no programs comprising 10% or more of the Company's revenues for the years ended July 3, 2026, June 27, 2025 and June 28, 2024.

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

On September 7, 2022, the Company entered into an interest rate Swap (the “Initial 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 a rate of 3.25 %.

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

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

On September 29, 2022, the Company terminated the Initial Swap.

At the time of termination, the fair value of the Initial Swap was an asset of $ 5,995 .

The Company received the cash settlement of $ 5,995 and these proceeds are classified within Operating Activities of the Consolidated Statements of Cash Flows for the year ended June 30, 2023.

Following the termination of the Initial Swap, the Company entered into the September 2022 Swap agreement with JPMorgan on September 29, 2022.

The September 2022 Swap fixed $ 300,000 of total $ 511,500 existing borrowings on the Revolver at the time of the Swap at a rate of 3.79 %.

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.

On September 28, 2023, the Company terminated the September 2022 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 for the year ended June 30, 2024.

Following the termination of the September 2022 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 June 27, 2025, the fair value of the September 2023 Swap was a liability of $ 5,391 and is included within Other non-current liabilities in the Company's Consolidated Balance Sheets.

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).

As of September 28, 2023, 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 $ 441,500 existing borrowings on the Company's Revolver at 4.66 %.

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.

As of July 3, 2026, the fair value of the September 2023 Swap was a liability of $ 1,576 and is included within Accrued expenses in the Company's Consolidated Balance Sheets.

During fiscal year 2026, the Company amortized $ 3,524 of the gains associated with the interest swaps terminated on September 29, 2022 and September 28, 2023, which is included within Accumulated other comprehensive income.

1 unchanged sentence

The counterparty to the Swap is JPMorgan.

Based on the credit ratings of the Company’s counterparty as of June 27, 2025, nonperformance is not perceived to be a material risk.

Based on the credit ratings of the Company’s counterparty as of July 3, 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.

6 unchanged sentences

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data