ANDOVER, Mass. - Mercury Systems (NASDAQ:MRCY) Inc., a company specializing in mission-critical processing solutions, has secured a contract with aerospace giant Boeing (NYSE:BA) to provide advanced FPGA processor boards for the U.S. Air Force's KC-46A tanker aircraft fleet. The technology is set to enhance the fleet's refueling system, ensuring improved operational efficiency and safety.
The FPGA boards, known as SCFE3920, are designed to deliver high-speed data processing and are tailored for seamless integration with the KC-46A's Remote Vision System (RVS) 2.0. This system relies on high-resolution, color video feeds to assist operators during aerial refueling operations, offering a precise and clear view that is critical for mission success.
Mercury has already supplied Boeing with hundreds of these boards for development testing purposes. The new contract stipulates the delivery of approximately 1,500 production boards, which will be used to equip the RVS 2.0 system on KC-46 aircraft operated by the United States and its allied nations.
Ken Hermanny, Mercury's Vice President of Signal Technologies, expressed pride in the company's legacy of supporting U.S. Air Force aircraft, emphasizing that the advanced technology from Mercury's Processing Platform will significantly enhance the capability of the KC-46A's aerial refueling operations.
Mercury Systems, headquartered in Andover, Massachusetts, is known for making advanced technologies accessible for challenging aerospace and defense missions. Its products and solutions are utilized in over 300 programs across 35 countries. The company's Processing Platform allows customers to transform data into actionable decisions within critical timeframes.
The announcement comes with the usual caveats of forward-looking statements, subject to risks and uncertainties that could affect actual results. These include changes in defense funding, market conditions, competition, technological shifts, and regulatory changes, among others.
This contract represents a significant step in Mercury Systems' continued partnership with Boeing and its support for the U.S. military's technological advancements. The information reported is based on a press release statement from Mercury Systems Inc.
In other recent news, Mercury Systems has reported noteworthy developments in the fourth quarter of fiscal year 2024. Record quarterly bookings were achieved, reaching $284 million, with annual bookings totaling $1.02 billion. The company's revenue for the quarter was $249 million, contributing to a full-year revenue of $835 million. Additionally, the adjusted EBITDA for the quarter saw a 42% year-over-year increase, reaching $31 million.
The company also reported a record free cash flow of $61 million for the fourth quarter. The backlog experienced a 16% year-over-year increase, reaching a new high of $1.3 billion. In terms of future expectations, Mercury Systems anticipates flat top-line growth in FY '25 with an increase in run rate during the second half of the year. The company aims to expand EBITDA margins and generate positive free cash flow in FY '25. These are recent developments that reflect the company's ongoing efforts to drive organic growth and secure multiple production orders.
InvestingPro Insights
Mercury Systems Inc.'s recent contract with Boeing for the KC-46A tanker aircraft fleet aligns with several key financial indicators and trends highlighted by InvestingPro data. Despite the company's current unprofitability over the last twelve months, InvestingPro Tips suggest that net income is expected to grow this year, and analysts predict the company will return to profitability. This positive outlook could be partly attributed to significant contracts like the one with Boeing.
The company's financial health appears stable, with InvestingPro data showing that liquid assets exceed short-term obligations, and Mercury operates with a moderate level of debt. This financial positioning may allow the company to fulfill large-scale contracts effectively, such as the production of 1,500 FPGA processor boards for Boeing.
Investors have taken notice of Mercury's potential, as evidenced by the strong return over the last three months and a large price uptick over the last six months. The stock's 3-month price total return stands at an impressive 38.94%, while the 6-month return is 27.12%. These figures suggest growing market confidence in Mercury's business prospects and technological capabilities.
It's worth noting that Mercury Systems does not pay a dividend to shareholders, potentially reinvesting profits into research and development to maintain its competitive edge in advanced technologies for aerospace and defense missions.
For readers interested in a deeper analysis, InvestingPro offers 9 additional tips for Mercury Systems, providing a more comprehensive view of the company's financial landscape and future prospects.
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