False0001049521February 3, 202600010495212026-02-032026-02-03


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 3, 2026

Mercury Systems, Inc.
(Exact Name of Registrant as Specified in its Charter)
 
Massachusetts001-4119404-2741391
(State or Other Jurisdiction
of Incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
 
50 Minuteman Road, Andover,Massachusetts01810
(Address of Principal Executive Offices)(Zip Code)
Registrant’s telephone number, including area code: (978) 256-1300
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.01
MRCY
Nasdaq Global Select Market




Item 2.02.    Results of Operations and Financial Condition.
On February 3, 2026, Mercury Systems, Inc. (the "Company") issued a press release and an earnings presentation regarding its financial results for the second quarter ended December 26, 2025. The Company’s press release and earnings presentation are attached as exhibits 99.1 and 99.2 to this Current Report on Form 8-K and incorporated by reference herein.
Information in Item 2.02 of this Current Report on Form 8-K and the exhibits 99.1 and 99.2 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
Use of Non-GAAP Financial Measures
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the Company provides adjusted EBITDA, adjusted income, adjusted EPS, and free cash flow, which are non-GAAP financial measures. Adjusted EBITDA, adjusted income, and adjusted EPS exclude certain non-cash and other specified charges. The Company believes these non-GAAP financial measures are useful to help investors more completely understand its past financial performance and prospects for the future. However, the presentation of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for financial information provided in accordance with GAAP. Management believes these non-GAAP financial measures assist in providing a more complete understanding of the Company’s underlying operational results and trends, and management uses these measures along with the corresponding GAAP financial measures to manage the Company’s business, to evaluate its performance compared to prior periods and the marketplace, and to establish operational goals.
Item 9.01.    Financial Statements and Exhibits.

(d)    Exhibits.

Exhibit No.
Description
99.1
Press Release dated February 3, 2026
99.2
Earnings Presentation dated February 3, 2026
104Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.  
Dated: February 3, 2026
MERCURY SYSTEMS, INC.
By: /s/ David E. Farnsworth
       David E. Farnsworth
       Executive Vice President, Chief Financial Officer



EXHIBIT INDEX
Exhibit No.
Description

Exhibit 99.1
newlogoa.jpg
FOR IMMEDIATE RELEASE

Mercury Systems Reports Second Quarter Fiscal 2026 Results

•Q2 FY26 Bookings of $288 million grew 18.6% year-over-year; book-to-bill of 1.23
•Record backlog of $1.5 billion; up 8.8% year-over-year
•Record first-half revenue with Q2 FY26 Revenue of $233 million; GAAP net loss of $15 million; and adjusted EBITDA of $30 million, up 36.3% year-over-year
•Q2 FY26 Operating Cash Flow of $52 million with Free Cash Flow of $46 million

ANDOVER, Mass. February 3, 2026 Mercury Systems, Inc. (NASDAQ: MRCY, www.mrcy.com), reported operating results for the second quarter of fiscal year 2026, ended December 26, 2025.
“We delivered second quarter fiscal 2026 results that were ahead of our expectations, with solid year-over-year growth in backlog, revenue, and adjusted EBITDA, and robust free cash flow,” said Bill Ballhaus, Mercury’s Chairman and CEO. “Our ability to accelerate progress on a number of our customers’ high-priority programs once again contributed to strong results this quarter, including record first-half revenue."
“In the second quarter we secured bookings of $288 million, with a 1.23 book-to-bill, resulting in a record backlog approaching $1.5 billion. Revenue for the second quarter was $233 million, resulting in a 7.1% year-over-year increase in the first half. GAAP net loss of $15 million, adjusted EBITDA of $30 million, and adjusted EBITDA margin of 12.9%, each improving year-over-year. Operating cash flow of $52 million, and free cash flow of $46 million, were well ahead of our expectations."
Second Quarter Fiscal 2026 Results
Second quarter fiscal 2026 revenues were $233 million, compared to $223 million in the second quarter of fiscal 2025.
Total bookings for the second quarter of fiscal 2026 were $288 million, yielding a book-to-bill ratio of 1.23 for the quarter.






Mercury Reports Second Quarter Fiscal 2026 Results, Page 2

GAAP net loss and loss per share for the second quarter of fiscal 2026 were $15 million and $0.26, respectively, compared to GAAP net loss and loss per share of $18 million and $0.30, respectively, for the second quarter of fiscal 2025. Adjusted earnings per share (“adjusted EPS”) was $0.16 per share for the second quarter of fiscal 2026, compared to $0.07 per share in the second quarter of fiscal 2025.
Second quarter fiscal 2026 adjusted EBITDA was $30 million, compared to $22 million for the second quarter of fiscal 2025.
Cash flows provided by operating activities in the second quarter of fiscal 2026 were $52 million, compared to $85 million in the second quarter of fiscal 2025. Free cash flow, defined as cash flows from operating activities less capital expenditures for property and equipment, was $46 million for the second quarter of fiscal 2026 and $82 million for the second quarter of fiscal 2025.
Backlog
Mercury’s total backlog at December 26, 2025 was $1.5 billion, an approximate $119 million increase from a year ago. Of the December 26, 2025 total backlog, $807 million represents orders expected to be recognized as revenue within the next 12 months.
Conference Call Information
Management will host a conference call and simultaneous webcast at 5:00 p.m. ET on Tuesday, February 3, 2026, to discuss Mercury's quarterly financial results, business highlights and outlook. In addition, Company representatives may answer questions concerning business and financial developments and trends, the Company's view on earnings forecasts, and other business and financial matters affecting the Company, the responses to which may contain information that has not been previously disclosed.
To attend the conference call or webcast, participants should register online at ir.mrcy.com/events-presentations. Participants are requested to register a day in advance or at a minimum 15 minutes before the start of the call. A replay of the webcast will be available two hours after the call and archived on the same web page for six months.
50 Minuteman Road, Andover, Massachusetts 01810 U.S.A. | +1-(978)-256-1300 | www.mrcy.com | X: @MRCY





Mercury Reports Second Quarter Fiscal 2026 Results, Page 3

Use of Non-GAAP Financial Measures
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the Company provides adjusted EBITDA, adjusted income, adjusted earnings per share (“adjusted EPS”) and free cash flow, which are non-GAAP financial measures. Adjusted EBITDA, adjusted income, and adjusted EPS exclude certain non-cash and other specified charges. The Company believes these non-GAAP financial measures are useful to help investors understand its past financial performance and prospects for the future. However, these non-GAAP measures should not be considered in isolation or as a substitute for financial information provided in accordance with GAAP. Management believes these non-GAAP measures assist in providing a more complete understanding of the Company’s underlying operational results and trends, and management uses these measures along with the corresponding GAAP financial measures to manage the Company’s business, to evaluate its performance compared to prior periods and the marketplace, and to establish operational goals. A reconciliation of GAAP to non-GAAP financial results discussed in this press release is contained in the attached exhibits.
Mercury Systems – Innovation that Matters®
Mercury Systems is a global technology company that delivers mission-critical processing power to the edge, making advanced technologies profoundly more accessible for today’s most challenging aerospace and defense missions. The Mercury Processing Platform allows customers to tap into innovative capabilities from silicon to system scale, turning data into decisions on timelines that matter. Mercury’s products and solutions are deployed in more than 300 programs and across 35 countries, enabling a broad range of applications in mission computing, sensor processing, command and control, and communications. Mercury is headquartered in Andover, Massachusetts, and has more than 20 locations worldwide. To learn more, visit mrcy.com. (Nasdaq: MRCY)
Investors and others should note that we announce material financial information using our website (www.mrcy.com), SEC filings, press releases, public conference calls, webcasts, and social media, including X (X.com/mrcy) and LinkedIn (www.linkedin.com/company/mercury-systems). Therefore, we encourage investors and others interested in Mercury to review the information we post on the social media and other communication channels listed on our website.
50 Minuteman Road, Andover, Massachusetts 01810 U.S.A. | +1-(978)-256-1300 | www.mrcy.com | X: @MRCY





Mercury Reports Second Quarter Fiscal 2026 Results, Page 4

Forward-Looking Safe Harbor Statement
This press release contains certain forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including those relating to the Company's focus on enhanced execution of the Company's strategic plan. You can identify these statements by the words “may,” “will,” “could,” “should,” “would,” “plans,” “expects,” “anticipates,” “continue,” “estimate,” “project,” “intend,” “likely,” “forecast,” “probable,” “potential,” and similar expressions. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. Such risks and uncertainties include, but are not limited to, continued funding of defense programs, the timing and amounts of such funding, general economic and business conditions, including unforeseen weakness in the Company’s markets, effects of any U.S. federal government shutdown or extended continuing resolution, effects of increasingly volatile geopolitical events and regional conflicts, competition, changes in technology and methods of marketing, delays in or cost increases related to completing development, engineering and manufacturing programs, changes in customer order patterns, changes in product mix, continued success in technological advances and delivering technological innovations, changes in, or in the U.S. government’s interpretation of, federal export control or procurement rules and regulations, including tariffs, changes in, or in the interpretation or enforcement of, environmental rules and regulations, market acceptance of the Company's products, shortages in or delays in receiving components, supply chain delays or volatility for critical components, production delays or unanticipated expenses including due to quality issues or manufacturing execution issues, failure to meet contractual performance specifications, adherence to required manufacturing standards, capacity underutilization, increases in scrap or inventory write-offs, failure to achieve or maintain manufacturing quality certifications, such as AS9100, failure to achieve or maintain qualified business systems, such as those required by the DFARS, adverse finding in government audits or investigations, the impact of supply chain disruption, inflation and labor shortages, among other things, on program execution and the resulting effect on customer satisfaction, inability to fully realize the expected benefits from acquisitions, restructurings, and operational efficiency initiatives or delays in realizing such benefits, challenges in integrating acquired businesses and achieving anticipated synergies, effects of shareholder activism, increases in interest rates, changes to industrial security and cyber-security regulations and requirements and impacts from any cyber or insider threat events, changes in tax rates or tax regulations, changes to interest rate swaps or other cash flow hedging arrangements, changes to generally accepted accounting principles, difficulties in retaining key employees and customers, litigation, unanticipated costs under fixed-price service and system integration engagements, and various other factors beyond our control. These risks and uncertainties also include such additional risk factors as are discussed in the Company's filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended June 27, 2025 and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The Company cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.
# # #
Contact:
Tyler Hojo, CFA, Vice President of Investor Relations
Mercury Systems, Inc.
978-967-3676

Mercury Systems and Innovation That Matters are registered trademarks of Mercury Systems, Inc. Other product and company names mentioned may be trademarks and/or registered trademarks of their respective holders.

50 Minuteman Road, Andover, Massachusetts 01810 U.S.A. | +1-(978)-256-1300 | www.mrcy.com | X: @MRCY





Mercury Reports Second Quarter Fiscal 2026 Results, Page 5

MERCURY SYSTEMS, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 26,June 27,
20252025
Assets
Current assets:
Cash and cash equivalents$334,990 $309,099 
Accounts receivable, net 105,832 109,588 
Unbilled receivables and costs in excess of billings, net273,938 278,475 
Inventory349,645 332,920 
Prepaid income taxes1,230 457 
Prepaid expenses and other current assets66,518 27,639 
Total current assets1,132,153 1,058,178 
Property and equipment, net102,019 101,440 
Goodwill938,093 938,093 
Intangible assets, net193,232 210,611 
Operating lease right-of-use assets, net51,972 52,264 
Deferred tax asset76,429 69,016 
Other non-current assets8,206 5,162 
          Total assets$2,502,104 $2,434,764 
Liabilities and Shareholders’ Equity
Current liabilities:
   Accounts payable$106,182 $79,116 
   Accrued expenses72,437 35,264 
   Due to factoring facility32,255 7,879 
   Accrued compensation35,251 51,321 
   Deferred revenues and customer advances136,918 126,797 
          Total current liabilities383,043 300,377 
Income taxes payable4,046 4,046 
Long-term debt591,500 591,500 
Operating lease liabilities50,960 52,738 
Other non-current liabilities12,567 12,642 
          Total liabilities1,042,116 961,303 
Shareholders’ equity:
Preferred stock— — 
   Common stock594 590 
   Additional paid-in capital1,302,020 1,287,478 
   Retained earnings154,285 181,895 
   Accumulated other comprehensive income3,089 3,498 
          Total shareholders’ equity1,459,988 1,473,461 
          Total liabilities and shareholders’ equity$2,502,104 $2,434,764 
50 Minuteman Road, Andover, Massachusetts 01810 U.S.A. | +1-(978)-256-1300 | www.mrcy.com | X: @MRCY





Mercury Reports Second Quarter Fiscal 2026 Results, Page 6

MERCURY SYSTEMS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Second Quarters EndedSix Months Ended
December 26, 2025December 27, 2024December 26, 2025December 27, 2024
Net revenues$232,872 $223,125 $458,081 $427,556 
Cost of revenues(1)
172,239 162,299 334,549 314,940 
   Gross margin60,633 60,826 123,532 112,616 
Operating expenses:
   Selling, general and administrative(1)
42,139 40,501 88,045 73,654 
   Research and development(1)
15,381 21,368 28,565 39,751 
   Amortization of intangible assets9,694 11,154 19,953 22,389 
   Restructuring and other charges4,055 40 5,639 2,300 
   Acquisition costs and other related expenses182 178 745 355 
      Total operating expenses71,451 73,241 142,947 138,449 
Loss from operations(10,818)(12,415)(19,415)(25,833)
Interest income1,648 406 3,675 950 
Interest expense(7,849)(8,430)(15,735)(17,336)
Other expense, net(440)(3,865)(2,520)(5,204)
Loss before income tax benefit(17,459)(24,304)(33,995)(47,423)
Income tax benefit(2,364)(6,725)(6,385)(12,319)
Net loss$(15,095)$(17,579)$(27,610)$(35,104)
Basic net loss per share$(0.26)$(0.30)$(0.47)$(0.60)
Diluted net loss per share$(0.26)$(0.30)$(0.47)$(0.60)
Weighted-average shares outstanding:
   Basic59,415 58,561 59,324 58,454 
   Diluted 59,415 58,561 59,324 58,454 
(1) Includes stock-based compensation expense, allocated as follows:
   Cost of revenues$1,863 $(167)$3,623 $(54)
   Selling, general and administrative $7,026 $6,317 $13,322 $10,928 
   Research and development $1,705 $1,812 $3,222 $3,180 
50 Minuteman Road, Andover, Massachusetts 01810 U.S.A. | +1-(978)-256-1300 | www.mrcy.com | X: @MRCY





Mercury Reports Second Quarter Fiscal 2026 Results, Page 7

MERCURY SYSTEMS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Second Quarters EndedSix Months Ended
December 26, 2025December 27, 2024December 26, 2025December 27, 2024
Cash flows from operating activities:
   Net loss$(15,095)$(17,579)$(27,610)$(35,104)
   Depreciation and amortization18,300 20,922 37,213 42,142 
   Other non-cash items, net12,435 5,083 25,155 10,685 
   Changes in operating assets and liabilities35,971 77,036 19,035 53,079 
      Net cash provided by operating activities51,611 85,462 53,793 70,802 
Cash flows from investing activities:
   Purchases of property and equipment(5,902)(3,555)(12,450)(9,791)
   Other investing activities— 1,900 — 1,900 
      Net cash used in investing activities(5,902)(1,655)(12,450)(7,891)
Cash flows from financing activities:
   Proceeds from employee stock plans2,728 1,492 2,728 1,492 
   Payments for retirement of common stock(15,001)— (15,001)— 
   Payments of deferred financing and offering costs(3,156)— (3,156)(2,249)
      Net cash (used in) provided by financing activities(15,429)1,492 (15,429)(757)
Effect of exchange rate changes on cash and cash equivalents(6)(857)(23)(110)
Net increase in cash and cash equivalents30,274 84,442 25,891 62,044 
Cash and cash equivalents at beginning of period304,716 158,123 309,099 180,521 
Cash and cash equivalents at end of period$334,990 $242,565 $334,990 $242,565 
50 Minuteman Road, Andover, Massachusetts 01810 U.S.A. | +1-(978)-256-1300 | www.mrcy.com | X: @MRCY





Mercury Reports Second Quarter Fiscal 2026 Results, Page 8

UNAUDITED SUPPLEMENTAL INFORMATION RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(In thousands, except per share data)

Adjusted EBITDA, a non-GAAP measure for reporting financial performance, excludes the impact of certain items and, therefore, has not been calculated in accordance with GAAP. Management believes that exclusion of these items assists in providing a more complete understanding of the Company’s underlying results and trends, and management uses these measures along with the corresponding GAAP financial measures to manage the Company’s business, to evaluate its performance compared to prior periods and the marketplace, and to establish operational goals. The adjustments to calculate this non-GAAP financial measure, and the basis for such adjustments, are outlined below:

Other non-operating adjustments. The Company records other non-operating adjustments such as gains or losses on foreign currency remeasurement, investments and fixed asset sales or disposals among other adjustments. These adjustments may vary from period to period without any direct correlation to underlying operating performance.
 
Interest income and expense. The Company receives interest income on investments and incurs interest expense on loans, financing leases and other financing arrangements. These amounts may vary from period to period due to changes in cash and debt balances and interest rates driven by general market conditions or other circumstances which may be outside of the normal course of the Company’s operations.
 
Income taxes. The Company’s GAAP tax expense can fluctuate materially from period to period due to tax adjustments that are not directly related to underlying operating performance or to the current period of operations.
 
Depreciation. The Company incurs depreciation expense related to capital assets purchased to support the ongoing operations of the business. These assets are recorded at cost or fair value and are depreciated using the straight-line method over the useful life of the asset. Purchases of such assets may vary significantly from period to period and without any direct correlation to underlying operating performance.
 
Amortization of intangible assets. The Company incurs amortization of intangible assets primarily as a result of acquired intangible assets such as backlog, customer relationships and completed technologies but also due to licenses, patents and other arrangements. These intangible assets are valued at the time of acquisition or upon receipt of right to use the asset, amortized over the requisite life and generally cannot be changed or influenced by management after acquisition.
 
Restructuring and other charges. The Company incurs restructuring and other charges in connection with management’s decisions to undertake certain actions to realign operating expenses through workforce reductions and the closure of certain Company facilities, businesses and lines of business. The Company’s adjustments reflected in restructuring and other charges are typically related to acquisitions and organizational redesign programs initiated as part of discrete post-acquisition integration activities. Management believes these items are non-routine and may not be indicative of ongoing operating results.
 
Impairment of long-lived assets. The Company incurs impairment charges of long-lived assets based on events that may or may not be within the control of management. Management believes these items are outside the normal operations of the Company’s business and are not indicative of ongoing operating results.
 
50 Minuteman Road, Andover, Massachusetts 01810 U.S.A. | +1-(978)-256-1300 | www.mrcy.com | X: @MRCY





Mercury Reports Second Quarter Fiscal 2026 Results, Page 9

Acquisition, financing and other third party costs. The Company incurs transaction costs related to acquisition and potential acquisition opportunities, such as legal, accounting, and other third party advisory fees. The Company may also incur third party costs, such as legal, banking, communications, proxy solicitation, and other third party advisory fees in connection with engagements by activist investors or unsolicited acquisition offers. Although the Company may incur such third party costs and other related charges and adjustments, it is not indicative that any transaction will be consummated. Additionally, the Company incurs unused revolver and bank fees associated with maintaining its credit facility as well as non-cash financing expenses associated with obtaining its credit facility. Management believes these items are outside the normal operations of the Company’s business and are not indicative of ongoing operating results.
 
Fair value adjustments from purchase accounting. As a result of applying purchase accounting rules to acquired assets and liabilities, certain fair value adjustments are recorded in the opening balance sheet of acquired companies. These adjustments are then reflected in the Company’s income statements in periods subsequent to the acquisition. In addition, the impact of any changes to originally recorded contingent consideration amounts are reflected in the income statements in the period of the change. Management believes these items are outside the normal operations of the Company and are not indicative of ongoing operating results.

Litigation and settlement income and expense. The Company periodically receives income and incurs expenses related to pending claims and litigation and associated legal fees and potential case settlements and/or judgments. Although the Company may incur such costs and other related charges and adjustments, it is not indicative of any particular outcome until the matter is fully resolved. Management believes these items are outside the normal operations of the Company’s business, often occur in periods other than the period of activity, and are not indicative of ongoing operating results. The Company periodically receives warranty claims from customers and makes warranty claims towards its vendors and supply chain. Management believes the expenses and gains associated with these recurring warranty items are within the normal operations and operating cycle of the Company’s business. Therefore, management deems no adjustments are necessary unless under extraordinary circumstances.
 
Stock-based and other non-cash compensation expense. The Company incurs expense related to stock-based compensation included in its GAAP presentation of cost of revenues, selling, general and administrative expense and research and development expense. The Company also incurs non-cash based compensation in the form of pension related expenses and matching contributions to its defined contribution plan. Although stock-based and other non-cash compensation is an expense of the Company and viewed as a form of compensation, these expenses vary in amount from period to period, and are affected by market forces that are difficult to predict and are not within the control of management, such as the market price and volatility of the Company’s shares, risk-free interest rates and the expected term and forfeiture rates of the awards, as well as pension actuarial assumptions. Management believes that exclusion of these expenses allows comparisons of operating results to those of other companies, both public, private or foreign, that disclose non-GAAP financial measures that exclude stock-based compensation and other non-cash compensation.
 
Mercury uses adjusted EBITDA as an important indicator of the operating performance of its business. Management excludes the above-described items from its internal forecasts and models when establishing internal operating budgets, supplementing the financial results and forecasts reported to the Company’s board of directors, determining a portion of bonus compensation for executive officers and other key employees based on operating performance, evaluating short-term and long-term operating trends in the Company’s operations, and allocating resources to various initiatives and operational requirements. The Company believes that adjusted EBITDA permits a comparative assessment of its operating performance, relative to its performance based on its GAAP results, while isolating the effects of charges that may vary from period to period without direct correlation to underlying operating performance. The Company believes that these non-GAAP financial adjustments are useful to investors because they allow investors to evaluate the effectiveness of the methodology and information used by management in its financial and operational decision-making. The Company believes that trends in its adjusted EBITDA are valuable indicators of its operating performance.
50 Minuteman Road, Andover, Massachusetts 01810 U.S.A. | +1-(978)-256-1300 | www.mrcy.com | X: @MRCY





Mercury Reports Second Quarter Fiscal 2026 Results, Page 10

 
Adjusted EBITDA is a non-GAAP financial measure and should not be considered in isolation or as a substitute for financial information provided in accordance with GAAP. This non-GAAP financial measure may not be computed in the same manner as similarly titled measures used by other companies. The Company expects to continue to incur expenses similar to the adjusted EBITDA financial adjustments described above, and investors should not infer from the Company’s presentation of this non-GAAP financial measure that these costs are unusual, infrequent or non-recurring.

The following table reconciles the most directly comparable GAAP financial measure to the non-GAAP financial measure.
Second Quarters EndedSix Months Ended
December 26, 2025December 27, 2024December 26, 2025December 27, 2024
Net loss$(15,095)$(17,579)$(27,610)$(35,104)
Other non-operating adjustments, net(299)2,549 449 814 
Interest expense, net6,201 8,024 12,060 16,386 
Income tax benefit(2,364)(6,725)(6,385)(12,319)
Depreciation8,606 9,768 17,260 19,753 
Amortization of intangible assets9,694 11,154 19,953 22,389 
Restructuring and other charges4,055 40 5,639 2,300 
Impairment of long-lived asset— — — — 
Acquisition, financing and other third party costs1,514 1,109 2,831 3,440 
Fair value adjustments from purchase accounting131 178 262 355 
Litigation and settlement expense, net2,287 2,087 9,511 3,481 
Stock-based and other non-cash compensation expense15,285 11,424 31,613 21,984 
Adjusted EBITDA$30,015 $22,029 $65,583 $43,479 

Free cash flow, a non-GAAP measure for reporting cash flow, is defined as cash provided by operating activities less capital expenditures for property and equipment, which includes capitalized software development costs, and, therefore, has not been calculated in accordance with GAAP. Management believes free cash flow provides investors with an important perspective on cash available for investment and acquisitions after making capital investments required to support ongoing business operations and long-term value creation. The Company believes that trends in its free cash flow are valuable indicators of its operating performance and liquidity.

Free cash flow is a non-GAAP financial measure and should not be considered in isolation or as a substitute for financial information provided in accordance with GAAP. This non-GAAP financial measure may not be computed in the same manner as similarly titled measures used by other companies. The Company expects to continue to incur expenditures similar to the free cash flow financial adjustment described above, and investors should not infer from the Company’s presentation of this non-GAAP financial measure that these expenditures reflect all of the Company's obligations which require cash.
50 Minuteman Road, Andover, Massachusetts 01810 U.S.A. | +1-(978)-256-1300 | www.mrcy.com | X: @MRCY





Mercury Reports Second Quarter Fiscal 2026 Results, Page 11


The following table reconciles the most directly comparable GAAP financial measure to the non-GAAP financial measure.
Second Quarters EndedSix Months Ended
December 26, 2025December 27, 2024December 26, 2025December 27, 2024
Net cash provided by operating activities$51,611 $85,462 $53,793 $70,802 
Purchases of property and equipment(5,902)(3,555)(12,450)(9,791)
Free cash flow$45,709 $81,907 $41,343 $61,011 

Adjusted income and adjusted earnings per share (“adjusted EPS”) are non-GAAP measures for reporting financial performance, exclude the impact of certain items and, therefore, have not been calculated in accordance with GAAP. Management believes that exclusion of these items assists in providing a more complete understanding of the Company’s underlying results and trends and allows for comparability with its peer company index and industry. These non-GAAP financial measures may not be computed in the same manner as similarly titled measures used by other companies. The Company uses these measures along with the corresponding GAAP financial measures to manage the Company’s business and to evaluate its performance compared to prior periods and the marketplace. The Company defines adjusted income as income before other non-operating adjustments, amortization of intangible assets, restructuring and other charges, impairment of long-lived assets, acquisition, financing and other third party costs, fair value adjustments from purchase accounting, litigation and settlement income and expense, and stock-based and other non-cash compensation expense. The impact to income taxes includes the impact to the effective tax rate, current tax provision and deferred tax provision(1). Adjusted EPS expresses adjusted income on a per share basis using weighted average diluted shares outstanding.  

The following tables reconcile the most directly comparable GAAP financial measures to the non-GAAP financial measures.
Second Quarters Ended
December 26, 2025December 27, 2024
Net loss and loss per share$(15,095)$(0.26)$(17,579)$(0.30)
Other non-operating adjustments, net(299)2,549 
   Amortization of intangible assets9,694 11,154 
   Restructuring and other charges4,055 40 
   Impairment of long-lived assets— — 
   Acquisition, financing and other third party costs1,514 1,109 
   Fair value adjustments from purchase accounting131 178 
   Litigation and settlement expense, net2,287 2,087 
   Stock-based and other non-cash compensation expense15,285 11,424 
   Impact to income taxes(1)
(8,135)(7,022)
Adjusted income and adjusted earnings per share(2)
$9,437 $0.16 $3,940 $0.07 
Diluted weighted-average shares outstanding60,523 58,843 
(1) Impact to income taxes is calculated by recasting income before income taxes to include the items involved in determining adjusted income and recalculating the income tax provision using this adjusted income from operations before income taxes. The recalculation also adjusts for any discrete tax expense or benefit related to the items.
(2) Adjusted earnings per share is calculated using diluted shares whereas Net loss per share or Adjusted loss per share is calculated using basic shares. There was a $0.01 impact and no impact to the calculation of adjusted earnings per share as a result of this for the second quarters ended December 26, 2025 and December 27, 2024, respectively.
50 Minuteman Road, Andover, Massachusetts 01810 U.S.A. | +1-(978)-256-1300 | www.mrcy.com | X: @MRCY





Mercury Reports Second Quarter Fiscal 2026 Results, Page 12

Six Months Ended
December 26, 2025December 27, 2024
Net loss and loss per share$(27,610)$(0.47)$(35,104)$(0.60)
Other non-operating adjustments, net449 814 
   Amortization of intangible assets19,953 22,389 
   Restructuring and other charges5,639 2,300 
   Impairment of long-lived assets— — 
   Acquisition, financing and other third party costs2,831 3,440 
   Fair value adjustments from purchase accounting262 355 
   Litigation and settlement expense, net9,511 3,481 
   Stock-based and other non-cash compensation expense31,613 21,984 
   Impact to income taxes(1)
(17,651)(13,275)
Adjusted income and adjusted earnings per share(2)$24,997 $0.41 $6,384 $0.11 
Diluted weighted-average shares outstanding60,349 58,752 
(1) Impact to income taxes is calculated by recasting income before income taxes to include the items involved in determining adjusted income and recalculating the income tax provision using this adjusted income from operations before income taxes. The recalculation also adjusts for any discrete tax expense or benefit related to the items.
(2) Adjusted earnings per share is calculated using diluted shares whereas Net loss per share is calculated using basic shares. There was a $0.01 impact and no impact to the calculation of adjusted earnings per share as a result of this for the six months ended December 26, 2025 and December 27, 2024, respectively.
50 Minuteman Road, Andover, Massachusetts 01810 U.S.A. | +1-(978)-256-1300 | www.mrcy.com | X: @MRCY
© Mercury Systems, Inc. WEBCAST LOGIN AT WWW.MRCY.COM/INVESTOR WEBCAST REPLAY AVAILABLE BY 7:00 P.M. ET FEBRUARY 3, 2026 Bill Ballhaus Chairman and CEO David Farnsworth Executive Vice President and CFO February 3, 2026, 5:00 pm ET SECOND QUARTER FISCAL YEAR 2026 FINANCIAL RESULTS 1

 
© Mercury Systems, Inc. /Mercury Proprietary/No Tech Data/ Forward-looking safe harbor statement This presentation contains certain forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including those relating to the Company's focus on enhanced execution of the Company's strategic plan. You can identify these statements by the words “may,” “will,” “could,” “should,” “would,” “plans,” “expects,” “anticipates,” “continue,” “estimate,” “project,” “intend,” “likely,” “forecast,” “probable,” “potential,” and similar expressions. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. Such risks and uncertainties include, but are not limited to, continued funding of defense programs, the timing and amounts of such funding, general economic and business conditions, including unforeseen weakness in the Company’s markets, effects of any U.S. federal government shutdown or extended continuing resolution, effects of increasingly volatile geopolitical events and regional conflicts, competition, changes in technology and methods of marketing, delays in or cost increases related to completing development, engineering and manufacturing programs, changes in customer order patterns, changes in product mix, continued success in technological advances and delivering technological innovations, changes in, or in the U.S. government’s interpretation of, federal export control or procurement rules and regulations, including tariffs, changes in, or in the interpretation or enforcement of, environmental rules and regulations, market acceptance of the Company's products, shortages in or delays in receiving components, supply chain delays or volatility for critical components, production delays or unanticipated expenses including due to quality issues or manufacturing execution issues, failure to meet contractual performance specifications, adherence to required manufacturing standards, capacity underutilization, increases in scrap or inventory write-offs, failure to achieve or maintain manufacturing quality certifications, such as AS9100, failure to achieve or maintain qualified business systems, such as those required by the DFARS, adverse findings in government audits or investigations, the impact of supply chain disruption, inflation and labor shortages, among other things, on program execution and the resulting effect on customer satisfaction, inability to fully realize the expected benefits from acquisitions, restructurings, and operational efficiency initiatives or delays in realizing such benefits, challenges in integrating acquired businesses and achieving anticipated synergies, effects of shareholder activism, increases in interest rates, changes to industrial security and cyber-security regulations and requirements and impacts from any cyber or insider threat events, changes in tax rates or tax regulations, changes to interest rate swaps or other cash flow hedging arrangements, changes to generally accepted accounting principles, difficulties in retaining key employees and customers, litigation, unanticipated costs under fixed-price service and system integration engagements, and various other factors beyond our control. These risks and uncertainties also include such additional risk factors as are discussed in the Company's filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended June 27, 2025 and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The Company cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made. Use of Non-GAAP (Generally Accepted Accounting Principles) Financial Measures In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the Company provides adjusted EBITDA, adjusted income, adjusted EPS, and free cash flow, which are non-GAAP financial measures. Adjusted EBITDA, adjusted income, and adjusted EPS exclude certain non-cash and other specified charges. The Company believes these non- GAAP financial measures are useful to help investors better understand its past financial performance and prospects for the future. However, these non-GAAP measures should not be considered in isolation or as a substitute for financial information provided in accordance with GAAP. Management believes these non-GAAP measures assist in providing a more complete understanding of the Company’s underlying operational results and trends, and management uses these measures along with the corresponding GAAP financial measures to manage the Company’s business, to evaluate its performance compared to prior periods and the marketplace, and to establish operational goals. A reconciliation of GAAP to non-GAAP financial results discussed in this presentation is contained in the Appendix hereto. 2

 
© Mercury Systems, Inc. /Mercury Proprietary/No Tech Data/ Today’s call  Opening remarks on business and results  Update on our four priorities  Performance expectations for FY26 and beyond  Q&A 3

 
© Mercury Systems, Inc. /Mercury Proprietary/No Tech Data/ Business and results  Results support our expectation to deliver robust organic growth, expanding margins, and positive free cash flow.  Quarterly bookings of $288M and a 1.23 book-to-bill resulting in record backlog approaching $1.5B.  Q2 revenue of $233M, with record first half revenue up 7.1% year-over-year.  Q2 adjusted EBITDA of $30M and adjusted EBITDA margin of 12.9% (up 36.3% and 300 basis points respectively, year-over-year).  Free cash flow of $46M, well ahead of our expectations. Ended Q2 with $335M of cash on hand.  Solid execution across our broad portfolio of production and development programs.  Streamlined operating structure enabling increased positive operating leverage.  Continued progress on free cash flow drivers with net working capital down $61M year-over-year. 4

 
© Mercury Systems, Inc. /Mercury Proprietary/No Tech Data/ Driving performance excellence  Our focus on performance excellence positively impacted our results primarily in two areas: • We recognized ~$4M of net adverse EAC changes across our portfolio, which is in line with recent quarters, reflecting sound execution on our development and production programs. • Focus on accelerating customer deliveries led to record first half revenue and the highest first half point-in-time revenue since FY21.  Progressed on a number of actions to increase capacity, add automation, and consolidate sub- scale sites as part of ongoing efforts to drive scale and efficiency. 5

 
© Mercury Systems, Inc. /Mercury Proprietary/No Tech Data/ Driving organic growth  Q2 bookings of $288M resulted in a record backlog approaching $1.5B and a book-to-bill of 1.23.  Key contract awards received in the quarter included: • Scope expansion on a long-standing cost-plus development program supporting modernization efforts within a core missile defense platform, extending our role through additional hardware content. • Two key development design wins in exciting growth markets: ̶ Major subsystem supporting a leading advanced air mobility manufacturer’s development of its ground control infrastructure. ̶ Design award supporting a space-based application with a leading aerospace and defense prime, expanding Mercury's capability set within the fast-growing space market. • Multiple follow-on production awards, including incremental quantities on a key U.S. missile franchise, plus additional awards supporting deployed naval platforms and international land-based radar and electronic warfare applications. • $20M of follow-on awards that leverage our Common Processing Architecture and include embedded anti- tamper and cybersecurity software from our recent acquisition of Star Lab.  Continued customer discussions on potential incremental demand across multiple programs, driven by rising global defense budgets and priorities such as Golden Dome. 6

 
© Mercury Systems, Inc. /Mercury Proprietary/No Tech Data/ Expanding margins  Remain focused on the following drivers in our efforts to achieve targeted adjusted EBITDA margins in the low to mid 20% range: • Backlog margin expansion as we convert low-margin backlog and add new bookings aligned with our target margin profile. • Ongoing initiatives to further simplify, automate, and optimize our operations. • Driving organic growth to realize positive operating leverage.  Q2 adjusted EBITDA margin of 12.9% was ahead of our expectations and up 300 basis points year-over-year.  Gross margin of 26.0% was slightly down year-over-year driven by an increased mix of low- margin backlog converted in the quarter.  Operating expenses were down year-over-year as a result of fully realizing the impact of previously implemented actions to simplify, streamline, and focus our operations. 7

 
© Mercury Systems, Inc. /Mercury Proprietary/No Tech Data/ Driving improved free cash flow conversion and release  Progress on drivers of free cash flow. Net working capital at approximately $414M, is down $61M year over year.  Continuous improvement related to program execution, accelerating deliveries, demand planning, and supply chain management will lead to continued reduction in working capital and net debt over time.  Allocating factory capacity in FY26 to programs with unbilled receivable balances, which drives free cash flow, although with limited revenue impact. 8

 
© Mercury Systems, Inc. /Mercury Proprietary/No Tech Data/ Expectations for FY26 and beyond  Optimistic about our expected ability to achieve our target profile over time of above market top-line growth, adjusted EBITDA margins in the low to mid 20% range, and FCF conversion of 50%.  Continue to expect full year FY26 revenue growth of low single-digits.  Given our Q2 over performance of approximately $30M, we expect Q3 revenue to be down year-over- year absent any additional delivery accelerations, followed by a ramp in Q4.  Continue to expect full year FY26 adjusted EBITDA margin approaching mid-teens. • Expect Q3 adjusted EBITDA margin approaching double digits as we convert low-margin backlog and realize lower operating leverage. • Expect Q4 adjusted EBITDA margin to be the highest of the fiscal year.  Continue to expect free cash flow to be positive in FY26. • We expect a free cash outflow in Q3 as we pulled forward approximately $30M of cash receipts into Q2.  Outlook excludes any further acceleration within or into FY26, or upside stemming from domestic priorities like Golden Dome or increased global defense budgets. 9

 
© Mercury Systems, Inc. /Mercury Proprietary/No Tech Data/ Q2 FY26 vs. Q2 FY25 10 Notes 1. Non-GAAP, see reconciliation table. 2. All references in this presentation to the second quarter of fiscal 2026 are to the quarter ended December 26, 2025. All references in this presentation to the second quarter of fiscal 2025 are to the quarter ended December 27, 2024. $ millions, except percentage and per share data Q2 FY26(2) Q2 FY25(2) CHANGE Bookings $287.5 $242.4 19% Book-to-Bill 1.23 1.09 Backlog $1,473.5 $1,354.9 9% 12-Month Backlog 807.1 789.9 Revenue $232.9 $223.1 4% Gross Margin 26.0% 27.3% -130 bps Operating Expenses $71.5 $73.2 (2%)Selling, General & Administrative 42.1 40.5 Research & Development 15.4 21.4 Amortization/Restructuring/Acquisition 14.0 11.3 GAAP Net Loss ($15.1) ($17.6) N.A. GAAP Net Loss Per Share ($0.26) ($0.30) N.A. Weighted Average Diluted Shares 59.4 58.6 Adjusted EPS(1) $0.16 $0.07 129% Adj. EBITDA(1) $30.0 $22.0 36% % of revenue 12.9% 9.9% Operating Cash Flow $51.6 $85.5 (40%) Free Cash Flow(1) $45.7 $81.9 (44%) % of Adjusted EBITDA 152.3% 372.3%

 
© Mercury Systems, Inc. /Mercury Proprietary/No Tech Data/ Balance sheet 11 Notes 1. Rounded amounts used. As of (In $ millions)(1) 12/27/24 3/28/25 6/27/25 9/26/25 12/26/25 ASSETS Cash & cash equivalents $242.6 $269.8 $309.1 $304.7 $335.0 Accounts receivable and unbilled receivables, net 383.1 374.7 388.1 367.5 379.8 Inventory, net 344.4 352.7 332.9 340.2 349.6 PP&E, net 111.5 107.5 101.4 102.6 102.0 Goodwill and intangibles, net 1,164.2 1,154.1 1,148.7 1,138.5 1,131.3 Other 155.7 155.6 154.6 204.1 204.4 TOTAL ASSETS $2,401.5 $2,414.4 $2,434.8 $2,457.6 $2,502.1 LIABILITIES AND S/E AP and accrued expenses $137.3 $154.1 $173.6 $196.7 $246.1 Deferred revenues and customer advances 136.0 142.5 126.8 125.5 136.9 Other liabilities 76.4 75.2 69.4 68.9 67.6 Debt 591.5 591.5 591.5 591.5 591.5 Total liabilities 941.2 963.3 961.3 982.6 1,042.1 Stockholders' equity 1,460.3 1,451.1 1,473.5 1,475.0 1,460.0 TOTAL LIABILITIES AND S/E $2,401.5 $2,414.4 $2,434.8 $2,457.6 $2,502.1

 
© Mercury Systems, Inc. /Mercury Proprietary/No Tech Data/ Cash flow summary 12 Notes 1. Rounded amounts used. 2. Non-GAAP, see reconciliation table. For the Fiscal Quarters Ended (In $ millions)(1) 12/27/24 3/28/25 6/27/25 9/26/25 12/26/25 Net (loss) income ($17.6) ($19.2) $16.4 ($12.5) ($15.1) Depreciation and amortization 20.9 19.9 20.0 18.9 18.3 Other non-cash items, net 5.1 9.0 6.9 12.7 12.5 Changes in Operating Assets and Liabilities Accounts receivable, unbilled receivables, and costs in excess of billings 37.6 9.3 (10.8) 20.1 (12.0) Inventory (7.9) (7.3) 12.0 (12.1) (11.6) Accounts payable and accrued expenses 7.2 14.5 13.4 20.9 46.1 Other 40.2 3.8 (19.8) (45.8) 13.4 77.1 20.2 (5.2) (16.9) 35.9 Operating Cash Flow 85.5 30.0 38.1 2.2 51.6 Capital expenditures (3.6) (5.9) (4.1) (6.6) (5.9) Free Cash Flow(2) $81.9 $24.1 $34.0 ($4.4) $45.7 Free Cash Flow(2) / Adjusted EBITDA(2) 372.3% 97.6% 66.3% N/A 152.3% Free Cash Flow(2) / GAAP Net (Loss) Income N.A. N.A. 208% N.A. N.A.

 
© Mercury Systems, Inc. APPENDIX

 
© Mercury Systems, Inc. /Mercury Proprietary/No Tech Data/ Adjusted EPS reconciliation Notes 1. Per share information is presented on a fully diluted basis. 2. Rounded amounts used. 3. Impact to income taxes is calculated by recasting income before income taxes to include the items involved in determining adjusted income and recalculating the income tax provision using this adjusted income from operations before income taxes. The recalculation also adjusts for any discrete tax expense or benefit related to the items. 4. All references in this presentation to the second quarter of fiscal 2026 and LTM Q2 FY26 are to the quarter ended December 26, 2025, and the four-quarter period ended December 26, 2025. All references in this presentation to the second quarter of fiscal 2025 and LTM Q2 FY25 are to the quarter ended December 27, 2024, and the four-quarter period ended December 27, 2024. 5. Earnings per share and Adjusted earnings per share is calculated using diluted shares whereas loss per share and adjusted loss per share is calculated using basic shares. There was a $0.01 impact and no impact to the calculation of adjusted earnings per share as a result of this for the second quarters ended December 26, 2025, and December 27, 2024, respectively. (In thousands, except per share data)(2) Q2 FY25 Q2 FY26 LTM Q2 FY25 LTM Q2 FY26 Loss per share(1) ($0.30) ($0.26) ($1.56) ($0.53) Net Loss ($17,579) ($15,095) ($90,455) ($30,410) Other non-operating adjustments, net 2,549 (299) 533 (8,107) Amortization of intangible assets 11,154 9,694 45,233 40,413 Restructuring and other charges 40 4,055 18,922 10,555 Impairment of long-lived assets — — — — Acquisition, financing and other third party costs 1,109 1,514 5,618 6,029 Fair value adjustments from purchase accounting 178 131 710 524 Litigation and settlement expense, net 2,087 2,287 6,522 19,040 Stock-based and other non-cash compensation expense 11,424 15,285 44,095 47,902 Impact to income taxes(3) (7,022) (8,135) (26,692) (29,467) Adjusted income $3,940 $9,437 $4,486 $56,479 Adjusted earnings (loss) per share(1)(5) $0.07 $0.16 $0.08 $0.95 Weighted-average shares outstanding: Basic 58,561 59,415 Diluted 58,843 60,523

 
© Mercury Systems, Inc. /Mercury Proprietary/No Tech Data/ Adjusted EBITDA reconciliation 15 Notes 1. Rounded amounts used. 2. All references in this presentation to the second quarter of fiscal 2026 and LTM Q2 FY26 are to the quarter ended December 26, 2025, and the four- quarter period ended December 26, 2025. All references in this presentation to the second quarter of fiscal 2025 and LTM Q2 FY25 are to the quarter ended December 27, 2024, and the four- quarter period ended December 27, 2024. (In thousands)(1)(2) Q2 FY25 Q2 FY26 LTM Q2 FY25 LTM Q2 FY26 Net loss ($17,579) ($15,095) ($90,455) ($30,410) Other non-operating adjustments, net 2,549 (299) 533 (8,107) Interest expense, net 8,024 6,201 33,797 25,497 Income tax benefit (6,725) (2,364) (32,786) (6,586) Depreciation 9,768 8,606 40,054 36,685 Amortization of intangible assets 11,154 9,694 45,233 40,413 Restructuring and other charges 40 4,055 18,922 10,555 Impairment of long-lived assets — — — — Acquisition, financing and other third party costs 1,109 1,514 5,618 6,029 Fair value adjustments from purchase accounting 178 131 710 524 Litigation and settlement expense, net 2,087 2,287 6,522 19,040 Stock-based and other non-cash compensation expense 11,424 15,285 44,095 47,902 Adjusted EBITDA $22,029 $30,015 $72,243 $141,542

 
© Mercury Systems, Inc. /Mercury Proprietary/No Tech Data/ Free cash flow reconciliation 16 Notes 1. Rounded amounts used.(In thousands)(1) Q2 FY25 Q2 FY26 LTM Q2 FY25 LTM Q2 FY26 Cash provided by operating activities $85,462 $51,611 $124,758 $121,842 Purchases of property and equipment (3,555) (5,902) (28,077) (22,462) Free cash flow $81,907 $45,709 $96,681 $99,380