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    Conor Walters • Jefferies

    Conor Walters's questions to Mercury Systems Inc (MRCY) leadership

    Conor Walters's questions to Mercury Systems Inc (MRCY) leadership • Q4 2025

    Question

    Conor Walters asked what drove the Q4 adjusted EBITDA margin beat and for the puts and takes on the expected margin deceleration in early FY26. He also inquired about the outlook for capital expenditures.

    Answer

    EVP & CFO David Farnsworth attributed the strong Q4 margin to increased operating leverage from higher-than-expected volume and a favorable program mix within the accelerated deliveries. CEO William Ballhaus projected that CapEx might 'tick up a little bit' in FY26 to support automation and capacity but does not foresee a significant increase.

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    Conor Walters's questions to Mercury Systems Inc (MRCY) leadership • Q3 2025

    Question

    An analyst on behalf of Conor Walters from Jefferies asked for details on the drivers for the expected Q4 adjusted EBITDA margin improvement to the mid-teens, specifically focusing on gross margin progression and its viability as a baseline for fiscal 2026.

    Answer

    CEO Will Ballhaus explained the Q4 margin expansion is driven by two key factors: the improving average margin of the backlog as lower-margin work is replaced by new, higher-margin bookings, and the positive operating leverage from a streamlined cost structure. CFO Dave Farnsworth reiterated that this margin improvement will be a gradual process over time, not a sudden step-change.

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    Conor Walters's questions to Mercury Systems Inc (MRCY) leadership • Q1 2025

    Question

    Conor Walters asked if the strong 90% production mix in Q1 bookings provides better clarity on the timing of achieving the 80-20 mix target. He also asked about the drivers for the lower R&D spend and its future trajectory.

    Answer

    CEO William Ballhaus agreed that the 90% production booking mix is a strong indicator of the ongoing shift. Executive David Farnsworth added that the financial impact of this shift should become more apparent in the second half of the year. Ballhaus explained the lower R&D spend was due to completing internal projects and reallocating resources to customer-funded work, and he expects only an incremental increase going forward.

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    Conor Walters's questions to CACI International Inc (CACI) leadership

    Conor Walters's questions to CACI International Inc (CACI) leadership • Q1 2025

    Question

    Conor Walters asked for clarification on the margin cadence for the rest of the year, noting that guidance could imply a second-half decline, and also inquired about the working capital outlook and its impact on cash flow.

    Answer

    CFO Jeffrey MacLauchlan explained that while the second half is typically stronger, the disparity between halves is lessening. He expects Q2 margins to be flattish with Q1, followed by a step-up in the second half. He confirmed that working capital demand, driven by growth in inventory-heavy technology businesses, is factored into the free cash flow guidance.

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