Mercury Systems Inc (MRCY)
Profitability ratios
Return on sales
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 27.90% | 26.10% | 24.33% | 21.64% | 22.10% | 22.63% | 26.78% | 31.18% | 32.52% | 36.51% | 37.84% | 38.82% | 39.97% | 39.84% | 40.29% | 40.86% | 41.69% | 42.56% | 43.57% | 44.44% |
| Operating profit margin | -2.15% | -5.76% | -8.98% | -14.09% | -17.69% | -17.70% | -11.29% | -5.90% | -2.19% | 1.51% | 3.02% | 3.78% | 3.91% | 3.52% | 4.00% | 6.01% | 8.77% | 9.55% | 10.65% | 11.20% |
| Pretax margin | -5.53% | -9.90% | -13.94% | -18.94% | -22.66% | -22.08% | -14.92% | -8.94% | -4.98% | -1.11% | 0.03% | 1.07% | 1.86% | 1.78% | 3.32% | 5.47% | 8.35% | 9.33% | 10.82% | 11.48% |
| Net profit margin | -4.16% | -7.33% | -10.23% | -13.79% | -16.48% | -16.08% | -9.54% | -5.47% | -2.91% | -0.32% | -0.42% | 0.41% | 1.14% | 1.29% | 2.50% | 4.15% | 6.71% | 8.01% | 9.42% | 9.97% |
The profitability ratios of Mercury Systems Inc. demonstrate a notable declining trend over the analyzed period. The gross profit margin commenced at approximately 44.44% as of September 30, 2020, and steadily declined to around 21.64% by September 30, 2024. This consistent decrease indicates that the company’s ability to retain gross profit from sales has diminished significantly, potentially reflecting increased cost of goods sold or competitive pressures affecting pricing strategies.
Operating profit margins mirrored this downward trajectory, starting at 11.20% in September 2020 and declining sharply into negative territory, reaching -14.09% as of September 30, 2024. The transition into negative margins signals that the company's core operations are becoming unprofitable during this period, which may be attributed to rising operating expenses or declining revenues relative to costs.
Similarly, pretax margins have contracted markedly from approximately 11.48% in September 2020 to -18.94% by September 2024. The trajectory indicates escalating challenges in covering pre-tax costs, ultimately leading to pre-tax losses.
Net profit margins followed a parallel pattern, with the ratio decreasing from 9.97% in September 2020 to -13.79% in September 2024. The continuous erosion signifies that net profitability is eroding, culminating in net losses since early 2022, increasingly exacerbated through 2023 and 2024.
In summation, Mercury Systems Inc. has experienced a sustained decline across all key profitability metrics over the analyzed timeframe. The progression from healthy margins to negative values suggests deteriorating profitability conditions, possibly driven by escalating costs, competitive pressures, or other operational challenges affecting the company's financial sustainability.
Return on investment
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -0.81% | -2.12% | -3.31% | -5.11% | -5.67% | -6.25% | -4.15% | -2.28% | -0.89% | 0.64% | 1.29% | 1.59% | 1.68% | 1.48% | 1.71% | 2.88% | 4.14% | 4.47% | 4.60% | 5.59% |
| Return on assets (ROA) | -1.56% | -2.69% | -3.77% | -5.00% | -5.28% | -5.68% | -3.50% | -2.11% | -1.18% | -0.13% | -0.18% | 0.17% | 0.49% | 0.54% | 1.07% | 1.99% | 3.17% | 3.75% | 4.07% | 4.98% |
| Return on total capital | -1.15% | -3.67% | -5.99% | -8.67% | -10.47% | -10.34% | -6.85% | -3.53% | -1.50% | 1.32% | 2.47% | 2.79% | 3.05% | 2.72% | 3.10% | 4.67% | 6.48% | 6.36% | 6.68% | 6.91% |
| Return on equity (ROE) | -2.57% | -4.48% | -6.19% | -8.11% | -9.35% | -9.17% | -5.67% | -3.29% | -1.81% | -0.20% | -0.27% | 0.27% | 0.73% | 0.82% | 1.60% | 2.64% | 4.18% | 4.91% | 5.54% | 5.84% |
The profitability ratios of Mercury Systems Inc. over the specified period demonstrate a pronounced downward trend, indicating a deterioration in the company's ability to generate profit relative to its assets, capital, and equity.
Operating Return on Assets (Operating ROA):
The ratio declined steadily from 5.59% as of September 30, 2020, to -5.11% by September 30, 2024. Notably, the negative trend accelerated significantly after March 2022, when the ratio dropped from approximately 1.48% to -2.28% by September 2023. The persistent decline into negative territory, reaching -4.15% as of December 2023 and further to -6.25% by March 2024, reflects increasing operational challenges impacting the efficiency of asset utilization.
Return on Assets (ROA):
Similarly, the ROA decreased from 4.98% on September 30, 2020, to -5.68% as of March 31, 2024. The trajectory indicates a consistent erosion of profitability at the asset level, culminating in substantial negative figures implying that the company's assets are no longer generating adequate returns, a situation that persists into the latest periods analyzed.
Return on Total Capital:
This ratio has declined from 6.91% on September 30, 2020, to a low of -10.47% on June 30, 2024. The persistent decline signifies reduced effectiveness in utilizing all sources of capital—the combination of debt and equity—to generate earnings, suggesting declining efficiency and potential strains in capital management.
Return on Equity (ROE):
ROE follows a similar deteriorating pattern, dropping from 5.84% on September 30, 2020, to -9.35% by June 30, 2024. The negative values in recent periods underscore that shareholders' equity is no longer being effectively employed to generate profits, and the company is experiencing losses attributable to equity holders.
Overall Trend and Implications:
The consistent downward movement across all profitability ratios indicates a significant decline in Mercury Systems Inc.'s operational and financial profitability over the analyzed period. The transition from positive to negative ratios signals worsening financial health, likely rooted in declining revenues, shrinking margins, or increased costs. This trend raises concerns regarding the organization's ability to generate sustainable profits and may reflect underlying operational, market, or strategic difficulties. It warrants thorough investigation into the company's recent financial strategies, market conditions, and operational efficiencies for a comprehensive understanding of the causes driving these ratios downward.