Mercury Systems Inc (MRCY)
Interest coverage
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -16,994 | -53,279 | -87,427 | -126,601 | -154,260 | -152,331 | -103,012 | -54,445 | -23,444 | 20,604 | 38,212 | 42,993 | 46,878 | 40,737 | 46,146 | 69,146 | 96,199 | 92,445 | 95,523 | 97,273 |
| Interest expense (ttm) | US$ in thousands | 33,430 | 34,563 | 35,814 | 36,058 | 35,015 | 33,167 | 30,559 | 28,475 | 25,159 | 20,301 | 15,254 | 9,758 | 5,806 | 3,953 | 2,838 | 1,817 | 1,222 | 1,570 | 1,079 | 1,318 |
| Interest coverage | -0.51 | -1.54 | -2.44 | -3.51 | -4.41 | -4.59 | -3.37 | -1.91 | -0.93 | 1.01 | 2.51 | 4.41 | 8.07 | 10.31 | 16.26 | 38.06 | 78.72 | 58.88 | 88.53 | 73.80 |
June 30, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-16,994K ÷ $33,430K
= -0.51
The interest coverage ratio for Mercury Systems Inc. has exhibited a significant downward trend over the analyzed period. Initially, in September 2020, the ratio was notably high at 73.80, indicating robust ability to cover interest expenses. This level persisted into December 2020, reaching 88.53, further emphasizing strong operational earnings relative to interest obligations.
Throughout 2021, the ratio experienced a marked decline, decreasing to 58.88 in March and to 38.06 in September, and continuing to fall further, reaching 16.26 by December 2021. The downward trajectory persisted into 2022, with ratios of 10.31 in March, 8.07 in June, and 4.41 in September, illustrating a progressively narrowing cushion for interest coverage.
In 2023, the trend intensified as the ratio approached the critical threshold of 1, registering 2.51 in December, and then turning negative in March 2024 at -4.59. The negative interest coverage ratios persisted through subsequent quarters, with values such as -4.41 in June 2024 and -3.51 in September 2024, signaling that the company's earnings before interest and taxes were insufficient to cover its interest expenses, resulting in potential difficulty in meeting debt obligations without additional financing or restructuring.
The forecasted figures indicate continued negative coverage into mid-2025, with projections of ratios near -1.54 in March 2025 and approximately -0.51 in June 2025, suggesting ongoing financial stress and diminishing capacity to service interest expenses solely from operating earnings. Overall, the data depict a substantial deterioration in Mercury Systems Inc.'s ability to meet interest obligations over the period, moving from a position of significant safety to one of heightened financial risk.
Peer comparison
Jun 30, 2025