Company: MRCY
Filing Date: 2025-09-10
Form Type: DEF 14A
Source: 0001049521-25-000029
Chunk: 123

Company: MERCURY SYSTEMS INC
Filing Date: 2025-09-10
Form: DEF 14A
Chunk 123
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| Impairment of long-lived assets                     |     |             |      — |     |             |     — |
| Acquisition, financing and other third party costs  |     |             |    4.4 |     |             |   6.6 |
| Fair value adjustments from purchase accounting     |     |             |    0.7 |     |             |   0.6 |
| Litigation and settlement expense, net              |     |             |    4.9 |     |             |  13.0 |
| Stock-based and other non-cash compensation expense |     |             |   41.3 |     |             |  38.3 |
| Adjusted EBITDA                                     |     | $           |    9.4 |     | $           | 119.4 |

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.

The following table reconciles the most directly comparable GAAP financial measure to the non-GAAP financial measure.

| (in millions)                             |     | Fiscal 2024 |       |     | Fiscal 2025 |       |
|:------------------------------------------|:----|:------------|------:|:----|:------------|------:|
| Net cash provided by operating activities |     | $           |  60.4 |     | $           | 138.9 |
| Purchases of property and equipment       |     |             | -34.3 |     |             | -19.8 |
| Free cash flow