Company: MRCY
Filing Date: 2025-02-04
Form Type: 10-Q
Source: 0001049521-25-000009
Chunk: 34

Company: MERCURY SYSTEMS INC
Filing Date: 2025-02-04
Form: 10-Q
Item: Item 1
Chunk 34
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 liabilities on the Company’s Consolidated Balance Sheets. Contract balances are reported in a net position on a contract-by-contract basis.The contract asset balances were $278,657 and $304,029 as of December 27, 2024 and June 28, 2024, respectively. The contract asset balance decreased due to $238,263 of billings, offset by revenue recognized under over time contracts of $212,891 during the six months ended December 27, 2024. The contract liability balances were $136,308 and $74,367 as of December 27, 2024 and June 28, 2024, respectively. The contract liability increased due to a higher volume of milestone billing events as well as timing of revenue recognized across multiple programs.Revenue recognized for the second quarter and six months ended December 27, 2024 that was included in the contract liability balance at June 28, 2024 was $15,336 and $41,747, respectively. Revenue recognized for the second quarter and six months ended December 29, 2023 that was included in the contract liability balance at June 30, 2023 was $10,228 and $31,243, respectively.REMAINING PERFORMANCE OBLIGATIONSThe Company includes in its computation of remaining performance obligations customer orders for which it has accepted executed sales orders. The definition of remaining performance obligations excludes contracts with original expected durations of less than one year, as well as those contracts that provide the customer with the right to cancel or terminate the order with no substantial penalty, even if the Company’s historical experience indicates the likelihood of cancellation or termination is remote. As of December 27, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was $770,011. The Company expects to recognize approximately 52% of its remaining performance obligations as revenue in the next 12 months and the balance thereafter.LONG-LIVED ASSETSLong-lived assets primarily include property and equipment, intangible assets and right-of-use ("ROU") assets. The Company regularly evaluates its long-lived assets for events and circumstances that indicate a potential impairment in accordance with ASC 360, Property, Plant and Equipment (“ASC 360”). The Company reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the estimated undiscounted cash flows of