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Rollins, Inc. (ROL) Presents at 46th Annual William Blair Growth Stock Conference Transcript

Key Takeaways Rollins shares fell 18.5% in a year, outperforming the industry's decline of 19.7%.ROL expects revenues to grow 10.1% y/y in 2026 and 9.3% in 2027, with double-digit earnings gains.Rollins' acquisitions, tech investments and dividends support growth despite margin and debt pressures. Shares of Rollins (ROL - Free Report) have dipped 18.5% in a year compared with the industry’s 19.7% plunge.

ROL’s revenues in 2026 and 2027 are expected to increase 10.1% and 9.3% year over year, respectively. Earnings are anticipated to rise 10.7% in 2026 and 12.1% in 2027.

Factors That Augur Well for ROL’s SuccessBuyouts Fueling Growth: Rollins disciplined and strategic M&A approach has allowed it to strengthen market share, enter new regions and diversify its service offerings. With an impressive 26 buyouts completed in 2025, following 44 in 2024 and 24 in 2023, Rollins has consistently demonstrated its ability to identify and integrate valuable targets. These acquisitions not only drive revenue growth but also create synergies, operational efficiencies and new customer relationships that enhance long-term shareholder value. 

Tech Boosts Operations: ROL uses technology strategically to boost operational efficiency, improve customer experience and drive cost savings — all of which support sustainable growth. Through targeted investments in digital tools like BOSS, VRM, Orkin 2.0, BizSuite and InSite, Rollins has transformed how it manages its field operations, customer interactions and sales processes. In a traditionally labor-intensive industry, Rollins stands out as a tech-forward player, appealing to investors seeking stable returns with long-term growth potential.

Dividends Attract Investors: The company paid out dividends of $264.3 million, $298 million and $327.9 million in 2023, 2024 and 2025, respectively. A continued dividend underscores the company's commitment to its shareholders and underlines its business confidence. It is highly motivating for income-seeking investors.

Image Source: Zacks Investment Research

Risks Faced by RollinsSpending Affecting Margins: Rollins’ spending on customer acquisition, salesforce expansion and marketing initiatives over the past few years has increased to drive top-line growth and bolster its competitive positioning. However, it has affected profitability, as evidenced by a dip in the adjusted operating income margin to 16.9%, reflecting a 100-basis-point year-over-year decline during the first quarter of 2026.

High Interest Expenses:  As of the end of 2025, ROL’s goodwill accounted for $1.4 billion, representing approximately 44% of the total assets. Since goodwill is an intangible asset, it cannot be leveraged to meet short-term obligations or reduce long-term debt. To finance many of these buyouts, Rollins has taken on substantial debt, which has increased interest expenses, putting pressure on profitability.

ROL’s Zacks Rank & Stocks to ConsiderThe company has a Zacks Rank #3 (Hold) at present.

Some better-ranked stocks from the broader Zacks Construction sector are AAON (AAON - Free Report) and Quanta Services (PWR - Free Report) , each currently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AAON has a long-term earnings growth expectation of 16%. AAON delivered a trailing four-quarter earnings surprise of 6.2%, on average.

Quanta Services has a long-term earnings growth expectation of 19.8%. PWR delivered a trailing four-quarter earnings surprise of 10.3%, on average.

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Pre-Market Stock Futures: Futures are trading mixed as we get ready to finish off another wild week. What a difference a day makes: after a flat-to-down Wednesday, all the major indices exploded higher on Thursday and closed solidly in the green. Big earnings for members of the Magnificent 7, oil prices falling somewhat, and while the first GDP estimates for the quarter came in lower than expected, and inflation came in higher than expected, an employment report showed that unemployment claims dropped to 189,000, the lowest print for that key economic indicator since 1969. The Russell 2000, which is still the top index for 2026, finished Thursday at 2,799, up 2.2%, while the S&P 500 closed above the 7200 level for the first time at 7,209, up 1.02%, the best month for the index since 2020. The Nasdaq, home for many of the Mag 7, finished the Thursday session at 24,892, up 0.89%, while the venerable Dow Jones Industrial Average came in strong and was last seen at 49,652, up 1.62%.

Treasury Bonds: For the first time in what seems like forever, yields were lower across the entire Treasury curve, as investors were lured by higher yields that jumped this week. Analysts noted the divided Federal Reserve, which had more Governors dissenting on the decision not to cut rates since 1992, the spike in rates over the last week, and the fact that traders have largely abandoned expectations for rate cuts in 2026, with some beginning to price in the possibility of rate increases in early 2027; so many were ready to grab sovereign U.S. debt at the current tempting yields. The 30-year long bond finished the session at 4.97%, while the benchmark 10-year note closed Thursday at 4.37%.  

Oil and Gas: Oil had another roller-coaster day, with the major indices split by the final bell. While the President expressed his desire to see stronger U.S. production, output, and deliveries, the reality is that current production can’t be ramped up overnight, and most oil companies don’t want to increase capex and spending when they know current pricing levels likely won’t hold.  Brent Crude finished the day higher, up 0.93% at $111.50, while West Texas Intermediate closed down 1.01% at $105.80. Natural gas was the big winner Thursday, closing up 4.28% at $2.76, and analysts cited the natural gas trade as a “relief rally” spurred by short-covering, allowing prices to bounce from multi-month lows despite a fundamentally bearish backdrop of high storage levels.

Gold: After a tough week, Gold also had a big turnaround on Thursday as the buyers returned in a big way. Traders pointed to a weakened U.S. dollar, lower-than-expected weekly jobless claims, and increased safe-haven demand due to ongoing Middle East tensions. Spot gold traded higher, rebounding from a one-month low, as traders monitored potential U.S. military action against Iran, which kept inflationary fears alive, and the very low possibility of rate cuts in 2026.  Gold closed the session at $4,621, up 1.73%, while Silver was last seen at $73.63, up 3.41%.

Crypto: The cryptocurrency market experienced a mix of consolidation and light volatility on Thursday, with Bitcoin trading in a tight range and some assets showing gains or losses amid the ever-changing daily sentiment. The cryptocurrency market as a whole, after the big price drop last fall, has been consolidating and trying to put in a decisive floor so prices can move higher, but the floor is not fully set yet. At 8 AM EDT, Bitcoin was trading at $77,390 while Ethereum was quoted at $2,285.

24/7 Wall St. reviews dozens of analyst research reports daily to identify new investment ideas for both investors and traders. Some of these daily analyst calls cover stocks to buy. Other calls cover stocks to sell or avoid. Remember that no single analyst call should ever be used as a basis to buy or sell a stock. 

Here are some of the top Wall Street analyst upgrades, downgrades, and initiations seen on Friday, May 1, 2026.  

Upgrades: Air Products & Chemicals (NYSE: APD | APD Price Prediction) was upgraded to Outperform from Market Perform at BMO Capital, which raised the target price for the shares to $360 from $325. Caterpillar (NYSE: CAT) was raised to Equal Weight from Underweight at Morgan Stanley, which catapulted the target price to $915 from $430. Hershey Company (NYSE: HSY) was upgraded to Buy from Hold at TD Cowen, which has a $210 target price for the stock. Paramount Skydance (NASDAQ: PSKY) was upgraded to Overweight from Underweight at Morgan Stanley, which bumped the target price to $14 from $11. Roblox (NYSE: RBLX) was raised to Hold from Sell at TD Cowen, which trimmed the target price for the shares to $49 from $54. Downgrades: Alaska Air Group (NYSE: ALK) caught a double downgrade to Sell from Buy at Citigroup, with a $32 target price. Avis Budget Group (NYSE: CAR) was downgraded to Hold from Buy at Jefferies, which boosted the target price for the shares to $160 from $112. This was the latest meme stock poster boy in April. e.l.f. Beauty (NYSE: ELF) was downgraded to Equal Weight from Overweight at Morgan Stanley, with the target price cut to $67 from $80. MGM Resorts International (NYSE: MGM) was cut to Hold from Buy at Jefferies, which trimmed the target price for the stock to $44 from $60. Truist Financial (NYSE: TFC) was downgraded to Neutral from Outperform at Baird, with a $55 target price for the shares. Initiations: AMC Global Media (NYSE: AMCX) was assumed in coverage with an Underweight rating at Morgan Stanley, which bumped the target price for the former meme stock leader to $7 from $6. Celestica (NYSE: CLS) was initiated with a Buy rating at Rothschild Redburn & Co., which has set a $460 target price objective. Ciena (NYSE: CIEN) was started with a Neutral rating at Rothschild Redburn & Co., which has a $416 target price for the shares. Commvault Systems (NASDAQ: CVLT) was initiated with a Peer Perform rating at Wolfe Research, which sees fair value for the company in a range of $80 to $120. Dutch Bros. (NYSE: BROS) was initiated with an Outperform rating at Oppenheimer, with a $72 target price for the stock. 

Resources Investor Relations Journalists Agencies Client Login Send a Release News Products Contact , /PRNewswire/ -- Truist Financial Corporation (NYSE: TFC) today announced that Chairman and Chief Executive Officer Bill Rogers will speak at the Bernstein Annual Strategic Decisions Conference on Thursday, May 28, 2026, at 11 am ET.

A live audio webcast will be available on the day of the conference at ir.truist.com under Events & Presentations. A replay of the webcast will be available on the website for 30 days.

About Truist
Truist Financial Corporation is a purpose-driven financial services company committed to inspiring and building better lives and communities. Headquartered in Charlotte, North Carolina, Truist has leading market share in many of the high-growth markets in the U.S. and offers a wide range of products and services through wholesale and consumer businesses, including consumer and small business banking, commercial and corporate banking, investment banking and capital markets, wealth management, payments, and specialized lending businesses. Truist is a top 10 commercial bank with $549 billion as of March 31, 2026. Truist Bank, Member FDIC. Equal Housing Lender. Learn more at Truist.com.

SOURCE Truist Financial Corporation

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Treasury yields are climbing as traders position for the Kevin Warsh appointment to the Federal Reserve, with markets pricing in a more growth-friendly path that could steepen the yield curve and reprice fixed-rate bank assets at higher levels. The 10Y-2Y spread sat at 0.47% on May 14, 2026, with the 2-year yield rising 0.12% over two weeks versus just 0.01% on the 3-month, a textbook steepening that historically widens net interest margins for lenders. Bank stocks trading under $55 are a logical place to scan for upside before that re-rating plays out.

With that backdrop in mind, here are three bank stocks trading under $55 that analysts and recent earnings suggest are positioned to benefit if the Warsh trade keeps pressuring Treasury yields higher.

Truist Financial (NYSE: TFC) Truist Financial (NYSE:TFC | TFC Price Prediction) is a Charlotte-based top-10 U.S. commercial bank covering consumer, commercial, wealth, and investment banking. Shares recently closed above $47, well under the $55 ceiling and giving retail investors a sub-$50 entry into a $549 billion-asset franchise.

Q1 2026 was a clean beat. Truist reported EPS of $1.09 versus a $1.0002 estimate, a 25% YoY EPS jump, and 250 basis points of positive operating leverage. Investment banking and trading revenue surged 36.3% YoY to $372 million, and management raised the buyback authorization to $5 billion from $4 billion. CEO Bill Rogers said the company is “establishing a long-term ROTCE target of 16% to 18%”.

The bull case rests on fixed-rate asset repricing into a steeper curve, plus accelerating capital return. The risk: nonperforming loans ticked up to 0.50% from 0.48% sequentially, and shares are down 2.24% YTD despite the earnings beat. For investors researching regional bank exposure, TFC offers a credible setup at a discount to recent levels.

Bank of Chile (NYSE: BCH) Bank of Chile (NYSE:BCH) is the largest Chilean bank by most measures, running retail, wholesale, wealth, and payments operations including Banchile Pagos. The ADR traded at $36.40 on May 14, 2026, comfortably under the ceiling and offering geographic diversification away from the U.S. rate cycle.

Q1 2026 was mixed. EPS estimates sat at $0.6296, and reported results missed at $0.57 on inflation-linked income compression. But management raised FY2026 ROAC guidance to 21.5%-22.5% from 19-21%, with an industry-best cost-to-income ratio of 38.4% versus an industry average of 46.1%. Higher expected Chilean inflation (~4.3%) is becoming a tailwind for inflation-indexed assets.

The bull case combines the upgraded ROAC, an 84.7% dividend payout ratio, and a dominant local franchise. The risk: Chilean GDP forecasts were trimmed to 2.1%, and proposed corporate tax changes could pressure earnings. Shares are up 21.92% over the past year, suggesting the upgrade cycle is already drawing attention.

Bank of America (NYSE: BAC) Bank of America (NYSE:BAC) is the diversified mega-cap with consumer banking, Merrill wealth, global banking, and global markets under one roof. Even at scale, shares trade at $49.85 as of May 14, 2026, slipping under the $55 ceiling after an 8.84% YTD decline.

The Q1 2026 numbers were broad-based. Revenue rose 7% YoY to $30.272 billion, net income climbed 17% to $8.584 billion, and EPS hit $1.11. NII grew 9% to $15.74 billion, equities trading rose 30%, and investment banking fees climbed 21%. CEO Brian Moynihan noted “healthy client activity, including solid consumer spending and stable asset quality, indicating a resilient American economy.” The bank returned $9.30 billion to shareholders, including $7.2 billion in buybacks.

The bull case is a diversified franchise compounding on multiple fronts with the Warsh-driven curve steepening as kicker. The risk is symmetric: a 100 basis point parallel decline in rates would shave roughly $2.0 billion off NII over 12 months, so a dovish surprise cuts both ways.

The Warsh narrative and recent Treasury yield action are tailwinds for bank net interest margins, but they are not guarantees, and each of these names carries idiosyncratic credit, macro, and rate-sensitivity risk. Investors should pair this framework with their own research before acting.

, /PRNewswire/ -- Truist Financial Corporation (NYSE: TFC) today announced it will redeem all $1,500,000,000 principal amount outstanding of its fixed-to-floating rate senior notes due June 8, 2027, (CUSIP 89788MAN2) on the redemption date of June 8, 2026.

The redemption price for the senior notes will be equal to 100% of the principal amount plus accrued and unpaid interest to, but excluding, the redemption date. Interest on the senior notes will cease to accrue on and after the redemption date.

Payment of the redemption price for the senior notes will be made through the facilities of The Depository Trust Company.

About Truist
Truist Financial Corporation is a purpose-driven financial services company committed to inspiring and building better lives and communities. Headquartered in Charlotte, North Carolina, Truist has leading market share in many of the high-growth markets in the U.S. and offers a wide range of products and services through wholesale and consumer businesses, including consumer and small business banking, commercial and corporate banking, investment banking and capital markets, wealth management, payments, and specialized lending businesses. Truist is a top-10 commercial bank with total assets of $549 billion as of March 31, 2026. Truist Bank, Member FDIC. Equal Housing Lender. Learn more at Truist.com.

SOURCE Truist Financial Corporation

Key Takeaways TFC offers a 4.31% dividend yield, backed by expected NII growth, NIM expansion and strong liquidity.COLB yields 4.99% and expects higher NIM as deposit balances rebound and integration synergies build.NWFL yields 4.23%, supported by its PB Bankshares acquisition, healthy liquidity and earnings growth plans. As investors navigate an evolving economic environment characterized by persistent inflation, geopolitical uncertainty and concerns related to economic growth, dividend-paying bank stocks continue to offer an appealing source of reliable income. Banks with strong balance sheets, diversified revenue streams and disciplined capital allocation remain well-positioned to withstand economic uncertainty.

Against this backdrop, several banking stocks stand out for their ability to generate attractive dividend income while maintaining the potential for long-term value creation. Among them, Truist Financial (TFC - Free Report) , Columbia Banking System (COLB - Free Report) and Norwood Financial Corp. (NWFL - Free Report) merit investors’ attention.

To choose these banks, we ran the Zacks Stocks Screener to identify stocks with a dividend yield of more than 4%. These three banks currently have a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The above-mentioned three bank stocks have gained more than 15% in the past year.

Price Performance

Image Source: Zacks Investment Research

3 Bank Stocks to Watch -- TFC, COLB & NWFLTruist Financial, headquartered in Charlotte, NC, is one of the largest commercial banks in the United States.

Truist Financial continues to generate stable earnings, supported by improving favorable interest rate conditions. Management anticipates NII to rise in the upcoming period, driven by higher client deposits and lower deposit costs, with NIM expected to expand as well.

Alongside core banking strength, Truist Financial is actively refining its business mix to support long-term growth. The company continues to invest in digital capabilities and high-growth markets, while divesting non-core businesses to sharpen its strategic focus. These actions are expected to enhance operating efficiency and foster sustainable revenue growth over time.

TFC maintains a diversified balance sheet and ample on-balance-sheet liquidity. As of March 31, 2026, the company had total debt of $69.1 billion (with 40% being short-term in nature) and cash and due from banks, and interest-bearing deposits with banks of $36.2 billion.

The company pays out regular dividends. Over the past five years, it has increased its dividend twice and has a 50% payout ratio. It has a dividend yield of 4.31%. Check Truist Financial’s dividend history here.

Truist Financial Corporation Dividend Yield (TTM)

Columbia Banking, headquartered in Tacoma, WA, provides commercial and consumer banking, treasury management, mortgage, wealth and trust services, and equipment finance through FinPac.

The company’s granular deposit base and relationship banking focus support resilient NII and balanced fee income growth. Columbia Banking is also scaling its Western footprint through strategic acquisition. In sync with this, in August 2025, COLB acquired Pacific Premier. The merger gives Columbia Banking roughly $70 billion in assets, about $50 billion in loans and $56 billion in deposits. With this buyout, the company gains greater scale and diversification across the Western United States, potentially improving competitive positioning, expanding its product offering and enhancing operating efficiencies.

COLB management remains focused on protecting core relationship deposits while continuing to wind down non-core, higher-cost sources. Management expects NIM to trend higher each quarter throughout 2026 as customer deposit balances rebound and balance sheet optimization actions continue to improve profitability. Strong capital generation and excess capital versus targets create tangible capacity to deploy capital opportunistically, supporting per-share value growth for Columbia Banking as integration synergies and earnings accretion continue to materialize.

As of March 31, 2026, COLB had cash and cash equivalents of $2.1 billion, while there was no short-term debt. The company has a dividend yield of 4.99%. Over the past five years, it has increased its dividend three times and has a 47% payout ratio. Check COLB’s dividend history here.

Norwood Financial, headquartered in Honesdale, PA, is the holding company for Wayne Bank, which provides a broad range of personal and business banking services, trust and investment products, and real estate settlement services. The bank operates across Northeastern Pennsylvania and parts of New York through a growing branch network. 

NWFL’s growth initiatives support its long-term outlook. In January 2026, it completed the acquisition of PB Bankshares, including its subsidiary Presence Bank. The acquisition enhanced scale, deepened Norwood Financial’s footprint across Pennsylvania and created opportunities for sustainable earnings growth as integration progresses. Higher asset yields and favorable interest rate conditions will aid NII and margin growth in the coming period.

The company also maintains a healthy liquidity position, which supports its capital distribution plan. As of March 31, 2026, the company reported a long-term debt of $88 million, with no short-term borrowings, while cash and cash equivalents totaled $103 million.

Norwood Financial currently has a dividend yield of 4.23%. Over the past five years, it has increased its dividend six times and has a 40% payout ratio. Check NWFL’s dividend history here.

Investments in talent and deeper client relationships drive Truist's growth in strategically important region

, /PRNewswire/ -- Truist Financial Corporation today announced Lindsey Stampone has been named regional president for Pennsylvania and New Jersey, leading one of the company's fastest-growing and strategically important regions.

Over the past five years, Truist has expanded its presence in the region, growing its commercial loan and deposit portfolio to one of the largest among a dozen regions, driven by targeted investments in talent and deeper client relationships.

Lindsey Stampone joins Truist as regional president Pennsylvania and New Jersey. Stampone joins Truist with nearly 20 years of commercial banking leadership experience.

She previously held senior leadership roles across Bank of America's Global Commercial Bank, where she led growth strategies and delivered banking, treasury and capital markets solutions to middle market and large corporate clients.

Most recently, Stampone served as New Jersey market executive for Bank of America's Global Commercial Bank. Her background includes leadership roles spanning business banking, treasury sales, national sales teams, and regional strategy and operations.

"Lindsey's leadership experience, client‑first mindset, and commitment to people make her an exceptional fit for Truist and for the Pennsylvania and New Jersey markets," said Truist Head of Commercial Banking Jodie Hughes. "She embodies our purpose to inspire and build better lives and communities for clients, teammates and the markets we serve."

In her new role, Stampone will:

Set regional strategy and accelerate market growth Strengthen client relationships and market presence Develop high‑performing teams that reflect Truist's purpose‑driven culture "I'm excited to join Truist and to lead such a strong commercial and middle market banking team in Pennsylvania and New Jersey," said Stampone. "This is an important growth market, and I look forward to partnering across Wholesale Banking to support our clients, invest in our teams, and make a meaningful impact in the communities we serve."

Stampone serves on the board of directors for the Community Food Bank of New Jersey and previously served on the board of the YWCA of Minneapolis. She resides in New Jersey with her family.

She succeeds Travis Rhodes, who was previously named regional president of Truist's North Carolina West region.

As a top‑10 commercial bank, Truist combines local relationship management with national industry expertise to help commercial and middle market companies grow and operate with confidence. Truist partners with clients across every stage of the business lifecycle, bringing strategic advice, customized credit and financing, treasury and payments solutions, and capital markets capabilities to support growth, manage risk, and optimize cash flow.

Through an integrated platform that includes corporate and investment banking, wealth management, and specialized industry teams, Truist delivers holistic financial solutions designed to meet the complex needs of today's businesses and their leaders.

About Truist
Truist Financial Corporation is a purpose-driven financial services company committed to inspiring and building better lives and communities. Headquartered in Charlotte, North Carolina, Truist has leading market share in many of the high-growth markets in the U.S. and offers a wide range of products and services through wholesale and consumer businesses, including consumer and small business banking, commercial and corporate banking, investment banking and capital markets, wealth management, payments, and specialized lending businesses. Truist is a top 10 commercial bank with total assets of $549 billion as of March 31, 2026. Truist Bank, Member FDIC. Equal Housing Lender. Learn more at Truist.com.

SOURCE Truist Financial Corporation

, /PRNewswire/ -- Truist Financial Corporation (NYSE: TFC) announced today that its board appointed Catherine Bessant to join as a director. Bessant will serve on the board's risk committee.  

Cathy Bessant joins Truist Board of Directors. "We're delighted to welcome Cathy, with her deep experience in financial services and philanthropy to the Truist board of directors," said Truist Chairman and CEO Bill Rogers. "Cathy's impressive track record of purpose-driven leadership and successful digital, technology and operational transformation on a global scale will serve Truist, our teammates, clients and stakeholders well."

Bessant, inducted into American Banker's "Most Powerful Women in Banking" Hall of Fame in 2020 after multiple years ranked number one for industry influence and execution, most recently served as CEO of Foundation For The Carolinas, one of the largest community foundations in the U.S.

"I look forward to working alongside the Truist board to help advance the company's strategic direction and purpose to inspire and build better lives and communities," said Bessant. "I'm honored to join the board of such a great franchise in this exciting moment of industry transformation."

Culminating a distinguished four-decade career at Bank of America, Bessant retired as vice chair, global strategy, and as a member of the company's executive management team. Prior to that, she was chief operations and technology officer, where she led the company's business continuity and information security strategies and policies. Earlier in her career, Bessant held numerous senior leadership roles, including president, global corporate banking; president, global product solutions and global treasury services; chief marketing officer; president, consumer real estate and community development banking; national small business segment executive; and president of the Florida market.

Bessant serves on the board of directors of Zurich Insurance Group and is on the advisory board for—and a graduate of—the University of Michigan Ross School of Business. She's also the immediate past chair of the USA Field Hockey board of directors. Locally in the Queen City, she formerly chaired the North Tryon Vision Plan Advisory Committee and served as co-chair of the Charlotte-Mecklenburg Housing & Homelessness Strategy.

About Truist
Truist Financial Corporation is a purpose-driven financial services company committed to inspiring and building better lives and communities. Headquartered in Charlotte, North Carolina, Truist has leading market share in many of the high-growth markets in the U.S. and offers a wide range of products and services through wholesale and consumer businesses, including consumer and small business banking, commercial and corporate banking, investment banking and capital markets, wealth management, payments, and specialized lending businesses. Truist is a top-10 commercial bank with total assets of $549 billion as of March 31, 2026. Truist Bank, Member FDIC. Equal Housing Lender. Learn more at Truist.com.

SOURCE Truist Financial Corporation

Truist Financial Corporation (TFC) Presents at Morgan Stanley US Financials Conference 2026 Transcript

Key Takeaways TFC launched a CMBS Master Servicing platform through Grandbridge.Grandbridge secured rating agency approvals required to operate as a CMBS master servicer.Truist can now oversee commercial loans across origination, servicing, reporting and monitoring. Truist Financial Corporation (TFC - Free Report) is strengthening its position in commercial real estate (CRE) finance through the launch of a new Master Servicing platform at its subsidiary, Grandbridge Real Estate Capital.

The move will likely broaden TFC’s commercial mortgage servicing capabilities and create an additional avenue for fee-based revenues, while enhancing its standing in the commercial mortgage-backed securities (CMBS) market.

The expansion follows Grandbridge's successful completion of reviews by major credit rating agencies, resulting in the approvals required to operate as a CMBS master servicer. These ratings place Grandbridge among a relatively small group of firms qualified to manage large and complex commercial mortgage securitization portfolios.

For Truist, the development extends Grandbridge’s responsibilities beyond its long-established primary and special servicing activities.

The new capability allows the platform to oversee commercial loans throughout their entire lifecycle, from origination and financing through ongoing administration, reporting and performance monitoring.

Truist Enhances Fee-Based Growth OpportunitiesMaster servicing is a critical component of CMBS transactions because it ensures consistent loan administration, cash-flow monitoring, investor reporting and portfolio oversight.

By entering this segment, TFC can deepen relationships with CRE borrowers, investors and institutional counterparties while expanding recurring servicing income streams that are less dependent on interest-rate cycles.

The milestone also demonstrates that Grandbridge possesses the operational controls, personnel, technology and risk-management infrastructure required to manage complex commercial mortgage portfolios.

Truist Strengthens Its Competitive PositionGrandbridge has serviced commercial mortgage loans for more than three decades and currently manages a diverse portfolio spanning CMBS, CRE collateralized loan obligations, life company loans, bridge financing, HUD loans and agency-backed assets.

Adding master servicing enables TFC to offer a more comprehensive suite of CRE solutions under one platform.

The launch underscores Truist’s ongoing investment in its wholesale banking franchise and reinforces its ambition to become a full-service partner for CRE clients. Over time, the expanded servicing platform could help increase market share, strengthen client retention and support sustainable earnings growth through higher fee-generating activity.

TFC’s Price Performance & Zacks RankOver the past six months, TFC shares have lost 0.5% against the industry’s 8.9% growth.

Image Source: Zacks Investment Research

Currently, Truist carries a Zacks Rank #3 (Hold).

Truist’s Peers Worth ConsideringA couple of better-ranked peers of TFC are KeyCorp (KEY - Free Report) and State Street Corporation (STT - Free Report) . Both these companies currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Over the past 30 days, the Zacks Consensus Estimate for KEY’s current-year earnings has been revised marginally higher. In the past six months, shares of KeyCorp have gained 6.8%.

Current-year earnings estimates for State Street have also been revised marginally higher over the past 30 days. Over the past six months, STT shares have gained 26%.

On Feb. 25, 2026, Howard L. Lance, director at Mercury Systems (MRCY +0.45%), reported an open-market sale of 4,832 common shares for a transaction value of approximately $430,000, according to the SEC Form 4 filing.

Transaction summaryMetricValueContextShares sold (direct)4,832Open-market shares sold on Feb. 25, 2026Transaction value$430,000Based on weighted average sale price of $88.98 per sharePost-transaction shares (direct)27,272Directly held after salePost-transaction shares (indirect)9,250Indirectly held via trust after salePost-transaction value (direct ownership)~$2.44 millionCalculated using Feb. 25, 2026 market closeTransaction value based on SEC Form 4 weighted average purchase price ($88.98); post-transaction value calculated using the Feb. 25, 2026 market close.

Key questionsHow does this sale compare to Lance’s historical transaction pattern?
This transaction is his only open-market sale in the past two years.What proportion of Lance’s direct holdings was impacted?
The sale accounted for 15% of his direct shares, with all shares sold from his direct account.What is the context of Lance’s remaining stake?
Following the sale, Lance continues to hold 27,272 shares directly and 9,250 shares indirectly through his revocable living trust, with a post-transaction direct holding valued at approximately $2.44 million as of Feb. 25, 2026.How does the transaction price relate to the current and historical stock price?
The weighted average sale price was $88.98 per share, which is slightly below the market close of $89.30 on the transaction date and 2.2% below the $91.01 level as of March 2, 2026, following a 104.9% total return year over year.Company overviewMetricValueMarket capitalization$4.54 billionRevenue (TTM)$942.55 millionNet income (TTM)($30.41 million)1-year price change105.4% 1-year price performance calculated using Feb. 25, 2026 as the reference date.

Company snapshotProvides advanced components, modules, and subsystems including RF/microwave devices, embedded processing boards, and integrated solutions for aerospace and defense applications.Generates revenue through the design, manufacture, and sale of proprietary technology solutions, targeting high-value defense programs and mission-critical systems integration.Serves leading defense contractors and commercial aviation companies, with products deployed in approximately 300 programs across the United States, Europe, and Asia Pacific.Mercury Systems is a mid-cap technology provider specializing in high-performance electronics for aerospace and defense markets. The company leverages its engineering expertise and proprietary technologies to deliver mission-critical solutions for major defense contractors and government agencies. Its competitive advantage stems from deep integration across the value chain and a focus on secure, scalable, and innovative subsystems supporting next-generation defense platforms.

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119.86

What this transaction means for investorsLance’s late February sale of aerospace and defense technology company Mercury Systems capitalized on the recent strong performance of both the stock and its sector. As of March 24, the stock is still up 68% year over year on a total return basis, though it’s down slightly from its more than 100% return earlier this year.

The company announced its results for the second quarter of fiscal year 2026 (ended Dec. 26, 2025) on Feb. 3. Q2 bookings were up 18.6% year over year and the company celebrated a record backlog of $1.5 billion, an 8% year-over-year increase. First-half revenue of $233 million was also a record.

In March, the company completed its acquisition of SolderMask Inc., a provider of specialized manufacturing processes that were already in use across more than 20 Mercury Systems programs. Bringing the processes in-house should allow Mercury Systems to expand manufacturing capacity and improve production rate.

Mercury Systems currently trades at a price-to-sales (P/S) ratio of 4.98, which is close to the aerospace and defense industry average P/S of 4.57, and below the peer group average of 11.29, according to Simply Wall St. While some still believe the stock is overvalued, bulls may be interested in the company’s strategic acquisitions and growing backlog amid enhanced recent interest in the aerospace and defense sector.

Sarah Sidlow has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Posted by Defense World Staff on Apr 7th, 2026

SG Americas Securities LLC grew its position in Mercury Systems Inc (NASDAQ:MRCY – Free Report) by 100.2% during the fourth quarter, according to the company in its most recent 13F filing with the SEC. The fund owned 22,227 shares of the technology company’s stock after purchasing an additional 11,123 shares during the quarter. SG Americas Securities LLC’s holdings in Mercury Systems were worth $1,623,000 as of its most recent filing with the SEC.

Other large investors also recently modified their holdings of the company. Vanguard Group Inc. boosted its holdings in shares of Mercury Systems by 4.0% during the 3rd quarter. Vanguard Group Inc. now owns 5,731,033 shares of the technology company’s stock worth $443,582,000 after buying an additional 221,093 shares in the last quarter. State Street Corp increased its stake in shares of Mercury Systems by 8.7% in the 2nd quarter. State Street Corp now owns 3,246,573 shares of the technology company’s stock valued at $174,860,000 after acquiring an additional 259,388 shares in the last quarter. First Trust Advisors LP lifted its position in shares of Mercury Systems by 96.3% during the 3rd quarter. First Trust Advisors LP now owns 1,532,822 shares of the technology company’s stock valued at $118,640,000 after acquiring an additional 751,813 shares during the period. Invesco Ltd. boosted its stake in Mercury Systems by 161.7% during the third quarter. Invesco Ltd. now owns 1,527,443 shares of the technology company’s stock worth $118,224,000 after acquiring an additional 943,736 shares in the last quarter. Finally, Bamco Inc. NY boosted its stake in Mercury Systems by 4.9% during the third quarter. Bamco Inc. NY now owns 1,295,284 shares of the technology company’s stock worth $100,255,000 after acquiring an additional 60,483 shares in the last quarter. 95.99% of the stock is currently owned by institutional investors and hedge funds.

Mercury Systems Stock Up 2.1% Shares of NASDAQ:MRCY opened at $75.75 on Tuesday. The business’s 50 day moving average is $83.79 and its 200 day moving average is $80.13. Mercury Systems Inc has a 12-month low of $39.89 and a 12-month high of $103.84. The stock has a market cap of $4.55 billion, a price-to-earnings ratio of -142.92, a PEG ratio of 7.19 and a beta of 0.84. The company has a quick ratio of 2.04, a current ratio of 2.96 and a debt-to-equity ratio of 0.41.

Mercury Systems (NASDAQ:MRCY – Get Free Report) last posted its quarterly earnings data on Tuesday, February 3rd. The technology company reported $0.16 EPS for the quarter, beating the consensus estimate of $0.07 by $0.09. The firm had revenue of $232.87 million during the quarter, compared to analyst estimates of $209.96 million. Mercury Systems had a negative net margin of 3.23% and a positive return on equity of 1.28%. The company’s revenue for the quarter was up 4.4% on a year-over-year basis. During the same quarter last year, the business posted $0.07 EPS. On average, sell-side analysts forecast that Mercury Systems Inc will post -0.08 earnings per share for the current fiscal year.

Analyst Upgrades and Downgrades A number of research firms have recently issued reports on MRCY. The Goldman Sachs Group increased their price objective on shares of Mercury Systems from $49.00 to $55.00 and gave the stock a “sell” rating in a research report on Tuesday, January 20th. Weiss Ratings reaffirmed a “sell (d-)” rating on shares of Mercury Systems in a research note on Thursday, January 22nd. Canaccord Genuity Group set a $102.00 price target on Mercury Systems in a report on Wednesday, February 4th. Royal Bank Of Canada reissued an “outperform” rating and issued a $105.00 price objective on shares of Mercury Systems in a research note on Wednesday, February 4th. Finally, Jefferies Financial Group restated a “hold” rating and set a $85.00 price objective on shares of Mercury Systems in a report on Sunday, February 8th. One equities research analyst has rated the stock with a Strong Buy rating, four have issued a Buy rating, three have assigned a Hold rating and two have issued a Sell rating to the stock. According to data from MarketBeat.com, Mercury Systems has a consensus rating of “Hold” and a consensus price target of $86.89.

Get Our Latest Stock Analysis on MRCY

Insider Buying and Selling at Mercury Systems In other news, EVP Stuart Kupinsky sold 2,287 shares of the business’s stock in a transaction dated Tuesday, February 17th. The stock was sold at an average price of $83.56, for a total transaction of $191,101.72. Following the completion of the transaction, the executive vice president owned 68,010 shares of the company’s stock, valued at approximately $5,682,915.60. The trade was a 3.25% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, CAO Douglas Munro sold 582 shares of the business’s stock in a transaction that occurred on Tuesday, February 17th. The stock was sold at an average price of $83.56, for a total transaction of $48,631.92. Following the completion of the transaction, the chief accounting officer directly owned 14,328 shares of the company’s stock, valued at approximately $1,197,247.68. This represents a 3.90% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 859,758 shares of company stock valued at $74,481,931 in the last quarter. Corporate insiders own 1.40% of the company’s stock.

About Mercury Systems (Free Report)

Mercury Systems, Inc (NASDAQ: MRCY) is a technology company that designs, manufactures and markets secure processing subsystems for aerospace and defense applications. The company’s products are built to address the stringent security, safety and reliability requirements of mission-critical programs, with a focus on radar, electronic warfare, intelligence and other sensor and processing functions. Mercury’s offerings encompass rugged embedded computing modules, high-performance radio frequency (RF) and microwave components, digital signal processing subsystems and secure networking solutions.

Since its origins in advanced signal processing, Mercury Systems has expanded its capabilities through a combination of internal development and targeted acquisitions.

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As Counter-Drone Spending Marches Toward $20 Billion, Defense Tech Companies Are Layering Visual Intelligence Onto RF-First Architectures To Stay Competitive

Featured Tickers: VisionWave Holdings, Inc. (NASDAQ: VWAV), Rekor Systems, Inc. (NASDAQ: REKR), Ondas Inc. (NASDAQ: ONDS), Red Cat Holdings, Inc. (NASDAQ: RCAT), Mercury Systems, Inc. (NASDAQ: MRCY).

KEY TAKEAWAYS

The global counter-unmanned aerial system market is projected to grow from approximately USD 2.08 billion in 2025 to roughly USD 19.06 billion by 2035, a CAGR of about 25.8%, according to Precedence Research.[1] VisionWave Holdings (Nasdaq: VWAV) has acquired the xClibre™ AI video intelligence IP — independently valued at approximately USD 60 million by BDO Consulting Group — to add a visual perception layer to its RF-based defense platforms.[2] The Pentagon's Drone Dominance Program is now targeting more than 200,000 autonomous systems, against the backdrop of a 2026 US defense budget being discussed at roughly USD 1 trillion.[3] xClibre is built on an edge-first "video-as-a-sensor" architecture, designed to convert existing camera infrastructure into a real-time AI intelligence layer with no cloud dependency.[2] Featured tickers covered in this report: VWAV, REKR, ONDS, RCAT, MRCY. , /PRNewswire/ -- Equity-Insider.com News Commentary — Modern air defense has a problem that money alone cannot solve: too many alerts, not enough certainty. Radio-frequency (RF) sensors are excellent at wide-area detection, but they cannot always tell an operator whether the contact in question is a hostile drone, a stray bird, or a passing aircraft. Visual confirmation has become a non-negotiable input before autonomous engagement — or even authorized human response — can move forward with confidence.

That single operational gap is reshaping the counter-unmanned aircraft system (C-UAS) procurement map. According to Precedence Research, the global C-UAS market is forecast to grow from approximately USD 2.08 billion in 2025 to roughly USD 19.06 billion by 2035, a compound annual growth rate of about 25.8%, with North America accounting for 49% of 2025 market share.[1] Within that growth, control systems — the integration layer that fuses detection, classification, and response — are the fastest-growing component segment, reflecting demand for AI-driven threat prioritization and automated decision support.[1]

The macro environment is amplifying the trend. The Pentagon's Drone Dominance Program is now aiming to field more than 200,000 autonomous systems, Section 1709 of the FY25 NDAA has effectively banned foreign-manufactured drones from the US market via FCC implementation, and the 2026 US defense budget is being discussed at roughly USD 1 trillion, with FY2027 proposals reportedly pushing toward USD 1.5 trillion.[3]

Against that backdrop, VisionWave Holdings, Inc. (Nasdaq: VWAV) has just made one of the most pointed strategic moves of the cycle.

VisionWave Buys The Visual Perception Layer Its Argus Stack Was Missing

On April 13, 2026, VisionWave announced the completed acquisition of the intellectual property assets underlying the xClibre™ AI video intelligence platform, pursuant to a definitive Asset Purchase Agreement dated April 10, 2026. The acquired IP was independently valued at approximately USD 60 million by BDO Consulting Group as of April 10, 2026.[2]

VisionWave's defense platforms — including its Argus™ space-enabled counter-UAS architecture and its WaveStrike™ RF-enabled fire-control workflows — had until now relied primarily on RF-based detection.[2][4] xClibre adds the visual perception layer expected to complement those RF capabilities, addressing what management described as a critical capability gap in the Company's sensing architecture.

"RF sensing tells you something is there. Video intelligence tells you what it is and what it's doing," said Douglas Davis, CEO and Executive Chairman of VisionWave.[2] "With xClibre, we have taken an important step toward delivering both — in a single integrated architecture built for the realities of contested environments. Our near-term focus is validating performance in the field. The commercial path follows from that."

Total consideration for the IP portfolio consists of 7,000,000 shares of VisionWave common stock (3,500,000 issued at closing and 3,500,000 contingent upon successful proof-of-concept validation and Nasdaq Shareholder Approval under Nasdaq Listing Rule 5635), plus a USD 6,000,000 promissory note.[2] VisionWave intends to assign the acquired IP into a dedicated subsidiary, xClibre Inc., creating a focused commercial vehicle for development and go-to-market execution.[2]

xClibre is designed as a "video-as-a-sensor" platform that converts existing camera infrastructure into a real-time AI intelligence layer. Stated capabilities include automated threat detection with behavioral analytics, rapid forensic search to accelerate post-incident investigation, visual verification of RF-detected contacts to potentially reduce false-positive response rates, and event-driven action pipelines that connect detection to autonomous system response.[2] The platform is built on an edge-first architecture — processing data locally via dedicated compute appliances, with no cloud dependency — a design choice intended to enable deployment in bandwidth-constrained forward environments and meet data sovereignty requirements.[2]

Integration is targeted across VisionWave's existing defense stack via APIs and SDKs, with near-term focus on the Argus counter-UAS platform (visual confirmation for RF-identified aerial threats), autonomous interceptor systems, the VARAN unmanned ground vehicle, and fixed-site security deployments with forensic replay capability.[2] A structured proof-of-concept evaluation with an industry partner is targeted for completion in H2 2026, and successful POC outcomes plus Nasdaq Shareholder Approval will trigger release of the remaining 3,500,000 contingent shares.[2]

The xClibre transaction lands against an active strategic backdrop. VisionWave previously entered into a definitive agreement to acquire a 51% controlling stake in C.M. Composite Materials, an Israeli manufacturer whose structural assemblies are used in Israel's multi-layer missile defense architecture, including Iron Dome and the Barak 8 long-range air defense system.[3] The Company has also been advancing its qSpeed™ pre-commercial computational acceleration architecture across defense-focused programs — including Argus counter-UAS workflows — where reduced end-to-end latency may enhance operational responsiveness in time-critical scenarios.[4]

Other Defense Tech Names Building The AI Sensing Stack

Rekor Systems, Inc. (NASDAQ: REKR)

Rekor Systems is one of the purer-play AI computer vision companies on US exchanges. Its Rekor One® roadway intelligence engine ingests data from proprietary systems, third-party sources, and existing infrastructure, applying computer vision, edge processing, pattern recognition, and predictive algorithms to transform that data into actionable intelligence.[5] On June 6, 2025, Rekor announced a one-year, USD 1.2 million Data-as-a-Service contract with a Sun Belt state transportation agency to deploy 150 Rekor Discover® systems, replacing intrusive legacy roadway sensors with FHWA-compliant AI-based technology.[6]

On October 23, 2025, the Company announced it would enter the global deepfake detection market via a new subsidiary called Rekor Labs, combining its AI and machine vision expertise to identify synthetic video, audio, and images. Proof-of-concept and alpha milestones were reported as complete, with a full product launch expected in the first half of 2026, and Rekor estimated the global deepfake detection market could exceed USD 30 billion over the next decade.[7] On March 18, 2026, the US Patent and Trademark Office granted Rekor a patent for an incident-based method to retain ALPR and vehicle recognition data based on suspected-offense severity, expanding the Company's IP portfolio in computer vision data management.[8]

Ondas Inc. (NASDAQ: ONDS)

Ondas — which changed its name from Ondas Holdings Inc. to Ondas Inc. in January 2026 — has built one of the most active counter-drone franchises among small-cap defense plays.[9] Through its Ondas Autonomous Systems unit and operating companies American Robotics, Airobotics, Apeiro Motion, Roboteam, and Sentrycs, the Company offers an integrated suite of autonomous aerial, ground, and counter-UAS solutions, including the Iron Drone Raider autonomous counter-UAS interception platform and the Optimus System.[9]

On November 17, 2025, Ondas secured an approximately USD 8.2 million order from a major European security authority to deploy multiple Iron Drone Raider systems at one of Europe's largest international airports, followed on December 1, 2025 by a second USD 8.2 million order from the same governmental customer for a different airport.[10] On December 3, 2025, Ondas announced it had been selected as prime contractor for a major government tender to develop a full-scale drone-based autonomous border-protection system, with an initial purchase order expected in January 2026 and the multi-phase program expected to culminate in the deployment of thousands of autonomous drones.[11] On January 28, 2026, the Company's Optimus drone was added to the Defense Contract Management Agency's Blue List, identifying it as an approved, secure, NDAA-compliant unmanned aircraft system for rapid Department of War procurement.[12]

Red Cat Holdings, Inc. (Nasdaq: RCAT)

Red Cat is a US-based provider of advanced all-domain drone and robotic solutions for defense and national security, operating through wholly owned subsidiaries Teal Drones and FlightWave Aerospace. Its Family of Systems is led by the Black Widow™ small unmanned aircraft system, which won the US Army's Short Range Reconnaissance (SRR) production contract over Skydio in November 2024.[13]

On February 2, 2026, Red Cat announced that an Asia-Pacific ally had selected Black Widow on a competitive tender in December 2025, the second Asia-Pacific ally to recently order the system.[14] Then on April 2, 2026, the Company announced that a NATO ally had selected Black Widow in March 2026 through a competitive tender facilitated by the NATO Support and Procurement Agency (NSPA), with deliveries scheduled across calendar year 2026.[15] Red Cat is widely viewed as a potential beneficiary of the Pentagon's Drone Dominance Program, which is focused on strengthening US ability to deploy advanced unmanned systems in future conflicts.[15]

Mercury Systems, Inc. (NASDAQ: MRCY)

Mercury Systems delivers mission-critical processing to the edge — the rugged compute infrastructure that makes AI sensor fusion possible inside platforms operating in harsh, contested environments. The Company's products are deployed in more than 300 programs across 35 countries, supporting applications in mission computing, sensor processing, command and control, and communications.[16]

On January 15, 2026, Mercury announced contract awards totaling more than USD 60 million for work associated with two critical US space and strategic weapons programs.[16] The Company's Q2 fiscal 2026 results, reported on February 3, 2026, showed bookings of USD 288 million (up 18.6% year-over-year), a book-to-bill of 1.23, and a record backlog of USD 1.5 billion (up 8.8% year-over-year).[17] On March 12, 2026, Mercury acquired SolderMask, Inc. to support higher-rate production across more than 20 Mercury programs, including the US Army's Lower Tier Air and Missile Defense Sensor (LTAMDS) program.[18] And on April 2, 2026, Mercury announced it had been selected by L3Harris Technologies (NYSE: LHX) to provide solid-state data recorders for the US Space Development Agency's Tranche 3 Tracking Layer satellite constellation, designed to protect the United States from advanced missile threats including hypersonic weapons.[19]

Frequently Asked Questions

What is xClibre and why does it matter for VisionWave?

xClibre is an AI video intelligence platform whose intellectual property assets VisionWave acquired on April 13, 2026 in a transaction valued at approximately USD 60 million by independent valuation from BDO Consulting Group. It is designed as a "video-as-a-sensor" system that converts existing camera infrastructure into a real-time AI intelligence layer, providing the visual perception capability that VisionWave's previously RF-first defense platforms — including Argus counter-UAS — had been missing.[2]

How fast is the counter-drone market actually growing?

Forecasts vary by methodology, but multiple credible sources point to compound annual growth rates in the 25%–26% range through the early 2030s. Precedence Research projects growth from approximately USD 2.08 billion in 2025 to roughly USD 19.06 billion by 2035 (CAGR of about 25.8%).[1] MarketsandMarkets projects growth from approximately USD 6.64 billion in 2025 to roughly USD 20.31 billion by 2030 (CAGR of about 25.1%) on a slightly different definitional basis.[20]

What is the Pentagon's Drone Dominance Program?

The Drone Dominance Program is a Department of War initiative aimed at fielding more than 200,000 autonomous systems in support of US forces, accelerating the delivery of advanced unmanned systems to operational units. It exists alongside Section 1709 of the FY25 NDAA, which has effectively banned foreign-manufactured drones from the US market through FCC implementation, against a 2026 US defense budget being discussed at roughly USD 1 trillion.[3]

Why is sensor fusion so important in counter-UAS architectures?

Single-modality detection — RF alone, radar alone, or optical alone — produces too many false positives in real-world conditions to support autonomous engagement or rapid human authorization. Layered architectures that combine RF detection with electro-optical confirmation and AI-driven classification are now considered the standard for both military and critical-infrastructure deployments. The control-systems segment, which fuses sensor inputs into integrated command interfaces with real-time threat response, is the fastest-growing component category in the C-UAS market.[1]

When will VisionWave's xClibre integration be validated?

VisionWave plans to conduct a structured proof-of-concept evaluation with an industry partner targeting completion in H2 2026, validating detection accuracy, false-alert performance, and integration across the multi-sensor stack. Successful POC outcomes plus receipt of Nasdaq Shareholder Approval will trigger release of the remaining 3,500,000 contingent shares of the consideration.[2]

CONTINUED… Read this and more news for VisionWave Holdings at: https://equity-insider.com/2025/09/25/the-ai-defense-technology-developments-on-the-rise-in-2025-26/

Article Sources

[1] Precedence Research, "Counter-Unmanned Aerial System (C-UAS) Market Size to Hit USD 19.06 Billion by 2035," https://www.precedenceresearch.com/counter-unmanned-aerial-system-market

[2] VisionWave Holdings, Inc., "VisionWave Acquires xClibre™ AI Video Intelligence IP Assets," April 13, 2026 (company press release).

[3] PR Newswire / Equity-Insider.com, "Counter-Drone Just Became the Fastest-Growing Niche in Defense. VisionWave Is Already Demonstrating ARGUS," April 6, 2026, https://www.prnewswire.com/news-releases/counter-drone-just-became-the-fastest-growing-niche-in-defense-visionwave-is-already-demonstrating-argus-302734941.html

[4] VisionWave Holdings, Inc., "VisionWave Advances qSpeed™ Pre-Commercial Computational Acceleration Architecture Across Defense Programs," January 20, 2026, https://www.globenewswire.com/news-release/2026/01/20/3221720/0/en/VisionWave-Advances-qSpeed-Pre-Commercial-Computational-Acceleration-Architecture-Across-Defense-Programs-Including-Fire-Control-Counter-UAS-and-Intercept-Workflows-Where-Microseco.html

[5] Rekor Systems, Inc., corporate website, https://www.rekor.ai

[6] StockTitan, "$1.2M AI Traffic Monitoring Contract Won by Rekor Systems," June 6, 2025, https://www.stocktitan.net/news/REKR/sun-belt-state-transportation-agency-to-deploy-150-rekor-discover-1cahyoj7102b.html

[7] Rekor Systems, Inc., "Rekor Systems Announces Plan to Enter the Global Deepfake Detection Market," October 23, 2025, https://www.stocktitan.net/news/REKR/rekor-systems-announces-plan-to-enter-the-global-deepfake-detection-tjdi0dvrvvec.html

[8] StockTitan, "REKR — Rekor Systems Inc Latest Stock News & Market Updates," https://www.stocktitan.net/news/REKR/

[9] Yahoo Finance, "Ondas Inc. (ONDS) Stock Price, News, Quote & History," https://finance.yahoo.com/quote/ONDS/

[10] Ondas Holdings Inc., "Ondas Secures Additional $8.2 Million Counter-UAS Order," December 1, 2025, https://ir.ondas.com/press-releases/detail/259/ondas-secures-additional-8-2-million-counter-uas-order

[11] Ondas Holdings Inc., "Ondas Wins Strategic Government Tender to Develop and Deploy Autonomous Border-Protection System with Thousands of Drones," December 3, 2025, https://ir.ondas.com/press-releases/detail/261/ondas-wins-strategic-government-tender-to-develop-and

[12] Ondas Inc., "Ondas' American Robotics Optimus Drone Approved for Rapid Federal Procurement via DCMA Blue UAS Cleared List," January 28, 2026, https://ir.ondas.com/press-releases/detail/275/ondas-american-robotics-optimus-drone-approved-for-rapid

[13] The Robot Report, "Red Cat wins U.S. Army next-gen drone contract over Skydio," November 22, 2024, https://www.therobotreport.com/red-cat-wins-u-s-army-next-gen-drone-contract-over-skydio/

[14] Red Cat Holdings, Inc., "Red Cat Secures New Orders for Black Widow™ Drones from Asia-Pacific Ally," February 2, 2026, https://ir.redcatholdings.com/news-events/press-releases/detail/210/red-cat-secures-new-orders-for-black-widow-drones-from-asia-pacific-ally

[15] Red Cat Holdings, Inc., "Red Cat Secures New Orders for Black Widow™ Drones from NATO Ally," April 2, 2026, https://www.globenewswire.com/news-release/2026/04/02/3267257/0/en/Red-Cat-Secures-New-Orders-for-Black-Widow-Drones-from-NATO-Ally.html

[16] Mercury Systems, Inc., "Mercury Awarded Contracts for U.S. Space and Strategic Weapons Programs," January 15, 2026 (per company news listings).

[17] Mercury Systems, Inc., "Mercury Systems Reports Second Quarter Fiscal 2026 Results," February 3, 2026.

[18] Mercury Systems, Inc., "Mercury Systems Acquires SolderMask To Support Higher Rate Production," March 12, 2026, https://www.globenewswire.com/news-release/2026/03/12/3255136/18849/en/Mercury-Systems-Acquires-SolderMask-To-Support-Higher-Rate-Production.html

[19] Mercury Systems, Inc., "L3Harris Selects Mercury To Provide Solid-State Data Recorders for SDA's Tranche 3 Tracking Layer Satellites," April 2, 2026, https://www.globenewswire.com/news-release/2026/04/02/3267213/18849/en/L3Harris-Selects-Mercury-To-Provide-Solid-State-Data-Recorders-for-SDA-s-Tranche-3-Tracking-Layer-Satellites.html

[20] MarketsandMarkets, "Counter-UAS Systems Market — Global Forecast to 2030," https://www.marketsandmarkets.com/Market-Reports/counter-cuas-systems-market-4197284.html

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Nothing in this publication should be considered as personalized financial advice. We are not licensed under securities laws to address your particular financial situation. No communication by our employees to you should be deemed as personalized financial advice. Please consult a licensed financial advisor before making any investment decision. This is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. Equity-Insider.com is a wholly-owned subsidiary of Market IQ Media Group, Inc. ("MIQ"). MIQ has been paid a fee for VisionWave Holdings, Inc. advertising and digital media from the company directly. There may be 3rd parties who may have shares of VisionWave Holdings, Inc., and may liquidate their shares which could have a negative effect on the price of the stock. This compensation constitutes a conflict of interest as to our ability to remain objective in our communication regarding the profiled company. Because of this conflict, individuals are strongly encouraged to not use this article as the basis for any investment decision. MIQ owns shares of VisionWave Holdings, Inc. that were purchased in the open market and reserves the right to buy and sell, and will buy and sell shares of VisionWave Holdings, Inc. at any time thereafter without any further notice. MIQ also expects to receive further compensation as outlined in our disclosures concerning VisionWave Holdings, Inc. This article is being distributed for Market IQ Media Group, Inc.

The above article contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact and may be "forward looking statements." Forward looking statements are based on expectations, estimates and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including without limitation, the ability of VisionWave Holdings, Inc. to successfully integrate the xClibre IP, complete the proof-of-concept evaluation, obtain Nasdaq Shareholder Approval for the issuance of the contingent shares, and execute on its broader commercialization roadmap. Always consult a licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.

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SOURCE Equity Insider

The $900.6 billion Pentagon budget that took effect in early 2026 was already the largest in American history before the Iran war started. Then, President Donald Trump proposed a budget of $1.5 trillion for the Defense Department for 2027. Whatever skepticism you might feel about the odds that Congress will set the final number anywhere near that, the directional signal is unmistakable: The United States government is in the midst of a generational expansion of its military networks, and it doesn't seem to be slowing down.

The companies that will benefit most from this cycle aren't necessarily the defense primes -- the giant primary contractors like Lockheed Martin and General Dynamics. The specific technological priorities of the current moment -- battle network integration, missile tracking, cyber warfare, and AI-enabled edge processing -- favor companies that have spent years building precisely those capabilities.

Image source: Getty Images.

1. Mercury Systems There's a way to think about Mercury Systems (MRCY +0.45%) that most coverage misses: It doesn't build the weapons. It builds what makes the weapons intelligent. Its products are processing platforms such as radiation-hardened signal processors and AI-capable edge computing subsystems that are embedded directly into the electronics of over 300 defense programs, including the F-35, the Patriot missile defense system, and numerous classified hypersonic programs.

In January, Mercury announced contracts exceeding $60 million across two critical U.S. space and strategic weapons programs. One extended a strategic weapons development contract through 2031. The other deal came from a space systems prime contractor, which tapped it to supply a subsystem for a national security satellite program -- specifically, Mercury's radiation-tolerant wideband storage and processing unit.

The "design-in" model is what makes Mercury stock particularly compelling. Once one of Mercury's processing platforms becomes embedded in a multidecade defense program -- and it is written into hundreds of them -- that sets it up for many years of ongoing revenues.

The Iran war is underscoring exactly how critical edge AI processing is at every node of the battlefield network. Mercury is the company that makes those nodes work.

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2. Leonardo DRS Leonardo DRS (DRS 1.26%) was awarded a subcontract in January 2026 to provide infrared mission payloads for the Space Development Agency's Tracking Layer Tranche 3 (TRKT3). That project is a cornerstone of the Pentagon's next-generation missile defense architecture.

Per its press release, Leonardo DRS "will design, build, integrate, and test advanced infrared mission payloads to support TRKT3’s accelerated capability to provide global detection, warning, and tracking of ballistic missiles and hypersonic weapons. The infrared capability will be used from the earliest stages of an adversarial launch through interception, including delivering precision fire-control sensing data for missile interceptors."

During the recent conflict, Iran has fired what it describes as hypersonic missiles. Tracking such weapons from space -- with the kind of speed and precision that DRS' infrared payloads are designed for -- is no longer a theoretical defense problem. The Space Force intends to deploy a constellation of approximately 30 of these missile-tracking satellites. Leonardo DRS is helping to build their eyes.

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3. Parsons owns the digital battlefield nobody sees Most defense industry coverage focuses on the companies behind the hardware -- missiles, planes, drones, satellites, etc. Parsons (PSN 1.19%) operates in the layer beneath it all, which is the cyber infrastructure that ties the battle network together. In February, its SealingTech subsidiary was awarded a three-year contract worth up to $500 million by U.S. Cyber Command to produce the Joint Cyber Hunt Kit -- a system for seeking out cyber threats on isolated computer networks.

Parsons also operates in space intelligence, signals intelligence, and missile warning -- capabilities it expanded in January through its acquisition of Altamira Technologies. The company is a classified-systems intelligence contractor that most retail investors have never heard of, which is the point. The less visible a defense contractor is to the public, the more likely its work sits in the sensitive programs that governments fund through every budget cycle, regardless of the direction the political winds are blowing.

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U.S. defense spending may or may not reach Trump's aggressive $1.5 trillion target in 2027. But the underlying demand for battle network integration, missile tracking, and cyberdefense is structural, and Mercury Systems, Leonardo DRS, and Parsons are doing the specific technical work that the next decade's worth of defense projects will be built around.

Mercury Systems, Inc. remains a Buy, with a base case price target of $97.53 (18% upside) and a more bullish target of $113.45 (37% upside). MRCY benefits from long-term demand for defense microelectronics but faces near-term risks from supply chain fragility and rising input costs due to geopolitical tensions. Recent estimate revisions show minimal change in annual revenue and EBITDA, but Q3 2026 EPS was trimmed 70% as non-recurring material receipts were excluded from ongoing guidance.

Record Q3 FY26 Bookings of $348 million grew 73.7% year-over-year; book-to-bill of 1.48Record backlog of approximately $1.6 billion; up 17.9% year-over-yearQ3 FY26 Revenue of $236 million; up 11.5% organically year-over-yearGAAP net loss of $3 million; and adjusted EBITDA of $36 million, up 46.2% year-over-year ANDOVER, Mass., May 05, 2026 (GLOBE NEWSWIRE) -- Mercury Systems, Inc. (NASDAQ: MRCY, www.mrcy.com), reported operating results for the third quarter of fiscal year 2026, ended March 27, 2026.

“We delivered third quarter fiscal 2026 results that were ahead of our expectations, with significant year-over-year growth in backlog, revenue, and adjusted EBITDA,” said Bill Ballhaus, Mercury’s Chairman and CEO. “Strong demand signals and solid execution contributed to better than expected organic growth and margin expansion this quarter."

“In the third quarter we delivered record bookings of $348 million, with a 1.48 book-to-bill, resulting in a record backlog of approximately $1.6 billion. Revenue for the third quarter was $236 million, up 11.5% year-over-year. GAAP net loss of $3 million, adjusted EBITDA of $36 million, and adjusted EBITDA margin of 15.3%, each improving year-over-year."

Third Quarter Fiscal 2026 Results

Third quarter fiscal 2026 revenues were $236 million, compared to $211 million in the third quarter of fiscal 2025.

Total bookings for the third quarter of fiscal 2026 were $348 million, yielding a book-to-bill ratio of 1.48 for the quarter.

GAAP net loss and loss per share for the third quarter of fiscal 2026 were $3 million and $0.04, respectively, compared to GAAP net loss and loss per share of $19 million and $0.33, respectively, for the third quarter of fiscal 2025. Adjusted earnings per share (“adjusted EPS”) was $0.27 per share for the third quarter of fiscal 2026, compared to $0.06 per share in the third quarter of fiscal 2025.

Third quarter fiscal 2026 adjusted EBITDA was $36 million, compared to $25 million for the third quarter of fiscal 2025.

Cash flows provided by operating activities in the third quarter of fiscal 2026 were $6 million, compared to $30 million in the third quarter of fiscal 2025. Free cash flow, defined as cash flows from operating activities less capital expenditures for property and equipment, was $(2) million for the third quarter of fiscal 2026 and $24 million for the third quarter of fiscal 2025.

Backlog

Mercury’s total backlog at March 27, 2026 was approximately $1.6 billion, an approximate $240 million increase from a year ago. Of the March 27, 2026 total backlog, $891 million represents orders expected to be recognized as revenue within the next 12 months.

Conference Call Information

Management will host a conference call and simultaneous webcast at 5:00 p.m. ET on Tuesday, May 5, 2026, to discuss Mercury's quarterly financial results, business highlights and outlook. In addition, Company representatives may answer questions concerning business and financial developments and trends, the Company's view on earnings forecasts, and other business and financial matters affecting the Company, the responses to which may contain information that has not been previously disclosed.

To participate in the conference call Q&A as an analyst please register online at https://events.q4inc.com/analyst/603599389?pwd=RYGqad9c or dial +1 585 542 9983 by phone using Meeting ID: 603599389. The live listen-only webcast and replay will be available ir.mrcy.com/events-presentations. A replay of the webcast will be available two hours after the call and archived on the same web page for six months.

Use of Non-GAAP Financial Measures

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the Company provides adjusted EBITDA, adjusted income, adjusted earnings per share (“adjusted EPS”) and free cash flow, which are non-GAAP financial measures. Adjusted EBITDA, adjusted income, and adjusted EPS exclude certain non-cash and other specified charges. The Company believes these non-GAAP financial measures are useful to help investors understand its past financial performance and prospects for the future. However, these non-GAAP measures should not be considered in isolation or as a substitute for financial information provided in accordance with GAAP. Management believes these non-GAAP measures assist in providing a more complete understanding of the Company’s underlying operational results and trends, and management uses these measures along with the corresponding GAAP financial measures to manage the Company’s business, to evaluate its performance compared to prior periods and the marketplace, and to establish operational goals. A reconciliation of GAAP to non-GAAP financial results discussed in this press release is contained in the attached exhibits.

Mercury Systems – Innovation that Matters®

Mercury Systems is a global technology company that delivers mission-critical processing power to the edge, making advanced technologies profoundly more accessible for today’s most challenging aerospace and defense missions. The Mercury Processing Platform allows customers to tap into innovative capabilities from silicon to system scale, turning data into decisions on timelines that matter. Mercury’s products and solutions are deployed in more than 300 programs and across 35 countries, enabling a broad range of applications in mission computing, sensor processing, command and control, and communications. Mercury is headquartered in Andover, Massachusetts, and has more than 20 locations worldwide. To learn more, visit mrcy.com. (Nasdaq: MRCY)

Investors and others should note that we announce material financial information using our website (www.mrcy.com), SEC filings, press releases, public conference calls, webcasts, and social media, including X (X.com/mrcy) and LinkedIn (www.linkedin.com/company/mercury-systems). Therefore, we encourage investors and others interested in Mercury to review the information we post on the social media and other communication channels listed on our website.

Forward-Looking Safe Harbor Statement
This press release contains certain forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including those relating to the Company's focus on enhanced execution of the Company's strategic plan. You can identify these statements by the words “may,” “will,” “could,” “should,” “would,” “plans,” “expects,” “anticipates,” “continue,” “estimate,” “project,” “intend,” “likely,” “forecast,” “probable,” “potential,” and similar expressions. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. Such risks and uncertainties include, but are not limited to, continued funding of defense programs, the timing and amounts of such funding, general economic and business conditions, including unforeseen weakness in the Company’s markets, effects of any U.S. federal government shutdown or extended continuing resolution, effects of increasingly volatile geopolitical events and regional conflicts, competition, changes in technology and methods of marketing, delays in or cost increases related to completing development, engineering and manufacturing programs, changes in customer order patterns, changes in product mix, continued success in technological advances and delivering technological innovations, changes in, or in the U.S. government’s interpretation of, federal export control or procurement rules and regulations, including tariffs, changes in, or in the interpretation or enforcement of, environmental rules and regulations, market acceptance of the Company's products, shortages in or delays in receiving components, supply chain delays or volatility for critical components, production delays or unanticipated expenses including due to quality issues or manufacturing execution issues, failure to meet contractual performance specifications, adherence to required manufacturing standards, capacity underutilization, increases in scrap or inventory write-offs, failure to achieve or maintain manufacturing quality certifications, such as AS9100, failure to achieve or maintain qualified business systems, such as those required by the DFARS, adverse finding in government audits or investigations, the impact of supply chain disruption, inflation and labor shortages, among other things, on program execution and the resulting effect on customer satisfaction, inability to fully realize the expected benefits from acquisitions, restructurings, and operational efficiency initiatives or delays in realizing such benefits, challenges in integrating acquired businesses and achieving anticipated synergies, effects of shareholder activism, increases in interest rates, changes to industrial security and cyber-security regulations and requirements and impacts from any cyber or insider threat events, including risks from heightened, persistent, and increasingly sophisticated nation-state level cyberattacks and emerging threats associated with agentic AI-enabled cyber tools, changes in tax rates or tax regulations, changes to interest rate swaps or other cash flow hedging arrangements, changes to generally accepted accounting principles, difficulties in retaining key employees and customers, litigation, including the federal securities class action lawsuit and related claims, unanticipated costs under fixed-price service and system integration engagements, and various other factors beyond our control. These risks and uncertainties also include such additional risk factors as are discussed in the Company's filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended June 27, 2025 and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The Company cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.

Contact:
Tyler Hojo, CFA, Vice President of Investor Relations
Mercury Systems, Inc.
978-967-3676

Mercury Systems and Innovation That Matters are registered trademarks of Mercury Systems, Inc. Other product and company names mentioned may be trademarks and/or registered trademarks of their respective holders.

   MERCURY SYSTEMS, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands)
       March 27, June 27, 2026 2025      Assets     Current assets:     Cash and cash equivalents$331,800  $309,099 Accounts receivable, net 95,547   109,588 Unbilled receivables and costs in excess of billings, net 269,498   278,475 Inventory 361,693   332,920 Prepaid income taxes 1,294   457 Prepaid expenses and other current assets 56,899   27,639 Total current assets 1,116,731   1,058,178       Property and equipment, net 102,592   101,440 Goodwill 942,614   938,093 Intangible assets, net 185,210   210,611 Operating lease right-of-use assets, net 50,094   52,264 Deferred tax asset 75,964   69,016 Other non-current assets 8,082   5,162 Total assets$2,481,287  $2,434,764       Liabilities and Shareholders’ Equity     Current liabilities:     Accounts payable$104,066  $79,116 Accrued expenses 69,059   35,264 Due to factoring facility 14,107   7,879 Accrued compensation 36,952   51,321 Deferred revenues and customer advances 126,312   126,797 Total current liabilities 350,496   300,377       Income taxes payable 4,046   4,046 Long-term debt 591,500   591,500 Operating lease liabilities 48,343   52,738 Other non-current liabilities 9,230   12,642 Total liabilities 1,003,615   961,303       Shareholders’ equity:     Preferred stock —   — Common stock 595   590 Additional paid-in capital 1,314,770   1,287,478 Retained earnings 151,424   181,895 Accumulated other comprehensive income 10,883   3,498 Total shareholders’ equity 1,477,672   1,473,461 Total liabilities and shareholders’ equity$2,481,287  $2,434,764          MERCURY SYSTEMS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
  Third Quarters Ended Nine Months Ended March 27, 2026 March 28, 2025 March 27, 2026 March 28, 2025Net revenues$235,759  $211,358  $693,840  $638,914 Cost of revenues(1) 166,709   154,248   501,258   469,188 Gross margin 69,050   57,110   192,582   169,726         Operating expenses:       Selling, general and administrative(1) 39,138   43,044   127,183   116,698 Research and development(1) 15,014   15,983   43,579   55,734 Amortization of intangible assets 9,561   10,185   29,514   32,574 Restructuring and other charges (48)  4,931   5,591   7,231 Acquisition costs and other related expenses 155   311   900   666 Total operating expenses 63,820   74,454   206,767   212,903         Income (loss) from operations 5,230   (17,344)  (14,185)  (43,177)        Interest income 2,507   1,290   6,182   2,240 Interest expense (7,331)  (8,068)  (23,066)  (25,404)Other (expense) income, net (3,093)  2,304   (5,613)  (2,900)        Loss before income tax provision (benefit) (2,687)  (21,818)  (36,682)  (69,241)Income tax provision (benefit) 174   (2,648)  (6,211)  (14,967)Net loss$(2,861) $(19,170) $(30,471) $(54,274)        Basic net loss per share$(0.04) $(0.33) $(0.51) $(0.93)        Diluted net loss per share$(0.04) $(0.33) $(0.51) $(0.93)        Weighted-average shares outstanding:       Basic 59,422   58,749   59,386   58,614 Diluted 59,422   58,749   59,386   58,614         (1) Includes stock-based compensation expense, allocated as follows:Cost of revenues$950  $813  $4,573  $759 Selling, general and administrative$6,556  $6,228  $19,878  $17,156 Research and development$1,543  $1,507  $4,765  $4,687                  MERCURY SYSTEMS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)
         Third Quarters Ended Nine Months Ended March 27, 2026 March 28, 2025 March 27, 2026 March 28, 2025Cash flows from operating activities:       Net loss$(2,861) $(19,170) $(30,471) $(54,274)Depreciation and amortization 17,956   19,916   55,169   62,058 Other non-cash items, net 12,335   8,989   37,490   19,674 Changes in operating assets and liabilities (20,988)  20,239   (1,953)  73,318         Net cash provided by operating activities 6,442   29,974   60,235   100,776         Cash flows from investing activities:       Purchases of property and equipment (8,263)  (5,914)  (20,713)  (15,705)Acquisition of assets and businesses, net of cash acquired (1,415)  —   (1,415)  — Other investing activities —   2,700   —   4,600         Net cash used in investing activities (9,678)  (3,214)  (22,128)  (11,105)        Cash flows from financing activities:       Proceeds from employee stock plans —   —   2,728   1,492 Payments for retirement of common stock —   —   (15,001)  — Payments of deferred financing and offering costs —   —   (3,156)  (2,249)        Net cash used in financing activities —   —   (15,429)  (757)        Effect of exchange rate changes on cash and cash equivalents 46   497   23   387         Net (decrease) increase in cash and cash equivalents (3,190)  27,257   22,701   89,301         Cash and cash equivalents at beginning of period 334,990   242,565   309,099   180,521         Cash and cash equivalents at end of period$331,800  $269,822  $331,800  $269,822                  UNAUDITED SUPPLEMENTAL INFORMATION RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(In thousands, except per share data)

Adjusted EBITDA, a non-GAAP measure for reporting financial performance, excludes the impact of certain items and, therefore, has not been calculated in accordance with GAAP. Management believes that exclusion of these items assists in providing a more complete understanding of the Company’s underlying results and trends, and management uses these measures along with the corresponding GAAP financial measures to manage the Company’s business, to evaluate its performance compared to prior periods and the marketplace, and to establish operational goals. The adjustments to calculate this non-GAAP financial measure, and the basis for such adjustments, are outlined below:

Other non-operating adjustments. The Company records other non-operating adjustments such as gains or losses on foreign currency remeasurement, investments and fixed asset sales or disposals among other adjustments. These adjustments may vary from period to period without any direct correlation to underlying operating performance.

Interest income and expense. The Company receives interest income on investments and incurs interest expense on loans, financing leases and other financing arrangements. These amounts may vary from period to period due to changes in cash and debt balances and interest rates driven by general market conditions or other circumstances which may be outside of the normal course of the Company’s operations.

Income taxes. The Company’s GAAP tax expense can fluctuate materially from period to period due to tax adjustments that are not directly related to underlying operating performance or to the current period of operations.

Depreciation. The Company incurs depreciation expense related to capital assets purchased to support the ongoing operations of the business. These assets are recorded at cost or fair value and are depreciated using the straight-line method over the useful life of the asset. Purchases of such assets may vary significantly from period to period and without any direct correlation to underlying operating performance.

Amortization of intangible assets. The Company incurs amortization of intangible assets primarily as a result of acquired intangible assets such as backlog, customer relationships and completed technologies but also due to licenses, patents and other arrangements. These intangible assets are valued at the time of acquisition or upon receipt of right to use the asset, amortized over the requisite life and generally cannot be changed or influenced by management after acquisition.

Restructuring and other charges. The Company incurs restructuring and other charges in connection with management’s decisions to undertake certain actions to realign operating expenses through workforce reductions and the closure of certain Company facilities, businesses and lines of business. The Company’s adjustments reflected in restructuring and other charges are typically related to acquisitions and organizational redesign programs initiated as part of discrete post-acquisition integration activities. Management believes these items are non-routine and may not be indicative of ongoing operating results.

Impairment of long-lived assets. The Company incurs impairment charges of long-lived assets based on events that may or may not be within the control of management. Management believes these items are outside the normal operations of the Company’s business and are not indicative of ongoing operating results.

Acquisition, financing and other third party costs. The Company incurs transaction costs related to acquisition and potential acquisition opportunities, such as legal, accounting, and other third party advisory fees. The Company may also incur third party costs, such as legal, banking, communications, proxy solicitation, and other third party advisory fees in connection with engagements by activist investors or unsolicited acquisition offers. Although the Company may incur such third party costs and other related charges and adjustments, it is not indicative that any transaction will be consummated. Additionally, the Company incurs unused revolver and bank fees associated with maintaining its credit facility as well as non-cash financing expenses associated with obtaining its credit facility. Management believes these items are outside the normal operations of the Company’s business and are not indicative of ongoing operating results.

Fair value adjustments from purchase accounting. As a result of applying purchase accounting rules to acquired assets and liabilities, certain fair value adjustments are recorded in the opening balance sheet of acquired companies. These adjustments are then reflected in the Company’s income statements in periods subsequent to the acquisition. In addition, the impact of any changes to originally recorded contingent consideration amounts are reflected in the income statements in the period of the change. Management believes these items are outside the normal operations of the Company and are not indicative of ongoing operating results.

Litigation and settlement income and expense. The Company periodically receives income and incurs expenses related to pending claims and litigation and associated legal fees and potential case settlements and/or judgments. Although the Company may incur such costs and other related charges and adjustments, it is not indicative of any particular outcome until the matter is fully resolved. Management believes these items are outside the normal operations of the Company’s business, often occur in periods other than the period of activity, and are not indicative of ongoing operating results. The Company periodically receives warranty claims from customers and makes warranty claims towards its vendors and supply chain. Management believes the expenses and gains associated with these recurring warranty items are within the normal operations and operating cycle of the Company’s business. Therefore, management deems no adjustments are necessary unless under extraordinary circumstances.

Stock-based and other non-cash compensation expense. The Company incurs expense related to stock-based compensation included in its GAAP presentation of cost of revenues, selling, general and administrative expense and research and development expense. The Company also incurs non-cash based compensation in the form of pension related expenses and matching contributions to its defined contribution plan. Although stock-based and other non-cash compensation is an expense of the Company and viewed as a form of compensation, these expenses vary in amount from period to period, and are affected by market forces that are difficult to predict and are not within the control of management, such as the market price and volatility of the Company’s shares, risk-free interest rates and the expected term and forfeiture rates of the awards, as well as pension actuarial assumptions. Management believes that exclusion of these expenses allows comparisons of operating results to those of other companies, both public, private or foreign, that disclose non-GAAP financial measures that exclude stock-based compensation and other non-cash compensation.

Mercury uses adjusted EBITDA as an important indicator of the operating performance of its business. Management excludes the above-described items from its internal forecasts and models when establishing internal operating budgets, supplementing the financial results and forecasts reported to the Company’s board of directors, determining a portion of bonus compensation for executive officers and other key employees based on operating performance, evaluating short-term and long-term operating trends in the Company’s operations, and allocating resources to various initiatives and operational requirements. The Company believes that adjusted EBITDA permits a comparative assessment of its operating performance, relative to its performance based on its GAAP results, while isolating the effects of charges that may vary from period to period without direct correlation to underlying operating performance. The Company believes that these non-GAAP financial adjustments are useful to investors because they allow investors to evaluate the effectiveness of the methodology and information used by management in its financial and operational decision-making. The Company believes that trends in its adjusted EBITDA are valuable indicators of its operating performance.

Adjusted EBITDA 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 expenses similar to the adjusted EBITDA financial adjustments described above, and investors should not infer from the Company’s presentation of this non-GAAP financial measure that these costs are unusual, infrequent or non-recurring.

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

 Third Quarters Ended Nine Months Ended March 27, 2026 March 28, 2025 March 27, 2026 March 28, 2025Net loss$(2,861) $(19,170) $(30,471) $(54,274)Other non-operating adjustments, net 2,445   (3,911)  2,894   (3,097)Interest expense, net 4,824   6,778   16,884   23,164 Income tax provision (benefit) 174   (2,648)  (6,211)  (14,967)Depreciation 8,395   9,731   25,655   29,484 Amortization of intangible assets 9,561   10,185   29,514   32,574 Restructuring and other charges (48)  4,931   5,591   7,231 Impairment of long-lived asset —   —   —   — Acquisition, financing and other third party costs 581   1,072   3,412   4,512 Fair value adjustments from purchase accounting 132   131   394   486 Litigation and settlement expense, net 2,120   5,467   11,631   8,948 Stock-based and other non-cash compensation expense 10,768   12,124   42,381   34,108 Adjusted EBITDA$36,091  $24,690  $101,674  $68,169                  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.

 Third Quarters Ended Nine Months Ended March 27, 2026 March 28, 2025 March 27, 2026 March 28, 2025Net cash provided by operating activities$6,442  $29,974  $60,235  $100,776 Purchases of property and equipment (8,263)  (5,914)  (20,713)  (15,705)Free cash flow$(1,821) $24,060  $39,522  $85,071                  Adjusted income and adjusted earnings per share (“adjusted EPS”) are non-GAAP measures for reporting financial performance, exclude the impact of certain items and, therefore, have not been calculated in accordance with GAAP. Management believes that exclusion of these items assists in providing a more complete understanding of the Company’s underlying results and trends and allows for comparability with its peer company index and industry. These non-GAAP financial measures may not be computed in the same manner as similarly titled measures used by other companies. The Company uses these measures along with the corresponding GAAP financial measures to manage the Company’s business and to evaluate its performance compared to prior periods and the marketplace. The Company defines adjusted income as income before other non-operating adjustments, amortization of intangible assets, restructuring and other charges, impairment of long-lived assets, acquisition, financing and other third party costs, fair value adjustments from purchase accounting, litigation and settlement income and expense, and stock-based and other non-cash compensation expense. The impact to income taxes includes the impact to the effective tax rate, current tax provision and deferred tax provision(1). Adjusted EPS expresses adjusted income on a per share basis using weighted average diluted shares outstanding.  

The following tables reconcile the most directly comparable GAAP financial measures to the non-GAAP financial measures.

 Third Quarters Ended March 27, 2026 March 28, 2025Net loss and loss per share$(2,861) $(0.04) $(19,170) $(0.33)Other non-operating adjustments, net 2,445     (3,911)  Amortization of intangible assets 9,561     10,185   Restructuring and other charges (48)    4,931   Impairment of long-lived assets —     —   Acquisition, financing and other third party costs 581     1,072   Fair value adjustments from purchase accounting 132     131   Litigation and settlement expense, net 2,120     5,467   Stock-based and other non-cash compensation expense 10,768     12,124   Impact to income taxes(1) (6,279)    (7,240)  Adjusted income and adjusted earnings per share(2)$16,419  $0.27  $3,589  $0.06         Diluted weighted-average shares outstanding   60,776     59,367         (1) Impact to income taxes is calculated by recasting income before income taxes to include the items involved in determining adjusted income and recalculating the income tax provision using this adjusted income from operations before income taxes. The recalculation also adjusts for any discrete tax provision or benefit related to the items.
(2) Adjusted earnings per share is calculated using diluted shares whereas Net loss per share is calculated using basic shares. There was a $0.01 impact and no impact to the calculation of adjusted earnings per share as a result of this for the third quarters ended March 27, 2026 and March 28, 2025, respectively.   Nine Months Ended March 27, 2026 March 28, 2025Net loss and loss per share$(30,471) $(0.51) $(54,274) $(0.93)Other non-operating adjustments, net 2,894     (3,097)  Amortization of intangible assets 29,514     32,574   Restructuring and other charges 5,591     7,231   Impairment of long-lived assets —     —   Acquisition, financing and other third party costs 3,412     4,512   Fair value adjustments from purchase accounting 394     486   Litigation and settlement expense, net 11,631     8,948   Stock-based and other non-cash compensation expense 42,381     34,108   Impact to income taxes(1) (23,930)    (20,515)  Adjusted income and adjusted earnings per share(2)$41,416  $0.68  $9,973  $0.17         Diluted weighted-average shares outstanding   60,525     59,024         (1) Impact to income taxes is calculated by recasting income before income taxes to include the items involved in determining adjusted income and recalculating the income tax provision using this adjusted income from operations before income taxes. The recalculation also adjusts for any discrete tax provision or benefit related to the items.
(2) Adjusted earnings per share is calculated using diluted shares whereas Net loss per share is calculated using basic shares. There was no impact and a $0.01 impact to the calculation of adjusted earnings per share as a result of this for the nine months ended March 27, 2026 and March 28, 2025, respectively. 

For the quarter ended March 2026, Mercury Systems (MRCY - Free Report) reported revenue of $235.76 million, up 11.5% over the same period last year. EPS came in at $0.27, compared to $0.06 in the year-ago quarter.

The reported revenue represents a surprise of +12.06% over the Zacks Consensus Estimate of $210.38 million. With the consensus EPS estimate being $0.06, the EPS surprise was +350%.

While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.

As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.

Here is how Mercury Systems performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

Net Revenue- Sensor & Effector- Radar: $44.84 million versus the two-analyst average estimate of $36.23 million. The reported number represents a year-over-year change of +24.8%.Net Revenue- Sensor & Effector- Electronic Warfare: $30 million compared to the $20.51 million average estimate based on two analysts. The reported number represents a change of +40.1% year over year.Net Revenue- Other: $31.82 million compared to the $32.51 million average estimate based on two analysts. The reported number represents a change of -9.6% year over year.Net Revenue- Sensor & Effector- Total: $114.16 million versus the two-analyst average estimate of $78.85 million. The reported number represents a year-over-year change of +43.8%.Net Revenue- C4I: $89.78 million versus $95.22 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -7.2% change.Net Revenue- Sensor & Effector- Other Sensor & Effector: $39.32 million versus the two-analyst average estimate of $22.12 million. The reported number represents a year-over-year change of +78.4%.View all Key Company Metrics for Mercury Systems here>>>

Shares of Mercury Systems have returned +3.7% over the past month versus the Zacks S&P 500 composite's +9.5% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.

Key Takeaways Mercury Systems fiscal Q3 EPS jumped to 27 cents, beating estimates and rising sharply year over year.MRCY posted record $348M bookings, up 73.7% Y/Y, with backlog hitting $1.6B and strong production demand.MRCY raised fiscal 2026 outlook, citing stronger revenue growth, improved margins and robust pipeline. Mercury Systems (MRCY - Free Report) reported adjusted earnings of 27 cents per share for the third quarter of fiscal 2026, which beat the Zacks Consensus Estimate by 350%. The bottom line increased significantly year over year from 6 cents in the prior-year quarter.

In the fiscal third quarter, MRCY reported revenues of $236 million, reflecting an 11.5% organic year-over-year increase and surpassing the Zacks Consensus Estimate by 12.06%.

Fiscal third-quarter results were ahead of management's expectations, with significant year-over-year growth in backlog, revenues and adjusted EBITDA, driven by strong demand signals and solid execution.

MRCY's Q3 DetailsTotal bookings for the third quarter of fiscal 2026 were a record $348 million, up 73.7% year over year, yielding a book-to-bill ratio of 1.48. As a defense technology company focused on mission-critical processing systems, Mercury Systems operates primarily as a single-segment business serving aerospace and defense markets. Third-quarter bookings were driven largely by follow-on production orders, reflecting the company's transition toward higher-rate production. The largest bookings spanned several missile, C4I and space programs, and the quarter featured the strongest bookings of the fiscal year for solutions leveraging Mercury's Common Processing Architecture. The company also secured a follow-on development award on a strategic program with potential to proliferate across multiple platforms.

MRCY achieved a record total backlog of approximately $1.6 billion as of March 27, 2026, up 17.9% (an approximately $240 million increase) year over year. Of the total backlog, $891 million represents orders expected to be recognized as revenues within the next 12 months. The 12-month backlog also increased 10.3% sequentially. Trailing 12-month bookings reached a record $1.23 billion.

MRCY's Q3 Operating DetailsThird-quarter fiscal 2026 adjusted EBITDA was $36 million, up 46.2% from $25 million in the third quarter of fiscal 2025. The adjusted EBITDA margin was 15.3%, expanding 360 basis points year over year. GAAP net loss and diluted loss per share for the third quarter of fiscal 2026 were $3 million and 4 cents, respectively, compared with GAAP net loss and loss per share of $19 million and 33 cents, respectively, for the third quarter of fiscal 2025.

MRCY’s Q3 Balance Sheet & Cash FlowAs of March 27, 2026, cash and cash equivalents totaled $331.8 million compared with $335 million as of Dec. 26, 2025. Long-term debt was $591.5 million, unchanged from the prior quarter. In the reported quarter, cash flow from operations was $6.4 million compared with $30 million in the third quarter of fiscal 2025. Free cash outflow was $2 million in the third quarter of fiscal 2026 compared with free cash flow of $24 million in the prior-year quarter. The fiscal third-quarter free cash outflow meaningfully outperformed the company's expectations, which had reflected the pull-forward of approximately $30 million of cash receipts into the second quarter.

MRCY Completes SolderMask AcquisitionDuring the quarter, Mercury Systems completed the acquisition of SolderMask, Inc., a specialized manufacturing process technology provider with unique expertise in dry-film solder mask applications leveraged across more than 20 Mercury programs, including the U.S. Army's Lower Tier Air and Missile Defense Sensor program and a number of Common Processing Architecture programs. The transaction closed on March 3, 2026, with Mercury acquiring SolderMask's assets, intellectual property and five-person workforce. Operations continue at the Huntington Beach, CA, facility, while a parallel manufacturing process line is being established at Mercury's Phoenix facility to enable greater throughput as key programs ramp into higher-rate production.

MRCY Raises Fiscal 2026 OutlookFollowing its fiscal third-quarter outperformance, Mercury raised its full-year fiscal 2026 outlook. The company now expects fiscal 2026 annual revenue growth approaching mid single-digits, up from the prior outlook of low single-digits, supported by efforts to stage material earlier and better align the supply base. Full-year adjusted EBITDA margin is now expected in the mid-teens, up from approaching mid-teens previously. Free cash flow is expected to be positive in the fourth quarter of fiscal 2026. Management noted that fourth-quarter bookings have the potential to be the strongest of the fiscal year, based on a pipeline of opportunities more robust than in the third quarter — a potential indicator of increased top-line growth and further margin expansion beyond fiscal 2026. The outlook excludes any upside from domestic priorities, such as the Golden Dome or increased global defense budgets.

MRCY Zacks Rank & Stocks to ConsiderMercury Systems currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Computer and Technology sector include Analog Devices (ADI - Free Report) , Applied Materials (AMAT - Free Report) and Audioeye (AEYE - Free Report) , each carrying a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Analog Devices have gained 46.4% in the year-to-date period. Analog Devices is set to report the second quarter of fiscal 2026 results on May 20.

Applied Materials shares have gained 52.3% in the year-to-date period. Applied Materials is scheduled to report its second-quarter 2026 results on May 14.

Audioeye shares have lost 21.6% in the year-to-date period. Audioeye is set to report its first-quarter 2026 results on May 13.

On May 28, 2026, Mercury Systems Inc (MRCY) shares rose 11.3% to a current price of $108.11. The stock has shown impressive price performance over the past year

Mercury Systems Inc (NASDAQ:MRCY) has received a multi-year contract to deliver 1,000 of its RTBX06 BuiltSECURE servers to Blue Raven, a leading distributor in the defense industry, marking the largest production order to date for the aerospace and defense electronics company's Common Processing Architecture.

The Andover, Massachusetts-based company said the contract covers a multi-year delivery schedule, providing forward visibility into a production stream of 1,000 units of the RTBX06 platform.

Mercury described Blue Raven as a leading distributor in the defense industry but did not disclose end customer identities, dollar value, or the specific platforms onto which the servers will be integrated.

The order is the largest production commitment to date for Mercury's Common Processing Architecture, a reusable hardware platform designed to be deployed across multiple defense and aerospace applications. A common architecture allows multiple programs to draw from a shared hardware baseline, which can reduce per-unit costs and shorten certification timelines for customers that adopt it.

For Mercury, the order validates the Common Processing Architecture strategy as a route to scaling production runs beyond program-specific bespoke builds. Multi-year contracts of this size support production planning and supply chain commitments, particularly in defense electronics where component lead times and certification cycles are long.

The BuiltSECURE branding refers to Mercury's family of secure processing products designed for trusted compute applications in defense and aerospace systems. The RTBX06 sits within that family as a member of the company's processing server line. Under the agreement, Mercury will produce, configure, and support the servers, while Blue Raven will handle global resale and distribution.

Mercury Systems is a global aerospace and defense electronics company, supplying secure processing systems and components to prime contractors and defense distributors, including its RTBX06 BuiltSECURE servers within a Common Processing Architecture portfolio.

Shares of Mercury Systems gained 3.5% on Friday morning.

Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.

We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.

Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.

The Zacks Earnings ESP, ExplainedThe Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information.

The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.

In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest.

Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank.

Should You Consider Idexx Laboratories?The final step today is to look at a stock that meets our ESP qualifications. Idexx Laboratories (IDXX - Free Report) earns a #3 (Hold) five days from its next quarterly earnings release on May 5, 2026, and its Most Accurate Estimate comes in at $3.45 a share.

By taking the percentage difference between the $3.45 Most Accurate Estimate and the $3.42 Zacks Consensus Estimate, Idexx Laboratories has an Earnings ESP of +0.77%. Investors should also know that IDXX is one of a large group of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

IDXX is one of just a large database of Medical stocks with positive ESPs. Another solid-looking stock is HCA Healthcare (HCA - Free Report) .

HCA Healthcare is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on July 24, 2026. HCA's Most Accurate Estimate sits at $7.39 a share 85 days from its next earnings release.

The Zacks Consensus Estimate for HCA Healthcare is $7.38, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +0.10%.

IDXX and HCA's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.

Find Stocks to Buy or Sell Before They're ReportedUse the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>

Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.

Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.

Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.

The Zacks Earnings ESP, ExplainedThe Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.

With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.

In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest.

Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.

Should You Consider Catalyst Pharmaceutical?The final step today is to look at a stock that meets our ESP qualifications. Catalyst Pharmaceutical (CPRX - Free Report) earns a #2 (Buy) seven days from its next quarterly earnings release on May 11, 2026, and its Most Accurate Estimate comes in at $0.69 a share.

By taking the percentage difference between the $0.69 Most Accurate Estimate and the $0.64 Zacks Consensus Estimate, Catalyst Pharmaceutical has an Earnings ESP of +7.81%. Investors should also know that CPRX is one of a large group of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

CPRX is just one of a large group of Medical stocks with a positive ESP figure. Idexx Laboratories (IDXX - Free Report) is another qualifying stock you may want to consider.

Slated to report earnings on May 5, 2026, Idexx Laboratories holds a #3 (Hold) ranking on the Zacks Rank, and its Most Accurate Estimate is $3.45 a share one day from its next quarterly update.

For Idexx Laboratories, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $3.42 is +0.77%.

CPRX and IDXX's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.

Find Stocks to Buy or Sell Before They're ReportedUse the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>

WESTBROOK, Maine--(BUSINESS WIRE)--IDEXX Laboratories, Inc. (NASDAQ: IDXX), a global leader in pet healthcare innovation, today announced first quarter results.

First Quarter Results

The Company reports revenues of $1,141 million for the first quarter of 2026, an increase of 14% as reported and 11% organic, driven by Companion Animal Group ("CAG") growth of 15% as reported and 12% organic.

First quarter earnings per diluted share (“EPS”) were $3.47, an increase of 17% as reported and 15% on a comparable basis. First quarter EPS included a $0.05 per share impact from a loss on an equity investment, $0.09 per share in tax benefits from share-based compensation, and $0.14 per share benefit from currency changes.

“Excellent commercial execution delivered exceptional first quarter results and positions IDEXX for continued strength through 2026,” said Jay Mazelsky, President and Chief Executive Officer. “IDEXX Cancer Dx™ platform momentum continues to build with the recent International launch and growing adoption in the U.S., and our IDEXX inVue Dx™ roll-out further advances our innovation-driven growth strategy. Initial customer response to the controlled launch of IDEXX inVue Dx FNA has been very encouraging and supports broadening access over the remainder of the year. As I transition from the CEO role, IDEXX remains well-positioned for continued success, and I look forward to continuing to work with Mike Erickson to drive long-term sustained growth in the business.”

First Quarter Performance Highlights

Companion Animal Group (“CAG”)

CAG revenue growth was led by CAG Diagnostics recurring revenue growth of 14% as reported and 11% organic, including 21% reported and 12% organic gains in International regions, and 11% reported and organic growth in the U.S., outpacing sector growth levels. U.S. growth was aided by a modest easing of clinical visit pressures and increased diagnostic frequency.

Additional U.S. companion animal practice key metrics are available in the Q1 2026 Earnings Snapshot accessible on the IDEXX website, www.idexx.com/investors.

Sustained commercial execution - including net customer gains, solid volume gains, benefits from IDEXX innovation, and expansion of the premium instrument installed base - drove double-digit CAG Diagnostics recurring revenue growth.

IDEXX VetLab™ consumables generated 20% reported and 15% organic revenue growth, supported by testing utilization gains, including increasing benefit from recent product launches, 12% growth in IDEXX's global premium instrument installed base, and net price gains. Reference laboratory diagnostic and consulting services generated 12% reported and 10% organic revenue growth, with benefits from higher testing volumes and net new customer gains. Rapid assay products revenues increased 1% as reported and were flat on an organic basis, driven by net price benefits with volume continuing to be impacted from the growing adoption of the Catalyst™ Pancreatic Lipase Test, which continues to shift some testing across modalities. CAG Diagnostics capital instrument revenues expanded 33% as reported and 28% on an organic basis, led by strong quarterly instrument placements, including benefits from 1,100 IDEXX inVue Dx placements.

Veterinary software, services and diagnostic imaging systems revenues grew 12% on a reported and 11% on an organic basis for the quarter, led by cloud-native software growth and continued installed base expansion, including record diagnostic imaging system installations.

Water

Water revenues grew 11% as reported and 7% organic for the quarter, reflecting solid organic growth in the U.S. and Latin America.

Livestock, Poultry and Dairy (“LPD”)

LPD revenues increased 14% as reported and 7% organic for the quarter, led by strong growth across core product categories.

Gross Profit and Operating Profit

Gross profit increased 16% as reported and 13% on a comparable basis. Gross margin of 63.4% increased 90 basis points as reported and comparable, supported by strong recurring revenue volume gains, operational productivity initiatives, and net price realization, which was offset by inflationary impacts and investments.

Operating margin was 31.8% for the quarter, higher than the prior year period by 10 basis points as reported and by 100 basis points on a comparable basis. Operating margin results reflect a 17% operating expense increase as reported and 11% growth on a comparable basis, including a $5 million loss on an equity investment in the current period and lapping a ~$9 million prior year benefit from a discrete expense accrual adjustment related to a concluded litigation matter. Operating expense growth was driven by investments in commercial capabilities, higher R&D spend related to advancing the Company's innovation agenda, further investment in the Veterinary Software and Services business, and higher employee benefit and incentive costs.

2026 Growth and Financial Performance Outlook

The Company is updating its full year revenue growth guidance range to $4,675 million - $4,760 million, or reported growth of 8.6% - 10.6%, an increase of $42 million at midpoint. This reflects a positive adjustment of ~1% at midpoint to full year estimates for reported revenue growth, reflecting strong CAG Diagnostics recurring revenue performance and outlook for modestly improving clinical visit trends. The Company is increasing its outlook for organic revenue growth to 7.7% - 9.7%, an increase of 0.7% at midpoint, reflecting the operational benefits highlighted above.

The Company increased its full year reported operating margin outlook to 32.1% - 32.5%, bringing the projected full year operating profit margin expansion to 50 - 90 basis points as reported and on a comparable basis. This outlook benefits from strong first quarter operating performance, while advancing strategic investment priorities.

The Company updated its EPS outlook range to $14.45 - $14.90, reflecting increased reported growth of 11% - 14% and 11% - 15% comparable growth. At midpoint this reflects benefits of $0.13 per share from operational performance and $0.05 from updated estimates for foreign exchange impacts, offset by $0.05 impact from a loss on an equity investment.

The following table provides the Company's updated outlook for annual key financial metrics in 2026 with a comparison to the prior outlook:

Amounts in millions except per share data and percentages

2026 Growth and Financial Performance Outlook

Updated

Prior

Revenue

$4,675

-

$4,760

$4,632

-

$4,720

Reported growth

8.6%

-

10.6%

7.6%

-

9.6%

Organic growth

7.7%

-

9.7%

7.0%

-

9.0%

CAG Diagnostics Recurring Revenue Growth

Reported growth

9.6%

-

11.6%

8.6%

-

10.6%

Organic growth

8.7%

-

10.7%

8.0%

-

10.0%

Operating Margin

32.1%

-

32.5%

32.0%

-

32.5%

Operating margin expansion

50 bps

-

90 bps

40 bps

-

90 bps

Comparable margin expansion

50 bps

-

90 bps

30 bps

-

80 bps

EPS

$14.45

-

$14.90

$14.29

-

$14.80

Reported growth

11%

-

14%

9%

-

13%

Comparable growth

11%

-

15%

10%

-

14%

Other Key Metrics

Net interest expense

~ $34

~ $34

Share-based compensation tax benefit

~ $15

~ $15

Share-based compensation tax rate benefit

~ 1.0%

~ 1.0%

Effective tax rate

~ 21.4%

~ 21.3%

Share-based compensation EPS impact

~ $0.19

~ $0.19

Reduction in average shares outstanding

1%

-

2%

1%

-

2%

Operating Cash Flow (% of Net Income)

105%

-

115%

105%

-

115%

Free Cash Flow (% of Net Income)

85%

-

95%

85%

-

95%

Capital Expenditures

~ $180

~ $180

The following table outlines estimates of foreign currency exchange rate impacts, net of foreign currency hedging transactions, and foreign currency exchange rate assumptions reflected in the above financial performance outlook for 2026.

Estimated Foreign Currency Exchange Rate Impacts

2026

Revenue growth rate impact

~0.9%

CAG Diagnostics recurring revenue growth rate impact

~0.9%

Operating margin growth impact

~ 30 bps

EPS impact

~ $0.27

EPS growth impact

~ 2%

Go-Forward Foreign Currency Exchange Rate Assumptions

2026

In U.S. dollars

euro

$1.16

British pound

$1.33

Canadian dollar

$0.72

Australian dollar

$0.70

Relative to the U.S. dollar

Japanese yen

¥160

Chinese renminbi

¥6.90

Brazilian real

R$5.15

Conference Call and Webcast Information

IDEXX Laboratories, Inc. will host a conference call today at 8:30 a.m. (ET) to discuss its first quarter 2026 results and management’s outlook. Individuals can access a live webcast of the conference call through a link on the IDEXX website, www.idexx.com/investors. An archived edition of the webcast will be available after 1:00 p.m. (ET) via the same link and will remain available for one year. The live call also will be accessible by telephone. To listen to the live conference call, please dial 1-800-330-6730 or 1-213-279-1575 and reference passcode 492760.

2026 Annual Meeting of Shareholders

IDEXX Laboratories, Inc. will hold its 2026 Annual Meeting of Shareholders (the “2026 Annual Meeting”) on Tuesday, May 12, 2026 at 10:00 a.m. (ET). The 2026 Annual Meeting will be a virtual meeting via a live audio webcast at www.virtualshareholdermeeting.com/IDXX2026. The online pre-meeting forum can be accessed before the 2026 Annual Meeting at www.proxyvote.com. At this online pre-meeting forum, you can submit questions in writing in advance of the 2026 Annual Meeting, vote, view the Rules of Conduct and Procedures relating to the 2026 Annual Meeting and access copies of the Company's proxy materials and annual report.

Shareholders as of the close of business on March 16, 2026 are entitled to attend the 2026 Annual Meeting, vote their shares electronically and submit questions before and during the live audio webcast. As part of the 2026 Annual Meeting, the Company will answer the questions submitted by our shareholders during a live Q&A session, as time permits. The Company will publish the answer to each question, including those which we are unable to address during the meeting due to time constraints during the 2026 Annual Meeting, on the Company’s Investor Relations website as soon as practicable after the meeting. An archived replay will be available at www.virtualshareholdermeeting.com/IDXX2026 after the conclusion of the 2026 Annual Meeting. Further information on the 2026 Annual Meeting can be found in the Company’s proxy materials.

About IDEXX Laboratories, Inc.

IDEXX is a global leader in pet healthcare innovation. Our diagnostic and software products and services create clarity in the complex, constantly evolving world of veterinary medicine. We support longer, fuller lives for pets by delivering insights and solutions that help the veterinary community around the world make confident decisions—to advance medical care, improve efficiency, and build thriving practices. Our innovations also help ensure the safety of milk and water across the world and maintain the health and well-being of people and livestock. IDEXX Laboratories, Inc. is a member of the S&P 500™ Index. Headquartered in Maine, IDEXX employs approximately 11,000 people and offers solutions and products to customers in more than 175 countries and territories. For more information about IDEXX, visit www.idexx.com.

Note Regarding Forward-Looking Statements

This earnings release and the statements to be made in the accompanying earnings conference call contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements about the Company’s business prospects and estimates of the Company’s financial results for future periods. Forward-looking statements are included above under "2026 Growth and Financial Performance Outlook" and elsewhere and can be identified by the use of words such as "expects", "may", "anticipates", "intends", "would", "will", "plans", "believes", "estimates", "projected", "should", and similar words and expressions. Our forward-looking statements include statements relating to our expectations regarding financial performance; revenue growth (including instrument revenue growth in 2026) and EPS outlooks; operating and free cash flow forecast; projected impact of foreign currency exchange rates and interest rates; projected operating margins and expenses and capital expenditures; projected tax, tax rate and EPS benefits from share-based compensation arrangements; projected effective tax rates, reduction of average shares outstanding and net interest expense; projected impact of tariffs; trends and other factors impacting the pet healthcare industry, including U.S. clinical visits; IDEXX inVue Dx analyzer placements; future IDEXX Cancer Dx testing panel addition; rollout of Fine Needle Aspiration to the IDEXX inVue Dx analyzer and future commercial and menu expansions; and future advancements in artificial intelligence. These statements are intended to provide management's expectations or forecasts of future events as of the date of this earnings release; are based on management's estimates, projections, beliefs, and assumptions as of the date of this earnings release; and are not guarantees of future performance. These forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, among other things, the adverse impact, and the duration, of macroeconomic events, conditions, and uncertainties, such as geopolitical instability (including wars, terrorist attacks, and armed conflicts), general economic uncertainty, changes in U.S. and other countries’ tariff and trade policies, severe weather and other natural conditions, and supply chain challenges on our business, results of operations, liquidity, financial condition, and stock price, as well as the matters described under the headings "Business," "Risk Factors," "Legal Proceedings," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Quantitative and Qualitative Disclosures About Market Risk" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and in the corresponding sections of the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, as well as those described from time to time in the Company’s other filings with the U.S. Securities and Exchange Commission available at www.sec.gov. The Company specifically disclaims any obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

Statement Regarding Non-GAAP Financial Measures

The following defines terms and conventions and provides reconciliations regarding certain measures used in this earnings release and/or the accompanying earnings conference call that are not required by, or presented in accordance with, generally accepted accounting principles in the United States of America ("GAAP"), otherwise referred to as non-GAAP financial measures. To supplement the Company’s consolidated results presented in accordance with GAAP, the Company has disclosed non-GAAP financial measures that exclude or adjust certain items. Management believes these non-GAAP financial measures provide useful supplemental information for its and investors’ evaluation of the Company’s business performance and liquidity and are useful for period-over-period comparisons of the performance of the Company’s business and its liquidity and to the performance and liquidity of our peers. While management believes that these non-GAAP financial measures are useful in evaluating the Company’s business, this information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures reported by other companies.

Constant currency - Constant currency references are non-GAAP financial measures which exclude the impact of changes in foreign currency exchange rates and are consistent with how management evaluates our performance and comparisons with prior and future periods. We estimate the net impacts of currency on our revenue, gross profit, operating profit, and EPS results by restating results to the average exchange rates or exchange rate assumptions for the comparative period, which includes adjusting for the estimated impacts of foreign currency hedging transactions and certain impacts on our effective tax rates. These estimated currency changes impacted first quarter 2026 results as follows: increased gross profit growth by 3.3%, no impact to gross margin expansion, increased operating expense growth by 2.0%, increased operating profit growth by 4.5%, increased operating profit margin growth by 40 basis points, and increased EPS growth by 4.6%. Constant currency revenue growth represents the percentage change in revenue during the applicable period, as compared to the prior year period, excluding the impact of changes in foreign currency exchange rates. See the supplementary analysis of results below for revenue percentage change from currency for the three months ended March 31, 2026 and refer to the 2026 Growth and Financial Performance Outlook section of this earnings release for estimated foreign currency exchange rate impacts on 2026 projections and estimates.

Growth and organic revenue growth - All references to growth and organic growth refer to growth compared to the equivalent prior year period unless specifically noted. Organic revenue growth is a non-GAAP financial measure that represents the percent change in revenue, as compared to the same period for the prior year, net of the impact of changes in foreign currency exchange rates, certain business acquisitions, and divestitures. Management believes that reporting organic revenue growth provides useful information to investors by facilitating easier comparisons of our revenue performance with prior and future periods and to the performance of our peers. Organic revenue growth should be considered in addition to, and not as a replacement of or a superior measure to, revenue growth reported in accordance with GAAP. See the supplementary analysis of results below for a reconciliation of reported revenue growth to organic revenue growth for the three months ended March 31, 2026. Please refer to the constant currency note above for a summary of foreign currency exchange rate impacts. Please refer to the 2026 Growth and Financial Performance Outlook section of this earnings release for estimated full year 2026 organic revenue growth for the Company and CAG Diagnostics recurring revenue growth. The percentage change in revenue resulting from acquisitions represents revenues during the current year period, limited to the initial 12 months from the date of the acquisition, that are directly attributable to business acquisitions. Revenue from acquisitions is expected to have an immaterial impact on projected full year 2026 revenue growth and no impact on CAG Diagnostics recurring revenue growth. Projected second quarter 2026 organic revenue growth for the Company and CAG Diagnostics recurring revenue each reflects adjustment to projected second quarter 2026 organic revenue growth for the Company and CAG Diagnostics recurring revenue, as applicable, for a positive ~60 basis point impact from year-over-year foreign currency exchange rate changes at noted exchange rates; no impact to either of these projected growth measures is expected from acquisitions.

We exclude from organic revenue growth the effect of changes in foreign currency exchange rates because changes in foreign currency exchange rates are not under management’s control, are subject to volatility, and can obscure underlying business trends. We calculate the impact on revenue resulting from changes in foreign currency exchange rates by applying the difference between the weighted average exchange rates during the current year period and the comparable prior year period to foreign currency denominated revenues for the prior year period.

We also exclude from organic revenue growth the effect of certain business acquisitions and divestitures because the nature, size, and number of these transactions can vary dramatically from period to period, and because they either require or generate cash as an inherent consequence of the transaction, and therefore can also obscure underlying business and operating trends. We consider acquisitions to be a business when all three elements of inputs, processes, and outputs are present, consistent with ASU 2017-01, “Business Combinations: (Topic 805) Clarifying the Definition of a Business.” In a business combination, if substantially all the fair value of the assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, we do not consider these assets to be a business. A typical acquisition that we do not consider a business is a customer list asset acquisition, which does not have all elements necessary to operate a business, such as employees or infrastructure. We believe the efforts required to convert and retain these acquired customers are similar in nature to our existing customer base and therefore are included in organic revenue growth.

Comparable growth metrics - Comparable gross profit growth, comparable gross margin gain (or growth), comparable operating expense growth, comparable operating profit growth and comparable operating margin gain (or growth) are non-GAAP financial measures and exclude the impact of changes in foreign currency exchange rates and non-recurring or unusual items (if any). Please refer to the constant currency note above for a summary of foreign currency exchange rate impacts. Management believes that reporting comparable gross profit growth, comparable gross margin gain (or growth), comparable operating expense growth, comparable operating profit growth and comparable operating margin gain (or growth) provides useful information to investors because it enables better period-over-period comparisons of the fundamental financial results by excluding items that vary independent of performance and provides greater transparency to investors regarding key metrics used by management. Comparable gross profit growth, comparable gross margin gain (or growth), comparable operating expense growth, comparable operating profit growth and comparable operating margin gain (or growth) should be considered in addition to, and not as replacements of or superior measures to, gross profit growth, gross margin gain, operating expense growth, operating profit growth and operating margin gain reported in accordance with GAAP.

The reconciliation of these non-GAAP financial measures is as follows:

Three Months Ended

Year-over-Year

March 31,

March 31,

Change

Dollar amounts in thousands

2026

2025

Gross profit and growth (as reported)

$

722,739

$

623,379

16

%

Gross margin and margin gain

63.4

%

62.4

%

90 bps

Less: comparability adjustments

Change from currency

20,471

—

Comparable gross profit and growth

$

702,268

$

623,379

13

%

Comparable gross margin and margin gain

63.3

%

62.4

%

90 bps

Operating expenses and growth (as reported)

$

360,153

$

306,845

17

%

Less: comparability adjustments

Change from currency

6,270

—

Loss on equity investment

5,000

—

Now-concluded litigation matter

—

(8,600

)

Comparable operating expense and growth

$

348,883

$

315,445

11

%

Operating profit and growth (as reported)

$

362,586

$

316,534

15

%

Operating margin and margin gain

31.8

%

31.7

%

10 bps

Less: comparability adjustments

Change from currency

14,201

—

Loss on equity investment

(5,000

)

—

Now-concluded litigation matter

—

8,600

Comparable operating profit and growth

$

353,385

$

307,934

15

%

Comparable operating margin and margin gain

31.8

%

30.8

%

100 bps

Amounts presented may not recalculate due to rounding.

Projected 2026 comparable operating margin expansion outlined in the 2026 Growth and Financial Performance Outlook section of this earnings release reflects the following adjustments: (i) full year 2026 reported operating margin adjusted for $5 million unfavorable impact of loss on an equity investment; and (ii) adjustment to projected 2026 operating margin for a positive impact from year-over-year foreign currency exchange rate changes at noted exchange rates; and (iii) adjustment to 2025 operating margin for positive impact of the approximately $9 million discrete litigation expense accrual adjustment in the first quarter of 2025.

Projected second quarter 2026 comparable operating margin expansion reflects adjustment to projected second quarter 2026 operating margin expansion for a positive ~10 basis point impact from year-over-year foreign currency exchange rate changes at noted exchange rates.

These impacts described above reconcile reported gross profit growth, gross margin gain, operating expense growth, operating profit growth and operating margin gain (including projected 2026 and second quarter 2026 operating margin expansion) to comparable gross profit growth, comparable gross margin gain, comparable operating expense growth, comparable operating profit growth and comparable operating margin gain for the Company.

Comparable EPS growth - Comparable EPS growth is a non-GAAP financial measure that represents the percentage change in earnings per share (diluted) ("EPS") for a measurement period, as compared to the prior base period, net of the impact of changes in foreign currency exchange rates from the prior base period and excluding the tax benefits of share-based compensation activity under ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, and non-recurring or unusual items (if any). Management believes comparable EPS growth is a more useful way to measure the Company’s business performance than EPS growth because it enables better period-over-period comparisons of the fundamental financial results by excluding items that vary independent of performance and provides greater transparency to investors regarding a key metric used by management. Comparable EPS growth should be considered in addition to, and not as a replacement of or a superior measure to, EPS growth reported in accordance with GAAP. Please refer to the constant currency note above for a summary of foreign currency exchange rate impacts.

The reconciliation of this non-GAAP financial measure is as follows:

Three Months Ended

Year-over-Year

March 31,

March 31,

Growth

2026

2025

Earnings per share (diluted) and growth

$

3.47

$

2.96

17

%

Less: comparability adjustments

Share-based compensation activity

0.09

0.01

Loss on equity investment

(0.05

)

—

Now-concluded litigation matter

—

0.08

Change from currency

0.14

—

Comparable EPS and growth

$

3.30

$

2.87

15

%

Amounts presented may not recalculate due to rounding.

Projected 2026 comparable EPS growth outlined in the 2026 Growth and Financial Performance Outlook section of this earnings release reflects the following adjustments: (i) adjustment to projected full year 2026 reported EPS for estimated positive year-over-year foreign currency exchange rate change impact of $0.27 at noted exchange rates; and (ii) adjustment to projected full year 2026 reported EPS for estimated positive impact of share-based compensation activity of ~$0.19; and (iii) adjustment to projected full year 2026 EPS of $0.05 for unfavorable impact of a loss on an equity investment; and (iv) adjustment to full year 2025 reported EPS for a positive $0.08 impact from the discrete litigation expense accrual adjustment in the first quarter of 2025; and (v) adjustment to full year 2025 reported EPS for positive impact of share-based compensation activity of $0.35.

These impacts and those described in the constant currency note above reconcile reported EPS growth (including projected 2026 reported EPS growth) to comparable EPS growth for the Company.

Segment and Other Income from Operations - We report segment income from operations in our Segment Information table below. Segment income from operations is a non-GAAP financial measure that adjusts for the impact of foreign currency transaction gains and losses and should be considered in addition to, and not as a replacement for, or superior measure to, income from operations. We exclude foreign currency transaction gains and losses for each reportable segment (CAG, Water, and LPD) from segment income from operations and report the full amount of foreign currency transaction gains and losses in Other. We believe that reporting segment income from operations provides supplemental analysis to help investors further evaluate each reportable segment’s business performance by excluding foreign currency transaction gains and losses, which are centrally managed by our corporate treasury function and which we do not consider relevant for assessing the results of each reportable segment’s operations. In addition, we believe that reporting segment income from operations provides information to investors regarding key metrics that are used by management, including our chief operating decision-maker, in evaluating the performance of each reportable segment.

The reconciliation of this non-GAAP financial measure is as follows for the three months ended March 31, 2026 and 2025:

Amounts in thousands

Three Months Ended March 31,

2026

2025

Income from Operations

Impact from Foreign Currency

Segment and Other Income from Operations

Income from Operations

Impact from Foreign Currency

Segment and Other Income from Operations

CAG

$

337,165

$

390

$

337,555

$

294,572

$

583

$

295,155

Water

23,643

26

23,669

20,774

43

20,817

LPD

1,262

28

1,290

80

45

125

Other

516

(444

)

72

1,108

(671

)

437

Total

$

362,586

$

—

$

362,586

$

316,534

$

—

$

316,534

Free cash flow - Free cash flow is a non-GAAP financial measure and means, with respect to a measurement period, the cash generated from operations during that period, reduced by the Company’s investments in property and equipment. Management believes free cash flow is a useful measure because it indicates the cash the operations of the business are generating after appropriate reinvestment for recurring investments in property and equipment that are required to operate the business. Free cash flow should be considered in addition to, and not as a replacement of or a superior measure to, net cash provided by operating activities. See the supplementary analysis of results below for our calculation of free cash flow for the three months ended March 31, 2026 and 2025. To estimate projected 2026 free cash flow, we have deducted projected purchases of property and equipment (also referred to as capital expenditures) of approximately $180 million. Free cash flow conversion, or the net income to free cash flow ratio, is a non-GAAP financial measure that is defined as free cash flow, with respect to a measurement period, divided by net income for the same period. To calculate trailing twelve-month net income to free cash flow ratio for the twelve months ended March 31, 2026, we have deducted purchases of property and equipment of approximately $127 million from net cash provided from operating activities of approximately $1,210 million, divided by net income of approximately $1,095 million.

Debt to Adjusted EBITDA (Leverage Ratios) - Adjusted EBITDA, gross debt, and net debt are non-GAAP financial measures. Adjusted EBITDA is a non-GAAP financial measure of earnings before interest, taxes, depreciation, amortization, non-recurring transaction expenses incurred in connection with acquisitions, share-based compensation expense, and certain other non-cash losses and charges. Management believes that reporting Adjusted EBITDA, gross debt, and net debt in the Debt to Adjusted EBITDA ratios provides supplemental analysis to help investors further evaluate the Company's business performance and available borrowing capacity under the Company's credit facility. Adjusted EBITDA, gross debt, and net debt should be considered in addition to, and not as replacements of or superior measures to, net income or total debt reported in accordance with GAAP. For further information on how Adjusted EBITDA and the Debt to Adjusted EBITDA Ratios are calculated, see the Company's Annual Report on Form 10-K for the year ended December 31, 2025 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.

Notes and Definitions

Discrete litigation expense accrual - During the first quarter of 2025, the Company reduced its previously established $89.0 million accrual related to a concluded litigation matter by approximately $9 million, which represented our best estimate at that time of the amount of the loss.

Concluded litigation matter - The Company was a defendant in a litigation matter involving an alleged breach of contract for underpayment of royalty payments made from 2004 through 2017 under an expired patent license agreement, and the trial court ruled in favor of the plaintiff in 2020. Following appeals and in light of the appellate court's April 3, 2025 decision, on April 17, 2025, the Company paid the judgment of approximately $80 million, and the plaintiff executed a satisfaction and release of judgment, which was filed with the trial court on the same date, concluding this matter. For further information, see the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.

IDEXX Laboratories, Inc. and Subsidiaries

Condensed Consolidated Statement of Operations

Amounts in thousands except per share data (Unaudited)

Three Months Ended

March 31,

March 31,

2026

2025

Revenue:

Revenue

$

1,140,820

$

998,427

Expenses and Income:

Cost of revenue

418,081

375,048

Gross profit

722,739

623,379

Sales and marketing

175,250

156,223

General and administrative

119,115

91,561

Research and development

65,788

59,061

Total operating expense

360,153

306,845

Income from operations

362,586

316,534

Interest expense, net

(7,144

)

(6,450

)

Income before provision for income taxes

355,442

310,084

Provision for income taxes

76,996

67,407

Net Income:

Net income attributable to stockholders

$

278,446

$

242,677

Earnings per share: Basic

$

3.50

$

2.98

Earnings per share: Diluted

$

3.47

$

2.96

Shares outstanding: Basic

79,648

81,319

Shares outstanding: Diluted

80,162

81,922

IDEXX Laboratories, Inc. and Subsidiaries

Selected Operating Information (Unaudited)

Three Months Ended

March 31,

March 31,

2026

2025

Operating Ratios

Gross profit

63.4

%

62.4

%

(as a percentage of revenue):

Sales, marketing, general and administrative expense

25.8

%

24.8

%

Research and development expense

5.8

%

5.9

%

Income from operations1

31.8

%

31.7

%

1Amounts presented may not recalculate due to rounding.

IDEXX Laboratories, Inc. and Subsidiaries

Segment and Other Information

Amounts in thousands (Unaudited)

Three Months Ended

March 31, 2026

Percent of Revenue

March 31, 2025

Percent of Revenue

Revenue:

CAG

$

1,054,052

$

919,836

Water

50,265

45,321

LPD

32,483

28,596

Other

4,020

4,674

Total

$

1,140,820

$

998,427

Gross Profit:

CAG

$

667,509

63.3

%

$

574,823

62.5

%

Water

36,537

72.7

%

32,073

70.8

%

LPD

16,910

52.1

%

14,365

50.2

%

Other

1,783

44.4

%

2,118

45.3

%

Total

$

722,739

63.4

%

$

623,379

62.4

%

Income from Operations:

CAG

$

337,555

32.0

%

$

295,155

32.1

%

Water

23,669

47.1

%

20,817

45.9

%

LPD

1,290

4.0

%

125

0.4

%

Other

72

1.8

%

437

9.3

%

Total

$

362,586

31.8

%

$

316,534

31.7

%

IDEXX Laboratories, Inc. and Subsidiaries

Revenues and Revenue Growth Analysis by Product and Service Categories and by Domestic and International Markets

Amounts in thousands (Unaudited)

Three Months Ended

March 31, 2026

March 31, 2025

Dollar Change

Reported Revenue Growth1

Percentage Change from
Currency

Percentage Change from Acquisitions

Organic Revenue Growth1

Net Revenue

CAG

$

1,054,052

$

919,836

$

134,216

14.6

%

3.0

%

—

11.6

%

United States

690,900

623,889

67,011

10.7

%

—

—

10.7

%

International

363,152

295,947

67,205

22.7

%

9.3

%

—

13.4

%

Water

$

50,265

$

45,321

$

4,944

10.9

%

3.8

%

—

7.1

%

United States

26,393

23,503

2,890

12.3

%

—

—

12.3

%

International

23,872

21,818

2,054

9.4

%

7.5

%

—

1.9

%

LPD

$

32,483

$

28,596

$

3,887

13.6

%

6.4

%

—

7.2

%

United States

6,384

5,788

596

10.3

%

—

—

10.3

%

International

26,099

22,808

3,291

14.4

%

7.9

%

—

6.5

%

Other

$

4,020

$

4,674

($

654

)

(14.0

%)

—

—

(14.0

%)

Total Company

$

1,140,820

$

998,427

$

142,393

14.3

%

3.1

%

—

11.2

%

United States

725,232

654,861

70,371

10.7

%

—

—

10.7

%

International

415,588

343,566

72,022

21.0

%

9.0

%

—

11.9

%

Three Months Ended

March 31, 2026

March 31, 2025

Dollar Change

Reported Revenue Growth1

Percentage Change from

Currency

Percentage Change from Acquisitions

Organic Revenue Growth1

Net CAG Revenue

CAG Diagnostics recurring revenue:

$

920,313

$

806,267

$

114,046

14.1

%

3.1

%

—

11.0

%

IDEXX VetLab consumables

412,582

344,779

67,803

19.7

%

4.2

%

—

15.4

%

Rapid assay products

84,938

84,034

904

1.1

%

1.2

%

—

(0.1

%)

Reference laboratory diagnostic and consulting services

386,179

344,406

41,773

12.1

%

2.5

%

—

9.7

%

CAG Diagnostics services and accessories

36,614

33,048

3,566

10.8

%

3.6

%

—

7.2

%

CAG Diagnostics capital – instruments

$

42,449

$

31,994

$

10,455

32.7

%

4.7

%

—

28.0

%

Veterinary software, services and diagnostic imaging systems:

$

91,290

$

81,575

$

9,715

11.9

%

1.0

%

—

10.9

%

Recurring revenue

73,536

65,793

7,743

11.8

%

1.1

%

—

10.7

%

Systems and hardware

17,754

15,782

1,972

12.5

%

0.5

%

—

12.0

%

Net CAG revenue

$

1,054,052

$

919,836

$

134,216

14.6

%

3.0

%

—

11.6

%

Three Months Ended

March 31, 2026

March 31, 2025

Dollar Change

Reported Revenue Growth1

Percentage Change from Currency

Percentage Change from Acquisitions

Organic Revenue Growth1

CAG Diagnostics recurring revenue:

$

920,313

$

806,267

$

114,046

14.1

%

3.1

%

—

11.0

%

United States

594,483

536,977

57,506

10.7

%

—

—

10.7

%

International

325,830

269,290

56,540

21.0

%

9.3

%

—

11.7

%

1See Statements Regarding Non-GAAP Financial Measures, above. Amounts presented may not recalculate due to rounding. IDEXX Laboratories, Inc. and Subsidiaries

Condensed Consolidated Balance Sheet

Amounts in thousands (Unaudited)

March 31, 2026

December 31, 2025

Assets:

Current Assets:

Cash and cash equivalents

$

200,528

$

180,070

Accounts receivable, net

603,544

552,378

Inventories

382,400

377,756

Other current assets

267,603

303,623

Total current assets

1,454,075

1,413,827

Property and equipment, net

740,382

747,380

Other long-term assets, net

1,191,040

1,189,552

Total assets

$

3,385,497

$

3,350,759

Liabilities and Stockholders'

Equity:

Current Liabilities:

Accounts payable

$

129,974

$

110,408

Accrued liabilities

453,552

530,147

Line of credit

530,000

398,000

Current portion of long-term debt

149,997

74,995

Deferred revenue

36,328

35,264

Total current liabilities

1,299,851

1,148,814

Long-term debt, net of current portion

299,854

374,842

Other long-term liabilities, net

229,689

221,720

Total long-term liabilities

529,543

596,562

Total stockholders' equity

1,556,103

1,605,383

Total liabilities and stockholders' equity

$

3,385,497

$

3,350,759

IDEXX Laboratories, Inc. and Subsidiaries

Selected Balance Sheet Information (Unaudited)

March 31,
2026

December 31,
2025

September 30,
2025

June 30,
2025

March 31,
2025

Selected Balance Sheet Information:

Days sales outstanding1

46.2

46.8

46.5

44.7

45.7

Inventory turns2

1.4

1.6

1.5

1.5

1.3

1Days sales outstanding represents the average of the accounts receivable balances at the beginning and end of each quarter divided by revenue for that quarter, the result of which is then multiplied by 91.25 days.

2Inventory turns are calculated as the ratio of our inventory-related cost of revenue for the quarter multiplied by four, divided by the average inventory balances at the beginning and end of each quarter.

IDEXX Laboratories, Inc. and Subsidiaries

Condensed Consolidated Statement of Cash Flows

Amounts in thousands (Unaudited)

Three Months Ended

March 31, 2026

March 31, 2025

Operating:

Cash Flows from Operating Activities:

Net income

$

278,446

$

242,677

Non-cash adjustments to net income

77,550

55,972

Changes in assets and liabilities

(89,748

)

(60,687

)

Net cash provided by operating activities

266,248

237,962

Investing:

Cash Flows from Investing Activities:

Purchases of property and equipment

(31,984

)

(30,026

)

Acquisitions

(2,599

)

—

Proceeds from net investment hedges

1,039

416

Net cash used by investing activities

(33,544

)

(29,610

)

Financing:

Cash Flows from Financing Activities:

Borrowings under credit facility, net

132,000

69,500

Repurchases of common stock

(351,036

)

(400,890

)

Proceeds from exercises of stock options and employee stock purchase plans

18,161

7,193

Shares withheld for statutory tax withholding payments on restricted stock

(10,555

)

(6,124

)

Net cash used by financing activities

(211,430

)

(330,321

)

Net effect of changes in exchange rates on cash

(816

)

(2,327

)

Net increase (decrease) in cash and cash equivalents

20,458

(124,296

)

Cash and cash equivalents, beginning of period

180,070

288,266

Cash and cash equivalents, end of period

$

200,528

$

163,970

IDEXX Laboratories, Inc. and Subsidiaries

Free Cash Flow

Amounts in thousands (Unaudited)

Three Months Ended

March 31, 2026

March 31, 2025

Free Cash Flow:

Net cash provided by operating activities

$

266,248

$

237,962

Investing cash flows attributable to purchases of property and equipment

(31,984

)

(30,026

)

Free cash flow1

$

234,264

$

207,936

1See Statement Regarding Non-GAAP Financial Measures, above.

IDEXX Laboratories, Inc. and Subsidiaries

Common Stock Repurchases

Amounts in thousands except per share data (Unaudited)

Three Months Ended

March 31, 2026

March 31, 2025

Shares repurchased in the open market

588

931

Shares acquired through employee surrender for statutory tax withholding

17

14

Total shares repurchased

605

945

Cost of shares repurchased in the open market

$

360,833

$

409,215

Cost of shares for employee surrenders

10,555

6,124

Total cost of shares

$

371,388

$

415,339

Average cost per share – open market repurchases

$

613.87

$

439.64

Average cost per share – employee surrenders

$

629.35

$

444.52

Average cost per share – total

$

614.30

$

439.71

More News From IDEXX Laboratories, Inc.

This positive momentum comes as broader market indices, including the S&P 500 and Nasdaq, are also showing gains, with the S&P 500 up by 0.76% and the Nasdaq up by 0.90%.

Diagnostics Segment Drives Growth Across RegionsThe pet healthcare company reported first-quarter earnings of $3.47 per share, beating the consensus of $3.41.

Sales reached $1.14 billion, slightly above the consensus of $1.109 billion, equivalent to an organic growth of 11%.

A modest easing of clinical visit pressures and increased diagnostic frequency aided U.S. growth.

"Excellent commercial execution delivered exceptional first quarter results and positions IDEXX for continued strength through 2026," said Jay Mazelsky, President and CEO.

Conference Call HighlightsIDEXX Laboratories Inc's operating margin improved by 100 basis points, supported by gross margin expansion and strong recurring revenue growth.

The company highlighted strategic initiatives, including the launch of FNA and the expansion of its Cancer DX platform, with positive customer feedback and increased adoption.

Management emphasized the importance of diagnostics in veterinary care and the potential for AI to enhance innovation and diagnostics utilization.

The company is optimistic about its long-term growth prospects, supported by a strong innovation pipeline and expanding global presence.

Company Raises 2026 GuidanceIDEXX Laboratories raised its fiscal 2026 earnings from $14.29-$14.80 to $14.45-$14.90 compared to the consensus of $14.53.

The company increased its 2026 sales guidance from $4.63 billion-$4.72 billion to $4.675 billion-$4.76 billion compared to the consensus of $4.678 billion.

IDXX Technical Outlook: Key Support, Resistance And MomentumCurrently, Idexx Laboratories is trading at $564.00, which places it 2.6% below its 20-day simple moving average (SMA) of $572.90 and 5.1% below its 50-day SMA of $588.05.

The stock's relative strength index (RSI) is at 45.20, indicating a neutral momentum, suggesting that the stock is neither overbought nor oversold at this time.

Key Resistance: $594.50 — a nearby level where rebounds can stall. Key Support: $548.50 — a nearby level where buyers previously stepped in. IDXX Stock Price Activity: IDEXX Laboratories shares were up 3.35% at $582 during premarket trading on Tuesday, according to Benzinga Pro data.

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