#14th Quarter and Full Fiscal Year 2018 Financial Results & Germane Systems Acquisition Overview Mark Aslett President and CEO Michael Ruppert Executive Vice President and CFO July 31, 2018, 5:00 pm ET © 2018 Mercury Systems, Inc. + > mercury systemsTM Conference call: Dial (877) 303-6977 in the USA and Canada, (760) 298-5079 in all other countries Webcast login at www.mrcy.com/investor Webcast replay available by 7:00 p.m. ET July 31, 2018 + INNOVATION THAT MATTERS TM 1#2Forward-looking safe harbor statement This presentation contains certain forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including those relating to the acquisition described herein and to fiscal 2019 business performance and beyond and the Company's plans for growth and improvement in profitability and cash flow. You can identify these statements by the use of 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 continued geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, delays in completing 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, market acceptance of the Company's products, shortages in components, production delays or unanticipated expenses due to performance quality issues with outsourced components, inability to fully realize the expected benefits from acquisitions and restructurings, or delays in realizing such benefits, challenges in integrating acquired businesses and achieving anticipated synergies, increases in interest rates, changes to cyber-security regulations and requirements, changes in tax rates or tax regulations, changes to generally accepted accounting principles, difficulties in retaining key employees and customers, 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 30, 2017. 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. Use of Non-GAAP (Generally Accepted Accounting Principles) 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 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 better 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 presentation is contained in the Appendix hereto. © 2018 Mercury Systems, Inc. 2#3Strong financial performance • Record bookings up 30% Record revenue up 32% Organic revenue(¹) up 16% • GAAP net income up 15% • Record adj. EBITDA up 36% ● Record backlog up 25% ● ● ● Q4 FY18 YOY Results ● Improved working capital H2 free cash flow up 106% vs. H1 © 2018 Mercury Systems, Inc. ● Record bookings up 27% • Record revenue up 21% Organic revenue (¹) • Record GAAP net income up 64% Record adj. EBITDA up 23% Record backlog up 25% ● ● Full FY18 YoY Results ● up 7% (1) Organic revenue represents total company revenue excluding net revenue from acquisitions for the first four full quarters since the entities' acquisition date (which excludes any intercompany transactions). After the completion of four fiscal quarters, acquired businesses are treated as organic for current and comparable historical periods. 3#4Q4 and fiscal 2018 strategic achievements ● ● Integration of prior acquisitions progressing well Recently acquired businesses performance strong Added important new capabilities at the USMO Insourcing ramp continued; delivering substantial savings New business capture demonstrates benefits of trusted manufacturing Penetrated C41 market organically and via RTL, Themis acquisitions Announcing acquisition of Germane Systems © 2018 Mercury Systems, Inc. 4#5Acquisition of Germane Systems Combination with Themis presents compelling value creation opportunity Leading provider of rugged servers for C21 applications Will integrate Germane with recently acquired Themis Computer Complementary market focus; strategic program portfolio • Creates $100M+ C21 rugged server business in less than 6 months $45M purchase price); funded with existing revolver Germane 10x gross purchase multiple of LTM adj. EBITDA (2) Germane 4x purchase multiple net of expected tax benefits and cost savings (³) Themis and Germane combined ~9x net purchase price multiple ● ● ● ● ● ● - Germane accretive to fiscal 2019 adj. EPS Slightly dilutive to fiscal 2019 gross margin and adj. EBITDA margin - Platform expected to achieve mid-point of target adj. EBITDA margin in FY20 Notes: (1) Subject to net working capital and net debt adjustments. (2) Acquisition of Germane Systems, a limited liability company, is treated as an asset purchase for tax purposes, resulting in $7M in net present value of tax benefits. (3) Acquisition of Germane Systems is expected to yield $5M in run rate cost synergies. © 2018 Mercury Systems, Inc. 5#6Business outlook remains strong ● ● Defense budget has increased; expected continued growth 3%+ Capitalizing on favorable industry trends - increased outsourcing, flight to quality, supply chain delayering Grow core C41, Sensor and Effector Mission Systems markets High-tech business model working extremely well Organic and M&A-driven growth outlook strong FY19 organic revenue growth expected to increase to 8% - 9% © 2018 Mercury Systems, Inc. 6#7Summary ● ● ● Continue to grow and expand in strategically aligned core markets Grow business organically, high single-digit / low double-digit rate Supplementing high level of organic growth with strategic M&A Expect to achieve high-end of adj. EBITDA target over time by: Increased revenue organically and through M&A Insourced manufacturing and operating efficiencies improving margins Lower organic operating expense growth than revenue growth - Fully integrating acquired businesses to generate synergies - - Continuing to successfully execute model - no fundamental change © 2018 Mercury Systems, Inc. 7#8Q4 FY18 vs. Q4 FY17 In $ millions, except percentage and per share data Bookings Book-to-Bill Backlog 12-Month Backlog Revenue Organic Revenue Growth (¹) Gross Margin Operating Expenses Selling, General & Administrative Research & Development Amortization/Restructuring/Acquisition GAAP Income GAAP EPS Weighted Average Diluted Shares Adjusted EPS (2²) Adj. EBITDA (²) % of revenue Free Cash Flow (²) Q4 FY17 $132.3 1.14 © 2018 Mercury Systems, Inc. $357.0 $290.8 $115.6 4% 46.6% $40.9 20.4 13.9 6.6 $8.8 $0.19 47.5 $0.32 $27.8 24.0% $3.7 Q4 FY18 $171.7 1.12 $447.1 $328.5 $152.9 16% 44.7% $49.4 25.4 14.9 9.1 $10.1 $0.21 47.5 $0.47 $37.7 24.6% $21.6 Change 30% 25% 32% (1.9 pt) 21% 15% 11% 47% 36% 487% Notes: (1) Organic revenue represents total company revenue excluding net revenue from acquisitions for the first four full quarters since the entities' acquisition date (which excludes any intercompany transactions). After the completion of four fiscal quarters, acquired businesses are treated as organic for current and comparable historical periods. (2) Non-GAAP, see reconciliation table. 8#9FY18 vs. FY17 In $ millions, except percentage and per share data Bookings Book-to-Bill Backlog 12-Month Backlog Revenue Organic Revenue Growth (¹) Gross Margin Operating Expenses Selling, General & Adr nistrative Research & Development Amortization/Restructuring/Acquisition GAAP Income GAAP EPS Weighted Average Diluted Shares Adjusted EPS (2²) Adj. EBITDA (²) % of revenue Free Cash Flow (²) FY17 $443.8 1.09 © 2018 Mercury Systems, Inc. $357.0 $290.8 $408.6 10% 46.9% $154.1 76.5 54.1 23.6 $24.9 $0.58 43.0 $1.15 $93.9 23.0% $26.3 FY18 $563.5 1.14 $447.1 $328.5 $493.2 7% 45.8% $178.9 88.4 58.8 31.7 $40.9 $0.86 47.5 $1.42 $115.4 23.4% $28.2 Change 27% 25% 21% (1.1 pt) 16% 64% 48% 23% 23% 7% Notes: (1) Organic revenue represents total company revenue excluding net revenue from acquisitions for the first four full quarters since the entities' acquisition date (which excludes any intercompany transactions). After the completion of four fiscal quarters, acquired businesses are treated as organic for current and comparable historical periods. (2) Non-GAAP, see reconciliation table. 9#10Balance Sheet (In $ millions) (1) ASSETS Cash & cash equivalents Accounts receivable, net Inventory, net PP&E, net Goodwill and intangibles, net Other TOTAL ASSETS LIABILITIES AND S/E AP and accrued expenses Other liabilities Debt (2) Total liabilities Stockholders' equity TOTAL LIABILITIES AND S/E As of 6/30/17 9/30/17 12/31/17 3/31/18 41.6 113.7 81.1 51.6 509.9 17.8 815.7 66.5 23.8 0.0 90.3 725.4 815.7 26.1 121.4 93.3 51.6 510.7 19.5 822.6 69.5 18.8 0.0 88.3 734.3 822.6 32.0 123.0 105.9 51.6 505.5 17.8 835.8 65.8 20.8 0.0 86.6 As of 749.2 835.8 44.2 141.6 117.1 51.3 685.7 17.0 1,056.9 69.8 36.3 195.0 301.1 755.8 1,056.9 Notes: (1) Rounded amounts used. (2) On July 31, 2018 (in Q1 FY19), Mercury acquired Germane Systems, LC, and borrowed $45 million on its existing revolving credit facility to fund the acquisition. © 2018 Mercury Systems, Inc. 6/30/18 66.5 143.8 108.6 51.0 675.3 19.3 1,064.5 59.1 38.5 195.0 292.6 771.9 1,064.5 10#11Cash Flow summary (In $ millions) (¹) Net Income Depreciation and amortization Other non-cash items, net Change in Working Capital Accounts receivable, unbilled receivables, and costs in excess of billings Inventory Accounts payable and accrued expenses Other Changes in Operating Assets and Liabilities Operating Cash Flow Capital expenditures Free Cash Flow (2) Free Cash Flow (2)/Adjusted EBITDA (2) Free Cash Flow (2)/GAAP Net Income Notes: (1) Rounded amounts used. (2) Non-GAAP, see reconciliation table. © 2018 Mercury Systems, Inc. FY17 24.9 32.3 8.7 (14.1) (9.3) 3.5 13.2 (6.7) 59.1 (32.8) 26.3 28% 106% Q1 18.0 9.3 0.8 (7.8) (1.4) (11.1) (11.3) 12.8 (1.2) (14.0) (0.7) (20.1) (14.6) 8.0 (3.6) 4.4 Q2 18% 24% 9.1 9.6 4.7 8.8 (4.0) 4.8 18% 53% FY18 Q3 3.7 11.4 3.3 (10.6) (2.5) (8.7) 4.2 (17.5) 0.9 (3.5) (2.6) n.a. n.a. Q4 10.1 12.0 5.1 (2.9) 8.7 (8.2) 0.8 (1.6) 25.6 (4.0) 21.6 57% 214% FY18 Total 40.9 42.3 14.0 (22.8) (16.2) (5.3) (9.5) (53.8) 43.3 (15.1) 28.2 24% 69% 11#12FY19 annual guidance In $ millions, except percentage and per share data Revenue Gross Margin Operating Expenses GAAP Income Effective tax rate (³) GAAP EPS Weighted-average diluted shares outstanding Adjusted EPS (4) Adj. EBITDA (4) % of revenue FY18 (¹) © 2018 Mercury Systems, Inc. $493.2 45.8% $178.9 $40.9 4% $0.86 47.5 $1.42 $115.4 23.4% FY19(²) $602 - $624 43.7% -44.4% $202.2 - $204.3 $36.1 - $44.5 27% $0.75 - $0.93 47.9 $1.58 - $1.76 $130.5 - $142.0 21.7% 22.8% Change 22% -27% (2.1) - (1.4)pts 13% -14% (12%) - 9% (13%) - 8% 11% -24% 13% -23% Notes: (1) FY18 figures are as reported in the Company's earnings release dated July 31, 2018. (2) The guidance included herein is from the Company's earnings release dated July 31, 2018. For purposes of modeling and guidance, we have assumed no restructuring, acquisition or non-recurring financing-related expenses. (3) The effective tax rate in the guidance included herein excludes discrete items. (4) Non-GAAP, see reconciliation table. 12