Comtech Announces Financial Results for Fourth Quarter and Fiscal Year 2025
Fiscal Q4 2025 Results Demonstrate Continued Progress in Comtech's Successful Transformation
Comtech Strengthens Financial Position with
Ken Traub, Chairman, President and CEO, stated:
“I am proud to report how much stronger Comtech is today – financially, operationally and strategically. This is the result of the ongoing successful execution of the transformation initiatives that we announced when I started as CEO in January 2025. As a testament to our improving financial health, the disclosure regarding the Company's ability to continue as a going concern, that was previously in the Company's quarterly SEC filings for the past seven quarters, has been removed as we no longer have those concerns. We have executed a successful turnaround of our Satellite & Space Communications business, which is now revitalized, and our Allerium business, formerly known as Terrestrial & Wireless Networks, has continued to deepen our presence in the public safety market while securing long-term customer partnerships. We expect the Company's significantly improved financial health to be reassuring to our current and prospective customers, vendors, employees, investors and partners.
The early success of our transformation initiatives and the positive trajectory of the business are evident across numerous key metrics. Examples include: (i) operating cash flow of
While we are just getting started – and recognize there are remaining legacy challenges still to be addressed as well as inevitable quarterly fluctuations – we are energized by what we have accomplished so far. These accomplishments were enabled by new disciplines that align accountability throughout the organization, enhanced operational efficiency, reduced cost structures, a focus on cash flow optimization, improved working capital management and improved corporate governance. These initiatives have not only helped to drive Comtech's significantly improved operating and financial performance, but have also enabled us to improve relationships with current and prospective customers, vendors and creditors. This leads to a flywheel effect in which improved relationships create a healthier dynamic for the business going forward and ultimately further improvements in performance.
Finally, we have been reinvigorating the corporate culture by emphasizing transparency, empowerment and accountability. On a personal note, it is particularly gratifying for me to see how our employees are increasingly taking pride in contributing to our success, which has also enhanced morale, retention and performance.”
Please review our fiscal 2025 results and commentary below, and join our conference call on Monday, November 10, 2025, at 4:30 PM Eastern Time, for further details about Comtech’s transformation and prospects.
Fiscal Year 2025 Consolidated Financial Results
-
Net sales of
$499.5 million -
Gross margin of
25.6% -
Operating loss of
$139.1 million -
Net loss attributable to common shareholders of
$204.3 million -
Adjusted EBITDA (a Non-GAAP measure) loss of
$2.0 million -
Net bookings of
$372.7 million -
Funded backlog at year end of
$672.1 million -
GAAP cash flows used in operations of
$8.3 million -
Total liquidity at year end of
$47.0 million
Fourth Quarter Fiscal 2025 Consolidated Financial Results
-
Net sales of
$130.4 million -
Gross margin of
31.2% -
Operating income of
$1.9 million -
Net loss attributable to common shareholders of
$11.6 million -
Adjusted EBITDA (a Non-GAAP measure) of
$13.3 million -
Net bookings of
$94.4 million -
GAAP cash flows provided by operations of
$11.4 million
Fiscal 2025 Consolidated Results Commentary
Net sales were
Gross profit was
Operating loss was
As outlined in our Form 10-K for fiscal 2025, net loss attributable to common shareholders was
Adjusted EBITDA (a Non-GAAP measure) was negative
Fiscal 2025 net bookings were
Funded backlog was
Fiscal 2025 GAAP cash flows used in operations were
Liquidity improved
Fourth Quarter Fiscal 2025 Consolidated Results Commentary
Net sales were
Gross profit was
Operating income was
Net loss attributable to common shareholders was
Adjusted EBITDA (a Non-GAAP measure) improved to
Net bookings were
Fourth quarter fiscal 2025 GAAP cash flows provided by operations were
Fiscal 2025 Satellite and Space Communications (“S&S”) Segment Commentary
In the second quarter of fiscal 2025, Daniel Gizinski was promoted to President of the S&S business. In this new role, Mr. Gizinski and the team identified sources of previous underperformance, executed a remediation plan and positioned the S&S segment for margin improvement, cash flow generation and long-term growth. Key elements of the remediation plan included: recruiting new leaders for the segment, including a new Chief Operating Officer, Chief Financial Officer, Chief Technology Officer and General Manager; developing a new product roadmap featuring differentiated technologies aligned with customer needs; eliminating more than
With these elements of the plan now in place, the S&S business is better positioned to pursue growth opportunities. We are prepared to meet increasing demand for technology to support 5G Non-Terrestrial Networks (referred to as “NTN”) and sovereign defense networks with the launch of our next-generation platforms. We are already seeing traction from the launch of our Digital Common Ground platform, including additional early production prototype order agreements.
Net sales in our S&S segment were
S&S operating loss was
S&S Adjusted EBITDA was a loss of
S&S bookings were
Fourth Quarter Fiscal 2025 Satellite and Space Communications (“S&S”) Segment Commentary
S&S net sales in the fourth quarter of fiscal 2025 were
S&S operating income was
S&S Adjusted EBITDA was
S&S bookings were
In September 2025, as part of our cost savings plans, we made the decision to migrate certain production capabilities and operational functions to our manufacturing operations in
During the fourth quarter of fiscal 2025, we were awarded orders that included:
-
Additional funding of approximately
$10.3 million U.S. prime contractor in support of NASA's Orion Production and Operations Contract ("OPOC"), commonly known as the Artemis project; -
Incremental funding of approximately
$7.4 million U.S. government customers; -
$2.8 million U.S. Army (given the award of the follow on "VSAT IV" contract to a competitor, we do not expect material contributions from our legacy contract going forward); -
Over
$2.0 million U.S. ; -
Approximately
$2.0 million -
Approximately
$2.0 million U.S. Navy for satellite ground infrastructure solutions; -
Over
$1.0 million -
Over
$1.0 million
In the fourth quarter, the S&S business completed initial deliveries of our small-form factor troposcatter system, referred to as our Multi-Path Radio, or MPR, to an international Air Force customer. We believe the small form factor troposcatter capabilities align closely with modern defense demands, and we believe there will be increasing demand for the unique features and capabilities we offer.
During fiscal 2025, we began deliveries of initial production units to our prime contractor in support of a next-generation satellite modem contract and will be moving into full production during fiscal 2026, as the program transitions from a multi-year development period into a production-oriented stage. A second next-generation product with the same prime contractor has also significantly progressed in development and is also expected to begin production deliveries in fiscal 2026. These are important milestones for the S&S segment, as they address the long-awaited migration from low-margin nonrecurring engineering efforts to higher volume production with improved operating margins and faster cash conversion cycles.
Fiscal 2025 Allerium Segment Commentary
Allerium, a brand rooted in experience, driven by innovation and built for those who protect our communities, is the renamed segment that was formerly our Terrestrial and Wireless Networks (“T&W”) segment. Our rebranding unifies and clarifies Allerium’s go-to-market strategy under one name. The new name “Allerium” reaffirms our focus, commitment and dedication to achieving successful outcomes when it matters most – secure, reliable communications in the most critical circumstances.
Allerium net sales were
Allerium operating income was
Allerium Adjusted EBITDA was
Allerium bookings were
Fourth Quarter Fiscal 2025 Allerium Segment Commentary
Allerium net sales were
Allerium operating income was
Allerium Adjusted EBITDA was
Allerium bookings were
Strategic wins in the
During the fourth quarter of fiscal 2025, we were awarded orders including:
-
Over
$20.0 million State of Ohio ; -
More than
$4.5 million South Australia ; -
Over
$3.5 million State of South Carolina ; -
In excess of
$2.0 million Canada ; -
Approximately
$2.0 million U.S. ; -
Various funded orders, aggregating to approximately
$2.0 million -
Over
$1.5 million U.S.
Subsequent to year end, in November 2025, Allerium secured a multi-year contract extension from its largest customer – a leading telecommunications company in the
The Allerium rebrand reflects a new, unified, go-to-market strategy that consolidates several product lines under the single Allerium name. A cornerstone of this strategy is "Allerium Mira," our next-generation, public-safety-grade, cloud-native call handling solution. Mira simplifies complex emergency call handling operations by allowing Public Safety Answering Points (“PSAPs”) to manage voice, text, video, and alerts through a single interface, unlocking smarter routing and deeper integration.
Capital Structure Improvements
On July 21, 2025, we amended our Credit Facility and Subordinated Credit Agreement to enhance Comtech’s financial flexibility, as we continue to execute our transformation plan. The following is a summary of such amendments to our capital structure. For a more complete description of our credit facilities, please see our filings with the SEC, including our Form 8-K filed on July 22, 2025.
The amendments to the Credit Facility and Subordinated Credit Agreement, among other things: (i) provided for the incurrence of a
Such amendments also permit us to engage in the sale or disposition of certain properties and assets approved by the administrative agents, subject to the conditions to use net cash proceeds from such sale to repay outstanding principal amounts of the obligations under our credit facilities.
Interest on the
Liquidity
As discussed further in our annual report on Form 10-K for fiscal 2025, due in part to our improved operational and financial performance, we expect cash and cash equivalents and cash flows from both operating and financing activities to be our principal sources of liquidity. We believe these sources of liquidity will be sufficient to fund our operating and cash commitments for investing and financing activities over the next year beyond the issuance date.
Over the next year beyond the issuance date, we believe that we will: (i) be able to generate sufficient positive cash inflows and maximize our borrowing capacity under our Credit Facility to continue as a going concern, and (ii) comply with the covenants contained in our credit facilities. As a result of the foregoing, we have disclosed in our annual report on Form 10-K that we have removed the substantial doubt regarding our ability to continue as a going concern, which had been disclosed in our SEC filings for the previous seven fiscal quarters.
At July 31, 2025, October 31, 2025 and November 7, 2025, our available sources of liquidity totaled
At July 31, 2025, total outstanding borrowings under our Credit Facility were
At July 31, 2025, total outstanding borrowings under our Subordinated Credit Facility were
At July 31, 2025, the liquidation preference of the Company’s outstanding convertible preferred stock was
First Quarter Fiscal 2026 Preliminary Update
For the fiscal quarter ended October 31, 2025, the Company currently estimates the following consolidated results:
-
Net sales to approximate a range of
$107 million $113 million $115.8 million -
Cash flow provided by operating activities to approximate a range of
$6 million $7 million $21.8 million -
Liquidity, defined as qualified cash and cash equivalents and the remaining available portion of the revolver loan under our Credit Facility, of
$51.0 million
Performance in the first quarter of fiscal 2026 is expected to reflect, among other things, the impacts of earlier-than-anticipated orders, net sales and cash collections, as well as certain contracts nearing completion, in the fourth quarter of fiscal 2025. Additionally, performance in the first quarter of fiscal 2026, particularly in our S&S segment, is expected to reflect the impacts of timing delays in orders, net sales and cash collections as a result of the recent
Conference Call and Webcast Information
Comtech will host a conference call with investors and analysts Monday, November 10, 2025, at 4:30 PM Eastern Time.
A live webcast of the conference call will be accessible on the Investor Relations section of Comtech’s website at www.comtech.com/investors. Alternatively, investors can access the conference call by dialing (833) 316-2483 (primary) or (785) 838-9284 (alternate) and using the conference I.D. of “Comtech.” A replay of the call will also be available by dialing (800) 688-4915 or (402) 220-1319 through Monday, November 24, 2025.
About Comtech
Comtech Telecommunications Corp. is a leading provider of satellite and space communications technologies; terrestrial and wireless network solutions; Next Generation 911 (“NG911”) and emergency services; and cloud native capabilities to commercial and government customers around the world. Through its culture of innovation and employee empowerment, Comtech leverages its global presence and decades of technology leadership and experience to create some of the world’s most innovative solutions for mission-critical communications. For more information, please visit www.comtech.com.
Cautionary Note Regarding Forward-Looking Statements
Certain information in this press release contains, and oral statements made by our representatives from time to time may contain, forward-looking statements. Forward-looking statements can be identified by words such as: "anticipate," "believe," "continue," "could," "estimate," "expect," "future," "goal," "outlook," "intend," "likely," "may," "plan," "potential," "predict," "project," "seek," "should," "strategy," "target," "will," "would," and similar references to future periods, or the negative of those words and expressions, as well as statements in future tense. Forward-looking statements include, among others, statements regarding our expectations for our strategic alternatives process, our expectations for further portfolio-shaping opportunities, our expectations for other operational initiatives, our expectations for completing further financing initiatives, our future performance and financial condition, including our expectations for, or guidance on, the performance and financial condition for the fiscal quarter ended October 31, 2025, the plans and objectives of our management and our assumptions regarding such future performance, financial condition, and plans and objectives that involve certain significant known and unknown risks and uncertainties and other factors not under our control which may cause our actual results, future performance and financial condition, and achievement of our plans and objectives of our management to be materially different from the results, performance or other expectations implied by these forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which, such performance or results will be achieved. Forward-looking information is based on information available at the time and/or our good faith belief with respect to future events, and is subject to risks and uncertainties that are difficult to predict and many of which are outside of our control. Factors that could cause actual results to differ materially from current expectations include, among other things: the outcome and effectiveness of the aforementioned strategic alternatives process, further portfolio-shaping opportunities, other operational initiatives, and the completion of further financing activities; our ability to access capital and liquidity; our ability to implement changes in our executive leadership; the possibility that the expected benefits from our strategic activities will not be fully realized, or will not be realized within the anticipated time periods; the risk that acquired businesses will not be integrated successfully; impacts from, and uncertainties regarding, future actions that may be taken by activist stockholders; the possibility of disruption from acquisitions or dispositions, making it more difficult to maintain business and operational relationships or retain key personnel; the risk that we will be unsuccessful in implementing a tactical shift in our Satellite and Space Communications segment away from bidding on large commodity service contracts and toward pursuing contracts for our niche products and solutions with higher margins; the nature and timing of our receipt of, and our performance on, new or existing orders that can cause significant fluctuations in net sales and operating results; the timing and funding of government contracts; the timing and amount of adjustments to gross profits on long-term contracts; risks associated with international sales; rapid technological change; evolving industry standards; new product announcements and enhancements or rebranding; changing customer demands and/or procurement strategies and our ability to scale opportunities and deliver solutions to current and prospective customers; changes and uncertainty in prevailing economic and political conditions (including financial and capital market conditions), including as a result of military conflicts or any tariff, trade restrictions or similar matters; impact of government shutdowns; changes to government procurement practices; changes in the price of oil in global markets; changes in prevailing interest rates and foreign currency exchange rates; risks associated with our legal proceedings, customer claims for indemnification, and other similar matters; risks associated with our obligations under our credit facilities; risks associated with our large contracts; risks associated with supply chain disruptions; and other factors described in this and our other filings with the Securities and Exchange Commission ("SEC"). However, these risks are not the only risks that we face. Additional risks and uncertainties, not currently known to us or that do not currently appear to be material, may also materially adversely affect our business, financial condition and/or operating results in the future. We describe risks and uncertainties that could cause actual results and events to differ materially in the Risk Factors (Part I, Item 1A of our Form 10-K for fiscal 2025), Management’s Discussion and Analysis of Financial Condition and Results of Operations (Part II, Item 7 of our Form 10-K for fiscal 2025) and Quantitative and Qualitative Disclosures about Market Risk (Part II, Item 7A of our Form 10-K for fiscal 2025). We do not intend to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise, except as required by law.
Appendix:
- Condensed Consolidated Statements of Operations (Audited and Unaudited)
- Condensed Consolidated Balance Sheets (Audited)
- Condensed Consolidated Statements of Cash Flows (Audited and Unaudited)
- Use of Non-GAAP Financial Measures
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES |
||||||||||||||
Consolidated Statements of Operations |
||||||||||||||
|
|
(Unaudited) |
|
(Audited) |
||||||||||
|
|
Three months ended July 31, |
|
Twelve months ended July 31, |
||||||||||
|
|
|
2025 |
|
|
2024 |
|
|
|
2025 |
|
|
2024 |
|
Net sales |
|
$ |
130,367,000 |
|
|
126,191,000 |
|
|
$ |
499,528,000 |
|
|
540,403,000 |
|
Cost of sales |
|
|
89,694,000 |
|
|
99,046,000 |
|
|
|
371,654,000 |
|
|
383,224,000 |
|
Gross profit |
|
|
40,673,000 |
|
|
27,145,000 |
|
|
|
127,874,000 |
|
|
157,179,000 |
|
|
|
|
|
|
|
|
|
|
||||||
Expenses: |
|
|
|
|
|
|
|
|
||||||
Selling, general and administrative |
|
|
27,808,000 |
|
|
31,499,000 |
|
|
|
143,487,000 |
|
|
123,198,000 |
|
Research and development |
|
|
4,916,000 |
|
|
3,676,000 |
|
|
|
17,408,000 |
|
|
24,077,000 |
|
Amortization of intangibles |
|
|
5,043,000 |
|
|
5,288,000 |
|
|
|
21,723,000 |
|
|
21,154,000 |
|
Impairment of long-lived assets, including goodwill |
|
|
— |
|
|
64,525,000 |
|
|
|
79,555,000 |
|
|
64,525,000 |
|
CEO transition costs |
|
|
1,045,000 |
|
|
424,000 |
|
|
|
2,117,000 |
|
|
2,916,000 |
|
Proxy solicitation costs |
|
|
— |
|
|
— |
|
|
|
2,682,000 |
|
|
— |
|
Loss on business divestiture |
|
|
— |
|
|
3,212,000 |
|
|
|
— |
|
|
1,199,000 |
|
|
|
|
38,812,000 |
|
|
108,624,000 |
|
|
|
266,972,000 |
|
|
237,069,000 |
|
|
|
|
|
|
|
|
|
|
||||||
Operating income (loss) |
|
|
1,861,000 |
|
|
(81,479,000 |
) |
|
|
(139,098,000 |
) |
|
(79,890,000 |
) |
|
|
|
|
|
|
|
|
|
||||||
Other expenses (income): |
|
|
|
|
|
|
|
|
||||||
Interest expense |
|
|
12,203,000 |
|
|
6,810,000 |
|
|
|
45,650,000 |
|
|
22,153,000 |
|
Interest (income) and other |
|
|
155,000 |
|
|
(568,000 |
) |
|
|
155,000 |
|
|
678,000 |
|
Write-off of deferred financing costs and debt discounts |
|
|
4,086,000 |
|
|
1,832,000 |
|
|
|
8,977,000 |
|
|
1,832,000 |
|
Change in fair value of warrants and derivatives |
|
|
(23,048,000 |
) |
|
2,166,000 |
|
|
|
(38,498,000 |
) |
|
(4,273,000 |
) |
|
|
|
|
|
|
|
|
|
||||||
Income (loss) before provision for (benefit from) income taxes |
|
|
8,465,000 |
|
|
(91,719,000 |
) |
|
|
(155,382,000 |
) |
|
(100,280,000 |
) |
Provision for (benefit from) income taxes |
|
|
555,000 |
|
|
(934,000 |
) |
|
|
(80,000 |
) |
|
(295,000 |
) |
|
|
|
|
|
|
|
|
|
||||||
Net income (loss) |
|
$ |
7,910,000 |
|
|
(90,785,000 |
) |
|
$ |
(155,302,000 |
) |
|
(99,985,000 |
) |
|
|
|
|
|
|
|
|
|
||||||
(Loss) gain on extinguishment of convertible preferred stock |
|
|
— |
|
|
(5,915,000 |
) |
|
|
51,179,000 |
|
|
(19,555,000 |
) |
|
|
|
|
|
|
|
|
|
||||||
Adjustments to reflect redemption value of convertible preferred stock: |
|
|
|
|
|
|
|
|
||||||
Dividend on convertible preferred stock |
|
|
(19,472,000 |
) |
|
(3,908,000 |
) |
|
|
(100,128,000 |
) |
|
(11,551,000 |
) |
Convertible preferred stock issuance costs |
|
|
— |
|
|
— |
|
|
|
— |
|
|
(4,349,000 |
) |
Net loss attributable to common stockholders |
|
$ |
(11,562,000 |
) |
|
(100,608,000 |
) |
|
$ |
(204,251,000 |
) |
|
(135,440,000 |
) |
|
|
|
|
|
|
|
|
|
||||||
Net loss per common share: |
|
|
|
|
|
|
|
|
||||||
Basic |
|
$ |
(0.39 |
) |
|
(3.48 |
) |
|
$ |
(6.95 |
) |
|
(4.70 |
) |
Diluted |
|
$ |
(0.39 |
) |
|
(3.48 |
) |
|
$ |
(6.95 |
) |
|
(4.70 |
) |
|
|
|
|
|
|
|
|
|
||||||
Weighted average number of common shares outstanding – basic |
|
|
29,436,000 |
|
|
28,938,000 |
|
|
|
29,405,000 |
|
|
28,799,000 |
|
|
|
|
|
|
|
|
|
|
||||||
Weighted average number of common and common equivalent shares outstanding – diluted |
|
|
29,436,000 |
|
|
28,938,000 |
|
|
|
29,405,000 |
|
|
28,799,000 |
|
|
|
|
|
|
|
|
|
|
||||||
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES |
||||||
Consolidated Balance Sheets |
||||||
(Audited) |
||||||
|
July 31, 2025 |
|
July 31, 2024 |
|||
Assets |
|
|
|
|||
Current assets: |
|
|
|
|||
Cash and cash equivalents |
$ |
40,019,000 |
|
|
32,433,000 |
|
Accounts receivable, net |
|
144,837,000 |
|
|
195,595,000 |
|
Inventories, net |
|
68,955,000 |
|
|
93,136,000 |
|
Prepaid expenses and other current assets |
|
16,375,000 |
|
|
15,387,000 |
|
Total current assets |
|
270,186,000 |
|
|
336,551,000 |
|
Property, plant and equipment, net |
|
43,410,000 |
|
|
47,328,000 |
|
Operating lease right-of-use assets, net |
|
30,812,000 |
|
|
31,590,000 |
|
Goodwill |
|
204,625,000 |
|
|
284,180,000 |
|
Intangibles with finite lives, net |
|
173,105,000 |
|
|
194,828,000 |
|
Deferred financing costs, net |
|
1,907,000 |
|
|
3,251,000 |
|
Other assets, net |
|
16,790,000 |
|
|
14,706,000 |
|
Total assets |
$ |
740,835,000 |
|
|
912,434,000 |
|
Liabilities, Convertible Preferred Stock and Stockholders’ Equity |
|
|
|
|||
Current liabilities: |
|
|
|
|||
Accounts payable |
$ |
25,965,000 |
|
|
42,477,000 |
|
Accrued expenses and other current liabilities |
|
58,423,000 |
|
|
62,245,000 |
|
Current portion of credit facility, net |
|
4,050,000 |
|
|
4,050,000 |
|
Operating lease liabilities, current |
|
7,250,000 |
|
|
7,869,000 |
|
Contract liabilities |
|
62,546,000 |
|
|
65,834,000 |
|
Interest payable |
|
15,000 |
|
|
1,072,000 |
|
Total current liabilities |
|
158,249,000 |
|
|
183,547,000 |
|
Non-current portion of credit facility, net |
|
114,414,000 |
|
|
173,527,000 |
|
Non-current portion of subordinated debt, net |
|
95,588,000 |
|
|
— |
|
Operating lease liabilities, non-current |
|
29,376,000 |
|
|
30,258,000 |
|
Income taxes payable, non-current |
|
1,818,000 |
|
|
2,231,000 |
|
Deferred tax liability, net |
|
4,619,000 |
|
|
6,193,000 |
|
Long-term contract liabilities |
|
21,005,000 |
|
|
21,035,000 |
|
Warrant and derivative liabilities |
|
17,849,000 |
|
|
5,254,000 |
|
Other liabilities |
|
3,950,000 |
|
|
4,060,000 |
|
Total liabilities |
|
446,868,000 |
|
|
426,105,000 |
|
Commitments and contingencies |
|
|
|
|||
Convertible preferred stock, par value |
|
189,545,000 |
|
|
180,076,000 |
|
Stockholders’ equity: |
|
|
|
|||
Preferred stock, par value |
|
— |
|
|
— |
|
Common stock, par value |
|
4,444,000 |
|
|
4,377,000 |
|
Additional paid-in capital |
|
548,722,000 |
|
|
640,145,000 |
|
Retained (deficit) earnings |
|
(6,895,000 |
) |
|
103,580,000 |
|
|
|
546,271,000 |
|
|
748,102,000 |
|
Less: |
|
|
|
|||
Treasury stock, at cost (15,033,317 shares at July 31, 2025 and July 31, 2024) |
|
(441,849,000 |
) |
|
(441,849,000 |
) |
Total stockholders’ equity |
|
104,422,000 |
|
|
306,253,000 |
|
Total liabilities, convertible preferred stock and stockholders’ equity |
$ |
740,835,000 |
|
|
912,434,000 |
|
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES |
||||||||||||||
Consolidated Statements of Cash Flows |
||||||||||||||
|
|
(Unaudited) |
|
(Audited) |
||||||||||
|
|
Three months ended July 31, |
|
Twelve months ended July 31, |
||||||||||
|
|
|
2025 |
|
|
2024 |
|
|
|
2025 |
|
|
2024 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
||||||
Net income (loss) |
|
$ |
7,910,000 |
|
|
(90,785,000 |
) |
|
$ |
(155,302,000 |
) |
|
(99,985,000 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization of property, plant and equipment |
|
|
3,398,000 |
|
|
3,086,000 |
|
|
|
11,798,000 |
|
|
12,159,000 |
|
Amortization of intangible assets with finite lives |
|
|
5,043,000 |
|
|
5,288,000 |
|
|
|
21,723,000 |
|
|
21,154,000 |
|
Amortization of stock-based compensation |
|
|
600,000 |
|
|
858,000 |
|
|
|
3,120,000 |
|
|
6,096,000 |
|
Amortization of cost to fulfill assets |
|
|
— |
|
|
240,000 |
|
|
|
261,000 |
|
|
960,000 |
|
Paid-in-kind interest under term loan |
|
|
— |
|
|
337,000 |
|
|
|
5,528,000 |
|
|
337,000 |
|
Amortization of deferred financing costs, debt discount and accreted interest related to subordinated credit facility |
|
|
4,009,000 |
|
|
— |
|
|
|
8,460,000 |
|
|
— |
|
Amortization of deferred financing costs and debt discount related to credit facility |
|
|
1,472,000 |
|
|
1,291,000 |
|
|
|
4,968,000 |
|
|
3,985,000 |
|
Write-off of deferred financing costs and debt discounts |
|
|
4,086,000 |
|
|
1,832,000 |
|
|
|
8,977,000 |
|
|
1,832,000 |
|
Change in fair value of warrants and derivatives |
|
|
(23,048,000 |
) |
|
2,166,000 |
|
|
|
(38,498,000 |
) |
|
(4,273,000 |
) |
Loss on business divestiture |
|
|
— |
|
|
3,212,000 |
|
|
|
— |
|
|
1,199,000 |
|
Changes in other liabilities |
|
|
— |
|
|
(1,010,000 |
) |
|
|
— |
|
|
(4,110,000 |
) |
Loss on disposal of property, plant and equipment |
|
|
— |
|
|
872,000 |
|
|
|
310,000 |
|
|
889,000 |
|
Provision for allowance for doubtful accounts and contract assets |
|
|
(108,000 |
) |
|
288,000 |
|
|
|
17,608,000 |
|
|
1,422,000 |
|
Provision for excess and obsolete inventory |
|
|
1,717,000 |
|
|
558,000 |
|
|
|
16,202,000 |
|
|
2,801,000 |
|
Deferred income tax benefit |
|
|
(1,116,000 |
) |
|
(1,977,000 |
) |
|
|
(1,700,000 |
) |
|
(2,990,000 |
) |
Impairment of long-lived assets, including goodwill |
|
|
— |
|
|
64,525,000 |
|
|
|
79,555,000 |
|
|
64,525,000 |
|
Changes in assets and liabilities, net of effects of divestitures: |
|
|
|
|
|
|
|
|
||||||
Accounts receivable |
|
|
6,743,000 |
|
|
3,763,000 |
|
|
|
33,150,000 |
|
|
(38,305,000 |
) |
Inventories |
|
|
6,748,000 |
|
|
2,426,000 |
|
|
|
7,708,000 |
|
|
(7,763,000 |
) |
Prepaid expenses and other current assets |
|
|
(609,000 |
) |
|
2,686,000 |
|
|
|
(1,161,000 |
) |
|
4,282,000 |
|
Other assets |
|
|
(465,000 |
) |
|
(1,876,000 |
) |
|
|
(2,074,000 |
) |
|
(717,000 |
) |
Accounts payable |
|
|
(1,264,000 |
) |
|
(11,614,000 |
) |
|
|
(15,194,000 |
) |
|
(18,930,000 |
) |
Accrued expenses and other current liabilities |
|
|
(3,721,000 |
) |
|
(1,362,000 |
) |
|
|
(8,964,000 |
) |
|
755,000 |
|
Contract liabilities |
|
|
(1,021,000 |
) |
|
6,060,000 |
|
|
|
(3,318,000 |
) |
|
2,755,000 |
|
Other liabilities, non-current |
|
|
(46,000 |
) |
|
(27,000 |
) |
|
|
(12,000 |
) |
|
14,000 |
|
Interest payable |
|
|
10,000 |
|
|
(184,000 |
) |
|
|
(1,057,000 |
) |
|
(296,000 |
) |
Income taxes payable |
|
|
1,109,000 |
|
|
(150,000 |
) |
|
|
(380,000 |
) |
|
(2,291,000 |
) |
Net cash provided by (used in) operating activities |
|
|
11,447,000 |
|
|
(9,497,000 |
) |
|
|
(8,292,000 |
) |
|
(54,495,000 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
||||||
Proceeds from business divestiture, net |
|
|
— |
|
|
— |
|
|
|
— |
|
|
33,225,000 |
|
Purchases of property, plant and equipment |
|
|
(2,036,000 |
) |
|
(4,179,000 |
) |
|
|
(8,565,000 |
) |
|
(13,083,000 |
) |
Net cash (used in) provided by investing activities |
|
|
(2,036,000 |
) |
|
(4,179,000 |
) |
|
|
(8,565,000 |
) |
|
20,142,000 |
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
||||||
Proceeds from subordinated credit facility |
|
|
35,000,000 |
|
|
— |
|
|
|
100,000,000 |
|
|
— |
|
Contribution for constructing long-lived assets |
|
|
2,814,000 |
|
|
— |
|
|
|
2,814,000 |
|
|
— |
|
Proceeds from term loan |
|
|
— |
|
|
157,140,000 |
|
|
|
— |
|
|
157,140,000 |
|
Repayment of term loan |
|
|
(29,494,000 |
) |
|
(28,187,000 |
) |
|
|
(56,746,000 |
) |
|
(48,800,000 |
) |
Net payments under revolving loans |
|
|
(5,775,000 |
) |
|
(102,854,000 |
) |
|
|
(14,859,000 |
) |
|
(85,300,000 |
) |
Payment of deferred financing costs and debt discount |
|
|
(325,000 |
) |
|
(7,114,000 |
) |
|
|
(4,545,000 |
) |
|
(10,294,000 |
) |
Proceeds from issuance of convertible preferred stock |
|
|
— |
|
|
— |
|
|
|
— |
|
|
43,200,000 |
|
Payment of convertible preferred stock issuance costs and fees |
|
|
— |
|
|
(77,000 |
) |
|
|
(726,000 |
) |
|
(4,272,000 |
) |
Cash dividends paid on common stock |
|
|
(1,000 |
) |
|
(1,000 |
) |
|
|
(158,000 |
) |
|
(268,000 |
) |
Remittance of employees' statutory tax withholding for stock awards |
|
|
(62,000 |
) |
|
(5,000 |
) |
|
|
(1,248,000 |
) |
|
(3,815,000 |
) |
Proceeds from issuance of employee stock purchase plan shares |
|
|
17,000 |
|
|
35,000 |
|
|
|
118,000 |
|
|
254,000 |
|
Payment of shelf registration costs |
|
|
— |
|
|
(20,000 |
) |
|
|
(207,000 |
) |
|
(20,000 |
) |
Net cash provided by financing activities |
|
|
2,174,000 |
|
|
18,917,000 |
|
|
|
24,443,000 |
|
|
47,825,000 |
|
Net increase in cash and cash equivalents |
|
$ |
11,585,000 |
|
|
5,241,000 |
|
|
$ |
7,586,000 |
|
|
13,472,000 |
|
Cash and cash equivalents at beginning of period |
|
|
28,434,000 |
|
|
27,192,000 |
|
|
|
32,433,000 |
|
|
18,961,000 |
|
Cash and cash equivalents at end of period |
|
$ |
40,019,000 |
|
|
32,433,000 |
|
|
$ |
40,019,000 |
|
|
32,433,000 |
|
|
|
|
|
|
|
|
|
|
||||||
Use of Non-GAAP Financial Measures
To provide investors with additional information regarding the Company’s financial results, this release contains "Non-GAAP financial measures" under the rules of the SEC. The Company’s Adjusted EBITDA is a Non-GAAP measure that represents earnings (loss) before interest, income taxes, depreciation, amortization of intangibles, impairment of long-lived assets, including goodwill, amortization of cost to fulfill assets, amortization of stock-based compensation, CEO transition costs, change in fair value of warrants and derivatives, proxy solicitation costs, restructuring costs, strategic emerging technology costs (for next-generation satellite technology), and write-off of deferred financing costs and debt discounts, and in the recent past, acquisition plan expenses, change in fair value of the convertible preferred stock purchase option liability, COVID-19 related costs, facility exit costs, strategic alternatives expenses and other and loss on business divestiture. These items, while periodically affecting its results, may vary significantly from period to period and may have a disproportionate effect in a given period, thereby affecting the comparability of results. Although closely aligned, the Company’s definition of Adjusted EBITDA is different than EBITDA (as such term is defined in its Credit Facility and Subordinated Credit Facility) utilized for financial covenant calculations and also may differ from the definition of EBITDA or Adjusted EBITDA used by other companies and therefore may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA, as well as adjusted operating income (loss), net income (loss) attributable to common shareholders and net income (loss) per diluted common share, as presented in the tables, are non-GAAP measures. These Non-GAAP measures are frequently requested by investors and analysts. The Company believes that investors and analysts may use these Non-GAAP measures along with other information contained in its SEC filings, including GAAP measures, in assessing its performance and comparability of its results with other companies. The Company's Non-GAAP measures reflect the GAAP measures as reported, adjusted for certain items as described herein and also excludes the effects of the Company’s outstanding convertible preferred stock. These Non-GAAP financial measures have limitations as an analytical tool as they exclude the financial impact of transactions necessary to conduct its business, such as the granting of equity compensation awards, and are not intended to be an alternative to financial measures prepared in accordance with GAAP. These measures are adjusted as described in the reconciliation of GAAP to Non-GAAP measures in the tables presented herein, but these adjustments should not be construed as an inference that all of these adjustments or costs are unusual, infrequent or non-recurring. Non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, financial measures determined in accordance with GAAP. Investors are advised to carefully review the GAAP financial results that are disclosed in the Company’s SEC filings. As we have not provided future Non-GAAP financial guidance or targets, there is no need to reconcile our business outlook to the most directly comparable GAAP measures. Furthermore, even if guidance or targets had been provided, items such as stock-based compensation, adjustments to the provision for income taxes, amortization of intangibles and interest expense, which are specific items that impact these measures, have not yet occurred, are out of the Company’s control, or cannot be predicted at this time. For example, quantification of stock-based compensation expense requires inputs such as the number of shares granted and market price that are not currently ascertainable. Accordingly, reconciliations to the Non-GAAP forward looking metrics would not be available without unreasonable effort and such unavailable reconciling items could significantly impact the Company’s financial results.
|
Three months ended July 31, |
|
Twelve months ended July 31, |
|||||||||||
|
|
2025 |
|
|
2024 |
|
|
|
2025 |
|
|
|
2024 |
|
Reconciliation of GAAP Operating income (loss) to Adjusted EBITDA: |
|
|
|
|
|
|
|
|||||||
Operating income (loss) |
$ |
1,861,000 |
|
$ |
(81,479,000 |
) |
|
$ |
(139,098,000 |
) |
|
$ |
(79,890,000 |
) |
Amortization of stock-based compensation |
|
600,000 |
|
|
858,000 |
|
|
|
3,120,000 |
|
|
|
6,096,000 |
|
Amortization of intangibles |
|
5,043,000 |
|
|
5,288,000 |
|
|
|
21,723,000 |
|
|
|
21,154,000 |
|
Impairment of long-lived assets, including goodwill |
|
— |
|
|
64,525,000 |
|
|
|
79,555,000 |
|
|
|
64,525,000 |
|
Depreciation |
|
3,398,000 |
|
|
3,086,000 |
|
|
|
11,798,000 |
|
|
|
12,159,000 |
|
Amortization of cost to fulfill assets |
|
— |
|
|
240,000 |
|
|
|
261,000 |
|
|
|
960,000 |
|
Restructuring costs |
|
1,363,000 |
|
|
3,273,000 |
|
|
|
15,585,000 |
|
|
|
12,470,000 |
|
Strategic emerging technology costs |
|
— |
|
|
882,000 |
|
|
|
280,000 |
|
|
|
4,110,000 |
|
Proxy solicitation costs |
|
— |
|
|
— |
|
|
|
2,682,000 |
|
|
|
— |
|
CEO transition costs |
|
1,045,000 |
|
|
424,000 |
|
|
|
2,117,000 |
|
|
|
2,916,000 |
|
Loss on business divestiture |
|
— |
|
|
3,212,000 |
|
|
|
— |
|
|
|
1,199,000 |
|
Adjusted EBITDA |
$ |
13,310,000 |
|
$ |
309,000 |
|
|
$ |
(1,977,000 |
) |
|
$ |
45,699,000 |
|
Reconciliations of GAAP consolidated results to the corresponding Non-GAAP measures are shown in the tables below (numbers and per share amounts in the tables may not foot due to rounding). Non-GAAP results reflect Non-GAAP provisions for (benefits from) income taxes based on year-to-date results, as adjusted for the Non-GAAP reconciling items included in the tables below. The Company evaluates its Non-GAAP effective income tax rate on an ongoing basis, and it can change from time to time. The Company’s Non-GAAP effective income tax rate can differ materially from its GAAP effective income tax rate.
|
July 31, 2025 |
||||||||||||||||||||||
|
Three months ended |
|
Twelve months ended |
||||||||||||||||||||
|
Operating
|
|
Net Loss Attributable
|
|
Net Loss per Diluted Common Share* |
|
Operating
|
|
Net Loss Attributable
|
|
Net Loss per Diluted Common Share* |
||||||||||||
Reconciliation of GAAP to Non-GAAP Earnings: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
GAAP measures, as reported |
$ |
1,861,000 |
|
|
$ |
(11,562,000 |
) |
|
$ |
(0.39 |
) |
|
$ |
(139,098,000 |
) |
|
$ |
(204,251,000 |
) |
|
$ |
(6.95 |
) |
Adjustments to reflect redemption value of convertible preferred stock |
|
— |
|
|
|
19,472,000 |
|
|
|
0.66 |
|
|
|
— |
|
|
|
100,128,000 |
|
|
|
3.40 |
|
Change in fair value of warrants and derivatives |
|
— |
|
|
|
(23,048,000 |
) |
|
|
(0.78 |
) |
|
|
— |
|
|
|
(38,498,000 |
) |
|
|
(1.32 |
) |
Gain on extinguishment of convertible preferred stock |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(51,179,000 |
) |
|
|
(1.74 |
) |
Impairment of long-lived assets, including goodwill |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
79,555,000 |
|
|
|
79,555,000 |
|
|
|
2.71 |
|
Amortization of intangibles |
|
5,043,000 |
|
|
|
4,689,000 |
|
|
|
0.16 |
|
|
|
21,723,000 |
|
|
|
20,774,000 |
|
|
|
0.71 |
|
Restructuring costs |
|
1,363,000 |
|
|
|
1,278,000 |
|
|
|
0.04 |
|
|
|
15,585,000 |
|
|
|
14,860,000 |
|
|
|
0.51 |
|
Proxy solicitation costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,682,000 |
|
|
|
2,545,000 |
|
|
|
0.09 |
|
Amortization of stock-based compensation |
|
600,000 |
|
|
|
720,000 |
|
|
|
0.02 |
|
|
|
3,120,000 |
|
|
|
3,120,000 |
|
|
|
0.11 |
|
CEO transition costs |
|
1,045,000 |
|
|
|
972,000 |
|
|
|
0.03 |
|
|
|
2,117,000 |
|
|
|
2,009,000 |
|
|
|
0.07 |
|
Strategic emerging technology costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
280,000 |
|
|
|
266,000 |
|
|
|
0.01 |
|
Amortization of cost to fulfill assets |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
261,000 |
|
|
|
261,000 |
|
|
|
0.01 |
|
Net discrete tax expense (benefit) |
|
— |
|
|
|
43,000 |
|
|
|
— |
|
|
|
— |
|
|
|
(348,000 |
) |
|
|
(0.01 |
) |
Non-GAAP measures |
$ |
9,912,000 |
|
|
$ |
(7,436,000 |
) |
|
$ |
(0.25 |
) |
|
$ |
(13,775,000 |
) |
|
$ |
(70,758,000 |
) |
|
$ |
(2.41 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
July 31, 2024 |
||||||||||||||||||||||
|
Three months ended |
|
Twelve months ended |
||||||||||||||||||||
|
Operating Loss |
|
Net Loss Attributable
|
|
Net Loss per Diluted Common Share* |
|
Operating
|
|
Net (Loss) Income Attributable to Common Stockholders |
|
Net (Loss) Income per Diluted Common Share* |
||||||||||||
Reconciliation of GAAP to Non-GAAP Earnings: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
GAAP measures, as reported |
$ |
(81,479,000 |
) |
|
$ |
(100,608,000 |
) |
|
$ |
(3.48 |
) |
|
$ |
(79,890,000 |
) |
|
$ |
(135,440,000 |
) |
|
$ |
(4.70 |
) |
Loss on extinguishment of convertible preferred stock |
|
— |
|
|
|
5,915,000 |
|
|
|
0.20 |
|
|
|
— |
|
|
|
19,555,000 |
|
|
|
0.68 |
|
Adjustments to reflect redemption value of convertible preferred stock |
|
— |
|
|
|
3,908,000 |
|
|
|
0.14 |
|
|
|
— |
|
|
|
15,900,000 |
|
|
|
0.55 |
|
Change in fair value of warrants and derivatives |
|
— |
|
|
|
2,166,000 |
|
|
|
0.07 |
|
|
|
— |
|
|
|
(4,273,000 |
) |
|
|
(0.15 |
) |
Impairment of long-lived assets, including goodwill |
|
64,525,000 |
|
|
|
63,800,000 |
|
|
|
2.20 |
|
|
|
64,525,000 |
|
|
|
63,800,000 |
|
|
|
2.21 |
|
Amortization of intangibles |
|
5,288,000 |
|
|
|
4,097,000 |
|
|
|
0.14 |
|
|
|
21,154,000 |
|
|
|
16,389,000 |
|
|
|
0.57 |
|
Restructuring costs |
|
3,273,000 |
|
|
|
2,661,000 |
|
|
|
0.09 |
|
|
|
12,470,000 |
|
|
|
9,736,000 |
|
|
|
0.34 |
|
Amortization of stock-based compensation |
|
858,000 |
|
|
|
710,000 |
|
|
|
0.02 |
|
|
|
6,096,000 |
|
|
|
4,797,000 |
|
|
|
0.17 |
|
Strategic emerging technology costs |
|
882,000 |
|
|
|
805,000 |
|
|
|
0.03 |
|
|
|
4,110,000 |
|
|
|
3,795,000 |
|
|
|
0.13 |
|
CEO transition costs |
|
424,000 |
|
|
|
326,000 |
|
|
|
0.01 |
|
|
|
2,916,000 |
|
|
|
2,245,000 |
|
|
|
0.08 |
|
Amortization of cost to fulfill assets |
|
240,000 |
|
|
|
240,000 |
|
|
|
0.01 |
|
|
|
960,000 |
|
|
|
960,000 |
|
|
|
0.03 |
|
Loss on business divestiture |
|
3,212,000 |
|
|
|
2,446,000 |
|
|
|
0.08 |
|
|
|
1,199,000 |
|
|
|
1,199,000 |
|
|
|
0.04 |
|
Net discrete tax expense |
|
— |
|
|
|
3,369,000 |
|
|
|
0.12 |
|
|
|
— |
|
|
|
4,136,000 |
|
|
|
0.14 |
|
Non-GAAP measures |
$ |
(2,777,000 |
) |
|
$ |
(10,165,000 |
) |
|
$ |
(0.35 |
) |
|
$ |
33,540,000 |
|
|
$ |
2,799,000 |
|
|
$ |
0.10 |
|
* Per share amounts may not foot due to rounding. In addition, due to the GAAP net loss for the period, Non-GAAP net income per diluted common share for the twelve months ended July 31, 2024 was computed using weighted average diluted shares outstanding of 29,132,000.
ECMTL
View source version on businesswire.com: https://www.businesswire.com/news/home/20251110814745/en/
Investor Relations Contact
Maria Ceriello
631-962-7115
Maria.Ceriello@comtech.com
Media Contacts
Jamie Clegg
480-532-2523
Jamie.Clegg@comtech.com
Longacre Square Partners
comtech@longacresquare.com
Source: Comtech Telecommunications Corp.
