Chandler, Ariz., March 16, 2026--Comtech Telecommunications Corp. (NASDAQ: CMTL) today reported financial results for its second quarter ended January 31, 2026. Consolidated net sales were $106.8 million, a decrease of 15.6% compared to US$ 126.6 million reported in the second quarter of fiscal 2025. As anticipated, the decline in net sales in the Satellite and Space Communications (“S&S”) segment primarily reflects the Company’s decision to phase out and eliminate certain low margin and working capital intensive revenues, as well as the impact of the recent U.S. government shutdown, according to the company.
Highlights of the results include (all amounts are in US$ unless otherwise noted):
- Net sales of $106.8 million
- Gross profit of 33.9%
- Operating loss of $1.2 million and net loss attributable to common shareholders of $20.2 million
- Adjusted EBITDA (a Non-GAAP financial measure) of $9.1 million, or 8.6% of net sales
- Net bookings of $175.4 million, representing a book-to-bill ratio of 1.64x
- Funded backlog of $731.6 million and revenue visibility of approximately $1.1 billion
- GAAP cash flows provided by operations of $4.9 million
- Total liquidity at quarter end of $49.9 million
Consolidated net sales were $106.8 million, a decrease of 15.6% compared to $126.6 million reported in the second quarter of fiscal 2025. As anticipated, the decline in net sales in the Satellite and Space Communications (“S&S”) segment primarily reflects the Company’s decision to phase out and eliminate certain low margin and working capital intensive revenues, as well as the impact of the recent U.S. government shutdown. Examples include contracts for services, including the Very Small Aperture Terminal (“VSAT”) Satellite Systems and Services contract and the Global Field Service Representative (“GFSR”) contract, as well as legacy troposcatter related products and services. As part of this repositioning, S&S is pursuing sales of innovative, higher-margin solutions, such as digital common ground modems, network solutions and rapidly deployable multi-path radios (“MPRs”). Allerium reported higher net sales in all three of its product areas compared to the prior year period.
Consolidated gross profit was $36.2 million, or 33.9% of consolidated net sales, an increase from $33.7 million, or 26.7% of consolidated net sales, reported in the second quarter of fiscal 2025. The year-over-year improvement in consolidated gross profit, both in dollars and as a percentage of net sales, reflects overall product mix changes and improved operational and financial performance as a result of the Company’s transformation initiatives to, among other things, enhance operational efficiency, streamline product lines with a focus on strategic, higher operating margin products and reduce cost structures. The improvement in the Company’s quarterly gross profit percentage builds upon the improving quarterly trend achieved throughout fiscal 2025 and the first quarter of fiscal 2026.
Consolidated operating loss was $1.2 million,
compared to an operating loss of $10.3 million in the second quarter of fiscal 2025. The improvement from the second quarter of fiscal 2025 is primarily the result of higher gross profit, both in dollars and as a percentage of consolidated net sales, and lower selling, general and administrative expenses, including lower restructuring costs, no proxy solicitation costs and lower amortization of stock-based compensation, offset in part by higher CEO transition costs that included a net benefit from the recovery of certain legal related expenses in the prior year period. Operating loss in the second quarter of fiscal 2026 reflects $5.0 million of amortization of intangibles, $1.6 million of restructuring costs (of which $0.7 million and $0.9 million related to the S&S and Unallocated segments, respectively), $0.4 million of amortization of stock-based compensation and $0.3 million of CEO transition costs. Excluding such items, consolidated operating income for this past quarter would have been $6.2 million, or 5.8% of consolidated net sales.
Consolidated net loss attributable to common stockholders was $20.2 million, compared to a net loss attributable to common stockholders of $22.4 million in the second quarter of fiscal 2025. In addition to those items described above, and as more fully discussed in the Company’s SEC filings, the more recent period included $6.5 million of net dividends related to the Company’s Convertible Preferred Stock, compared to $26.4 million of net deemed contributions in the prior year period.
Consolidated Adjusted EBITDA (a Non-GAAP financial measure) was $9.1 million, compared to $2.9 million in the second quarter of fiscal 2025, representing an increase of 214%. The year-over-year improvement in Adjusted EBITDA reflects the improvement in operating income described above and the Non-GAAP reconciliations described in the appendix.
Consolidated net bookings were $175.4 million, an increase of 120.9% compared to the second quarter of fiscal 2025. Consolidated net bookings include over $107.0 million of incremental funding toward a multi-year contract extension, valued in excess of $130.0 million and awarded to Comtech’s Allerium segment by a domestic Tier 1 mobile network operator. The book-to-bill ratio in the second quarter of fiscal 2026 was 1.64x, compared to 0.63x in the second quarter of fiscal 2025. As part of the Company’s transformation plan, it has refocused and prioritized its product development and sales efforts to eliminate certain low-margin revenue and target higher-margin opportunities in which it has greater differentiation and to optimize cash flow.
Consolidated backlog was $731.6 million as of January 31, 2026, compared to $763.8 million as of January 31, 2025 and $672.1 million as of July 31, 2025. Revenue visibility, measured as the sum of funded backlog and the total unfunded value of certain multi-year contracts, was approximately $1.1 billion at the end of the second quarter.
GAAP cash flows provided by operations were $4.9 million, an improvement from the second quarter of fiscal 2025 cash flows used in operations of $0.2 million. This is Comtech’s fourth consecutive quarter of positive operating cash flows and reflects improved operating income and favorable changes in networking capital requirements, due primarily to improved accountability and process disciplines, as well as the timing of and progress toward completion on contracts accounted for over time, including related shipments, billings and collections.
Operating cash flows in the second quarter of fiscal 2026 include aggregate net cash payments for interest and taxes of $4.9 million, compared to $5.6 million in the second quarter of fiscal 2025. Operating cash flows for the second quarter of fiscal 2026 and 2025 also include $4.2 million and $5.6 million, respectively, in aggregate net cash payments for restructuring costs, including severance, proxy solicitation costs and CEO transition costs.
Satellite and Space Communications (“S&S”) Segment
S&S net sales were $50.6 million, a decrease of 31.3% compared to the second quarter of fiscal 2025. As anticipated, the decline in net sales in the S&S segment primarily reflects the Company’s decision to phase out and eliminate certain low margin and working capital intensive revenues, as well as the impact of the recent U.S. government shutdown. Examples include contracts for services, including its legacy VSAT, GFSR and troposcatter related products and services. As part of this repositioning, S&S is pursuing sales of innovative, higher-margin solutions, such as digital common ground modems, network solutions and rapidly deployable MPRs.
S&S operating income was $2.5 million, compared to operating income of $1.2 million in the second quarter of fiscal 2025. S&S operating income in the second quarter of fiscal 2026 was impacted by $0.7 million of restructuring costs to streamline its operations, compared to $1.4 million in the second quarter of fiscal 2025. The year-over-year improvement in S&S operating income primarily reflects lower selling, general and administrative expenses (due to cost reduction actions), partially offset by lower net sales and gross profit, in dollars, and higher research and development expenses.
S&S Adjusted EBITDA was $5.4 million in the second quarter of fiscal 2026, compared to $4.7 million in the prior year period. Compared to the prior year period, Adjusted EBITDA reflects those factors discussed above.
S&S’ book-to-bill ratio for the second quarter of fiscal 2026 was 0.68x. This ratio compares to 0.64x in the second quarter of fiscal 2025.
Allerium Segment
Allerium net sales were $56.2 million, an increase of 6.2% compared to the second quarter of fiscal 2025. Compared to the prior year period, Allerium experienced higher net sales in all three product areas (location-based, NG-911 and call handling solutions). Such increase reflects the continued adoption of Allerium’s solutions by new customers, as well as the migration of more PSAPs onto Allerium’s NG-911 core services, cloud-based platforms and monthly recurring revenue streams.
Allerium operating income was $5.5 million, compared to $3.4 million in the second quarter of fiscal 2025. The year-over-year increase in Allerium’s operating income primarily reflects higher net sales and gross profit (both in dollars and as a percentage of segment net sales) and lower research and development expenses while Allerium evaluates and invests in cloud-based and AI-infused software applications designed to deliver advanced emergency communication platforms to its customers. Such improvement in Allerium’s operating income was offset, in part, by higher selling, general and administrative expenses.
Allerium’s Adjusted EBITDA was $11.3 million, compared to $8.9 million in the second quarter of fiscal 2025. Compared to the prior year period, Adjusted EBITDA reflects those factors discussed above.
Allerium’s book-to-bill ratio in the second quarter of fiscal 2026 was 2.51x, compared to 0.61x in the prior year period.
With strategic wins in the U.S., Canada and Australia, the Company believes its position as a trusted leader in 911, NG-911 and public safety applications positions Allerium increasingly well to deliver similarly sophisticated solutions for other types of emergencies. New emergency requesting devices, such as “wearables,” vehicles, smart speakers and AI capable cameras, and new delivery methods, such as through satellite networks, are expected to drive innovation and growth for Allerium within the public safety market over time.