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COMTECH TELECOMMUNICATIONS CORP /DE/ (CMTL)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 FY26 prelim: revenue $107–$113M and operating cash flow $6–$7M; liquidity was $51M at 10/31/25. Management cited pull-forward from Q4 and U.S. government shutdown timing in S&S; they expect improvement in subsequent quarters .
  • Q4 FY25 delivered clean beats: revenue $130.4M vs $115.0M consensus*, Non-GAAP EPS $(0.25) vs $(0.44)*; gross margin expanded to 31.2%. Positive OCF of $11.4M and liquidity up to $47M at 7/31/25 .
  • Strategic momentum: Allerium rebrand and a multi-year, $130M+ Tier-1 carrier contract extension provide durable backlog and validation of the public safety platform .
  • Structural turn progressing: going-concern language removed; S&S turned to operating income in Q4; culture and working-capital discipline underpin sequential margin/EBITDA improvements .

Note: Asterisked estimate figures are from S&P Global.

What Went Well and What Went Wrong

  • What Went Well

    • Delivered broad-based Q4 beats with revenue $130.4M and Non-GAAP EPS $(0.25), reflecting mix shift and cost control; OCF positive for a second consecutive quarter .
    • S&S turnaround: Q4 S&S operating income $3.3M and Adj. EBITDA $6.3M, with improved mix and discipline; initial deliveries of small-form-factor troposcatter MPR and traction for Digital Common Ground .
    • Allerium momentum: Q4 segment revenue $61.3M (+12% YoY) and Adj. EBITDA $13.7M; secured multi-year $130M+ Tier-1 contract extension post quarter-end .
    • Management tone: “I am proud to report how much stronger Comtech is today – financially, operationally and strategically,” highlighting removal of going-concern disclosure and improved liquidity .

  • What Went Wrong

    • Bookings below 1.0x: Q4 consolidated book-to-bill 0.72x (S&S 0.65x; Allerium 0.81x), reflecting prior-year difficult compare and selective pruning of low-margin opportunities .
    • Q1 FY26 softness: prelim revenue guide below Q4 due to pull-forward into Q4, contracts nearing completion, and U.S. government shutdown timing impacts in S&S .
    • FY25 still loss-making with heavy non-cash charges; FY25 bookings 0.75x and backlog down YoY as mix shifts away from low-margin/legacy programs .

Financial Results

Consolidated: Actual vs Estimates and Sequential Trend

MetricQ3 FY25Q4 FY25Q1 FY26 (Prelim)
Revenue ($M)$126.8 $130.4 $107–$113
Revenue Consensus Mean ($M)$124.12*$115.00*$110.36*
Non-GAAP EPS ($)$(0.18) $(0.25) N/A
Primary EPS Consensus Mean ($)$(0.2133)*$(0.44)*$(0.39)*
Gross Margin (%)30.7% 31.2% N/A
Adj. EBITDA ($M)$12.6 $13.3 N/A
Operating Cash Flow ($M)$2.3 $11.4 $6–$7
Liquidity ($M)$27.3 (6/6/25) $47.0 (7/31/25) $51.0 (10/31/25)

Note: Asterisked estimate figures are from S&P Global.

Observation: Q4 revenue beat by ~$15M vs consensus and Non-GAAP EPS beat by ~$0.19; Q1 prelim revenue midpoint ~$110M is roughly in line with consensus $110.36M* .

Segment Breakdown

Segment MetricQ3 FY25Q4 FY25
S&S Revenue ($M)$67.6 $69.0
S&S Operating Income ($M)$2.7 $3.3
S&S Adj. EBITDA ($M)$5.7 $6.3
Allerium (T&W) Revenue ($M)$59.2 $61.3
Allerium Operating Income ($M)$8.4 $7.1
Allerium Adj. EBITDA ($M)$13.9 $13.7

KPIs

KPIQ3 FY25Q4 FY25Q1 FY26 (Prelim)
Bookings ($M)$71.0 $94.4 N/A
Book-to-Bill (x)0.56x 0.72x N/A
Adj. EBITDA ($M)$12.6 $13.3 N/A
Operating Cash Flow ($M)$2.3 $11.4 $6–$7
Liquidity ($M)$27.3 (6/6/25) $47.0 (7/31/25) $51.0 (10/31/25)

Non-GAAP note: Non-GAAP excludes items such as stock-based comp, amortization, impairments, restructuring, proxy/CEO transition, derivative/warrant fair value changes, etc. See reconciliations in the 8-Ks .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales (Consolidated)Q1 FY26None$107–$113M Introduced
Operating Cash FlowQ1 FY26None$6–$7M Introduced
Liquidity snapshotAs of 10/31/25N/A$51.0M New datapoint
Qualitative outlookFY26 (rest of year)N/AExpect improvement in subsequent quarters New commentary

Company does not provide full-year guidance; management noted shutdown-related timing impacts and a pull-forward into Q4 .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 FY25)Previous Mentions (Q4 FY25)Current Period (Q1 FY26)Trend
Transformation, culture, accountabilityCost actions, product rationalization, positive OCF return; “lines of responsibility… are clearer” Removal of going-concern disclosure; focus on cash flow optimization Carryover with continued cash generation focus in prelim update Improving execution
S&S turnaround and product roadmap (Digital Common Ground, MPR, EDIM)Streamlining; debooking of low-margin Army field services; VSAT wins S&S op income positive; MPR initial deliveries; prototypes for Digital Common Ground EDIM entering certification phase timing into early CY26; shutdown timing affects Q1 Positive mix, near-term timing headwinds
Allerium (NG911/call handling/location)Strong Q3; nearing launch of cloud/AI call handling Q4 growth, strong Adj. EBITDA; post-Q4 $130M+ Tier-1 extension Contract supports multi-year revenue visibility Strengthening
Capital structure & liquidityAmended facilities; liquidity ~$27M (6/6) Further amendments; liquidity $47M at 7/31 Liquidity $51M at 10/31 Improved flexibility
Bookings/book-to-billQ3 book-to-bill 0.56x; debooking impact Q4 book-to-bill 0.72x; prior-year tough compare Q1 not provided; mgmt expects improvement later in FY26 Recovering over time

Management Commentary

  • “I am proud to report how much stronger Comtech is today – financially, operationally and strategically.” Removal of going-concern disclosure underscores improved health .
  • “Our S&S business is better positioned to pursue growth opportunities… we are already seeing traction from the launch of our Digital Common Ground platform… initial deliveries of our small-form factor troposcatter system (MPR)” .
  • “After year-end, we secured a multi-year contract extension… valued in excess of $130 million” reinforcing Allerium’s role in modernization of critical infrastructure .
  • CFO: “We achieved our second consecutive quarter of positive cash flows from operations… and positive operating income in Q4” .
  • Q1 FY26 prelim: “Net sales $107–$113M… OCF $6–$7M… performance expected to improve in subsequent quarters” .

Q&A Highlights

  • $130M+ Tier-1 carrier contract: Management declined detailed economics; emphasized long-term, scalable nature and anchor for future growth .
  • FY26 cadence: No formal guidance; expect improvement after Q1 as shutdown impacts ease and timing normalizes .
  • Bookings trajectory: Expect cadence to pick up post-shutdown; international Allerium opportunities highlighted .
  • EDIM program: Prototype deliveries to begin certification prior to CY25 year-end; certification to progress in early CY26 .

Estimates Context

  • Q3 FY25: Revenue $126.8M vs $124.12M consensus*; Non-GAAP EPS $(0.18) vs Primary EPS consensus $(0.2133)* — both better than expected .
  • Q4 FY25: Revenue $130.4M vs $115.0M consensus*; Non-GAAP EPS $(0.25) vs Primary EPS consensus $(0.44)* — clear beats on both lines .
  • Q1 FY26: Company prelim revenue $107–$113M brackets consensus $110.36M* (midpoint roughly in line); no EPS outlook provided (consensus $(0.39)*) .

Note: Asterisked estimate figures are from S&P Global.

Key Takeaways for Investors

  • Near-term setup: Q1 FY26 prelim softer vs Q4 due to timing/shutdown, but management expects improvement in subsequent quarters; watch for S&S order timing normalization and certification milestones (e.g., EDIM) .
  • Structural progress: Two consecutive quarters of positive OCF, removal of going-concern disclosure, and covenant relief into 1/31/27 reduce liquidity risk and support operational execution .
  • Mix shift benefits: S&S margin recovery (Q4 op income positive) and Allerium durability (911/call handling/location) underpin gross margin expansion and Adj. EBITDA resilience .
  • Backlog visibility: $130M+ Tier-1 Allerium extension adds multi-year revenue stability; track additional international wins and Mira cloud-native rollout .
  • Bookings watch: Q4 book-to-bill <1.0 reflects selectivity and tough compare; conversion of next-gen programs (Digital Common Ground, MPR, VSAT) and government timing will drive trajectory .
  • Valuation implications: Consecutive beats (Q3/Q4) and improving liquidity/cash conversion are positive catalysts; sustained S&S profitability and bookings inflection are key to multiple expansion .

Appendix: Additional Data Points

  • Q4 FY25 consolidated metrics: Revenue $130.4M; GM 31.2%; Op income $1.9M; Adj. EBITDA $13.3M; Bookings $94.4M (0.72x); OCF $11.4M .
  • FY25 summary: Net sales $499.5M; GM 25.6%; Adj. EBITDA $(2.0)M; funded backlog $672.1M; liquidity $47.0M at 7/31/25 .

Note: Non-GAAP definitions and reconciliations provided in the company’s 8-K releases .