Financial Performance - The company reported positive operating cash flows of $2.3 million in Q3 2025, the first positive cash flow in eight quarters, followed by $11.4 million in Q4 2025[22]. - Liquidity improved to $47.0 million as of July 31, 2025, up from approximately $18.0 million in December 2023[22]. - Accounts payable decreased to $26.0 million as of July 31, 2025, down from $66.5 million in October 2023[22]. - The company achieved a 12.6% increase in net sales from Q1 to Q4 of fiscal 2025, despite phasing out low-margin legacy contracts[22]. - Gross profit as a percentage of consolidated net sales improved from 12.5% in Q1 to 31.2% in Q4 of fiscal 2025[22]. - Adjusted EBITDA improved from negative $30.8 million in Q1 to positive $13.3 million in Q4 of fiscal 2025[22]. - As of July 31, 2025, the company's backlog was $672.1 million, with 69.6% attributed to U.S. commercial customers and 12.1% to U.S. government contracts[85][86]. - International sales for fiscal 2025 were $105.1 million, down from $132.1 million in fiscal 2023[83]. Strategic Initiatives - The company secured long-term customer commitments, including a multi-year contract extension valued at over $130.0 million with a top-tier U.S. mobile network operator[22]. - The company is expanding its student and administration portal capabilities through hosted SaaS delivery models to enhance scalability and accessibility in cybersecurity training[41]. - The company aims to enhance operational efficiency and streamline product lines to focus on higher operating margin products as part of its transformation plan[72]. - The company plans to continue expanding its international marketing efforts and leverage relationships with larger companies to market its technology solutions[75]. Product Development and Innovation - The company launched the Digital Common Ground (DCG) portfolio of modems, designed for hybrid satellite network architectures, supporting both commercial and government operations[33]. - The Troposcatter Family of Systems has been significantly advanced, delivering a next-generation solution with a thousand-fold performance increase over prior generations[36]. - The company is investing in product enhancements for the Guardian platform, including the launch of Allerium Mira, targeting fiscal 2026[59]. - The company expects growth in demand for satellite-based cellular backhaul as next-generation cellular networks deploy in underserved regions[6]. - The company is targeting the launch of the Allerium Mira solution, a cloud-based emergency call handling and analytics platform, in fiscal 2026[59]. Market Position and Competition - The company holds an estimated market share of 22.1% in the Next Generation 911 (NG-911) primary contract holder market, covering nearly 60 million people[53]. - The company’s competitive landscape includes larger firms with greater resources, and it must keep pace with rapid technological changes to maintain its market position[100]. - The company faces competition from various firms in the Satellite and Space Communications segment, including major players like General Dynamics and Raytheon Technologies[102]. Government Contracts and Compliance - In fiscal 2025, $151.3 million or 30.3% of consolidated net sales were to the U.S. government, with $96.7 million from firm fixed-price contracts and $54.6 million from cost-reimbursable contracts[127]. - The U.S. government is shifting towards multiple-award IDIQ contracts, which may increase competition for future contracts while providing new opportunities[124]. - The company faces risks related to compliance with various export control laws and regulations, which could adversely affect international sales[130]. - The company has implemented a due diligence program for Conflict Minerals, which may increase costs and impact the availability of raw materials[132]. Workforce and Operational Changes - The company implemented workforce reductions approximating 23% of its workforce, resulting in annualized labor cost savings of approximately $47.0 million[80]. - The company had 1,385 employees as of July 31, 2025, with 820 engaged in production and production support, 323 in research and development, and 242 in marketing and administrative functions[114]. - The company anticipates annualized cost savings of approximately $3.0 million from operational optimizations initiated in September 2025, including facility footprint reductions and product manufacturing migrations[80]. Research and Development - Research and development expenses were $17.4 million, $24.1 million, and $48.6 million for fiscal 2025, 2024, and 2023, representing 3.5%, 4.5%, and 8.8% of total consolidated net sales respectively[92]. - Customer-funded research and development reimbursements were $22.8 million, $23.0 million, and $14.0 million for fiscal 2025, 2024, and 2023 respectively[92]. - The company experienced a significant decrease in research and development expenses compared to historical periods due to increased customer-funded activities and reductions in force[93]. Environmental and Corporate Responsibility - The company is committed to reducing its environmental impact and complying with global environmental regulations across its value chain[118]. - The company aims to foster a culture of continuous improvement in environmental, health, and safety (EHS) practices[120]. - The company emphasizes corporate responsibility and employee engagement through various initiatives, including a focus on health, safety, and wellness programs[105].

Core Insights - Comtech Telecommunications Corp. has demonstrated significant progress in its financial transformation, reporting positive operating cash flow and improved liquidity [1][3][15] - The company has successfully executed transformation initiatives, leading to a revitalized Satellite & Space Communications business and growth in the Allerium segment [2][4][38] Financial Performance - For fiscal year 2025, net sales were $499.5 million, a decline of 7.6% from $540.4 million in 2024, primarily due to lower sales in the Satellite and Space Communications segment [6][10] - Gross profit for fiscal 2025 was $127.9 million, with a gross margin of 25.6%, down from $157.2 million and 29.1% in the prior year [7] - The operating loss for fiscal 2025 was $139.1 million, compared to a loss of $79.9 million in fiscal 2024, heavily influenced by the first quarter's performance [8][10] Segment Performance Satellite and Space Communications (S&S) - S&S segment net sales for fiscal 2025 were $269.3 million, down from $324.1 million in fiscal 2024, reflecting the discontinuation of low-margin contracts [25][26] - The operating loss in the S&S segment was $111.6 million, significantly impacted by a $79.6 million non-cash goodwill impairment charge [26] - Adjusted EBITDA for the S&S segment was a loss of $15.8 million, compared to a positive $29.8 million in fiscal 2024, but showed sequential improvement throughout fiscal 2025 [27] Allerium - Allerium segment net sales increased by 6.5% to $230.3 million in fiscal 2025, driven by growth in NG-911 services and location-based solutions [38] - Operating income for the Allerium segment was $24.1 million, up 11.1% from $21.7 million in fiscal 2024 [39] - Adjusted EBITDA for Allerium was $47.6 million in fiscal 2025, compared to $44.7 million in the previous year [40] Cash Flow and Liquidity - The company reported operating cash flow of $11.4 million in the fourth quarter of fiscal 2025, marking the first quarters of positive cash flow since fiscal 2023 [3][22] - Total liquidity improved to $47 million as of July 31, 2025, a 71.5% increase from $27.4 million in March 2025 [15][54] Strategic Initiatives - Comtech has implemented new operational disciplines and cost reduction initiatives, enhancing accountability and efficiency across the organization [4][24] - The company has rebranded its Terrestrial and Wireless Networks segment to Allerium, consolidating its go-to-market strategy and focusing on public safety communications [37][47]

Financial Data and Key Metrics Changes - Consolidated net sales were $126.8 million compared to $128.1 million a year ago and $126.6 million in Q2 of fiscal 2025 [24] - Consolidated gross margin was 30.7% in Q3 compared to 30.4% a year ago and improved from 26.7% in Q2 [27] - Consolidated operating loss for Q3 decreased to $1.5 million compared to a $3.5 million operating loss in Q3 of last year and a $10.3 million operating loss last quarter [29] - Consolidated adjusted EBITDA for Q3 increased to $12.6 million compared to $11.9 million in Q3 of last year and $2.9 million in Q2 [30] - The company generated positive GAAP cash flow from operations of $2.3 million this quarter, marking the first positive cash flow in the past eight quarters [21] Business Line Data and Key Metrics Changes - The Terrestrial and Wireless (T and W) segment experienced higher net sales of $59.2 million, a 12% increase sequentially, driven by next generation 911 services [26] - The Satellite and Space (S and S) segment's net sales decreased 8.3% to $67.6 million, impacted by lower sales of troposcatter solutions, but improved gross profit percentage was achieved [27] - T and W's net sales included over $3 million of incremental NG911 services revenue due to a retroactive invoicing agreement [26] Market Data and Key Metrics Changes - The company secured a $40 million capital infusion that allowed for renegotiation of terms with senior secured lenders, improving financial flexibility [11] - The S and S segment's book to bill ratio was higher this quarter than in the second quarter of this year, despite a $36 million debooking related to a low-margin contract [17][28] Company Strategy and Development Direction - The company is focused on a transformation plan aimed at addressing historical challenges while leveraging core strengths and capitalizing on growth opportunities [10] - The strategy includes streamlining product lines, improving operational efficiency, and enhancing accountability throughout the organization [12][13] - The company aims to prioritize returning to positive cash flow and has made significant progress in executing its transformation plan [21][33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the longstanding challenges but expressed optimism about the company's strong assets and growth opportunities [33] - The company is committed to improving operational discipline and has made notable progress in financial performance [10][33] - Management highlighted a renewed sense of purpose and urgency within the organization, contributing to improved morale and accountability [10] Other Important Information - The company has discontinued more than 70 products across the satellite and space business to focus on higher-margin offerings [13] - The company is supporting a review by the director of defense trade controls regarding potential misclassification of certain modem variants [18] Q&A Session Summary Question: Status of next generation digital back end modems development - Management indicated good progress on the development of platforms, with expectations for significant progress towards certification by the end of the calendar year [36][37] Question: Outstanding competitions in the 911 business - Management confirmed there are several compelling bids in the RFP process but preferred not to disclose specifics [40] Question: Current quarter bookings characterization - Management refrained from providing guidance on Q4 bookings [41] Question: Impact of discontinued products on revenue - Management expects the impact to be less than 10% of satellite and space segment revenue [44] Question: Outlook for growth in terrestrial wireless segment - Management sees growth opportunities in international carrier markets, especially in 5G, and is launching new products to enhance growth [50]

Financial Data and Key Metrics Changes - Consolidated net sales were $126.8 million compared to $128.1 million a year ago and $126.6 million in Q2 of fiscal 2025 [22] - Consolidated gross margin was 30.7% in Q3 compared to 30.4% a year ago and improved from 26.7% in Q2 [26] - Consolidated operating loss for Q3 decreased to $1.5 million compared to a $3.5 million operating loss in Q3 of last year and a $10.3 million operating loss last quarter [28] - Consolidated adjusted EBITDA for Q3 increased to $12.6 million compared to $11.9 million in Q3 of last year and $2.9 million in Q2 [29] - The company generated positive GAAP cash flow from operations of $2.3 million this quarter, the first positive cash flow in the past eight quarters [20] Business Line Data and Key Metrics Changes - The Terrestrial and Wireless (T and W) segment experienced higher net sales of $59.2 million, a 12% increase sequentially, driven by higher sales of next-generation 911 services [25] - The Satellite and Space (S and S) segment's net sales decreased 8.3% to $67.6 million, impacted by lower sales of troposcatter solutions, but achieved a more favorable product mix [26] Market Data and Key Metrics Changes - The T and W segment's growth is driven by new cloud-based emergency response products and increased interest from international carriers in 5G location technologies [19] - The S and S segment is capitalizing on differentiated technologies and extensive customer relationships to develop new growth vectors [14] Company Strategy and Development Direction - The company is executing a transformation plan aimed at addressing historical challenges while leveraging core strengths and capitalizing on opportunities [9] - The transformation plan includes reducing costs, improving operational efficiency, and streamlining product lines, with over 70 products discontinued in the satellite and space business [12][44] - The company aims to return to positive cash flow and has made significant progress in improving financial performance and accountability [32] Management's Comments on Operating Environment and Future Outlook - Management acknowledges longstanding challenges but emphasizes strong assets and compelling growth opportunities [32] - The company has secured a $40 million capital infusion to improve financial flexibility and address prior covenant breaches [10] - Management expresses optimism about the renewed sense of purpose and progress within the organization [20] Other Important Information - The company has amended its credit facility to waive defaults and suspend testing of certain covenants until October 31, 2025 [29] - The company is supporting a review by the director of defense trade controls regarding potential misclassification of certain modem variants [17] Q&A Session Summary Question: Status of next-generation digital back-end modems development - Management reports good progress on the development of next-generation platforms, with expectations for significant progress towards certification by the end of the calendar year [36] Question: Outstanding competitions in the 911 business - Management confirms there are several compelling bids in the RFP process but prefers not to disclose specifics [39] Question: Current quarter bookings characterization - Management refrains from providing guidance on Q4 bookings at this stage [40] Question: Impact of discontinued products on revenue - Management expects the impact from discontinued products to be less than 10% of satellite and space segment revenue [43] Question: Outlook for terrestrial wireless segment growth - Management sees growth opportunities in international carrier markets, especially in 5G, and is launching new products to enhance market presence [48]

Financial Performance - Consolidated net sales were $126.8 million in Q3 FY2025, a decrease of 1.0% year-over-year and an increase of 0.2% sequentially[6]. - Consolidated gross profit was $38.9 million, representing a gross margin of 30.7%, up from 26.7% in the previous quarter[7]. - Consolidated net loss attributable to common shareholders was $14.5 million, compared to a net loss of $1.0 million in the prior year period[10]. - Consolidated Adjusted EBITDA was $12.6 million, an increase from $11.9 million in the prior year period and $2.9 million in the previous quarter[11]. - Consolidated net bookings were $71.0 million, a decrease of 30.2% year-over-year, with a book-to-bill ratio of 0.56x[12]. - The company reported a net loss of $163.2 million for the nine months ended April 30, 2025, compared to a net loss of $9.2 million in the same period of 2024[41]. - The net loss per common share for the nine months ended April 30, 2025, was $6.56, compared to a loss of $1.21 in the same period of 2024[41]. - For the three months ended April 30, 2025, the company reported a net loss of $1,532,000, translating to a loss per diluted share of $(0.49) compared to a net loss of $3,470,000 and a loss per diluted share of $(0.04) for the same period in 2024[47]. - The non-GAAP net loss for the three months ended April 30, 2025, was $5,238,000, resulting in a non-GAAP loss per diluted share of $(0.18), while the non-GAAP net income for the same period in 2024 was $8,790,000 with a non-GAAP income per diluted share of $0.20[47]. Revenue and Sales Segments - The Terrestrial and Wireless Networks segment reported net sales of $59.2 million, an increase of 4.6% year-over-year, driven by NG-911 services[22]. - The Satellite and Space Communications segment's net sales were $67.6 million, a decrease of 5.3% year-over-year, impacted by lower sales to the U.S. Marine Corps and U.S. Army[15]. - A new contract valued at over $27.0 million for statewide NG-911 services has been secured for a Southeastern state[32]. - Various funded orders totaling $9.0 million for wireless location-based messaging services were received[32]. - Incremental funding of over $2.5 million was secured from a new international customer for location-based messaging services[32]. Cost and Expenses - Selling, general and administrative expenses increased to $115.7 million for the nine months ended April 30, 2025, compared to $91.7 million in 2024, reflecting a 26.2% rise[41]. - The company incurred restructuring costs of $14,222,000 for the nine months ended April 30, 2025, compared to $9,197,000 for the same period in 2024[45]. - The company recognized restructuring costs of $12,470,000 for the fiscal year 2024, contributing to the overall net loss[48]. - The company incurred CEO transition costs of $2,916,000 during the fiscal year 2024, which were part of the overall operational expenses[48]. Balance Sheet and Assets - Total assets decreased from $912,434,000 on July 31, 2024, to $751,144,000 on April 30, 2025, representing a decline of approximately 17.7%[43]. - Current liabilities increased significantly from $183,547,000 to $372,683,000, marking an increase of about 103%[43]. - Goodwill decreased from $284,180,000 on July 31, 2024, to $204,625,000 on April 30, 2025, a reduction of approximately 28%[43]. - Total stockholders' equity fell from $306,253,000 to $115,433,000, a decrease of about 62.3%[43]. - The current portion of credit facility increased dramatically from $4,050,000 to $148,882,000, reflecting a rise of approximately 3,577%[43]. Future Outlook and Guidance - The company has not provided future financial targets, making it difficult to reconcile business outlook to GAAP measures[44]. - The company will host a conference call with investors and analysts on June 9, 2025[34]. Impairments and Adjustments - The company experienced a significant impairment of long-lived assets, including goodwill, amounting to $79,555,000 for the nine months ended April 30, 2025[47]. - The total net discrete tax expense for the fiscal year 2024 was $4,136,000, impacting the overall financial results[48]. - The adjustments to reflect the redemption value of convertible preferred stock contributed $15,900,000 to the fiscal year 2024 results, equating to $0.55 per diluted share[48]. - The company reported a change in the fair value of warrants and derivatives, resulting in a loss of $4,273,000 for the fiscal year 2024[48].

Financial Performance - Consolidated net sales for Q3 fiscal 2025 were $126.8 million, slightly up from $126.6 million in Q2 fiscal 2025 but down from $128.1 million in Q3 fiscal 2024[229]. - Consolidated net sales for the three months ended April 30, 2025, were $126.8 million, a decrease of $1.3 million, or 1.0%, compared to $128.1 million in the same period of 2024[244]. - Consolidated net sales decreased by $45.0 million, or 10.9%, to $369.2 million for the nine months ended April 30, 2025, compared to $414.2 million for the same period in 2024[289]. - The net loss attributable to common stockholders for the three months ended April 30, 2025, was $14.5 million, or $(0.49) per diluted common share[288]. - For the nine months ended April 30, 2025, the GAAP net loss attributable to common stockholders was $192.7 million, with a net loss per diluted common share of $6.56[337]. - The company incurred operating losses of $141.0 million for the nine months ended April 30, 2025, following previous losses of $79.9 million in fiscal 2024[342]. Segment Performance - Net sales in the Satellite and Space Communications segment were $67.6 million, down $3.8 million, or 5.3%, from $71.4 million in the prior year, primarily due to lower sales to the U.S. Marine Corps and U.S. Army[245]. - The Terrestrial and Wireless Networks segment saw net sales increase to $59.2 million, up $2.6 million, or 4.6%, compared to $56.6 million in the same period of 2024, driven by higher sales of NG-911 services[246]. - Net sales in the Satellite and Space Communications segment fell by $52.2 million, or 20.7%, to $200.2 million for the nine months ended April 30, 2025, primarily due to lower sales of troposcatter solutions and high-power solid state amplifiers[290]. - The Terrestrial and Wireless Networks segment saw an increase in net sales of $7.1 million, or 4.4%, reaching $168.9 million for the nine months ended April 30, 2025, driven by higher sales of NG-911 services[291]. Expenses and Costs - Selling, general and administrative expenses increased to $30.2 million, or 23.8% of consolidated net sales, compared to $28.7 million, or 22.4% in the prior year[254]. - Selling, general and administrative expenses rose to $115.7 million for the nine months ended April 30, 2025, representing 31.3% of consolidated net sales, up from 22.1% in 2024[299]. - Research and development expenses decreased to $4.4 million, or 3.5% of consolidated net sales, down from $5.7 million, or 4.5% in the same period of 2024[257]. - Research and development expenses decreased by $7.9 million, or 38.8%, to $12.5 million, accounting for 3.4% of consolidated net sales compared to 4.9% in the prior year[303]. - The company incurred $4.3 million in restructuring costs during the three months ended April 30, 2025, compared to $2.8 million in the same period of 2024[255]. - The company incurred $14.2 million in restructuring costs during the nine months ended April 30, 2025, compared to $9.2 million in the prior year[301]. Goodwill and Impairment - The company reported a total goodwill of $204.6 million as of April 30, 2025, with $30.5 million related to the Satellite and Space Communications segment and $174.1 million related to the Terrestrial and Wireless Networks segment[216]. - A non-cash impairment charge of $79.6 million was recorded in the Satellite and Space Communications segment during the first quarter of fiscal 2025[216]. - A non-cash goodwill impairment charge of $79.6 million was recognized in the first quarter of fiscal 2025 due to lower-than-expected financial performance in the Satellite and Space Communications segment[309]. - The Satellite and Space Communications segment experienced a non-cash goodwill impairment charge of $79.6 million, contributing to significantly lower net sales and gross profit[317]. Revenue and Contracts - Revenue recognition is based on FASB ASC 606, reflecting the consideration expected in exchange for goods or services promised to customers[211]. - The company anticipates future growth in end markets due to increasing demand for global voice, video, and data usage, as well as the growth of emergency communication networks[206]. - The company has experienced and expects ongoing risks related to contract revenue and cost estimates, particularly for fixed-price development contracts[214]. - The company faces risks related to government contracts, including unpredictable funding and the potential for contract termination at any time[208]. - Bookings for the quarter totaled $71.0 million, reflecting a book-to-bill ratio of 0.56x; excluding a $36.4 million debooking, gross bookings were $107.4 million with a ratio of 0.85x[229]. - Backlog as of April 30, 2025, was $708.1 million, down from $798.9 million as of July 31, 2024[229]. - Revenue visibility is approximately $1.2 billion, combining $708.1 million of funded backlog and the total unfunded value of multi-year contracts[229]. Financing and Debt - The company entered into a Second Amendment to the Credit Facility, reducing interest rates and waiving defaults, allowing for additional unsecured subordinated debt of $40.0 million[237]. - The company entered into an amendment to the Subordinated Credit Agreement, providing an incremental aggregate principal of $40.0 million[238]. - The company recorded $4.9 million of deferred financing fees and debt discounts as an immediate expense during the nine months ended April 30, 2025[322]. - Total outstanding borrowings under the credit facility were $168.0 million as of April 30, 2025[343]. - The credit facility was amended to decrease interest rate margins applicable to the term loan from 12.00% to 9.50% per annum[345]. - The company anticipates challenges in complying with financial covenants over the next twelve months[346]. Cash Flow and Liquidity - Cash and cash equivalents decreased from $32.4 million on July 31, 2024, to $28.4 million on April 30, 2025[338]. - Net cash used in operating activities improved to $19.7 million for the nine months ended April 30, 2025, compared to $45.0 million for the same period in 2024[341]. - Net cash used in investing activities was $6.5 million for the nine months ended April 30, 2025, primarily for capital expenditures related to cloud-based networks[341]. - The company plans to raise additional funds through equity and debt financing to provide flexibility and pursue acquisitions[353]. - Material cash requirements include $168.0 million in principal payments and $69.5 million in interest payments due under the Credit Facility, with total contractual cash obligations amounting to $366.9 million[361]. Strategic Outlook - The company is exploring strategic alternatives for its businesses, which may impact future results of operations[292]. - The company is not providing forward-looking guidance due to uncertainties related to its transformation strategy and various external economic factors[242]. - The company faces uncertainties regarding its ability to continue as a going concern, with substantial doubt raised about its financial stability[349]. - Significant capital expenditures are being made to support cloud-based networks for NG-911 contract wins, expected to continue throughout fiscal 2025 and beyond[354]. Legal and Regulatory Matters - The company’s U.S. federal income tax returns for fiscal 2022 through 2024 are subject to potential IRS audit, which could materially affect consolidated results[220]. - The company is subject to ongoing legal proceedings that may materially affect its financial condition and results of operations[364].

Core Insights - YNCU and Comtech Fire Credit Union are forming a partnership to enhance member experiences, strengthen financial resilience, and expand community impact [1][2] - The unified credit union will serve 65,000 members, manage $3.5 billion in assets, and operate 22 branches across 18 communities in Ontario [1][4] Company Overview - YNCU currently has 17 branches and $2.8 billion in assets under administration, serving 53,000 members [7] - Comtech Fire Credit Union has over $450 million in assets and more than 12,000 members [6] Partnership Benefits - The partnership aims to deliver enhanced products, increased branch access, and expanded digital banking solutions while maintaining personalized service [2][3] - Members will benefit from an expanded branch network, including locations in Ottawa, Kingston, Mississauga, Amherstview, and Toronto [4] Leadership Perspectives - YNCU CEO Lisa Colangelo emphasized the opportunity to strengthen collective impact for members and communities [3] - Comtech Fire CEO Dave Birak highlighted the creation of new possibilities for members and employees through the partnership [5] Community Commitment - Both organizations are committed to retaining all team members and ensuring continuity of member service [3] - YNCU allocates a minimum of 1% of pre-tax profit annually for charitable initiatives that improve communities [7]

Group 1 - Comtech Telecommunications Corp. held its Q2 2025 earnings conference call on March 12, 2025, with key participants including the CEO, CFO, and presidents of various business units [1][3]. - The conference call was recorded and included a detailed discussion of the quarter, which was also summarized in a press release available on the company's website [1][3]. - The company emphasized that certain information presented would include forward-looking statements regarding future performance, financial condition, and business outlook, which involve significant risks and uncertainties [4].

Financial Performance - Consolidated net sales were $126.6 million in Q2 FY2025, a decrease of 5.7% year-over-year but an increase of 9.3% sequentially[10]. - Gross margin was 26.7%, down from 32.2% in the prior year period, but improved from 12.5% in the previous quarter[11]. - Operating loss was $10.3 million, significantly improved from a loss of $129.2 million in the prior quarter[12]. - Net loss was $48.7 million, compared to a net loss of $10.6 million in the prior year period, but improved from a net loss of $148.4 million in the previous quarter[13]. - Adjusted EBITDA was $2.9 million, down from $15.1 million in the prior year period but improved from a loss of $19.4 million in the previous quarter[14]. - Consolidated net bookings were $79.4 million, a decrease of 44.0% year-over-year and 37.9% sequentially, with a book-to-bill ratio of 0.63x[15]. - The net loss attributable to common stockholders for the three months ended January 31, 2025, was $22.4 million, compared to a loss of $30.5 million in the same period last year[35]. - Net loss for the three months ended January 31, 2025, was $48,739,000, compared to a net loss of $10,558,000 for the same period in 2024, indicating a deterioration in performance[39]. - Adjusted EBITDA for the three months ended January 31, 2025, was $2,903,000, down from $15,111,000 in the same period of 2024, reflecting a decrease of approximately 80.8%[39]. - The six months ended January 31, 2025, showed a net loss of $139.43 million, translating to a diluted loss per share of $6.06[41]. Capital Structure and Liquidity - The company received a $40.0 million capital infusion in subordinated debt to improve its capital structure and financial flexibility[7]. - Qualified cash and cash equivalents were $26.3 million as of January 31, 2025, compared to $21.5 million in the previous year[31]. - Total outstanding borrowings under the Credit Facility increased to $202.9 million from $168.0 million, with $32.5 million drawn on the Revolver Loan[31]. - The company amended its Credit Facility to reduce the minimum quarterly Average Liquidity requirement from $20.0 million to $17.5 million[28]. - Available sources of liquidity as of March 10, 2025, approximated $27.4 million[31]. Operational Adjustments - The company is conducting a comprehensive review of strategic alternatives with financial advisors to enhance operational discipline and reduce costs[7]. - The company has reduced its global workforce by approximately 13% since July 31, 2024, representing about $26.0 million in annualized labor cost savings[27]. - The company plans to pursue contracts for niche products and solutions with higher margins in its Satellite and Space Communications segment[32]. - The company incurred restructuring costs of $3,400,000 in Q1 2025, compared to $2,726,000 in Q1 2024, reflecting ongoing operational adjustments[39]. Asset and Equity Changes - Total assets decreased from $912,434,000 on July 31, 2024, to $770,561,000 on January 31, 2025, representing a decline of approximately 15.5%[37]. - Total stockholders' equity fell from $306,253,000 to $128,708,000, a decline of approximately 58.0%[37]. - Goodwill decreased from $284,180,000 on July 31, 2024, to $204,625,000 on January 31, 2025, a reduction of about 28.0%[37]. - Current liabilities increased significantly from $183,547,000 to $385,309,000, marking an increase of about 109.5%[37]. Expenses and Interest - Total expenses for selling, general and administrative increased to $85.5 million for the six months ended January 31, 2025, from $63.0 million in the previous year[35]. - The company reported a significant increase in interest expense, which rose to $20.5 million for the six months ended January 31, 2025, compared to $10.2 million in the prior year[35]. - The company reported a significant increase in interest expense, rising from $5,265,000 in Q1 2024 to $11,008,000 in Q1 2025[39]. Impairments and Gains - The company recognized impairment of long-lived assets, including goodwill, amounting to $79.56 million for the six months ended January 31, 2025[41]. - The change in fair value of warrants and derivatives resulted in a gain of $28,568,000 for the three months ended January 31, 2025, compared to no gain in the same period of 2024[39]. - The company reported a gain on the change in fair value of warrants and derivatives of $28.57 million for the three months ended January 31, 2025[41]. Non-GAAP Measures - Non-GAAP measures for the three months ended January 31, 2025, indicated a net loss of $10.28 million, with a diluted loss per share of $0.35[41]. - Non-GAAP measures for the fiscal year 2024 showed a net income of $33.54 million, with a diluted earnings per share of $0.10[42].

Goodwill and Impairment - As of January 31, 2025, total goodwill recorded on the balance sheet was $204.6 million, with $30.5 million in the Satellite and Space Communications segment and $174.1 million in the Terrestrial and Wireless Networks segment[231]. - A non-cash impairment charge of $79.6 million was recorded in the Satellite and Space Communications segment during the first quarter of fiscal 2025 related to long-lived assets, including goodwill[231]. - Consolidated gross profit for the six months ended January 31, 2025, was significantly impacted by a non-cash goodwill impairment charge of $79.6 million and restructuring costs totaling $21.3 million[326][328]. Financial Performance - Consolidated net sales for Q2 fiscal 2025 were $126.6 million, compared to $115.8 million in Q1 fiscal 2025 and $134.2 million in Q2 fiscal 2024[243]. - Consolidated net sales for the three months ended January 31, 2025, were $126.6 million, a decrease of $7.6 million or 5.7% compared to the same period in 2024[259]. - Consolidated net sales decreased by $43.7 million, or 15.3%, to $242.4 million for the six months ended January 31, 2025, compared to $286.1 million for the same period in 2024[302]. - GAAP net loss attributable to common stockholders was $22.4 million, including $5.0 million of intangible asset amortization and $3.4 million of restructuring costs[243]. - For the six months ended January 31, 2025, the consolidated net loss attributable to common stockholders was $178.2 million, compared to $33.8 million for the same period in 2024[340]. Segment Performance - Net sales in the Satellite and Space Communications segment were $73.7 million, down $4.9 million or 6.2% from $78.6 million in the prior year[260]. - Net sales in the Terrestrial and Wireless Networks segment were $52.9 million, a decrease of $2.7 million or 4.9% from $55.6 million in the same period of 2024[261]. - The Satellite and Space Communications segment represented 54.7% of consolidated net sales for the six months ended January 31, 2025, down from 63.3% in the prior year[303]. - The Terrestrial and Wireless Networks segment saw an increase in net sales of $4.6 million, or 4.4%, reaching $109.7 million for the six months ended January 31, 2025, driven by higher sales of call handling and NG-911 services[304]. Expenses and Costs - Selling, general and administrative expenses increased to $33.8 million, or 26.7% of consolidated net sales, compared to $30.3 million or 22.6% in the same period of 2024[269]. - Research and development expenses were $4.4 million, or 3.4% of consolidated net sales, down from $6.8 million or 5.1% in the prior year[272]. - The company recorded provisions for excess and obsolete inventory of $13.5 million for the six months ended January 31, 2025, compared to $1.5 million in the prior year[311]. - Interest expense increased to $20.5 million for the six months ended January 31, 2025, up from $10.2 million in the previous year, with an effective interest rate of approximately 20.3%[332]. Cash Flow and Liquidity - Cash and cash equivalents decreased to $26.7 million as of January 31, 2025, down from $32.4 million at July 31, 2024[347]. - Net cash used in operating activities was $22.0 million for the six months ended January 31, 2025, a decrease from $41.2 million in the same period of 2024[350]. - The company recognized a net cash provided by financing activities of $20.3 million for the six months ended January 31, 2025, compared to $37.3 million in the same period of 2024[350]. Contracts and Backlog - New bookings for Q2 fiscal 2025 were $79.4 million, resulting in a book-to-bill ratio of 0.63x[243]. - Backlog as of January 31, 2025, was $763.8 million, down from $798.9 million as of July 31, 2024[243]. - Revenue visibility is approximately $1.6 billion, combining funded backlog and the total unfunded value of multi-year contracts[243]. - A multi-year GFSR contract awarded by the U.S. Army has a total potential value of $544.0 million[244]. Strategic Initiatives - The company is exploring strategic alternatives for its various businesses and product lines to enhance profitability and efficiency[361]. - Capital investments for high-volume manufacturing centers and cloud-based networks are expected to continue throughout fiscal 2025 and beyond[362]. - The company plans to address its going concern uncertainties by maximizing borrowing capacity and generating positive cash inflows from operations[358]. Market Outlook - The company anticipates future growth in end markets due to increasing demand for global voice, video, and data usage, as well as the growth of emergency communication networks[226]. - The company is not providing forward-looking guidance due to uncertainties related to its transformation strategy and external economic factors[257].