Financial Data and Key Metrics Changes - Comtech reported a significant improvement in operating cash flow, achieving $11.4 million in Q4 2025, up from $2.3 million in Q3 2025, marking the first positive cash flow since fiscal 2023 [4][39] - The company ended the fiscal year with $47 million in liquidity, a notable increase from $27 million in March 2025, reflecting improved operational cash flow and better terms with lenders [5] - Adjusted EBITDA improved sequentially from a negative $30.8 million in Q1 to positive $13.3 million in Q4 2025, indicating a turnaround in financial performance [9][38] - Consolidated net sales for fiscal 2025 were $499.5 million, down from $540.4 million in fiscal 2024, primarily due to the wind down of legacy contracts [30][31] Business Line Data and Key Metrics Changes - The Satellite and Space Communications segment generated over $20 million in operating cash flow in Q4 2025, a significant improvement from negative cash flow in previous quarters [19][20] - The Allerium segment saw adjusted EBITDA grow 37% to $13.7 million in Q4 2025, driven by higher net sales and gross profit from emergency communication solutions [23][24] Market Data and Key Metrics Changes - Comtech's funded backlog as of July 31, 2025, was $672.1 million, down from $798.9 million a year earlier, reflecting a decrease in net bookings impacted by a debooking in Q3 2025 [35] - The company secured a multi-year contract extension valued over $130 million from its largest customer, reinforcing its position in the emergency communication market [24][48] Company Strategy and Development Direction - Comtech is focused on optimizing cash flow rather than just revenue growth, which is expected to strengthen its financial position and operational efficiency [13][14] - The company has implemented a series of transformation initiatives aimed at improving corporate governance, executive leadership, and operational efficiency [11][12][15] - The Allerium segment is expanding its product offerings and has opened a new innovation lab to drive next-generation R&D in public safety technology [25][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's improved financial health and operational performance, highlighting a cultural shift towards accountability and cash flow optimization [4][16] - The company anticipates continued improvements in fiscal 2026, despite potential impacts from the U.S. government shutdown and the phase-out of low-margin contracts [44][45] Other Important Information - Comtech has made significant progress in remediating material weaknesses in internal controls, which has led to improved reporting and operational processes [10] - The company has amended its credit facilities to enhance financial flexibility, including a $35 million incremental subordinated loan [40][42] Q&A Session Summary Question: Regarding the $130 million carrier contract, can you help model some of the economics? - Management confirmed it is a long-term commitment with a major customer, providing a foundation for future growth [48][49] Question: How should we think about the quarterly cadence through fiscal 2026? - Management indicated that while they do not provide guidance, they expect business to improve throughout fiscal 2026 [50] Question: Can you elaborate on the book-to-bill ratio improvement? - Management noted that the recent large contract award contributed to the improvement, and they are optimistic about international market success [51] Question: What is the status of the EDIM certification? - Management confirmed that the program is progressing well, with expectations to begin the certification process before year-end [52][53]

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]