Comtech Telecommunications (CMTL) Q4 2026 earnings summary

Executive summary

• Fiscal 2026 advanced operational discipline, positive operating cash flow, strategic alternatives and capital-structure changes; continuing operations center on Allerium public safety, retained cyber training and corporate functions.

• Agreement to sell most Satellite and Space operations to a Gilat affiliate for $157.5 million is pending regulatory approval and closing; the retained business is focused on Allerium and cyber security training.

• Improving margins and cash flow, recurring revenue and funded backlog support growth; management withheld FY2027 guidance during the transition.

Financial highlights

• FY2026 net sales were $249.6 million vs. $300.9 million; excluding inactive legacy VSAT and GFSR contracts, sales were comparable year over year, with timing shifts in call-handling revenue.

• FY2026 gross profit was $97.2 million, or 38.9% of sales, vs. $95.2 million and 31.6%; Adjusted EBITDA was $20.6 million, or 8.3%, vs. $16.4 million and 5.5%.

• FY2026 GAAP operating loss was $18.2 million vs. $29.9 million; adjusted operating income was $10.8 million vs. $7.6 million. Net loss attributable to common shareholders was $51.0 million, including $32.8 million of preferred stock dividends.

• Q4 FY2026 sales were $66.2 million vs. $75.3 million; gross profit was $26.9 million, or 40.6%, vs. $26.2 million and 34.7%. Lower location and call-handling sales were partly offset by NG9-1-1 and cyber training.

• Q4 Adjusted EBITDA was $9.2 million, or 13.9% of sales, vs. $7.5 million and 10.0%; adjusted operating income was $6.5 million vs. $5.1 million.

Outlook and guidance

• No FY2027 or FY2028 guidance; management expects to provide guidance after executing the transition and describes the remaining business as more predictable.

• Funded backlog was $520.4 million, spread somewhat evenly over three years, with ~40% expected to convert to revenue in FY2027; recurring revenue was ~80%.

• Unaudited pro forma FY2026 Adjusted EBITDA is estimated at $37 million-$39 million after the sale and transition; annual savings are projected at $16 million-$18 million after roughly one year of implementation.

• Transition-related costs are estimated at $13 million-$15 million, mostly in FY2027 and FY2028; investment in cloud networks and software development is expected to continue in FY2027.

• Management cited strong expected NextGen 911 procurement activity in the U.S., Canada and Australia; FY2027 priorities include pipeline conversion, cross-selling and new products.