Comtech Telecommunications Reports Q3 Fiscal 2025 Results with Increased Net Loss and Decreased Sales

Comtech Telecommunications Corp. reported its financial results for the third quarter of fiscal 2025, revealing a consolidated net sales figure of $126.8 million, a slight decrease from $128.1 million in the same quarter of the previous year. The company's gross profit for the quarter was $38.9 million, representing a gross margin of 30.7%, compared to 30.4% in the prior year. The net loss attributable to common stockholders was $14.5 million, or $0.49 per share, which included significant costs related to restructuring and amortization of intangible assets. In contrast, the company recorded a net loss of $1.0 million, or $0.04 per share, in the same quarter of the previous year.

For the nine months ended April 30, 2025, Comtech's consolidated net sales totaled $369.2 million, down from $414.2 million in the prior year, marking a decrease of 10.9%. The decline was primarily driven by a significant drop in sales within the Satellite and Space Communications segment, which saw revenues fall by 20.7% to $200.2 million. This segment's performance was adversely affected by lower sales of troposcatter solutions and the impact of recent divestitures. Conversely, the Terrestrial and Wireless Networks segment experienced a 4.4% increase in sales, reaching $168.9 million, bolstered by higher demand for next-generation 911 services.

Operationally, Comtech's total liabilities increased to $465.6 million as of April 30, 2025, compared to $426.1 million at the end of the previous fiscal year. The company also reported a significant goodwill impairment charge of $79.6 million during the first quarter of fiscal 2025, which contributed to an operating loss of $141.0 million for the nine-month period. The company’s cash and cash equivalents stood at $28.4 million, down from $32.4 million at the end of July 2024, reflecting ongoing challenges in cash flow management.

Strategically, Comtech has been undergoing a transformation aimed at improving operational efficiency and profitability. The company has implemented cost-cutting measures, including workforce reductions that have reduced employee headcount from 1,676 to approximately 1,468. Additionally, Comtech is exploring strategic alternatives for its various business lines, including potential divestitures. The company has also amended its credit facilities to enhance financial flexibility, including a recent amendment that reduced interest rates and suspended certain financial covenants until late 2025.

Looking ahead, Comtech's management expressed uncertainty regarding future performance due to various external factors, including economic conditions and government spending priorities. The company is not providing specific forward-looking guidance but remains focused on executing its transformation strategy and improving liquidity. The ongoing evaluation of its business operations and potential strategic alternatives will be critical in navigating the current challenging environment.