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Oct 31, 2025
Comtech Q1 2026 Earnings Report
Comtech reported a net loss and operating loss in Q1 FY2026 despite improvements in gross margin and positive operating cash flow.
Key Takeaways
Comtech saw net sales decline in Q1 FY2026 compared to the previous year, but achieved its third consecutive quarter of positive operating cash flow. Gross margin improved substantially, and the company emphasized strategic streamlining and contract wins, though it posted a net loss of $19.8 million.
Revenue for Q1 FY2026 was $111 million, down 4.1% YoY.
Gross profit rose to $36.8 million with a gross margin of 33.1%, a major improvement from 12.5% last year.
Net loss attributable to shareholders was $19.8 million, an improvement from a $155.9 million loss in Q1 FY2025.
Operating cash flow was positive at $8.1 million, marking three consecutive quarters of positive cash generation.
Revenue by Segment
Forward Guidance
Comtech expects continued operational improvements and revenue momentum driven by contract wins and margin expansion strategies.
Positive Outlook
- Multi-year $130M+ contract extension not yet included in backlog.
- Improved gross margins expected to continue due to strategic streamlining.
- Continued focus on higher-margin opportunities to enhance cash flow.
- Migration of production to Chandler, AZ expected to cut costs by $3M annually.
- Strong demand in NG-911 and public safety positioning Allerium for growth.
Challenges Ahead
- Revenue declined YoY and sequentially due to product rationalization.
- Allerium and S&S both experienced lower sales versus prior year.
- Bookings down 20.3% YoY, impacting near-term revenue growth.
- Government shutdown affected sales and orders timing.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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