COMTECH TELECOMMUNICATIONS CORP /DE/

Our financial performance for the fiscal year ended July 31, 2026 includes:

•Net sales of $249.6 million, compared to $300.9 million in fiscal 2025; fiscal 2026 and fiscal 2025 include net sales of $0.3 million and $48.5 million, respectively, and gross profit of $0.1 million and $1.7 million, respectively, related to the legacy U.S. Army Very Small Aperture Terminal (“VSAT”) Satellite Systems and Services and Global Field Service Representative (“GFSR”) contracts which were previously included within the Company's S&S segment; these contracts wound down as a result of our decision to phase out and eliminate certain low margin and capital intensive revenues, are not part of the Disposal Group being acquired by Gilat and, therefore, are not part of discontinued operations;

•Gross margin was 38.9%, compared to 31.6% in fiscal 2025; excluding the contracts discussed above, the improvement in the gross profit percentage in the more recent period reflects the continued adoption of our solutions by customers, as well as the migration of PSAPs onto its NG9-1-1 core services and call handling platforms;

•GAAP net loss attributable to common stockholders was $68.9 million and included, among other things: (i) non-cash charges of $44.7 million, of which (a) $32.8 million in net dividends related to our Convertible Preferred Stock; (b) $16.1 million related to the amortization of deferred financing costs, debt discount and accreted interest associated with our senior and subordinated credit facilities; (c) $14.8 million related to the amortization of intangible assets; and (d) $3.1 million related to the amortization of stock-based compensation, offset in part, by (e) a $22.1 million non-cash benefit related to the remeasurement of warrants and derivatives; and (ii) cash charges of $7.8 million consisting primarily of restructuring costs;

•GAAP EPS loss of $1.71 and Non-GAAP EPS of $0.36;

•Adjusted EBITDA (a Non-GAAP financial measure discussed below) was $20.6 million, compared to Adjusted EBITDA of $16.4 million in fiscal 2025;

•New bookings (also referred to as orders) of $263.7 million, resulting in an annual book-to-bill ratio of 1.06x (a measure defined as bookings divided by net sales); such bookings include a multi-year contract extension earlier in the fiscal year, valued in excess of $130.0 million, by Allerium’s largest customer, a leading telecommunications company in the U.S.;

•Backlog of $520.4 million as of July 31, 2026, compared to $506.3 million as of July 31, 2025;

•Revenue visibility of approximately $862.0 million as of July 31, 2026. We measure this revenue visibility as the sum of our $520.4 million of funded backlog, plus the total unfunded value of certain multi-year contracts that we have received and from which we expect future orders; and

•Cash flows provided by operating activities from continuing operations of $25.0 million; excluding $7.8 million in aggregate payments for restructuring costs, including severance, and CEO transition costs, fiscal 2026 cash flows provided by operating activities would have been $32.8 million; fiscal 2026 operating cash flows from continuing operations include $5.0 million of total cash paid for interest related to debt obligations.

Non-GAAP financial measures discussed above are reconciled to the most directly comparable GAAP financial measures in the table included in the below section Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Comparison of Fiscal 2026 and 2025.

Other Key Business Developments and Updates

With strategic wins in the U.S., Canada and Australia, we believe Allerium's position as a trusted leader in 9-1-1, NG9-1-1 and public safety applications positions us increasingly well when it comes to delivering similarly sophisticated solutions for other types of emergencies. New emergency requesting devices, such as "wearables," vehicles, smart speakers and AI capable cameras, and new delivery methods are expected to drive innovation and growth within the public safety market over time.

As an update to our recent performance, during the fourth quarter of fiscal 2026, we were awarded a mix of orders which span across multiple product lines and included, among others:

•over $8.0 million of funding from a domestic Tier 1 mobile network operator primarily to support the development, testing and migration of various security features and enhancements;

•approximately $6.5 million in incremental funding for ongoing training and support of complex cybersecurity operations for U.S. government customers;

•in excess of $2.5 million of funding from an existing international customer of our Guardian solutions; and

•over $1.0 million of additional funding from an existing NG9-1-1 customer in a Northeastern state.

Subsequent to July 31, 2026, we were also awarded:

•over $3.0 million of funding from the Canadian government for a new, multi-year contract to deploy our Guardian call handling solutions; and

•in excess of $2.3 million of funding from a domestic Tier 1 mobile network operator to support the development, testing and migration of various security features and enhancements.

In May 2026, we announced the opening of our new purpose-built facility in Gatineau, Quebec. The new office reflects Allerium’s continued commitment to Canada and its long-standing presence in the region. Allerium’s new facility in Canada builds on strong operational momentum. This includes the recent go-live of the Gatineau 9-1-1 agency, as well as over 60 NG9-1-1 upgrades in Canada this past fiscal year. These milestones reflect Allerium’s expanding role in modernizing emergency communications infrastructure and supporting public safety agencies in Canada, while contributing to a broader footprint of public safety agencies across North America and internationally.

In June 2026, we launched Allerium Mira, a multi-tenant, cloud-agnostic solution that gives public safety agencies a flexible and secure alternative to traditional on-premise call handling systems, with the scalability to grow as their needs evolve. In June 2026, we also announced Allerium Coral, a new network-native capability that advances how critical information is coordinated and exchanged across NG9-1-1 environments. While Allerium Coral focuses on the secure exchange, coordination and continuity of critical information across systems, agencies and workflows, Allerium Mira provides the environment where such call handling information can be received, understood and acted upon.

In June 2026, Jeff Robertson, President of Allerium, was appointed to the Board of the First Responder Network Authority ("FirstNet Authority"), the independent federal authority responsible for overseeing the development and evolution of FirstNet, the nationwide public safety broadband network dedicated to first responders in the U.S. FirstNet's mission is to help ensure first responders in the U.S. have access to the communications capabilities they need to protect the communities they serve. Mr. Robertson's experience, leadership and commitment to public safety make him exceptionally well suited to serve on the FirstNet Authority Board, bringing thoughtful leadership to this important role.

Transformation Plan and Capital Structure Updates

On June 14, 2026, we entered into the Purchase Agreement to sell the Disposal Group to Gilat. The Purchase Agreement provides for a base purchase price of $157.5 million in cash, subject to customary adjustments as defined in the Purchase Agreement. Upon execution of the Purchase Agreement, we received a $10.0 million Advance Payment. The Strategic Transaction is expected to close in calendar 2026, subject to certain closing conditions and regulatory approvals. The consummation of the Strategic Transaction does not require the approval of our common stockholders.

On June 14, 2026, in connection with entering into the Purchase Agreement, we entered into:

•An additional amendment to our existing Credit Facility (the “Fourth Amendment”), which among other things: (a) provides consent to the consummation of the Strategic Transaction; (b) acknowledges and agrees that the Strategic Transaction shall not result in a Change of Control as defined in the Credit Facility, as amended; (c) suspends, through the four quarter period ending July 31, 2027, testing of the Net Leverage Ratio, Fixed Charge Coverage Ratio and Minimum EBITDA covenants; (d) clarifies that the Advance Payment will not be required to be applied to prepay the applicable obligations in accordance with the terms of the Credit Facility until the Strategic Transaction closes; and (e) provides that the Maximum Revolver Amount under the Credit Facility shall not be reduced to an amount less than $27.3 million as a result of the prepayment of the Term Loan in accordance with the terms of Credit Facility. The Fourth Amendment also: (i) sets the applicable margin for Base Rate Loans and SOFR Loans at 9.50% and 10.50%, respectively, through the maturity of the Credit Facility; (ii) provides for a fee to be applied to the Term Loan balance outstanding at various intervals after the closing of the Strategic Transaction; and (iii) reduces the prepayment penalty associated with the application of the net proceeds from the Strategic Transaction by 1.00%. On July 30, 2026, we further amended the Credit Facility (the "Fifth Amendment") to, among other things, waive any excess cash flow prepayment that would have been payable for the fiscal year ended July 31, 2026.

•An additional amendment to our existing Subordinated Credit Facility (“Amendment No. 3”), which among other things: (a) provides consent to the consummation of the Strategic Transaction; (b) acknowledges and agrees that the Strategic Transaction shall not result in a Change of Control as defined in the Subordinated Credit Facility; (c) suspends, through the four quarter period ending July 31, 2027, testing of the Net Leverage Ratio, Fixed Charge Coverage Ratio and Minimum EBITDA covenants; (d) clarifies that the Advance Payment will not be required to be applied to prepay the applicable obligations in accordance with the terms of the Subordinated Credit Facility until the Strategic Transaction closes; and (e) modifies the calculation of the Make-Whole Amount applicable to certain tranches of subordinated term loans by deferring the respective trigger dates for such Make-Whole Amount adjustments to April 1, 2027. In connection with Amendment No. 3, we also issued warrants to the subordinated lenders to purchase up to 625,000 shares of our common stock at an exercise price of $0.10 per share. The warrants, and the shares of our common stock underlying the warrants, will vest and become exercisable on October 17, 2026, and are automatically and irrevocably forfeitable if the related subordinated term loans (including, without limitation, payment of (x) all accrued and unpaid interest thereon and (y) the applicable Make-Whole Amount payable in connection therewith) are repaid in full prior to vesting.

•An exchange agreement (the “Series B-4 Exchange Agreement”) with the holders of Series B-3 Convertible Preferred Stock, pursuant to which the holders, among other things: (a) provided consent to the consummation of the transactions related to the sale of most of our S&S business; (b) waived any rights to repayment or repurchase of shares of Series B-3 Convertible Preferred Stock in connection therewith; (c) agreed that holders of Convertible Preferred Stock may not: (i) exercise their optional repurchase rights until October 31, 2029, except upon consummation of certain qualified asset sales by us or upon a Change of Control as defined in the Series B-4 Certificate of Designations, or (ii) elect to receive dividends in cash earlier than October 31, 2028. To effect these changes, upon consummation of the Strategic Transaction, all 178,180.34 shares of Series B‑3 Convertible Preferred Stock will be exchanged for 178,180.34 shares of Series B‑4 Convertible Preferred Stock, which have substantially similar terms as those of the Series B-3 Convertible Preferred Stock except for the changes described above. In connection with the exchange, new Voting Agreements and a new Registration Rights Agreement with the holders of our Series B-4 Convertible Preferred Stock will automatically take effect, each having substantially similar terms to the existing agreements. The Series B-4 Convertible Preferred Stock maintains the $7.99 conversion price of the Series B-3 Convertible Preferred Stock. We did not incur any fees to the holders of Series B-3 Convertible Preferred Stock in connection with the foregoing.

Upon closing the Strategic Transaction, we will use the net cash proceeds to substantially reduce debt and then seek a comprehensive recapitalization of the business with the intention to further enhance our financial flexibility and reduce the cost of capital.

Collectively, the Strategic Transaction and fiscal 2026 amendments to our Credit Facility, Subordinated Credit Facility and convertible preferred stock agreements, represent a successful outcome of our previously announced strategic review process.

As we await regulatory approval of the Strategic Transaction, we will be executing a transformation plan to further align the organization to be purpose-built to support Allerium's anticipated growth from increasing demand for next-generation public safety technologies and services.

In connection with aligning its operations, strategy and brand with a public safety focus, we announced today that upon consummation of the Strategic Transaction, Amy Rothstein-Hovey will take on the role of Chief Legal Officer and Corporate Secretary, positions currently held by Donald Walther. Additionally, after the filing of the Company's Quarterly Report on Form 10-Q for the first quarter of fiscal 2027, Richard Nyren will take on the role of Chief Financial Officer, a position currently held by Michael Bondi. Mr. Walther and Mr. Bondi, who joined Comtech in 2023 and 2004, respectively, will be transitioning from the Company. The Company thanks each executive for their tireless efforts and countless contributions to the organization over their respective tenures and appreciates their dedication and partnership in fostering a smooth transition in leadership at a pivotal time in the Company's transformation.

As part of our ongoing board refreshment initiatives, our Board of Directors (the “Board”) appointed Christopher Maloney as an independent director, effective October 1, 2026. Mr. Maloney's extensive leadership experience in building, leading and governing public safety and mission critical communications technology companies, including direct operating and board service in 9-1-1 dispatch and emergency communications, qualifies him to serve on the Board.

See Part I - Item 1. Business - Transformation Plan and Part II. - Item 8. Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note (2) - Business Divestiture, Note (8) - Credit Facility, Note (9) - Subordinated Credit Facilityand Note (17) - Convertible Preferred Stock for further information.

Business Outlook

While business conditions and our operational and financial performance have improved over the past several quarters, the operating environment remains largely unpredictable due to many factors, including but not limited to our ongoing transformation plan and the actions we may take, as well as those other matters as discussed throughout this Form 10-K, in our Cautionary Statement Regarding Forward-Looking Statements in this Form 10-K and in Part 1, Item 1A. Risk Factors. Such conditions and factors have caused and could cause variability in our financial results from period-to-period.

Additional information related to our Fiscal 2026 Results and Business Outlook and a definition and explanation of Adjusted EBITDA is included in the below section Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Comparison of Fiscal 2026 and 2025.