COMTECH TELECOMMUNICATIONS CORP /DE/

Overview of Business

We are a leading provider of terrestrial and wireless network solutions, Next Generation 9-1-1 ("NG9-1-1") and emergency services and cloud native capabilities. This includes the critical communications infrastructure that people, businesses, and governments rely on when durable, trusted connectivity is required, no matter where they are and no matter what the circumstances. Our solutions are designed to fulfill our customers’ needs for secure wireless communications in the most demanding environments, and in mission-critical and other scenarios where performance is crucial. Over the long-term, we anticipate future growth in our end markets due to a trend of increasing demand for emergency communication networks and related applications. We provide our solutions to both commercial and governmental customers.

Our operating segments historically consisted of Allerium and Satellite and Space Communications ("S&S"). On June 14, 2026, we entered into a definitive Securities Purchase Agreement (the "Purchase Agreement," and the transaction contemplated by the Purchase Agreement and related ancillary documents, the "Strategic Transaction") to sell most of our Satellite and Space Communications ("S&S") segment (the "Disposal Group") to Wavestream Corporation ("Buyer"), an affiliate of Gilat Satellite Networks Ltd (together with Buyer, "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 $10.0 million of the purchase price (the "Advance Payment"). Comtech will have the right to retain the Advance Payment in the event that the Purchase Agreement is terminated, if at the time of such termination: (i) all closing conditions have been satisfied or waived, other than certain conditions relating to regulatory approval and clearance, and any conditions by their nature are to be satisfied at the closing, and (ii) Sellers, as defined, are not in material breach of the Purchase Agreement. 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.

As the Strategic Transaction represents a material strategic shift in our business, the results and net assets of the Disposal Group are presented herein as discontinued operations and comparable prior periods have been recast to reflect this change. Through the closing date of the Strategic Transaction, we will continue to operate the Disposal Group in accordance with the terms of the Purchase Agreement. Following the classification of the Disposal Group as discontinued operations, we have one reportable segment, which is also our one operating segment, that constitutes consolidated results consisting of our public safety business. Unless otherwise noted, all activities and amounts reported in this document relate to our continuing operations and exclude activities and amounts related to the Disposal Group. For additional information related to the Strategic Transaction and Disposal Group, see Notes to Consolidated Financial Statements - Note (2) - Business Divestiture included in Part II - Item 8. Financial Statements and Supplementary Data (which discussion is incorporated herein by reference).

Allerium is organized into four service areas: Emergency Routing Solutions ("ERS"), which includes our next-generation 9-1-1 and carrier emergency routing offerings; Agency Solutions ("AS"), which includes our 9-1-1 call handling solutions; Mobile Network Solutions ("MNS"), which includes our trusted location, messaging and alerting solutions sold primarily into wireless carriers; and Cybersecurity Training Solutions ("CTS"), which includes our advanced cybersecurity training in support of certain government and commercial customers. Allerium offers customers: Wireless/VolP 9-1-1 location and routing services to connect emergency calls to Public Safety Answering Points ("PSAPs"); SMS text to 9-1-1 services; next generation 9-1-1 solutions, providing emergency call routing, location validation, and policy-based routing rules, logging and security functionality; Emergency Services IP Network transport infrastructure for emergency services communications and support of next generation 9-1-1 services; call handling applications for PSAPs; wireless emergency alert solutions for network operators; and software and equipment for location-based and text messaging services for various applications, including for public safety, commercial and government services.

Our Quarterly Financial Information

Quarterly and period-to-period sales and operating results may be significantly affected by, among other things, short-term or long-term revenue contracts with our customers, depreciation related to capitalized costs to fulfill contracts and internal use software, research and development activities, restructuring related charges, impairments of long-lived assets (including goodwill) and changes in the estimated fair value of derivative instruments and warrants. In addition, our gross profit is affected by a variety of factors, including, among other things, the mix of products, systems and services sold, project deployment efficiencies, price competition and general economic conditions. Our gross profit may also be affected by the impact of any cumulative adjustments to contracts that are accounted for over time. In general, our contracts can be terminated for convenience at any time and orders are subject to unpredictable funding, deployment and technology decisions by our customers. Some of these contracts are indefinite delivery/indefinite quantity ("IDIQ") contracts and, as such, the U.S. government is not obligated to purchase any equipment or services under these contracts. We have, in the past, experienced and we continue to expect significant fluctuations in sales and operating results from quarter-to-quarter and period-to-period due to these factors. As such, comparisons between periods and our current results may not be indicative of a trend or future performance.

Please see the "Transformation Plan" section discussed above, as well as disclosures in Item 1A – Risk Factors under Part I of this Form 10-K for more information about risks pertaining to our business and those factors that can influence our future results.