Comtech Telecom Q2 Results Miss Expectations, Stock Price Drops 7%

Chandler, Arizona - Comtech Telecommunications Corp. (NASDAQ:CMTL) reported second-quarter results that missed analyst expectations, causing the stock to fall 7.8% after the announcement.

The telecommunications technology company posted a loss of $0.68 per share for the quarter ending January 31, 2026, compared to the analyst consensus of a $0.64 loss per share.

Revenue was $106.8 million, below the expected $113.9 million, a 15.6% year-over-year decline from $126.6 million last year. The shortfall was mainly due to the company’s strategic decision to gradually phase out low-margin contracts and the impact of the U.S. government shutdown.

Despite the revenue decline, Comtech’s profitability metrics improved. Gross profit increased to $36.2 million, accounting for 33.9% of sales, up from $33.7 million (26.7%) last year. Adjusted EBITDA grew 214% to $9.1 million from $2.9 million, reflecting improved operational efficiency and cost-cutting measures.

Chairman, President, and CEO Ken Traub stated, “We achieved positive operating cash flow for the fourth consecutive quarter and ended the quarter with approximately $50 million in total liquidity. We increased gross profit from $34 million to $36 million, gross margin from 27% to 34%, and adjusted EBITDA from $2.9 million to $9.1 million.”

The company announced net orders of $175.4 million, with an order-to-shipment ratio of 1.64, and backlog increased to $731.6 million. A significant portion of the orders includes over $107 million in incremental funding from a domestic Tier 1 mobile network operator for Comtech’s Allerium division.

Operating cash flow was positive at $4.9 million, marking the fourth consecutive quarter of positive cash flow. Total liquidity at the end of the quarter was $49.9 million.

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