Comtech Telecommunications Stock

Comtech Telecommunications Corp. (Comtech) operates as a global provider of next-generation 911 emergency systems (‘NG-911’) and secure wireless and satellite communications technologies.

The company’s solutions are designed to fulfill its customers’ needs for secure wireless communications in the most demanding environments, including those where traditional communications are unavailable or cost-prohibitive, and in mission-critical and other scenarios where performance is crucial. The company anticipates future growth in its business due to a trend of increasing demand for global voice, video and data usage in recent years, upgraded ground stations and related services resulting from the large quantities of satellites anticipated to be launched for new LEO and MEO constellations, digitization and virtualization of modems, the resurgence of troposcatter as a viable form of primary or backup communications, enhanced location positioning combined with data-rich geospatial intelligence, and the growth of 988 networks. The company provides its solutions to both commercial and governmental customers within the converging satellite and space communications and terrestrial and wireless networking markets.

In the year ended July 31, 2023 (fiscal 2023), the company established EVOKE as Comtech’s innovation foundry, which is dedicated to creating and accelerating transformational changes in global technologies. EVOKE will enhance the company’s existing technologies and service offerings (e.g., cloud-native satellite ecosystems, 5G advanced services and ‘as-a-service’ business models), as well as allow the company to pioneer entirely new ideas and opportunities with the benefit of multiple perspectives, industry backgrounds and areas of expertise. Since the company’s launch of EVOKE, the company has announced several technology partners, including Aarna Networks, Descartes Labs, Inc., Sirqul, Inc. and WishKnish Corp. By combining Aarna Networks’ technologies with Comtech’s Dynamic Cloud Platform, the companies anticipate enabling customers to easily add and manage a variety of open architecture cloud-based applications across private, hybrid and public networks, in both terrestrial and non-terrestrial environments. The company is working with Descartes Labs to infuse the power of artificial intelligence, machine learning, predictive intelligence and insight monitoring across Comtech’s product offerings. Comtech and Sirqul are working on ‘Smart Operations,’ where enterprises will be able to make business decisions with real time Internet of Things (‘IoT’) data. Through the company’s collective efforts, the company is working to bring robust mobile, web, social, voice, IoT, and other technologies to a variety of global markets. The company is working in collaboration with WishKnish on integrating highly secure, flexible distributed ledger (blockchain) technologies across diverse commercial and government applications.

Business Segments

The company offers advanced secure wireless communications technologies founded on decades of expertise in the satellite communications and cellular markets. The company manages its business through two reportable operating segments: Satellite and Space Communications and Terrestrial and Wireless Networks.

Satellite and Space Communications segment

The company’s Satellite and Space Communications segment designs, builds, and supports a variety of sophisticated communications equipment that is designed to meet or exceed the highest standards for performance and quality by businesses and governments worldwide. Applications of the company’s equipment include high-throughput cellular backhaul solutions, modern troposcatter communications equipment, satellite ground station systems, electronic components engineered for use in outer space and high-powered RF/microwave amplifiers and control components. The company’s customers and end-users include the world’s largest corporations, governments and defense agencies, including the U.S. government.

The company’s Satellite and Space Communications segment has four product areas: Satellite Modem and Amplifier Technologies, Troposcatter and SATCOM Solutions, Space Components and Antennas, and High-Power Amplifiers and Switch Technologies.

Satellite Modem and Amplifier Technologies

The company is a leading provider of satellite earth station modems, solid-state amplifiers and traveling wave tube amplifiers. Many of the company’s key satellite earth station modems incorporate forward error correction and bandwidth compression technologies, which enable the company’s customers to optimize their satellite networks by either reducing their satellite transponder lease costs or increasing data throughput. The company holds leadership positions in the market for high-throughput modems used in cellular backhaul, a market that has been rapidly growing due to increased mobile phone usage and increasing data throughput demands from LTE and 5G deployments worldwide.

In 2021, the company introduced a Time Division Multiple Access (‘TDMA’) technology solution, which offers best-in-class support for very large satellite networks that use Very Small Aperture Terminals (‘VSATs’). This technology allows the company’s customers to provide wireless services to end-users in complex geographies or areas where cellular infrastructure is otherwise unavailable. In 2022, the company introduced ELEVATE, a revolutionary solution that combines the company’s Heights Dynamic Network Access (‘H-DNA’) and TDMA technologies into a single VSAT platform that delivers increased value to the company’s customers by enabling private or shared VSAT networks of any size and topology on a single unified platform. To date, although sales cycles are long, the company has made good progress in securing several significant orders for ELEVATE.

An increasing area of focus for many governments, including the United States Department of Defense (‘DoD’) and several coalition partners, is maturing satellite communications. Many of the company’s satellite communications products have been tested and certified for use by the U.S. and coalition military satellite communications (‘MILSATCOM’) assets, such as the Wideband Global SATCOM constellation. This provides the company the opportunity to capture the increased demand for MILSATCOM programs.

The company also provides rugged, highly efficient, and reliable amplifiers for commercial and military applications around the world. These High-Power Amplifiers (‘HPAs’) are used in critical communications links on the ground, in the air and on the sea; they support fixed traditional and direct-to-home broadcast, mobile news gathering, transportable and flyaway systems, secure high data rate communications, and broadband access over satcom. These products include configurations that are formally qualified for use on aircraft and being installed as both retrofit and linefit initiatives.

Finally, the company is well-positioned in the millimeter wave (‘mmWave’) market and expect that market to continue to grow as new satellite constellations move into those higher, less crowded frequencies. The Ka band Low Earth orbit (‘LEO’) and Medium Earth orbit (‘MEO’) amplifiers that the company designs and manufactures for large commercial customers’ non-GEO constellations represent key strategic wins as the company builds positions in higher frequency bands.

Troposcatter and SATCOM Solutions

Many of the company’s mission-critical technologies are part of integrated communication infrastructure systems, such as the U.S. military's Command, Control, Communications, Computers, Cyber Intelligence, Surveillance and Reconnaissance (also known as ‘C5ISR’) systems and similarly complex networks for international governments.

The company is a world leader in the design and supply of troposcatter equipment. The company has designed, manufactured, and delivered troposcatter systems (sometimes referred to as over-the-horizon (‘OTH’) microwave products and systems) for well over fifty years.

The company’s OTH systems, which include its patented forward error correction technology, can transmit video and other broadband applications at high throughputs in the most demanding environments: the U.S. and foreign governments use the company’s over-the-horizon microwave systems to, among other things, transmit radar tracking, run C5ISR applications and connect to remote border locations. Additionally, energy companies use the company’s systems to enable communication links for offshore oil rigs and other remote locations, as well as for exploration activities. The Comtech COMET is a rapidly deployable OTH microwave system that directly addresses a void in capabilities that have long been desired by tactical communications planners: low probability of intercept and low probability of detection (‘LPI/LPD’), while providing high reliability, mission essential communications. The COMET is capable of being transported in a carrying case by a single individual and set up in under fifteen minutes, extending critical services into areas where there is no communications infrastructure, or the infrastructure has been destroyed. The U.S. Special Forces, as well as non-U.S. NATO forces, have already begun procuring and deploying the COMET for high reliability, mission essential communications.

The company provides field support sustainment services, centralized and deployed depot services, and technology insertion services to the U.S. Army’s AN/TSC-198 family of communication systems that are commonly referred to as ‘SNAP’ (Secret Internet Protocol Router (‘SIPR’) and Non-secure Internet Protocol Router (‘NIPR’) Access Point) VSATs, support for the Army ‘SCOUT’ (Scalable Class of Unified Terminals), and Army T2C2 (Tactical Command Communication). The company’s field support services include providing DoD personnel with curriculum development and training services to support cybersecurity workforce development.

Space Components and Antennas

The company is an industry leader and global supplier of high-reliability products and supply chain management and engineering services, supporting selection of space-qualified parts for satellite and launch vehicle tracking solutions geared for critical U.S. National Aeronautics and Space Administration (‘NASA’) programs, as well as several international space and defense agencies. The company’s engineers are not only involved in the design of products, but the company’s technical team is heavily involved with the customer development of electronic parts and testing specifications to assure capability, reliability and radiation tolerance to specific mission/project requirements both as an individual service and for Electrical, Electronic, and Electromechanical (‘EEE’) parts supplied to the company’s customers. The company also leads and conducts failure analysis investigations and assists with manufacturing and test problems at the source and support reporting and selloff with the customer and its prime (such as the Japanese Space Exploration Agency (‘JAXA’) and NASA). The company’s quality engineering team assures that the product received from the company’s suppliers and test facilities are compliant to their respective specifications prior to shipment to the company’s end customers. Most recently, the company’s service offerings have been expanded to include kitting to customer Bill of Materials with direct shipments to customer designated contract manufacturers.

Within the satellite communications market, the company is a leading provider of X/Y terminal solutions that fully support the mission requirements of LEO, MEO and GEO satellite communication and tracking requirements, offering a host of high-performance single-band and multi-band feed solutions. The company also supplies maritime antenna solutions that are fielded by foreign governments.

High Power Amplifiers and Switches

The company offers several unique high-performance transmit and receive technologies used in sophisticated communication systems, including electronic warfare, radar, data link, medical and identification friend or foe (‘IFF’).

The company’s solid-state, high-power RF microwave amplifiers and related switching control technologies are utilized in many critical applications, including electronic warfare, communications, radar, data link, IFF and medical applications (such as oncology treatment systems). In the electronic warfare marketplace, the company supports a variety of legacy systems and are participating in the ongoing migration to platforms that require smaller and lighter amplifiers integrated with additional signal processing functionality, providing more complete transmit and receive functionality. The company’s solutions are designed to increase the flexibility of systems by providing wider bandwidth capabilities to address increased data transmission needs in challenging environments. The desire for increased airspace situational awareness will create increased opportunities for the company’s radar and IFF products, which are used by government and commercial customers around the world. The company’s high power and highly reliable Gallium Nitride (‘GaN’) amplifier technology is increasingly used both to update existing radar systems for improved sensitivity and range, as well as for new radar applications and installations. In addition to technologies that enhance performance of primary radars, the company supplies solutions for IFF systems that provide positive identification of radar targets for secondary surveillance systems.

Satellite and Space Communications: Key Markets and Growth Drivers

Combined, the company’s Satellite and Space Communications segment offers the company’s customers one-stop-shopping for sophisticated satellite ground station technologies and solutions, including SCPC and TDMA modems, amplifiers, antennas, frequency converters and network software for customers who utilize satellite communications. The company’s products are used to modulate, demodulate and amplify signals, carry voice, video and/or data over networks and are vital to satellite communication applications, including air-to-ground communications, video broadcasting and the backhaul of cellular traffic. The company’s Satellite and Space Communications segment manufactures most of the satellite ground station equipment the company sells to its customers.

The overall satellite ground station equipment industry will grow from current levels and will be increasingly combined with existing and new cellular networks. This growth is expected to occur because of widespread deployment of, and upgrades to, 4G and 5G ground-based systems, including satellite earth stations, as well as the integration of high-performance amplifiers necessary to meet long-term demand for high-performance satellite communications applications, such as satellite-based wireless backhaul, DTH, HD and 4K broadcasting, and in-flight connectivity. Comtech is well-positioned to capitalize on this demand through sales of the company’s market-leading satellite ground station technologies, including new next-generation satellite earth station technologies that can be used with the thousands of new LEO, MEO and large HTS satellite constellations that are expected to be deployed over the next several years.

Examples of end-market applications that are driving long-term demand for the company’s satellite-based communication technologies include:

New LEO, MEO and HTS Satellites: Thousands of new satellites are reportedly being launched over the next several years, according to announcements by companies including Telesat Lightspeed, OneWeb, SpaceX Starlink, Amazon Kuiper and Viasat, which will lead to increasingly complex satellite networks. As service providers work to offer connectivity to these high-speed, high-bandwidth satellites and expand their networks to handle the demand for new LEO, MEO and HTS applications, the company’s ELEVATE, Heights, and UHP networking platforms, the company’s solid-state amplifiers and the company’s X/Y antennas will ultimately be incorporated into many new installations and equipment upgrades. The company continues to provide modems and amplifiers to existing LEO and MEO communications satellite providers and expects to see growth in imaging satellites alongside commercial imaging constellations, including conventional, thermal, and hyperspectral.

Satellite-Based Cellular Backhaul: Demand for satellite-based cellular backhaul services is anticipated to grow rapidly as a result of the increased penetration of smart cellular phones and network upgrades to 4G and 5G in developing regions of the world. Ultimately, as 5G services continue to be deployed, the company expects that mobile data services will become more critical. As mobile data penetration expands and mobile data consumption increases, wireless carriers must invest in their mobile network infrastructures, and businesses will require back-up communications. In developing regions of the world, and in remote areas where terrestrial network infrastructure is lacking (or where challenging geography prohibits it), wireless network operators often backhaul, or transport, their wireless data traffic using satellite-based networking technologies. Comtech is well positioned to serve the high-performance, high availability needs of satellite-based cellular backhaul through sales of the company’s SCPC and TDMA satellite modems, as well as the company’s Heights, ELEVATE, and UHP networking platforms.

Government and Military Satellite Communications: Government users rely on high-speed connectivity in a variety of conditions throughout the world to provide real time information sharing, including Situational Awareness (‘SA’), dissemination of Intelligence, Surveillance, and Reconnaissance (‘ISR’) information, and communications. The company’s communications solutions provide command and control and satellite networking capabilities that support the U.S. and allied government initiatives for assured and resilient communications capabilities, as well as supporting interoperability objectives, including the Joint All Domain Command and Control (‘JADC2’) efforts.

Enterprise Networks and Internet of Things (‘IoT’): Satellite services are increasingly used for Machine-to-Machine data connectivity for both critical infrastructure applications, such as utility companies (electrical grid, oil rigs, gas pipelines, and water companies), as well as IoT networks. Comtech TDMA equipment is widely used in these applications, where it delivers superior network availability (by making use of geographical hub redundancy and other technologies), and high Quality of Service (‘QoS’).

Geospatial and Earth Observation: Led by the need to deliver near real time insights to government and commercial customers globally, the LEO operated Geospatial and Earth Observation satellite constellations have a driving need to gain access to their data at speed, and via trusted U.S. providers. Comtech is uniquely positioned to stand the company’s Geospatial and Earth Observation services on the shoulders of the company’s globally proven technologies to connect critical services for LEO based satellite communications operators. In this way, the company is able to position fixed ground services, transportable kits and, by leveraging the company’s partners in EVOKE, data processing and analytics at the edge to support the company’s Geospatial and Earth Observation customers going forward.

Terrestrial and Wireless Networks segment

The company’s Terrestrial and Wireless Networks segment is a leading provider of the hardware, software, and solutions critical to any modern 911 public safety and mobile network operator (‘MNO’) infrastructure, as well as for applications services requiring the specific location of a mobile user's geospatial position. From the moment a 911 call is made, Comtech provides highly reliable solutions that contribute to emergency calls being processed instantly, with proper routing to first responders. The company’s solutions include feature-rich data sets (such as precise location information, route optimization, text messaging, photos and real-time video), putting first responders in the best possible position to make decisions when every second counts. The company’s customers are the businesses, communities and governments that need to implement and improve 911 infrastructure in the U.S., as well as MNOs in the U.S. and abroad that have a need to determine subscriber location within a network or to facilitate messaging services. The company’s direct NG-911 contracts covered a population of over 56 million at the end of 2022. As such, the company is a leader in public safety communication and location technologies.

The Terrestrial and Wireless Networks segment is organized into three product areas: Next Generation 911 & Call Delivery, Solacom Call Handling Solutions, and Trusted Location and Messaging Solutions.

Next Generation 911 & Call Delivery

In addition to 911 call routing, the company provides systems integration, geospatial location information, satellite and location infrastructure terminals, and linkage to NG-911 Emergency Services IP Networks (‘ESInet’). The company also offers 911 call handling solutions under the Solacom brand name. State and local governments need to upgrade existing legacy networks, location technologies, and call handling systems to modern NG-911 systems infrastructure, including 911 text messaging services, advanced data, real-time photos, and other types of information sharing over IP networks.

Comtech’s public safety and location technology solutions have been deployed since 2006 and are utilized by domestic MNOs, as well as internationally, to provide reliable device location determination for public safety and commercial applications. Many of the company’s technologies, such as positioning, mapping, and text messaging, are embedded in the company’s public safety and location offerings to help address mapping, routing, and geolocations. The company’s solutions address Federal Communications Commission (‘FCC’) mandates for emergency services as they relate to location delivery by supporting precise caller location. The company’s text messaging platforms are used by wireless carriers to provide short messaging services (‘SMS’) to their end-customers, as well as being used to communicate with 911 public safety answering points (‘PSAPs’).

Solacom Call Handling Solutions

The company offers a call handling solution marketed under the Solacom Guardian brand name, which provides an integrated text-to-and-from 911 solution on a unified platform. The solution provides a flexible user interface, adapts to varying customer environments and preferences, provides powerful call conferencing capabilities, enhanced reporting capabilities and offers geospatial 911 location call display directly from a customized map. Because of its advanced features, it allows the company to offer an immediate upgrade path to existing and new customers and has expanded the company’s presence in the public safety solutions market with more than 700 PSAPs and emergency call centers installed in 5 countries.

The Guardian platform includes an integrated cloud-based texting solution (‘Guardian Messenger’) which provides call takers / dispatchers with the ability to collect, process and share previously unavailable live incident information, such as text, photos, and video via SMS and multimedia messaging services (‘MMS’), from one integrated desktop. The Guardian platform also offers a cloud-based reporting and analytics solution (‘Guardian Insights’), designed to assist emergency call center directors to know their operations, so they can better plan and manage resources and workloads.

The company is investing in product enhancements for its Guardian platform, including additional cloud-based capabilities, analytics, and cyber security solutions. The company has significantly increased the company’s ‘911-as-a-Service’ (‘911aaS’) offering, deploying hosted 911 call centers solutions across numerous states and regions in the U.S. and provinces in Canada.

Trusted Location and Messaging Solutions

The company’s location technology solutions enable the determination of a mobile phone's geospatial position in a variety of environments, leveraging a wide range of signals, including Global Positioning System (‘GPS’), Global Navigation Satellite Systems (‘GNSS’) and multiple cellular positioning technologies ranging from 2G through 5G mobile networks. For the company’s installed base of systems, the company provides ongoing operational support, including administration of system components, system optimization, configuration management and maintenance services, including tracking customer support issues, troubleshooting, and developing and installing maintenance releases.

The company’s Location Studio platform enables customers, particularly public safety agencies, to build their own applications with end-user functionality, such as maps, search, geocoding, routing, and navigation, using their own brand. Customers and prospects are increasingly looking for alternatives to mapping services that are subject to change by the provider, and which meet market privacy and security requirements. The Location Studio platform is a complete end-to-end location application consisting of maps, map data, including the company’s Trusted OpenStreetMap (‘TOSM’) geo-services, application program interfaces (‘APIs’) and software development kits (‘SDKs’) enabling public safety ecosystems and enterprises to customize unique mapping applications. Map data includes positioning, search, enhanced local content, custom maps, navigation, geo-fencing, tracking integrated with third party data sources like camera feeds and IoT sensor data via cross-platform APIs and SDKs supporting all leading operating systems.

In 2022, the company began marketing SmartResponse, a newly developed cloud-based solution that offers a common operational picture to PSAPs and first responders, enabling an effective data-driven response for security agencies and first responders by providing a holistic information environment for them. This new solution offers streaming live feeds from traffic cameras at and near incident location, and accesses caller information like past residences, criminal history, or next-of-kin information at the tap of a button. Offering a bird's-eye view of integrated data, the SmartResponse solution empowers first responders to ensure appropriate resources are on the scene and to better serve the public in emergency situations.

Terrestrial and Wireless Networks: Key Markets and Growth Drivers

The company is a leading provider of modern public safety and location technologies. The company’s next generation solutions enable rich, multimedia information to be delivered alongside 911 calls. Also, the company’s E911 and NG-911 call routing solutions allow cellular carriers and voice over the Internet (‘VoIP’) carriers, as well as legacy telecommunications carriers, to deliver emergency calls to public safety emergency call centers nationwide. When someone places an emergency call, the company’s technologies identify the call as an emergency call, access the user’s location information from the wireless or VoIP networks and location databases, and route the call to the assigned public safety jurisdiction. The company provides public safety and location technologies to many U.S. telecommunication carriers, the largest being Verizon (for which the company provides 911 call routing via cellular service). The company services a significant portion of the carrier market for 911 cellular call routing applications, along with one other leading competitor.

In addition to the company’s growth in core 911 services, the expected expansion of 988 networks in fiscal 2024 and beyond across the United States is expected to have a positive impact on the company’s business. 988 services provide free and confidential support for people in distress, suicide prevention and crisis resources. Comtech is uniquely positioned to expand the company’s 911 services into 988 services and help mitigate some of the core challenges the network is experiencing with area code specific call routing. By connecting the 988 services with Comtech’s existing 911 infrastructure, the location services critical to dispatch personnel can be improved for 988 exponentially.

In the growth area of 5G networks, new network-based positioning technologies are poised to deliver opportunities thanks to the ongoing digital transformation of multiple industry verticals, including the Public Safety, Transportation, Manufacturing, Healthcare and Retail industries. As these industries increasingly rely on data from connected devices, using location information in real-time is expected to enhance existing business processes and outcomes, as well as end user experiences. End-market applications, such as worker’s safety in high-risk areas, smart manufacturing, and autonomous driving would benefit enormously from new precision-positioning techniques. Also, MNOs can now provide even more advanced location-based services, in addition to existing connectivity solutions.

Examples of end-market applications that are driving long-term demand for the company’s Terrestrial and Wireless Networks technologies include:

The company’s XyPoint Mobile Location Platform: Provided to MNOs globally, the company’s virtualized location-based services (‘LBS’) platform is a high availability robust solution with multiple positioning technologies, that allows authorized users to locate and track specific mobile devices and monitor specific areas of interest. MNOs can use this platform for location accuracy to support a wide variety of use cases, including public safety, location intelligence, network optimization and big data analytics. On the legacy front, the company’s LBS platform is compatible within 2G through 4G wireless networks, as well as an enabler to the MNOs to seamlessly migrate to cloud native environments, as they progress their migrations to 5G.

Comtech INSIGHTS LightSource: Provides first responders a reporting and analytics platform for the rich data created in Comtech’s NG-911 core systems. Authorized users at state, regional, and jurisdiction organizations can see reports and analysis of call, behavior, and location characteristics in both time and geospatial visualizations. Users are able to interact directly with the visualization in real time to focus on desired characteristics to include timeframes, call types, media types, and other information. Authorized users can also schedule reports for automatic delivery via email.

Comtech INSIGHTS SmartResponse: Provides first responders of all types (fire, police, medical, state, regional emergency communications centers, dispatch centers, emergency management agencies, fusion cells, intelligence centers, etc.) access to real-time 911 call information and related supplemental information for situational awareness in a geospatial, mapped context. Authorized users can view 911 calls and emergency response vehicles/assets in a 3-D map via a single pane of glass view to enhance response. SmartResponse is available for use in both emergency centers and response vehicles.

Wireless Emergency Alerts (‘WEA’): WEA, also known as Commercial Mobile Alerts System (‘CMAS’) in the U.S., enable authorized officials to inform the public about life-threatening events by automatically delivering emergency alerts to mobile devices (including roaming users) via the government alert gateway. Using standardized infrastructure, ensuring compliance with government regulations globally, the company’s patented technology facilitates the origination and accurate delivery of geo-targeted emergency alerts, empowering emergency services providers to better serve the public. Using this technology, for example, MNOs can quickly broadcast emergency communications, such as severe weather alerts, to all devices in a specific geographical area.

Diverse Global Customer Base

The company has established long-standing relationships with thousands of customers worldwide, including leading system and network suppliers in the global satellite, mobile cellular, defense, broadcast and aerospace industries, as well as the U.S. federal government (including the U.S. Army, Air Force, Marine Corps, and Navy), the U.S. state and local governments, and foreign governments. The company’s global Satellite and Space Communications and Terrestrial and Wireless Networks customers are increasingly seeking integrated solutions to meet their operational needs.

Satellite and Space Communications Segment

This segment’s representative customers include satellite systems integrators, wireless and other communication service providers, and broadcasters, such as DIRECTTV Group; the U.S. Army, the U.S. Marine Corps, the U.S. Navy, prime contractors to the U.S. Armed Forces, NATO and foreign governments (i.e., ministries of defense); domestic and international defense customers, as well as prime contractors and system suppliers, such as General Dynamics Corporation, Lockheed Martin Corporation, L3Harris Technologies, Inc., Northrop Grumman Corporation, Raytheon Technologies Corporation, Telephonics Corporation, The Boeing Company and ViaSat Inc.; medical equipment companies, such as Varian Medical Systems, Inc., and aviation industry system integrators, such as Collins Aerospace (a subsidiary of Raytheon Technologies Corporation); end-customers also include China Mobile Limited, Claro Argentina, Intelsat S.A., JAXA, NASA, SED Systems (a division of Calian Ltd.), SES S.A. and Speedcast International Limited; and oil companies, such as Shell Oil Company and PETRONAS.

Terrestrial and Wireless Networks Segment

This segment’s representative customers include the U.S. state and local governments, such as the Commonwealth of Massachusetts, the Commonwealth of Pennsylvania and the states of Arizona, Iowa, Maine, Ohio, New Hampshire, South Carolina, Vermont and Washington; end-customers also include AT&T Inc., Lumen Technologies, Inc., Comcast Corporation, Nokia Corporation, T-Mobile USA, Inc. and Verizon Communications Inc.; and different solutions deployed with telephone companies and federal, provincial, and local governments in Australia, Canada, Cayman Islands and New Zealand.

Sales, Marketing and Customer Support

The company intends to continue to expand international marketing efforts by engaging additional independent sales representatives, distributors and value-added resellers and by establishing foreign sales offices. In addition, the company expects to leverage its relationships with larger companies (such as prime contractors to the U.S. government and large mobile wireless operators) to market the company’s technology solutions. In fiscal 2024, the company expects to continue expanding its social media and Internet presence and further developing an updated marketing and branding strategy.

The company is pre-qualified as an approved vendor for certain government contracts. The company collaborates in sales efforts under various arrangements with integrators. The company’s marketing efforts also include advertising, public relations, speaking engagements and attending and sponsoring industry conferences.

The company’s management, technical and marketing personnel establish and maintain relationships with customers. Sales to the U.S. government customers include sales to the DoD, intelligence and civilian agencies, as well as sales directly to or through prime contractors.

Domestic sales include sales to commercial customers, as well as to the U.S. state and local governments. Included in domestic sales are sales to Verizon Communications Inc. (‘Verizon’), which represented 10.6% of consolidated net sales for fiscal 2023.

Research and Development

The company’s internal research and development expenses were $48.6 million in fiscal 2023.

Intellectual Property

The company has a portfolio of several hundred patents worldwide relating to wireless location services, text messaging, GPS ephemeris data, emergency public safety data routing, electronic commerce and other areas. As of July 31, 2023, the company’s strategy had been to avoid offensive and defensive patent litigation and focus on building meaningful partnerships with other companies through direct licensing, cross licensing, and other forms of agreements.

The company has filed additional patent applications for certain apparatus and processes the company has invented covering key features of location services, wireless text alerts, SMS Center, mobile-originated data and E911 network software.

Almost all the products and services the company sells to the U.S. government include technology and other technical know-how that the company has internally developed.

As a U.S. government contractor and subcontractor, the company is subject to a variety of rules and regulations, such as the Federal Acquisition Regulations (‘FAR’).

Regulatory Matters

The company’s products that are incorporated into wireless communications systems must comply with various government regulations, including those of the FCC. The company’s manufacturing facilities, which may store, handle, emit, generate and dispose of hazardous substances that are used in the manufacture of the company’s products, are subject to a variety of local, state and federal regulations, including those issued by the Environmental Protection Agency. The company’s products are also subject to European Union directives related to the recycling of electrical and electronic equipment.

The company’s international sales are subject to the U.S. and foreign regulations, such as the Arms Export Control Act, the International Emergency Economic Powers Act (‘IEEPA’), the International Traffic in Arms Regulations (‘ITAR’), the Export Administration Regulations (‘EAR’) and the trade sanctions laws and regulations administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’), the Department of Commerce (‘DoC’), as well as other applicable laws relating to trade, export controls and foreign corrupt practices, the violation of which could adversely affect the company’s operations.

In addition, the company is subject to the FCPA and other local laws that generally bar bribes or unreasonable gifts to foreign governments or officials.

The company’s financial reporting, corporate governance, public disclosure and compliance practices are governed by laws such as the Sarbanes-Oxley Act of 2002, Dodd-Frank Act of 2010, and rules and regulations issued by the SEC.

Competition

Some large defense-based companies, such as Northrop Grumman Corporation, have subsidiaries or divisions that compete against the company in one or more business segments.

Listed below are some of the company’s competitors in each of its two business segments:

Satellite and Space Communications – ACTIA Group, Advantech Co., Ltd., Aethercomm Inc. (recently acquired by Frontgrade Technologies, a portfolio company of Veritas Capital), Agilis Satcom, AMERGINT Technologies, Inc., Amkom Design Group Inc., AnaCom, Inc., Codan Limited, CPI International, Inc., Datum Systems, Inc., dB Control Corp. (a subsidiary of HEICO Corp.), ENENSYS Technologies, ETM Electromatic Inc., Gilat Satellite Networks Ltd., Empower RF Systems, Inc., General Dynamics Corporation, Hughes Network Systems, LLC (a subsidiary of EchoStar), KVH Industries, Inc., Kratos Defense and Security Solutions (Including Kratos RT Logic and Avtec Systems, Inc.), L3Harris Technologies, Inc., Mission Microwave Technologies, LLC, ND Satcom GmbH, Novelsat LTD, Panasonic Corporation, Paradise Datacom Ltd. (a subsidiary of Teledyne Technologies Incorporated), Raytheon Technologies Corporation, SatixFy Israel Ltd., ST Engineering iDirect, Inc. (including Newtec), Terrasat Communications Inc., and ViaSat, Inc.

Terrestrial and Wireless Networks – AT&T Inc., Atos, Bandwidth.com, Carbyne, Central Square Technologies, 8x8, Inc., Everbridge, Inc., Google Inc. (a subsidiary of Alphabet Inc.), Here Technologies, Hexagon AB, Immersive Labs, INdigital, Intersec, Intrado Corporation, LM Ericsson, Lumen Technologies, Inc., Mobilaris AB, Mobile Arts AB, Motorola Solutions, Inc., NGA911, Nokia Networks (a subsidiary of Nokia Corporation), Polaris Wireless, RapidDeploy, Inc., Rave Mobile Safety, Sinch AB (Inteliquent), Synergem Technologies, SS8, ThriveDX, TomTom N.V., Versaterm Public Safety Inc., WestTel, and Zetron.

History

Comtech Telecommunications Corp. was founded in 1967. The company was incorporated in 1986.