Comtech Secures $26 Million in Sole Source Contracts from L3Harris to Advance Next-Generation Protected SATCOM Programs

Rhea-AI Summary

Comtech Telecommunications Corp. (NASDAQ: CMTL) has secured multiple sole source follow-on contracts from L3Harris valued at over $26 million. The contracts focus on delivering Comtech's modem technologies for the U.S. Air Force and U.S. Army Anti-Jam Modem (A3M) programs.

The A3M technologies are designed to provide software-defined, secure, and resilient anti-jam satellite communications capabilities for military platforms worldwide. These modems support the Protected Anti-jam Tactical Satellite ecosystem, including operations over Wideband Global Satellites and emerging Protected Tactical Satellites.

The contract vehicle enables the Department of Defense to increase production orders for A3M modems in the coming years, strengthening Comtech's position as a leading provider of advanced SATCOM solutions for defense applications.

Positive

• Secured $26 million in follow-on contracts from L3Harris
• Contract vehicle allows for potential increased future orders from Department of Defense
• Strengthens position as leading provider of military SATCOM technology
• Demonstrates continued trust from DoD partners

Negative

• None.

Insights

Defense Technology Analyst

Comtech's $26 million in sole source contracts from L3Harris represents a significant strategic win in the defense communications sector. The 'sole source' designation is particularly telling – it indicates Comtech possesses unique technical capabilities that competitors cannot easily replicate, creating an effective barrier to entry. Their Anti-Jam Modem (A3M) technologies address a critical military need for secure communications in contested electromagnetic environments, where adversaries actively attempt to disrupt battlefield communications.

The contract's focus on software-defined, secure, and resilient anti-jam SATCOM capabilities aligns with the Pentagon's modernization priorities for communications infrastructure. L3Harris, as a tier-one defense contractor, provides substantial validation of Comtech's technological approach. The contract vehicle established creates a streamlined pathway for additional DoD orders, potentially generating a multi-year revenue stream beyond the initial $26 million.

Importantly, Comtech's systems support both the Wideband Global Satellites and emerging Protected Tactical Satellites, positioning them advantageously across both current and future military satellite architectures. Their compliance with multiple government and commercial standards further enhances their systems' interoperability – a important factor in Joint All Domain Command and Control operations where seamless information sharing across military branches and coalition partners is essential.

Financial Analyst

This $26 million contract announcement represents a transformative opportunity for Comtech, with the contract value exceeding 50% of the company's current $50.5 million market capitalization. For perspective, this single contract series could significantly alter the company's financial trajectory. The contract's 'sole source' designation is particularly valuable from a financial perspective, as it typically commands higher margins than competitively bid contracts while also indicating a defensible technological moat.

The follow-on nature of these contracts demonstrates customer satisfaction with previous deliverables and suggests potential for stable, recurring revenue. CEO Ken Traub's statement that "this contract vehicle will allow the Department of Defense to increase production order requests for A3M modems for years to come" points to additional revenue opportunities beyond the announced amount.

While the announcement doesn't specify the contract's timeframe for revenue recognition, the establishment of this contract vehicle creates improved revenue visibility and potentially steadier cash flows. For a company trading at such a modest valuation, securing substantial contracts with both L3Harris and ultimately the Department of Defense could trigger a reassessment of Comtech's growth prospects and risk profile. The contract's significance is amplified by Comtech's relatively small size, where each major win can materially impact overall financial performance.

CHANDLER, Ariz.--(BUSINESS WIRE)-- Mar. 10, 2025-- Comtech Telecommunications Corp. (NASDAQ: CMTL) (“Comtech” or the “Company”), a global communications technology leader, announced today that L3Harris awarded the Company multiple sole source follow on contracts valued in excess of $26 million. These contracts facilitate the delivery of Comtech designed and manufactured modem technologies supporting the U.S. Air Force and U.S. Army Anti-Jam Modem (“A3M”). A3Ms are at the forefront of providing cutting-edge anti-jam satellite communications (“SATCOM”) capabilities to military personnel across diverse operational environments and geographies.

Under the terms of these contracts, Comtech will supply modem technologies that will be integrated into A3M. Comtech’s A3M technologies are meticulously engineered to deliver software-defined, secure, and resilient anti-jam SATCOM capabilities for U.S. Air Force and U.S. Army platforms operating around the world.

“These strategic awards further establish Comtech as a leading provider of A3M technologies that will support critical protected U.S. Air Force and U.S. Army SATCOM programs,” said Ken Traub President and CEO of Comtech. “As demand grows for our next generation A3M technologies, this contract vehicle will allow the Department of Defense (“DoD”) to increase production order requests for A3M modems for years to come.”

“These awards also demonstrate the unique value of our modem technologies, the trust of our DoD partners, and Comtech’s proven expertise designing, developing, and deploying next-generation SATCOM modems and related systems for the DoD and commercial partners,” said Daniel Gizinski, President of Comtech’s Satellite & Space Communication Segment.

A3M leverages advanced protected tactical waveforms and complies with multiple U.S. Government and commercial standards. The jam-resistant modems also support the Protected Anti-jam Tactical Satellite ecosystem, including operations over the Wideband Global Satellites as well as emerging Protected Tactical Satellites.

Comtech’s portfolio of defense solutions and services, including those provided under these contracts, are uniquely positioned to deliver capabilities needed to enhance Combined Joint All Domain Command and Control operations. The Company has an extensive track record of developing and deploying customized, interoperable, robust, and resilient communications systems for all branches of the DoD and coalition forces.

About Comtech

Comtech Telecommunications Corp. is a leading provider of satellite and space communications technologies; terrestrial and wireless network solutions; Next Generation 911 (NG911) and emergency services; and cloud native capabilities to commercial and government customers around the world. Through its culture of innovation and employee empowerment, Comtech leverages its global presence and decades of technology leadership and experience to create some of the world’s most innovative solutions for mission-critical communications. For more information, please visit www.comtech.com.

Forward-Looking Statements

Certain information in this press release contains statements that are forward-looking in nature and involve certain significant risks and uncertainties. Actual results and performance could differ materially from such forward-looking information. The Company's Securities and Exchange Commission filings identify many such risks and uncertainties. Any forward-looking information in this press release is qualified in its entirety by the risks and uncertainties described in such Securities and Exchange Commission filings.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250309158687/en/

Investor Relations

Maria Ceriello

631-962-7102

investors@comtech.com

Media

Jamie Clegg

480-532-2523

jamie.clegg@comtech.com

Source: Comtech Telecommunications Corp.

FAQ

What is the value of Comtech's (CMTL) new contracts with L3Harris?

Comtech secured multiple sole source follow-on contracts valued at over $26 million from L3Harris.

What technology will Comtech (CMTL) deliver under these contracts?

Comtech will supply modem technologies for integration into the U.S. Air Force and U.S. Army Anti-Jam Modem (A3M) programs.

What capabilities do Comtech's (CMTL) A3M technologies provide?

The A3M technologies deliver software-defined, secure, and resilient anti-jam satellite communications capabilities for military platforms.

Which satellite systems are supported by Comtech's (CMTL) A3M modems?

The modems support operations over Wideband Global Satellites and emerging Protected Tactical Satellites within the Protected Anti-jam Tactical Satellite ecosystem.