U.S. Navy Awards Comtech $50 Million SLM-5650B Modem Contract

Rhea-AI Summary

Comtech Telecommunications (NASDAQ: CMTL) has been awarded a $50 million sole source contract by the U.S. Navy Information Warfare Systems Command for their SLM-5650B satellite communications modems, upgrade kits, firmware options, and technical support. The contract spans four years, with initial funded orders of $2 million. The SLM-5650B, developed and manufactured in Chandler, AZ, is Wideband Global SATCOM-certified and supports multiple DoD and NATO waveforms, including DVB-S2X. Thousands of Comtech SATCOM modems are currently deployed across U.S. Navy programs, providing critical communications capabilities over commercial and military satellite networks.

Positive

• Secured $50 million contract with U.S. Navy
• Initial funded orders of $2 million already received
• Four-year contract duration providing steady revenue stream
• Existing large-scale deployment across U.S. Navy programs
• Recent strategic contract win with SES Space & Defense

Negative

• None.

Insights

Defense Technology Analyst

This $50 million U.S. Navy contract represents a significant win for Comtech, particularly given their $77.6 million market cap. The sole-source nature of the contract highlights Comtech's unique position and technological advantage in military SATCOM systems. With $2 million already funded and the potential to expand deployments over four years, this creates a stable revenue stream and strengthens Comtech's foothold in military communications.

The SLM-5650B modem's software-defined architecture and WGS certification are important differentiators, enabling adaptation to emerging military needs and ensuring interoperability across platforms. The recent SES Space & Defense contract further validates the technology's market position. This dual commercial-military application capability aligns perfectly with the Space Force Commercial Space Strategy, potentially opening additional revenue streams.

Financial Analyst

This contract's value at $50 million represents approximately 64% of Comtech's current market capitalization, making it a transformative deal for the company. The four-year performance period provides revenue visibility and stability, while the sole-source designation suggests strong competitive barriers. The initial $2 million funding indicates a measured start with significant upside potential as additional orders materialize.

The contract builds on existing relationships with thousands of deployed units, suggesting lower execution risk and potential for high-margin support services. The parallel commercial market opportunity through the SES contract demonstrates revenue diversification potential, reducing dependency on single-source government contracts.

CHANDLER, Ariz.--(BUSINESS WIRE)-- November 14, 2024-- Comtech Telecommunications Corp. (NASDAQ: CMTL) (“Comtech” or the “Company”), a global technology leader, announced today that the U.S. Navy Information Warfare Systems Command awarded the Company a sole source contract for Comtech’s U.S sovereign software-defined SLM-5650B satellite communications (“SATCOM”) modems, upgrade kits, firmware options and technical support. The contract has a four-year period of performance and is valued in excess of $50.0 million. Funded orders received to date are valued at approximately $2 million.

Currently, multiple U.S. Navy programs field thousands of Comtech SATCOM modems. Comtech’s commercially available modems support communications over commercial and military satellite networks and are critical for interoperability across Navy platforms and shore sites.

“As data rate demands in the U.S. Navy Fleet increase, and satellite technologies evolve to provide enhanced capabilities, Comtech’s U.S. sovereign SLM-5650B modems are uniquely designed to meet the needs of the Navy today, as well as the joint force operations of tomorrow,” said John Ratigan, President and CEO of Comtech. “As a longstanding trusted partner of the U.S. Navy, Comtech’s modem technologies provide critical communications capabilities that enhance situational awareness and improve operational effectiveness in the world’s most challenging environments. We are honored to strengthen our relationship with the U.S. Navy through this award, which provides a new contracting vehicle to significantly expand the number of Comtech SATCOM modems delivered over the next four years.”

Developed and manufactured at its headquarters in Chandler, AZ, Comtech’s SLM-5650B is the Company’s current Wideband Global SATCOM-certified modem designed to deliver critical communications services for commercial backhaul and government and military applications. The software-defined SLM-5650B currently supports multiple critical DoD and NATO waveforms, including DVB-S2X, with the ability to easily add more waveforms and functions to meet emerging mission needs. The Company was also recently awarded a strategically significant SES Space & Defense contract to deliver SLM-5650B and other next-generation modems to support sovereign connectivity programs over the SES O3b mPOWER constellation.

Comtech’s portfolio of U.S. sovereign defense technologies and services, including the Company’s SLM-5650B and next-generation modems, align with the Space Force Commercial Space Strategy and deliver capabilities that will enhance Combined Joint All Domain Command and Control operations. Comtech’s expansive portfolio of defense and security technologies is designed to continuously evolve over time to enable digitalized SATCOM infrastructures and integrate services across blended military and commercial networks to enhance mission effectiveness in future all-domain operations.

About Comtech

Comtech Telecommunications Corp. is a leading global technology company providing terrestrial and wireless network solutions, next-generation 9-1-1 emergency services, satellite and space communications technologies, and cloud native capabilities to commercial and government customers around the world. Our unique culture of innovation and employee empowerment unleashes a relentless passion for customer success. With multiple facilities located in technology corridors throughout the United States and around the world, Comtech leverages our global presence, technology leadership, and decades of experience to create the world’s most innovative communications solutions. 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.

PCMTL

View source version on businesswire.com: https://www.businesswire.com/news/home/20241113670030/en/

Investor Relations Comtech

Maria Ceriello

631-962-7115

Maria.Ceriello@comtech.com

Media Contact Comtech

Jamie Clegg

480-532-2523

jamie.clegg@comtech.com

Source: Comtech Telecommunications Corp.

FAQ

What is the value of Comtech's (CMTL) new U.S. Navy contract?

The U.S. Navy contract awarded to Comtech (CMTL) is valued in excess of $50.0 million, with initial funded orders of approximately $2 million.

What product is Comtech (CMTL) providing to the U.S. Navy under the new contract?

Comtech is providing their SLM-5650B satellite communications modems, upgrade kits, firmware options, and technical support.

How long is the duration of Comtech's (CMTL) new Navy contract?

The contract has a four-year period of performance.

What certifications does Comtech's (CMTL) SLM-5650B modem have?

The SLM-5650B is Wideband Global SATCOM-certified and supports multiple DoD and NATO waveforms, including DVB-S2X.