Comtech Telecommunications Corp 10-Q for FY2025 Q2

Comtech Telecommunications Corp (CMTL)

10-Q 2025-03-12 For: 2025-01-31

Added on April 06, 2026

About this 10-Q

Comtech Telecommunications Corp filed this 10-Q on March 12, 2025, covering the quarter ended January 31, 2025 (FY2025 Q2).

Headline figures

Quarter ended January 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $126.57M; down 5.7% from $134.23M a year earlier
Net loss: $48.74M; compared with a net loss of $10.56M a year earlier
Diluted EPS: -$0.76; compared with -$1.07 a year earlier

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Delaware						11-2139466
(State or other jurisdiction of incorporation /organization)						(I.R.S. Employer Identification Number)
305 N 54th Street, Chandler, Arizona						85226
(Address of principal executive offices)						(Zip Code)


COMTECH TELECOMMUNICATIONS CORP. INDEX
			Page
PART I. FINANCIAL INFORMATION

	Item 1.	Condensed Consolidated Financial Statements	2

		Condensed Consolidated Balance Sheets - January 31, 2025 and July 31, 2024 (Unaudited)	2

		Condensed Consolidated Statements of Operations - Three and Six Months Ended January 31, 2025 and 2024 (Unaudited)	3

		Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity - Three and Six Months Ended January 31, 2025 and 2024 (Unaudited)	4

		Condensed Consolidated Statements of Cash Flows - Six Months Ended January 31, 2025 and 202 4 (Unaudited)	6

		Notes to Condensed Consolidated Financial Statements (Unaudited)	8

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	45

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	73

	Item 4.	Controls and Procedures	73

PART II. OTHER INFORMATION

	Item 1.	Legal Proceedings	75

	Item 1A.	Risk Factors	75

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	75

	Item 4.	Mine Safety Disclosures	75

	Item 5.	Other Information	75

	Item 6.	Exhibits	75

		Signature Page	78


Assets	January 31, 2025		July 31, 2024
Current assets:
Cash and cash equivalents	$	26,666,000	32,433,000
Accounts receivable, net	167,197,000		195,595,000
Inventories, net	81,401,000		93,136,000
Prepaid expenses and other current assets	14,283,000		15,387,000

Total current assets	289,547,000		336,551,000
Property, plant and equipment, net	45,228,000		47,328,000
Operating lease right-of-use assets, net	30,231,000		31,590,000
Goodwill	204,625,000		284,180,000
Intangibles with finite lives, net	183,192,000		194,828,000
Deferred financing costs, net	1,806,000		3,251,000
Other assets, net	15,932,000		14,706,000
Total assets	$	770,561,000	912,434,000
Liabilities, Convertible Preferred Stock and Stockholders’ Equity
Current liabilities:
Accounts payable	$	43,056,000	42,477,000
Accrued expenses and other current liabilities	53,470,000		62,245,000
Current portion of credit facility, net	186,434,000		4,050,000
Current portion of subordinated credit facility, net	28,729,000		—
Operating lease liabilities, current	7,363,000		7,869,000
Contract liabilities	65,616,000		65,834,000
Interest payable	641,000		1,072,000

Total current liabilities	385,309,000		183,547,000
Non-current portion of credit facility, net	—		173,527,000

Operating lease liabilities, non-current	28,667,000		30,258,000
Income taxes payable, non-current	2,516,000		2,231,000
Deferred tax liability, net	5,899,000		6,193,000
Long-term contract liabilities	20,253,000		21,035,000
Warrant and derivative liabilities	72,746,000		5,254,000
Other liabilities	4,146,000		4,060,000
Total liabilities	519,536,000		426,105,000
Commitments and contingencies (See Note 20)
Convertible preferred stock, par value $0.10 per share; authorized and issued 175,264 shares at January 31, 2025 (redemption value of $192,051,000 which includes accrued dividends of $1,430,000) and authorized and issued 171,827 shares at July 31, 2024 (redemption value of $180,076,000, which includes accrued dividends of $1,341,000)	122,317,000		180,076,000
Stockholders' equity:
Preferred stock, par value $0.10 per share; authorized and unissued 1,824,736 and 1,828,173 shares at January 31, 2025 and July 31, 2024, respectively	—		—
Common stock, par value $0.10 per share; authorized 100,000,000 shares; issued 44,380,110 and 43,766,109 shares at January 31, 2025 and July 31, 2024, respectively	4,438,000		4,377,000
Additional paid-in capital	614,858,000		640,145,000
Retained (deficit) earnings	(48,739,000)		103,580,000
	570,557,000		748,102,000
Less:
Treasury stock, at cost (15,033,317 shares at January 31, 2025 and July 31, 2024)	(441,849,000)		(441,849,000)
Total stockholders’ equity	128,708,000		306,253,000
Total liabilities, convertible preferred stock and stockholders’ equity	$	770,561,000	912,434,000


	Three months ended January 31,			Six months ended January 31,
	2025		2024	2025		2024
Net sales	$	126,574,000	134,225,000	$	242,374,000	286,136,000
Cost of sales	92,834,000		91,027,000	194,118,000		195,056,000
Gross profit	33,740,000		43,198,000	48,256,000		91,080,000

Expenses:
Selling, general and administrative	33,832,000		30,307,000	85,476,000		63,002,000
Research and development	4,354,000		6,843,000	8,067,000		14,655,000
Amortization of intangibles	5,043,000		5,288,000	11,636,000		10,577,000
Impairment of long-lived assets, including goodwill	—		—	79,555,000		—
Proxy solicitation costs	1,099,000		—	2,682,000		—
CEO transition costs	(331,000)		—	267,000		—
Gain on business divestiture, net	—		(2,213,000)	—		(2,213,000)

	43,997,000		40,225,000	187,683,000		86,021,000

Operating (loss) income	(10,257,000)		2,973,000	(139,427,000)		5,059,000

Other expenses (income):
Interest expense	11,008,000		5,265,000	20,540,000		10,197,000
Interest (income) and other	(126,000)		902,000	509,000		837,000
Write-off of deferred financing costs	—		—	1,412,000		—
Change in fair value of warrants and derivatives	28,568,000		—	34,092,000		—

Loss before (benefit from) provision for income taxes	(49,707,000)		(3,194,000)	(195,980,000)		(5,975,000)
(Benefit from) provision for income taxes	(968,000)		7,364,000	1,166,000		6,020,000


Net loss	$	(48,739,000)	(10,558,000)	$	(197,146,000)	(11,995,000)

(Loss) gain on extinguishment of convertible preferred stock	—		(13,640,000)	51,179,000		(13,640,000)

Adjustments to reflect redemption value of convertible preferred stock:
Convertible preferred stock issuance costs	—		(4,273,000)	—		(4,273,000)

Deemed contributions (dividends) on convertible preferred stock	26,383,000		(2,061,000)	(32,251,000)		(3,884,000)
Net loss attributable to common stockholders	$	(22,356,000)	(30,532,000)	$	(178,218,000)	(33,792,000)

Net loss per common share (See Note 6):
Basic	$	(0.76)	(1.07)	$	(6.06)	(1.18)
Diluted	$	(0.76)	(1.07)	$	(6.06)	(1.18)

Weighted average number of common shares outstanding – basic	29,339,000		28,662,000	29,393,000		28,704,000

Weighted average number of common and common equivalent shares outstanding – diluted	29,339,000		28,662,000	29,393,000		28,704,000



	Three months ended January 31, 2025 and 2024
	Convertible Preferred Stock			Common Stock			Additional Paid-in Capital		Retained Earnings (Deficit)		Treasury Stock			Stockholders' Equity
	Shares	Amount		Shares	Amount						Shares	Amount
Balance as of October 31, 2023	100,000	$	114,034,000	43,268,782	$	4,327,000	$	638,652,000	$	235,676,000	15,033,317	$	(441,849,000)	$	436,806,000
Equity-classified stock award compensation	—	—		—	—		2,189,000		—		—	—		2,189,000

Issuance of employee stock purchase plan shares	—	—		11,318	1,000		81,000		—		—	—		82,000
Issuance of restricted stock, net of forfeiture	—	—		(16,590)	(2,000)		2,000		—		—	—		—
Net settlement of stock-based awards	—	—		242,779	25,000		(1,624,000)		—		—	—		(1,599,000)
Extinguishment of convertible preferred stock	(100,000)	(115,721,000)		—	—		—		(13,640,000)		—	—		(13,640,000)
Issuance of convertible preferred stock	166,121	166,121,000		—	—		—		—		—	—		—
Convertible preferred stock issuance costs	—	(4,273,000)		—	—		—		—		—	—		—
Adjustment to reflect redemption value of convertible preferred stock (including accrued dividends)		6,334,000		—	—		—		(6,334,000)		—	—		(6,334,000)

Reversal of dividend equivalents	—	—		—	—		—		13,000		—	—		13,000
Net loss	—	—		—	—		—		(10,558,000)		—	—		(10,558,000)
Balance as of January 31, 2024	166,121	$	166,495,000	43,506,289	$	4,351,000	$	639,300,000	$	205,157,000	15,033,317	$	(441,849,000)	$	406,959,000

Balance as of October 31, 2024	175,264	$	148,700,000	43,927,127	$	4,393,000	$	587,820,000	$	—	15,033,317	$	(441,849,000)	$	150,364,000
Equity-classified stock award compensation	—	—		—	—		1,170,000		—		—	—		1,170,000
Issuance of employee stock purchase plan shares	—	—		13,111	2,000		43,000		—		—	—		45,000
Issuance of restricted stock, net of forfeiture	—	—		37,216	3,000		(3,000)		—		—	—		—
Net settlement of stock-based awards	—	—		402,656	40,000		(560,000)		—		—	—		(520,000)



Adjustment to reflect redemption value of convertible preferred stock (including accrued dividends)	—	(26,383,000)		—	—		26,383,000		—		—	—		26,383,000
Reversal of dividend equivalents	—	—		—	—		5,000		—		—	—		5,000
Net loss	—	—		—	—		—		(48,739,000)		—	—		(48,739,000)
Balance as of January 31, 2025	175,264	$	122,317,000	44,380,110	$	4,438,000	$	614,858,000	$	(48,739,000)	15,033,317	$	(441,849,000)	$	128,708,000


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


(480)			333-2200
(Registrant's telephone number, including area code)


	Six months ended January 31, 2025 and 2024
	Convertible Preferred Stock			Common Stock			Additional Paid-in Capital		Retained Earnings (Deficit)		Treasury Stock			Stockholders' Equity
	Shares	Amount		Shares	Amount						Shares	Amount
Balance as of July 31, 2023	100,000	$	112,211,000	43,096,271	$	4,310,000	$	636,925,000	$	238,913,000	15,033,317	$	(441,849,000)	438,299,000
Equity-classified stock award compensation	—	—		—	—		4,834,000		—		—	—		4,834,000

Issuance of employee stock purchase plan shares	—	—		24,117	2,000		174,000		—		—	—		176,000
Issuance of restricted stock, net of forfeiture	—	—		(2,686)	—		—		—		—	—		—
Net settlement of stock-based awards	—	—		388,587	39,000		(2,633,000)		—		—	—		(2,594,000)
Extinguishment of convertible preferred stock	(100,000)	(115,721,000)		—	—		—		(13,640,000)		—	—		(13,640,000)
Issuance of convertible preferred stock	166,121	166,121,000		—	—		—		—		—	—		—
Convertible preferred stock issuance costs		(4,273,000)		—	—		—		—		—	—		—
Adjustment to reflect redemption value of convertible preferred stock (including accrued dividends)	—	8,157,000		—	—		—		(8,157,000)		—	—		(8,157,000)
Reversal of dividend equivalents	—	—		—	—		—		36,000		—	—		36,000
Net loss	—	—		—	—		—		(11,995,000)		—	—		(11,995,000)
Balance as of January 31, 2024	166,121	$	166,495,000	43,506,289	$	4,351,000	$	639,300,000	$	205,157,000	15,033,317	$	(441,849,000)	$	406,959,000

Balance as of July 31, 2024	171,827	$	180,076,000	43,766,109	$	4,377,000	$	640,145,000	$	103,580,000	15,033,317	$	(441,849,000)	$	306,253,000
Equity-classified stock award compensation	—	—		—	—		1,325,000		—		—	—		1,325,000

Issuance of employee stock purchase plan shares	—	—		27,586	3,000		80,000		—		—	—		83,000
Issuance of restricted stock, net of forfeiture	—	—		63,450	6,000		(6,000)		—		—	—		—
Net settlement of stock-based awards	—	—		522,965	52,000		(819,000)		—		—	—		(767,000)

Extinguishment of convertible preferred stock	(171,827)	(183,489,000)		—	—		—		51,179,000		—	—		51,179,000
Issuance of convertible preferred stock (at fair value), excluding embedded derivatives reported in Warrant and Derivative Liabilities	175,264	93,479,000		—	—		—		—		—	—		—

Adjustment to reflect redemption value of convertible preferred stock (including accrued dividends)	—	32,251,000		—	—		(25,872,000)		(6,379,000)		—	—		(32,251,000)


Reversal of dividend equivalents	—	—		—	—		5,000		27,000		—	—		32,000
Net loss	—	—		—	—		—		(197,146,000)		—	—		(197,146,000)
Balance as of January 31, 2025	175,264	$	122,317,000	44,380,110	$	4,438,000	$	614,858,000	$	(48,739,000)	15,033,317	$	(441,849,000)	$	128,708,000


	Three months ended January 31, 2025					Six months ended January 31, 2025
	Satellite and Space Communications		Terrestrial and Wireless Networks	Total		Satellite and Space Communications		Terrestrial and Wireless Networks	Total
Geographical region and customer type
U.S. government	$	44,192,000	598,000	$	44,790,000	$	84,619,000	1,196,000	$	85,815,000
Domestic	8,987,000		48,603,000	57,590,000		13,834,000		99,763,000	113,597,000
Total United States	53,179,000		49,201,000	102,380,000		98,453,000		100,959,000	199,412,000

International	20,542,000		3,652,000	24,194,000		34,201,000		8,761,000	42,962,000
Total	$	73,721,000	52,853,000	$	126,574,000	$	132,654,000	109,720,000	$	242,374,000
Contract type
Firm fixed-price	$	52,624,000	52,853,000	$	105,477,000	$	100,885,000	109,720,000	$	210,605,000
Cost reimbursable	21,097,000		—	21,097,000		31,769,000		—	31,769,000
Total	$	73,721,000	52,853,000	$	126,574,000	$	132,654,000	109,720,000	$	242,374,000
Transfer of control
Point in time	$	34,852,000	615,000	$	35,467,000	$	65,026,000	1,337,000	$	66,363,000
Over time	38,869,000		52,238,000	91,107,000		67,628,000		108,383,000	176,011,000
Total	$	73,721,000	52,853,000	$	126,574,000	$	132,654,000	109,720,000	$	242,374,000


	Three months ended January 31, 2024					Six months ended January 31, 2024
	Satellite and Space Communications		Terrestrial and Wireless Networks	Total		Satellite and Space Communications		Terrestrial and Wireless Networks	Total
Geographical region and customer type
U.S. government	$	41,701,000	573,000	$	42,274,000	$	94,707,000	1,169,000	$	95,876,000
Domestic	8,804,000		48,830,000	57,634,000		24,756,000		94,020,000	118,776,000
Total United States	50,505,000		49,403,000	99,908,000		119,463,000		95,189,000	214,652,000

International	28,098,000		6,219,000	34,317,000		61,528,000		9,956,000	71,484,000
Total	$	78,603,000	55,622,000	$	134,225,000	$	180,991,000	105,145,000	$	286,136,000
Contract type
Firm fixed-price	$	71,425,000	55,622,000	$	127,047,000	$	156,833,000	105,145,000	$	261,978,000
Cost reimbursable	7,178,000		—	7,178,000		24,158,000		—	24,158,000
Total	$	78,603,000	55,622,000	$	134,225,000	$	180,991,000	105,145,000	$	286,136,000
Transfer of control
Point in time	$	32,571,000	685,000	$	33,256,000	$	78,312,000	1,332,000	$	79,644,000
Over time	46,032,000		54,937,000	100,969,000		102,679,000		103,813,000	206,492,000
Total	$	78,603,000	55,622,000	$	134,225,000	$	180,991,000	105,145,000	$	286,136,000


	January 31, 2025		July 31, 2024
Receivables from commercial and international customers	$	58,599,000	53,108,000
Unbilled receivables from commercial and international customers	63,679,000		72,540,000
Receivables from the U.S. government and its agencies	42,259,000		20,682,000
Unbilled receivables from the U.S. government and its agencies	22,453,000		51,197,000
Total accounts receivable	186,990,000		197,527,000
Less allowance for doubtful accounts	19,793,000		1,932,000
Accounts receivable, net	$	167,197,000	195,595,000


	January 31, 2025		July 31, 2024
Raw materials and components	$	70,600,000	72,820,000
Work-in-process and finished goods	38,324,000		38,587,000
Total inventories	108,924,000		111,407,000
Less reserve for excess and obsolete inventories	27,523,000		18,271,000
Inventories, net	$	81,401,000	93,136,000


	January 31, 2025		July 31, 2024
Accrued wages and benefits	$	19,339,000	22,131,000
Accrued contract costs	9,561,000		17,267,000
Accrued warranty obligations	8,578,000		7,049,000

Accrued commissions and royalties	5,280,000		5,396,000
Accrued legal costs	1,538,000		3,092,000
Other	9,174,000		7,310,000
Accrued expenses and other current liabilities	$	53,470,000	62,245,000


	January 31, 2025		July 31, 2024
Term Loan	$	170,440,000	$	161,663,000
Less unamortized deferred financing costs related to Term Loan	5,886,000		6,425,000
Less unamortized discount related to Term Loan	15,165,000		13,202,000
Term Loan, net	149,389,000		142,036,000
Revolving Loan	32,500,000		32,500,000
Embedded derivative related to Credit Facility	4,545,000		3,041,000
Amount outstanding under Credit Facility, net	$	186,434,000	177,577,000
Less current portion of credit facility, net	186,434,000		4,050,000
Non-current portion of credit facility, net	$	—	$	173,527,000


FORM			10-Q



Remainder of fiscal 2025	$	3,983,000
Fiscal 2026	7,148,000
Fiscal 2027	5,060,000
Fiscal 2028	4,484,000
Fiscal 2029	3,925,000
Thereafter	16,884,000
Total future undiscounted cash flows	41,484,000
Less: Present value discount	5,454,000
Lease liabilities	$	36,030,000

Weighted-average remaining lease terms (in years)	7.68
Weighted-average discount rate	3.76%


	Awards (in Shares)	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding at July 31, 2024	141,190	$	20.61



Outstanding at October 31, 2024	141,190	$	20.61

Expired/canceled	(5,500)	17.88

Outstanding at January 31, 2025	135,690	$	20.72	3.95	$	—





Exercisable at January 31, 2025	128,440	$	20.88	3.87	$	—

Vested and expected to vest at January 31, 2025	135,287	$	20.73	3.95	$	—


	Awards (in Shares)	Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Outstanding at July 31, 2024	1,800,288	$	10.61
Granted	1,154,859	5.04
Settled	(204,292)	11.26
Canceled/Forfeited	(128,892)	10.61
Outstanding at October 31, 2024	2,621,963	8.11
Granted	489,191	3.63
Settled	(578,751)	9.41
Canceled/Forfeited	(643,012)	5.48
Outstanding at January 31, 2025	1,889,391	$	6.61	$	3,779,000





Vested at January 31, 2025	125,904	$	13.09	$	252,000

Vested and expected to vest at January 31, 2025	1,811,411	$	6.60	$	3,623,000


	January 31, 2025
Subordinated Credit Facility		$	25,000,000
Less: Unamortized deferred financing costs		1,675,000
Less: Unamortized discount		3,156,000
Plus: Accretion of Make-Whole Amount		1,315,000
Subordinated Credit Facility, net - subtotal		21,484,000
Plus: Embedded derivative related to redemption features		7,245,000
Amount outstanding under the Subordinated Credit Facility		28,729,000
Less: Current portion of Subordinated Credit Facility, net		(28,729,000)
Non-current portion of Subordinated Credit Facility, net		$	—


			January 31, 2025
Stock options			135,690
Performance shares			668,103
RSUs, restricted stock, share units and other stock-based awards			1,221,288


Total			2,025,081


	January 31, 2025
	Weighted Average Amortization Period	Gross Carrying Amount		Accumulated Amortization	Net Carrying Amount
Customer relationships	20.2	$	294,258,000	141,733,000	$	152,525,000
Technologies	13.6	106,149,000		83,490,000	22,659,000
Trademarks and other	16.9	31,826,000		23,818,000	8,008,000
Total		$	432,233,000	249,041,000	$	183,192,000


2025	$	21,722,000
2026	19,128,000
2027	17,774,000
2028	17,774,000
2029	16,353,000


Initial estimated fair value of Series B-2 Convertible Preferred Stock	$	132,310,000
Initial estimated fair value and carrying value of combined embedded derivatives	38,832,000
Initial carrying value of Series B-2 Convertible Preferred Stock	$	93,478,000


Redemption value of Series B-2 Convertible Preferred Stock at January 31, 2025	$	192,051,000
Less: Carrying value of combined embedded derivatives at January 31, 2025	69,734,000
Carrying value of Series B-2 Convertible Preferred Stock at January 31, 2025	122,317,000
Less: Initial carrying value of Series B-2 Convertible Preferred Stock at October 17, 2024	93,478,000
Adjustment to increase the carrying value of Series B-2 Convertible Preferred Stock to its redemption value at January 31, 2025	28,839,000
Adjustment to increase carrying value of Series B-1 Convertible Preferred Stock to its redemption value (while outstanding)	3,412,000
Total adjustments to redemption values charged to Stockholder's Equity:
Six months ended January 31, 2025	32,251,000
Less: Three months ended October 31, 2024	58,634,000
Three months ended January 31, 2025	$	(26,383,000)


($ in millions)	Fiscal Year 2024
Reconciliation of GAAP Net Loss to Adjusted EBITDA:
Net loss	$	(100.0)
Benefit from income taxes	(0.3)
Interest expense	22.2
Interest (income) and other	0.7
Write-off of deferred financing costs	1.8
Change in fair value of warrants and derivatives	(4.3)
Amortization of stock-based compensation	6.1
Amortization of intangibles	21.2
Depreciation	12.2
Impairment of long-lived assets, including goodwill	64.5
Amortization of cost to fulfill assets	1.0
Restructuring costs	12.5
Strategic emerging technology costs	4.1
CEO transition costs	2.9
Loss on PST Divestiture	1.2
Adjusted EBITDA	$	45.7


	Three months ended January 31, 2025
($ in millions, except for per share amount)	Operating (Loss) Income		Net Loss Attributable to Common Stockholders		Net Loss per Diluted Common Share
Reconciliation of GAAP to Non-GAAP Earnings:
GAAP measures, as reported	$	(10.3)	$	(22.4)	$	(0.76)

Adjustments to reflect redemption value of convertible preferred stock		—		(26.4)		(0.90)
Change in fair value of warrants and derivatives		—		28.6		0.98
Amortization of intangibles		5.0		4.8		0.16
Restructuring costs		3.4		3.2		0.11
Amortization of stock-based compensation		1.2		1.1		0.04
Proxy solicitation costs		1.1		1.0		0.03
CEO transition costs		(0.3)		(0.3)		(0.01)



Net discrete tax expense		—		0.1		—
Non-GAAP measures	$	0.1	$	(10.3)	$	(0.35)

	Three months ended January 31, 2024
($ in millions, except for per share amount)	Operating (Loss) Income		Net Loss Attributable to Common Stockholders		Net Loss per Diluted Common Share
Reconciliation of GAAP to Non-GAAP Earnings:
GAAP measures, as reported	$	3.0	$	(30.5)	$	(1.07)
Loss on extinguishment of convertible preferred stock		—		13.6		0.48
Adjustments to reflect redemption value of convertible preferred stock		—		6.3		0.22
Amortization of intangibles		5.3		4.1		0.14
Restructuring costs		2.7		2.1		0.07
Amortization of stock-based compensation		2.2		1.7		0.06
Strategic emerging technology costs		1.0		0.8		0.03
Amortization of costs to fulfill assets		0.2		0.2		0.01
Gain on business divestiture, net		(2.2)		(2.9)		(0.10)
Net discrete tax expense		—		0.4		0.01
Non-GAAP measures	$	12.2	$	(4.2)	$	(0.15)


	Six months ended January 31, 2025
($ in millions, except for per share amount)	Operating Loss		Net Loss Attributable to Common Stockholders		Net Loss per Diluted Common Share
Reconciliation of GAAP to Non-GAAP Earnings:
GAAP measures, as reported	$	(139.4)	$	(178.2)	$	(6.06)
Change in fair value of warrants and derivatives		—		34.1		1.16
Adjustments to reflect redemption value of convertible preferred stock		—		32.3		1.10
Gain on extinguishment of convertible preferred stock		—		(51.2)		(1.74)
Impairment of long-lived assets, including goodwill		79.6		79.6		2.71
Restructuring costs		21.3		20.3		0.69
Amortization of intangibles		11.6		11.2		0.38
Proxy solicitation costs		2.7		2.5		0.09
Amortization of stock-based compensation		1.3		1.2		0.04
CEO transition costs		0.3		0.3		0.01
Strategic emerging technology costs		0.3		0.3		0.01
Amortization of cost to fulfill assets		0.3		0.3		0.01

Net discrete tax expense		—		0.1		—
Non-GAAP measures	$	(22.2)	$	(47.4)	$	(1.61)

	Six months ended January 31, 2024
($ in millions, except for per share amount)	Operating Income		Net (Loss) Income Attributable to Common Stockholders		Net (Loss) Income per Diluted Common Share
Reconciliation of GAAP to Non-GAAP Earnings:
GAAP measures, as reported	$	5.1	$	(33.8)	$	(1.18)
Loss on extinguishment of convertible preferred stock				13.6		0.48
Adjustment to reflect redemption value of convertible preferred stock		—		8.2		0.29
Amortization of intangibles		10.6		8.2		0.28


Restructuring costs		6.4		5.0		0.17
Amortization of stock-based compensation		4.8		3.8		0.13
Strategic emerging technology costs		2.3		1.8		0.06
Amortization of cost to fulfill assets		0.5		0.5		0.02


Gain on business divestiture, net		(2.2)		(1.4)		(0.05)
Net discrete tax expense		—		1.0		0.03
Non-GAAP measures	$	27.5	$	6.7	$	0.23



($ in thousands)	Total		Due Within 1 Year
Credit Facility - principal payments	$	202,940	6,076
Credit Facility - interest payments	76,714		24,387
Operating lease obligations	41,484		7,781
Subordinated Credit Facility	25,000		—
Contractual cash obligations	$	346,138	38,244



Date:	March 12, 2025	By: /s/ Kenneth H. Traub
	(Date)	Kenneth H. Traub, Chairman of the Board
		President and Chief Executive Officer
		(Principal Executive Officer)

Date:	March 12, 2025	By: /s/ Michael A. Bondi
	(Date)	Michael A. Bondi
		Chief Financial Officer
		(Principal Financial and Accounting Officer)


RSU			$80,000
LTIP (Cash)			$40,000
Perf Shares			$80,000
Total LTI			$200,000


			/s/ Kenneth H. Traub
			Kenneth H. Traub, Chairman of the Board President and Chief Executive Officer


			/s/ Michael A. Bondi
			Michael A. Bondi Chief Financial Officer