Comtech Telecommunications Corp. (NASDAQ:CMTL) Q1 2023 Earnings Call Transcript

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Unidentified Analyst: Okay. The company’s international customer base as a percentage has stayed constant last couple of years, last five years or so around one quarter and correct me if I’m wrong. So, can you comment on the dynamics of business developments internationally, and the sales and marketing efforts internationally, maybe how it is, per se, and how it is different from domestic dynamics?

Ken Peterman: We have a dedicated sales team that serves the international market, we have a dedicated sales team that serves a defense market, and then the domestic market as well. I think our international presence has about 21.2%. So you’re right in the sense that it’s about a quarter of our business. But it’s going to benefit and as part of this One Comtech transformation in ways that seemed to me going in that they’re going to be at least as favorable as our domestic and defense business. And the reason I say that is because as we move to ground — satellite-ground infrastructure, and maybe providing that as a system or providing that as a service, international customers have the opportunity to benefit that as well. As we see the international community migrate from 2G and 3G to 4G, 5G technologies in the Terrestrial and Wireless market, we see the opportunity that that will benefit us.

And we see the opportunity to extend our location-based services into the international market in a bigger way, too. So we think our — really the several legs of our business, all can move into the international market, as we update our capabilities and our marketing schemes, the international market will benefit by that the same as our domestic and defense activities.

Unidentified Analyst: So, this quarter benefited from military sales — foreign military sales of your beyond line of sight communication terminals, and for Ukrainian government to an extent you can give us color. Do you think next quarter and how long do you think — any color you can give this would be a benefit?

Ken Peterman: What I can tell you is something we’ve said in our blogs, as well as writer communications. And that is the most effective marketing person in the world is a customer in a uniform, a uniform son or daughter who is in a conflict or otherwise, in the service of the nation. And the Ukraine is a great example because they’re in a conflict with what we like to say, as a pure adversary. And our equipment is present, our equipment is working. So, that becomes a test that has a greater value than any marketing brochure or podcast that I’ve ever seen. So yes, we do expect that to have an extent — an extended benefit that continues the viability of our equipment, and extends its value, because it works, it works in the toughest of environments proven.

Unidentified Analyst: Absolutely. Yes. And it develops a great narrative for the stock too. And finally, it’s a very long-term question and — so if we can comment on this. So, the recent iPhone models have this Emergency SOS. So, in that regard, do you think this product from Apple or if you kind of draw a trend line, what they might come next year, in their products? It could be a competitive threat or a substitution possibility, or you’ll see it the way that Apple’s foray as a complementary to company’s offerings?

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