Comtech Telecommunications Corp. (NASDAQ:CMTL) Q3 2023 Earnings Call Transcript

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Greg Burns: Okay. So just — so clearly this is the work you’re doing at the behest of the customer? Or this isn’t something you’re doing in hopes of obtaining orders from this customer. These orders are coming and some kind of reasonable time frame?

Mike Bondi: Yes. This is work that we’re doing on our nickel. We have contracts with the end customer to do certain development work in the anticipation of also getting production orders down the line. So we do have contracts in place with the customer. But what we’ve decided to do is to work collaboratively given that this is a new market, and this is a race, we felt that this is a great way to show our legal customer that we’re there to stand by them and support their endeavors. So we took it upon ourselves to — in this fiscal year, do some work at risk, if you will. But we think that this will pay dividends downstream as the constellation gets deployed. That’s something that would be recurring.

Greg Burns: Right. Okay. And then lastly, in terms of Evoque, could you give a time frame on when we might see some, I guess, you called them last quarter minimally viable products coming out of Evoque and maybe time frame to that and maybe a time frame to when maybe we might start to see some revenue coming from these partnerships.

Ken Peterman: Yes, sure. I’ll say a couple of things. First of all, our Evoque partners have been very active with us. And if you are attending our Investor Day coming up in a couple of weeks, you will see their engagement. You will see the kind of collaborative things we’re doing together. You will see how our technology blended with their technology creates more comprehensive customer values. And in fact, I can say also that we have, in fact, contracts in hand, subcontracts that we have let to some of those Evoque partners. We’re not in a position — look, it’s very competitive as these growth initiatives take root. So we obviously have some sensitivity about that. But yes, we have some contracts in place. We’re seeing these things get traction.

Some of these are coming out of the workshops that we had with our prime customers, where they saw the value that Comtech could bring in our technology road maps, but they also saw the additional value that these partnerships bring. So we’re moving forward to demonstrate that for those customers, show the value creation in the customers’ currency, not in a technical parameter, but actually in customer parameter like additional subscribers on a network or additional revenue and profit creation additional speed, reduction of operating costs or whatever it might be. So yes, we’re not prepared to talk specifically about that. But yes, we are seeing those good traction.

Greg Burns : Perfect. Thank you.

Operator: Thank you. At this time, there are no further questions in the queue. So I would like to turn the call back over to Robert Samuels for any additional or closing remarks.

Robert Samuels: Thanks, operator. Thanks, Ken, Mike, and everyone for dialing in today. As Ken said, there are additional details about our strategy and performance available in our investor letter and SEC filings, and we’ll provide ongoing insights and signals. And as a reminder, we intend to be as responsible as we can with investors going forward. So if anyone with questions, please reach out to me directly and let’s connect. We look forward to seeing you on the 21st in Arizona. This concludes our third quarter call. We thank you for your continued support.

Operator: Thank you, ladies, and gentlemen. This concludes today’s program, and we appreciate your participation. You may disconnect at any time.

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