On December 7, 2023, Comtech released its earnings report for the quarter ended October 31, 2023. The report contained an “going concern” qualification due to worries about Comtech’s continued compliance with its financial covenants. The Company further revealed it had drawn down most of its credit facility and was engaged in protracted negotiations to renew that facility, set to expire in October 2024.

Analysts raised alarm about Comtech’s “unbilled receivables,” an accounting practice used to recognize revenue prior to a company actually receiving those funds. One analyst described the practices as “Aggressive Accounting”.

On March 18, 2024, the Company released its quarterly earnings report, days after dismissing its CEO for alleged ethics violations. The Company missed revenue projections and indicated ongoing uncertainty about its debt negotiations. Analysts also noted Comtech’s continued use of “unbilled receivables” and its impact on the Company’s financial statements.

Following the release of the earnings report, CMTL shares fell $4.63, or 37%, overnight.