Comtech CEO Ken Traub, left; and Daniel Gizinski, president of Comtech’s Satellite & Space segment, right. Photos: Comtech

After a series of management changes in the CEO position in recent years, Comtech appointed Ken Traub as its new CEO in January. While Comtech has long been a leading player in the ground segment, it is undergoing a period of transformation under Traub’s leadership to streamline its business to capitalize on what it sees as a number of growth opportunities in satellite communications.

Via Satellite spoke with new Comtech CEO Ken Traub and Daniel Gizinski, president of Comtech’s Satellite & Space segment, about the details behind its transformation plan. Traub is optimistic that despite a challenging period in recent times, Comtech is well-positioned to bounce back and cement its status as one of the major technology providers in the industry. Traub and Gizinski outline how they aim to do this and what is next for Comtech.

VIA SATELLITE: Ken, can you share a little more about your background and what brought you to Comtech for Via Satellite readers that may be less familiar with your career?

Traub: I was recruited to Comtech because I have a background in managing turnarounds and working with technology companies. Harvard Business School wrote a case study about a business transformation that I managed earlier in my career with a company called American Bank Note Holographics (ABNH). On my first day of work at ABNH, I discovered there were significant misstatements in the company’s publicly filed financial statements. When the company disclosed the financial irregularities a cascade of other problems shortly ensued including the stock had declined on the New York Stock Exchange from $18 to 52 cents, a liquidity crisis, defaults under loan agreements, SEC investigations, U.S. attorney criminal investigations, extensive litigation, customers  cancelling contracts, vendors cutting supply and the workforce in turmoil. In short, former management’s corruption created an existential crisis that threatened the viability of the company.

I enjoy teaching this case study at Harvard and other leading business schools since it has compelling lessons for managing turnarounds and business in general. The essential lesson was the key to saving ABNH and successfully leading it, was to earn the trust of all of the company’s stakeholders after that trust was lost by former management. We did this by being transparent about the issues the company was facing, our action plan to first remediate the problems, and then our action plans to capitalize on the strengths within the company to develop new growth vectors to be better positioned for long term success.  So, the case study emphasizes that the most essential key to success in any business, and particularly in a turnaround, is earning the trust of all of your stakeholders.

VIA SATELLITE: How does what you learned in that case study apply to Comtech?  

Traub: The issues of Comtech are nowhere near as extreme as they were at ABNH. There was no fraud here. But, Comtech has faced challenges. Broadly speaking, Comtech’s historical challenges are the result of three factors: Industry changes that the company needed to adapt to; poor operational execution; and burdensome capital structure. We are being transparent about the challenges, how they are being addressed and how we are going to better capitalize on the company’s strengths to build sustainable advantages for long-term success. As I mentioned, the core lesson in the case study is about earning trust, and at Comtech we are committed to earning the trust of all major stakeholders — our employees, partners, customers, suppliers, creditors and investors — by understanding their objectives and working collaboratively to build mutually beneficial and productive win-win relationships.

VIA SATELLITE: Ken, you became the president and CEO in January and you also announced a comprehensive transformation strategy at that time. Can you share more about the transformation strategy and some of your priorities as you look to close out Fiscal Year 2025? 

Traub: The transformation plan has the following pillars: Improving operational discipline — Comtech has been taking decisive action to optimize processes, streamline product lines, sharpen its organizational focus and improve lines of accountability which all contribute to a positive impact on customer responsiveness, quality, cycle times and costs.

Investing in and supporting differentiated technologies and solutions — Comtech has developed some of the world’s most sophisticated communications equipment for both defense and commercial users that rely on us to provide mission-critical communications infrastructure. We will continue to invest in advancing our technologies and providing differentiated solutions for our customer’s evolving needs.

Exploring strategic alternatives —We are reviewing a broad range of strategic alternatives in both our Terrestrial & Wireless and Satellite & Space segments to best position Comtech for long-term success.

Strengthening the capital structure — In March, we secured a capital infusion of $40 million and used most of the proceeds to pay down the senior secured debt and amend the credit agreements which now provide the company with more financial flexibility. We continue to explore opportunities to further strengthen the capital structure.

VIA SATELLITE: What has been the response so far to your transformation strategy?

Traub: The most gratifying aspect of my job is the support and enthusiasm we are seeing from our major stakeholders who love Comtech, resonate to the transformative actions we have been taking and want to see us succeed. The corporate culture is energized as employees are increasingly taking pride in the important work we do and the positive trajectory of the company. Customers appreciate the improved focus and the passionate commitment to reliably deliver the best solutions for their needs. Suppliers also appreciate the focus, discipline and commitment to quality and reliability. And our investors and creditors have not only complimented us for the vision and execution of the transformation strategy, but they have demonstrated their support with additional capital and more favorable terms to improve the company’s financial flexibility.

VIA SATELLITE: Daniel, how do you see this transformation in the context of Comtech’s technology?

Gizinski: It is worth starting at the roots: We have a very strong infrastructure, great people, technology and legacy. We have products operating in more than 100 countries, many that have been in the field for 20 to 30 years with a history of proven performance and value over time. This has created some really strong customer relationships, and that is something we have been able to parlay into our next generation of product development. We’ve been able to align our investment dollars and what we are building and preparing over the last several years, to line up with where the market is headed. And I think the new focus we have within the organization, and the transition towards fewer diversified product sets and really a focus on the products that matter has enabled us to get some of these products into market quickly, get them into trials and fielded with customers. We have been incredibly pleased with the reaction we have seen from our customers.

VIA SATELLITE: Comtech’s S&S segment has positive momentum with new contract wins and product launches like your Digital Common Ground product line and ELEVATE 2.0. Can you touch on the response you are seeing from customers and how Comtech is differentiating itself?  

Gizinski: When we look at our DCG portfolio in particular, we have identified several core customers, including major satellite operators, U.S. government services, and prime integrators, that have each been early adopters of these products. This has allowed us to secure multiple orders just eight months after an initial public release and get these products out into the field to start collecting feedback from customers. The steps we have taken to allow for further digitalization of satellite signals, greater levels of flexibility and greater levels of adaptability have resonated with our customers. They have seen cost pressures created by the introduction of new satellite services, particularly in Non-Geostationary orbit and there is an enormous desire to better capitalize on existing infrastructure and existing fleets alongside those next generational capabilities that have been afforded by the DCG platform, both for military and commercial users.

In the case of ELEVATE 2.0, we saw a successful Comtech ELEVATE product launch a few years ago, and were able to continue to cultivate and develop those relationships with customers that have fielded it. We were able to identify core areas where we were able to level up the capabilities in that product set. We have already secured a number of major wins including with a significantly strategic partner in the Asia Pacific.

VIA SATELLITE: What are some key trends you’re seeing in the industry at the moment and how is Comtech positioned to capitalize on these moving forward? 

Gizinski: When you look at the satellite industry over the last 20 to 30 years, it went through a period of time where perhaps the pace of innovation slowed a bit. We have now seen an increased level of disruption with some of the Non-Geostationary operators coming online, each of which had a slightly different approach to enabling connectivity. We have not just been focusing on the changes that have occurred, but also making sure our customers feel comfortable that when they are designing, developing, and fielding a next generation ground communications system, it will support the both the networks that exist today and those that will evolve over the next 5 to 10 years. We have focused our investment on digitalization, and the move to digital frequencies, greater levels of adaptability in signal routing and signal path in ground stations, as well as software defined systems that allow for multiple satellite constellations to be supported by the same set of ground hardware.

We have seen a tremendous rate of adoption both within commercial operators, and even within the U.S. government, in recognizing that communications requirements don’t look the same on a Tuesday than they might on the next Wednesday. We are building in the flexibility and tools, and while they are getting increased adaptability and flexibility, they are still able to get a high level of reliability they have come to expect from our communications equipment.

VIA SATELLITE: When it comes to the transformation strategy, what are a few things our readers should be paying attention to as it relates to Comtech’s S&S segment over the next 12 months? 

Gizinski: We have focused heavily on streamlining the segment. It has allowed us to focus on accelerating on what we see as the key products that are important for the transformation of not just ourselves, but the industry at large. These next generation products can enable customers, whether traditional Geostationary (GEO) operators, or operators that have mixed fleets, as well as pure play Low-Earth Orbit (LEO) providers. We have simplified the product portfolio, and eliminated several of the legacy products, particularly those that were aging and were starting to tail off.  This has allowed us to focus on more of our internal resources, our engineering team and our development team on accelerating and bringing to market those next generation products more quickly.

VIA SATELLITE: Is Comtech able to go from product cycles of two to three years to ones that are a matter of months?

Gizinski: We have provided our customers with software only upgrades that have enabled multi-orbit capabilities on those fielded products at the pace of relevance. We recognize that when working with some of our U.S. DoD customers, the process to recapitalize ground system infrastructure can be 10 to 15 to 20 years to take old equipment out of the field and replace with new equipment, assuming the equipment is readily available. The ability to make those changes in software has been a key enabler for our customers. It is something that we have seen some significant uptake in.

VIA SATELLITE: While there has been a lot of excitement around the mobility market in recent times, it seems as though a lot of satellite operators believe the defense market will be the number one market for the going forward? How does this impact a company like Comtech?

Gizinski: There has been a change in the way defense spending looks. We have seen significant upticks within the U.S. in space spending. Whether this is the U.S. Space Force and their annual budget increases or the stand up of new fast-moving organizations like the Space Development Agency (SDA). Commercial and defense shouldn’t be a pivot, it should be an ‘and.’ Commercial satellite systems today are increasingly being used for defense purposes. The operators need the ability to flex and adapt amongst those two end users. Frankly, even within the defense market, many of those satellites are used for use cases that look commercial, as well as very specific and very purpose-built defense focused modes. So, building systems that have flexibility, adaptability to deal with that ebb and flow, rather than having to make a pivot as an organization as defense and commercial budgets shift.

We have seen a tremendous amount of opportunity for shared technology and shared use. There are many common infrastructure requirements with 5G-NTN and certain advanced defense capabilities. There is a tremendous amount of overlap. We are grateful to have really strong relationships on both sides and continue to see both defense and commercial applications.

VIA SATELLITE: Ken, Do you see Comtech as an unpolished diamond that will be sparkling again?

Traub: That is a good metaphor. I think the company has tremendous assets — its technology, its installed customer base, its relationship with its partners and most importantly, its talented people. What I take the most pride in is hearing from our employees throughout the company who are starting to really believe that Comtech will be better than ever. There is a new energy at Comtech. The company has gone through some challenges and a period of change, but people are now starting to see how the transformation strategy is working and helping to position the company for long-term success. There is a new enthusiasm, a new morale. I am hearing from employees all the time about how excited they are for the future of Comtech.