Gilat Satellite Networks Ltd. (NASDAQ: GILT, TASE: GILT), a worldwide leader in satellite networking technology, solutions and services, today reported its results for the second quarter, ended June 30, 2024.

Second Quarter 2024 Financial Highlights

  • Revenue of $76.6 million, up 13% compared with $67.6 million in Q2 2023;
  • GAAP operating income of $2.8 million, compared with $5.4 million in Q2 2023;
    • The decline is mainly attributable to the acquisition-related expenses, amortization of purchased intangibles, and earnout-based expenses related to DataPath acquisition;
  • Non-GAAP operating income of $7.3 million, up 21% compared with $6.1 million in Q2 2023;
  • GAAP net income of $1.3 million, or $0.02 per diluted share, compared with $4.3 million, or $0.08 per diluted share, in Q2 2023;
  • Non-GAAP net income of $5.6 million, or $0.10 per diluted share, up 13% compared with $4.9 million, or $0.09 per diluted share, in Q2 2023;
  • Adjusted EBITDA of $10.1 million, up 10% compared with $9.2 million in Q2 2023.

Forward-Looking Expectations

The Company today reiterated its formerly issued guidance expectations for 2024.

Expectations are for revenue between $305 and $325 million, representing year-over-year growth of 18% at the midpoint. GAAP operating income is expected to be between $15 and $19 million, and Adjusted EBITDA is expected to be between $40 and $44 million, representing year-over-year growth of 15% at the mid-point.

This Guidance does not include any contribution expected from the acquisition of Stellar Blu. However given Stellar Blu has already begun delivering its antennas, and assuming closing will happen during the beginning of Q4, we estimate SBS revenues will add between $25 to $35 million in Q4.

Management Commentary

Adi Sfadia, Gilat’s CEO, commented: “We are pleased with our results for the second quarter. Our business continues to perform well and we are on track with our expectations for 2024. The pipeline of potential orders throughout our business continues to broaden, supported by our next-generation platform and growth engines. In particular, we are pleased with the solid traction we are experiencing in the growing defense satellite communications segment, a strategic growth vector for us. This is strongly supported by our DataPath subsidiary acquired at the end of last year, which has already proven itself as a successful acquisition and key contributor to our success this quarter.”

Mr. Sfadia added, “We recently took a major strategic step and announced our intention to acquire Stellar Blu, a leader and first-to-market in delivering Electronically Steerable Antenna for the In-Flight-Connectivity market. Given Stellar Blu has already begun delivering its antennas we now expect Stellar Blu to add between $120-$150 million in revenue in 2025 and be accretive to our Non-GAAP results. Furthermore, we estimate that once Stellar Blu reaches its target manufacturing capacity during the second half of 2025, its EBITDA margin will be above 10%.”

Mr. Sfadia concluded, “With Stellar Blu on board, we will become the leader in the ESA IFC market, which we believe is set to explode in popularity and become widely adopted in the coming years. I believe that this acquisition will transform Gilat into a high-growth company for many years to come, providing us with a highly attractive portfolio of ESA products and technologies. We are very excited about the significant potential this acquisition holds for Gilat.”

Key Recent Announcements

  • Gilat Awarded Over $9M for its GEO and NGSO Satellite Communications Solutions
  • Gilat Awarded Over $5M by a National Defense Organization for the Upgrade of Transportable SATCOM Network Hubs
  • Gilat Receives Over $10M Contract Extension for Cellular Backhaul Services
  • Gilat Awarded Over $9M to Support Critical Connectivity Requirements for the US Department of Defense
  • Gilat Receives over $14M in Orders Expanding Further into the IFC Market
  • Gilat to Acquire Stellar Blu, an IFC Market Leader with a First-to-Market ESA-Based Solution for Commercial Aviation
  • Nicole Robinson Appointed President of DataPath Inc.

Conference Call Details

Gilat’s management will discuss its second quarter 2024 results and business achievements and participate in a question-and-answer session:

Date:Start:Dial-in: Wednesday, August 7, 202409:30 AM EDT / 16:30 IDTUS: 1-888-407-2553International: +972-3-918-0609
   

A simultaneous webcast of the conference call will be available on the Gilat website at www.gilat.com and through this link: https://veidan.activetrail.biz/gilatq2-2024

The webcast will also be archived for a period of 30 days on the Company’s website and through the link above.

Non-GAAP Measures

The attached summary unaudited financial statements were prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). To supplement the consolidated financial statements presented in accordance with GAAP, the Company presents non-GAAP presentations of gross profit, operating expenses, operating income, income before taxes on income, net income, Adjusted EBITDA, and earnings per share. The adjustments to the Company’s GAAP results are made with the intent of providing both management and investors with a more complete understanding of the Company’s underlying operational results, trends, and performance. Non-GAAP financial measures mainly exclude, if and when applicable, the effect of stock-based compensation expenses, amortization of purchased intangibles, lease incentive amortization, other non-recurring expenses, other integration expenses, other operating expenses (income), net, one-time changes of deferred tax assets and income tax effect on the relevant adjustments.

Adjusted EBITDA is presented to compare the Company’s performance to that of prior periods and evaluate the Company’s financial and operating results on a consistent basis from period to period. The Company also believes this measure, when viewed in combination with the Company’s financial results prepared in accordance with GAAP, provides useful information to investors to evaluate ongoing operating results and trends. Adjusted EBITDA, however, should not be considered as an alternative to operating income or net income for the period and may not be indicative of the historic operating results of the Company; nor is it meant to be predictive of potential future results. Adjusted EBITDA is not a measure of financial performance under GAAP and may not be comparable to other similarly titled measures for other companies. Reconciliation between the Company’s net income and adjusted EBITDA is presented in the attached summary financial statements.

Non-GAAP presentations of gross profit, operating expenses, operating income, income before taxes on income, net income, adjusted EBITDA and earnings per share should not be considered in isolation or as a substitute for any of the consolidated statements of operations prepared in accordance with GAAP, or as an indication of Gilat’s operating performance or liquidity.

About Gilat

Gilat Satellite Networks Ltd. (NASDAQ: GILT, TASE: GILT) is a leading global provider of satellite-based broadband communications. With over 35 years of experience, we create and deliver deep technology solutions for satellite, ground and new space connectivity and provide comprehensive, secure end-to-end solutions and services for mission-critical operations, powered by our innovative technology. We believe in the right of all people to be connected and are united in our resolution to provide communication solutions to all reaches of the world.

Our portfolio includes a diverse offering to deliver high value solutions for multiple orbit constellations with very high throughput satellites (VHTS) and software defined satellites (SDS). Our offering is comprised of a cloud-based platform and high-performance satellite terminals; high performance Satellite On-the-Move (SOTM) antennas; highly efficient, high-power Solid State Power Amplifiers (SSPA) and Block Upconverters (BUC) and includes integrated ground systems for commercial and defense, field services, network management software, and cybersecurity services.

Gilat’s comprehensive offering supports multiple applications with a full portfolio of products and tailored solutions to address key applications including broadband access, mobility, cellular backhaul, enterprise, defense, aerospace, broadcast, government, and critical infrastructure clients all while meeting the most stringent service level requirements. For more information, please visit: www.gilat.com

Certain statements made herein that are not historical are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. The words “estimate”, “project”, “intend”, “expect”, “believe” and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties. Many factors could cause the actual results, performance or achievements of Gilat to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic and business conditions, inability to maintain market acceptance to Gilat’s products, inability to timely develop and introduce new technologies, products and applications, rapid changes in the market for Gilat’s products, loss of market share and pressure on prices resulting from competition, introduction of competing products by other companies, inability to manage growth and expansion, loss of key OEM partners, inability to attract and retain qualified personnel, inability to protect the Company’s proprietary technology and risks associated with Gilat’s international operations and its location in Israel, including those related to the current terrorist attacks by Hamas, and the war and hostilities between Israel and Hamas and Israel and Hezbollah. For additional information regarding these and other risks and uncertainties associated with Gilat’s business, reference is made to Gilat’s reports filed from time to time with the Securities and Exchange Commission. We undertake no obligation to update or revise any forward-looking statements for any reason.

Contact:

Gilat Satellite NetworksHagay Katz, Chief Products and Marketing Officerhagayk@gilat.com

Gilat Satellite NetworksMayrav Sher, Head of Finance and Investor Relationsmayravs@gilat.com

EK Global IREhud Helft, Managing Partnerehud@ekgir.com

GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED STATEMENTS OF INCOME
U.S. dollars in thousands (except share and per share data)
 
 
  Six months ended   Three months ended
  June 30,   June 30,
  2024   2023   2024   2023
  Unaudited   Unaudited
               
Revenues $ 152,709     $ 126,551     $ 76,631     $ 67,589  
Cost of revenues   98,082       76,330       50,058       42,053  
               
Gross profit   54,627       50,221       26,573       25,536  
               
Research and development expenses, net   18,547       19,003       9,228       9,384  
Selling and marketing expenses   14,109       11,941       7,032       5,932  
General and administrative expenses   14,514       9,155       6,437       4,724  
Other operating expenses (income), net   (725 )     (2,340 )     1,085       47  
               
Total operating expenses   46,445       37,759       23,782       20,087  
               
Operating income   8,182       12,462       2,791       5,449  
               
Financial income (expenses), net   779       (735 )     266       (586 )
               
Income before taxes on income   8,961       11,727       3,057       4,863  
               
Taxes on income   (2,695 )     (1,822 )     (1,755 )     (538 )
               
Net income $ 6,266     $ 9,905     $ 1,302     $ 4,325  
               
Earnings per share (basic and diluted) $ 0.11     $ 0.17     $ 0.02     $ 0.08  
               
Weighted average number of shares used in              
computing earnings per share              
Basic   57,016,808       56,615,714       57,017,032       56,617,943  
Diluted   57,016,808       56,622,204       57,017,032       56,620,977  
               
GILAT SATELLITE NETWORKS LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED STATEMENTS OF INCOME
FOR COMPARATIVE PURPOSES
U.S. dollars in thousands (except share and per share data)
       
       
  Three months ended   Three months ended
  June 30, 2024   June 30, 2023
  GAAP   Adjustments (*)   Non-GAAP   GAAP   Adjustments (*)   Non-GAAP
  Unaudited   Unaudited
                       
Gross profit $ 26,573   $ 1,617     $ 28,190   $ 25,536   $ 95     $ 25,631
Operating expenses   23,782     (2,914 )     20,868     20,087     (513 )     19,574
Operating income   2,791     4,531       7,322     5,449     608       6,057
Income before taxes on income   3,057     4,531       7,588     4,863     608       5,471
Net income $ 1,302   $ 4,253     $ 5,555   $ 4,325   $ 608     $ 4,933
                       
Earnings per share (basic and diluted) $ 0.02   $ 0.08     $ 0.10   $ 0.08   $ 0.01     $ 0.09
                       
                       
Weighted average number of shares                      
used in computing earnings per share                      
Basic   57,017,032         57,017,032     56,617,943         56,617,943
Diluted   57,017,032         57,017,032     56,620,977         56,620,977
                       
                       
(*) Adjustments reflect the effect of stock-based compensation expenses as per ASC 718, amortization of purchased intangibles, other operating expenses, net, 
 other non-recurring expenses, other integration expenses and income tax effect on such adjustments which is calculated using the relevant effective tax rate.
                       
                       
  Three months ended   Three months ended
  June 30, 2024   June 30, 2023
      Unaudited           Unaudited    
                       
GAAP net income     $ 1,302             $ 4,325      
                       
Gross profit                      
Stock-based compensation expenses       150               95      
Amortization of purchased intangibles       920               -      
Other non-recurring expenses       466               -      
Other integration expenses       81               -      
        1,617               95      
Operating expenses                      
Stock-based compensation expenses       705               417      
Stock-based compensation expenses related to business combination       842               -      
Amortization of purchased intangibles       267               49      
Other operating expenses, net       1,085               47      
Other integration expenses       15               -      
        2,914               513      
                       
Taxes on income       (278 )             -      
                       
Non-GAAP net income     $ 5,555             $ 4,933      
                       
GILAT SATELLITE NETWORKS LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED STATEMENTS OF INCOME
FOR COMPARATIVE PURPOSES
U.S. dollars in thousands (except share and per share data)
 
 
  Six months ended   Six months ended
  June 30, 2024   June 30, 2023
  GAAP   Adjustments (*) Non-GAAP   GAAP   Adjustments (*) Non-GAAP
  Unaudited   Unaudited
                       
Gross profit $ 54,627   $ 2,343     $ 56,970   $ 50,221   $ 170     $ 50,391
Operating expenses   46,445     (3,413 )     43,032     37,759     1,296       39,055
Operating income   8,182     5,756       13,938     12,462     (1,126 )     11,336
Income before taxes on income   8,961     5,756       14,717     11,727     (1,126 )     10,601
Net income $ 6,266   $ 5,303     $ 11,569   $ 9,905   $ (1,126 )   $ 8,779
                       
Earnings per share (basic and diluted) $ 0.11   $ 0.09     $ 0.20   $ 0.17   $ (0.01 )   $ 0.16
                       
                       
Weighted average number of shares                      
used in computing earnings per share                      
Basic   57,016,808         57,016,808     56,615,714         56,615,714
Diluted   57,016,808         57,062,883     56,622,204         56,622,204
                       
                       
(*) Adjustments reflect the effect of stock-based compensation expenses as per ASC 718, amortization of purchased intangibles, other operating income, net, 
other non-recurring expenses, other integration expenses and income tax effect on such adjustments which is calculated using the relevant effective tax rate.
                       
                       
  Six months ended   Six months ended
  June 30, 2024   June 30, 2023
      Unaudited           Unaudited    
                       
GAAP net income     $ 6,266             $ 9,905      
                       
Gross profit                      
Stock-based compensation expenses       300               170      
Amortization of purchased intangibles       1,427               -      
Other non-recurring expenses       466               -      
Other integration expenses       150               -      
        2,343               170      
Operating expenses                      
Stock-based compensation expenses       1,422               944      
Stock-based compensation expenses related to business combination       2,166               -      
Amortization of purchased intangibles       524               100      
Other operating income, net       (725 )             (2,340 )    
Other integration expenses       26               -      
        3,413               (1,296 )    
                       
Taxes on income       (453 )             -      
                       
Non-GAAP net income     $ 11,569             $ 8,779      
                       
GILAT SATELLITE NETWORKS LTD.
SUPPLEMENTAL INFORMATION
U.S. dollars in thousands
               
               
ADJUSTED EBITDA:              
               
  Six months ended   Three months ended
  June 30,   June 30,
  2024   2023   2024   2023
  Unaudited   Unaudited
               
GAAP net income $ 6,266     $ 9,905     $ 1,302     $ 4,325
Adjustments:              
Financial expenses (income), net   (779 )     735       (266 )     586
Taxes on income   2,695       1,822       1,755       538
Stock-based compensation expenses   1,722       1,114       855       512
Stock-based compensation expenses related to business combination   2,166       -       842       -
Depreciation and amortization (*)   7,443       6,335       3,963       3,172
Other operating expenses (income), net   (725 )     (2,340 )     1,085       47
Other non-recurring expenses   466       -       466       -
Other integration expenses   176       -       96       -
               
Adjusted EBITDA $ 19,430     $ 17,571     $ 10,098     $ 9,180
               
(*) Including amortization of lease incentive              
               
SEGMENT REVENUES:              
               
  Six months ended   Three months ended
  June 30,   June 30,
  2024   2023   2024   2023
  Unaudited   Unaudited
               
Satellite Networks $ 97,378     $ 74,273     $ 50,605     $ 40,727
Integrated Solutions   24,619       25,619       12,969       12,700
Network Infrastructure and Services   30,712       26,659       13,057       14,162
               
Total revenues $ 152,709     $ 126,551     $ 76,631     $ 67,589
               
GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
       
  June 30,   December 31,
  2024   2023
  Unaudited   Audited
       
ASSETS      
       
CURRENT ASSETS:      
Cash and cash equivalents $ 93,667     $ 103,961  
Restricted cash   1,030       736  
Trade receivables, net   62,217       44,725  
Contract assets   26,041       28,327  
Inventories   36,774       38,525  
Other current assets   20,016       24,299  
       
Total current assets   239,745       240,573  
       
LONG-TERM ASSETS:      
Restricted cash   54       54  
Long-term contract assets   8,587       9,283  
Severance pay funds   5,607       5,737  
Deferred taxes   9,760       11,484  
Operating lease right-of-use assets   4,910       5,105  
Other long-term assets   8,120       9,544  
       
Total long-term assets   37,038       41,207  
       
PROPERTY AND EQUIPMENT, NET   71,168       74,315  
       
INTANGIBLE ASSETS, NET   14,238       16,051  
       
GOODWILL   54,740       54,740  
       
TOTAL ASSETS $ 416,929     $ 426,886  
       
       
GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED BALANCE SHEETS (Cont.)
U.S. dollars in thousands
       
  June 30,   December 31,
  2024   2023
  Unaudited   Audited
       
LIABILITIES AND SHAREHOLDERS' EQUITY      
       
CURRENT LIABILITIES:      
Short-term debt $ 129     $ 7,453  
Trade payables   17,585       13,873  
Accrued expenses   48,621       51,906  
Advances from customers and deferred revenues   25,188       34,495  
Operating lease liabilities   2,622       2,426  
Other current liabilities   18,079       16,431  
       
Total current liabilities   112,224       126,584  
       
LONG-TERM LIABILITIES:      
Long-term loan   2,000       2,000  
Accrued severance pay   6,467       6,537  
Long-term advances from customers and deferred revenues   912       1,139  
Operating lease liabilities   2,430       3,022  
Other long-term liabilities   10,141       12,916  
       
Total long-term liabilities   21,950       25,614  
       
SHAREHOLDERS' EQUITY:      
Share capital - ordinary shares of NIS 0.2 par value   2,733       2,733  
Additional paid-in capital   940,520       937,591  
Accumulated other comprehensive loss   (6,443 )     (5,315 )
Accumulated deficit   (654,055 )     (660,321 )
       
Total shareholders' equity   282,755       274,688  
       
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 416,929     $ 426,886  
       
GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
               
  Six months ended   Three months ended
  June 30,   June 30,
  2024   2023   2024   2023
  Unaudited   Unaudited
Cash flows from operating activities:
Net income $ 6,266     $ 9,905     $ 1,302     $ 4,325  
Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization   7,333       6,222       3,908       3,115  
Stock-based compensation (*)   3,888       1,114       1,697       512  
Accrued severance pay, net   60       196       115       (101 )
Deferred taxes, net   1,724       1,820       1,273       694  
Decrease (increase) in trade receivables, net   (17,734 )     9,398       (8,937 )     2,907  
Decrease (increase) in contract assets   2,982       8,378       (3,266 )     3,461  
Decrease in other assets and other adjustments (including              
short-term, long-term and effect of exchange ratechanges on cash and cash equivalents)   5,512       243       2,005       3,010  
Decrease (increase) in inventories, net   974       (7,895 )     4,167       (272 )
Increase (decrease) in trade payables   3,579       (4,240 )     4,245       (6,229 )
Decrease in accrued expenses   (2,229 )     (5,039 )     (989 )     (2,840 )
Increase (decrease) in advances from customers and deferred revenues   (9,486 )     3,124       (6,732 )     7,593  
Decrease in other liabilities   (2,177 )     (15,009 )     (2,316 )     (14,161 )
Net cash provided by (used in) operating activities   692       8,217       (3,528 )     2,014  
               
Cash flows from investing activities:
Purchase of property and equipment   (2,650 )     (6,556 )     (1,857 )     (3,524 )
Net cash used in investing activities   (2,650 )     (6,556 )     (1,857 )     (3,524 )
               
Cash flows from financing activities:
Repayment of credit facility, net   (7,453 )     -       (4,709 )     -  
Repayments of short-term debts   (1,340 )     -       (1,340 )     -  
Proceeds from short-term debts   1,469       -       1,469       -  
Net cash used in financing activities   (7,324 )     -       (4,580 )     -  
               
Effect of exchange rate changes on cash, cash equivalents and restricted cash   (718 )     (1,010 )     (450 )     (433 )
               
Increase (decrease) in cash, cash equivalents and restricted cash   (10,000 )     651       (10,415 )     (1,943 )
               
Cash, cash equivalents and restricted cash at the beginning of the period   104,751       87,145       105,166       89,739  
               
Cash, cash equivalents and restricted cash at the end of the period $ 94,751     $ 87,796     $ 94,751     $ 87,796  
               
               
(*) Stock-based compensation including expenses related to business combination in the amounts of $2,166 and $842 for the six months and three months ended June 30, 2024, respectively. 
               
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