Revenues Increased by 17% Year-over-Year
GAAP Operating Income of $6.7 Million
Adjusted EBITDA of $10.7 Million
PETAH TIKVA, Israel, Nov. 13, 2024 (GLOBE NEWSWIRE) — Gilat Satellite Networks Ltd. (NASDAQ: GILT, TASE: GILT), a worldwide leader in satellite networking technology, solutions and services, today reported its results for the third quarter, ended September 30, 2024.
Third Quarter 2024 Financial Highlights
Revenues of $74.6 million, up 17% compared with $63.9 million in Q3 2023;GAAP operating income of $6.7 million, compared with $12.7 million in Q3 2023; GAAP operating income includes other income, net, of $1.3 million. Q3 2023 GAAP operating income included other income, net, of $7.4 million; Non-GAAP operating income of $8.3 million, up 36% compared with $6.1 million in Q3 2023;GAAP net income of $6.8 million, or $0.12 per diluted share, compared with $10.2 million, or $0.18 per diluted share, in Q3 2023; GAAP net income includes other income, net, of $1.3 million. Q3 2023 GAAP net income included other income, net, of $7.4 million; Non-GAAP net income of $8.1 million, or $0.14 per diluted share, almost doubled compared with $4.6 million, or $0.08 per diluted share, in Q3 2023;Adjusted EBITDA of $10.7 million, up 13% compared with $9.5 million in Q3 2023.
Forward-Looking Expectations
The Company narrowed the range of its 2024 revenue guidance. Expectations of revenue between $305 million to $315 million now represent year-over-year growth of 17% at the mid-point. The main effect on the revenue guidance is the company’s decision to terminate its activities in Russia due to limitations and constraints that are imposed with regard to operations there.
The Company raised and narrowed the range of its 2024 GAAP operating income guidance to between $24 million to $26 million, mainly due to the receipt of approximately $11 million in proceeds from an arbitration in Peru in H2 2024.
The Company also narrowed the range of its Adjusted EBITDA guidance to between $41 to $43 million, representing year-over-year growth of 15% at the mid-point.
Management Commentary
Adi Sfadia, Gilat’s CEO, commented: “We performed strongly in the third quarter, achieving solid growth driven by our Satellite Network segment. This growth highlights the progress we are making in expanding our defense opportunities following our acquisition of DataPath at the end of 2023. This is highly encouraging for Gilat, as our defense business represents a rapidly growing strategic segment for the company. Our innovative satellite solutions are meeting the specialized demands of government and military customers, reinforcing our position as a trusted partner. In addition, our in-flight connectivity solutions continue to set new benchmarks for reliability and performance, addressing the increasing need for seamless airborne connectivity. Together, these efforts underscore our commitment to capturing growth in these critical markets.”
Mr. Sfadia added, “We continued to broaden our pipeline of potential orders throughout our business, supported by our next-generation platform, as we capture new LEO satellite communications opportunities. Gilat is extremely well-positioned to leverage the growing demand for NGSO with an emphasis on LEO based on our comprehensive product offering and satellite expertise.”
Mr. Sfadia concluded, “We are continuing to work towards the closing of our acquisition of Stellar Blu Solutions, a leader and first-to-market of Electronically Steerable Antenna for the In-Flight-Connectivity market, and are awaiting the receipt of final regulatory approvals, documentation and other customary closing conditions. Stellar Blu’s production ramp is progressing very well, and it has already begun delivering antennas to its customers. We are more confident today that Stellar Blu will add between $120-$150 million in annual revenues 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%.”
Key Recent Announcements
Gilat Receives Approximately $5 Million in Orders from US Defense CustomersGilat Received Over $4 Million Order from the US Department of DefenseGilat Secures Approximately $15 Million in Orders from Leading Satellite Operators for GEO, MEO and LEO ConstellationsGilat Satellite Networks Awarded approximately $4 Million Contract to Provide Connectivity for rural areas in Latin AmericaGilat Satellite Networks Receives Multimillion Service Contract from Leading Satellite Operator in APAC regionGilat Satellite Networks Awarded Over $5M in Support of the US Department of DefenseGilat Secures Over $12 Million Orders for SkyEdge Platforms from Leading Satellite Operator
Conference Call Details
Gilat’s management will discuss its third quarter 2024 results and business achievements and participate in a question-and-answer session:
Date:Wednesday, November 13, 2024Start:09:30 AM EST / 16:30 ISTDial-in:US: 1-888-407-2553 International: +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/gilatq3-2024
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 income, net, 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 Networks
Hagay Katz, Chief Products and Marketing Officer
hagayk@gilat.com
Gilat Satellite Networks
Mayrav Sher, Head of Finance and Investor Relations
mayravs@gilat.com
GILAT SATELLITE NETWORKS LTD. CONSOLIDATED STATEMENTS OF INCOME U.S. dollars in thousands (except share and per share data) Nine months ended
Three months ended
September 30,
September 30,
2024 2023 2024 2023 Unaudited Unaudited Revenues $227,320 $190,478 $74,611 $63,927 Cost of revenues 145,010 114,453 46,928 38,123 Gross profit 82,310 76,025 27,683 25,804 Research and development expenses, net 28,028 29,549 9,481 10,546 Selling and marketing expenses 20,724 18,124 6,615 6,183 General and administrative expenses 20,676 12,903 6,162 3,748 Other operating income, net (2,045) (9,757) (1,320) (7,417) Total operating expenses 67,383 50,819 20,938 13,060 Operating income 14,927 25,206 6,745 12,744 Financial income (expenses), net 1,441 (1,087) 662 (352) Income before taxes on income 16,368 24,119 7,407 12,392 Taxes on income (3,283) (4,062) (588) (2,240) Net income $13,085 $20,057 $6,819 $10,152 Earnings per share (basic and diluted) $0.23 $0.35 $0.12 $0.18 Weighted average number of shares used in computing earnings per share Basic 57,016,883 56,618,407 57,017,032 56,623,793 Diluted 57,016,883 56,623,125 57,017,032 56,624,966
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 September 30, 2024 September 30, 2023 GAAP Adjustments (*) Non-GAAP GAAP Adjustments (*) Non-GAAP Unaudited Unaudited Gross profit$27,683 $755 $28,438 $25,804 $108 $25,912Operating expenses 20,938 (767) 20,171 13,060 6,753 19,813Operating income 6,745 1,522 8,267 12,744 (6,645) 6,099Income before taxes on income 7,407 1,522 8,929 12,392 (6,645) 5,747Net income$6,819 $1,325 $8,144 $10,152 $(5,568) $4,584 Earnings per share (basic and diluted)$0.12 $0.02 $0.14 $0.18 $(0.10) $0.08 Weighted average number of shares used in computing earnings per share Basic 57,017,032 57,017,032 56,623,793 56,623,793Diluted 57,017,032 57,017,032 56,624,966 56,906,057 (*) Adjustments reflect the effect of stock-based compensation expenses as per ASC 718, amortization of purchased intangibles, other operating income, net, 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 September 30, 2024 September 30, 2023 Unaudited Unaudited GAAP net income $6,819 $10,152 Gross profit Stock-based compensation expenses 85 108 Amortization of purchased intangibles 596 – Other integration expenses 74 – 755 108 Operating expenses Stock-based compensation expenses 696 614 Stock-based compensation expenses related to business combination 1,131 – Amortization of purchased intangibles 248 50 Other operating income, net and other integration expenses (1,308) (7,417) 767 (6,753) Taxes on income (197) 1,077 Non-GAAP net income $8,144 $4,584
GILAT SATELLITE NETWORKS LTD. RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED STATEMENTS OF INCOMEFOR COMPARATIVE PURPOSES U.S. dollars in thousands (except share and per share data) Nine months ended Nine months ended September 30, 2024 September 30, 2023 GAAP Adjustments (*) Non-GAAP GAAP Adjustments (*) Non-GAAP Unaudited Unaudited Gross profit$82,310 $3,098 $85,408 $76,025 $278 $76,303Operating expenses 67,383 (4,180) 63,203 50,819 8,049 58,868Operating income 14,927 7,278 22,205 25,206 (7,771) 17,435Income before taxes on income 16,368 7,278 23,646 24,119 (7,771) 16,348Net income$13,085 $6,628 $19,713 $20,057 $(6,694) $13,363 Earnings per share (basic and diluted)$0.23 $0.12 $0.35 $0.35 $(0.11) $0.24 Weighted average number of shares used in computing earnings per share Basic 57,016,883 57,016,883 56,618,407 56,618,407Diluted 57,016,883 57,047,599 56,623,125 56,716,822 (*) 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. Nine months ended Nine months ended September 30, 2024 September 30, 2023 Unaudited Unaudited GAAP net income $13,085 $20,057 Gross profit Stock-based compensation expenses 385 278 Amortization of purchased intangibles 2,023 – Other non-recurring expenses 466 – Other integration expenses 224 – 3,098 278 Operating expenses Stock-based compensation expenses 2,118 1,558 Stock-based compensation expenses related to business combination 3,297 – Amortization of purchased intangibles 772 150 Other operating income, net and other integration expenses (2,007) (9,757) 4,180 (8,049) Taxes on income (650) 1,077 Non-GAAP net income $19,713 $13,363
GILAT SATELLITE NETWORKS LTD. SUPPLEMENTAL INFORMATION U.S. dollars in thousands ADJUSTED EBITDA: Nine months ended
Three months ended
September 30,
September 30,
2024 2023 2024 2023 Unaudited Unaudited GAAP net income $13,085 $20,057 $6,819 $10,152 Adjustments: Financial expenses (income), net (1,441) 1,087 (662) 352 Taxes on income 3,283 4,062 588 2,240 Stock-based compensation expenses 2,503 1,836 781 722 Stock-based compensation expenses related to business combination 3,297 – 1,131 – Depreciation and amortization (*) 10,709 9,765 3,266 3,430 Other operating income, net (2,045) (9,757) (1,320) (7,417)Other non-recurring expenses 466 – – – Other integration expenses 262 – 86 – Adjusted EBITDA $30,119 $27,050 $10,689 $9,479 (*) Including amortization of lease incentive SEGMENT REVENUES: Nine months ended
Three months ended
September 30,
September 30,
2024 2023 2024 2023 Unaudited Unaudited Satellite Networks $149,110 $115,010 $51,732 $40,737 Integrated Solutions 37,668 36,630 13,049 11,011 Network Infrastructure and Services 40,542 38,838 9,830 12,179 Total revenues $227,320 $190,478 $74,611 $63,927
GILAT SATELLITE NETWORKS LTD. CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands September 30, December 31, 2024 2023 Unaudited Audited ASSETS CURRENT ASSETS: Cash and cash equivalents $109,554 $103,961 Restricted cash 1,192 736 Trade receivables, net 51,506 44,725 Contract assets 32,010 28,327 Inventories 39,892 38,525 Other current assets 23,304 24,299 Total current assets 257,458 240,573 LONG-TERM ASSETS: Restricted cash 13 54 Long-term contract assets 8,587 9,283 Severance pay funds 5,764 5,737 Deferred taxes 9,948 11,484 Operating lease right-of-use assets 4,427 5,105 Other long-term assets 8,177 9,544 Total long-term assets 36,916 41,207 PROPERTY AND EQUIPMENT, NET 70,607 74,315 INTANGIBLE ASSETS, NET 13,463 16,051 GOODWILL 54,740 54,740 TOTAL ASSETS $433,184 $426,886 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Short-term debt $2,727 $7,453 Trade payables 19,134 13,873 Accrued expenses 53,477 51,906 Advances from customers and deferred revenues 22,672 34,495 Operating lease liabilities 2,431 2,426 Other current liabilities 18,085 16,431 Total current liabilities 118,526 126,584 LONG-TERM LIABILITIES: Long-term loan 2,000 2,000 Accrued severance pay 6,547 6,537 Long-term advances from customers and deferred revenues 759 1,139 Operating lease liabilities 2,124 3,022 Other long-term liabilities 11,753 12,916 Total long-term liabilities 23,183 25,614 SHAREHOLDERS’ EQUITY: Share capital – ordinary shares of NIS 0.2 par value 2,733 2,733 Additional paid-in capital 941,904 937,591 Accumulated other comprehensive loss (5,926) (5,315)Accumulated deficit (647,236) (660,321) Total shareholders’ equity 291,475 274,688 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$433,184 $426,886
GILAT SATELLITE NETWORKS LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands Nine months ended
Three months ended
September 30,
September 30,
2024 2023 2024 2023 Unaudited UnauditedCash flows from operating activities: Net income $13,085 $20,057 $6,819 $10,152 Adjustments required to reconcile net income to net cash provided by operating activities: Depreciation and amortization 10,542 9,597 3,209 3,375 Capital gain from sale of property – (2,084) – (2,084)Stock-based compensation *) 5,800 1,836 1,912 722 Accrued severance pay, net (17) 155 (77) (41)Deferred taxes, net 1,536 3,865 (188) 2,045 Decrease (increase) in trade receivables, net (7,019) 3,887 10,715 (5,511)Decrease (increase) in contract assets (2,987) 6,110 (5,969) (2,268)Decrease (increase) in other assets and other adjustments (including short-term, long-term and effect of exchange rate changes on cash and cash equivalents) 3,071 3,598 (2,441) 3,355 Decrease (increase) in inventories, net (2,472) (6,185) (3,446) 1,710 Increase (decrease) in trade payables 5,080 (5,321) 1,501 (1,081)Increase (decrease) in accrued expenses 2,675 (2,782) 4,904 2,257 Increase (decrease) in advances from customers and deferred revenues (12,162) 2,646 (2,676) (478)Increase (decrease) in other liabilities (1,745) (13,392) 432 1,617 Net cash provided by operating activities 15,387 21,987 14,695 13,770 Cash flows from investing activities: Purchase of property and equipment (4,095) (8,656) (1,445) (2,100)Receipts from sale of property – 2,168 – 2,168 Net cash provided by (used in) investing activities (4,095) (6,488) (1,445) 68 Cash flows from financing activities: Repayment of credit facility, net (7,453) – – – Repayments of short-term debts (4,043) – (2,703) – Proceeds from short-term debts 6,770 – 5,301 – Net cash provided by (used in) financing activities (4,726) – 2,598 – Effect of exchange rate changes on cash, cash equivalents and restricted cash (558) (2,351) 160 (1,341) Increase in cash, cash equivalents and restricted cash 6,008 13,148 16,008 12,497 Cash, cash equivalents and restricted cash at the beginning of the period 104,751 87,145 94,751 87,796 Cash, cash equivalents and restricted cash at the end of the period $110,759 $100,293 $110,759 $100,293 *) Stock-based compensation including expenses related to business combination in the amounts of $3,297 and $1,131 for the nine months and three months ended September 30, 2024, respectively.