Revenue Increased by 13% Year-over-Year,
GAAP Operating Income of $2.8 Million and
Adjusted EBITDA of $10.1 Million
PETAH TIKVA, Israel, Aug. 07, 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 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 SolutionsGilat Awarded Over $5M by a National Defense Organization for the Upgrade of Transportable SATCOM Network HubsGilat Receives Over $10M Contract Extension for Cellular Backhaul ServicesGilat Awarded Over $9M to Support Critical Connectivity Requirements for the US Department of DefenseGilat Receives over $14M in Orders Expanding Further into the IFC MarketGilat to Acquire Stellar Blu, an IFC Market Leader with a First-to-Market ESA-Based Solution for Commercial AviationNicole 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, 2024
09:30 AM EDT / 16:30 IDT
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/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 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
EK Global IR
Ehud Helft, Managing Partner
ehud@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 $25,631Operating expenses 23,782 (2,914) 20,868 20,087 (513) 19,574Operating income 2,791 4,531 7,322 5,449 608 6,057Income before taxes on income 3,057 4,531 7,588 4,863 608 5,471Net income$ 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 56,617,943Diluted 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 $50,391Operating expenses 46,445 (3,413) 43,032 37,759 1,296 39,055Operating income 8,182 5,756 13,938 12,462 (1,126) 11,336Income before taxes on income 8,961 5,756 14,717 11,727 (1,126) 10,601Net income$ 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 56,615,714Diluted 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 $4,325Adjustments: Financial expenses (income), net (779) 735 (266) 586Taxes on income 2,695 1,822 1,755 538Stock-based compensation expenses 1,722 1,114 855 512Stock-based compensation expenses related to business combination 2,166 – 842 -Depreciation and amortization (*) 7,443 6,335 3,963 3,172Other operating expenses (income), net (725) (2,340) 1,085 47Other 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 $40,727Integrated Solutions 24,619 25,619 12,969 12,700Network Infrastructure and Services 30,712 26,659 13,057 14,162 Total revenues$ 152,709 $ 126,551 $ 76,631 $ 67,589
GILAT SATELLITE NETWORKS LTD.CONSOLIDATED BALANCE SHEETSU.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 UnauditedCash flows from operating activities:Net income$6,266 $9,905 $1,302 $4,325 Adjustments required to reconcile net income to net
cash provided by operating activities:Depreciation and amortization 7,333 6,222 3,908 3,115 Stock-based compensation (*) 3,888 1,114 1,697 512 Accrued severance pay, net 60 196 115 (101)Deferred taxes, net 1,724 1,820 1,273 694 Decrease (increase) in trade receivables, net (17,734) 9,398 (8,937) 2,907 Decrease (increase) in contract assets 2,982 8,378 (3,266) 3,461 Decrease in other assets and other adjustments (including short-term, long-term and effect of exchange rate
changes on cash and cash equivalents) 5,512 243 2,005 3,010 Decrease (increase) in inventories, net 974 (7,895) 4,167 (272)Increase (decrease) in trade payables 3,579 (4,240) 4,245 (6,229)Decrease in accrued expenses (2,229) (5,039) (989) (2,840)Increase (decrease) in advances from customers and deferred revenues (9,486) 3,124 (6,732) 7,593 Decrease in other liabilities (2,177) (15,009) (2,316) (14,161)Net cash provided by (used in) operating activities 692 8,217 (3,528) 2,014 Cash flows from investing activities:Purchase of property and equipment (2,650) (6,556) (1,857) (3,524)Net cash used in investing activities (2,650) (6,556) (1,857) (3,524) Cash flows from financing activities:Repayment of credit facility, net (7,453) – (4,709) – Repayments of short-term debts (1,340) – (1,340) – Proceeds from short-term debts 1,469 – 1,469 – Net cash used in financing activities (7,324) – (4,580) – Effect of exchange rate changes on cash, cash equivalents and restricted cash (718) (1,010) (450) (433) Increase (decrease) in cash, cash equivalents and restricted cash (10,000) 651 (10,415) (1,943) Cash, cash equivalents and restricted cash at the beginning of the period 104,751 87,145 105,166 89,739 Cash, cash equivalents and restricted cash at the end of the period$ 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.