Gilat Reports Third Quarter 2024 Results

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 Customers
• Gilat Received Over $4 Million Order from the US Department of Defense
• Gilat Secures Approximately $15 Million in Orders from Leading Satellite Operators for GEO, MEO and LEO Constellations
• Gilat Satellite Networks Awarded approximately $4 Million Contract to Provide Connectivity for rural areas in Latin America
• Gilat Satellite Networks Receives Multimillion Service Contract from Leading Satellite Operator in APAC region
• Gilat Satellite Networks Awarded Over $5M in Support of the US Department of Defense
• Gilat 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, 2024
Start:	09:30 AM EST / 16:30 IST
Dial-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
[email protected]

Gilat Satellite Networks
Mayrav Sher, Head of Finance and Investor Relations
[email protected]

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			$	25,912
Operating expenses		20,938			(767	)			20,171			13,060			6,753				19,813
Operating income		6,745			1,522				8,267			12,744			(6,645	)			6,099
Income before taxes on income		7,407			1,522				8,929			12,392			(6,645	)			5,747
Net 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							56,623,793
Diluted		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 INCOME
FOR 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			$	76,303
Operating expenses		67,383			(4,180	)			63,203			50,819			8,049				58,868
Operating income		14,927			7,278				22,205			25,206			(7,771	)			17,435
Income before taxes on income		16,368			7,278				23,646			24,119			(7,771	)			16,348
Net 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							56,618,407
Diluted		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								Unaudited
Cash 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.

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