Gilat Satellite Networks Ltd. (NASDAQ: GILT, TASE: GILT), a worldwide leader in satellite networking technology, solutions and services, today reported its results for the first quarter, ended March 31, 2024.

First Quarter 2024 Financial Highlights

  • Revenue of $76.1 million, up 29% compared with $59.0 million in Q1 2023;
  • GAAP operating income of $5.4 million, compared with $7.0 million in Q1 2023;
    • The decline is mainly due to lower other income, higher stock-based compensation, mainly related to the Datapath acquisition, and amortization of purchased intangibles;
  • Non-GAAP operating income of $6.6 million, up 25% compared with $5.3 million in Q1 2023;
  • GAAP net income of $5.0 million, or $0.09 per diluted share, compared with $5.6 million, or $0.10 per diluted share, in Q1 2023;
  • Non-GAAP net income of $6.0 million, or $0.11 per diluted share, almost doubled compared with $3.8 million, or $0.07 per diluted share, in Q1 2023;
  • Adjusted EBITDA of $9.3 million compared with $8.4 million in Q1 2023.

Forward-Looking Expectations

The Company today reiterated its guidance 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.

Management Commentary

Adi Sfadia, Gilat's CEO, commented: “We are pleased with our financial results representing another strong quarter of growth and profitability, with revenue up 29% year-over-year and Adjusted EBITDA up 11% year-over-year. Our revenue growth was driven by solid organic growth in both our Satellite Networks and our Network Infrastructure and Services segments, as well as a full quarter of contribution from Datapath, the defense communications business we acquired in November of last year. Our pipeline of potential orders throughout our business continues to increase and broaden, supported by our next-generation platforms and growth engines.”

Mr. Sfadia added, “Our strong revenue growth demonstrates the continued growing traction for many of Gilat’s products and services among both new and existing customers. In particular, we are pleased with the strong level of orders from the Defense sector in recent months, which is a strategic growth vector for us. We continue to work on extracting potential synergies from the Datapath acquisition, which we believe will increasingly benefit our profitability over the coming quarters.”

Mr. Sfadia concluded, “Given the fundamental advantages of satellite communications that are driving market interest and generating growing orders for our leading technological solutions, we are excited by Gilat’s potential in both the near and long term. Furthermore, Gilat’s strong financial position is allowing us to explore potential inorganic growth opportunities, which we believe can significantly accelerate our growth trajectory.”

Key Recent Announcements

  • SES’s O3b mPOWER System Launches Service via Gilat’s SkyEdge IV Platform
  • Gilat Received Approximately $5 Million for Providing Services to a Leading LATAM Service Provider
  • Gilat Received Multimillion-Dollar Order from a Leading Defense Organization
  • Gilat Expanding into Additional IFC Market Segments After Receiving Over $3 Million in Orders from a Leading IFC Service Provider
  • Gilat Awarded Over $3M Follow-On Order for Public WiFi Service in Latin America
  • Gilat Awarded over $5 Million Order from the US Department of Defense
  • US Army Awards $12 Million Contract Extension to Gilat to Sustain Anytime, Anywhere Satellite Connectivity
  • Gilat Awarded Over $13M in Additional Orders from Satellite Operators for its World Leading SkyEdge IV and SkyEdge II-c Platforms

Conference Call Details

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

Date: Wednesday, May 8, 2024
Start: 09:30 AM EDT / 16:30 IDT
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/gilatq1-2024

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 integration expenses, one-time changes of deferred tax assets, other operating expenses (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 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)    
        Three months ended
        March 31,  
          2024       2023    
        Unaudited  
               
Revenues     $ 76,078     $ 58,962    
Cost of revenues     48,024       34,277    
               
Gross profit       28,054       24,685    
               
Research and development expenses, net   9,319       9,619    
Selling and marketing expenses   7,077       6,009    
General and administrative expenses   8,077       4,431    
Other operating income, net   (1,810 )     (2,387 )  
               
Total operating expenses   22,663       17,672    
               
Operating income     5,391       7,013    
               
Financial income (expenses), net   513       (149 )  
               
Income before taxes on income   5,904       6,864    
               
Taxes on income     940       1,284    
               
Net income     $ 4,964     $ 5,580    
               
Earnings per share (basic and diluted) $ 0.09     $ 0.10    
               
Weighted average number of shares used in      
  computing earnings per share        
  Basic       57,016,585       56,613,485    
  Diluted     57,016,585       56,623,432    
               
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    
      March 31, 2024     March 31, 2023    
      GAAP     Adjustments (*)   Non-GAAP   GAAP   Adjustments (*)   Non-GAAP   
      Unaudited     Unaudited    
                                     
Gross profit   $ 28,054       726     $ 28,780     $ 24,685       75     $ 24,760    
Operating expenses   22,663       (499 )     22,164       17,672       1,809       19,481    
Operating income   5,391       1,225       6,616       7,013       (1,734 )     5,279    
Income before taxes on income   5,904       1,225       7,129       6,864       (1,734 )     5,130    
Net income   $ 4,964       1,050     $ 6,014     $ 5,580       (1,734 )   $ 3,846    
                                     
Earnings per share (basic and diluted) $ 0.09     $ 0.02     $ 0.11     $ 0.10     $ (0.03 )   $ 0.07    
                                     
Weighted average number of shares used in                                
computing earnings per share                                
Basic   57,016,585           57,016,585       56,613,485             56,613,485    
Diluted   57,016,585           57,108,734       56,623,432             56,623,432    
                                     
                                     
 (*) 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      
              March 31, 2024                      March 31, 2023           
            Unaudited               Unaudited      
                                     
GAAP net income       $ 4,964                 $ 5,580        
                                     
Gross profit                                  
Stock-based compensation expenses         150                   75        
Amortization of purchased intangibles         507                   -        
Other integration expenses         69                   -        
              726                   75        
Operating expenses                                
Stock-based compensation expenses         717                   527        
Stock-based compensation expenses related to business combination        1,324                   -        
Amortization of purchased intangibles         257                   51        
Other operating income, net         (1,810 )                 (2,387 )      
Other integration expenses         11                   -        
              499                   (1,809 )      
                                       
Taxes on income         (175 )                 -        
                                     
Non-GAAP net income       $ 6,014                 $ 3,846        
                                     
GILAT SATELLITE NETWORKS LTD.    
SUPPLEMENTAL INFORMATION      
U.S. dollars in thousands        
               
               
ADJUSTED EBITDA:        
               
        Three months ended
        March 31,  
          2024       2023    
        Unaudited  
               
GAAP net income   $ 4,964     $ 5,580    
Adjustments:            
Financial expenses (income), net         (513 )     149    
Taxes on income     940       1,284    
Stock-based compensation expenses         867       602    
Stock-based compensation expenses related to business combination         1,324       -    
Depreciation and amortization (*)         3,481       3,163    
Other operating income, net   (1,810 )     (2,387 )  
Other integration expenses   80       -    
               
Adjusted EBITDA   $ 9,333     $ 8,391    
               
(*) Including amortization of lease incentive    
               
SEGMENT REVENUES:        
               
         Three months ended
         March 31,  
          2024       2023    
        Unaudited  
               
Satellite Networks   $ 46,773     $ 33,546    
Integrated Solutions     11,650       12,919    
Network Infrastructure and Services         17,655       12,497    
               
Total revenues   $ 76,078     $ 58,962    
               
GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands    
           
    March 31,   December 31,
     2024     2023  
    Unaudited   Audited  
           
ASSETS        
           
CURRENT ASSETS:    
Cash and cash equivalents   $ 104,057     $ 103,961  
Restricted cash     1,057        736  
Trade receivables, net     53,459       44,725  
Contract assets     22,775       28,327  
Inventories   41,241       38,525  
Other current assets     20,873       24,299  
           
Total current assets     243,462       240,573  
           
LONG-TERM ASSETS:    
Restricted cash     52        54  
Long-term contract assets     8,587        9,283  
Severance pay funds     5,673        5,737  
Deferred taxes     10,893       11,484  
Operating lease right-of-use assets     4,911        5,105  
Other long-term assets     9,772        9,544  
           
Total long-term assets     39,888       41,207  
           
PROPERTY AND EQUIPMENT, NET     72,624       74,315  
           
INTANGIBLE ASSETS, NET     15,354       16,051  
           
GOODWILL     54,740       54,740  
           
TOTAL ASSETS   $ 426,068     $ 426,886  
           
GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED BALANCE SHEETS (Cont.)
U.S. dollars in thousands    
           
    March 31, December 31,
     2024      2023  
    Unaudited   Audited
           
LIABILITIES AND SHAREHOLDERS' EQUITY
           
CURRENT LIABILITIES:  
Short-term debt   $ 4,709     $ 7,453  
Trade payables     13,169       13,873  
Accrued expenses     50,489       51,906  
Advances from customers and deferred revenues     31,967       34,495  
Operating lease liabilities     2,643        2,426  
Other current liabilities     18,915       16,431  
           
Total current liabilities     121,892       126,584  
           
LONG-TERM LIABILITIES:  
Long-term loan     2,000     2,000  
Accrued severance pay     6,418     6,537  
Long-term advances from customers and deferred revenues     906     1,139  
Operating lease liabilities     2,516     3,022  
Other long-term liabilities     11,516       12,916  
           
Total long-term liabilities     23,356       25,614  
           
SHAREHOLDERS' EQUITY:  
Share capital - ordinary shares of NIS 0.2 par value     2,733     2,733  
Additional paid-in capital     939,062       937,591  
Accumulated other comprehensive loss     (5,618 )     (5,315 )
Accumulated deficit     (655,357 )     (660,321 )
           
Total shareholders' equity     280,820       274,688  
           
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 426,068     $ 426,886  
           
GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands      
             
       Three months ended
       March 31,  
        2024       2023    
      Unaudited  
Cash flows from operating activities:  
Net income   $ 4,964     $ 5,580    
Adjustments required to reconcile net income
 to net cash provided by operating activities:
Depreciation and amortization       3,425       3,107    
Stock-based compensation expenses       2,191       602    
Accrued severance pay, net       (55 )     297    
Deferred taxes, net   451       1,126    
Decrease (increase) in trade receivables, net       (8,797 )     6,491    
Decrease in contract assets       6,248       4,917    
Decrease (increase) in other assets and other adjustments (including short-term, long-term
and effect of exchange rate changes on cash and cash equivalents)       3,507       (2,767 )  
Increase in inventories       (3,193 )     (7,623 )  
Increase (decrease) in trade payables       (666 )     1,989    
Decrease in accrued expenses       (1,240 )     (2,199 )  
Decrease in advances from customers and deferred revenues       (2,754 )     (4,469 )  
Increase (decrease) in other liabilities       139       (848 )  
Net cash provided by operating activities       4,220       6,203    
             
Cash flows from investing activities:  
Purchase of property and equipment       (793 )     (3,032 )  
Net cash used in investing activities       (793 )     (3,032 )  
             
Cash flows from financing activities:  
Repayment of short-term debt, net       (2,744 )     -    
Net cash used in financing activities       (2,744 )     -    
             
Effect of exchange rate changes on cash, cash equivalents and restricted cash       (268 )     (577 )  
             
Increase in cash, cash equivalents and restricted cash       415       2,594    
             
Cash, cash equivalents and restricted cash at the beginning of the period       104,751       87,145    
             
Cash, cash equivalents and restricted cash at the end of the period     $ 105,166     $ 89,739    
             
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