Gilat Reports First Quarter 2024 Results

Strong Revenue Growth of 29% Year-over-Year, GAAP Operating Income of $5.4 Million and Adjusted EBITDA of $9.3 Million


PETAH TIKVA, Israel, May 08, 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 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 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)  
    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