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Gilat Reports Third Quarter 2024 Results
Globe Newswire 13-Nov-2024 7:31 AM
RevenuesIncreasedby 17% Year-over-Year
GAAP Operating Income of $6.7Million
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:
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.
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
$
25,912
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.
