Revenue Increased by 13% Year-over-Year,GAAP Operating Income of $2.8 Million andAdjusted 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 Solutions Gilat Awarded Over $5M by a National Defense Organization for the Upgrade of Transportable SATCOM Network Hubs Gilat Receives Over $10M Contract Extension for Cellular Backhaul Services Gilat Awarded Over $9M to Support Critical Connectivity Requirements for the US Department of Defense Gilat Receives over $14M in Orders Expanding Further into the IFC Market Gilat to Acquire Stellar Blu, an IFC Market Leader with a First-to-Market ESA-Based Solution for Commercial Aviation Nicole 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, 202409:30 AM EDT / 16:30 IDTUS: 1-888-407-2553International: +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 NetworksHagay Katz, Chief Products and Marketing Gilat Satellite NetworksMayrav Sher, Head of Finance and Investor EK Global IREhud Helft, Managing 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     $ 25,631 Operating expenses   23,782     (2,914 )     20,868     20,087     (513 )     19,574 Operating income   2,791     4,531       7,322     5,449     608       6,057 Income before taxes on income   3,057     4,531       7,588     4,863     608       5,471 Net 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         56,617,943 Diluted   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