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home / news releases / GILT - Gilat Reports Second Quarter 2023 Results

GILT - Gilat Reports Second Quarter 2023 Results

Gilat Satellite Networks Ltd.

PETAH TIKVA, Israel, Aug. 08, 2023 (GLOBE NEWSWIRE) -- Gilat Satellite Networks Ltd. (NASDAQ: GILT, TASE: GILT), a worldwide leader in satellite networking technology, solutions and services, reported today its results for the second quarter, ended June 30, 2023.

Second Quarter 202 3 Financial Highlights

  • Revenue s of $ 67 . 6 million, up 22% compared with $ 55.5 million in Q2 2022;
  • GAAP operating income of $5.4 million, compared with $1.5 million in Q2 2022;
  • Non-GAAP operating income of $6.1 million, compared with $2.4 million in Q2 2022;
  • GAAP net income of $4.3 million, or $0.08 earnings per diluted share, compared with $0.5 million, or $0.01 earnings per diluted share in Q2 2022;
  • Non-GAAP net income of $4.9 million, or $0.09 earnings per diluted share, compared with $1.4 million, or $0.03 earnings per diluted share in Q2 2022;
  • Adjusted EBITDA of $9.2 million, up 74% compared with $5.3 million in Q2 2022;

Forward-Looking Expectations

The Company today raised its 2023 revenues guidance to between $265 to $285 million, representing year-over-year growth of 15% at the mid-point, as well as increased its GAAP operating income guidance to between $18 to $22 million, representing year-over-year growth of 101% at the mid-point and its adjusted EBITDA guidance to between $33 to $37 million, representing year-over-year growth of 39% at the mid-point.

Adi Sfadia, Gilat's CEO, commented:

“We are very pleased with our strong second quarter results, with solid growth in revenue, which was up 22% year-over-year, and a stronger growth in Adjusted EBITDA, up 74% year-over-year, demonstrating operating leverage in our business model. The revenue growth was broad across most of our business areas, a testimony to the strong market interest in Gilat’s solutions as well as growing interest in satellite communications overall.

We are experiencing a significant expansion in our in-flight connectivity (IFC) business with a growing demand for both electronically steered antennas (ESA) and Solid-State Power Amplifiers (SSPA) from existing and new customers.

We signed a significant agreement and received the first orders from Satcom Direct, for the development and supply of new ultra-low profile electronically steered antennas (ESA) to operate over OneWeb’s LEO constellation. This ESA project is an important turning point and an important future growth engine as we increase our presence by entering new market segments such as IFC for business jets, as well as connectivity for government and military aviation.

We are progressing in obtaining the necessary regulatory approvals for our acquisition of DataPath Inc., which was announced during the first quarter. Conditioned upon this process's satisfactory conclusion, we anticipate that the closing of the transaction will occur in Q4 2023."

Mr. Sfadia concluded, "Not only did we report strong results in the quarter, but we also had strong bookings and signed some strategic deals this quarter, all of which led us to increase our 2023 guidance and makes me confident about our ability to materialize our long-term growth potential.”

Key Recent Announcements

  • Satcom Direct and Gilat Sign Strategic Agreement for Joint ESA Project to Expand Plane Simple® Portfolio
  • Tier 1 Telecom Operator Selects Gilat Satellite Connectivity for a Major Western European Utility Company
  • Gilat Awarded Millions of Dollars in Orders for Cellular Backhaul Over Satellite Project in Mexico

Conference C all D etails
Gilat’s management will discuss its second quarter 2023 results and business achievements and participate in a question-and-answer session:

Date: Tuesday, August 8, 2023
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/gilatq2-2023

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 (loss), adjusted EBITDA, and earnings (losses) 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 non-cash stock-based compensation expenses, amortization of purchased intangibles, amortization of intangible assets related to acquisition transactions, lease incentive amortization, impairment of held for sale asset, income tax effect on adjustments, one-time changes of deferred tax assets, and other operating expenses (income), net.

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 (loss) 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 (loss) 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 (loss), adjusted EBITDA and earnings (losses) 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 end-to-end solutions and services, 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.

Delivering high value solutions, our portfolio is comprised of a cloud-based platform and high performance satellite terminals designed to work in harmony with satellite constellations, including Very High Throughput Satellites (VHTS) and Software-Defined Satellites (SDS) in multiple orbits; high performance Satellite On-the-Move (SOTM) antennas; and highly efficient, high-power Solid State Power Amplifiers (SSPA) and Block Upconverters (BUC).

Gilat’s comprehensive solutions support multiple applications with a full portfolio of products to address key applications including broadband access, mobility, cellular backhaul, military, government, and enterprise, 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, risks associated with the outbreak and global spread of the coronavirus (COVID-19) pandemic; 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. 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
Doreet Oren, Senior Director Corporate Communications
DoreetO@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 (LOSS)
U.S. dollars in thousands (except share and per share data)
Six months ended
Three months ended
June 30,
June 30,
2023
2022
2023
2022
Unaudited
Unaudited
Revenues
$
126,551
$
106,863
$
67,589
$
55,454
Cost of revenues
76,330
70,706
42,053
35,685
Gross profit
50,221
36,157
25,536
19,769
Research and development expenses, net
19,003
16,386
9,384
8,718
Selling and marketing expenses
11,941
10,310
5,932
4,960
General and administrative expenses
9,155
*)
8,495
4,724
*)
4,311
Impairment of held for sale asset
-
439
-
229
Other operating expenses (income), net
(2,340
)
*)
60
47
*)
60
Total operating expenses
37,759
35,690
20,087
18,278
Operating income
12,462
467
5,449
1,491
Financial expenses, net
735
1,663
586
468
Income (loss) before taxes on income
11,727
(1,196
)
4,863
1,023
Taxes on income
1,822
832
538
517
Net income (loss)
$
9,905
$
(2,028
)
$
4,325
$
506
Earnings (losses) per share (basic and diluted)
$
0.17
$
(0.04
)
$
0.08
$
0.01
Weighted average number of shares used in computing earnings (losses) per share
Basic
56,615,714
56,574,296
56,617,943
56,597,523
Diluted
56,622,204
56,574,296
56,620,977
56,637,208
*) Reclassified


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, 2023
June 30, 2022
GAAP
Adjustments(*)
Non-GAAP
GAAP
Adjustments(*)
Non-GAAP
Unaudited
Unaudited
Gross profit
$
25,536
95
$
25,631
$
19,769
81
$
19,850
Operating expenses
20,087
(513
)
19,574
18,278
(832
)
17,446
Operating income
5,449
608
6,057
1,491
913
2,404
Income before taxes on income
4,863
608
5,471
1,023
913
1,936
Net income
$
4,325
608
$
4,933
$
506
913
$
1,419
Earnings per share (basic and diluted)
$
0.08
$
0.01
$
0.09
$
0.01
$
0.02
$
0.03
Weighted average number of shares used in computing earnings per share
Basic
56,617,943
56,617,943
56,597,523
56,597,523
Diluted
56,620,977
56,620,977
56,637,208
56,773,970
(*) Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718, amortization of intangible assets related to acquisition transactions, impairment of held for sale asset and other operating expenses
Three months ended
Three months ended
June 30, 2023
June 30, 2022
Unaudited
Unaudited
GAAP net income
$
4,325
$
506
Gross profit
Non-cash stock-based compensation expenses
95
76
Amortization of intangible assets related to acquisition transactions
-
5
95
81
Operating expenses
Non-cash stock-based compensation expenses
417
493
Amortization of intangible assets related to acquisition transactions
49
50
Impairment of held for sale asset
-
229
Other operating expenses
47
60
513
832
Non-GAAP net income
$
4,933
$
1,419



GILAT SATELLITE NETWORKS LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED STATEMENTS OF INCOME (LOSS)
FOR COMPARATIVE PURPOSES
U.S. dollars in thousands (except share and per share data)
Six months ended
Six months ended
June 30, 2023
June 30, 2022
GAAP
Adjustments(*)
Non-GAAP
GAAP
Adjustments(*)
Non-GAAP
Unaudited
Unaudited
Gross profit
$
50,221
170
$
50,391
$
36,157
156
$
36,313
Operating expenses
37,759
1,296
39,055
35,690
(1,515
)
34,175
Operating income
12,462
(1,126
)
11,336
467
1,671
2,138
Income (loss) before taxes on income
11,727
(1,126
)
10,601
(1,196
)
1,671
475
Net income (loss)
9,905
(1,126
)
8,779
(2,028
)
1,671
(357
)
Earnings (losses) per share (basic and diluted)
$
0.17
$
(0.01
)
$
0.16
$
(0.04
)
$
0.03
$
(0.01
)
Weighted average number of shares used in computing earnings (losses) per share
Basic
56,615,714
56,615,714
56,574,296
56,574,296
Diluted
56,622,204
56,622,204
56,574,296
56,574,296
(*) Adjustments reflect the effect of non-cash stock-based compensation as per ASC 718, amortization of intangible assets related to acquisition transactions, impairment of held for sale asset and other operating expenses (income), net
Six months ended
Six months ended
June 30, 2023
June 30, 2022
Unaudited
Unaudited
GAAP net income (loss)
$
9,905
$
(2,028
)
Gross profit
Non-cash stock-based compensation expenses
170
145
Amortization of intangible assets related to acquisition transactions
-
11
170
156
Operating expenses
Non-cash stock-based compensation expenses
944
916
Amortization of intangible assets related to acquisition transactions
100
100
Impairment of held for sale asset
-
439
Other operating expenses (income), net
(2,340
)
60
(1,296
)
1,515
Non-GAAP net income (loss)
$
8,779
$
(357
)



GILAT SATELLITE NETWORKS LTD.
SUPPLEMENTAL INFORMATION
U.S. dollars in thousands
ADJUSTED EBITDA:
Six months ended
Three months ended
June 30,
June 30,
2023
2022
2023
2022
Unaudited
Unaudited
GAAP net income (loss)
$
9,905
$
(2,028
)
$
4,325
$
506
Adjustments:
Financial expenses, net
735
1,663
586
468
Taxes on income
1,822
832
538
517
Non-cash stock-based compensation expenses
1,114
1,061
512
569
Impairment of held for sale asset
-
439
-
229
Other operating expenses (income), net
(2,340
)
60
47
60
Depreciation and amortization (*)
6,335
5,792
3,172
2,941
Adjusted EBITDA
$
17,571
$
7,819
$
9,180
$
5,290
(*) Including amortization of lease incentive
SEGMENT REVENUES:
Six months ended
Three months ended
June 30,
June 30,
2023
2022
2023
2022
Unaudited
Unaudited
Satellite Networks
$
74,273
$
51,627
$
40,727
$
26,857
Integrated Solutions
25,619
29,397
12,700
15,691
Network Infrastructure and Services
26,659
25,839
14,162
12,906
Total revenues
$
126,551
$
106,863
$
67,589
$
55,454



GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
June 30,
December 31,
2023
2022
Unaudited
Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
87,408
$
86,591
Restricted cash
374
541
Trade receivables, net
41,577
50,644
Contract assets
17,557
24,971
Inventories
40,049
33,024
Other current assets
22,744
19,283
Total current assets
209,709
215,054
LONG-TERM ASSETS:
Restricted cash
14
13
Long-term contract assets
9,980
11,149
Severance pay funds
5,551
5,947
Deferred taxes
16,445
18,265
Operating lease right-of-use assets
3,198
3,891
Other long-term assets
9,086
10,737
Total long-term assets
44,274
50,002
PROPERTY AND EQUIPMENT, NET
73,895
76,578
INTANGIBLE ASSETS, NET
209
309
GOODWILL
43,468
43,468
TOTAL ASSETS
$
371,555
$
385,411
GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED BALANCE SHEETS (Cont.)
U.S. dollars in thousands
June 30,
December 31,
2023
2022
Unaudited
Audited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables
$
14,662
$
20,668
Accrued expenses
43,091
50,356
Advances from customers and deferred revenues
33,240
30,531
Operating lease liabilities
1,870
1,941
Other current liabilities
14,353
22,291
Total current liabilities
107,216
125,787
LONG-TERM LIABILITIES:
Accrued severance pay
6,381
6,580
Long-term advances from customers and deferred revenues
1,480
1,041
Operating lease liabilities
1,261
1,890
Other long-term liabilities
181
5,988
Total long-term liabilities
9,303
15,499
SHAREHOLDERS' EQUITY:
Share capital - ordinary shares of NIS 0.2 par value
2,711
2,711
Additional paid-in capital
933,200
932,086
Accumulated other comprehensive loss
(6,955
)
(6,847
)
Accumulated deficit
(673,920
)
(683,825
)
Total shareholders' equity
255,036
244,125
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
371,555
$
385,411



GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Six months ended
Three months ended
June 30,
June 30,
2023
2022
2023
2022
Unaudited
Unaudited
Cash flows from operating activities:
Net income (loss)
$
9,905
$
(2,028
)
$
4,325
$
506
Adjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization
6,222
5,683
3,115
2,887
Impairment of held for sale asset
-
439
-
229
Stock-based compensation of options
1,114
1,061
512
569
Accrued severance pay, net
196
114
(101
)
177
Deferred taxes, net
1,820
1,664
694
1,358
Decrease (increase) in trade receivables, net
9,398
(11,883
)
2,907
(5,471
)
Decrease (increase) in contract assets
8,378
(2,608
)
3,461
(599
)
Decrease (increase) in other assets and other adjustments (including short-term, long-term and effect of exchange rate changes on cash and cash equivalents)
243
(7,763
)
3,010
(4,047
)
Increase in inventories
(7,895
)
(4,075
)
(272
)
(1,731
)
Increase (decrease) in trade payables
(4,240
)
4,205
(6,229
)
2,533
Decrease in accrued expenses
(5,039
)
(1,690
)
(2,840
)
(2,442
)
Increase in advance from customers and deferred revenue
3,124
7,010
7,593
4,700
Decrease in other liabilities
(15,009
)
(810
)
(14,161
)
(1,975
)
Net cash provided by (used in) operating activities
8,217
(10,681
)
2,014
(3,306
)
Cash flows from investing activities:
Purchase of property and equipment
(6,556
)
(4,515
)
(3,524
)
(2,314
)
Repayment of short term deposits
-
2,159
-
2,159
Net cash used in investing activities
(6,556
)
(2,356
)
(3,524
)
(155
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
(1,010
)
32
(433
)
(221
)
Increase (decrease) in cash, cash equivalents and restricted cash
651
(13,005
)
(1,943
)
(3,682
)
Cash, cash equivalents and restricted cash at the beginning of the period
87,145
84,463
89,739
75,140
Cash, cash equivalents and restricted cash at the end of the period
$
87,796
$
71,458
$
87,796
$
71,458

Stock Information
Company Name: Gilat Satellite Networks Ltd.
Stock Symbol: GILT
Market: NASDAQ
Website: gilat.com
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