Gilat Satellite Networks Q2 2026 Earnings Call: Complete Transcript

Gilat Satellite Networks (NASDAQ: GILT ) released second-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below. This content is powered APIs. 8 million the previous year.

The company announced a strategic acquisition of Comtech’s Satellite and Space Communications segment to enhance its defense and satellite communications capabilities, expected to close by year-end. S. Department of Defense and a multi-million dollar order from the European Ministry of Defense for SATCOM terminals. The Commercial segment saw robust growth driven by the SkyEdge platforms and IFC business, with over $20 million in orders from a global satellite operator and $43 million from a leading IFC service provider for Sidewinder ESA terminals.

Gilat reaffirmed its 2026 guidance, anticipating revenues between $500 million and $520 million and adjusted EBITDA of $61 to $66 million, citing strong market demand and a solid backlog. The Peru segment continued to show operational progress, completing key infrastructure upgrades and transitioning to the operational phase in several regions. Management highlighted a healthy pipeline and backlog, with ongoing demand for multi-orbit and resilient connectivity solutions across various sectors. Full Transcript OPERATOR Ladies and gentlemen, thank you for standing by.

Welcome to Gilat's second quarter 2026 results conference call. All participants are at present in listen-only mode. Following the management's formal presentation, instructions will be given for the question-and-answer session. For operator assistance during the conference, please press star zero.

As a reminder, this conference is being recorded August 5, 2026. By now you should have all received the Company's press release. If you have not received it, please view it in the news section of the Company's website, I would now like to hand over the call to Mr. Stan Jay Harry of Alliance Advisors IR.

Mr. Harry, would you like to begin? Please. Stan Jay Harry, Alliance Advisors, Investor Relations Thank you, Hila, and good morning, everyone.

Thank you for joining us for Gilat Satellite Networks' earnings conference call for the second quarter of 2026. With us on the call today are Mr. Adi Sfadia, Gilat's CEO, and Mr. Gil Benyamini, Gilat's Chief Financial Officer.

Before turning the call over to management, I would like to remind everyone that some statements made during this conference call contain forward-looking statements based on current expectations. Actual results could differ materially from those projected as a result of various risks and uncertainties. S. and foreign military spending, acceptance of the Company's new products on a global basis, and disruptions or delays in the Company's supply of raw materials and components due to business conditions, global conflicts, weather, and other factors not under their control.

The Company cautions investors to not place undue reliance on forward-looking statements which reflect the Company's analysis only as of today's date. The Company undertakes no obligation to publicly update forward-looking statements to reflect subsequent events or circumstances. Further information on these factors and other factors that could affect Gilat's financial results is included in the Company's filings with the Securities and Exchange Commission, including the latest reports. In addition, on today's call, management will refer to certain non-GAAP financial measures that management considers to be useful and differ from GAAP.

These non-GAAP measures should be considered supplemental to corresponding GAAP figures. With that, I'd like to turn the call over now to Gilat's CEO, Adi Sfadia. Please go ahead, Adi. Adi Sfadia, CEO Thank you, Sanjay, and good day, everyone.

Thank you for joining us today to discuss Gilat's second quarter 2026 results. I am pleased to report that Gilat delivered a strong quarter. During the second quarter, we continued to strengthen our position, advance important strategic initiatives, and execute successfully across our defense, commercial, and Peru businesses. 8 million in the same quarter last year.

5 million. Overall, the first half of the year demonstrates continued progress across our strategic growth engines: Defense and IFC. During the quarter we announced a significant strategic milestone with the signing of a definitive agreement to acquire most of Comtech's Satellite and Space Communications segment. S.

presence, broaden our technology portfolio, and more than double Gilat Defense revenues. The closing of the transaction is expected towards the end of the year and is subject to several regulatory approvals such as HSR and CFIUS and other customary closing conditions. Now, on to the business review. I will start with Defense.

Gilat Defense continued to build momentum, supported by increasing global demand for mission-critical SATCOM solutions that can operate reliably in dynamic, mobile, and contested environments. Recent conflicts have highlighted the importance of communication systems that provide mobility, rapid deployment, and operational continuity across land, sea, air, and space domains, driving increased demand for resilient and deployable SATCOM capabilities. These evolving operational requirements align well with our defense portfolio and the operational and sales capabilities we have built.

During the quarter we received important awards that demonstrate our growing defense activity in both the United States and Europe. S. Department of Defense. S.

market. Gilat Defense received a multi-million dollar order to supply custom SATCOM terminals to the European Ministry of Defense. These terminals are designed to meet unique operational requirements, combining ruggedized hardware with advanced multi-orbit operability to deliver resilient communications in challenging environments. This award reflects the continued recognition of Gilat's field-proven technologies and reinforces our expanding role in the European defense market.

During the quarter we made important progress in product innovation for unmanned platforms. During URUSA 3 we introduced the Viper Ka, our UAV Ka-band ESA terminal designed to support unmanned ISR and tactical UAV applications. The Viper Ka ESA terminal is designed for resilient multi-orbit connectivity, supporting operations across multi-orbit satellite constellations and delivering secure, low-latency communications with low SWaP for mission-critical unmanned operations. S.

and Europe and continued investment in technologies that address evolving defense requirements. With the closing of the acquisition of Comtech Satellite and Space Communications in parallel, we believe Gilat Defense will be equipped to pursue even larger opportunities and support the growing demand for secure, resilient mission-critical connectivity. Turning to our Commercial business. Our commercial business continued to show strong progress during the second quarter, particularly around our SkyEdge platforms and IFC portfolio.

Satellite operators and IFC service providers are moving towards more flexible, scalable, and multi-orbit architectures, and Gilat has the ground-segment expertise, ESA portfolio, and customer relationships needed to support this transition. Our SkyEdge platforms remain a key foundation for next-generation satellite networks. During the quarter we received more than $20 million in orders from a leading global satellite operator, awarded mainly for our SkyEdge platforms and services. We expect to see additional demand for our SkyEdge platforms as operators continue to deploy next-generation constellations and upgrade their ground infrastructure.

In IFC, the Sidewinder ESA terminal is progressing into large-scale deployment. During the quarter we received $43 million of orders from a leading IFC service provider for Sidewinder ESA terminals, with deliveries for both line fit and retrofit. These awards support continued growth in our mobility business and further validate Sidewinder's role in next-generation multi-orbit IFC architectures. The Boeing line fit program and certification activities continued to advance during the quarter.

Through integration partners, Boeing will offer line fit installation capability, helping accelerate deployment timelines and reduce the cost and operational disruption associated with retrofit programs. We are progressing well towards full certification, an important step in making the Sidewinder ESA terminal commercially available as a line fit option. Deliveries of the first units are expected in Q4 this year. In parallel, we have begun the process toward line fit availability with Airbus and received an order as part of this effort, further expanding the long-term opportunity for Sidewinder across the commercial aviation market.

Overall, our commercial business continues to benefit from growing demand for multi-orbit connectivity across both network infrastructure and mobility applications. With continued traction for our SkyEdge platforms, strong momentum for Sidewinder, and progress on both Boeing and Airbus line fit programs, we believe we have a strong foundation for additional growth opportunities as the market continues to evolve. Our Peru business continues to execute well, with solid operational progress across our social inclusion programs.

We completed work in the first three regions of our infrastructure upgrade program, and we moved to the operational phase, in parallel with the supervision activity in Cusco expected to be completed during the third quarter. These milestones continue to demonstrate Gilat Peru's ability to deliver large-scale communication projects efficiently and reliably. We continue to advance discussions on several significant project expansions while actively pursuing additional large-scale opportunities that support Peru's ongoing investment in social inclusion and nationwide connectivity. I am pleased to say that we continue to have a strong backlog and a healthy pipeline.

Therefore, we are reiterating our 2026 annual guidance. We expect 2026 revenues of between $500 million and $520 million and adjusted EBITDA of between $61 and $66 million. The satellite communications market continues to benefit from growing demand for resilient connectivity, mobility applications, and multi-orbit networks. We continue to see favorable market dynamics across our Defense and IFC growth engines supporting our long-term growth strategies.

Gilat Defense continues to be one of our primary growth engines. , Europe, and other allied markets, supported by ongoing demand for advanced SATCOM solutions. We believe our portfolio and continued focus on innovation provide a strong foundation for future growth. Our commercial business continues to benefit from the industry transition towards multi-orbit networks and next-generation mobility services.

We see continued opportunities for our SkyEdge platforms as operators expand network capacity and capabilities, while Sidewinder remains a strong contributor to the growing demand for advanced IFC solutions. Our second quarter results reflect continued execution across the business and reinforce our confidence in the opportunities ahead. Backlog and pipeline during the second half of the year support our full-year outlook and reinforce our confidence in the long-term growth opportunities across the business. And with that I will hand over the call to Gil Benyamini, our CFO.

Gil, please go ahead. Gil Benyamini, Chief Financial Officer Thank you, Adi. Good morning and good afternoon to everyone. Before I dive into the numbers, I would like to remind everyone that our financial results are presented both on a GAAP and non-GAAP basis.

I will now walk through our financial highlights for the second quarter of 2026. As Adi mentioned, we delivered a strong second quarter with 17% year-over-year revenue growth and 31% year-over-year growth in adjusted EBITDA. Growth was broad-based across all three segments and adjusted EBITDA grew faster than revenues, demonstrating solid operating leverage. 7 million, representing a 17% growth compared with $105 million in Q2 25.

1 million in the same quarter last year. The 20% growth year over year was primarily driven by revenues from the inflight connectivity vertical. 5 million, 12% higher than $20 million in the same quarter last year. 9 million in Q2 25.

Our GAAP gross margin in Q2 26 was 30%, in line with the same quarter last year. The decrease in the gross margin compared to Q1 26 is mainly attributed to a less favorable deal mix in the Commercial segment, partially offset by higher gross margins in the Services segment. 2 million in Q2 25. The increase was primarily attributable to an earn-out provision related to the acquisition of Datapath and was recorded in GAAP G&A expenses.

7 million in Q2 25. 17 in Q2 25. Turning to non-GAAP results, our non-GAAP gross margin in Q2 26 was 32% compared with 33% in Q2 25, the decrease primarily attributable to a less favorable deal mix in Defense and the Peru segment, partially offset by improved margins in the Commercial segment. 2 million in Q2 25.

3 million in Q2 25. 21 in Q2 25. The difference between the growth in the net income and the diluted earnings per share reflects the higher diluted share count due to $166 million raised in the last trimester of 2025. 4 million, 31% higher than Q2 25, reflecting strong operating leverage on higher revenues.

4%. 9 million in operating cash, primarily reflecting working capital. We ended the quarter with a strong liquidity position of $159 million, comprised of cash, cash equivalents, restricted cash, and short-term deposits. DSOs were 110 days excluding Peru construction activity and remain within our expected range.

Our shareholders' equity as of June 30, 2026 totaled $545 million compared with $536 million on March 31, 2026. Looking ahead, based on our backlog, pipeline and expected delivery plan, we are reiterating our full year 26 guidance. Revenues are expected to be between $500 to $520 million, representing 13% growth year over year. At the midpoint, we expect an adjusted EBITDA of between $61 to $66 million, 19% growth at the midpoint and continued margin expansion.

S. dollar which are expected to increase our operating expenses in the second half of 2026. That concludes my financial review. We'd now like to open the call for questions.

Operator, please go ahead. OPERATOR Thank you. Ladies and gentlemen, at this time we will begin the question-and-answer session. If you have a question, please press star one.

If you wish to cancel your request, please press star two. Your questions will be queued in the order received. Please stand by while we poll for your questions. The first question is from Louis De Palma of William Blair.

Please go ahead. Louis De Palma, Analyst at William Blair And Gil, good afternoon. Over the years, Hughes has been referenced as one of your larger competitors. Do you see any impact from the bankruptcy in terms of potential opportunities or strategic activity?

Thanks. Adi Sfadia, CEO So indeed, Hughes over the years were a significant competitor of Gilat, mainly on the GEO side, but also the sole provider of OneWeb modems.