Gilat Presents Fourth Quarter and Full Year 2023 Results

Published

Q4 Revenue of $75.6 million, GAAP Operating Income of $2.9 million and Adjusted EBITDA of $9.4 million

2023 Revenue of $266.1 million, up 11% year over year, GAAP Operating Income of $28.1 million and Adjusted EBITDA of $36.4 million, up 44% YoY

PETAH TIKVA, Israel, Feb. 26, 2024 (GLOBE NEWSWIRE) -- Gilat Satellite Networks Ltd. (NASDAQ: GILT, TASE: GILT), a worldwide leader in satellite networking technology, solutions and services, today reported its unaudited results for the fourth quarter and full year ended December 31, 2023.

Fourth Quarter 2023 Financial Highlights

  • Revenue of $75.6 million, up 4% compared with $72.6 million in Q4 2022;
  • GAAP operating income of $2.9 million, compared with $6.1 million in Q4 2022;
  • Non-GAAP operating income of $6.1 million, compared with $7.1 million in Q4 2022;
  • GAAP net income of $3.4 million, or $0.06 per diluted share, compared with GAAP net loss of $6.0 million, or $0.11 loss per share, in Q4 2022;
  • Non-GAAP net income of $6.5 million, or $0.11 per diluted share, compared with $7.9 million, or $0.14 per diluted share, in Q4 2022;
  • Adjusted EBITDA of $9.4 million compared with $10.1 million in Q4 2022.

Full year 2023 Financial Highlights

  • Revenue of $266.1 million, up 11% compared with $239.8 million in 2022;
  • GAAP operating income of $28.1 million, almost tripled compared to $10.0 million in 2022;
  • Non-GAAP operating income of $23.5 million, up 73% compared with $13.6 million in 2022;
  • GAAP net income of $23.5 million, or $0.41 per diluted share, compared with GAAP net loss of $5.9 million in 2022, or $0.10 loss per share;
  • Non-GAAP net income of $19.9 million, or $0.35 per diluted share, almost doubled compared to non-GAAP net income of $10.6 million or $0.19 per diluted share in 2022;
  • Adjusted EBITDA was $36.4 million, up 44% compared with adjusted EBITDA of $25.2 million in 2022.

Forward-Looking Expectations

Management’s financial guidance for 2024 is for revenues of between $305 to $325 million, representing year-over-year growth of 18% at the midpoint. GAAP operating income is expected to be between $15 to $19 million, and Adjusted EBITDA is expected to be between $40 to $44 million, representing year-over-year growth of 15% at the midpoint.

Management Commentary

Adi Sfadia, Gilat’s CEO, commented: “We are pleased with the financial results, capping off a strong 2023 with $266 million in revenue, up 11% over last year, and very strong growth in EBITDA at $36.4 million, up 44% over last year. This demonstrates the operating leverage inherent to our business model combined with a favorable product revenue mix during 2023.

“Furthermore, 2023 was also particularly successful from a strategic perspective. Looking back, we have a lot to be proud of. In mid-November, we concluded the acquisition of DataPath in the US, which brings several synergies for both businesses and we see DataPath as a significant long-term growth asset for Gilat in the defense sector. Moreover, our strong cash position is allowing us to explore additional inorganic growth opportunities and we are currently exploring several of these opportunities.

Mr. Sfadia added, “Throughout the year, we achieved highly strategic contract wins with market-dominating satellite operators, and we extended Gilat’s market leadership in satellite-based cellular backhaul and In-Flight Connectivity, including a very significant Electronic Steered Antenna (ESA) award for business aviation.

Mr. Sfadia concluded, “Our ongoing success is due to the continued growing market interest in the satellite communications sector in general and for our leading technological solutions in particular. We see these favorable trends continuing into 2024 and therefore our expectations for the year ahead are for continued strong growth in revenue and profit.”

Key Recent Announcements

  • Gilat Awarded $10 Million Follow-On Order from the US Department of Defense
  • Gilat Awarded Multimillion-Dollar Defense Satellite Connectivity Project
  • Gilat Awarded $17 Million by Pronatel for Expansion of Regional Telecommunications Project in Peru
  • Gilat Announces New Brand Identity Embracing the Company’s Commitment to the New Space Revolution
  • Gilat Awarded Approximately $3M for a Satellite Connectivity Project for a National Police Force
  • US Army Awards Nearly $20 Million Contract Extension to Gilat to Sustain Anytime, Anywhere Satellite Connectivity
  • Gilat Completes Acquisition of DataPath, Inc.

Conference Call Details

Gilat’s management will discuss its fourth quarter and full year 2023 results and business achievements and participate in a question-and-answer session:

Date:Monday, February 26, 2024
Start:09:30 AM EST / 16:30 IST
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/gilatq4-2023

The webcast will also be archived for a period of 30 days on the Company’s website and through the link above.

Unaudited ResultsThe attached summary unaudited financial statements represent the most current information available to management. Audited results will be reported in our annual report on Form 20-F.

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, other expenses, one-time changes of deferred tax assets, one-time tax expense related to the release of historical tax-trapped earnings, 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 (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, 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 Officerhagayk@gilat.com

Gilat Satellite NetworksMayrav Sher, Head of Finance and Investor Relationsmayravs@gilat.com

EK Global IREhud Helft, Managing Partnerehud@ekgir.com

GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
U.S. dollars in thousands (except share and per share data)
  Twelve months ended  Three months ended
  December 31,   December 31,
  2023   2022   2023  2022 
 Unaudited Audited Unaudited
        
Revenues$266,090  $239,840  $75,612 $72,627 
Cost of revenues 161,145   152,932   46,692  44,911 
        
Gross profit 104,945   86,908   28,920  27,716 
        
Research and development expenses, net 41,173   35,640   11,624  10,098 
Selling and marketing expenses 25,243   21,694   7,119  5,970 
General and administrative expenses 19,215  *)18,412   6,312 *)5,198 
Impairment of held for sale asset -   771   -  53 
Other operating expenses (income), net (8,771) *)438   986 *)327 
        
Total operating expenses  76,860   76,955   26,041  21,646 
         
Operating income  28,085   9,953   2,879  6,070 
        
Financial income (expenses), net 109   (2,818)  1,196  (102)
        
Income before taxes on income 28,194   7,135   4,075  5,968 
        
Taxes on income 4,690   13,063   628  11,988 
        
Net income (loss)$ 23,504  $ (5,928) $ 3,447 $ (6,020)
        
Earnings (losses) per share (basic and diluted)$ 0.41  $ (0.10) $ 0.06 $ (0.11)
        
Weighted average number of shares used in computing earnings (losses) per share       
Basic 56,668,999   56,591,994   56,820,774  56,610,404 
Diluted 56,672,537   56,591,994   56,820,774  56,610,404 
        
*) Reclassified       
        

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)           
 
 Three months ended Three months ended
 December 31, 2023 December 31, 2022
 GAAP Adjustments (*) Non-GAAP GAAP Adjustments (*) Non-GAAP
 Unaudited Unaudited
            
Gross profit$28,920 $617  $29,537 $27,716  $73  $27,789
Operating expenses 26,041  (2,615)  23,426  21,646   (943)  20,703
Operating income 2,879  3,232   6,111  6,070   1,016   7,086
Income before taxes on income 4,075  3,232   7,307  5,968   1,016   6,984
Net income (loss)$ 3,447 $3,097  $ 6,544 $ (6,020) $13,896  $ 7,876
            
Basic earnings (losses) per share$ 0.06 $0.06  $ 0.12 $ (0.11) $0.25  $ 0.14
            
Diluted earnings (losses) per share$ 0.06 $0.05  $ 0.11 $ (0.11) $0.25  $ 0.14
            
            
Weighted average number of shares used in computing earnings (losses) per share           
Basic 56,820,774    56,820,774  56,610,404     56,610,404
Diluted 56,820,774    56,987,939  56,610,404     56,623,366
            
            
(*) Adjustments reflect the effect of non-cash stock-based compensation expenses as per ASC 718, amortization of intangible assets related to acquisition transactions, impairment of held for sale asset, other operating expenses (income), net, one-time tax expense related to the release of historical tax-exempt earnings and income tax effect on adjustments which is calculated using the relevant effective tax rate.
            
            
 Three months ended Three months ended
 December 31, 2023 December 31, 2022
   Unaudited     Unaudited  
            
GAAP net income (loss)  $3,447      $(6,020)  
            
Gross profit           
Non-cash stock-based compensation expenses   129       73   
Amortization of intangible assets related to acquisition transactions   448       -   
Others   40       -   
    617       73   
Operating expenses           
Non-cash stock-based compensation expenses   1,458       513   
Amortization of intangible assets related to acquisition transactions   162       50   
Impairment of held for sale asset   -       53   
Other operating expenses (income), net   986       327   
Others   9       -   
    2,615       943   
            
Taxes on income   (135)      12,880   
            
Non-GAAP net income  $6,544      $7,876   
            

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)
 
 Twelve months ended Twelve months ended
 December 31, 2023 December 31, 2022
 GAAP Adjustments (*) Non-GAAP GAAP Adjustments (*) Non-GAAP
 Unaudited Audited Unaudited
            
Gross profit$104,945 $895  $105,840 $86,908  $303  $87,211
Operating expenses 76,860  5,434   82,294  76,955   (3,337)  73,618
Operating income 28,085  (4,539)  23,546  9,953   3,640   13,593
Income before taxes on income 28,194  (4,539)  23,655  7,135   3,640   10,775
Net income (loss)$ 23,504 $(3,597) $ 19,907 $ (5,928) $16,478  $ 10,550
            
Earnings (losses) per share (basic and diluted)$ 0.41 $(0.06) $ 0.35 $ (0.10) $0.29  $ 0.19
            
            
Weighted average number of shares used in computing earnings (losses) per share           
Basic 56,668,999    56,668,999  56,591,994     56,591,994
Diluted 56,672,537    56,784,601  56,591,994     56,650,362
            
            
(*) Adjustments reflect the effect of non-cash stock-based compensation expenses as per ASC 718, amortization of intangible assets related to acquisition transactions, impairment of held for sale asset, other operating expenses (income), net, one-time tax expense related to the release of historical tax-exempt earnings and income tax effect on adjustments which is calculated using the relevant effective tax rate.
            
            
 Twelve months ended Twelve months ended
 December 31, 2023 December 31, 2022
   Unaudited     Unaudited  
            
GAAP net income (loss)  $23,504      $(5,928)  
            
Gross profit           
Non-cash stock-based compensation expenses   407       293   
Amortization of intangible assets related to acquisition transactions   448       10   
Others   40       -   
    895       303   
Operating expenses           
Non-cash stock-based compensation expenses   3,016       1,927   
Amortization of intangible assets related to acquisition transactions   312       201   
Impairment of held for sale asset   -       771   
Other operating expenses (income), net   (8,771)      438   
Others   9       -   
    (5,434)      3,337   
            
Taxes on income   942       12,838   
            
Non-GAAP net income  $19,907      $10,550   
            

GILAT SATELLITE NETWORKS LTD.       
SUPPLEMENTAL INFORMATION       
U.S. dollars in thousands       
        
ADJUSTED EBITDA:       
        
 Twelve months ended Three months ended
 December 31, December 31,
  2023   2022   2023   2022 
 Unaudited Unaudited
        
GAAP net income (loss)$23,504  $(5,928) $3,447  $(6,020)
Adjustments:       
Financial expenses (income), net (109)  2,818   (1,196)  102 
Taxes on income 4,690   13,063   628   11,988 
Non-cash stock-based compensation expenses 3,423   2,220   1,587   586 
Impairment of held for sale asset -   771   -   53 
Depreciation and amortization (*) 13,627   11,832   3,862   3,063 
Other operating expenses (income), net (8,771)  438   986   327 
Others 49   -   49   - 
        
Adjusted EBITDA$36,413  $25,214  $9,363  $10,099 
        
(*) Including amortization of lease incentive       
        
SEGMENT REVENUES:       
 Twelve months ended Three months ended
 December 31, December 31,
  2023   2022   2023   2022 
 Unaudited Audited Unaudited
        
Satellite Networks $168,527  $120,381  $53,517  $36,388 
Integrated Solutions 46,133   61,376   9,503   16,329 
Network Infrastructure and Services 51,430   58,083   12,592   19,910 
        
Total revenues$ 266,090  $ 239,840  $ 75,612  $ 72,627 
        

GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
    
 December 31, December 31,
  2023   2022 
 Unaudited Audited
    
ASSETS   
    
CURRENT ASSETS:   
Cash and cash equivalents$103,961  $86,591 
Restricted cash 736   541 
Trade receivables, net 44,725   50,644 
Contract assets 28,327   24,971 
Inventories 38,525   33,024 
Other current assets 24,299   19,283 
    
Total current assets 240,573   215,054 
    
LONG-TERM ASSETS:   
Restricted cash 54   13 
Long-term contract assets 9,283   11,149 
Severance pay funds 5,737   5,947 
Deferred taxes 11,484   18,265 
Operating lease right-of-use assets 5,105   3,891 
Other long-term assets 9,544   10,737 
    
Total long-term assets 41,207   50,002 
    
PROPERTY AND EQUIPMENT, NET 74,315   76,578 
    
INTANGIBLE ASSETS, NET 16,051   309 
    
GOODWILL 54,740   43,468 
    
TOTAL ASSETS$426,886  $385,411 
    
GILAT SATELLITE NETWORKS LTD.   
CONSOLIDATED BALANCE SHEETS (Cont.)   
U.S. dollars in thousands   
    
 December 31, December 31,
  2023   2022 
 Unaudited Audited
    
LIABILITIES AND SHAREHOLDERS' EQUITY   
    
CURRENT LIABILITIES:   
Short-term loan$7,453  $- 
Trade payables 13,873   20,668 
Accrued expenses 51,906   50,356 
Advances from customers and deferred revenues 34,495   30,531 
Operating lease liabilities 2,426   1,941 
Other current liabilities 16,431   22,291 
    
Total current liabilities 126,584   125,787 
    
LONG-TERM LIABILITIES:   
Long-term loan 2,000   - 
Accrued severance pay 6,537   6,580 
Long-term advances from customers and deferred revenues 1,139   1,041 
Operating lease liabilities 3,022   1,890 
Other long-term liabilities 12,916   5,988 
    
Total long-term liabilities 25,614   15,499 
    
SHAREHOLDERS' EQUITY:   
Share capital - ordinary shares of NIS 0.2 par value 2,733   2,711 
Additional paid-in capital 937,591   932,086 
Accumulated other comprehensive loss (5,315)  (6,847)
Accumulated deficit (660,321)  (683,825)
    
Total shareholders' equity 274,688   244,125 
    
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$426,886  $385,411 
    

GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
        
 Twelve months ended Three months ended
 December 31, December 31,
  2023   2022   2023   2022 
 Unaudited Audited Unaudited
Cash flows from operating activities:       
Net income (loss)$23,504  $(5,928) $3,447  $(6,020)
Adjustments required to reconcile net income (loss) to net cash provided by operating activities:         
Depreciation and amortization 13,402   11,608   3,805   3,004 
Capital gain from sale of property (2,084)  -   -   - 
Impairment of held for sale asset -   771   -   53 
Stock-based compensation 3,423   2,220   1,587   586 
Accrued severance pay, net 167   136   12   44 
Deferred taxes, net 2,662   (627)  (1,203)  (2,450)
Decrease (increase) in trade receivables, net 13,448   (11,162)  9,561   1,108 
Decrease (increase) in contract assets (1,694)  2,481   (7,804)  4,771 
Decrease (increase) in other assets and other adjustments (including short-term, long-term and effect of exchange rate changes on cash and cash equivalents) (351)  (3,445)  (3,949)  5,208 
Decrease (increase) in inventories (2,387)  (5,416)  3,798   614 
Decrease in trade payables (7,635)  (259)  (2,314)  (4,574)
Increase in accrued expenses 735   549   3,517   2,316 
Increase (decrease) in advance from customers and deferred revenues 803   5,929   (1,843)  (1,468)
Increase (decrease) in other liabilities (12,049)  13,957   1,343   13,592 
Net cash provided by operating activities 31,944   10,814   9,957   16,784 
        
Cash flows from investing activities:       
Purchase of property and equipment (10,746)  (12,793)  (2,090)  (3,568)
Proceeds from short-term deposits -   2,159   -   - 
Investment in financial instrument -   (1,536)  -   - 
Acquisitions of subsidiary, net of cash acquired (4,107)  -   (4,107)  - 
Receipts from sales of properties 2,168   4,006   -   4,006 
Net cash provided by (used in) investing activities (12,685)  (8,164)  (6,197)  438 
        
Cash flows from financing activities:       
Repayment of short-term loan (1,590)  -   (1,590)  - 
Net cash used in financing activities (1,590)  -   (1,590)  - 
        
Effect of exchange rate changes on cash, cash equivalents and restricted cash (63)  32   2,288   47 
        
Increase in cash, cash equivalents and restricted cash 17,606   2,682   4,458   17,269 
        
Cash, cash equivalents and restricted cash at the beginning of the period 87,145   84,463   100,293   69,876 
        
Cash, cash equivalents and restricted cash at the end of the period$ 104,751  $ 87,145  $ 104,751  $ 87,145 
        

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Source: Gilat Satellite Networks Ltd.

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