Gilat Satellite Networks NASDAQ: GILT reported second-quarter revenue growth of 17% year over year as demand increased across its commercial, defense and Peru operations, while the satellite communications company reiterated its full-year outlook.
Revenue for the quarter ended June 30 totaled $122.7 million, compared with $105 million a year earlier. Adjusted EBITDA rose 31% to $15.4 million from $11.8 million, and the adjusted EBITDA margin expanded to approximately 12.6% from 11.2%.
“During the second quarter, we continued to strengthen our position, advance important strategic initiatives, and execute successfully across our defense, commercial, and Peru businesses,” CEO Adi Sfadia said on the company’s Aug. 5 earnings call.
Segment Growth Led by Commercial Business
Commercial revenue increased 20% year over year to $83 million, primarily driven by in-flight connectivity, according to CFO Gil Benyamini. Defense revenue rose 12% to $22.5 million, while revenue in Peru grew 8% to $17.2 million.
Gilat’s commercial business received more than $20 million in orders from global satellite operators, mainly for its SkyEdge platforms and services. The company also received $43 million in orders from a leading in-flight connectivity service provider for its Sidewinder electronically steered antenna terminals, covering both line-fit and retrofit installations.
Sfadia said Sidewinder is moving into large-scale deployment, with more than 200 terminals delivered during the quarter, which he described as a record quarterly delivery volume. He said slightly more than 600 units were installed and operating, while noting that installation timing depends on customers, aircraft availability and maintenance windows.
The company continued certification work for Boeing line-fit availability and expects deliveries of the first units in the fourth quarter. Gilat has also begun the process to make Sidewinder available for Airbus line-fit programs and received an order as part of that effort.
“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 strong foundation for additional growth opportunities,” Sfadia said.
Defense Orders and Comtech Transaction
Gilat Defense received $11 million in U.S. Department of War orders for satellite communications terminals and field services during the quarter. It also received a multi-million-dollar order to supply customized satellite communications terminals to a European ministry of defense.
The company introduced the Viper Ka, a Ka-band ISR terminal designed for unmanned ISR and tactical UAV applications. Sfadia said the terminal is intended to support Ka-band constellations including GEO satellites, Telesat LEO, mPOWER and Amazon, and can be used on small to medium UAVs.
Management also highlighted rising demand for mobile gateways following damage to fixed U.S. gateways in the Middle East, as well as growing interest in connectivity solutions for loitering munitions. Gilat does not currently have a dedicated solution for the latter market but is discussing potential customized products with customers, Sfadia said.
Separately, Gilat signed a definitive agreement during the quarter to acquire most of Comtech’s Satellite & Space Communications segment. The transaction is expected to close near the end of 2026, subject to regulatory approvals, including HSR and CFIUS reviews, and customary closing conditions.
Sfadia said the acquisition is expected to more than double Gilat Defense revenue, broaden the company’s technology portfolio and strengthen its U.S. presence. He said approximately 70% to 80% of the acquired business’s revenue is defense-related, with the remainder commercial. The defense activities will be placed within Gilat Defense, while commercial operations will be assigned to the commercial segment.
Profitability, Cash Flow and Outlook
GAAP gross margin was 30%, unchanged from the prior-year quarter. GAAP operating income declined to $4.7 million from $5.7 million, primarily because of an earnout provision related to Gilat’s DataPath acquisition that was recorded in general and administrative expenses. GAAP net income was $8.1 million, or 10 cents per diluted share, compared with $9.8 million, or 17 cents per diluted share, a year earlier.
On a non-GAAP basis, operating income climbed 35% to $12.6 million. Non-GAAP net income rose to $15.6 million, or 20 cents per diluted share, from $12 million, or 21 cents per share. Benyamini attributed the difference between net-income growth and per-share results to a higher diluted share count following $166 million raised in late 2025.
The company used approximately $1.9 million in operating cash during the quarter, which management attributed mainly to working-capital timing and inventory needs for second-half deliveries. Gilat ended the quarter with $159 million in cash equivalents, restricted cash and short-term deposits. Days sales outstanding, excluding Peru construction activity, were 110 days.
For the first half of 2026, Gilat reported revenue of $233.1 million and adjusted EBITDA of $30.5 million.
Management reiterated its 2026 guidance for revenue of $500 million to $520 million and adjusted EBITDA of $61 million to $66 million. At the midpoint, the outlook represents 13% revenue growth and 19% adjusted EBITDA growth, Benyamini said.
The company expects a higher level of defense revenue in the second half based on backlog, delivery schedules and expected orders. However, management expects unfavorable movements in the Israeli shekel against the U.S. dollar to add approximately $3 million to $5 million of operating expenses in the second half.
In Peru, Gilat completed infrastructure-upgrade work in its first three regions and expects to complete work in Cusco during the third quarter. Benyamini said most Peru revenue going forward is expected to come from recurring long-term service arrangements rather than one-time construction work.
About Gilat Satellite Networks (NASDAQ:GILT)
Gilat Satellite Networks is a leading provider of satellite-based broadband connectivity solutions, specializing in the design, development and deployment of ground segment equipment and network services. The company's core offerings include Very Small Aperture Terminal (VSAT) modems and hub systems, network management software, and end-to-end satellite communication platforms. These technologies enable broadband Internet access, enterprise networking, and cellular backhaul in regions where terrestrial infrastructure is limited or non-existent.
Founded in 1987 and headquartered in Petah Tikva, Israel, Gilat has established a track record of innovation in satellite communications.
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