Gilat Satellite Networks Q3 Earnings Call Highlights

Key Points

• Gilat cut its 2026 revenue outlook to $455 million–$475 million from $500 million–$520 million as launch constraints, customer delivery shifts and contract negotiations pushed commercial revenue into 2027 or later. Its adjusted EBITDA forecast is now $61 million–$63 million, with the midpoint still implying 17% annual growth.
• Defense growth and improved margins supported profitability despite third-quarter revenue slipping 1% to $116.2 million. Defense revenue rose 53%, while adjusted EBITDA increased 13% to $17.6 million and its margin expanded to about 15%.
• Gilat’s planned acquisition of Comtech’s Satellite and Space business, which it expects to add more than $180 million in revenue and $18 million in adjusted EBITDA, is awaiting foreign-investment approval. The deal is excluded from the 2026 outlook.

Gilat Satellite Networks NASDAQ: GILT lowered its full-year revenue outlook after satellite launch delays, shifting customer delivery schedules and contract negotiations pushed some expected commercial business into 2027 and beyond. The company reported higher third-quarter profitability, however, as defense revenue grew and margins improved.

Gilat now expects 2026 revenue of $455 million to $475 million, down from its prior forecast of $500 million to $520 million. The midpoint of the new range implies 3% year-over-year growth, Chief Financial Officer Gil Benyamini said on the company’s Nov. 10 earnings call.

The company narrowed its adjusted earnings before interest, taxes, depreciation and amortization forecast to $61 million to $63 million. Benyamini said the midpoint represents 17% growth from the prior year, with favorable deal mix and cost savings limiting the effect of lower expected revenue on profitability.

Defense Growth Helps Offset Commercial Weakness

Third-quarter revenue fell 1% to $116.2 million from $117.7 million a year earlier. Adjusted EBITDA rose 13% to $17.6 million, and the adjusted EBITDA margin expanded to approximately 15% from about 13%.

Defense revenue increased 53% to $36.9 million, primarily due to transportable product deliveries at Gilat DataPath. Commercial revenue declined 4% to $69.7 million, according to Benyamini, mainly because amplifier deliveries to some customers were deferred. Peru revenue dropped 54% to $9.6 million, reflecting lower construction revenue from upgrade projects and hardware-related deliveries recorded a year earlier.

GAAP gross margin rose to 35% from 30%. Benyamini attributed much of the improvement to defense economies of scale and a more profitable product mix, particularly DataPath’s transportable products, as well as higher margins in Peru.

GAAP net income increased to $8.7 million, or 11 cents per diluted share, from $8.1 million, or 14 cents per share, a year earlier. Benyamini said per-share earnings declined because of a higher share count, mainly related to equity raises.

Customer Delays Shift Revenue

Chief Executive Officer Adi Sfadia said commercial customers face competitive pressure, particularly in enterprise and cellular backhaul, while launch availability constraints and longer decisions on large satellite projects are slowing deployments. An agreement in Peru that had been expected in the first half of 2026 was signed at the end of the third quarter, shifting associated revenue into 2027, he said.

In in-flight connectivity, Sfadia said some aircraft installation delays shifted deliveries into 2027. Gilat is also negotiating better economic terms with key customers because retrofit units are currently close to break-even, while cost reductions have taken longer than expected.

“We would like to ensure that we will make profits on the retrofit as well,” Sfadia said. He added that the company expects line-fit units to be profitable.

Gilat delivered more than 150 Sidewinder electronically steered antenna terminals during the quarter. Sfadia said deliveries matched the company’s plan, while the commercial shortfall was mainly tied to delayed amplifier deliveries for a large low-Earth-orbit project. The units are in inventory and backlog, he said.

The company is working toward Sidewinder line-fit certification with Boeing and Airbus. Sfadia said Gilat expects Boeing certification and its first delivery to Boeing before year-end, with Airbus to follow.

Comtech Deal Awaits Approval

Gilat is pursuing its acquisition of Comtech’s Satellite and Space business as part of its defense expansion. Sfadia said the business is expected to add more than $180 million in revenue and more than $18 million in adjusted EBITDA. The company’s 2026 outlook excludes contributions from the pending acquisition.

Sfadia said the transaction had received Hart-Scott-Rodino clearance and was awaiting approval from the Committee on Foreign Investment in the United States, along with customary closing conditions. Gilat expects approval before year-end and is targeting a closing shortly afterward.

During the quarter, DataPath received an award of more than $32 million for multi-band transportable gateway systems and more than $8 million in additional U.S. defense orders for field services and satellite communications upgrades. In Peru, Gilat signed a $28 million broadband network upgrade contract and a $14 million digital inclusion agreement.

Gilat ended the quarter with $260 million in cash equivalents and short-term deposits. Net of convertible notes and a short-term loan, its net cash position was $158 million, Benyamini said.

About Gilat Satellite Networks (NASDAQ:GILT)

Gilat Satellite Networks Ltd. is an Israel-based provider of satellite networking technology and services. The company develops and supplies very small aperture terminal (VSAT) systems, satellite hubs, antennas, modems and related ground infrastructure used to deliver broadband connectivity and other communications services.

Gilat's solutions support telecommunications operators, internet service providers, enterprises, governments and defense organizations. Its offerings are used for cellular backhaul and access, enterprise networking, community broadband, in-flight connectivity, maritime communications, mobility applications and other situations where terrestrial networks may be unavailable or insufficient.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.