GuruFocus - Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Gilat Satellite Networks Ltd (NASDAQ:GILT) reported a 17% year-over-year growth in revenue for Q3 2024, driven by the acquisition of DataPath and momentum in defense and inflight connectivity businesses.
- The company increased its adjusted EBITDA by 13% year-over-year, reaching $10.7 million.
- Gilat secured several contracts with the U.S. Department of Defense, totaling over $14 million, showcasing strong performance in the defense sector.
- The company has a strong pipeline in Peru, with recurring revenues from managed services and successful arbitration collections.
- Gilat is making progress in the NGSO and LEO constellation markets, securing approximately $15 million in orders from major satellite operators.
- Gilat's organic revenue decreased by 10% year-over-year, excluding the impact of the DataPath acquisition.
- The company decided to terminate its activities in Russia, impacting revenue guidance due to imposed limitations and constraints.
- The acquisition of Stellar Blue Solutions is taking longer than anticipated, pending regulatory approvals and other closing conditions.
- Gilat's GAAP gross margin decreased to 37.1% from 40.4% in the same quarter last year, partly due to lower margins from DataPath.
- The cellular backhaul market is experiencing project delays with no new significant initiatives, impacting growth in this segment.
A: We are in the process of exiting Russia and have stopped selling there. Russia accounted for approximately $10 million annually. Excluding Russia, the organic business is tracking as expected. - Adi Sfadia, CEO
Q: Can you simplify the updates on the Peru business?
A: In Peru, we operate several government networks. We recently started the acceptance process for an expansion project. We have five operational regions and expect another to start soon. Most of our Peru business is recurring revenue, which is highly profitable. - Adi Sfadia, CEO
Q: Any updates on the Stellar Blue acquisition and their business progress?
A: The closing is taking longer than expected due to regulatory approvals. Stellar Blue has started delivering commercial units and is expected to generate $25-35 million in Q4 2024 and $120-150 million in 2025. - Adi Sfadia, CEO
Q: How is Gilat positioned in the IRIS SQUARED constellation project in Europe?
A: Gilat is well-positioned with subsidiaries in the EU. Our Bulgarian facility is approved to participate. We expect to see RFPs soon and anticipate competition mainly from EU-based companies. - Adi Sfadia, CEO
Q: What is the status of the SES power program and its impact on Gilat?
A: We are supporting SES with their service launch and have deployed equipment in all their gateways. We expect significant growth once additional satellites are operational, likely more pronounced in 2025. - Adi Sfadia, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.