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01/11 11:08
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call shows mixed results: strong Defense segment growth and potential European defense opportunities are positives, but significant losses, declining margins, and unclear management responses on revenue structure pose concerns. Stellar Blu's acquisition contributes to revenue but also increases expenses and losses. The Peru segment's revenue decline adds uncertainty. Overall, the mixed financial performance and uncertain guidance create a neutral outlook for the stock price movement.
Revenue $92 million, a 21% increase year-over-year from $76.1 million in Q1 '24. The increase was led by the Commercial segment due to the acquisition of Stellar Blu, combined with growth in the Defense segment, offset by lower revenue in the Peru segment.
Commercial Segment Revenue $64.2 million, a 56% increase from $41.2 million in Q1 '24. The increase was primarily due to the acquisition of Stellar Blu, which contributed $25 million to revenue, partially offset by the termination of activity in Russia.
Defense Segment Revenue $23 million, a 34% increase from $17.2 million in Q1 '24. The increase was driven by high deliveries to defense customers in the US and Asia.
Peru Segment Revenue $4.8 million, a decrease from $17.7 million in Q1 '24. The decline is attributed to delays in renewing several projects and slower progress on existing projects.
GAAP Gross Margin 30.9%, down from 36.9% in Q1 '24. The decrease is primarily due to lower margins in Stellar Blu as it ramps up production, amortization of purchased intangibles, and lower gross margins in Peru.
GAAP Operating Expenses $31.1 million, an increase from $22.7 million in Q1 '24. The increase is due to the consolidation of Stellar Blu, amortization of purchased intangibles, and transaction costs.
GAAP Operating Loss $2.7 million, compared to a GAAP operating income of $5.4 million in Q1 '24. The decrease was driven by acquisition-related expenses and the absence of proceeds from an arbitration in Peru.
GAAP Net Loss $6 million, or a loss per share of $0.10, compared to a net income of $5 million or diluted income per share of $0.09 in Q1 '24.
Non-GAAP Gross Margin 31.7%, down from 37.8% in Q1 '24.
Non-GAAP Operating Expenses $24.1 million, compared to $22.2 million in Q1 '24.
Non-GAAP Operating Income $5.2 million, down from $6.6 million in Q1 '24.
Non-GAAP Net Income $1.8 million, or a diluted income per share of $0.03, compared to a net income of $6 million or income per share of $0.11 in Q1 '24.
Adjusted EBITDA $7.6 million, down from $9.3 million in Q1 '24. The decrease is primarily due to Stellar Blu losses in the first quarter. Organic adjusted EBITDA, excluding Stellar Blu losses, was $11.2 million, a 20% increase compared with Q1 '24.
Cash and Cash Equivalents $64.3 million as of March 31, '25, down from $118.2 million on December 31, 2024, due to the utilization of $60 million from a $100 million credit line to finance the acquisition of Stellar Blu.
Operating Activities Cash Flow Used $6.6 million in Q1 '25 to support the working capital needs of Stellar Blu during the ramp-up and its acquisition-related expenses.
Shareholders' Equity $300 million as of March 31, '25, compared with $304 million at the end of '24.
New Products Launched: Several new products launched including the GLT modem, Aquarius Pro DS modem, and Gilat DataPath 2.6 meter terminal.
Stellar Blu Contribution: Stellar Blu contributed about $25 million to Q1 revenues and is expected to reach a 10% adjusted EBITDA margin run rate in the second half of the year.
Market Expansion in Defense: Gilat Defense Division launched successfully, with positive market response and increased demand for secure satellite communications.
European Market Growth: Growing investments in sovereign communications networks in Europe, creating significant opportunities for Gilat Defense.
Commercial Sector Growth: Received $15 million in orders from satellite operators for SkyEdge IV platform and high-performance SSPAs.
Digital Inclusion Projects: Multiple digital inclusion projects in Peru, reflecting strong momentum in expanding connectivity to remote areas.
Revenue Growth: Q1 revenues reached $92 million, a 21% increase year-over-year.
Adjusted EBITDA: Adjusted EBITDA was $7.6 million; excluding Stellar Blu losses, it was $11.2 million, a 20% increase year-over-year.
R&D Investment: Increased investment in R&D and sales/marketing for Gilat Defense in 2025.
Organizational Structure: First quarter operating under a newly aligned organizational structure.
Sourcing Strategy Adjustment: Proactively shifted raw material sourcing to lower tariff countries and the US.
OEM Qualification: Sidewinder platform progressing through OEM qualification with Boeing, expected availability in early 2026.
Global Economic Conditions: Uncertain global economic conditions could impact revenues and overall business performance.
Customer Revenue Reductions: Potential reductions in revenues from key customers may affect financial stability.
Military Spending Delays: Delays or reductions in US and foreign military spending could hinder growth in defense-related revenues.
Product Acceptance: Challenges in the acceptance of new products on a global basis may limit market expansion.
Supply Chain Disruptions: Disruptions or delays in the supply of raw materials and components due to various factors could impact production and delivery.
International Trade Policies: Shifting international trade policies and tariffs are creating new challenges for sourcing and manufacturing.
Project Delays in Peru: Several large projects in Peru are facing delays, which may affect revenue generation in that segment.
Acquisition of Stellar Blu: Stellar Blu contributed about $25 million to our top line and incurred an adjusted EBITDA loss of about $3.6 million. Stellar Blu's yearly performance remains on track, with revenue expectation of between $120 million and $150 million.
Investment in R&D and Sales: We are increasing our investment in allocating more resources to R&D as well as to sales and marketing at Gilat Defense in 2025.
Launch of New Products: We launched several new products, including our new GLT modem, the Aquarius Pro DS modem and the Gilat DataPath 2.6 meter terminal.
Expansion in Defense Sector: Gilat Defense was awarded over $5 million to support critical connectivity for the US DoD and international defense forces.
Digital Inclusion Projects: We are leveraging the proven capabilities of Gilat Peru to compete on projects worldwide, with multiple digital inclusion projects currently in the pipeline.
2025 Revenue Guidance: Projected revenue between $415 million and $455 million, representing year-over-year growth of 42% at the midpoint.
2025 Adjusted EBITDA Guidance: Expected to be between $47 million and $53 million, representing year-over-year growth of 18% at the midpoint.
Shareholder Return Plan: The company secured a $100 million credit line from a bank consortium, utilizing $60 million to finance the acquisition of Stellar Blu.
Share Repurchase Program: None
Dividend Program: None
The earnings call summary indicates positive growth trends across multiple divisions, strong revenue and EBITDA guidance, and promising contract developments, especially in defense and commercial sectors. The Q&A section supports these sentiments, with management addressing potential risks and providing optimistic future expectations. The company's strategic moves, like the private placement and production ramp-up, further bolster confidence. Despite some uncertainties, the overall outlook remains positive, suggesting a likely stock price increase in the short term.
The earnings call shows strong financial performance, with a significant increase in diluted income per share. Despite some challenges, guidance remains optimistic, particularly for Stellar Blu and Gilat Defense. The Q&A section reveals positive developments, such as improved margins and strategic opportunities like OneWeb Gen 2 and Iris Square. The company's expansion in the defense sector and digital inclusion projects further bolster the outlook. Overall, the combination of strong financial results, optimistic guidance, and strategic initiatives suggests a positive stock price movement over the next two weeks.
The earnings call shows mixed results: strong revenue growth driven by acquisitions but declining margins and increased losses. The lack of guidance clarity and no shareholder return plan are concerning. The Q&A reveals uncertainties, particularly in revenue expectations for key segments. Despite growth in defense and potential in Peru, the financial health and unclear guidance weigh heavily, suggesting a negative sentiment.
The earnings call shows mixed results: strong Defense segment growth and potential European defense opportunities are positives, but significant losses, declining margins, and unclear management responses on revenue structure pose concerns. Stellar Blu's acquisition contributes to revenue but also increases expenses and losses. The Peru segment's revenue decline adds uncertainty. Overall, the mixed financial performance and uncertain guidance create a neutral outlook for the stock price movement.
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