Gilat Satellite Networks Ltd. (NASDAQ/TASE: GILT)

Gilat’s Q2 2025 results showcased remarkable financial performance, with total revenue reaching $105.0 million, a substantial 37% increase compared to $76.6 million in Q2 2024. This growth was primarily driven by the successful integration of Stellar Blu, which contributed approximately $36 million in revenue, and strong performance across the commercial satellite communication markets.

Adjusted EBITDA increased 17% to $11.8 million from $10.1 million in the prior year period, demonstrating operational leverage despite integration costs associated with the Stellar Blu acquisition. The Adjusted EBITDA margin compressed slightly to 11.2% from 13.2% in Q2 2024, primarily due to the integration of Stellar Blu, which recorded an Adjusted EBITDA loss of approximately $1.5 million as the business scales operations.

GAAP operating income showed dramatic improvement, increasing to $9.8 million from $1.3 million in Q2 2024, representing a 653% year-over-year increase. This improvement reflects both revenue growth and operational efficiency gains across the core business segments. GAAP net income more than doubled to $5.7 million from $2.8 million in the prior year period.

The company’s balance sheet strengthened during the quarter, with cash from operations improving to $5.1 million compared to a negative $6.6 million in Q1 2025. Days Sales Outstanding (DSO) improved to 60 days from 75 days in Q1 2025, indicating enhanced working capital management and collection processes.

Notably, the strong financial performance was achieved while the company continued investing in research and development, strategic acquisitions integration, and market expansion initiatives that position Gilat for long-term growth in the rapidly evolving satellite communications landscape.

Gilat Commercial delivered outstanding performance with revenue increasing 59% to $69.1 million from $43.4 million in Q2 2024. This growth was primarily driven by the integration of Stellar Blu, which contributed $36 million in revenue focused on the In-Flight Connectivity (IFC) market. The segment secured significant contract wins including a $40 million strategic project for the virtualized SkyEdge IV platform and $47 million in orders from Tier-1 satellite operators for multi-orbit applications.

The IFC market momentum continued with Stellar Blu announcing $27 million in new orders during the quarter. The subsidiary has now accumulated more than 150,000 flight hours and deployed solutions across more than 225 airplanes, demonstrating strong market traction. Stellar Blu is on track to achieve $120-150 million in revenues for 2025, representing a significant growth driver for the overall commercial segment.

Gilat Defense maintained stable performance with revenue of $20.0 million, essentially flat compared to $20.2 million in Q2 2024. The segment continued to experience strong demand from defense customers across North America, Europe, Israel, and Asia-Pacific. Notable achievements included leveraging synergies with DataPath to win contracts with the Israeli Ministry of Defense and securing an up to $70 million U.S. Army Field Services award, positioning the segment for future growth.

Gilat Peru showed solid growth with revenue increasing 22% to $15.9 million from $13.1 million in the prior year period. The segment’s performance was highlighted by securing a major $60 million contract from Pronatel to expand broadband infrastructure to more than 800 public institutions. The company now operates all six regional projects and the new award significantly increases the recurring revenue backlog, providing visibility for future performance.

Across all segments, Gilat demonstrated its ability to capitalize on the growing demand for satellite communications solutions, particularly in multi-orbit environments. The company’s strategic focus on innovation, platform virtualization, and market expansion is clearly driving results across the diversified business portfolio.

Gilat’s strategic initiatives in Q2 2025 focused on strengthening its position as a leader in the multi-orbit satellite revolution and expanding its technological capabilities:

Platform Virtualization and NextGen Technology

• $40M Strategic Contract: Secured a major NRE project for the virtualized SkyEdge IV platform, representing a significant advancement in cloud-native, software-defined satellite communications
• Multi-Orbit Solutions: Continued development of integrated solutions that support both traditional GEO and new LEO/MEO satellite constellations
• Software-Defined Platform: Progressing toward a fully cloud-native, software-defined environment that provides greater flexibility and scalability

Stellar Blu Integration and IFC Market Expansion

• Successfully integrated Stellar Blu’s advanced ESA (Electronically Steered Antenna) technology
• Expanded presence in the rapidly growing In-Flight Connectivity market
• Leveraged combined expertise to pursue larger, more comprehensive projects
• Enhanced product portfolio with cutting-edge antenna technology for aviation applications

Defense and Security Solutions

• Advanced innovation across an integrated suite of defense solutions
• Strengthened position in secure, high-performance satellite communications
• Leveraged synergies with DataPath acquisition to win strategic contracts
• Invested in R&D and sales capabilities to lay foundation for future growth

Global Market Expansion

• Drove digital inclusion initiatives through Peru operations expertise
• Expanded international footprint in defense and commercial markets
• Developed region-specific solutions for emerging markets
• Enhanced local partnerships and market penetration strategies

The company’s strategic vision centers on capitalizing on the fundamental shift toward multi-orbit satellite networks, where traditional geostationary satellites are being complemented by new Low Earth Orbit (LEO) and Medium Earth Orbit (MEO) constellations. Gilat’s technology platform is uniquely positioned to support this transition through its flexible, software-defined architecture.

Management emphasized the importance of continued investment in R&D and strategic partnerships to maintain technological leadership. The company’s innovation pipeline includes advanced beamforming technologies, AI-driven network optimization, and next-generation ground segment solutions that will support the evolving satellite communications ecosystem.

Gilat’s balance sheet reflected the impact of the Stellar Blu acquisition while maintaining operational flexibility:

• Net Cash Position: $5.5 million at quarter-end, improved from $3.8 million in Q1 2025, though significantly lower than $118.2 million in Q4 2024 due to the Stellar Blu acquisition
• Stockholders’ Equity: $316 million, increased from $299.5 million in Q1 2025, demonstrating strong book value growth
• Working Capital Management: DSO improved to 60 days from 75 days in Q1 2025, indicating enhanced collection processes
• Cash Flow Generation: Positive cash from operations of $5.1 million compared to negative $6.6 million in Q1 2025

The reduction in net cash position primarily reflects the strategic investment in Stellar Blu, which provides access to the high-growth IFC market and advanced ESA technology. This acquisition is expected to generate significant returns through revenue synergies and market expansion opportunities.

The improvement in cash from operations during Q2 2025 demonstrates the company’s ability to generate positive cash flow from core business activities. Enhanced working capital management, including the improvement in DSO, reflects operational efficiency gains and better collection processes.

Gilat’s financial position provides adequate flexibility to pursue growth initiatives while maintaining operational stability. The company’s diversified revenue base across commercial, defense, and infrastructure markets provides natural hedging against sector-specific volatility.

Management continues to focus on optimizing capital allocation between organic growth investments, strategic acquisitions, and operational efficiency improvements. The strong equity base provides a solid foundation for future expansion and technology development initiatives.

Based on strong first-half performance, robust backlog, and healthy pipeline across all segments, Gilat raised its full-year 2025 guidance:

Updated 2025 Financial Guidance

• Revenue: $435-455 million, representing 46% year-over-year growth at the midpoint
• Adjusted EBITDA: $50-53 million, representing 22% year-over-year growth at the midpoint
• Previous guidance: Revenue $415-455 million, Adjusted EBITDA $47-53 million

Key Growth Drivers for 2025

• Stellar Blu Integration: Expected to contribute $120-150 million in revenues for 2025, significantly exceeding initial projections
• Defense Market Expansion: Strong pipeline of opportunities across global defense customers
• Commercial Platform Growth: Continued adoption of multi-orbit solutions by satellite operators
• Peru Infrastructure: New $60 million contract providing multi-year revenue visibility

Strategic Outlook

Management expressed confidence in Gilat’s positioning to capitalize on several key market trends:

• Accelerating adoption of multi-orbit satellite networks
• Growing demand for In-Flight Connectivity solutions
• Increased defense spending on secure satellite communications
• Expansion of broadband infrastructure in emerging markets

The company anticipates continued investment in research and development to maintain technological leadership in software-defined platforms and multi-orbit solutions. These investments are expected to drive long-term market share gains and margin expansion as the satellite communications industry evolves.

Gilat’s diversified business model across commercial, defense, and infrastructure markets provides resilience against economic cycles while positioning the company to benefit from secular growth trends in satellite communications. The raised guidance reflects management’s confidence in executing strategic initiatives and capturing market opportunities throughout 2025.