Gilat Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Revenue: $122.7 million, up 17% year-over-year from $105 million in Q2 2025.

Adjusted EBITDA: $15.4 million, a 31% increase from $11.8 million in Q2 2025.

First Half 2026 Revenue: $233.1 million; Adjusted EBITDA: $30.5 million.

GAAP Net Income: $8.1 million, down from $9.8 million in Q2 2025.

Non-GAAP Net Income: $15.6 million, compared to $12 million in Q2 2025.

Gross Margin: GAAP gross margin at 30%; Non-GAAP gross margin at 32%.

Operating Cash Flow: Used approximately $1.9 million, reflecting working capital timing.

Liquidity Position: $159 million in cash and equivalents.

Days Sales Outstanding (DSO): 110 days, in line with expectations.

2Strategic Updates and Business Highlights

Acquisition Announcement: Signed a definitive agreement to acquire most of Comtech's Satellite and Space Communications segment, expected to close by year-end, which will significantly enhance Gilat's Defense revenues.

Defense Segment Growth: Received $11 million in orders from the U.S. Department of War and multimillion-dollar orders from European ministries, highlighting strong demand for SATCOM solutions.

Commercial Segment Performance: Achieved $83 million in revenue, a 20% increase, driven by In-Flight Connectivity (IFC) orders, including $43 million for Sidewinder ESA terminals.

Peru Operations: Continued progress in social inclusion programs and infrastructure upgrades, with a strong backlog and pipeline for future projects.

3Forward Guidance and Outlook

2026 Revenue Guidance: Reiterated guidance of $500 million to $520 million, representing 13% growth year-over-year at the midpoint.

Adjusted EBITDA Guidance: Expected between $61 million and $66 million, indicating a 19% growth at the midpoint.

Market Dynamics: Continued demand for resilient connectivity and multi-orbit networks is expected to drive growth, particularly in Defense and IFC sectors.

4Bad News, Challenges, or Points of Concern

Gross Margin Pressure: A slight decrease in gross margins attributed to less favorable deal mix, particularly in the Commercial segment.

Operating Expenses: Anticipated increase of $3 million to $5 million in operating expenses due to currency fluctuations, which may impact margins in the second half.

Competitive Landscape: Concerns regarding potential uncertainty among customers of Hughes, a competitor currently in bankruptcy, which may present both risks and opportunities.

5Notable Q&A Insights

Impact of Hughes Bankruptcy: Gilat sees potential opportunities to capture market share as customers may seek alternatives due to Hughes’ Chapter 11 status.

Stellar Blu Update: The company did not meet certain milestone payments but is now free from earn-out obligations, focusing on cost reductions and deployment.

Defense Segment Trajectory: The Defense segment is expected to see significant growth in the second half, supported by a strong backlog.

UAV Product Development: The new Ka-band Viper antenna is designed to support various UAV applications, with demand anticipated from both small and medium UAVs.

Commercial Market Trends: Continued traction in the IFC sector, especially in regions with low penetration like Asia Pacific and Latin America. Overall, Gilat's Q2 2026 results reflect strong growth across its segments, strategic advancements through acquisitions, and a positive outlook despite some challenges related to margins and operating expenses.