Gilat Satellite Networks Q4 Earnings Call Highlights

Gilat Satellite Networks (NASDAQ:GILT) reported fourth-quarter and full-year 2025 results that management characterized as strong, citing major year-over-year revenue growth and higher adjusted EBITDA as the company expanded in its commercial in-flight connectivity (IFC) business, increased defense activity, and advanced network upgrade work in Peru.

Financial results and segment performance

CEO Adi Sfadia said fourth-quarter revenue was $137 million, up 75% from the prior-year period, while full-year revenue rose to $451.7 million, an increase of 48% versus 2024, including 6% year-over-year organic growth. Adjusted EBITDA was $18.2 million in the fourth quarter, up 50% year-over-year, and $53.2 million for the full year, up 26%.

CFO Gil Benyamini said fourth-quarter growth was driven primarily by the in-flight connectivity vertical. By segment in Q4 2025:

• Commercial revenue: $75.1 million versus $37.0 million in Q4 2024, up 103%, mainly reflecting IFC and the contribution from Stellar Blu.
• Defense revenue: $33.3 million versus $29.4 million, up 14%.
• Peru revenue: $28.5 million versus $11.8 million, with the increase attributed to upgrade projects across four of the six regions where the company operates.

Gross margin in Q4 2025 was 28%, down from 40% a year earlier. Benyamini attributed the decline to lower margins at Stellar Blu as production ramps, plus $2.9 million of amortization of purchased intangible assets related to the acquisition. GAAP operating expenses rose to $25.3 million from $18.3 million, which the company said was driven by consolidation of Stellar Blu expenses, amortization of acquired intangibles, and stock-based compensation tied mainly to acquisitions.

GAAP operating income was $13.0 million compared with $12.8 million in Q4 2024. GAAP net income was $8.8 million, or $0.13 per diluted share, down from $11.8 million, or $0.21 per diluted share, which management linked primarily to higher financing costs associated with a loan used to finance the Stellar Blu acquisition and higher tax expense.

On a non-GAAP basis, the company reported Q4 non-GAAP operating income of $15.2 million versus $9.7 million a year earlier, and non-GAAP net income of $13.4 million, or $0.20 per diluted share, compared with $8.5 million, or $0.15 per diluted share.

Defense: new market expansion and order momentum

Sfadia said military forces are increasing reliance on resilient satellite connectivity for mobility and operations “in contested environments,” and described Gilat Defense as benefiting from long-term programs, upgrades, and “consistent SATCOM spending.” He said the defense business had a “record year” for sales in 2025, driven by demand from U.S. and allied defense customers for transportable, high-performance SATCOM solutions.

During the fourth quarter, management highlighted an entry into Earth observation with an approximately $10 million order for a direct downlink solution intended to enable rapid acquisition of satellite imagery and data to a transportable ground terminal. In response to a question about margin profile, Sfadia said Earth observation deals typically carry margins “give or take the average of Gilat,” which he described as 30% to 40%.

Management also pointed to traction in Israel, citing “significant orders across our defense portfolio,” and said increased resources, an expanded sales team, and higher R&D investment are strengthening the company’s position. Addressing concerns about U.S. budget dynamics, Sfadia said Gilat did not see an effect from a recent U.S. government shutdown and reported increased traction in the U.S., Israel, and Europe. He added that the company typically enters a year with roughly 50% to 60% of expected revenue already in backlog, providing visibility.

Commercial: IFC orders, SkyEdge IV, and Stellar Blu integration

In commercial markets, Sfadia said demand for advanced IFC continues to accelerate due to free Wi-Fi, rising passenger expectations for bandwidth, and adoption of NGSO and multi-orbit architectures. He described SkyEdge IV as a central growth driver and said Gilat received a $42 million order in the fourth quarter from a leading global satellite operator for a multi-orbit platform primarily supporting IFC.

Additional fourth-quarter commercial highlights included:

• Two new SkyEdge IV customers added in Asia-Pacific.
• A SkyEdge platform order of approximately $11 million from a regional satellite operator to provide services over VHTS satellites.
• More than $16 million in orders for Wavestream solid-state power amplifiers to support LEO constellations.
• A $7 million order for Gilat Wavestream AeroStream BUCs for next-generation IFC installations on commercial aircraft.

On Stellar Blu, Sfadia said the business is now fully integrated into Gilat’s operations and production is ramping. During the quarter, the company delivered approximately 190 terminals, and management said it expects increased deliveries and improved margins in coming quarters. Sfadia said more than 420 aircraft are online with the company’s ESA terminal and that over 1 million passengers are being served each week with its modems and ESA solutions.

Responding to questions, Sfadia said Stellar Blu did not attain an airline-related milestone tied to $120 million in new backlog by the end of December, achieving “slightly above half of it,” with a large order expected to slip into 2026. He said the timing was not expected to affect 2026 revenue because 2026 revenue is “already in the backlog,” noting a nine- to 12-month lead time on major terminal components and that the order is expected to be delivered mainly in 2027.

Management said Stellar Blu revenue in 2025 was about $127 million, within a previously communicated range of $120 million to $150 million. For 2026, Sfadia said the company expects “double-digit growth in unit deliveries,” while noting that the business is integrated and harder to break out as a standalone P&L.

Peru: network upgrades and 2026 expectations

Sfadia said Gilat Peru signed more than $85 million in agreements from PRONATEL in 2025 for upgrades of four regional networks and that the projects are progressing ahead of schedule. In Q&A, he said the company is in discussions to upgrade the remaining two networks and believes it can close those agreements before an election expected in the second quarter. He added that Peru is discussing large RFPs for internet connectivity—terrestrial and satellite—and Gilat expects to participate, with management expecting most RFP activity in the first and fourth quarters of the year.

In the company’s segment outlook, Benyamini projected Peru segment revenue of $60 million to $65 million in 2026, representing an 11% decrease at the midpoint due to lower construction revenue and a shift to an operations base compared with 2025.

Balance sheet actions, M&A focus, and 2026 guidance

Benyamini said the company strengthened liquidity through capital raises in September and December 2025 totaling $166 million from institutional and accredited investors in Israel. In December 2025, Gilat also repaid a $60 million loan that had financed the Stellar Blu acquisition.

For cash flow, Benyamini said Gilat used about $6.3 million of cash from operating activities in the fourth quarter and generated approximately $21 million of operating cash flow for the full year. As of December 31, 2025, total cash, cash equivalents, restricted cash, and short-term deposits were $185.4 million, or approximately $183.4 million net of loans. Shareholders’ equity totaled $500 million at year-end, up from $391 million as of September 30, 2025, primarily from the capital raise and earnings.

Looking ahead, management guided for 2026 revenue of $500 million to $520 million and adjusted EBITDA of $61 million to $66 million. By segment, the company expects:

• Commercial: $315 million to $335 million
• Defense: $115 million to $130 million
• Peru: $60 million to $65 million

On strategy, Sfadia said M&A will be a key focus, primarily emphasizing defense-related capabilities. In Q&A, he said the company is focused on acquiring businesses—rather than only technology—with potential to be significant to revenues and “accretive as soon as possible,” and that it is also evaluating adjacent areas such as radar solutions and electronic warfare.

About Gilat Satellite Networks (NASDAQ:GILT)

Gilat Satellite Networks is a leading provider of satellite-based broadband connectivity solutions, specializing in the design, development and deployment of ground segment equipment and network services. The company’s core offerings include Very Small Aperture Terminal (VSAT) modems and hub systems, network management software, and end-to-end satellite communication platforms. These technologies enable broadband Internet access, enterprise networking, and cellular backhaul in regions where terrestrial infrastructure is limited or non-existent.

Founded in 1987 and headquartered in Petah Tikva, Israel, Gilat has established a track record of innovation in satellite communications.