Gilat's Q1 Earnings Miss Despite Higher Revenues, Shares Slide 10%

Gilat Satellite Networks Ltd. GILT reported first-quarter 2025 adjusted earnings per share (EPS) of 3 cents compared with 11 cents a year ago. The bottom line lagged the Zacks Consensus Estimate by 57.14%.

Revenues for the quarter reached $92 million, up 21% from a year ago. The expansion was primarily attributable to the Commercial segment, driven by the acquisition of Stellar Blu, along with continued growth in the Defense segment. These gains were partially offset by a decline in revenues from the Peru segment. The Zacks Consensus Estimate was pegged at $107 million.

The Gilat Defense unit is gaining healthy momentum, driven by increased global investment in secure, mission-critical communication technologies. In a world increasingly shaped by geopolitical uncertainties, nations and agencies are expanding their communication infrastructure to ensure security, resilience and operational agility. Gilat’s wide-ranging portfolio positions it well to meet this rising demand, making defense a more prominent revenue stream.

On the commercial side, the IFC business is expanding steadily, backed by strong customer engagement and execution. A major highlight is the ramp-up of Gilat Stellar Blu and its Sidewinder electronically steered array (ESA) product. Sidewinder is now installed on more than 150 aircraft, garnering positive feedback and increased interest from new customers.

Gilat Satellite Networks Ltd. Price, Consensus and EPS Surprise

Gilat Satellite Networks Ltd. price-consensus-eps-surprise-chart | Gilat Satellite Networks Ltd. Quote

New applications for Sidewinder, such as ISR and VVIP aviation, are already in development. Furthermore, efforts are underway to enable OEM installations and broaden modem compatibility, making Sidewinder a versatile, multi-orbit IFC solution poised for mass adoption.

However, Gilat is facing new challenges due to global macroeconomic uncertainty and changing international trade policies and tariffs, which are negatively impacting its business environment.

In response to the mixed performance, GILT’s shares plunged 10.3% in trading and closed the session at $5.99 on May 19, 2025. Shares of the company have soared 15.1% in the past six months against the Zacks Satellite and Communication industry's decline of 9.5%. (See the Zacks  Earnings Calendar to stay ahead of market-making news.)

Segmental Results

As part of its growth strategy, Gilat has restructured its organization into three primary divisions effective Jan. 1, 2025. It will present financial results under three categories - Gilat Defense, Gilat Commercial and Gilat Peru. 

Commercial revenues (70% of first-quarter net sales) rose 56% year over year to $64.2 million, fueled by the Stellar Blu acquisition, adding $25 million in revenues, partly offset by ending its operations in Russia in 2024.

Defense revenues (25%) surged 34% year over year to $23 million on the back of strong delivery volumes to its defense customers in the United States and Asia.

Peru revenues (5%) totaled $4.8 million, down from $17.7 million in the prior-year quarter. The downside resulted from delays in project renewals, postponed major project bids and slower advancement in expanding current projects.

Other Details

Non-GAAP gross margin fell to 31.7% from 37.8%.

Non-GAAP operating income for the quarter was $5.2 million compared with $6.6 million in the previous-year quarter.

Non-GAAP operating expenses totaled $24.1 million, up 8.5% year over year. 

Adjusted EBITDA declined 18.3% year over year to $7.6 million, hurt by the $3.6 million loss from Gilat Stellar Blu.

Cash Flow & Liquidity

In the quarter under discussion, GILT utilized $6.6 million of net cash from operating activities against $4.2 million generated in the prior-year quarter. The utilization was to cover Stellar Blu's working capital needs during its ramp-up phase and to pay for acquisition-related expenses.

As of March 31, 2025, the company had $63.8 million in cash and cash equivalents compared with $119.4 million as of Dec. 31, 2024.

2025 Guidance Reiterated

Management continues to project 2025 revenues between $415 million and $455 million, with adjusted EBITDA expected to range from $47 million to $53 million.

GILT’s Zacks Rank

Gilat currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performance of Other Companies

Iridium Communications IRDM reported EPS of 27 cents for the first quarter of 2025, beating the Zacks Consensus Estimate by 22.7%. The bottom line compared favorably with the prior-year quarter's figure of 16 cents.

In the past year, IRDM shares have declined 19.1%.

Globalstar, Inc. GSAT reported a loss per share of 10 cents for the first quarter of 2025, missing the Zacks Consensus Estimate by 43%. The bottom line compared favorably with the prior-year quarter's loss of 15 cents.

In the past year, GSAT shares have gained 4.7%.

EchoStar Corporation SATS reported a loss per share of 71 cents for the first quarter of 2025, beating the Zacks Consensus Estimate by 21%. The bottom line compared unfavorably with the prior-year quarter's loss of 40 cents.

In the past year, SATS shares have gained 21.9%.

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