Gilat Satellite Networks Ltd. Q4 FY2024 earnings call

• Acquisitions: Closing of Stellar Blu acquisition on January 6, 2025, strengthening IFC market leadership. Acquisition of DataPath in 2023, contributing to Gilat Defense.
• Segment Changes: New organizational structure into 3 divisions (Gilat Defense, Gilat Commercial, Gilat Peru) to focus on specific markets: defense, commercial (including IFC), and Peru's digital inclusion.
• Q4 Highlights: Q4 2024 revenue $78.1 million, full-year revenue $305.4 million (15% YoY growth). Adjusted EBITDA Q4 $12.1 million, full-year $42.2 million (16% YoY growth). Stellar Blu shipped over 125 multi-orbit ESA aero terminals, received $19 million orders for network equipment. Defense division secured key deals, including $9 million in Q4 from U.S. DoD and international. Gilat Peru secured $20 million in orders, focusing on bridging digital divide.

Gilat Defense: Acquired DataPath in 2023, with Q4 2024 revenues including approximately $9 million in orders from U.S. DoD and international defense organizations. 2024 was the first full year of DataPath operating under Gilat. Gilat Commercial: Q4 2024 revenues for Integrated Solutions were $17.3 million (up from $9.5 million in Q4 2023, driven by defense vertical). Satellite Networks segment had $49.1 million in Q4 2024 (down from $53.5 million in Q4 2023 due to termination of Russia activity). Network Infrastructure and Services segment had $11.8 million in Q4 2024 (down from $12.6 million in Q4 2023). The acquisition of Stellar Blu in January 2025 enhanced capabilities in the IFC market. Gilat Peru: Secured $20 million in orders in 2024, focused on digital inclusion in Peru, bridging the digital divide in underserved communities.

• 2025 revenue guidance: $415 million to $455 million.
• 2025 adjusted EBITDA guidance: $47 million to $53 million.
• Stellar Blu's contribution is included in overall guidance. Defense division expects growth with R&D and marketing investments planned, anticipating significant improvement in 2026 and beyond.

• Forward-looking statements involve risks, uncertainties, and contingencies beyond Gilat's control, which may cause actual results to differ from anticipated. Risks include acquisition integration challenges, market competition, regulatory changes, and geopolitical factors affecting defense and commercial segments.

Q: Regarding Stellar Blu guidance, is it still relevant?

A: Yes, included in overall guidance.

Q: Details on costs related to new organizational structure?

A: Website has a short presentation, and unaudited high-level financials for 2023 and 2024 are provided.

Q: Discussions with IRIS2?

A: Initial discussions with the consortium are friendly. IRIS2 issued RFIs in mid-2024, with awards expected before end of year and agreements by early 2026, but likely delayed.

Q: Trends in defense vertical?

A: Strong growth expected, with acquisition of DataPath, pipeline increasing for portable and transportable solutions, leveraging relationships with satellite operators like SES and Intelsat.

Q: Peru revenue guidance?

A: Slight decline in 2025 due to renewal delays, but long-term growth expected as most revenues are long-term.

Q: Production ramp at Stellar Blu?

A: Q4 delivered around 75 units, systems installed and performing well, expect volume ramp in first half of 2025.

Q: R&D spending in defense?

A: Significant increase, focusing on new modems, security features, next-gen modems, UAV antennas, with R&D allocation to defense being a few million dollars.

Q: Outlook for SkyEdge IV in commercial side?

A: Slight flattish year due to satellite launch delays, but expect growth from virtual/cloud-based solutions once satellites launch.