Q4 Revenue of $75.6 million, GAAP Operating Income of $2.9 million and Adjusted EBITDA of $9.4 million

2023 Revenue of $266.1 million, up 11% year over year, GAAP Operating Income of $28.1 million and Adjusted EBITDA of $36.4 million, up 44% YoY

PETAH TIKVA, Israel, Feb. 26, 2024 (GLOBE NEWSWIRE) -- Gilat Satellite Networks Ltd. (NASDAQ:GILT, TASE: GILT))), a worldwide leader in satellite networking technology, solutions and services, today reported its unaudited results for the fourth quarter and full year ended December 31, 2023.

Fourth Quarter 2023 Financial Highlights

Revenue of $75.6 million, up 4% compared with $72.6 million in Q4 2022;
GAAP operating income of $2.9 million, compared with $6.1 million in Q4 2022;
Non-GAAP operating income of $6.1 million, compared with $7.1 million in Q4 2022;
GAAP net income of $3.4 million, or $0.06 per diluted share, compared with GAAP net loss of $6.0 million, or $0.11 loss per share, in Q4 2022;
Non-GAAP net income of $6.5 million, or $0.11 per diluted share, compared with $7.9 million, or $0.14 per diluted share, in Q4 2022;
Adjusted EBITDA of $9.4 million compared with $10.1 million in Q4 2022.

Full year 2023 Financial Highlights

Revenue of $266.1 million, up 11% compared with $239.8 million in 2022;
GAAP operating income of $28.1 million, almost tripled compared to $10.0 million in 2022;
Non-GAAP operating income of $23.5 million, up 73% compared with $13.6 million in 2022;
GAAP net income of $23.5 million, or $0.41 per diluted share, compared with GAAP net loss of $5.9 million in 2022, or $0.10 loss per share;
Non-GAAP net income of $19.9 million, or $0.35 per diluted share, almost doubled compared to non-GAAP net income of $10.6 million or $0.19 per diluted share in 2022;
Adjusted EBITDA was $36.4 million, up 44% compared with adjusted EBITDA of $25.2 million in 2022.

Forward-Looking Expectations

Management's financial guidance for 2024 is for revenues of between $305 to $325 million, representing year-over-year growth of 18% at the midpoint. GAAP operating income is expected to be between $15 to $19 million, and Adjusted EBITDA is expected to be between $40 to $44 million, representing year-over-year growth of 15% at the midpoint.

Management Commentary

Adi Sfadia, Gilat's CEO, commented: "We are pleased with the financial results, capping off a strong 2023 with $266 million in revenue, up 11% over last year, and very strong growth in EBITDA at $36.4 million, up 44% over last year. This demonstrates the operating leverage inherent to our business model combined with a favorable product revenue mix during 2023.

"Furthermore, 2023 was also particularly successful from a strategic perspective. Looking back, we have a lot to be proud of. In mid-November, we concluded the acquisition of DataPath in the US, which brings several synergies for both businesses and we see DataPath as a significant long-term growth asset for Gilat in the defense sector. Moreover, our strong cash position is allowing us to explore additional inorganic growth opportunities and we are currently exploring several of these opportunities.

Mr. Sfadia added, "Throughout the year, we achieved highly strategic contract wins with market-dominating satellite operators, and we extended Gilat's market leadership in satellite-based cellular backhaul and In-Flight Connectivity, including a very significant Electronic Steered Antenna (ESA) award for business aviation.

Mr. Sfadia concluded, "Our ongoing success is due to the continued growing market interest in the satellite communications sector in general and for our leading technological solutions in particular. We see these favorable trends continuing into 2024 and therefore our expectations for the year ahead are for continued strong growth in revenue and profit."

Key Recent Announcements

Gilat Awarded $10 Million Follow-On Order from the US Department of Defense
Gilat Awarded Multimillion-Dollar Defense Satellite Connectivity Project
Gilat Awarded $17 Million by Pronatel for Expansion of Regional Telecommunications Project in Peru
Gilat Announces New Brand Identity Embracing the Company's Commitment to the New Space Revolution
Gilat Awarded Approximately $3M for a Satellite Connectivity Project for a National Police Force
US Army Awards Nearly $20 Million Contract Extension to Gilat to Sustain Anytime, Anywhere Satellite Connectivity
Gilat Completes Acquisition of DataPath, Inc.

Conference Call Details

Gilat's management will discuss its fourth quarter and full year 2023 results and business achievements and participate in a question-and-answer session:

Date:	Monday, February 26, 2024
Start:	09:30 AM EST / 16:30 IST
Dial-in:	US: 1-888-407-2553
	International: +972-3-918-0609

A simultaneous webcast of the conference call will be available on the Gilat website at www.gilat.com and through this link: https://veidan.activetrail.biz/gilatq4-2023

The webcast will also be archived for a period of 30 days on the Company's website and through the link above.

Unaudited Results

The attached summary unaudited financial statements represent the most current information available to management. Audited results will be reported in our annual report on Form 20-F.

Non-GAAP Measures

The attached summary unaudited financial statements were prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). To supplement the consolidated financial statements presented in accordance with GAAP, the Company presents non-GAAP presentations of gross profit, operating expenses, operating income, income before taxes on income, net income (loss), Adjusted EBITDA, and earnings (losses) per share. The adjustments to the Company's GAAP results are made with the intent of providing both management and investors with a more complete understanding of the Company's underlying operational results, trends, and performance. Non-GAAP financial measures mainly exclude, if and when applicable, the effect of non-cash stock-based compensation expenses, amortization of purchased intangibles, amortization of intangible assets related to acquisition transactions, lease incentive amortization, impairment of held for sale asset, other expenses, one-time changes of deferred tax assets, one-time tax expense related to the release of historical tax-trapped earnings, other operating expenses (income), net and income tax effect on the relevant adjustments.

Adjusted EBITDA is presented to compare the Company's performance to that of prior periods and evaluate the Company's financial and operating results on a consistent basis from period to period. The Company also believes this measure, when viewed in combination with the Company's financial results prepared in accordance with GAAP, provides useful information to investors to evaluate ongoing operating results and trends. Adjusted EBITDA, however, should not be considered as an alternative to operating income or net income for the period and may not be indicative of the historic operating results of the Company; nor is it meant to be predictive of potential future results. Adjusted EBITDA is not a measure of financial performance under GAAP and may not be comparable to other similarly titled measures for other companies. Reconciliation between the Company's net income (loss) and adjusted EBITDA is presented in the attached summary financial statements.

Non-GAAP presentations of gross profit, operating expenses, operating income, income before taxes on income, net income, adjusted EBITDA and earnings per share should not be considered in isolation or as a substitute for any of the consolidated statements of operations prepared in accordance with GAAP, or as an indication of Gilat's operating performance or liquidity.

About Gilat

Gilat Satellite Networks Ltd. (NASDAQ:GILT, TASE: GILT))) is a leading global provider of satellite-based broadband communications. With over 35 years of experience, we create and deliver deep technology solutions for satellite, ground and new space connectivity and provide comprehensive, secure end-to-end solutions and services for mission-critical operations, powered by our innovative technology. We believe in the right of all people to be connected and are united in our resolution to provide communication solutions to all reaches of the world.

Our portfolio includes a diverse offering to deliver high value solutions for multiple orbit constellations with very high throughput satellites (VHTS) and software defined satellites (SDS). Our offering is comprised of a cloud-based platform and high-performance satellite terminals; high performance Satellite On-the-Move (SOTM) antennas; highly efficient, high-power Solid State Power Amplifiers (SSPA) and Block Upconverters (BUC) and includes integrated ground systems for commercial and defense, field services, network management software, and cybersecurity services.

Gilat's comprehensive offering supports multiple applications with a full portfolio of products and tailored solutions to address key applications including broadband access, mobility, cellular backhaul, enterprise, defense, aerospace, broadcast, government, and critical infrastructure clients all while meeting the most stringent service level requirements. For more information, please visit: www.gilat.com

Certain statements made herein that are not historical are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. The words "estimate", "project", "intend", "expect", "believe" and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties. Many factors could cause the actual results, performance or achievements of Gilat to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic and business conditions, inability to maintain market acceptance to Gilat's products, inability to timely develop and introduce new technologies, products and applications, rapid changes in the market for Gilat's products, loss of market share and pressure on prices resulting from competition, introduction of competing products by other companies, inability to manage growth and expansion, loss of key OEM partners, inability to attract and retain qualified personnel, inability to protect the Company's proprietary technology and risks associated with Gilat's international operations and its location in Israel, including those related to the current terrorist attacks by Hamas, and the war and hostilities between Israel and Hamas and Israel and Hezbollah. For additional information regarding these and other risks and uncertainties associated with Gilat's business, reference is made to Gilat's reports filed from time to time with the Securities and Exchange Commission. We undertake no obligation to update or revise any forward-looking statements for any reason.

Contact:

Gilat Satellite Networks

Hagay Katz, Chief Products and Marketing Officer

hagayk@gilat.com

Gilat Satellite Networks

Mayrav Sher, Head of Finance and Investor Relations

mayravs@gilat.com

EK Global IR

Ehud Helft, Managing Partner

ehud@ekgir.com

GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
U.S. dollars in thousands (except share and per share data)
	Twelve months ended						Three months ended
	December 31,						December 31,
		2023			2022			2023		2022
	Unaudited			Audited			Unaudited

Revenues	$	266,090		$	239,840		$	75,612	$	72,627
Cost of revenues		161,145			152,932			46,692		44,911

Gross profit		104,945			86,908			28,920		27,716

Research and development expenses, net		41,173			35,640			11,624		10,098
Selling and marketing expenses		25,243			21,694			7,119		5,970
General and administrative expenses		19,215		*)	18,412			6,312	*)	5,198
Impairment of held for sale asset		-			771			-		53
Other operating expenses (income), net		(8,771	)	*)	438			986	*)	327

Total operating expenses		76,860			76,955			26,041		21,646

Operating income		28,085			9,953			2,879		6,070

Financial income (expenses), net		109			(2,818	)		1,196		(102	)

Income before taxes on income		28,194			7,135			4,075		5,968

Taxes on income		4,690			13,063			628		11,988

Net income (loss)	$	23,504		$	(5,928	)	$	3,447	$	(6,020	)

Earnings (losses) per share (basic and diluted)	$	0.41		$	(0.10	)	$	0.06	$	(0.11	)

Weighted average number of shares used in computing earnings (losses) per share
Basic		56,668,999			56,591,994			56,820,774		56,610,404
Diluted		56,672,537			56,591,994			56,820,774		56,610,404

*) Reclassified

GILAT SATELLITE NETWORKS LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED STATEMENTS OF INCOME (LOSS)
FOR COMPARATIVE PURPOSES
U.S. dollars in thousands (except share and per share data)

	Three months ended							Three months ended
	December 31, 2023							December 31, 2022
	GAAP		*Adjustments ()**			Non-GAAP		GAAP			*Adjustments ()**			Non-GAAP
	Unaudited							Unaudited

Gross profit	$	28,920	$	617		$	29,537	$	27,716		$	73		$	27,789
Operating expenses		26,041		(2,615	)		23,426		21,646			(943	)		20,703
Operating income		2,879		3,232			6,111		6,070			1,016			7,086
Income before taxes on income		4,075		3,232			7,307		5,968			1,016			6,984
Net income (loss)	$	3,447	$	3,097		$	6,544	$	(6,020	)	$	13,896		$	7,876

Basic earnings (losses) per share	$	0.06	$	0.06		$	0.12	$	(0.11	)	$	0.25		$	0.14

Diluted earnings (losses) per share	$	0.06	$	0.05		$	0.11	$	(0.11	)	$	0.25		$	0.14


Weighted average number of shares used in computing earnings (losses) per share
Basic		56,820,774					56,820,774		56,610,404						56,610,404
Diluted		56,820,774					56,987,939		56,610,404						56,623,366


(*) Adjustments reflect the effect of non-cash stock-based compensation expenses as per ASC 718, amortization of intangible assets related to acquisition transactions, impairment of held for sale asset, other operating expenses (income), net, one-time tax expense related to the release of historical tax-exempt earnings and income tax effect on adjustments which is calculated using the relevant effective tax rate.


	Three months ended							Three months ended
	December 31, 2023							December 31, 2022
			Unaudited								Unaudited

GAAP net income (loss)			$	3,447							$	(6,020	)

Gross profit
Non-cash stock-based compensation expenses				129								73
Amortization of intangible assets related to acquisition transactions				448								-
Others				40								-
				617								73
Operating expenses
Non-cash stock-based compensation expenses				1,458								513
Amortization of intangible assets related to acquisition transactions				162								50
Impairment of held for sale asset				-								53
Other operating expenses (income), net				986								327
Others				9								-
				2,615								943

Taxes on income				(135	)							12,880

Non-GAAP net income			$	6,544							$	7,876

GILAT SATELLITE NETWORKS LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED STATEMENTS OF INCOME (LOSS)
FOR COMPARATIVE PURPOSES
U.S. dollars in thousands (except share and per share data)

	Twelve months ended							Twelve months ended
	December 31, 2023							December 31, 2022
	GAAP		*Adjustments ()**			Non-GAAP		GAAP			*Adjustments ()**			Non-GAAP
	Unaudited							Audited			Unaudited

Gross profit	$	104,945	$	895		$	105,840	$	86,908		$	303		$	87,211
Operating expenses		76,860		5,434			82,294		76,955			(3,337	)		73,618
Operating income		28,085		(4,539	)		23,546		9,953			3,640			13,593
Income before taxes on income		28,194		(4,539	)		23,655		7,135			3,640			10,775
Net income (loss)	$	23,504	$	(3,597	)	$	19,907	$	(5,928	)	$	16,478		$	10,550

Earnings (losses) per share (basic and diluted)	$	0.41	$	(0.06	)	$	0.35	$	(0.10	)	$	0.29		$	0.19


Weighted average number of shares used in computing earnings (losses) per share
Basic		56,668,999					56,668,999		56,591,994						56,591,994
Diluted		56,672,537					56,784,601		56,591,994						56,650,362


(*) Adjustments reflect the effect of non-cash stock-based compensation expenses as per ASC 718, amortization of intangible assets related to acquisition transactions, impairment of held for sale asset, other operating expenses (income), net, one-time tax expense related to the release of historical tax-exempt earnings and income tax effect on adjustments which is calculated using the relevant effective tax rate.


	Twelve months ended							Twelve months ended
	December 31, 2023							December 31, 2022
			Unaudited								Unaudited

GAAP net income (loss)			$	23,504							$	(5,928	)

Gross profit
Non-cash stock-based compensation expenses				407								293
Amortization of intangible assets related to acquisition transactions				448								10
Others				40								-
				895								303
Operating expenses
Non-cash stock-based compensation expenses				3,016								1,927
Amortization of intangible assets related to acquisition transactions				312								201
Impairment of held for sale asset				-								771
Other operating expenses (income), net				(8,771	)							438
Others				9								-
				(5,434	)							3,337

Taxes on income				942								12,838

Non-GAAP net income			$	19,907							$	10,550

GILAT SATELLITE NETWORKS LTD.
SUPPLEMENTAL INFORMATION
U.S. dollars in thousands

ADJUSTED EBITDA:

	Twelve months ended						Three months ended
	December 31,						December 31,
		2023			2022			2023			2022
	Unaudited						Unaudited

GAAP net income (loss)	$	23,504		$	(5,928	)	$	3,447		$	(6,020	)
Adjustments:
Financial expenses (income), net		(109	)		2,818			(1,196	)		102
Taxes on income		4,690			13,063			628			11,988
Non-cash stock-based compensation expenses		3,423			2,220			1,587			586
Impairment of held for sale asset		-			771			-			53
Depreciation and amortization (*)		13,627			11,832			3,862			3,063
Other operating expenses (income), net		(8,771	)		438			986			327
Others		49			-			49			-

Adjusted EBITDA	$	36,413		$	25,214		$	9,363		$	10,099

(*) Including amortization of lease incentive

SEGMENT REVENUES:
	Twelve months ended						Three months ended
	December 31,						December 31,
		2023			2022			2023			2022
	Unaudited			Audited			Unaudited

Satellite Networks	$	168,527		$	120,381		$	53,517		$	36,388
Integrated Solutions		46,133			61,376			9,503			16,329
Network Infrastructure and Services		51,430			58,083			12,592			19,910

Total revenues	$	266,090		$	239,840		$	75,612		$	72,627

GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands

	December 31,			December 31,
		2023			2022
	Unaudited			Audited

ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	103,961		$	86,591
Restricted cash		736			541
Trade receivables, net		44,725			50,644
Contract assets		28,327			24,971
Inventories		38,525			33,024
Other current assets		24,299			19,283

Total current assets		240,573			215,054

LONG-TERM ASSETS:
Restricted cash		54			13
Long-term contract assets		9,283			11,149
Severance pay funds		5,737			5,947
Deferred taxes		11,484			18,265
Operating lease right-of-use assets		5,105			3,891
Other long-term assets		9,544			10,737

Total long-term assets		41,207			50,002

PROPERTY AND EQUIPMENT, NET		74,315			76,578

INTANGIBLE ASSETS, NET		16,051			309

GOODWILL		54,740			43,468

TOTAL ASSETS	$	426,886		$	385,411

GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED BALANCE SHEETS (Cont.)
U.S. dollars in thousands

	December 31,			December 31,
		2023			2022
	Unaudited			Audited

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Short-term loan	$	7,453		$	-
Trade payables		13,873			20,668
Accrued expenses		51,906			50,356
Advances from customers and deferred revenues		34,495			30,531
Operating lease liabilities		2,426			1,941
Other current liabilities		16,431			22,291

Total current liabilities		126,584			125,787

LONG-TERM LIABILITIES:
Long-term loan		2,000			-
Accrued severance pay		6,537			6,580
Long-term advances from customers and deferred revenues		1,139			1,041
Operating lease liabilities		3,022			1,890
Other long-term liabilities		12,916			5,988

Total long-term liabilities		25,614			15,499

SHAREHOLDERS' EQUITY:
Share capital - ordinary shares of NIS 0.2 par value		2,733			2,711
Additional paid-in capital		937,591			932,086
Accumulated other comprehensive loss		(5,315	)		(6,847	)
Accumulated deficit		(660,321	)		(683,825	)

Total shareholders' equity		274,688			244,125

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	426,886		$	385,411

GILAT SATELLITE NETWORKS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

	Twelve months ended						Three months ended
	December 31,						December 31,
		2023			2022			2023			2022
	Unaudited			Audited			Unaudited
Cash flows from operating activities:
Net income (loss)	$	23,504		$	(5,928	)	$	3,447		$	(6,020	)
Adjustments required to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		13,402			11,608			3,805			3,004
Capital gain from sale of property		(2,084	)		-			-			-
Impairment of held for sale asset		-			771			-			53
Stock-based compensation		3,423			2,220			1,587			586
Accrued severance pay, net		167			136			12			44
Deferred taxes, net		2,662			(627	)		(1,203	)		(2,450	)
Decrease (increase) in trade receivables, net		13,448			(11,162	)		9,561			1,108
Decrease (increase) in contract assets		(1,694	)		2,481			(7,804	)		4,771
Decrease (increase) in other assets and other adjustments (including short-term, long-term and effect of exchange rate changes on cash and cash equivalents)		(351	)		(3,445	)		(3,949	)		5,208
Decrease (increase) in inventories		(2,387	)		(5,416	)		3,798			614
Decrease in trade payables		(7,635	)		(259	)		(2,314	)		(4,574	)
Increase in accrued expenses		735			549			3,517			2,316
Increase (decrease) in advance from customers and deferred revenues		803			5,929			(1,843	)		(1,468	)
Increase (decrease) in other liabilities		(12,049	)		13,957			1,343			13,592
Net cash provided by operating activities		31,944			10,814			9,957			16,784

Cash flows from investing activities:
Purchase of property and equipment		(10,746	)		(12,793	)		(2,090	)		(3,568	)
Proceeds from short-term deposits		-			2,159			-			-
Investment in financial instrument		-			(1,536	)		-			-
Acquisitions of subsidiary, net of cash acquired		(4,107	)		-			(4,107	)		-
Receipts from sales of properties		2,168			4,006			-			4,006
Net cash provided by (used in) investing activities		(12,685	)		(8,164	)		(6,197	)		438

Cash flows from financing activities:
Repayment of short-term loan		(1,590	)		-			(1,590	)		-
Net cash used in financing activities		(1,590	)		-			(1,590	)		-

Effect of exchange rate changes on cash, cash equivalents and restricted cash		(63	)		32			2,288			47

Increase in cash, cash equivalents and restricted cash		17,606			2,682			4,458			17,269

Cash, cash equivalents and restricted cash at the beginning of the period		87,145			84,463			100,293			69,876

Cash, cash equivalents and restricted cash at the end of the period	$	104,751		$	87,145		$	104,751		$	87,145

Gilat Presents Fourth Quarter and Full Year 2023 Results