Financial Data and Key Metrics Changes - Q1 2025 revenues reached $92 million, a 21% increase year over year from $76.1 million in Q1 2024 [8][28] - Adjusted EBITDA for Q1 2025 was $7.6 million, with an organic adjusted EBITDA of $11.2 million, representing a 20% year over year increase [8][33] - GAAP net loss for Q1 2025 was $6 million, or a loss per share of $0.10, compared to a net income of $5 million, or diluted income per share of $0.09 in Q1 2024 [32][33] Business Line Data and Key Metrics Changes - Commercial segment revenues for Q1 2025 were $64.2 million, a 56% increase from $41.2 million in Q1 2024, primarily due to the acquisition of Stellar Blue [28] - Defense segment revenues increased by 34% to $23 million in Q1 2025 from $17.2 million in Q1 2024, driven by high deliveries to defense customers in the U.S. and Asia [29] - Peru segment revenues declined to $4.8 million in Q1 2025 from $17.7 million in Q1 2024, attributed to delays in project renewals and slower progress on existing projects [29][30] Market Data and Key Metrics Changes - The company is seeing increased demand from diverse geographical markets, including North America, Europe, and Asia Pacific, particularly in the defense sector [12][13] - In Europe, there is a growing demand for secure high-performance communication over satellites, driven by increased defense budgets [12][13] Company Strategy and Development Direction - The company is focused on accelerating revenues in 2025, capitalizing on the acquisition of Stellar Blue and strong demand for Gilat Defense Solutions [7][23] - Increased investment in R&D and sales and marketing for Gilat Defense is planned for 2025 to enhance product offerings and market presence [16][24] - The company aims to leverage its diverse product portfolio to support the evolution of satellite communications and address the digital divide [21][22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of global economic uncertainty and shifting international trade policies on business operations, indicating proactive adjustments to raw material sourcing [9][10] - The company reiterated its 2025 annual guidance, projecting revenues between $415 million and $455 million, representing year-over-year growth of 42% at the midpoint [35] Other Important Information - Stellar Blue is expected to contribute between $120 million and $150 million in revenue for the year, with a target of achieving a 10% adjusted EBITDA margin in the second half of 2025 [9][49] - The company secured a $100 million credit line to finance the acquisition of Stellar Blue, utilizing $60 million of it [34] Q&A Session Summary Question: Is the defense business expected to benefit from increases in European defense spending? - Management indicated that there is traction from increased defense budgets in Europe, with expectations for decent business growth in the mid-term [38] Question: What milestones need to be achieved for the Boeing line fit program? - Management stated that adaptations to the terminal are in progress, with certification expected within the next two to three quarters [39] Question: How should revenue linearity in Peru be viewed over the next few quarters? - Management expects a revenue run rate of $45 million to $50 million for Peru, with delays in project renewals impacting current revenues [40][41] Question: How is the integration of Stellar Blue progressing? - Management reported good progress, with significant market acceptance and feedback, and expects to resolve supply chain issues soon [47][48] Question: What is the anticipated revenue structure for primary and secondary aviation markets? - Management indicated that 100% of revenues in 2025 will come from retrofit, with expectations for a 50-50 split between retrofit and line fit by mid to late 2026 [60] Question: What is the impact of tariffs on the business? - Management noted that the effect of tariffs is currently not significant, and proactive measures have been taken to shift sourcing to lower tariff countries [102]

Financial Data and Key Metrics Changes - Q1 2025 revenues reached $92 million, a 21% increase year over year from $76.1 million in Q1 2024 [7][26] - Adjusted EBITDA for Q1 2025 was $7.6 million, with an organic adjusted EBITDA of $11.2 million, representing a 20% year over year increase [7][31] - GAAP net loss in Q1 2025 was $6 million, or a loss per share of $0.10, compared to a net income of $5 million, or $0.09 per share in Q1 2024 [30] Business Line Data and Key Metrics Changes - Commercial segment revenues in Q1 2025 were $64.2 million, a 56% increase from $41.2 million in Q1 2024, primarily due to the acquisition of Stellar Blue [26] - Defense segment revenues increased by 34% to $23 million in Q1 2025 from $17.2 million in Q1 2024, driven by high deliveries to U.S. and Asia defense customers [27] - Peru segment revenues decreased to $4.8 million in Q1 2025 from $17.7 million in Q1 2024, attributed to delays in project renewals and slower progress on existing projects [27][28] Market Data and Key Metrics Changes - Demand for Gilat Defense solutions is increasing, particularly in North America, Europe, and Asia Pacific, with a notable rise in European defense budgets [12][11] - The company secured multiple contracts in Q1 2025, including over $5 million for U.S. DoD connectivity and $23 million for satellite transportable terminals [13][14] Company Strategy and Development Direction - The company is focusing on its newly aligned organizational structure, emphasizing growth in defense, VHTS, and NGSO constellations, as well as in-flight connectivity [6][10] - Gilat plans to increase investment in R&D and sales for its defense segment in 2025, launching several new products to enhance its market position [15][19] - The company aims to leverage its diverse product portfolio to support the growing demand for mission-critical defense connectivity and satellite communications [22][23] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by global economic uncertainty and shifting trade policies but expressed confidence in the company's proactive adjustments to sourcing and production [9][10] - The company reiterated its 2025 revenue guidance of $415 million to $455 million, representing a year-over-year growth of 42% at the midpoint [33] Other Important Information - The acquisition of Stellar Blue was completed on January 6, 2025, contributing approximately $25 million to Q1 revenues but also incurring an adjusted EBITDA loss of $3.6 million [7][26] - The company secured a $100 million credit line to finance the acquisition, utilizing $60 million for this purpose [32] Q&A Session Summary Question: Is the defense business expected to benefit from increases in European defense spending? - Management indicated that there is significant traction from increased European defense budgets, with expectations for decent business growth in the mid-term [37] Question: What milestones need to be achieved for the Boeing line fit program? - Management stated that adaptations to the terminal are ongoing, with certification expected within the next two to three quarters [38] Question: How should revenue linearity in Peru be viewed over the next few quarters? - Management expects a revenue run rate of $45 million to $50 million for Peru, with significant revenue anticipated in Q2 and Q3 due to project renewals and hardware deliveries [39][40] Question: How is the integration of Stellar Blue progressing? - Management reported good progress, with strong market acceptance and feedback, and expects to meet revenue goals for Stellar Blue [46][49] Question: What is the anticipated production rate for Sidewinder by the end of the year? - Management expects to reach a production rate of about 100 units per month by the end of the year [56] Question: What is the impact of tariffs on the business? - Management noted that the effect of tariffs is currently not significant, as proactive sourcing adjustments have been made [101][102]

Core Insights - Gilat Satellite Networks Ltd. reported a revenue increase of 21% year-over-year, reaching $92 million in Q1 2025, compared to $76.1 million in Q1 2024 [7] - The company reiterated its guidance for 2025, expecting revenues between $415 million and $455 million, which represents a year-over-year growth of 42% at the midpoint [4] - Adjusted EBITDA for Q1 2025 was $7.6 million, down from $9.3 million in Q1 2024, primarily due to a $3.6 million loss from the ramp-up of Gilat Stellar Blu [7][12] Financial Performance - Revenues for Q1 2025 were $92 million, a 21% increase from $76.1 million in Q1 2024 [7] - GAAP operating loss was $2.7 million, compared to a GAAP operating income of $5.4 million in Q1 2024 [7] - Non-GAAP operating income decreased to $5.2 million from $6.6 million in Q1 2024 [7] - GAAP net loss was $6.0 million, or $0.11 per share, compared to a net income of $5.0 million, or $0.09 per diluted share, in Q1 2024 [7] - Non-GAAP net income was $1.8 million, or $0.03 per diluted share, down from $6.0 million, or $0.11 per diluted share, in Q1 2024 [7] Business Segments - The commercial segment generated $64.2 million in revenue, up from $41.2 million in Q1 2024, while the defense segment increased to $23.0 million from $17.2 million [25] - The company is experiencing significant momentum in its defense sector, driven by increased demand for secure communications [5] Future Outlook - The company expects adjusted EBITDA for 2025 to be between $47 million and $53 million, representing an 18% year-over-year growth at the midpoint [4] - Management expressed confidence in achieving a record year in both revenues and non-GAAP profitability, supported by the ramp-up of Gilat Stellar Blu and expanding opportunities in mission-critical communications [5] Recent Contracts and Orders - Gilat received over $15 million in orders from leading satellite operators and a multimillion-dollar order from a global defense organization [8] - The company was awarded a contract worth up to $23 million to service satellite transportable terminal units for U.S. Department of Defense customers [8]