Gilat Satellite Networks Ltd., a worldwide leader in satellite networking technology, solutions and services, today reported its results for the third quarter ended September 30, 2018.
Key Financial Highlights:
Revenues for Q3 2018 were $62.8 million, compared with $69.9 million in Q3 2017.
Continued strong profitability:
Q3 2018 GAAP operating income increased to $6.0 million, up 79.6% from Q3 2017.
Q3 2018 Non-GAAP operating income rose to $6.5 million, up 32.7% year over year.
Q3 2018 GAAP net income was $8.7 million, or $0.16 per diluted share (including a one-time tax benefit of $4.1 million related to the Company’s US subsidiary), compared with $2.1 million, or $0.04 per diluted share, in Q3 2017.
Q3 2018 non-GAAP net income was $5.1 million, or $0.09 per diluted share, versus $3.6 million, or $0.07 per diluted share, in Q3 2017.
Q3 2018 Adjusted EBITDA increased 27.8% from Q3 2017 to $9.1 million, or 14.5 % of revenues.
Updated management objectives for 2018: GAAP operating income increased to between $22 to $24 million (from $17 to 21 million), and Adjusted EBITDA increased to between $35 to $37 million (from $30 to $34 million). Revenue range revised to between $265 to $275 million (from $285 to 305 million) due to continued delays in the Company’s projects for FITEL in Peru, as well as exerting caution as it relates to the Company’s two additional recently awarded regional telecommunications infrastructure projects in Peru. Recently, the losing party appealed the award and obtained a preliminary injunction against the award. Gilat has been informed by FITEL that it believes the injunction was improperly obtained and FITEL is opposing it. Gilat is not a party in either action and based on advice of counsel, firmly believes that the chances of success of the losing party’s appeal are remote, yet decided to exert caution and reduce its revenue targets for 2018.
Yona Ovadia, CEO of Gilat, commented: “I am pleased to report that the third quarter of 2018 was another strong quarter for Gilat. We continued to increase profitability, with noteworthy year-over-year growth in GAAP operating income and Adjusted EBITDA. We also continued to benefit from our investment in our growth engines of cellular backhaul and In-Flight Connectivity (IFC) and in our focus on improving profitability.
“From a business perspective, Gilat was awarded multi-million-dollar projects around the globe. New projects were secured in Russia, China and Japan, for broadband and high throughput satellites in which Gilat will provide its multi-service ground segment.
“From a technological perspective, we reached a major milestone with our partners Global Eagle and Telesat for demonstrating the first-ever live in-flight connectivity with a LEO satellite as well as switchover between Telesat’s GEO and LEO satellites.
“We also remain optimistic and committed to our opportunities in Peru, although we decided to exercise caution and reduce our revenue target for the full year due to the events in Peru mentioned above. We strongly expect, however, that we will overcome these challenges in the coming few months.
We are confident in our strategy and remain focused on our growth engines of cellular backhaul, IFC, and HTS/VHTS, as well as on balancing our investments in R&D to maintain product leadership while continuously improving profitability, as evidenced by the increase in our profit targets for the year.”