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    GILT
    Earnings call· Jun 2026(Q2 FY26)

    GILAT SATELLITE NETWORKS Q2 FY26 earnings call GILT

    Aug 5, 2026 Source

    Executive summary

    Gilat Q2 FY26 — Strong Revenue Growth and Strategic Acquisition

    Gilat delivered a strong second quarter, driven by robust revenue growth across all segments and significant adjusted EBITDA expansion. The company advanced its strategic initiatives, including a definitive agreement to acquire Comtech's Satellite and Space Communications segment, which is set to bolster its Defense capabilities. Despite some margin pressure from deal mix and increased operating expenses due to FX, Gilat reiterated its full-year guidance, supported by a healthy backlog and pipeline, particularly in its Defense and In-Flight Connectivity growth engines.

    Highlights

    5

    • Q2 FY26 revenue reached $122.7 million, representing 17% year-over-year growth.

    • Adjusted EBITDA grew 31% year-over-year to $15.4 million in Q2 FY26, with margin expanding to 12.6%.

    • Signed definitive agreement to acquire most of Comtech's Satellite and Space Communications segment, expected to more than double Gilat Defense revenues.

    • Received $43 million in orders for Sidewinder ESA terminals from a leading IFC service provider, with deliveries expected in Q4 this year.

    • Defense segment received $11 million in orders from the U.S. Department of War and a multimillion-dollar order from a European Ministry of Defense.

    Concerns

    4

    • GAAP operating income decreased to $4.7 million in Q2 FY26 from $5.7 million in Q2 FY25, primarily due to an earn-out provision related to the DataPath acquisition.

    • Non-GAAP gross margin decreased to 32% in Q2 FY26 from 33% in Q2 FY25, mainly due to a less favorable deal mix in Defense and Peru.

    • Used approximately $1.9 million in operating cash in Q2 FY26, primarily reflecting working capital timing.

    • Did not meet the earn-out requirement for the Stellar Blu acquisition by June 2026, despite signing an agreement with Airbus.

    Guidance & targets

    2
    CategoryTargetConfidence
    Revenue
    $500 million to $520 million
    high materiality
    High
    Adjusted EBITDA
    $61 million to $66 million
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Commercial
    Growth primarily driven by revenues from the In-Flight Connectivity vertical.
    Primary driver: In-Flight Connectivity vertical
    		$83 million20%——
    Defense
    Higher than $20 million in the same quarter last year, reflecting continued momentum.
    		$22.5 million12%——
    Peru
    Higher than $15.9 million in Q2 '25, with solid operational progress across social inclusion programs.
    		$17.2 million8%——

    Operational metrics

    23
    Revenue
    $122.7 million17% YoY (vs $105 million Q2 FY25)
    Q2 FY26
    Adjusted EBITDA
    $15.4 million31% YoY (vs $11.8 million Q2 FY25)
    Q2 FY26
    Adjusted EBITDA margin
    12.6%1.4% improvement (vs 11.2% Q2 FY25)
    Q2 FY26
    Revenue
    $233.1 million
    H1 FY26
    Adjusted EBITDA
    $30.5 million
    H1 FY26
    GAAP gross margin
    30%in line with Q2 FY25
    Q2 FY26
    Non-GAAP gross margin
    32%vs 33% Q2 FY25
    Q2 FY26
    GAAP operating expenses
    $32.6 millionvs $26.2 million Q2 FY25
    Q2 FY26
    Non-GAAP operating expenses
    $26.3 millionvs $25.2 million Q2 FY25
    Q2 FY26
    GAAP operating income
    $4.7 millionvs $5.7 million Q2 FY25
    Q2 FY26
    GAAP net income
    $8.1 millionvs $9.8 million Q2 FY25
    Q2 FY26
    Diluted GAAP EPS
    $0.10vs $0.17 Q2 FY25
    Q2 FY26
    Non-GAAP operating income
    $12.6 million35% higher than $9.3 million Q2 FY25
    Q2 FY26
    Non-GAAP net income
    $15.6 millionvs $12 million Q2 FY25
    Q2 FY26
    Diluted non-GAAP EPS
    $0.20vs $0.21 Q2 FY25
    Q2 FY26
    Cash and investments balance
    $159 million
    as of June 30, 2026
    DSO
    110 days
    Q2 FY26
    Shareholders' equity
    $545 millionvs $536 million March 31, 2026
    as of June 30, 2026
    Stellar Blu acquisition cost
    $98 million
    Paid
    Stellar Blu terminal deliveries
    >200 unitsrecord quarter
    Q2 FY26
    Stellar Blu book-to-revenue ratio
    >1
    Q2 FY26
    Installed Sidewinder units
    ~600 units
    as of Q2 FY26
    Operating expenses impact from FX
    $3 million to $5 millionincrease
    H2 FY26

    Industry KPIs

    5
    MetricValueDetails
    Backlog order bookStrong
    Book to bill ratio>1
    Orders backlog qualityHealthy pipeline and strong backlog
    Revenue mix by product customer typeCommercial: $83M (67.6%), Defense: $22.5M (18.3%), Peru: $17.2M (14.0%)USD, %
    Design wins product cycle transitionsBoeing Line-fit program and certification activities progressing well; Airbus Line-fit availability initiated with an order received.

    Orderbook & backlog

    4
    Orders from U.S. Department of War$11 millionQ2 FY26

    To supply SATCOM terminals and field services.

    Orders from European Ministry of DefenseMultimillion dollarQ2 FY26

    To supply SATCOM terminals designed for unique operational requirements.

    Orders for SkyEdge platforms and services>$20 millionQ2 FY26

    From a leading global satellite operator.

    Orders for Sidewinder ESA terminals$43 millionQ2 FY26

    From a leading IFC service provider, for deliveries for both Line-fit and retrofit. Deliveries expected in Q4 this year.

    Product announcements

    1
    ProductTypeDetails
    Viper Ka ESA terminallaunch

    Deals & partnerships

    2
    ComtechAcquisition of most of Comtech's Satellite and Space Communications segment.

    The acquired business is expected to have a revenue mix of 70%-80% Defense and 20%-30% Commercial, and includes 6 different business units.

    AirbusInitiated process for Line-fit availability of Sidewinder ESA terminal with Airbus.

    This agreement did not meet the earn-out qualification for Stellar Blu.

    Risks & headwinds

    4
    Unfavorable movements in Israeli shekel vs. U.S. dollarH2 FY26

    Expected to increase operating expenses by $3 million to $5 million in H2 FY26.

    Mitigation: Management is maintaining full-year outlook despite this.

    Uncertainty for customers working with a company under Chapter 11 (referring to Hughes)Ongoing

    Not quantified, but creates "opportunity to penetrate" for Gilat.

    Mitigation: Gilat sees this as an opportunity to gain market share.

    GAAP operating income decreaseQ2 FY26

    Decreased to $4.7 million in Q2 FY26 from $5.7 million in Q2 FY25.

    Mitigation: Primarily attributed to an earn-out provision related to the DataPath acquisition.

    Non-GAAP gross margin decreaseQ2 FY26

    Decreased to 32% in Q2 FY26 from 33% in Q2 FY25.

    Mitigation: Primarily attributed to a less favorable deal mix in Defense and Peru, partially offset by improved margins in Commercial.

    What to watch in Q3 FY26

    5

    Comtech acquisition closing

    Towards the end of the year (2026)
    CurrentDefinitive agreement signed, pending regulatory approvals.
    TargetClosed

    Why it matters

    This acquisition is expected to more than double Gilat Defense revenues and significantly expand its market position.

    The closing of the transaction is expected towards the end of the year and is subject to several regulatory approvals such as HSR and CFIUS and other customary closing conditions.

    Q&A highlights

    6

    How does Hughes' bankruptcy affect Gilat, given they are a competitor, customer, and have a small debt to Gilat?

    Hughes is a competitor and customer. Gilat has a small, insignificant debt from them, which Hughes intends to pay. Gilat sees opportunities to penetrate customers who may be uncertain about working with a Chapter 11 company, especially for long-term development and service needs.

    “I suspect that some of the customers will have uncertainty to work with a company under Chapter 11, especially customers that require long-term development efforts and long-term service needs. And over there, we see opportunity to penetrate.”

    asked by Louie Dipalma · answered by Adi Sfadia

    2 min read6 chapters

    Detailed Narrative

    01

    Comtech Acquisition

    Gilat signed a definitive agreement to acquire most of Comtech's Satellite and Space Communications segment. This transaction is expected to expand Gilat's position in mission-critical Defense and Satellite Communications, strengthen its U.S. presence, broaden its technology portfolio, and more than double Gilat Defense revenues. The closing is expected towards the end of the year, subject to regulatory approvals (HSR, CFIUS) and customary conditions.

    02

    Defense Business Momentum

    The Defense segment continues to gain momentum with increasing global demand for mission-critical SATCOM solutions, particularly in dynamic mobile and contested environments. Recent conflicts highlight the need for resilient and deployable SATCOM capabilities, aligning well with Gilat's portfolio. The company received significant orders from the U.S. Department of War ($11 million) and a European Ministry of Defense for SATCOM terminals.

    03

    Commercial Business Progress

    The Commercial business showed strong progress, especially with SkyEdge platforms and the IFC portfolio. Satellite operators are moving towards flexible, scalable, multi-orbit architectures, which Gilat supports with its ground segment expertise and PSA portfolio. The company received over $20 million in orders for SkyEdge platforms and $43 million for Sidewinder ESA terminals from a leading IFC service provider.

    04

    Sidewinder ESA Terminal Development

    The Sidewinder ESA terminal is progressing towards large-scale deployment. Deliveries for Line-fit and retrofit are expected in Q4 this year. Boeing Line-fit program and certification activities are advancing, and efforts have begun for Airbus line-fit availability, with an initial order received. This expands the long-term opportunity for Sidewinder in Commercial aviation.

    05

    Peru Business Execution

    The Peru business continues to execute well, completing work in the first three regions of its infrastructure upgrade program and moving to the operational phase. The company is advancing discussions on significant project expansions and pursuing additional large-scale opportunities for social inclusion and nationwide connectivity. The majority of Peru revenues are now recurring from long-term service contracts.

    06

    Working Capital and Liquidity

    The company used $1.9 million in operating cash due to working capital timing, primarily reflecting increased inventory to support expected higher deliveries in H2 FY26. Gilat ended the quarter with a strong liquidity position of $159 million in cash, cash equivalents, restricted cash, and short-term deposits.

    AI-generated summary of the company’s earnings call. Not investment advice.