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Israel’s Gilat Reports Continued Growth in Profitability in Q3 2017

Photograph courtesy of Gilat Satellite Networks Ltd.

Gilat Satellite Networks Ltd., a worldwide leader in satellite networking technology, solutions and services, has reported its results for the third quarter ended September 30, 2017.

Key Financial Highlights:

  • Revenues for Q3 2017 were $69.9 million compared with $66.2 million in Q2 2017 and $78.6 million in Q3 2016.
  • Profitability improvement continued in Q3 2017:
    • GAAP operating income improved substantially to $3.3 million in Q3 2017 from $1.9 million in Q2 2017, and compared with an operating loss of $0.2 million in Q3 2016.
    • Non-GAAP operating income grew to $4.9 million from $4.1 million in Q2 2017 and $3.3 million in Q3 2016.
    • The Company achieved GAAP net income of $2.1 million, or $0.04 per diluted share in Q3 2017, in line with $2.1 million, or $0.04 per diluted share, in Q2 2017, and compared with a loss of $2.2 million, or $0.04 per diluted share, in Q3 2016.
    • Non-GAAP net income was $3.6 million, or $0.07 per diluted share in Q3 2017, compared with $4.6 million, or $0.08 per diluted share in Q2 2017, and $1.4 million, or $0.02 per diluted share, in Q3 2016.
    • Adjusted EBITDA increased to $7.1 million, or 10.2% of revenues, compared with $5.9 million, or 8.9% of revenues, in Q2 2017, and $5.2 million, or 6.7% of revenues, in Q3 2016.
  • Updated management objectives for 2017: revenue range maintained at between $280 to $290 million, GAAP operating income narrowed to upper range between $9 and $11 million (from $7 to $11 million), and Adjusted EBITDA narrowed to upper range between $24 and $26 million (from $22 to $26 million).

Yona Ovadia, CEO of Gilat, commented: “I am pleased to report that Gilat again achieved very positive results in the third quarter as we see consistent improvement in our operating income and in our Adjusted EBITDA – two major indicators of our financial progress. I am in particular pleased to note our GAAP net income of $2.1 million for the quarter, as we remain committed to our long-term goal of profitability on a GAAP basis.

“Further, based on our progress year-to-date, we have narrowed our profitability objectives for 2017 towards the high end of the previous range, while maintaining our prior objective for revenues.

“One of our growth initiatives has been to develop multi-year cellular backhaul service projects with recurring revenues, particularly with telco service providers. I am gratified that we have closed four significant such deals in the past few months. We believe they were awarded to Gilat due to both our LTE cellular backhaul carrier-grade technology that meets the stringent requirements of throughput and user experience, as well as our expertise in integrating multi-site satellite-based networks into the MNO’s cellular network.

“In the United States, we have just been awarded a major contract with T-Mobile for end-to-end services for LTE cellular backhaul for their network expansion in rural areas, destinations, highways, and elsewhere where fiber delivery is challenging throughout the continental United States. In addition, Sprint has expanded our contract to include a three-year project in addition to the technology provided for their 3G/4G network.

“In the Philippines, we secured a five-year multi-million dollar services contract with Globe for satellite backhaul for 4G cellular services.

“And, we closed a deal with a major telecom service provider in Latin America to provide an end-to-end services project for rapid rollout of high-performance broadband.

“In Mobility, we have reached a noteworthy milestone with our customer, Gogo, with over 150 airplanes now flying with our airborne modem, showing a strong pace of ramp-up, with potential of approximately 2,000 aircraft.

“Equally important, we are making further inroads with our airborne antennas. We are progressing towards completion of development of our dual-band Ku-Ka antenna in early 2018, and have started the development of our next generation antenna. I am optimistic that the interest we see in the market will translate into concrete achievements in the coming quarters.

Mr. Ovadia concluded: “We are pleased with the momentum we gained in both growth engines, and we will continue to execute according to our strategic priorities, with an ongoing emphasis on improving profitability.”

Key Recent Announcements:

  • Major Telecom Service Provider in Latin America Selects Gilat for Managed Service Cellular Backhaul Project
  • Sprint Expands Gilat Contract to a Three-Year Multi-Million Dollar Managed Service Project
  • Globe Awards Gilat Five Year Multi-Million Dollar Contract for Managed Service Satellite Backhaul for Cellular Services

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