Gilat Q2 Earnings Call Highlights Defense and IFC Momentum

Gilat Keeps Full-Year Outlook Intact

CEO Adi Sfadia said execution across Commercial, Defense and Peru supported the reiterated 2026 guidance. Revenues remain projected at $500 million to $520 million, with adjusted EBITDA of $61 million to $66 million.

The outlook is backed by backlog, pipeline and delivery schedules. At the midpoint, the ranges imply revenue growth of about 13% and adjusted EBITDA growth of about 19%.

CFO Gil Benyamini cautioned that a stronger Israeli shekel is expected to add $3 million to $5 million of operating expenses in the second half. Management expects higher revenues and operating leverage to offset part of that pressure.

GILT Expects Defense to Accelerate

Sfadia described Defense as a growth engine, with demand centered on resilient and rapidly deployable satellite communications. Second-quarter Defense revenues rose 12% year over year to $22.5 million.

A Quilty Space analyst asked whether the segment still required a sharp second-half step-up. The CFO confirmed that Defense revenues should be materially higher in the second half, based on firm backlog and expected book-to-ship activity.

A Needham analyst asked about product-mix changes. The CEO highlighted demand for mobile gateways, tactical systems and smaller electronically steered antennas, while noting that loitering-munition solutions remain under customer discussion.

Gilat Advances Sidewinder Deployment

Commercial revenues increased 20% year over year to $83 million, driven mainly by in-flight connectivity. CEO Adi Sfadia said Gilat delivered more than 200 terminals during the quarter, a record, and terminal bookings exceeded recognized revenues.

Sidewinder ESA received $43 million in additional orders. Boeing line-fit certification continued to advance, with first unit deliveries expected in the fourth quarter, while an Airbus-related order broadened the opportunity.

A Quilty Space analyst pressed management on installed units. CEO Adi Sfadia estimated that slightly more than 600 units were operating, while CFO Gil Benyamini stressed that installation timing depends on customers, airlines and aircraft maintenance windows.

GILT Positions Comtech as Scale Catalyst

Sfadia called the acquisition of most of Comtech’s Satellite and Space Communications segment a major expansion step. The transaction is expected to more than double Defense revenues and lift pro forma annual revenues above $700 million.

Management expects the deal to close toward year-end, subject to regulatory approvals and customary conditions. Sfadia said six acquired business units will be allocated mainly to Defense, with a smaller portion assigned to Commercial.

Sfadia also said the transaction should deepen Gilat’s U.S. engineering and manufacturing footprint and improve access to larger U.S. and allied programs.

Gilat Addresses Margin and Cash Questions

Adjusted EBITDA rose 31% year over year to $15.4 million, with margin expanding to about 12.6% from 11.2%. CFO Gil Benyamini attributed the faster EBITDA growth to operating leverage.

A Freedom Broker analyst questioned second-half margin pressure despite higher sales. Benyamini cited foreign exchange and delivery mix, while maintaining that full-year margin assumptions remain consistent with the original guidance framework.

A Quilty Space analyst asked about working capital after operating cash use of $1.9 million. CFO Gil Benyamini and CEO Adi Sfadia linked higher inventory to second-half deliveries and expect stabilization as backlog-related inventory is consumed over two to three quarters.

GILT Leaves Investors Focused on Execution

Management’s tone remained confident but operationally grounded. Sfadia emphasized Defense, IFC, SkyEdge demand and Peru’s service activity as the main supports for the second half.

Execution points are the Defense ramp, Sidewinder certification and deployment, working-capital normalization and completion of the Comtech acquisition on schedule.

Gilat’s Zacks Signals Stay Mixed

GILT carries a Zacks Rank #3 (Hold) at present, indicating a neutral near-term earnings-estimate revision signal. Its Value Score of C and Momentum Score of C are middle-tier readings, while the Growth Score of F and VGM Score of F indicate weak alignment with those style factors. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Style Scores complement the Zacks Rank, with A and B grades representing stronger characteristics. The current combination does not provide a strong style-based signal, and the Zacks Rank can change as analysts revise estimates after the reported results.

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