Gilat's $60M Peru Contract: A Strategic Win for Digital Inclusion and Long-Term Revenue Stability

In July 2025, Gilat Satellite Networks (NASDAQ: GILT) secured a landmark $60 million contract with Pronatel, Peru's national telecommunications program, to modernize broadband infrastructure in three remote regions: Apurímac, Huancavelica, and Ayacucho. This deal, which accounts for roughly 11% of the company's trailing twelve-month revenue, is more than a financial milestone—it is a strategic validation of Gilat's business model and a testament to its ability to thrive in emerging markets through government-backed infrastructure projects.

Reinforcing the Core Business Model

Gilat's success has always hinged on its ability to deliver scalable, satellite-based connectivity solutions to governments and institutions in underserved regions. The Peru contract exemplifies this approach. By providing 200 Mbps high-speed internet to 800 public institutions—including schools, health centers, and police stations—Gilat is addressing a critical need in rural communities while securing a long-term revenue stream. The 12-month implementation phase is followed by a four-year service delivery period, ensuring recurring cash flow that mitigates the volatility often associated with one-off commercial contracts.

This structure aligns perfectly with Gilat's strategy of prioritizing projects with multi-year service components. Unlike traditional infrastructure deals, which generate revenue upfront but offer little visibility beyond initial deployment, government-backed contracts like this one provide financial stability. For investors, this means reduced exposure to short-term market fluctuations and a predictable earnings trajectory.

Expanding in Emerging Markets: A Path to Sustainable Growth

The Peruvian deal underscores Gilat's focus on emerging markets, where demand for connectivity is surging and competition remains fragmented. Latin America, in particular, has become a key growth corridor for the company. By leveraging its existing partnership with the Peruvian government, Gilat has positioned itself as a trusted provider of digital inclusion initiatives. This trust is not accidental—it is the result of decades of experience executing complex projects in challenging environments.

The contract also reflects a broader global trend: governments increasingly turning to satellite technology to bridge the digital divide. With terrestrial infrastructure often impractical in remote or mountainous regions, Gilat's satellite-based solutions offer a cost-effective alternative. For example, the use of solar-powered equipment in Peru's rugged terrain demonstrates the company's adaptability and technical expertise, qualities that are hard to replicate.

Strategic Implications for Investors

From an investment perspective, the Peru contract is a win on multiple fronts. First, it provides immediate revenue visibility, with $60 million in contracted value over five years. Second, it strengthens Gilat's balance sheet by locking in recurring service revenue, which is critical for maintaining margins during periods of slower growth. Third, it enhances the company's reputation as a leader in digital inclusion, a narrative that resonates with ESG-focused investors.

The deal also opens the door for future expansion in Peru and neighboring markets. Gilat's ability to execute large-scale projects—such as this one—demonstrates operational excellence, a key differentiator in a sector where technical complexity and regulatory hurdles can derail even the most promising ventures.

A Model for the Future

The Peru contract is more than a one-time win—it is a blueprint for Gilat's future. By targeting government-backed infrastructure projects in emerging markets, the company is tapping into a market segment characterized by high growth potential and long-term stability. This approach not only diversifies revenue sources but also aligns with global development goals, creating a virtuous cycle of demand for connectivity solutions.

For investors, the key takeaway is clear: Gilat's business model is evolving in a way that prioritizes sustainable growth over short-term gains. The Peru contract exemplifies this shift, offering a glimpse into a future where satellite-based connectivity becomes the backbone of digital inclusion in remote regions.

Investment Advice

Given the strategic and financial benefits of the Peru contract, investors should consider Gilat as a long-term holding in a diversified portfolio. The company's focus on emerging markets, combined with its proven ability to execute complex projects, positions it well for future government contracts. However, investors should also monitor macroeconomic factors, such as interest rates and geopolitical risks in Latin America, which could impact project timelines and margins.

In summary, the $60 million Peru contract is a strategic win that reinforces Gilat's core business model while expanding its footprint in a high-growth region. For those seeking exposure to the satellite broadband sector, GILT offers a compelling case of long-term value creation through innovation, adaptability, and a commitment to bridging the digital divide.