Gilat's Q1 2025: Unraveling Key Contradictions in Stellar Blu's Revenue, Integration, and Production Plans

Stellar Blu revenue guidance, Stellar Blu integration and revenue expectations, Peru revenue linearity, Stellar Blu production and certification, Stellar Blu's impact on financial performance are the key contradictions discussed in Gilat Satellite Networks Ltd.'s latest 2025Q1 earnings call.



Revenue and Earnings Growth:
- Gilat Satellite Networks reported revenue of $92 million for Q1 2025, marking a 21% increase year-over-year.
- Adjusted EBITDA was $7.6 million, with an organic adjusted EBITDA excluding Stellar Blu losses of $11.2 million, a 20% year-over-year increase.
- The growth was driven by contributions from the newly acquired Stellar Blu, increased defense sector demand, and strong performance in commercial satellite constellations.

Defense Sector Expansion:
- Gilat's Defense segment reported revenues of $23 million, up 34% year-over-year, primarily due to high deliveries to defense customers in the U.S. and Asia.
- Awards spanning a diverse customer base included over $5 million for DKET terminals and $6 million for SkyEdge platform orders, highlighting the demand for their products in various global markets.
- An increase in investment in R&D and sales efforts is expected to further enhance Gilat's position in the defense sector.

Commercial and Stellar Blu Segment Performance:
- Commercial segment revenues reached $64.2 million, with a 56% increase due to the acquisition of Stellar Blu contributing $25 million.
- Stellar Blu's Sidewinder ESA is gaining market traction, with over 150 aircraft installations and 70,000 flight hours of seamless connectivity achieved.
- Stellar Blu is expected to achieve revenue between $120 million to $150 million, with a target of reaching a 10% adjusted EBITDA margin run rate in the second half of the year.

Peru Operations and Digital Inclusion Projects:
- Peru segment revenues were $4.8 million, down from $17.7 million in Q1 2024, primarily due to delays in renewing projects and slower expansion progress.
- Despite challenges, Gilat Peru is progressing with the Amazonas transport and access networks, indicating ongoing activity in digital inclusion projects.
- The company remains optimistic about future opportunities in Peru as several large projects are expected to resume.