Gilat Satellite Q2 Results: Revenue rises 17% to $122.7 million
Gilat Satellite Networks beat Q2 estimates with $122.7 million in revenue and a 35% rise in adjusted operating income. The company reaffirmed FY2026 guidance and highlighted progress on the $157.5 million Comtech acquisition, which aims to double defense revenue.
*this image is generated using AI for illustrative purposes only.
Gilat Satellite Networks Ltd. reported second-quarter revenue of $122.7 million, surpassing analyst estimates of $120.7 million and rising from $105 million in the prior-year quarter. The company’s adjusted operating income increased 35% year over year to $12.6 million, and adjusted EPS of 20 cents exceeded expectations of 10 cents. This performance underscores strong execution across its Defense, Commercial, and Peru segments, driving improved margins despite broader market volatility.
The results were driven by solid execution across key business units, with CEO Adi Sfadia highlighting continued momentum in the Defense segment. Demand for advanced communication solutions supporting mobility, rapid deployment, and operational continuity grew in the U.S. and Europe. Additionally, the company launched the Viper Ka ESA terminal to support unmanned and autonomous missions and advanced certification efforts for next-generation defense communication systems.
Financial Performance Snapshot
| Metric | Q2 Value | Change / Estimate |
|---|---|---|
| Revenue | $122.7 million | Up from $105 million (YoY); vs $120.7 million estimate |
| Adjusted Operating Income | $12.6 million | Up 35% YoY |
| Adjusted EBITDA | $15.4 million | Up 31% YoY |
| Adjusted EPS | 20 cents | vs 10 cents estimate |
Comtech Acquisition Progress
Gilat is progressing well with its acquisition of most of Comtech Telecommunications Corp.’s satellite and space communications business for $157.5 million, agreed in June. Management stated the deal represents a major step in expanding Gilat into a scaled defense, space, and mission-critical communications provider. The acquisition is expected to create a company with more than $700 million in pro forma annual revenue.
The deal is projected to more than double Defense revenue, expand U.S. engineering and manufacturing capabilities, and improve access to larger defense and space programs. It is expected to close by year-end, subject to regulatory approvals and closing conditions.
What the Numbers Show
The divergence between revenue growth (17%) and adjusted operating income growth (35%) indicates significant margin expansion in Q2. This suggests that the company is not only growing top-line sales but also improving operational efficiency, likely driven by the higher-margin defense contracts mentioned by management.
Outlook and Guidance
Gilat reaffirmed its FY2026 revenue guidance of $500 million-$520 million, compared with analyst expectations of $509.3 million. The company continues to see adjusted EBITDA of $61 to $66 million, representing a growth rate of approximately 19% at the midpoint. Despite the strong quarterly results, shares were down 5.12% at $11.30 at the time of publication, reflecting broader market sentiment or potential profit-taking following the beat.
How will the integration of Comtech's satellite and space communications business impact Gilat's operational synergies and cost structure in the near term?
What specific regulatory hurdles could potentially delay the year-end closing of the Comtech acquisition, and how might this affect pro forma revenue projections?
Will the expanded U.S. engineering and manufacturing capabilities from the Comtech deal allow Gilat to secure larger defense contracts previously out of reach?
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