Gilat Satellite Networks Ltd. (NASDAQ:GILT) Q4 2018 Earnings Conference Call Transcript
Feb 12, 2019 • 09:30 am ET
revenues into 2019. Fortunately, these delays are temporary, and I will say more about probably later in my remarks.
In total Gilat's full year 2018 revenues were $266.4 million or 6% lower than 2017, while fourth quarter revenues were $69.7 million due again to the lower construction revenues in Peru. Even with the effect of Peru, we made substantial strides in improving profitability in 2018. GAAP operating income for full year 2018 increased 98% virtually doubled from 2017 to $21.3 million. Adjusted EBITDA rose 35% to $35.2 million, and GAAP net income reached $18.4 million or $0.33 per diluted share. I might add that this was accomplished while we made a significant investment in R&D, which represented 12.4% for 2018 revenues, up from 9.9% in 2017. We plan to continue and make substantial investments in R&D in 2019 in order to maintain our product leadership in the market, which I will speak more about later.
Let me now provide more details on our business with this review. In 2018, we continue to see progress in our strategic focus area of broadband connectivity. The year started with a major achievement with NBN, Australia for a deal worth tens of millions of dollars. Additional significant successes were achieved in collaboration with Hispasat in Brazil, Gazprom in Russia, JSAT in Japan, and finally in China with China Satcom where our win of the ground network for ChinaSat-18 joined with our 2016 win of ChinaSat-16 makes Gilat the fastest solution for anyone who wants to benefit from the advantages of HDS Ka over China. Specifically in the fourth quarter, we closed new broadband connectivity business in Japan, where we secured a multi-million dollar project with the Japanese government agency called Local Authorities Satellite Communication or LASCOM. In Mexico, where we collaborated with Hispasat and jointly won the deal with DISH Mexico, and in India where Gilat was chosen to provide broadband connectivity for the GSAT-11 multi-spot beam satellite recently launched by ISRO, the Indian Space Research Organization. These substantial successes throughout the year demonstrate Gilat's leadership in providing a high performance, highly efficient ground network.
Regarding cellular backhaul, in 2018 Gilat also continued as the front-runner of 4G/LTE cellular backhaul with extensions of projects with existing customers such as Globe in the Philippines as well as new contract wins, including Telstra in Australia and Altice in Portugal, in the strategic focus area of mobility, which is various milestones throughout the year. In 2018, Gilat significantly expanded the largest global IFC network, which serves Gogo.
Gogo recently reported ending the year with over 1,000 commercial aircraft installed and activated with 2Ku solution, which includes the Gilat IFC's modem. We also made significant strides with our aero dual-band terminal including passing the standard for the environmental testing of avionics hardware and received the DO-160 certification.
Another area of opportunity for us is the non-geostationary orbit, also known as NGSO constellations. Gilat achieved two important milestones in demonstrating successful trials of our mobility technology for LEO satellites.