Gilat Satellite Networks Ltd. (NASDAQ:GILT) Q3 2019 Earnings Conference Call - Final Transcript
Nov 19, 2019 • 09:30 am ET
one of the pillars of our strategy and we have every intention of repeating this going forward.
Summarizing our financial performance for the third quarter. GAAP operating income totaled $7 million, adjusted EBITDA grew to $10.1 million and revenues totaled $63.4 million. We also achieved bottom line profitability with GAAP net income of $6.3 million or $0.11 per diluted share. We have updated our management objectives for 2019 as follows: Reiterating GAAP operating income of between $23 million and $27 million and adjusted EBITDA of between $38 million and $42 million, while reducing the revenue range to between $260 million and $270 million. The adjustment in the revenue objectives is due to delay in several key orders, particularly in Latin America and Southeast Asia, coupled with delivery constraints that we have since mostly result.
And let me move now to the business section and elaborate on our progress this quarter. I would like to start out with an outstanding achievement for Gilat, in reaching a landmark and fulfilling our strategy to be a significant player in the NGSO constellations. Gilat multi-orbit GEO and NGSO platform was selected by SES for its revolutionary mPOWER MEO constellation with a multi-million dollar contract for Gilat.
We expect deployment of constellation services to start in roughly two years. Gilat was selected for one reason only. The fact that we brought to the table, technological innovation, and our innovation ground product design significantly reduces cost per bit provides best-in-class spectral efficiency, and demonstrate a step function in modern performance.
All are vital for the revolutionary multi-terabit high performance constellation, such as mPOWER. This win positions Gilat at the forefront of ground network for NGSO constellations and put Gilat in an excellent position to win additional opportunities in the vast market that NGSO creates. But further than that, Gilat's product road-map will serve not only NGSO, but also the new generation of GEO satellites, namely HTS and VHTS, thus creating more opportunity for Gilat.
Moving to mobility, the mobility aero market was a positive driver for our revenue growth in the third quarter and continues to be a major growth engine for Gilat. As mentioned last quarter, the plan by a number of U.S. airlines to offer free WiFi is a tailwind and a major opportunity for Gilat. This is due to a significant expected usage increase and particularly a usage shift to a mix of business and leisure travellers. Free WiFi is likely to enhance the usage of higher bandwidth applications such as streaming and social media.
To support this trend, there will be an increase in the IFC bandwidth, requiring additional equipment that can provide excellent satellite resource utilization. Gilat is well positioned with our field-proven high performance solution that easily met the demand of hundreds of concurrent passengers, providing hundreds of megabit per second with an excellent user experience.
As I said in my opening remarks, we are already starting to see significant demand as a result of this trend. We also believe