Follow-Up to Gilat: How Much Bargaining Power Shifted to the Largest Customers
Gilat’s two largest commercial customers already accounted for 44% of 2025 revenue, but that is still a transition-year snapshot. Because the European customer completed the acquisition of the U.S. customer during 2025, bargaining power in the Commercial Division may now be more concentrated than the annual customer table first suggests.
Follow-Up Focus
The main article focused on the gap between Gilat’s revenue growth and the slower improvement in profit and cash. This follow-up isolates one reason that gap matters so much: Gilat’s commercial business became far more dependent on a narrow group of large customers, and by the end of 2025 those two biggest customers no longer looked like two separate power centers.
2025 ended with an unusually sharp concentration profile: the European customer contributed 24% of revenue, the U.S. customer 20%, and PRONATEL in Peru another 14%. In other words, the two largest commercial customers contributed 44% of the top line, and the top three customers already reached 58%. This is no longer a footnote-level disclosure. It is a business structure that can affect pricing, delivery terms, deployment cadence, and the priority stack inside the entire Commercial Division.
What is working today is also clear: the Commercial Division expanded sharply and reached 62% of revenue, and on January 20, 2026 the company announced an approximately $11 million SkyEdge platform order from a leading satellite operator in Asia Pacific, with deliveries expected over the next 12 months. But that still does not solve the power problem. The Commercial Division grew 81% to $281.4 million, yet its gross profit slipped slightly to $74.6 million and its gross margin fell from 48% to 27%.
The more interesting point is that 44% is probably not the end of the story but a transition number. The company states that the European customer completed the acquisition of the U.S. customer during 2025, and that sales to the U.S. customer in 2025 relate to the period before the acquisition. This is already an analytical inference, not a reported 2026 fact: if the 2025 table still splits the number between two customers because of timing, the underlying bargaining power may be even more concentrated in practice going into the next cycle.
Where Concentration Really Jumped
What makes 2025 unusual is not only the level of exposure but the speed of the change. In 2023 and 2024 the two largest commercial customers represented 29% and 23% of revenue. In 2025 that figure jumped to 44%. This was not a gradual deepening of sales to existing customers. It was a sharp change in the company’s dependency profile.
In dollar terms, 44% of $451.7 million in 2025 revenue is about $198.7 million. Adding PRONATEL brings the top-three customer exposure to roughly $262.0 million, meaning well over half of annual revenue depended on only three customers. That is the core issue. Gilat may operate through several business lines, but the actual revenue base is far less diversified than the operating structure suggests.
Another important point is disclosure quality. The company reveals the geography of the major customers, the European Union, the U.S., and Peru, but not their names. That leaves outside readers with limited ability to judge whether Gilat’s bargaining position rests on deep technological lock-in, strong switching costs, critical operational dependence, or simply a temporary purchasing surge from very large customers.
Inside the Commercial Division, This Is Dependence on the Core Engine
The 44% figure already looks severe at the company level, but inside the Commercial Division it is more extreme. If the Commercial Division generated 62% of 2025 revenue and the two largest customers generated 44% of total company revenue, then roughly 71% of Commercial Division revenue came from that pair. In 2024 the same math pointed to roughly 45%. The center of gravity did not just grow in absolute size, it took control of a much larger portion of Gilat’s main commercial engine.
| Metric | 2024 | 2025 | Why it matters |
|---|---|---|---|
| Top two customers as % of company revenue | 23% | 44% | A sharp jump in overall dependence |
| Top two customers as % of Commercial Division revenue | about 45% | about 71% | Most of the core commercial business leaned on a pair of customers that effectively became one group |
| Commercial Division revenue | $155.3 million | $281.4 million | Sales volume expanded materially |
| Commercial Division gross profit | $75.3 million | $74.6 million | The added volume did not create higher gross profit |
| Commercial Division gross margin | 48% | 27% | There is no visible proof of stronger pricing power here |
Precision matters here. The decline in Commercial gross margin is not presented as a direct result of those two customers, and the company attributes it mainly to SBS, with lower gross margins during initial production periods and amortization of acquired intangibles. But that is exactly the point. Even without claiming that the large customers forced pricing concessions, 2025 provides no evidence that their concentrated purchasing power worked in Gilat’s favor. The same year that dependence rose sharply is also the year the economics of the Commercial Division weakened.
What the Customer Merger Changes
When one customer acquires another, supplier risk is no longer only about credit or top-line concentration. It becomes a question of power: who dictates the technical roadmap, who controls deployment timing, who chooses the platform, and who can press on pricing and delivery terms. The 2025 customer table still shows two customers, but by year end the commercial reality already looked closer to one customer group than to two independent demand centers.
The analytical implication is that the reported number probably does not yet capture the full shift. Sales to the U.S. customer in 2025 are attributed to the pre-acquisition period, so the 20-F still splits revenue between two generic customer buckets. If the commercial relationship is now converging under one acquirer, bargaining power in future periods could be even more concentrated than the 44% headline suggests. That is not a reported 2026 fact, but it is a reasonable inference from the timing the company itself disclosed.
The missing names matter as well. Without knowing exactly who the European customer and the U.S. customer are, outside readers cannot properly assess whether Gilat faces a deeply embedded strategic relationship, a genuine switching-cost moat, or instead a large buyer that can centralize procurement, demand better terms, and slow programs that are no longer top priority after integration.
The January Order Is Positive, but Still Too Small
The January 20, 2026 order is clearly positive. Gilat’s Commercial Division received an approximately $11 million SkyEdge platform order from a leading satellite operator in Asia Pacific, with deliveries expected over the next 12 months. It shows that the Commercial Division is still generating orders around a platform selected for performance, flexibility, and scalability, but it does not disclose whether the operator is a new or existing customer.
But in terms of power structure, it is still not enough. $11 million is only about 2.4% of 2025 revenue, and only a small offset against roughly $198.7 million of exposure to the two largest commercial customers. On top of that, the customer is unnamed. So the order proves commercial activity, but it does not yet prove commercial diversification.
The right reading is narrower. It shows that the Commercial Division is still adding business, but it does not yet demonstrate that the additional business is large enough, broad enough, and independent enough to rebalance the new concentration map created by the largest customers.
Conclusion
Thesis now: 2025 did not only expand Gilat’s commercial activity, it also shifted a larger share of power toward a very small customer group, precisely in the year when that structure failed to translate into better profitability.
The important number here is not only 44%, but the context around it. Inside the Commercial Division, the two largest customers already represent roughly 71% of revenue. That is a meaningful change in the business geometry. Instead of a broad customer base supporting the main growth engine, Gilat now looks like a company whose Commercial Division grew very quickly while leaning much more heavily on one effective center of power.
The strongest counter-thesis is that the merger could actually produce a deeper and more durable strategic relationship, with a wider deployment base and a larger long-term purchasing opportunity, especially if SBS and SkyEdge become more deeply embedded across the combined customer group. That is a real possibility. But until Gilat shows better gross-margin recovery, broader customer dilution, or a larger stream of new commercial contracts, the 2025 message remains sharp: the company grew, but bargaining power in the Commercial Division did not obviously grow with it.
Over the next 2 to 4 quarters, three checkpoints should decide the read: whether the next customer disclosure still shows similar or higher concentration with the merged customer group, whether Commercial gross margin recovers after SBS moves beyond its initial production phase, and whether January-style orders turn into a real sequence that expands the customer base instead of adding one-off volume.
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