Gilat Satellite Networks Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to GILAD's fourth quarter 2021 results conference call. All participants are at present in listen-only mode. Following the management formal presentation, instructions will be given for the question and answer session. For operator assistance during the conference, please press star zero. As a reminder, this conference is being recorded February 15, 2022. By now, you should have all received the company's press release. If you have not received it, please contact Gilad's Investor Relations team at GK Investor and Public Relations at 1-646-688-3559 or view it in the news section of the company's website, www.gilad.com. I would now like to hand over the call to Mr. Ehud Helft of GK Investor Relations. Mr. Helft, would you like to begin, please?

A recording of this call will be available beginning approximately noon Eastern Time today, February 15, and will be available for telephone replay until November 15 at noon. Webcasts will be archived on the Gilad's website for a period of 30 days. Also, please note that investors are urged to read the forward-looking statements in Gilad's earnings release with the reminder that statements made on this earnings call are not historical facts, which are not historical facts, may deem forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements, including statements regarding future financial operation results, involve risk uncertainties and contingencies, many of which are beyond the control of Gilad, and which may cause actual results to differ materially from those anticipated results. Gilad is under no obligation to update or alter these forward-looking statements, whether as a result of new information, future events, or otherwise, and the company may expressly disclaim any obligation to do so. More detailed information about the risk factors can be found in Gilad's Reports filed with the Securities and Exchange Commission. With that said, let me turn to introductions. On the call today are Mr. Adis Fadia, Gilad's CEO, and Mr. Gilbini Amini, Gilad's CFO. I would now like to turn over the call to Adis Fadia. Adis, we are ready to begin.

Thank you, Ehud, and good day to everyone. I would like to thank you for joining us today for our fourth quarter and full year 2021 earnings call. Our results in 2021 showed strong revenue growth with even stronger profitability growth. This kept off strong end to 2021, which we see as a transition year for Gilad and was a challenging year in many aspects. First quarter revenues were $67 million, up 58% year over year. Adjusted EBITDA was $10.6 million, up from only $1 million a year ago. For 2021, we reported revenue of $219 million, up 32% from 2020, and adjusted EBITDA of $15.7 million versus an adjusted EBITDA loss of $3.3 million in 2020. More importantly, looking ahead, we expect 2022 to be a stronger year. The improved visibility across our various business segments allow us to provide for the first time in two years full year guidance, which I will elaborate on at the end of my statement. I will now focus on some of the business achievements and discuss some of the recent highlights. I'm excited to report that we recently launched Gilad's next generation platform, SkyH4, with a goal to increase our market share in the ground segment market of the new era of satellite communications, consisting of non-geostationary orbit constellations known as NGSO, and very high throughput satellites, known as VHTS. Today's new era consists of new multi-orbit constellations and very high throughput satellites that meet the demands for connectivity everywhere, all the time. This market dynamic presents unique opportunities for Gilad since SkyH4 is a software-centric platform. We therefore expect to see a favorable mix of software licenses in addition to hardware sales. I am proud to report that we recently closed strategic SkyH4 deals with both Intelsat and SCS, and we have a healthy pipeline as we move forward. With SkyH4, our goal is to capture a leading position of this multi-billion dollar emerging market. SkyH4 opens new markets and enhances our leadership in others. This includes fortifying our 4G cellular backup leadership and opening up 5G opportunities. SkyH4 is further growing ILAT leadership in mobility, both in IFC and maritime, as well as positioning us for enlarging our pipeline in the defense and enterprise market. SkyH4 is equipped with an elastic architecture built to deliver speeds of gigabits per second and unmatched CAPEX and OPEX efficiency, supporting next-generation software-defined satellites and simultaneously supporting any application, even the most demanding situation. In addition to the exciting news about SkyEdge 4, I would like to shed more light on two outstanding achievements in the NGSO and VHTS markets. The first achievement is that we entered into a multi-year contract with a potential of hundreds of millions of dollars to customize and provide our leading technology for NGSO constellations. Upon signing this contract, we received the first multi-million dollar purchase order for initial units. And the second achievement is that we received orders totaling over $40 million for a leading satellite operator for our SSPA product line to support low-Earth orbit constellations. Gilad sees solid growth potential in the emerging VHTS and NGSO satellite communication market and is materializing its goal to benefit from these growing mega-markets. I'm happy to report that in the mobility market segment, we continue to see market recovery. In the IFC segment, Gilad expanded its strategic partnership with Intelsat for commercial aviation. As a reminder, at the end of 2020, Intelsat acquired Grover Commercial Aviation Business. Intelsat selects Gilad's SkyEdge4 as a platform to provide IFC services over North America with their latest IS-40E high-throughput satellite that is expected to be launched during 2022. In addition, Intelsat's global IFC network will be expanded by Gilad to cater to the growing use of IFC over Asia. We expect additional significant revenue in this segment as Intelsat continues to enhance and expand their network. Moving on to maritime. We secured a deal in the fourth quarter with a new service provider in Eurasia for expanded maritime connectivity for commercial fishing and maritime transport markets. This recent maritime success is on top of the reported multi-million dollar deal with SCS that we closed during 2021 for SkyEdge 4, which provides Gilad with access to top cruise lines and maritime service providers that will use SCS O3BM power as well as the geostationary satellite fleet. I am optimistic that Gilad technology will continue to be the leading solution for Internet connectivity during travel in the air, at sea, and on land. In the cellular backhaul segment, we had new accounts penetration with one of the world's largest mobile operators. This achievement has significant upside potential for Gilad as we continue to strengthen our proven global market leadership for 4G backhaul over satellite markets. In the fourth quarter, we also received a managed service contract extension from a leading operator in Mexico. Furthermore, in the last quarter of 2021, we received awards totaling millions of dollars from other Tier 1 mobile operators around the globe, which contributed to our strong performance in 2021 in the Seoul-Arbeco market segment. The last mobile operators continue to expand their network coverage to remote areas with Gilad's solar backhaul over satellite solution. We also see them using our equipment for emergency response services as well as for IoT. We believe that we will continue to see additional business growth with the MNOs as this market is expected to significantly grow in the coming years. Gilad further intends to support and lead the market transition to 5G with our newest technology. In the fourth quarter, we closed a significant multi-million dollar deal with one of the largest service providers in Eurasia. We were chosen as a ground segment provider to modernize and expand satellite communications throughout the region for a variety of applications, including maritime, land mobility, and consumer. Furthermore, we were awarded several additional contracts to extend broadband networks with thousands of resets to assist people overcoming some of the pandemic consequences. The defense market is a growing focus area for Gilad. During the last quarter of 2021, we secured over $5 million for solid state power amplifiers from tier one US global military terminal provider. This contract was extension to initial $5 million order from this customer that we reported earlier the year. And we expect additional expansion for this project in 2022. Our defense segment received additional focus during the year, and we saw several multimillion-dollar global deals, including the first commitment for a new multi-orbit next-generation platform, SkyH4, to a defense customer. In Peru, we are making progress in building the terrestrial networks in Ica and Amazonas, and providing services in Juancavelica, Ayacucho, Apurímac, and Cusco while successfully executing on our strategy. We have received orders for services in Peru during 2021 totaling more than $40 million, and as such, we achieved our goal of $50 million in annual recurring revenue run rate ahead of our stated objectives. In 2022, we expect to turn a corner in Peru and for our business in Peru to become significantly profitable. I'd like to conclude with sharing a few more points. We plan to continue to heavily invest in R&D to maintain our leadership position and be prepared for the wealth of opportunities ahead. We also are carefully monitoring the global supply chain crisis and so far I am proud that in 2021 we have managed to meet our commitments. Finally, I am pleased to say that we have a strong backlog and a healthy pipeline and a good visibility into 2022. We therefore have decided to share with you our guidance for 2022. Our revenue guidance is between $245 to $265 million, which represents a growth of between 12% to 21% from our comparable 2021 results. We expect gap operating income of between $5 to $9 million and adjusted EBITDA of between $20 to $24 million. This represents an adjusted EBITDA increase of between 27% to 53% year-over-year, even with significant increase in our investment in R&D. We expect that as we move along the year and our visibility will further improve, we'll be able to narrow the range of our guidance. And with that, I'd like to hand over to our new CFO, Gil Binyamini. Welcome, Gil. Gil, we are now ready for your report. Please, go ahead.