Gilat Satellite Networks Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to Gilad's first quarter 2022 results conference call. All participants are present in listen-only mode. Following management's 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 May 23, 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?

Thank you, operator. Good morning and good afternoon, everyone. Thank you for joining us today for Gilad's first quarter 2022 results conference call and webcast. A recording of this call will be available beginning at approximately noon Eastern time today, May 23, as a webcast on Gilad's website for a period of 30 days. Also, please note that investors are urged to read the forward-looking statement in Gilad's earnings release with a reminder that statements made on this earnings call are not historical facts may be deemed 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 operating 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 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 expressly disclaimed any obligation to do so. More detailed information about risk factors can be found in Gilad's report filed with the Securities and Exchange Commission. And with that said, let me turn to the introductions. On the call today are Mr. Adis Fadia, Gilad's CEO, and Mr. Gil Binyamini, Gilad's CFO. I would now like to turn over the call to Adi. Adi, over to you.

Thank you, Ehud, and good day to everyone. I would like to thank you for joining us today for our first quarter of 2022 earnings call. We are pleased with the results of the first quarter of 2022, which showed strong revenue growth and improved adjusted EBITDA profitability. First quarter revenues were $51.4 million, up 19% year over year. Adjusted EBITDA was $2.5 million, comparing to an adjusted EBITDA loss of $1.3 million a year ago. More importantly, and as we discussed in the last earning call, looking ahead, we expect 2022 to be a strong year and we reiterate our annual guidance and management objective as we announced in February. I will now focus on some of the business achievements and discuss some of the recent highlights. I am pleased to report that we are progressing as planned in the new era of satellite communication consisting of very high-throughput satellite known as VHTS and non-geostationary orbit constellation known as NGSO. Further to our launch last quarter of Gilad's next-generation platform, SkyH4, we are continuing to see significant increased interest in our multi-orbit, multi-service platform with additional orders and growing pipeline. SkyH4 is being well accepted as we are competing on important opportunities for additional major satellite operators. In addition, we are encouraged by additional geo-software-defined satellite launch plans since SkyH4 was built with an architecture to support these next-generation satellites. In addition to the progress with SkyH4, I would like to share that we continue as planned with two other major achievements for our SSPA product lines reported last quarter. We are progressing well with the development as part of the multi-year contract which has a potential of hundreds of millions of dollars to customize and provide our leading technology for NGSO constellations. Furthermore, we have received additional multi-million dollar orders from a leading satellite operator for our SSPA product line to support low Earth orbit constellation. Gilad sees solid growth potential in the emerging VHTS and NGSO satellite communication market and we are on track to meet the goal of capturing a strong position in this mega market. The ground segment market alone is estimated to reach multi-billion dollars over the next few years, according to industry analyst NSR. We see increased activity in the mobility market as orders continue to pick up. InterSat has made a strategic decision and selected GILAT SkyH4 as a platform to provide IFC services over North America with their latest IS-40E high throughput satellite. In addition, InterSat expanded its IFC capabilities with SkyH4 operating with GILAT's Taurus air modems to serve its global network with enhanced user experience. These modems provide a high-quality IFC for commercial aviation, regional aircraft, and business jets, while leveraging interoperability with SkyH4 and SkyH2C. In the maritime market segment, we are progressing with a contract to deliver SkyH4 platform and our Aquarius modems to top cruise lines that will use SCS's O3BM power, as well as SCS's geostationary satellite fleet. On another front, we achieved an important milestone with our electronically steered antenna for IFC. This past quarter, we achieved a breakthrough when operating on the Airbus C295 flight testbed. Gilad ISA terminal worked in conjunction with our SkyH2C platform and the Taurus aero modem. The project marks a successful completion of the final phase of five-year European Clean Sky II IFC ISA project. I am optimistic that Gilad's technology will provide the needed capabilities for Gilad to continue to be the leading solution for internet connectivity during travel, in the air, at sea, and on land. In the solar backdoor segment, we continue to lead the industry with multi-million dollar orders this quarter for network expansion received from Tier 1 MNOs worldwide. This is a testament to our proven technology and close working relationship with our partners. I am happy to report a win in the second largest country in Africa, the Democratic Republic of Congo. Gilad was selected by Intelsat in a multi-million dollar deal to provide cellular backhaul of a satellite to a leading mobile network operator. We see good potential to capture additional market share in the DRC consisting of 90 million and growing population. We also achieved a milestone in with our partner team in Brazil, enriching 1,000 sites of 4G cellular back-over-satellite network, the largest sat network in Latin America. Furthermore, we expect to significantly expand business in Latin America with thousands of additional VSATs and related services, indicating yet again our proven leading cellular back-over-satellite technology. Looking forward, we expect additional business with the MNOs worldwide as this market significantly grows in the coming years. According to industry analyst NSR in an April 2022 report, the modern market revenues are forecasted to grow at the rate of 13% per year on an average over the next 10 years. The 4G market is forecasted to be about 75% of modern shipments in 2022, as well as the majority of shipments through 2031. the 5G market expected to start only in 2024 and to pick up in growth only in 2026. Gilad intend to support and lead the market transition to 5G with our newest technology. In the enterprise segment, I am pleased to report a multi-million dollar deal to support business continuity for a large U.S. retail network. SkyH2C hubs and Vsats support thousands of storefronts throughout the United States, with the required gateway backup to guarantee that each of the stores has the assurance of always being connected. We are increasing our focus in the defense market and are seeing success with our product line for unmanned aerial vehicles, known as UAVs. A world-leading UAV manufacturer placed an order for our satellite terminals as a satellite antenna solution for its tactical UAVs, and we are hoping to close additional such deals soon. In Peru, we continue to successfully execute our strategy while making progress in building the terrestrial network in Ica and Amazonas and providing services in Juancavelica, Ayacucho, Apurímac and Cusco, as well as to local service providers and MNOs. In 2022, we expect to turn a corner in Peru and for our business in Peru to become more profitable. I'd like to conclude by sharing a few more points. As we said in the last several calls, we plan to continue to heavily invest in R&D to maintain our leadership position and to be prepared for the wealth of opportunities that we see ahead of us. We also are carefully monitoring the global supply chain issues and so far we have managed it well and have been able to meet most of our commitments to customers and partners. Finally, I am pleased to say that we have a strong backlog and a healthy pipeline and good visibility into 2022. We therefore reiterate our management objective for 2022 as we announced in February. Our revenue guidance is between $245 to $265 million. We expect gap operating income of between $5 to $9 million and adjusted EBITDA of between $20 to $24 million. And with that, I'd like to hand over to our CFO, Gil Benyamini. Gil, we are now ready for your report. Please go ahead.