Gilat Satellite Networks Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to Gilad's second quarter 2022 results conference call. All participants are present in listen-only mode. Following the 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 August 9th, 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 second quarter 2022 results conference call and webcast. A recording of this call will be available beginning at approximately noon Eastern time today, August 9, 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 statements in Gilad's earnings release, with a reminder that statements made on this earning call that 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 risks, 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 disclaims any obligation to do so. More detailed information about which factors can be found in Gilad's report filed with the Securities and Exchange Commission. With that, let me turn to introductions. On the call today are Mr. Adis Fadiyat, Gilad's CEO, and Mr. Gil Benyamin, Gilad's CFO. I would now like to turn the call over to Adi Sadia. Adi, 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 second quarter of 2022 earning call. We are pleased with our results for the second quarter. We are particularly happy with our solid improvement in profitability and with a strong growth in our adjusted EBITDA. Second quarter revenues were $55.5 million, slightly above the second quarter of last year. Adjusted EBITDA improved to $5.3 million, more than double compared to an adjusted EBITDA of $2.4 million a year ago. Adjusted EBITDA represents a margin of 9.5% of revenues compared to 4% a year ago. More importantly, looking ahead, we are well on track with our expectations for 2022 and which is turning to be a strong recovery year for Gilad. We are therefore reiterating our 2022 annual guidance of revenues, operating income and adjusted EBITDA. I will now focus on some of the business achievements and discuss some of the recent highlights. I am excited to share that we had a strong quarter in the current new era of satellite communication. Gilad is expanding its strategic relationship with satellite operators and has received, during the second quarter, about $20 million in additional orders for our next-generation platform, SkyH4. SkyH4 continues to show strong market acceptance for multi-orbit, multi-service applications. SkyH4 was designed and built to capitalize on the large opportunities of the launch of GEO satellite and NGSO constellations. We have a growing pipeline and we continue to compete on important geo-VHTS opportunities for additional major satellite operators. We see solid growth potential in this new era of satellite communication, and we are on track to meet our goal of capturing a strong position in this mega market. The ground segment market alone is estimated to be a multi-billion dollar market opportunity over the next few years, according to industry analyst NSR. In our SSPA product line, we continue as planned with two previously reported major projects with a potential of hundreds of millions of dollars for large NGSO constellations. We saw a strong quarter for the mobility market, including both for the IFC and maritime segments. As the business continued to pick up, we received multi-million dollar orders from key customers for both our SkyH4 platform and our SSPA product line. As the current demand for air travel is booming, Interstat Commercial Aviation has expanded its strategic partnership with Gilad. Additional orders were received to expand Interstat's service and increase user experience for air travelers in Asia Pacific. In addition, multi-million dollars orders were received from key customers for IFC SSPA solutions. On the maritime front, we are working hand-in-hand with SCS to introduce premium maritime service to cruise lines, and we expect the first ship to go online this quarter. The service will operate initially over geosatellite, and the plan is that next year it will also include Empire NGSO Constellation. This is an example of Gilad's unique advantage with SkyH4, as it's the first to support both GEO and MEO constellations. The mobility market is a strategic market for Gilad. I am optimistic that Gilad technology will provide the needed capabilities for us to continue to be the leading solution for Internet connectivity during travel in the air and increase our penetration into the maritime market. In the cellular backhaul segment, Gilad continued to lead with a growing business of more than $10 million in orders in the second quarter to expand existing projects in Latin America and Asia Pacific. Tier 1 mobile operators continue to rely on Gilad's leading cellular backhaul solution to increase their coverage to thousands of new sites, providing a reliable, excellent 4G user experience. Gilad's technology is ready and proven to facilitate the market transition to 5G. As the transition from 4G to 5G is expected to take place in the coming years, we are optimistic that this will create new business opportunities for Gilad. Gilad is continuing to focus on the defense business, and I am excited to share that we are making good progress with a very large defense program. In addition, we received follow-on orders to expand the Defense Force SATCOM network business in Asia. Gilad's equipment will be used to expand tactical SATCOM solutions, as well as address mission-critical C4I needs. Furthermore, we are making significant progress with our product line for unmanned aerial vehicles. In Peru this quarter, Gilad received an expansion of a large contract with Internet Paratodos, a consortium consisting of Telefonica and Facebook, among others, to expand Internet connectivity in Latin America. The contract with Gilad is for 4G server backhaul services over the Internet being deployed at more than 100 new sites and more than 800 sites in total to provide coverage to rural areas through Gilad's access network. This extension demonstrates our ability to execute our vision to profitable recurring revenues in Peru. In the enterprise segment, we signed an agreement to enable a Central Asian government to provide digital services over satellite. Gilad will facilitate the connection of rural villages to the government network and will enable access to citizens to remote digital services, thus assisting in bridging the digital divide. Finally, I am pleased to say that we continue to have a strong backlog and a healthy pipeline and we have good visibility into the remainder of 2022. We expect to show in the second half of the year significant growth both in revenue and profitability. We therefore feel comfortable reiterating our 2022 annual guidance. This is even as we consider the challenges such as the supply chain turmoil and our continued strong investment in R&D that enable us to prepare for the wealth of opportunities we see ahead. And with that, I'd like to hand over to our CFO, Gil Benyamini. Gil, please go ahead.