Gilat Satellite Networks Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to GILAT's third quarter 2023 results conference call. All participants are present in listen-only mode. Following management's formal presentation, instructions will be via VIN for the question and answer session. For operator assistance during the conference, please press star zero. As a reminder, this conference is being recorded November 7, 2023. By now, you should have all received the company's press release. If you have not received it, please contact Gilat's investor relations team at EK Global Investor Relations at 1-646-688-3559 or view it in the news section of the company's website, www.gilat.com. I would now like to hand over the call to Mr. Ehud Helft of EK Global Investor Relations. Mr. Helft, would you like to begin?

Yeah, good morning, good afternoon, everyone. Thank you for joining us today for Gilad's third quarter 2023 results conference call and webcast. A recording of this call will be available beginning at approximately noon Eastern time today, November 9th, November 7th, so in the 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 these earnings calls that are not historical facts, may be deemed forward-looking statements within the meaning of the Private Security 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 explicitly defamed 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. With that said, let me turn to the deductions. On the call today are Mr. Adis Fadia, Gilad's CEO, and Mr. Gil Benyamin, Gilad's CFO. I would now like to turn over the call to Adis Fadia. Adi, we're ready to start.

Thank you Yehud and good day to everyone. I want to thank you for joining us today for our third quarter of 2023 earning call. I want to take a moment to comment on the tragic events of October 7 and the war in Israel. Our thoughts and prayers are with the victims and families of this horrific attack. We are very proud of our employees' response to this crisis and their dedication to the company during these times. We also want to thank our partners, customers, suppliers and the world community at large for their full-hearted support. Before I discuss the business results of the quarter, I want to emphasize that Gilad is a strong global company with operation and development centers worldwide. Our operation remains unaffected by the recent event in Israel. We continue to closely monitor the situation and have implemented relevant measures and refreshed our business continuity plans to minimize any potential effect, if at all, on our business. Now let's move to the business review of the third quarter of 2023. We are pleased with our results for the third quarter, particularly the continued revenue growth combined with the continued improvement of our profitability. The good performance was due to growing interest in our solutions as well as advancement in the satellite communication space in general. In particular, I would mention the in-flight connectivity market that contributes significantly to our revenue growth and profitability this quarter. We report significantly improved profitability and adjusted EBITDA, demonstrating the operating leverage inherent in our business. In fact, our year-to-date adjusted EBITDA of $27 million already exceeds the adjusted EBITDA from the all of 2022. We are very pleased with the progress made this year, and we expect this trend to continue. Looking ahead, we are narrowing our revenue and profitability expectations for the full year 2023. We expect revenues of between $265 to $275 million. We are increasing our gap operating income to between $29 to $31 million due to one-time income net that Gil Benyaminia, our CFO, will discuss in his comments. And we expect adjusted EBITDA of between $35 to $37 million, representing year-over-year growth of 43% at the midpoint. In the very high-throughput satellite, the VHDS, and the non-geostationary satellite, the NGSO Constellations business, we continue to lead with follow-on multi-million-dollar orders from our strategic partners, the satellite operators. Network expansions and delivery of Gilad multi-orbit next-generation platform, the SkyH4, and the Aquarius VSATs are taking place globally in support of multiple applications such as in-flight connectivity, cellular backhaul, and enterprise. In the third quarter, we secured a new win for millions of dollars for our multi-application platform to support new high-throughput satellites. These satellites will be used primarily for IFC with maritime and stellar backhaul as secondary applications. In our SSDA product line, I am pleased to report that we continue to take progress in a major project with significant potential for a large NGSO constellation. We are on track and expect to pass the qualification process in Q4 this year. This quarter continues to be a strong quarter for Gilad's solar backhaul solution over satellite. A significant award this quarter for approximately $20 million for a contract extension from a Tier 1 MNO in the United States. Gilad continues to support this long-term Tier 1 customer with a multi-year end-to-end managed services contract for satellite-based solar backhaul and emergency response services. Furthermore, A most exciting technical milestone was achieved with CH4 Aquarius VSAT for 5G cellular backhaul in India with Reliance Jio over SCS O3B Empire services. An outstanding performance of 1 gigabits per second was showcased in India's first satellite-based gigafiber service called Geospace Fiber at the India Mobile Congress. The amazing success demonstrates high-speed backhauling services of a satellite to deliver high-throughput connectivity to previously inaccessible geographies within India. I couldn't be prouder of our team who made this happen. During the quarter, we built upon our ongoing activity with Intelsat with an additional multi-million dollar deal to enhance the global network and terrorist modems deployments that operate both on SkyH4 and SkyH2C. In addition, we engage in our SSPA business in several new opportunities for next-generation IFC equipment, which we hope will mature in the next few months. This success, in addition to our ongoing business with another large aerospace integrator, a long-time partner in the IFC market, we have continually relied on Gilad transceivers. In March this year, we signed an agreement to acquire DataPass, Inc., a leading U.S. defense satellite integrator. This is a major step in our initiative to increase our presence in the strategically growing defense market. The acquisition is an important step in the expansion of Gilad business into the U.S. DOD and government sector, as well as into other international government and defense markets. We are progressing very well towards the closing of the transaction. We expect our revenues in the defense sector to increase by approximately $50 million on a yearly basis following the imminent closing of this acquisition. We are now awaiting final regulatory approval, which by recent indication should arrive soon, following which we expect closing to happen this quarter. We further expect that the forthcoming closing of Datapath acquisition will provide a tailwind for major defense opportunities. As I have mentioned in the past, we are putting great focus on the defense market, and we are seeing slow but good progress in this area and expect This extra focus will bear fruit soon. In the third quarter, we already advanced a project with the Ministry of Defense of a country in Southeast Asia. We continue to grow our pipeline and are working on several exciting deals which we hope will materialize in the near future. Furthermore, our enterprise customers worldwide continue to depend on us to enhance their business and new opportunities continue to arise. For example, we received a managed service contract expansion from a large government corporation in Asia-Pacific to provide connectivity for multiple applications across the nation. This includes, but not limited to, enterprise applications with strong opportunities for cellular backup, emergency response, and mobility applications, such as comms on the move and comms on the pause. Providing social inclusion is a big part of our strategy, and we have exemplified also a new deal in the Philippines. A new global network was deployed to provide connectivity to the unconnected, leveraging our SkyH2C platform and Gemini Vsats. In Peru, we are progressing towards completing the construction of the Amazonas region, which is the sixth region awarded to Gilad back in 2018. We expect to enter acceptance process soon, enabling us to deliver the network to PONATEL and to move into the operational phase in the first half of 2024. Furthermore, in Peru, we are expecting additional progress in the next few months. This includes the maturity of several large RFPs with Pronatel and the Peruvian government, as well as several project extensions. We are most pleased with the strong pipeline we have in Peru. To conclude, I am pleased with our ongoing support of our partners, as well as our ability to capture significant new opportunities. We continue to lead with our next generation platform, SkyEdge 4, that support multiple orbits and verticals, including our strategic markets of mobility, cellular backhaul, and defense. We also secured new opportunities for our SSPA business, especially in the IFC segment, and are seeing increased opportunities in that line of business. We have a strong pipeline and expect the materialization of important deals over the coming months. And with that, I hand over to Gil Benyaminia, our CFO. Gil, please.