Gilat Satellite Networks Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to Gilad's first quarter 2024 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 8, 2024. 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 EK Global Investor 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 EK Global Investor Relations. Mr. Helft, would you like to begin, please?

Yeah, good morning and good afternoon, everyone. Thank you for joining us today for Gilad's first quarter 2024 results conference call and webcast. A recording of this call will be available beginning at approximately noon Eastern time today, May 8th, 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 the statement made on this earnings 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 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 expressly disclaims any obligation to do so. More detailed information about 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. Adil Sfadia, Gilad's CEO, and Mr. Gil Benyamin, Gilad's CFO. I would now like to turn over the call to Adil Sfadia. Adil, you are ready to begin.

Thank you, Ud. and good day to everyone. I want to thank you for joining us today for our first quarter of 2024 earning call. We are pleased with the results of the first quarter, which starts 2024 well and is in line with our expectations for the year. The first quarter of 2024 showed strong 29% year-over-year revenue growth, including the contribution of the revenues from our recent acquisition data pass and a solid level of organic growth which was broad across multiple business areas. The broad interest and good performance were due to continued growing market interest in our solution and advancement in the satellite communication space. I also want to highlight, in particular, that our strategic partnership with the major satellite operators also strongly supported the growth in our business during this quarter. We are pleased with DataPass' contribution to the quarter's results. DataPass contributed about 17% to the top line growth and positive adjusted EBITDA. We are already demonstrating our ability to leverage the capabilities of DataPass and Wavestream, our two U.S.-based subsidiaries, which I will explain further when discussing our recent activities in the defense sector. In terms of overall bottom line, we improved our adjusted EBITDA profitability over Q1 of last year, which itself was a very strong quarter with a favorable revenue mix by 11% year-over-year. Looking ahead, we are very much on track, and as such, we are reiterating the guidance we gave at the beginning of the year, which Gil will summarize shortly. Now let's move to the business review of the first quarter of 2024. In the very high-throughput satellite, the VHTS, and the non-geostationary satellite, the NGSO Constellation business segment, We continue to lead the market and grow our business with follow-on multi-million dollar orders from our strategic partners, the satellite operators, which mainly include SCS and IntelSat, among others. This is driven by increasing demand for Gilad's SkyEdge platforms as satellite operators expand their networks and deliver a wider range of applications to a growing number of users. During the last few months, we have been awarded more than $13 million in cumulative orders from several satellite operators to expand their global networks utilizing GILAT, SkyH2C, and SkyH4 multi-orbit multi-service capabilities. Overall, we are enjoying an increase in the pace of deployment and installation for both Gateway Hubs and terminals across EMPOWER and other SES geosatellites. In addition, our only-owned subsidiary in the United States, Wavestream, is successfully delivering SSPAs to a new NGSO operator for its gateway deployments. We believe this success positions us well as the main SSPA supplier to this operator and potentially to receive the large share of their future business, which is worth tens of millions of dollars. Additional orders from this NGSO operator are expected during 2024. Our increased focus on the defense market segment is already bearing fruit. The acquisition of Datapath was completed in November of last year, and Q1 was the first full quarter consolidating the revenues into our defense sector under the satellite network segment. We recently announced several new projects that were awarded to Datapath and Wavestream. Datapath received multiple orders during the first quarter, totaling more than $15 million from the U.S. Department of Defense for DCAT 3421 terminals. This market-leading solution is a transportable SATCOM hub that delivers the operational flexibility, capacity, connectivity, and control required to ensure connectivity anywhere in the world. Following last quarter's announcement that the U.S. Army awarded WaveStream a $20 million contract for the Sustain Anytime Anywhere Satellite Connectivity Program, we have already received the following orders for more than $12 million – we are providing a 50-watt KA-band SSPA for the long-term sustainment of thousands of mobile satellite transportable terminals, which enables a continuous communication on-the-post solution across diverse climates and hard conditions around the globe. This order demonstrates Gilad's ability to leverage the capabilities of our two U.S.-based subsidiaries. We also received a multimillion-dollar defense satellite connectivity project order from a leading governmental defense organization. This order included Gilad's CH4 platform and Taurus-M modems to augment the defense organization's advanced satellite communication capabilities. In addition, a leading defense organization selected Gilad to develop a next-generation software-defined modem for SATCOM on the move and SATCOM on the pause military applications valued at millions of dollars. We continue to make great progress in the mobility sector, demonstrating solid year-over-year growth, developing more products, adding more customers, and supporting more verticals. During the first quarter, we made significant progress in developing our electronically-sterile antenna for GEO and LEO. Initial tests over GEO proved that the antenna design meets the intended specifications for commercial aviation. Gilad ISA further meets and exceeds the performance of existing flat-panel antennas while supporting two satellite beams simultaneously. Safran Passenger Innovation selected Wavestream to develop, qualify, and produce a new line of KU-band power supply unit products to support the KU-band ISA, bolstering Gilad's growth in the IFC market. In addition, we received orders for the Taurus modem from Safran for the Airbus HBC Plus program, as well as from a leading IFC service provider that expands Gilad IFC footprint into the business aviation and government markets. In our enterprise business segment, our customers worldwide continue to depend on us to enhance their business, and new opportunities continue to arise. We are witnessing a significant surge in social inclusion projects globally. This project aims to bridge the digital divide and empower underserved communities by providing access to essential services such as education, healthcare, and economic opportunities. Communication is the cornerstone of social inclusion, and satellite communication stands out as the key achieving widespread connectivity that surpasses the limitation of terrestrial alternatives. We received a $3 million follow-on order for a public Wi-Fi service in Latin America. This project highlights once again the importance of social inclusion projects aimed at bridging the digital divide. During the quarter, we also received a significant order for an additional social inclusion project in Brazil. This program will expand Wi-Fi services across the country and require thousands of additional visa systems from Gilad over the coming years. In Peru, we are pleased to announce the completion of the construction and implementation of the sixth regional project for Puanatel in the Amazonas region. We are now in the acceptance process and expect to be operational later this year. In addition, we are progressing in building the $17 million expansion project in the Amazonas region, expecting to finish the expansion before the end of the year. Furthermore, in Peru, We are expecting additional progress in the next few months. This includes the maturity of several large RFPs with Pornaterra and the Peruvian government, as well as several project extensions. We are very pleased with the strong pipeline in Peru for the rest of the year. To conclude, I am pleased with our results for the first quarter, which included the contribution of the revenues of our recent acquisition data path, in addition to a solid level of organic growth, which are attributed to the growing interest in our solutions, advancement in the satellite communication market, and particularly our strategic partnership with the major satellite operators. We continue to lead with our next-generation platform, the SkyH4, which supports multiple orbits, verticals, and applications, including our strategic markets of mobility, cellular backhaul, and defense. During the first quarter, we made significant progress in developing our electronically steerable antenna for GEO and LEO, and expanded our IFC footprint into business aviation and government markets. We have also delivered our SSPAs to a new NGSO operator for its gateway deployments and are seeing increasing opportunities in this line of business. We have a strong pipeline and expect the materialization of important deals over the coming months. With that, I hand over to Gil Binyamini, our CFO.