Gilat Satellite Networks Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to Gilad's fourth 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 February 12, 2025. By now, you should have all received the company's press release. If you have not received it, please view it in the news section of the company's website, www.gilat.com. I would now like to hand over the call to Ms. Mayrav Sher, Head of Finance and IR. Ms. Sher, please go ahead.

Yes, thank you, Operator. Good morning and good afternoon, everyone. Thank you for joining us today for Gilat's fourth quarter 2024 Results Conference Call and Webcast. I am Merav Sher, Gilad's Head of Finance and Investor Relations. The earning press release that was issued can be found in the Investor Relations section of our website at www.gilad.com. Also, a recording of this call will be available beginning at approximately noon Eastern Time today, February 12th, and a webcast on Gilad's website for a period of 30 days. Also, please note that statements made on this earning call that are not historical fact 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 GILAS 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 disclaims any obligation to do so. More detailed information about risk factors can be found in Gilad's report filed with the Security and Exchange Commission. Also, on today's call, management will refer to non-GAAP measures. The company believes these non-GAAP measures assists management and investors in comparing the company's performance across reporting periods on a consistent basis by excluding these non-cash, non-recurring, or other charges that it does not believe are indicative of its core operating performance. The reconciliation of GAAP results to non-GAAP measures can be found in the fourth quarter of fiscal year 2024 earning press release that the company issued and furnished to the SEC earlier today on Form 6 case. With that, let me turn to introduction. On the call today are Mr. Adit Tfadia, Gilad's CEO, and Mr. Gil Bin Yamini, Gilad's CFO. I would now like to turn the call over to Adit Tfadia. Adit, go ahead, please.

Thank you, Merav, and good day to everyone. Thank you for joining us today to discuss our fourth quarter and full year 2024 earnings results. On the call, we will highlight key achievements for the quarter and talk about our opportunities and plans to accelerate revenues in 2025 as we capitalize on the acquisition of Stellar Blue and Datapath and continue to drive innovation. We finished 2024 with a strong fourth quarter, achieving a strong adjusted EBITDA and accelerating our revenue growth. Q4 revenue reached $78.1 million, driving full-year revenues to $305.4 million, a 15% increase year-over-year. Adjusted EBITDA also saw significant growth, with Q4 reaching $12.1 million and the full year hitting $42.2 million, 16% growth year-over-year. This performance highlights Gilad's strong execution, strategic growth, and dedication to delivering value. Overall, 2024 has been a profitable and successful year for the company. Before we proceed to the business review, I would like to share some information about the organizational change we are undergoing. As part of our ongoing efforts to streamline operations and increase our focus and resources on our main growth engines, we are pleased to announce our new organizational structure and reportable segments. This new structure is an outcome of a strategic process which we identified our main growth opportunities and that also led to our recent acquisition of DataPass and StellarBlue. Our new organizational structure will allow us to focus more precisely on serving the growing defense market and the increasing opportunities in the commercial, NGSO, and VHTS markets, specifically the IFC segment. We also believe that this structure will provide investors with greater insight into Gilad business lines and simplify the understanding of our operations. As of January 1, 2025, the company is divided into into three new divisions, Gilad Defense, Gilad Commercial, and Gilad Peru. Let me take a moment to explain in more detail. I will start with Gilad Defense. About four years ago, we identified defense as a market with significant potential for our growth. The demand for government and defense outcome solutions is growing and is driven by macro political dynamics and the increasing needs for multi-office connectivity strategies Defense organizations require multiple layers of communication redundancy to ensure high availability, making SATCOM a critical component of mission success. Recognizing these strengths, we acquired DataPath in 2023 and now have created Gilad Defense Division specifically to meet these demanding needs. The newly formed Gilad Defense Division is dedicated to meeting the specific needs of defense integrators military and government organizations worldwide with a strong focus on the U.S. Department of Defense. By integrating products from the wide portfolio of Gilad, Wavestream, and Datapath, the Gilad Defense Division delivers secure, rapid deployment solutions and battlefield connectivity. Moving to Gilad Commercial, the satellite industry is rapidly shifting towards multi-orbit connectivity, driven by the need for greater resiliency, flexibility, and seamless global coverage. At the same time, the push for digital inclusion and the growing demand for in-flight connectivity are reshaping the commercial market. To address these evolving needs, we established the Commercial Division. Our acquisition of Stellar Blue serves as one of the cornerstones of this division, strengthening our position in the high-growth IFC market and enabling us to provide cutting-edge connectivity solutions that meet the demands of passengers, airlines, and service providers worldwide. Gilad's commercial division is focused on providing advanced broadband satellite communication network solutions for enterprises and cellular backhaul, being the partner of choice for the global and regional satellite operators for HTS, VHTS, and NGSO constellations, with turnkey solutions for service providers, MNOs, satellite operators, and enterprises. The third division is Gilad Peru. Latin America in general, and specifically Peru, faces enormous challenges in terms of connectivity, especially in rural and hard-to-reach geographies. Gilad Peru is focused on digital and social inclusion and end-to-end telco solutions focusing on government solutions across Peru. Gilad Peru plays a vital role in bridging the digital divide, connecting underserved communities and delivering high-quality telecommunication services. More specifically, Gilad Peru focuses on telecom services and the operation and implementation of large-scale network projects. Gilad Peru provides terrestrial fiber optic, wireless network, and satellite network construction, implementation, and operations. You can find a link to a dedicated presentation for the matter in the Q4 press release, and our website in the investor relations section. Now let's move to the business review of the fourth quarter. The first highlight I would like to discuss is the closing of our Stellar Blue acquisition, which completed on January 6, 2025. The acquisition marks a significant milestone in Gilad's strategy to expand our leadership in the IFC market. As discussed before, this acquisition enhanced our capabilities to deliver advanced multi-orbit ESA solutions and strengthen our position in the commercial aviation, making us the market leader in this rapidly growing sector. StellarBlue brings unique expertise in satellite communications and system integrations for aviation, complementing our existing solutions and extending our reach to key commercial partners. The addition of StellarBlue strengthen our position to capture a larger share of the IFC market. In addition, StellarBlue continues to make progress in extending its product line into the defense sector's air applications. We are already seeing strong early results, promising partnerships, and significant new business opportunities. Building on this momentum, StellarBlue has made significant strides in the IFC market. With over 125 multi-orbit ESA air terminals shipped to date and activation as well underway, StellarBlue is leading the way in next-generation aviation connectivity. Our production capacity is scaling to meet this growing demand. During Q4, we received very significant orders of approximately $19 million for network equipment from our IFC partners, successfully expanding our deployments with them. These are very large-scale IFC operating networks over multi-orbit constellations. Also, Gilad Wavestream demonstrates consistent growth and continued success with SSPA and terminal-related avionics products dedicated to the IFC market. Our strong partnership with InterSat continues to drive growth, expanding beyond commercial aviation into business aviation and maritime. Leveraging our SkyEdge family of VSAT platforms, InterSat is enhancing its global SATCOM network to deliver seamless, high-performance connectivity across diverse orbital assets. This expansion reinforced our position as a key technology provider and opened new long-term revenue opportunities. As we look ahead to 2025, we see significant opportunities for our IFC product portfolio as multi-orbit constellations grow in capacity and coverage. In the fourth quarter, we saw strong demand in the NGSO market with Gillette Wavestream Leo Gateway Solid State Power Amplifiers product portfolio a category leader playing a key role in supporting LEO constellations. In 2024, SCS successfully launched its service for all 3BM power, a major milestone that underscores the strengths and advanced capabilities of our SkyH4 platform. This launch cements our leadership in next-generation satellite networking, demonstrating our ability to support highly flexible, software-defined satellite services. At the same time, InterSat expanded its multi-service network, choosing ELAT technology for its maritime and business aviation sector. This highlights the confidence that the leading satellite operators have in our solutions and reinforce our growing role as a key technology provider across multiple verticals. These achievements further validate our strategy of delivering cutting-edge, future-proof satellite communication solutions. As we look ahead to 2025, we are well positioned to secure very significant orders for our Leo Gateway products while also anticipating growth with SCS and InterSats multi-orbit and cloud strategy. In addition, the recent award of the Iris Square Constellation by the EU to the SpaceRise Consortium that includes Udalsat, SCS, and Ispasat is a positive development with significant opportunities and potential. Turning to defense, we concluded the year with significant wins for Gilad Data Pass, securing key deals for our portable and transportable products. This success includes contracts with both the U.S. DOD and international defense organizations, further solidifying our position in the critical market. Specifically, in the fourth quarter, we received approximately $9 million in orders from the U.S. DOD and other international defense organizations. 2024 was the first full year of DataPass operating under Gilad, and we couldn't be more pleased with the results. Gilad DataPass transportable and portable products have gained success with various defense organizations all over the globe. At the same time, we have been advancing our defense strategy by adapting SkyEdge 4 to meet military requirements and developing our next-generation GLT software-defined radio modem tailored to the evolving needs of the defense market. As we look ahead to 2025, we are planning significant investments in Gilad Defense, substantially increasing our R&D efforts to introduce more product solutions and features. Additionally, we will increase Gilad Defense sales and marketing investment to approach the defense market channels and customers. We see significant opportunities for Gilad Defense unified solutions seamlessly integrating the expertise and technologies of Gilad, Datapass, and Wavestream to provide a comprehensive, mission-critical offering for the defense government customers worldwide. In Peru, we experienced solid growth this year, securing $20 million in orders from major players in the country's communication sector. A key highlight was our partnership with IPT, Internet para Todos, a consortium of Telefonica and Facebook's that is expanding and extending its network reach to more communities. Our efforts remain focused on bridging the digital divide, enabling underserved communities to gain access to high-quality Internet connectivity. Looking forward, we have a robust pipeline for 2025 with large opportunities emerging, such as the progression of significant RFPs with PONATEL and the Peruvian government, along with several upcoming projects, expansions, and extensions. Given our expanding opportunity set in 2025, we expect another year of top-line and profit growth. We expect 2025 revenues of between $415 and $455 million. We expect an adjusted EBITDA of between $47 and $53 million. Looking ahead, Gilad is well-positioned for continued growth, driven by strong market tailwinds, including increasing satellite size, declining launch costs, and growing data transfer demand. Our SkyH4 platform, particularly with VHTS and NGSO technologies, is ideally suited to capitalize on these trends. Our commercial business, bolstered by Stellar Blue, is poised for significant expansion as we establish our leadership in the expanding ESA for IFC market. Our portfolio of ESA products and multi-orbit solutions will be instrumental in capitalizing on the increasing demand for IFC by airlines and passengers. Our defense business also maintains strong momentum with increased orders and awards as Gilad Data Pass leverages our expertise in supporting operations in most challenging environments. The defense segment represents a significant growth opportunity, and we are pleased with our progress in meeting government and military customer needs with innovative satellite solutions. And with that, I will hand over the call over to Gil Benyaminia, CFO. Gil, please go ahead.