Gilat Satellite Networks Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to Gilad's second quarter 2026 results conference call. All participants are at 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 5th, 2026. By now you should have all received the company's press list. If you have not received it, please 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. Sanjay Hari of Alliance Advisors IR. Mr. Hari, would you like to begin, please?

Thank you, Hila, and good morning, everyone. Thank you for joining us for Gilad Satellite Networks' earnings conference call for the second quarter of 2026. With us on the call today are Mr. Adi Sfadia, Gilad's CEO, and Mr. Gil Benyamini, Gilad's Chief Financial Officer. Before turning the call over to management, I would like to remind everyone that some statements made during this conference call contain forward-looking statements based on current expectations. Actual results could differ materially from those projected as a result of various risks and uncertainties. The potential risks and uncertainties that could cause actual results to differ materially include uncertain global economic conditions, reductions in revenue from key customers, delays or reductions in US and foreign military spending, acceptance of the company's new products on a global basis, and disruptions or delays in the company's supply of raw materials and components due to business conditions, global conflicts, weather, and other factors not under their control. The company cautions investors to not place undue reliance on forward-looking statements, which reflect the company's analysis only as of today's date. The company undertakes no obligation to publicly update forward-looking statements to reflect subsequent events or circumstances. Further information on these factors and other factors that could affect Gilad's financial results Adi Sfadia Please go ahead, Adi.

Thank you Sanjay, and good day everyone. Thank you for joining us today to discuss Gilad's second quarter 2026 results. I am pleased to report that Gilad delivered a strong quarter. During the second quarter, we continued to strengthen our position, advance important strategic initiatives, and execute successfully across our defense, commercial, and Peru businesses. Second quarter revenues reached $122.7 million, representing 17% year-over-year growth and adjusted EBITDA reached $15.4 million compared with $11.8 million in the same quarter last year. For the first half of 2026, revenue reached $233.1 million and adjusted EBITDA reached $30.5 million. Overall, the first half of the year demonstrates continued progress across our strategic growth engines, defense and IFC. During the quarter, we announced a significant strategic milestone, with the signing of a definite agreement to acquire most of ComTech's satellite and space communications segment. The transaction is expected to expand our position in mission-critical defense and satellite communications, strengthen our U.S. presence, broaden our technology portfolio, and more than double DILAB defense revenues. The closing of the transaction is expected towards the end of the year, and is subject to several regulatory approvals such as HSR and CFIUS and other customary closing conditions. Now on to the business review. I will start with the defense. Gilad Defense continues to build momentum supported by increasing global demands for mission-critical SATCOM solutions that can operate reliably in dynamic, mobile and contested environments. Recent conflicts have highlighted the importance of communication systems that provide mobility, rapid deployment, and operation continuity across land, sea, air, and space domains, driving increased demand for resilient and deployable SATCOM capabilities. These evolving operational requirements align well with our defense portfolio and the operational and sales capabilities we have built. During the quarter, we received important awards that demonstrate our growing defense activity in both the United States and Europe. In the United States, Gilad Defense received orders totaling $11 million to supply SATCOM terminals and field services to the U.S. Department of War. This award highlights continued demand for Gilad Defense's resilient multi-orbit connectivity solutions and services and reinforced Gilad Defense's role as a trusted provider in the U.S. market. Gilad Defense received a multi-million dollar order to supply custom SATCOM terminals to the European Ministry of Defense. These terminals are designed to meet unique operational requirements, combining ruggedized hardware with advanced multi-orbit operability to deliver resilient communications in challenging environments. This award reflects the continued recognition of Gilad's field-proven technologies and reinforces our expanding role in the European defense market. During the quarter, we made important progress in product innovation for unmanned platforms. During EuroSat Week, we introduced the VIPER-KA, our UAV-KA-band ESA terminal, designed to support unmanned ISR and tactical UAVs applications. The VIPER-KA ESA terminal is designed for resilient multi-orbit connectivity, supporting operations across multi-orbit satellite constellations, and delivering secure, low-latency communications with low-swap for mission-critical unmanned operations. Overall, our defense business continues to gain momentum, supported by growing demand in both the U.S. and Europe and continued investment in technologies that address evolving defense requirements. With the closing of the acquisition of Coptic Satellite and Space Communications in parallel, we believe Gilad Defense will be equipped to pursue even larger opportunities and support the growing demand for secure, resilient, mission-critical connectivity. Turning to our commercial business, Our commercial business continues to show strong progress during the second quarter, particularly around our SkyEdge platforms and IFC portfolio. Satellite operators and IFC service providers are moving towards more flexible, scalable, and multi-orbit architectures, and Gilad has a ground segment expertise, ISA portfolio, and customer relationship needed to support this transition. Our SkyEdge platforms remain a key foundation for Next Generation Satellite Networks. During the quarter, we received more than $20 million in orders from the leading global satellite operators, awarded mainly for our SkyEdge platforms and services. We expect to see additional demand for our SkyEdge platforms as operators continue to deploy next-generation constellations and upgrade their grounded infrastructure. In IFC, the site where the RISA terminal is progressing into large-scale deployment. During the quarter, we received $43 million of orders from a leading IFC service provider for Sidewinder ISA terminals with deliveries for both LineFit and RetroFit. These awards support continued growth in our mobility business and further validate Sidewinder's role in next-generation multi-orbit IFC architectures. The Boeing LineFit program and certification activities continue to advance during the quarter. Through integration partners, Boeing will offer line fit installation capability, helping accelerate deployment timelines and reduce the cost and operational disruption associated with retrofit programs. We are progressing well towards full certification, an important step in making Sidewinder ISA terminal commercially available as line fit options. Deliveries of the first units are expected in Q4 this year. In parallel, we have began the process toward line-fit availability with Airbus and received an order as part of this effort, further expanding the long-term opportunity for SideRender across the commercial aviation market. Overall, our commercial business continues to benefit from growing demand for multi-orbit connectivity across both network infrastructure and mobility applications. With continued traction for our SkyEdge platforms, strong momentum for SideRender, and progress on both Boeing and Airbus landing programs, we believe we have a strong foundation for additional growth opportunities as market continues to evolve. Our forward business continues to execute well with solid operational progress across our social inclusion programs. We completed work in the first three regions of our infrastructure upgrade program and we moved to the operational phase in parallel with the supervision activity. In Cusco, The project is expected to be completed during the third quarter. These milestones continue to demonstrate Gilad Peru's ability to deliver large-scale communication projects efficiently and reliably. We continue to advance discussion on several significant project expansions while actively pursuing additional large-scale opportunities that support Peru's ongoing investment in social inclusion and nationwide connectivity. I am pleased to say that we continue to have a strong backlog and a healthy pipeline. Therefore, we are reiterating our 2026 annual guidance. We expect 2026 revenues of between $500 and $520 million and adjusted EBITDA of between $61 and $66 million. The satellite communications market continues to benefit from growing demand for resilient connectivity, mobility applications, and multi-orbit networks. We continue to see favorable market dynamics across our defense and IFC growth engines, supporting our long-term growth strategies. Elab Defense continues to be one of our primary growth engines. We are seeing increasing investment in defense communication across the U.S., Europe, and other allied markets, supported by ongoing demand for advanced SATCOM solutions. We believe our portfolio and continued focus on innovation provide a strong foundation for future growth. Our commercial business continues to benefit from the industry transition towards multi-orbit networks and next-generation mobility services. We see continued opportunities for our SkyEdge platforms as operators expand network capacity and capabilities, while SideWinder remains a strong contributor to the growing demand for advanced IFC solutions. Our second quarter result reflects continued execution across the business and reinforces our confidence Thank you, Adi. Good morning and good afternoon to everyone. Before I dive into the numbers, I would like to remind everyone that our financial results are presented both on a gap and non-gap basis.