Gilat Satellite Networks Ltd. Aktie

Ladies and gentlemen, thank you for standing by. Welcome to Gilat's First Quarter 2026 Results Conference Call. [Operator Instructions] Following the management's following presentation, instructions will be given for the question-and-answer session. [Operator Instructions]. As a reminder, this conference is being recorded, May 13, 2026. 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 Mr. Sanjay Hurry of Alliance Advisors IR. Mr. Hurry, would you like to begin, please?

Thank you, Haila. Good morning, everyone. Thank you for joining us for Gilat's Satellite Networks Earnings Conference Call for the first quarter of 2026. With us on the call today are Mr. Adi Sfadia, Gilat's CEO; and Mr. Gil Benyamini, Gilat'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 on certain global economic conditions, reductions in revenues from key customers, delays or reductions in U.S. and foreign military spending, acceptance of the company's new products on a global basis and disruptions or delays in its supply of raw materials and components due to business conditions, global conflicts, weather or other factors not under the company's control.

The company cautions investors to not place undue reliance on forward-looking statements, which reflect the company's analysis 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 Gilat's financial results is included in the company's filings with the Securities and Exchange Commission, including its latest quarterly report.

In addition, on today's call, management will refer to certain non-GAAP financial measures that management considers to be useful and differ from GAAP. These non-GAAP measures should be considered supplemental to corresponding GAAP figures.

With that, I'd like to turn the call now to Gilat's CEO, Adi Sfadia. Please go ahead, Adi.

Thank you, Sanjay, and good day, everyone. Thank you for joining us today to discuss Gilat's first quarter results. I am pleased to report that we opened the year with solid execution across the business, reflecting strong performance. Our results underscore the competitiveness of our portfolio across the satellite communication landscape and strong year-over-year revenue growth and profitability.

Satellite operators and government customers advanced next-generation programs from VHTS satellites to NGSO constellations. We are seeing our capabilities to translate into new orders expanding customer engagement and growing opportunities. This momentum is closely tied to the progress we continue to make in technology development as we invest in advanced and interoperable system designed to support the evolving requirements of next-generation satellite communication networks.

During the quarter, Gilat Defense conducted a live demonstration of its virtualized SATCOM gateway modem architecture, a satellite 2026 in Washington, D.C. in collaboration with Amazon AWS, FCS, Space & Defense and the WAVE Consortium. The demonstration show cast a flexible cloud-based and software-defined gateway architecture designed to improve scalability, resiliency and agility for defense and government networks and represent a significant step forward in our future SATCOM gateways will be deployed and operated.

In parallel, we successfully conducted a 5G nonterrestrial network demonstration, highlighting how satellite systems can integrate with future 5G-based architectures. Together, this milestone reflects our continued investment in technology solutions that will support next-generation satellite and hybrid networks across both commercial and defense markets.

First quarter revenues reached $110.5 million, 20% year-over-year revenue growth and first quarter adjusted EBITDA reached $15.1 million, almost double the same quarter last year. Overall, the first quarter reflects continued traction and position us well for the remainder of the year. Now on to the business review. I will start with the defense business. We are seeing a significant increase in interest for transportable and portable SATCOM solutions, driven by the growing importance of mobility, rapid deployment and operational flexibility.

As militaries and government users increasingly operate in dynamic and contested environments, the value proposition of highly mobile resilient SATCOM solutions continue to strengthen. This demand translates into meaningful orders during the quarter. In February, we announced a $16 million order from a European Ministry of Defense for our DKET transportable solutions reinforcing our leadership in high-performance rapidly deployed systems.

These orders also reflect increased penetration into the European market driven in part by the evolving geopolitical environment and higher defense readiness requirements across the region. In Israel, we continue to strengthen our relationship with the Ministry of Defense. During the quarter, we announced an order of $9 million, further expanding the deployments of our solution and reinforcing our long-term strategic partnerships.

The order includes next-generation defense modems build for mission-critical operations to ensure reliable connectivity across a wide range of operational scenarios. During the quarter, we received an order for over $7 million for our new EnduroStream solid-state power amplifiers to support the U.S. defense program. EnduroStream delivers reliability and operational resilience required for mission-critical environments as defense customers transition away from legacy technologies.

Also in the United States, we continue our long-standing support of the U.S. Army. During the quarter we received an order for approximately $6 million for field and technical services reflecting the continued reliance on Gilat Defense to support mission-critical SATCOM operations and ensure system availability in the field.

Our defense pipeline remains strong, supported by sustained global demand and our continued investment in R&D, advanced system architectures and customer engagement. Turning to our commercial business. In the first quarter, our commercial business continued to show solid performance, supported by ongoing customer engagement and steady execution across our programs and satellite operators and service providers move forward with next-generation network.

They are increasing focus on platforms that offer scalability, flexibility and multi-orbit support for our mobility applications. Gilat remains well positioned within this evolving landscape. In-flight connectivity remains one of our key growth engines. Demand for IFC continues to increase, driven by airline expectations for consistent high-performance connectivity, growing passenger usage and the industry's transition towards NGSO and multi-orbit networks. This environment strongly aligns with Gilat technology road map and product portfolio.

As of today, we have delivered approximately 750 Sidewinder ESA terminals, of which more than 570 are already installed and in service. During the quarter, Boeing and Gilat reached an important key in-cabin milestone to offer Sidewinder ESA terminal as a Line-fit solution available to airlines and IFC service providers.

Certification is on track and deliveries of the first units are expected in Q4 this year. In addition, we are starting a process to achieve a Line-fit availability with Airbus. During the quarter, we announced $39 million in orders for our Sidewinder ESA terminal. These awards reinforce the market's confidence in its performance, low profile design and multi-orbit capability.

We have also expanded our ESA portfolio with the ESR 2030, which is now commercially available. ESR 2030 is designed to support commercial and defense applications over the OneWeb LEO constellation complementing our Sidewinder offering and broadening our addressable market. With growing interest in LEO services, we believe ESR 2030 position us well to support new programs and as operators move from network deployment towards commercial service.

We also received a multimillion dollar order from a leading IFC integrator for solid-state power amplifiers to support connectivity solutions on commercial aviation aircrafts. Across the industry, operators are operating grounded infrastructure to support a wider range of services across multiple orbits.

SkyEdge IV is built for this shift, providing a scalable software-defined platform that enable efficient management of complex multiservice satellite networks. A recent example is our strategic multimillion dollar partnership with Nelco in India to deploy SkyEdge IV in support of India's first Ka-band service deployment using the JSAT-N2 HTS satellite.

India represent an important growth market for Gilat in the central part of our expectation expansion strategy in the Asia Pacific region. The deployment will enable scalable, high-performance connectivity across multiple services, including IFC, cellular backhaul and enterprise connectivity, delivering the performance and flexibility required for Ka deployments. Overall, the commercial pipeline remained healthy, supported by continued IFC demand alongside longer-term investments in advanced satellite networks architectures.

Our Peru business continued to execute very well with strong operational progress across our national connectivity programs. We expect to complete that upgrade project that we have announced a few quarters ago, ahead of schedule in the second quarter of 2026, demonstrating Gilat Peru's ability to deliver large-scale complex infrastructure projects reliably and on time.

These results strengthen our position as a trusted partner for national digital inclusion initiative and provide a solid foundation for continued activity in the region. We expect additional large RFPs and follow-on orders during the year.

I am pleased to say that we continue to have a strong backlog and a healthy pipeline. Therefore, we feel comfortable reiterating our 2026 annual guidance. We expect 2026 revenues of between $500 million and $520 million and adjusted EBITDA of between $61 million to $66 million.

Technology development remained a core pillar of our strategy across defense and commercial markets. During the quarter, we advanced software-defined system capabilities that enable more scalable and resilient satellite networks while also continuing our work on integrating satellite network with future 5G NTN frameworks.

Together, these efforts support next-generation satellite system serving defense, mobility and commercial applications. Demand across our core markets continue to develop favorably, and our strategic focus on mobility, multi-orbit architectures and next-generation systems is translating into tangible momentum across our business.

Gilat Defense continued to see strong customer interest as defense and government organizations expand investment in mobile resilient SATCOM capabilities. We continue to see growing engagement across the United States, Europe and Israel, supported by a robust pipeline and ongoing investment in advanced architectures that address evolving defense requirements. IFC remain one of our key growth engines supported by increasing airline demand and continued adoption of ESA based solutions.

We continue to maintain a strong balance sheet and financial flexibility while remaining disciplined in our capital allocation. Mergers and acquisitions continue to be a key element of our defense and long-term growth strategy with a focus on opportunities that complement our core technologies, strengthen our defense portfolio and support sustainable value creation.

Overall, we delivered a solid start to 2026, validating the strength of our diversified portfolio across our business. With growing backlog and healthy pipeline and a continued investment in technology leadership, Gilat is well positioned to sustain growth and create long-term value.

And with that, I will hand over the call to Gil Benyamini, our CFO. Gil. Please go ahead.

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 in both GAAP and non-GAAP basis. I will now walk through our financial highlights for the first quarter of 2026.

As Adi mentioned, we delivered a strong first quarter with 20% revenue growth, margin expansion and a significant increase in profitability reflecting continued execution across all three segments and continued momentum into 2026. Revenues for the first quarter were $110.5 million, representing a 20% growth compared with $92 million in Q1 '25. The growth was driven by all three segments. The revenues for the commercial segments in Q1 '26 were $72.8 million compared with $64.2 million in the same quarter last year.

The 13% growth year-over-year was primarily driven by the in-flight connectivity vertical. Revenues for the Defense segment in the first quarter of '26 were $25.4 million, 10% higher than $23 million in the same quarter last year. And Q1 '26 revenues for Peru segment were $12.3 million compared with $4.8 million in Q1 '25.

The increase was mainly driven by the higher revenues related to the new upgrade projects in four of the six regions in which we operate, reflecting the continued expansion of our long-term Peru programs, which provide multiyear recurring revenue streams.

Our GAAP gross margin in Q1 '26 was 34% compared with 31% in Q1 '25. The increase is primarily attributable to a favorable deal mix as well as better margins Stellar Blu. GAAP operating expenses in Q1 '26 were $33.3 million compared with $31.1 million in Q1 '25. As a result, we delivered a significant improvement in profitability with GAAP operating income of $4.4 million compared to a loss of $2.7 million in Q1 '25, representing a year-over-year swing of $7.1 million.

GAAP net income in Q1 '26 was $5.2 million or diluted income per share of $0.07 compared with GAAP net loss of $6 million or a diluted loss per share of $0.11 in Q1 '25. The improvement was driven by the higher operating income as well as higher financial income associated with our stronger net cash position and lower tax expenses.

Turning to non-GAAP results. Our non-GAAP gross margin in Q1 '26 was 36% compared with 32% in Q1 '25. Non-GAAP operating expenses for the quarter were $26.8 million compared with $24.1 million in Q1 '25 and non-GAAP operating income in Q1 '26 was $12.5 million compared with $5.2 million in Q1 '25. The non-GAAP net income in Q1 '26 was $13.6 million or a diluted income per share of $0.18 compared with net income of $1.8 million or income per share of $0.03 in Q1 '25.

The adjusted EBITDA reached $15.1 million, nearly doubling year-over-year, reflecting strong operating leverage on higher revenues. Moving to our balance sheet and cash flow. Over the past several quarters, we significantly strengthened our balance sheet and liquidity position. During the quarter, we used approximately $12.2 million in operating cash, primarily driven by working capital timing while generating approximately $15 million over the trailing 12 months.

We ended the quarter with a strong liquidity position of $171 million, comprised of cash, cash equivalents, restricted cash and short-term deposits. DSOs were 112 days, excluding Peru construction activity and remain within our expected range.

During the quarter, we reached an agreement with the former shareholders of DataPath to satisfy the share linked component of the earnout associated with our 2023 acquisition of the company before the end of 2026. Under the original terms, this component called for Gilat to issue up to 3.1 million shares tied to DataPath performance from 2024 through 2026.

Under the agreement with the former shareholders of DataPath, we issued a total of 2.5 million shares in full satisfaction of the portion of the earnout at an average price of $15.45 per share. The remaining bonus earnout component capped at $9 million in cash or shares per Gilat discretion is unchanged and continues to be evaluated each quarter based on the performance against agreed targets to reach settlement by the end of 2026.

Our shareholders' equity as of March 31, '26 totaled $536 million, compared with $500 million on December 31, 2025, resulting mainly from issuance of shares for DataPath earnout and net earnings.

Looking ahead, based on our strong backlog and visibility, we are reiterating our full year '26 guidance. Revenues are expected to be between $500 million to $520 million, representing 13% growth year-over-year at the midpoint. We expect an adjusted EBITDA of between $61 million to $66 million, 19% growth at the midpoint.

That concludes my financial review. I would now like to open the call for questions. Operator, please go ahead.

Thank you. Ladies and gentlemen, at this time, we will begin the question-and-answer session. [Operator Instructions]. The first question is from Ryan Koontz, Needham & Company.

Great. Maybe starting with the Commercial segment here. It sounds like Stellar Blu is executing pretty well. You talked about better margin improvements. How are you seeing the overall demand environment for the Stellar Blu products? What's behind some of the gross margin improvements? And how are you thinking about this business kind of over the medium term and into next year? How is the visibility looking relative to backlog, et cetera?

Ryan, Stellar Blu is performing well. We are providing explicit guidance on Stellar Blu, but we can say that -- we see nice year-over-year growth. We expect them to do better performance this year. They reached the threshold of EBITDA. So now they are profitable. Gross margin is a bit better and will mainly because of sharpening the supply chain. We replaced one of the units with internal units, which provide better margins. And we do expect margins to be much better towards the end of the year, once we started delivering Line-fit units.

Great. And those Line-fit, is that starting initially with Boeing there?

Correct. With Boeing, we passed the in-cabin certification, waiting to the full certification, probably, if not by the end of the quarter, early Q3, and we expect to deliver first units during Q4, if not earlier than that.

And then maybe continuing on commercial. Relative to SkyEdge IV, you had a nice win in India here as well as the demo for the virtualized with AWS. How are you thinking about that transition from kind of hardware to a software-based platform? Any updates you can share with us about how you think that business evolves over the next year or two.

I think year or two, it's a short term. So I'm not sure we'll see significantly involvement in the year or two. SkyEdge IV is a software-defined platform, meaning at day 1, you get give or take, all the hardware you need for the gateway and all the upgrades and expansion is done through software licenses.

Moving to commercial of the shelf hardware and running on virtualized platform, I guess it's three to four years now, and it's combined together with the plans of shifting away from DBS 2x to 5G NTN.

Perfect. Makes sense on that. And then maybe shifting to defense. Any other color you can provide, you talked about some traction with other countries. Is this for the mobility products you talked about? Or is that more of a U.S. a U.S. need for your mobility defense products?

I think it's a combination of the two. I think that everyone understands, especially now after the war with Iran that mobility solution, portable and transportable solution are crucial. We saw that some of the U.S. gateways over the Middle East got hit and they will need to replace them.

And we believe that the replacement will be done with mobility solution, so you can move the gateway on a daily basis to another place and give you some kind of advantage. DataPath is the leader with that such a product portfolio. We're already starting to see significant order for our transportable solution, $16 million in Europe, which is also a very big market that is growing and our presence over there is very important, and this penetration to new MoD is crucial for our future growth.

And also, we see a lot of traction in Israel. So all in all, we believe that the defense -- the strong pipeline will drive at the end, a significant booking year. It's important to remember that there is a time between booking to revenues. In the defense, it's typically projects, and it takes six to nine months from the order until you deliver the product. And in some cases, if it's a big project, it can take much more than that. So we are very optimistic about our growth in defense in '26 and more in '27.

Next question is from Chris Quilty of Quilty Analytics.

Adi, just to follow up. You were saying six to nine months from booking to ship -- are you seeing any changes or any indications here in the U.S. where the administration is really pushing hard on moving quickly. Do you see any possibility of that order to ship gap closing over time?

It really depend on its lead time and inventory. If we will understand that -- there is a big demand for quicker turnaround, we can do that. We do hold the inventory, but those units are highly expensive and sometimes are made to build based on a unique requirements. So it's not that easy. But definitely, if we with the negotiation with the customer, if we understand that, we have the ability to expedite.

Great. And when you talk about the uptick in portable solutions, is it fair to assume that that's all coming out of the DataPath portfolio of products? .

The portable and portable solutions are mainly from DataPath products, but we do see also a very nice business to our modem solutions. And we do hope to be able to penetrate to the DoW and the U.S. Army with our modem, the SkyEdge IV modems and highly resilient defense volume.

Got you. And staying on defense, I mean, you mentioned demos with Amazon AWS and SES. I know on the Amazon side, you do some hardware into Amazon LEO, but what is the connection with Amazon AWS.

The main idea is to run our gateway on AWS platform. And this is the demonstration that we showcased in satellite in D.C. that we can do that. And of course, we need to tailor the solution based on AWS and customer requirements. But I think that the demo reflects our ability to cooperate with AWS cloud.

And is it fair to assume this is a virtualized platform.

Correct. It's virtualized platform. We are running our gateway modem on the AWS platform, which connects to a standard modem at the end user side.

Very good. I guess, back on the traditional Geo side of the business, it appears that both Airbus and California space have now kind of gotten their act together with regard to the next-gen software-defined satellites. I think the first ones are going up next year. So at what point do you start to see an uptake in equipment to support those systems.

Typically, we are getting orders, give or take 6 to 12 months before the satellite launch. And the deployment really depends on the customer readiness to get the equipment and to deploy it in the gateways. We believe we will start getting large part of those orders this year. I'm not sure we'll need to deliver everything this year, but some of it is factored within our guidance already.

Great. Gil, the gross margins were nice in the quarter. Obviously, that was a little bit mix and a little bit Stellar Blu, on the Stellar Blu side, it's profitable, but you were shooting for 10% EBITDA exiting 25, didn't happen. Do you have a sense of where in '26 you expect to hit that milestone.

So as Adi mentioned, Stellar Blu is now fully integrated into Gilat with the operations team and R&D team and so on. I guess that if we would go back and measure it as a stand-alone company would be very close to that. But we don't do it anymore. So it's less relevant. But we definitely see this improvement a long time. Of course, with the Line-fit deliveries that, as Adi mentioned, expected to start at the last quarter of this year. It will also give another improvement to the gross margins and to the EBITDA margin of this activity.

Chris, I think it's important to mention that we do -- we start investing in next-generation ESA technology and terminals. So R&D expenses is shifting towards Stellar Blu, which is now part of Gilat antenna and Terminal subdivision and then correlation and the integration between the commercial business and Stellar Blu is tightening on a daily basis. Another positive news, I think that Stellar Blu is starting to sell their solutions also to defense application. It's not big yet, but we do expect them to have more than $10 million business with defense this year.

That's great. And I know you did have in the original purchase agreement and earn-out agreement, some large strategic wins that were part of that -- how is that stuff shaping up? Is it still on the horizon here, maybe not on the time zone or time line that you were targeting?.

Yes. So we do have significant progress with one of the strategic deal that initially we thought we would be able to close faster. It's progressing slower than expected. We do expect to close it within the coming year in 2026. I'm not sure we'll be able to close it before the end of June. And I'm not sure that the first order will be more than $35 million, but definitely the potential can be north of $100 million.

The next question is from Mr. Sergey Glinyanov of Freedom Broker.

You provided a really great work on your gross margin side, so my question is, recently you tap on NTN solution. And I'm wondering, do you see any solution demands on your 5G NTN solution, have this trend with better visibility?

We do see a lot of traction in the market on 5G NTN and OneWeb Gen 2 and Gen 1.5 is talking about 5G modems. IRIS² is talking about 5G modems. And also other small LEO start-ups are talking on 5G modems. And here and there, also Geo players are talking about 5G modems.

I think that the overall requirement in the market is not mature enough, so we do -- we already started the work on 5G network, mainly the main building blocks. But in order to launch it, we need to tightly work with one of our big customers, and we hope to close something within the coming year.

What do you expect, well, when the market conditions would be ready for a full deployment of these [ techno ].

5G NTN full deployment. I guess right now, the first -- the most advanced is IRIS². So I guess it's four to five years from today.

Okay. Got it. And a little bit about Peru. Your statement about this segment, should we think the most part of revenue leading towards second half of 2026.

We do expect to get large awards in Peru. And once we get it, revenue will kick, kick in. So I guess, the second half of the year should have a higher revenue than the first one. But in general, Peru can be very -- the revenue can be very volatile because of the nature of the business over there. It's usually implementation of network when you see relatively high revenues in short time and then recurring revenue over a period of 3, 5 and sometimes 10 years.

And I would add to that. I think that one of the most important things or takeaways about Peru is that the base level of the recurring revenues of Peru this year is higher than it feels to be in previous years, and the construction and implementation are boosting it for the next year. So you can see that we're in a much better position over there.

The next question is from Louie DiPalma of William Blair.

Adi and Gil, I was wondering -- what is the potential timing of the Airbus partnership with the Stellar Blu system, how long do you think that will take to materialize? Will it be similar to the time line with the Boeing?

I think it will be slightly faster than the time line with Boeing because we gained some knowledge and some of the testing are equivalent, so we can use the qualification and test that we have done. Of course, the documentation is totally different, and we need to rewrite some of them. But the knowledge we gain through the Boeing process definitely give us a head start with Airbus.

And do you have any sense for the timing should it take? Should we be thinking 2027, 2028, what is your thoughts there?

I would say that we expect to finish the certification process early in 2027 and shipped first units second half of 2027.

Great. And earlier in the call, did you mentioned that you should ship the first units to Boeing in the fourth quarter of this year.

Correct.

Great. And my second question, also relating to the Stellar Blu development. I think for the past year you've been working on like the multi-beam technology. And it would also seem that like the broader in-flight connectivity industry is looking for multiband technology, so a terminal that can communicate both in Ka-band and Ku-band. What is the progress for these initiatives? And how far away are we from having Stellar Blu multibeam or for multiband.

So multi-beam is mainly dependent on cheap availability and customer requirements. I think today, with LEO constellation, especially with Terrasat in service hopefully within the coming 18 months. Ku-ka antenna Ku and Ka that will do. LEO has high potential.

We are already looking to introduce technologies either internally or with a third party, cooperation with third parties. I think availability for such antenna is between two to three years, including development cycle and certification cycle. And I think it will be in line with the future service launch of the IFC service providers.

[Operator Instructions] There are no further questions at this time. Mr. Benyamini, would you like to make a concluding statement?

I want to thank you all for joining us on this call and for your time and attention. We hope to see you soon or speak with you on our next call. Thank you very much, and have a great day.

Thank you. This concludes Gilat's First Quarter 2026 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.

Ladies and gentlemen, thank you for standing by. Welcome to Gilat's Fourth Quarter 2025 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded February 10, 2026. By now, you should have all received the company's press release. If you've 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 [ Mr. Sanjay Herry ] of Alliance Advisors IR. [ Mr. Herry ], would you like to begin, please?

Thank you, Hilla, and good morning, everyone. Thank you for joining us for Gilat Satellite Networks Earnings Conference Call for the fourth quarter and full year 2025. With us on today's call are Mr. Adi Sfadia, Gilat's CEO; and Mr. Gil Benyamini, Gilat's Chief Financial Officer. The earnings press release was issued earlier today, and if anyone has not yet received a copy, I invite you to visit the company's website, www.gilat.com, where you'll find the release in the Investor Relations section.

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 revenues from key customers, delays or reductions in U.S. and foreign military spending, acceptance of the company's 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 or other factors not under its 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 Gilat's financial results is included in the company's filings with the Securities and Exchange Commission. In addition, on today's call, management will refer to certain non-GAAP financial measures that management considers to be useful and differ from GAAP. These non-GAAP measures should be considered supplemental to corresponding GAAP figures.

With that, I would like to turn the call over to Gilat's CEO, Mr. Adi Sfadia. Please go ahead, Adi.

Thank you, Sanjay, and good day, everyone. Thank you for joining us today to discuss Gilat's fourth quarter and full year 2025 results.

I'm pleased to report that we closed both the quarter and the year with strong performance. The fourth quarter capped a very solid 2025, reflecting consistent execution across our Commercial, Defense and Peru businesses as well as continued strategic progress. 2025 was a year of significant acceleration of our revenue growth. Fourth quarter revenue reached $137 million, up 75% year-over-year, and full year revenue rose to $451.7 million, up 48% with 6% year-over-year organic growth. Adjusted EBITDA also saw significant growth with the fourth quarter reaching $18.2 million, 50% above the same quarter last year. The full year adjusted EBITDA hit $53.2 million, 26% growth year-over-year. Overall, 2025 was a good and successful year for the company.

Now on to the business review. I will start with the Defense. Military forces are increasing their dependence on resilient satellite connectivity to support mobility, real-time intelligence and operations in contested environments. This shift favors suppliers with proven scalable systems, strong track records and the ability to leverage commercial technology to the defense market, all of which are attributes of Gilat Defense. Gilat Defense is gaining steady demand from long-term defense programs, ongoing upgrades and consistent satcom spending, giving the business clear visibility into future growth. This strengthens Gilat's broader defense portfolio and supports the company's ability to capture a larger share of growing market that values the capabilities we provide.

In 2025, our Defense business delivered strong year-over-year growth in new order bookings, expanding customer engagement and our addressable market. We achieved a record year for Gilat Defense sales, driven by increased demand from U.S. and allied defense customers for transportable high-performance satcom solutions. This system continued to gain traction as defense organization prioritize flexibility, rapid deployment and resilient connectivity across diverse operational environments. The fourth quarter marked 2 important milestones for the business.

First, we expanded into a new market segment, Earth Observation, with an approximately $10 million order for a direct downing solution. This system enabled rapid acquisition of satellite imagery and data directly from space to a transportable ground terminal, supporting near real-time intelligence and situational awareness in remote or contested environment. Our transportable platform provides fast deployment, resilient and reliable operation. Also in the fourth quarter, we saw continued traction in Israel, securing significant orders across our Defense portfolio and expanding the deployment of our solutions in the region. Our decision to shift more resources into Gilat Defense, expand the sales team and increased R&D investment are now clearly strengthening Gilat's position in the defense market. Our Defense pipeline remains strong, supported by sustained global demand for secure, resilient satcom solution.

Turning to our Commercial business. Demand for advanced IFC continues to accelerate, fueled by free WiFi growing passenger expectations for high-bandwidth applications and increasing adoption of NGSO and multi-orbit architectures across the aviation ecosystem. This trends align directly with Gilat's strength and long-term strategy. Our Commercial business delivered a strong fourth quarter and solid 2025, reflecting continuing -- continued wins, growing customer adoption and consistent performance across our key programs. As satellite operators accelerating investment in next-generation networks, our platform continued to be selected for the scalability, flexibility and ability to support multi-orbit mobility-driven services.

SkyEdge IV remained a central growth driver throughout the year. During the fourth quarter, we received a $42 million order from a leading global satellite operator for our multi-orbit platform, primarily supporting IFC services. During the fourth quarter, we added 2 new SkyEdge IV customers in Asia Pacific. We continue to expand deployments with leading satellite operators as they invest in flexible software-defined ground networks. These awards reinforce SkyEdge IV's role as a core platform for large-scale next-generation satellite networks. We also strengthened our presence in Asia Pacific with the SkyEdge platform order for approximately $11 million from a leading regional satellite operator to provide services over VHTS satellites supporting multiple commercial applications.

In addition, we received more than $16 million in orders for Gilat Wavestream gateway solid-state power amplifiers to support LEO constellations, highlighting growing traction for our solutions as LEO networks move from deployment into operational phases. Airlines and system integrators expanded the adoption of our IFC technology for next-generation aircraft connectivity. During the fourth quarter, we received a $7 million order for Gilat Wavestream Aerostream BUCs. These units will be deployed as part of next-generation IFC solutions to be installed on commercial aircraft.

Stellar Blu is now fully integrated into Gilat's operations, and we are benefiting from cross-company synergies. Gilat Stellar Blu plays a key role in our IFC leadership position with enhanced offering that drive further growth for ESA in the IFC sector. Production is ramping up. And during the quarter, we delivered approximately 190 terminals, and we expect increased deliveries with improved margins in the coming quarters. As of year-end, we have a significant backlog that will be delivered in 2026 and beyond based mostly on order received during 2025. To date, more than 420 aircraft are online with our ESA terminal and cumulatively, over 1 million passengers are being served each week with our modems and ESA solutions.

Continuing this progress, we received a multimillion dollar order for our Sidewinder ESA terminal from a large global avionics company, underscoring the advantage of our high-performance, lightweight, low-profile configuration that is compatible with both GEO and LEO satellite constellations. Overall, our commercial pipeline remains strong as operators transition to multi-orbit architectures to support additional services, position us well for continued growth into 2026.

Moving to Peru. Gilat Peru delivered exceptional results during the year, closing more than $85 million in agreements from Pronatel for the upgrade of 4 regional networks. These awards clearly reinforce Gilat's Peru role as a key technology and solution partner for large-scale national connectivity initiatives. These projects, which are progressing ahead of schedule, are advancing Peru's digital inclusion objectives by enabling public WiFi hotspots and high-speed connectivity to public institutions such as schools, health centers and police stations. Looking ahead, we see this progress continuing.

We expect additional large RFPs and follow-on orders during 2026, positioning Peru as an important contributor to Gilat's long-term growth in large national digital inclusion programs. Our backlog is growing with a strong, healthy and diverse pipeline of opportunities in each of our divisions. As such, we expect another year of top line and profit growth. We expect 2026 revenues to be between $500 million and $520 million. We expect adjusted EBITDA to be between $61 million and $66 million.

To summarize, 2025 was a strong year for Gilat, marked by a good fourth quarter, record performance in key segments, meaningful customer wins and significantly strengthened balance sheet. We are entering 2026 with a strong momentum across the company. In Defense, we will focus on driving revenue growth throughout business development, R&D investment and portfolio expansion, further strengthening our position. We intend to pursue opportunities in government and sovereign communication programs worldwide. In Commercial, we will continue to drive adoption of our IFC product portfolio and expand our offering for next-generation aircraft connectivity, further strengthening our leadership position in IFC. We will also focus on expanding our SkyEdge IV customer base. In Peru, we plan to expand our footprint by participating in new digital inclusion initiatives and network expansion projects, building on our proven execution and local presence.

Gilat is accelerating its competitive advantage through our continued technology leadership in multi-orbit connectivity and development of advanced 5G NTN capabilities. Mergers and acquisition will be a key strategic focus with primary emphasis on Defense-related capabilities that complement our existing strengths. Gilat entered 2026 with a strong balance sheet and with additional $100 million equity placement in the fourth quarter, bringing total capital raised in 2025 to $166 million. This investment enhanced our ability to pursue strategic opportunities and build on the milestone achieved this year.

I would like to thank our employees for their commitment and performance and our customers and partners for their continued trust. And with that, I will hand over the call to Gil, our CFO. Gil, please go ahead.

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 GAAP and non-GAAP basis. I will now walk through our financial highlights for the fourth quarter of 2025.

As Adi mentioned, we delivered a strong quarter and year, demonstrating continued execution across our strategic priorities and building momentum into 2026. In terms of our financial results, revenues for the fourth quarter were $137 million, representing a 75% growth compared with $78.1 million in Q4 '24. Importantly, our organic growth quarter-over-quarter was 28%. For the full year, revenues totaled $451.7 million, reflecting 48% growth from $305.4 million in 2024. The growth was primarily driven by the in-flight connectivity vertical.

In terms of the revenue breakdown by segment, Q4 '25 revenues for the Commercial segment were $75.1 million compared with $37 million in the same quarter last year. The 103% growth was primarily driven by the in-flight connectivity vertical, mainly reflecting the contribution from Stellar Blu. Q4 '25 revenues for the Defense segment were $33.3 million, 14% higher than $29.4 million in the same quarter last year. Q4 '25 revenues for the Peru segment were $28.5 million compared with $11.8 million in Q4 '24. The increase was driven primarily by higher revenues related to new upgrade projects in 4 of the 6 regions in which we operate.

Our GAAP gross margin in Q4 '25 was 28% compared with 40% in Q4 '24. The decrease is primarily attributable to lower margins at Stellar Blu as production ramps up as well as an additional $2.9 million of amortization of purchased intangibles expenses related to the acquisition. GAAP operating expenses in Q4 '25 were $25.3 million compared with $18.3 million in Q4 '24. The increase was primarily driven by the consolidation of Stellar Blu expenses, amortization of acquired intangible assets and stock-based compensation mainly related to acquisitions.

As a result, GAAP operating income in Q4 '25 was $13 million compared with GAAP operating income of $12.8 million in Q4 '24. GAAP net income in Q4 '25 was $8.8 million or a diluted income per share of $0.13 compared with GAAP net income of $11.8 million or diluted income per share of $0.21 in Q4 '24. The decrease in net income mainly reflects higher financing costs associated with the loan taken to finance Stellar Blu acquisition, together with higher tax expenses during the quarter.

Moving to non-GAAP results. Our non-GAAP gross margin in Q4 '25 was 31% compared with 40% in Q4 '24. Non-GAAP operating expenses in Q4 '25 were $26.6 million compared with $21.9 million in Q4 '24. The increase was primarily driven by the consolidation of Stellar Blu operating expenses. Non-GAAP operating income in Q4 '25 was $15.2 million compared with $9.7 million in Q4 '24, and non-GAAP net income in Q4 '25 was $13.4 million or a diluted income per share of $0.20 compared with a net income of $8.5 million or income per share of $0.15 in Q4 '24. The adjusted EBITDA in Q4 '25 was $18.2 million, a 50% increase compared with an adjusted EBITDA of $12.1 million in Q4 '24. For the full year, adjusted EBITDA was $53.2 million, a 26% increase compared with an adjusted EBITDA of $42.2 million in 2024.

Moving to the balance sheet and cash flow. Over the past several quarters, we significantly strengthened our balance sheet and liquidity position. In September and December 2025, the company completed capital raises totaling $166 million from leading institutional and accredited investors in Israel. In December '25, we also repaid an outstanding $60 million loan that had originally financed the acquisition of Stellar Blu. In the fourth quarter of '25, we used about $6.3 million of cash on operating activities. And on the full year basis, we generated approximately $21 million of operating cash flow in 2025.

As a result, as of December 31, '25, total cash, cash equivalents, restricted cash and short-term deposits were $185.4 million or approximately $183.4 million net of loans compared with $95.6 million as of September 30, 2025. DSOs, which exclude receivables and revenue of our terrestrial network construction projects in Peru were 88 days. Our shareholders' equity as of December 31, '25, totaled $500 million compared with $391 million on September 30, '25, resulting mainly from the capital raise and earnings.

Looking ahead, reflecting our strong backlog and our visibility into '26, we expect 2026 revenues of between $500 million and $520 million, representing 13% growth year-over-year at the midpoint. We expect an adjusted EBITDA of between $61 million and $66 million, a 19% growth at the midpoint. We expect 2026 Commercial segment revenues of between $315 million to $335 million, 16% growth at the midpoint, Defense segment revenues of between $115 million to $130 million, a 22% growth at the midpoint and revenue of Peru segment of between $60 million to $65 million, an 11% decrease at the midpoint due to lower construction revenue in 2026 and shift to operation phase compared to '25.

That concludes my financial review. I would now like to open the call for questions. Operator, please go ahead.

[Operator Instructions] The first question is from Ryan Koontz of Needham & Company.

On the Defense side, given kind of some of the puts and takes been going on with the U.S. budget process and how you're thinking about this year. Maybe can you update us on your visibility as it relates to the defense market, both in the U.S. and any international traction you might have?

Ryan, on the visibility of Defense, generally, when we are entering a year, we have between 50% to 60% of the revenues are already in backlog from the guidance. So we have a relatively good visibility. We have some large projects that we are working on that can secure the year during the first half of the year. We don't see any effect of the recent shutdown in the U.S. administration. We see increased budget and a lot of traction both in the U.S., in Israel and in Europe when defense organization requires satellite connectivity.

That's great. And maybe shifting gears to IFC a bit. Can you update us on your road map there for linefit? I know you've been looking forward to that and maybe an update on the competitive landscape in IFC.

Sure. So on the linefit, as we said in the past calls, we are progressing with Boeing linefit. We expect to pass certification during the first half of the year and start delivering in the third quarter. So it seems promising and on track. With Airbus, we are in initial phases. So it takes some time and probably will drag us to next year. But this is based on initial expectations. So we didn't expect revenues from Airbus linefit in 2026.

Competitive landscape stayed, give or take, the same. There are a lot of traction. Both SES and Panasonic have decent awards. Not everything is published yet. So we do see their forecast, and we do expect some large orders coming in, in the first half of the year, hopefully, this quarter. As I said in my script, most of the guidance is already covered with existing backlog that we have that we received mostly in 2025. So all the orders that we expect to get during '26 probably will be recognized in revenues in 2027.

That's terrific. Maybe just touching on Peru. I know that business can be a bit lumpy. I think they have an election plan coming up. Can you maybe talk to the kind of cadence that you expect the Peru business to unfold this year?

Sure. So in Peru, during last -- during 2025, we got award of upgrading 4 regional networks that we maintain. We are in discussion with the government to upgrade the remaining 2 networks. We believe that we'll be able to close it before the election in the second quarter. In parallel, there are a lot of internal discussion in Peru of very large RFPs for Internet connectivity, both terrestrial and satellite in Peru. So we expect to participate in those RFPs, a lot of traction in Peru. We don't believe that the election will cancel any of those RFPs. Probably we will see most of the RFPs during the first quarter and during the fourth quarter of the year.

The next question is from Sergey Glinyanov of Freedom Broker.

So you provide pretty positive guidance for Defense. And you mentioned new area to expand the operations in Earth Observation solution. But could you put some color on these contracts and its margin profile? Could it be a significant driver for Defense revenue this year? And do you expect Defense order acceleration in Q1 compared to Q4?

Sergey, so I'll start with a general comment on the Defense. We saw in revenues a relatively small growth year-over-year. This is mainly due to the previous shutdown of the U.S. administration that caused some delays in orders. We didn't lose any deal, but because some of the revenues are recognized based on project progress and if the order arrive late, we are unable to recognize revenue. So we'll see it in 2026. We did see very nice more than 35% year-over-year growth in orders getting in. As for the Earth Observation, it typically has the same margin profile that we see on those kind of deals, which is give or take the average of Gilat between, I would say, 30% to 40%.

The next question is from Louie DiPalma of William Blair.

Following the private placement, what areas of M&A are you targeting?

That's a very good question. So first of all, we are open to -- we are not limiting ourselves to a specific segment, but our main focus is on the Defense. We -- on one hand, we want to increase our market presence, both in the U.S., but we are also focusing on Europe. There is a lot of business in Europe, a lot of budget, especially because of the Russian-Ukraine war and conflict between the Trump administration and the European countries. So they want to control their own destiny, and they are increasing their investment in defense. And we see also a lot of traction in secure satellite communication. So we are targeting also companies over there.

Our main focus is to bring businesses, not to buy technology. And we'll continue to look for companies with great potential. It's something that can be significant to the company's revenues. So it could be with revenues of $50 million and above or maybe $100 million and above, and it should be accretive as soon as possible. It's not that we are not -- we will not buy a company that needs a turnaround, and we know how to do that. We did that in DataPath. We bought a company with less than $40 million in revenues and close to breakeven, and now it's almost double the revenues.

We're also looking to expand our addressable market in adjacent markets. For example, radar solutions, electronic warfare and things like that. But it will be something that we are considering. We are doing internal work to define exactly where we want to focus. But also, we might be opportunistic here. In addition, we invested in the past in a start-up with unique technology, a company called Crosense, and we'll continue to look for unique technologies, either a minority investment or taking control, but it's not something that's going to change the overall financials of the company.

Great. And secondly, did the Stellar Blu attain the second milestone related to the $120 million in new backlog by the end of December?

So no, they didn't attain the earnout milestone. They achieved around slightly above half of it. Very large order that we are expecting to get slipped into 2026. We know that it's being processed. We expect to get it, if not by the end of this quarter, so early next quarter. It's not affecting our revenues for 2026 because revenues for 2026 are already in the backlog. There is 9 to 12 months lead time on the main components of the terminal. So we are pretty close for 2026. We can affect it here and there, but not materially.

The order that we are expecting should be delivered mainly in 2027. And since we need to deliver it based on customer needs, if it will arrive today or in 2 months, it's not really a big issue from our perspective. I would like to emphasize that from our perspective, both the risk of delivery and the risk of new business is mitigated. We see the very good acceptance of the antennas in the market, a very good quality, the availability of more than 95%. More than 420 aircraft are connected and more than 500 delivered in 2025. So we know for a fact that the risk that we wanted to mitigate are mitigated, and we do expect to see future growth.

And what was Stellar Blu's revenue in 2025? And what is the general projection for growth in 2026?

So revenues for '25 were about $127 million within the range that we gave between $120 million to $150 million. Today, Stellar Blu is in 2026 are closely integrated with Gilat business. So it's hard to break the P&L. We do expect that from a revenue perspective to see a double-digit growth in unit deliveries.

And one final one. Did you previously indicate that you made progress with Airbus for the inclusion of Sidewinder into its linefit program?

So we do have an agreement together with SES to bring the Sidewinder to be linefit. And with Airbus, SES will be able to install the terminal within Airbus premises. It's not yet part of the official Airbus plan of HBCplus.

The next question is from Chris Quilty of Quilty Space.

I just wanted to follow up a little bit on Stellar Blu. I think the other -- the next set of milestones they were targeting the large strategic contracts. I think those are separate from the large order you just mentioned, which is more of a Commercial customer. Can you give us an update on how they're progressing on some of those strategic orders?

Chris, you're a bit disconnected. Can you repeat the question, please?

The question was whether you've made any progress with Stellar Blu on some of the strategic opportunities that they're pursuing?

Okay. So you're referring to the third earn-out. We are making some progress with one company that we cannot name yet. It's progressing well. I don't know if we'll be able to close everything by the end of the milestone, which is by June, but it seems promising. We are progressing. I want to remind you that it's not just signing the agreement. It has some technical condition as well. It needs to come with a minimum order commitment of at least $35 million with a gross profit, which is significant, almost double the gross profit that the original units booked and come with a relatively significant down payment. The discussion with the customer seems like applying to those conditions, but it's still in early stages. So I cannot comment if it will be closed or not.

Understand. And would those products require significant changes in manufacturing or design? And where do you currently stand in the production rate?

So those future products might require significant design. A lot of our products and a lot of our design changes are approved relatively quick because Stellar Blu expertise is with those certification and working based on qualification by similarity. But in some of the cases, we are offering a different variation of the terminal with a cheaper design. It really depends on the customer.

In terms of production, we said at the beginning of the year that we expect to reach to 60 to 70 units per month. So we reached this run rate. During the fourth quarter, we delivered 190 full terminals, including -- on top of it, we delivered some spare parts. We can increase this production rate with relatively small capital investment. But right now, this production rate is, give or take, in line with customer expectations for deliveries. During the year, we delivered more than 500 units. In Q4, it was a record quarter in terms of deliveries.

Understand. And should we expect the deliveries to be relatively even across the year? Or is there a seasonal pattern to that?

No. In 2026, we expect it to be linear across the year. Of course, it can be small changes between the quarters, but we expect it to be linear.

Understand. And staying on IFC, do you have an update on the ESR2030 terminal. I think that was supposed to be starting early this year for delivery. Is that still on track? And maybe more broadly, what are your evolving thoughts on what is the sweet spot of the flat panel antenna market, both in terms of FANS or single beam, dual beam, where are you taking it in the new product direction?

So in terms of the ESR2030, we passed qualifications, and we expect to start delivering production units probably second half of the year. It really depends when Gogo is ready to accept them. We know that Gogo is promoting the terminal and already have some small awards that they want to install those antennas. So I think it's on track for the year.

As for the future road map, the antenna currently doesn't support simultaneously dual beams. The plans that the next generation of the product will support dual beam. But usually, it comes with customer demand. So it's really what matters to the customer, fast time to market or he has the time to wait for a new version of antenna with dual beam capabilities.

Great. And I assume based on the earlier or the delay in the large order, the backlog probably gets below 1,000. Where do you expect it to finish out, say, maybe by midyear and end of the year?

It's good question. We typically do not disclose the number of units that we have in backlog. I can say that at year-end, we are give or take, at the same level that we were at the beginning of the year, maybe slightly below. We do expect to finish the year with backlog that will cover us for at least 2027 and beyond.

The next question is from Gunther Karger of Discovery Group.

Excellent year, excellent quarter. Congratulations. My question is, we haven't heard in a long time about high-speed ground transport like high-speed rail. There was a project underway, I think, in China on that. Any updates on that -- in that area?

Indeed, I remember the project in China. I think it was 10 years ago when I just arrived to Gilat. It was promising back then. But since then, we didn't see a lot of traction. We do have here and there some terminals that we are selling for fast trains around the world, but it's in limited numbers. And right now, it's not our main focus.

[Operator Instructions] There are no further questions at this time. Mr. Benyamini, would you like to make a concluding statement?

Thank you. I want to thank you all for joining us on this call and for your time and attention. We hope to see you soon or speak with you on our next call. Thank you very much, and have a great day.

Thank you. This concludes Gilat's Fourth Quarter 2025 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.

Ladies and gentlemen, thank you for standing by. Welcome to Gilat's Third Quarter 2025 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, November 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. Jody Burfening of Alliance Advisors IR. Ms. Burfening, please go ahead.

Thank you, Hilla, and good morning, everyone. Thank you for joining us for Gilat Satellite Networks earnings conference call for the third quarter of 2025. With us on the call today are Mr. Adi Sfadia, Gilat's CEO; and Mr. Gil Benyamini, Gilat'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. Potential risks and uncertainties could cause actual results to differ materially include global economic conditions, reductions in revenues from key customers, delays or reductions in U.S. and foreign military spending, acceptance of our new products on a global basis and disruptions or delays in our supply of raw materials and components due to business conditions, global conflicts, weather or other factors not under our control.

Company cautions investors not to 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 Gilat's financial results is included in the company's filings with the Securities and Exchange Commission, including the latest quarterly report on Form 10-Q.

In addition, on today's call, management will refer to certain non-GAAP financial measures that management considers to be useful and differ from GAAP. These non-GAAP measures should be considered supplemental to corresponding GAAP figures.

With that, I would now like to turn the call over to Gilat's CEO. Please go ahead, Adi.

Thank you, Jody, and good day to everyone. Thank you for joining us today to discuss Gilat's third quarter of 2025 results. Please note that we are posting a PowerPoint presentation on our website with all the data we will discuss today.

The third quarter of 2025 was a strong quarter for Gilat and showed strong revenue, including solid organic growth and adjusted EBITDA performance. Our competitive edge across the satellite communication landscape and success in next-generation satellite programs is clearly translating directly into new orders and growing opportunities.

During the quarter, we announced a $66 million private placement from institutional and accredited investors. This demonstrates the confidence of the investment community in Gilat's strategy and performance, providing additional strength to support our next phase of growth.

At the end of the quarter, we had a very strong cash position, [indiscernible] an example of our efforts to create a competitive edge in our first-to-market integration of AI into our Network Management System. This marks an important step in bringing AI-driven automation and intelligence to satellite network operations, allowing customers to manage their network with greater efficiency and insight. It reflects our commitment to innovation and our active role in shaping the future of intelligent SATCOM solutions. We expect to introduce additional AI capabilities as we progress with our road map development. Third quarter revenues reached $117.7 million, a 58% increase year-over-year. Adjusted EBITDA was $15.6 million, 46% above the same quarter last year.

Now on to the business review. Gilat Defense continued to invest in sales, marketing and R&D resources to support business development. Gilat Defense is front and center, actively engaging with customers across North America, Europe and Asia Pacific. Our unique advantage lies in the combined strengths of Gilat DataPath, Wavestream and Stellar Blu. This collaboration enable us to deliver comprehensive SATCOM solutions that supports the full spectrum of Defense operations.

During the quarter, Gilat Defense received over $14 million in orders through a prime contractor for its DKET terminals from the U.S. Army and the Department of Defense, broadening our presence across key defense programs. In Israel, Gilat Defense strengthened its relationship with the Israeli Ministry of Defense through a new multimillion dollar contract for the delivery and integration of satellite communication systems and services.

With a robust pipeline, trusted partnership and proven execution, we are well positioned to capture additional opportunities as global demand for secure satellite communication continue to rise.

Turning to our Commercial business. The third quarter delivered strong results driven by new wins, continued adoption of our next-generation platforms and steady execution across major programs. These results reflect both the rapid evolution of the satellite communication market and Gilat's ability to deliver technology and performance our customers require.

Operators worldwide are investing in flexible multi-orbit ground networks that can seamlessly support fixed broadband mobility and government applications. Gilat's SkyEdge IV platform remains central to this transformation, combining scalability, reliability and advanced network management via virtualized software-defined ground infrastructure.

During the quarter, Gilat received $42 million in orders from a leading global satellite operator for SkyEdge IV for use across multiple applications, mainly in-flight connectivity. These systems will expand the worldwide deployment of our platform and strengthen Gilat's position as a preferred choice for next-generation connectivity in multi-orbit environment. Demand continued to build for Gilat's IFC solutions as airlines and system integrators expand adoption of our technology for next-generation aircraft connectivity.

Recently, we received an order of approximately $7 million to supply IFC equipment. This order demonstrates the growing trust of leading aviation partners in Gilat to deliver reliable, high-performance connectivity for IFC. During the quarter, Gilat signed a strategic partnership agreement and received an initial order for SkyEdge IV from a leading satellite operator in Asia Pacific region, supporting both fixed and cellular backhaul connectivity.

Together, these wins highlight strong market confidence in our technology and reinforce our position as a key enabler of multi-orbit broadband connectivity worldwide. Gilat was awarded more than $60 million in orders from a leading satellite operator for its Stellar Blu's Sidewinder ESA IFC terminal. With about 300,000 community flight hours and about 350 terminals already deployed, the Sidewinder continued to set new benchmarks for performance, reliability and passenger experience.

Production is ramping up, and we expect increased deliveries with improved margins in the coming quarters. Gilat Stellar Blu continues to collaborate closely with its partners to secure new fleet wins and expand its global reach. The growing pipeline in our Commercial business continued to benefit from demand momentum and expanding customer adoption across key markets. Combination of major satellite operators awards, growing IFC demand and the integration of Stellar Blu testify to Gilat's leadership in next-generation connectivity, positioning us well continued growth into 2026.

Gilat Peru delivered strong results this quarter, marked by an additional award of $25 million for an expansion project from Pronatel. This is on top of the $60 million projects awarded to us that was reported at the beginning of the quarter for a quarterly total of $85 million. The new awards will extend high-speed connectivity to additional public institutions, including schools, health centers and police stations as well as public Wi-Fi hotspots, further advancing Peru's digital inclusion goals. The impact of this project goes beyond connectivity, supporting access to education, health care and public safety while creating the infrastructure needed for future broadband expansion. The project implementation is progressing on schedule, and we continue to anticipate additional large RFPs and follow-on orders for network expansions and renewals in the coming quarters. The experience and expertise gained in Peru are also being applied globally, allowing us to replicate successful models and accelerate digital inclusion programs in other markets.

I am pleased to say that we continue to have a strong backlog and a healthy pipeline of opportunities in all divisions. On the strength of our results year-to-date, improved visibility and business momentum, we are resetting our full year guidance. We are narrowing our revenue range to between $445 million to $455 million for a higher revenue growth rate of approximately 47% at the midpoint. We've also narrowed our adjusted EBITDA guidance range, now targeting $51 million to $53 million for a higher growth rate of approximately 23% at the midpoint. Demand across our key markets is accelerating and the strategic initiatives we have implemented are delivering measurable results.

Gilat Defense continued to develop opportunities as government expand investment in mission-critical secure satellite communications. Our focus remains on converting the growing pipeline into new awards in the United States and allied countries.

In the Commercial division, we are seeing broader adoption of our multi-orbit SkyEdge IV platform as operators scale their next-generation networks and invest in advanced broadband and IFC applications.

Gilat Stellar Blu is making steady progress as production increases and new fleet wins are secured, further strengthening our position in the global aviation connectivity market.

In Peru, project execution remains on track, and we continue to expect additional RFPs and follow-on awards from Pronatel and other public programs. The operational expertise developed in Peru continues to serve as the foundation for similar digital inclusion initiatives globally.

In summary, we delivered another strong quarter, successfully validating our diversified growth engines across Defense, Commercial and Peru. Gilat is actively strengthening its competitive edge through technological leadership in multi-orbit connectivity and the integration of SkyEdge IV and AI. With a growing backlog, a robust pipeline of opportunities, particularly in the IFC market and a strong balance sheet, Gilat is well positioned for sustained profitable growth and continued leadership in the global SATCOM market.

And with that, I will hand over the call over to Gil Benyamini, our CFO. Gil, please go ahead.

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 GAAP and non-GAAP basis.

I will now walk through our financial highlights for the third quarter of 2025. As Adi mentioned, we delivered a strong third quarter, demonstrating continued execution across our strategic priorities and building momentum into the remainder of the year. In terms of our financial results, revenues for the third quarter were $117.7 million, representing 58% growth compared to $74.6 million in Q3 '24. Importantly, our organic growth quarter-over-quarter was 19%.

In terms of revenue breakdown by segment, Q3 '25 revenues for the Commercial segment were $73 million compared to $33.8 million in the same quarter last year. The 116% growth was primarily driven by the in-flight connectivity vertical, reflect both the contribution from Stellar Blu and organic expansion.

Q3 '25 revenue for the Defense segment were $24.1 million compared to $31 million in the same quarter last year. The decrease primarily reflects the transition from mature programs to new programs and initiatives that are currently in [indiscernible] phase. We secured a number of meaningful orders and awards that are expected to convert to revenues over the coming quarters. As a reminder, our Defense business is inherently project-based with deliveries and revenue recognition occurring over time. Looking ahead, we expect to see growth in this segment as these newer programs continue to scale.

Revenues for Peru in Q3 '25 were $20.6 million, more than double than the $9.8 million in Q3 '24. The increase was driven by higher revenues related to the new upgrade projects in 4 of the 6 regions in which we operate as well as increased equipment deliveries.

Our GAAP gross margin in Q3 '25 was 30% compared to 37% in Q3 '24. The decrease is primarily attributable to lower margins at Stellar Blu as production ramps up as well as the amortization of purchased intangibles related to the acquisition. GAAP operating expenses in Q3 '25 were $27.2 million compared to $20.9 million in Q3 '24. The increase was primarily driven by the addition of Stellar Blu and the amortization of acquired intangible assets. As a result, GAAP operating income in Q3 '25 was $7.5 million compared to GAAP operating income of $6.7 million in Q3 '24. GAAP net income in Q3 '25 was $8.1 million or a diluted income per share of $0.14 compared to GAAP net income of $6.8 million or a diluted income per share of $0.12 in Q3 '24.

Moving to non-GAAP results. Our non-GAAP gross margin in Q3 '25 was 32% compared to 38% in Q3 '24. Non-GAAP operating expenses in Q3 '25 were $24.7 million compared to $20.2 million in Q3 '24. Non-GAAP operating income in Q3 '25 was $12.8 million compared to $8.3 million in Q3 '24. The non-GAAP net income in Q3 '25 was $11.8 million or a diluted income per share of $0.19 compared to a net income of $8.1 million or income per share of $0.14 in Q3 '24. Adjusted EBITDA in Q3 '25 was $15.6 million compared to an adjusted EBITDA of $10.7 million in Q3 '24.

Moving to our balance sheet. We strengthened our balance sheet and liquidity during the last quarter. In September '25, the company raised $66 million from leading institutional and accredited investors in Israel. In January '25, we secured a $100 million credit line from a bank consortium, of which $60 million was used to finance the acquisition of Stellar Blu. The company also generated more than $28 million in cash from operating activities during this quarter. As a result, as of September 30, '25, total cash, cash equivalents and restricted cash were $155 million or approximately $94.6 million net of loans compared to $5.5 million on June 30, '25.

DSOs, which exclude receivables and revenues of our terrestrial network construction projects in Peru were 63 days, similar to the previous quarter. Our shareholders' equity as of September 30, '25 totaled $391 million compared with $316 million on June 30, '25.

Looking ahead, reflecting our strong performance and visibility into the remainder of the year, we're narrowing our guidance range and raising the guidance midpoint for both revenues and EBITDA. Revenue is now expected to be between $445 million and $455 million, representing year-over-year growth of 47% at the midpoint. The adjusted EBITDA is expected to be between $51 million and $53 million, representing year-over-year growth of 23% at the midpoint.

That concludes my financial review. I would now like to open the call for questions. Operator, please go ahead.

[Operator Instructions] The first question is from Ryan Koontz of Needham.

Really nice quarter, guys. Congrats. I wanted to ask about Stellar Blu and how we should think about that trajectory? Where are we now on gross margins at this point in time? And what sort of improvements you think you can make in gross margin over the coming quarters? And as well as I also want to ask about the product cycle for this version of Sidewinder. How long do you think that lasts before you really need kind of a next-generation product in production?

Ryan, thank you for the greetings. So [ SES ] is progressing very nicely. Production is ramping up. We're still behind the targeted gross margin. The first phase of production incur higher expenses than we originally expected.

We do believe that during next year, we'll see a significant improve in the gross margin that will be combined with orders for line fit on top of the retrofit that we are delivering to date.

As you can see, we announced $60 million orders, which also included initial orders for line fleet units. So we believe that once we start delivering those units, we'll see significantly better gross margins.

In parallel, the cost reduction efforts are starting to bear fruits, not as fast as we expected, but we see the seeds of it. And we believe that next year, we'll see even a higher reduction in costs.

In terms of revenues, it was close to $30 million this quarter. And overall, Stellar Blu was slightly losing. We expect them to be profitable starting Q4.

On the next-generation product, it's -- we haven't announced anything yet, but we are definitely working both on several new programs that will -- once we will be ready, we'll introduce several new ESA terminals. Our focus today is on the Ku new version and also targeting Ka version. And of course, as everyone, we are considering also a version to include Ku and Ka with introducing LEO in Ka, it might be also appealing offering as well.

That's great. Really nice to hear that. And on the Peru front, you talked about the $85 million in orders. Is most of that incremental to your ongoing kind of maintenance contract there? Or is that also a renewal of that maintenance ongoing rate?

Yes. The $85 million award that we received during the last few months is upgrades for additional projects. So it's on top of the existing business that we have with Pronatel. It's not a renewal. Those projects -- the original projects are about to be renewed in 4 to 7 years' time. It depends on every region when it shifts to operation. And those projects include both upgrading the network and maintenance contract until the end of the period. So some of them are for 4 years, some for 5 and some for more.

We do expect several other projects, not necessarily related, but some are also related to those projects in the coming few quarters. It will be renewals of smaller projects in scope and renewals of services that we provide to operators on top of the networks that we built in Peru.

In addition, in Peru, we expect that the government will release several new RFPs in the coming few quarters. It's delayed for more than 6 months, but we do expect to release them in the coming few months. Next year is an election year in Peru. So we do expect it to be released. So the awards will be announced before the election. But again, it's Peru, we can't control the government, so we are waiting.

Got it. Really helpful. And then on the [indiscernible], any impact you're seeing on bookings or product acceptance from the shutdown in the last 45 days?

To be honest, yes, as everyone, we see -- we are not getting orders because of that. But we don't believe that anything is canceled. It's just delayed in new orders and probably might cause a small delay between the quarters in 2026 because there is a lead time from the day we get the orders, but we don't consider it now it's a big impact on our guidance and forecast.

Got it. And Gil, any impact from FX from the shekel versus dollar in the quarter?

Ryan, so no, this quarter, we hardly had any impact. We do hedge the shekel looking forward. So this effect, if we will encounter it, it will only be in the second half of 2026.

The next question is from Louie DiPalma of William Blair.

Congrats on the guidance raise and the recent awards. My first question is, how many Stellar Blu Sidewinder aircraft are online now? I believe last quarter, you indicated there were 225 planes flying with the system. And I was also wondering, how is the antenna performing in the field in terms of connecting with the OneWeb constellation. Is the performance similar to what Starlink is achieving?

Louie, today, there are slightly more than 350 aircrafts connected. We deliver more units, but connected is 350 units with more than 300,000 flight hours. The feedback that we are getting both from the customers and from the airlines that is performance is very good. They are very happy with the performance with a very stringent SLA. The antennas, the OneWeb constellation, it's limited by the modem. So we are bringing, give or take, close to 200 megabit per second on OneWeb. We can bring more, but it depends on the satellites. And I think that it's more than what you need in the aircraft. So I think that the service is at least in part, if not better than Starlink.

Excellent. And for my second question, you discussed on the earnings call 2 different SkyEdge IV orders that you won that were each worth more than $40 million. Are you able to provide the applications for these awards? And are there others in the pipeline just because these awards seem much larger than your traditional SkyEdge IV [indiscernible]?

Yes. In general, as you know, the SkyEdge IV is a multi-application platform. So with the same platform, you can serve several applications. The main application for the orders are in-flight connectivity. So it's to increase the existing customer deployment globally with SkyEdge IV in-flight connectivity application.

Great. But for those orders, they don't -- they're not on the same planes as the Stellar Blu Sidewinder, right? It would be on...

Can be on the same plane. The Sidewinder is a multi-orbit antenna. So on -- for example, on the [ SES ], the old Intelsat, the old Gogo, you have today with Sidewinder both Gilat modem and OneWeb modem.

Right. Yes, that seems like in the future for you to definitely add Gilat modems to a future successor OneWeb constellation since it seems superfluous to have 2 different modems on the same plane.

Yes. The industry wants to have virtualized or several waveform that will run on the same hardware. It's something that everyone wants and then Gilat has the ability, of course, to deliver things like that based on the road map and the relevant customers.

In addition, this quarter, we announced that we signed a strategic agreement with an Asian Pacific operator for SkyEdge IV. So we added another customer to the SkyEdge IV platform. And over there, the focus will be fixed application, I would say, especially cellular backhaul.

Great. And my third question, for the $60 million Stellar Blu order, you mentioned how for some of the installations, it will support, I think you said line fit...

Correct.

But what is the timing of when the factory installations with Boeing will start?

So we are progressing. We expect to get some of the certification before the end of the year that will allow in aircraft installation and some at the beginning of next year. So we'll be able to have a full installation towards mid next year.

Great. So by the middle of 2026, that should start. Excellent. And my fourth and final question, as it relates to the Stellar Blu milestones, I believe one of the milestones, the second one was about attaining $120 million in new Stellar Blu backlog by the end of 2025. And I know you received that $60 million order, but do you expect to that milestone to be hit?

This is a good question. We are -- the earn-out milestone is until give or take mid-December. We are in advanced negotiation to get a very large order from one of our customers. And we want the order as soon as possible. So there is a decent chance that we'll need to -- we'll be able to achieve the milestone and pay the earnout. We still need to comply with several commercially -- customer commercially requirement and relevant gross profits and things like that. But in general, we are on track.

The next question is from Chris Quilty of Quilty Space.

I had a couple of follow-up on IFC and Stellar Blu. Revenues were down sequentially. And obviously, you're ramping production, but is that more timing of orders? Or is there a seasonality component? And should we expect revenues to continue to ramp? And is there seasonality in Q4?

In general, we are delivering mainly the terminals, but there are some auxiliary and avionics that is onetime per quarter. So it might create some bumps during the quarters. In general, the last 2 quarters, production is stable. We managed to overcome the supply chain issues that we had with one of the components. So we do expect to ramp up of production in Q4. We can deliver around 70 to 80 units per month, and we are on track to reach that. I believe that next year, we'll be able to deliver slightly more than that.

Good. And I think you had originally talked about 100 a month earlier this year. Is that the target for '26?

Something like that, yes, in subject, of course, for backlog and orders, but something like that is our target for next year.

Got you. And I think when you acquired Stellar Blu, it had about 1,000 in backlog. Or is the backlog up? Or are you working down the backlog from here? Or I should say, maybe where do you expect as you exit the year with large orders that you expect to close, would the backlog be up or down from that?

It was slightly below 1,000 units in backlog. And we are, give or take, now at the same level that we were because we received a large order at the beginning of Q3. And if the order that we are now negotiating will mature, I believe that we will end up the year with an even higher backlog than we entered the year.

Got you. And again, I know the original target was exiting the year with 10% EBITDA. I'm assuming you're not going to hit that because you're behind with the component issue. But since you just raised EBITDA guide, where across the portfolio did you make up the difference for Stellar Blu coming up a little bit short?

Yes. So we do have a very nice growth that we see in the Commercial and also on the Peru side that outperformed our EBITDA expectation. On the Defense, as we said at the beginning of the year, we significantly increased our investment, increased sales and marketing and the R&D investment in order to support future business development. And it seems on track. We saw a very nice orders this quarter. We hope that the shutdown will end soon, and we'll see also additional orders as we expect Q4 to be strong in booking as well, and we expect to see revenue growth also next year.

Okay. You mentioned Commercial and specifically cellular backhaul, which has been suck and wind for the past year. Was it just a good quarter? Or do you see that trend in cellular backhaul starting to gather steam?

It was a relatively small order on cellular backhaul. The main growth on the Commercial side is the IFC business that we have and slightly on the fixed side, but the main growth engine is IFC.

Got you. And back to Stellar Blu, sorry, there's -- the third earn-out is based upon the 4 strategic wins. Have they -- have you closed any of those? Or is the fourth quarter large order associated with that? And how do you feel still on track for those events?

So up until today, we haven't closed any strategic deal. The large order is not associated with a new strategic deal. It will come from existing customers. We have -- we started several negotiations with customers that can be considered a strategic deal. I remind everyone that the strategic deal is something like, for example, additional line fit agreement with minimum commitment of at least $35 million with a significant gross margin. And we are in initial stages of discussion. So I can't predict right now if [indiscernible] contract will be signed until mid-June next year. But no doubt the strategic deals will increase significantly our addressable market. So it's something we invest a lot and a lot of efforts are on that.

A quick question. I know you did a 6-K when you filed for the private placement, but I didn't see a 6-K when it closed. Is it fair to assume that all the terms in the original 6-K were the same for the close?

Yes. The money received $66 million, net of slightly below $1 million of costs.

Okay. And just to confirm, if you could a bit later, but what was the closing share count? I just wanted to confirm that. And I guess the other question was CapEx was up kind of big in the quarter. Was there anything specific going on there?

So the closing share count is a little bit above $64 million. And what was the second half? Sorry, I didn't hear it clearly.

CapEx.

The CapEx. So I mean CapEx is going as usual. I mean it's within the original planning, a little bit higher than last year, but as expected. So no real news over there.

Got you. And maybe final one for you, Gil. I mean, obviously, this was Stellar Blu drag on the gross margins, which kind of ticked down below 30% for the first time in a while. Where do you expect to sort of -- I could say, exit Q4, but if we look at maybe '26, I know you're not providing guidance, are we back more at the mid-30% gross margin as that product line picks up?

Yes. I believe that this would be a fair statement. We also have a burden in the gap of about 2% in our gross margin of depreciation of the backlog. So this will be gone sometime during the first half of '26 or maybe even before. And then we'll get this 2% in the gap as well. So I think that the mid-30s are a fair statement. And of course, as more line fits and the cost reduction efforts will kick in, we may see even higher gross margins looking further.

[Operator Instructions] There are no further questions at this time. Mr. Benyamini, would you like to make a concluding statement?

Yes. I want to thank you all for joining us on this call and for your time and attention. We hope to see you soon or speak with you on our next call. Thank you very much, and have a great day.

Thank you. This concludes Gilat's Third Quarter 2025 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.

Welcome to this special edition of Freedom fireside chat. I'm Jay Woods, Chief Global Strategist of Freedom Capital Markets. Today, we are going to explore the booming defense satellite communications market, and we are joined not by 1, but by 2 industry leaders.

From Gilat, we have Gilad, with a D, Gilad Landsberg, President of Gilat's Defense division. Gilad has over 20 years of defense experience. At this interesting time, I can't wait to pick his brain and take a deep dive into what he's been seeing and how the company continues to grow. And with him is Nicole Robinson. Nicole is the President of DataPath, a key Gilat subsidiary. She brings deep satellite industry experience to the table.

Now we're going to take a deep dive and say hello to our guests as we dive into how Gilat is capitalizing on the multibillion-dollar market driving innovation and boosting shareholder value. So let's get started. Gilad, Nicole, welcome.

Thank you.

Thank you, Jay.

I usually go ladies first, but Gilad, I'm going to go to you. Can you share your journey to becoming the President of Gilat's Defense division and what experiences have shaped your approach?

Well, I started in Gilat about 2 years ago. Actually, I'm celebrating the 2 years -- I celebrated the 2 years' mark last week. During the last 20 years, as you mentioned before, I started my career in Rafael. I think everybody knows or heard about this company. That's actually the company who created the Iron Dome, which is very, very famous nowadays. Spent almost 18 years in Rafael, in different areas. Began as a system engineer. And later on, I continued with a company called Aeronautics. Aeronautics, by the way, which is a subsidiary now of Rafael, deals mostly with the tactical and small tactical UAVs, which was quite an experience as well. Spent 3 years there as a division manager and then moved to Gilat.

I have to say that during those years, I had the privilege to be a customer for Gilat. So now I move to the other side of the equation, and I found out an amazing and wide world that I was not aware of. So I started Gilat as a COO for about the first 1.5 years. After a while, I got the privilege of being the Executive-in-Charge and a Board member in DataPath. Later on, I got the mission of leading Gilat defense strategy, which was something we found out that we want to do after the acquirement of DataPath. One of the outcomes of the strategy was the creation of Gilat Defense.

You mentioned DataPath. With us is the President of DataPath. Nicole, it's great to have you. You have an extensive background: Comtech, SES, General Dynamics. What drew you to lead DataPath? And how did that symmetry with Gilat come to fruition?

Well, thanks so much, Jay. It's really good to be here with you. Similar to Gilad, in fact, I've been in this industry about 20 years and, as you alluded, across a variety of different space-driven capabilities. What really drew me to Gilat was the passion toward not only delivering next-generation technology to customers worldwide, but the opportunity in DataPath in particular, to focus acutely on the needs of our U.S. government customers, our men and women in uniform. So when Gilat purchased DataPath about 1.5 years ago now, it was really towards the mission of expanding that portfolio, expanding their value into the U.S. government domain, into the U.S. government market. And certainly, with DataPath at the helm, doing a fabulous job of delivering critical SATCOM terminal solutions to that customer set was a perfect fit and one I felt particularly inspired by.

Let's talk about the satellite communications industry. It's expected to reach $6.2 billion in 2025. There's a lot driving this growth. And Nicole, I'll go to you first. What opportunities do you see driving this growth? And what does it mean for Gilat?

Yes. All too often, we focus on the space segment alone. We've got billionaires launching new constellations into new orbits that have not been explored in the past. In some cases, we have billionaires launching themselves into outer space. So there's a sharp focus on the space segment. What's really fascinating to me is how we bring all of that capability together, how we make sense of it from the ground. Our secret sauce is really maximizing the capabilities we have inherent in the modem technologies, the ground systems, and really bringing together a tremendous value to bring all that's happening at space down into the hands of our end users through our terminal and modem solutions. So it's certainly a very exciting time for us, and I know it is for our parent company as well.

Yes. And Gilad, same question to you. What are the things that excite you about the growth? What's driving it? And you're a busy man. What is driving you each day?

The world we're dealing with is entering a new era. Actually, it began a few years ago, and I think that's the most exciting thing. New technologies, new constellations in space. I mean, all of those creates a lot of opportunities business-wise, but it creates also a lot of excitement technology-wise. And looking at the market, we really see the growth. And you mentioned the $6.2 billion, and we actually see that in real opportunities for us, and we just need to adopt and see that we meet the market there where we need to.

Nicole, I just want to follow up with you. With the DataPath integration with Gilat's Defense division, what do you think you -- how do you enhance their offerings the best? What is it that they saw in you and where you're going to take them to another level?

For decades, we've been operating as a trusted provider with the U.S. DoD. In terms of our alignment within the Gilat portfolio, we do operate as a wholly owned U.S. subsidiary and a proxy corporation. And that allows us a couple of things. Chief among them is the ability to operate in the classified arena at the highest level with those U.S. government customers. So I'd say with that trust comes along not only the trust to manage confidentiality and classified programs, but also trust that we will bring the very best to our men and women and our war fighters. I mean that is particularly key. Today, we're the leader in this category with more than 40 of our terminal systems WGS-certified. That's the most arduous defense certification that you can achieve, and we have the most number of them. So really proud to be doing that.

In terms of how we're integrating and working well with our parent company, and in particular, with Gilat Defense to really strengthen our offering, there's a couple of different things that we've been doing to that end. We are a systems integrator and a solutions provider at DataPath. We often reflect on the fact that we're technology-agnostic. And with that, it means we will incorporate and integrate the very best of technology in our terminal solutions to support our war fighters. And in doing that, it just so happens that Gilat is the very best. So it works out really beautifully, the modem technologies that have enabled our terminals to go multi-orbit, have enabled our terminals to go multi-frequency. It's really an exciting time, and the integration is off to a really strong start.

Gilad, people may not realize this, but the Defense division wasn't launched until just a few months ago. How do you position yourself in this company in such a competitive market now? What are you going to do to differentiate yourself besides this great partnership with DataPath?

Historically, we saw the defense market as a significant growth engine to Gilat. We talked about the size of the market, and we saw a lot of opportunities in the DoD like the PWSA, the Proliferated Warfighter Space Architecture; or a family of terminals, PLEO, NGS. Lots of acronyms, I'm not going to go through all of them. But we also saw opportunities outside of the DoD like Iris Square in Europe and many others. Basically, since we saw it was a significant growth engine, and we saw some changes and disruptions on the commercial side, the first step we did was acquiring DataPath. That actually was the first, I'd say, serious step that we did towards the defense market. But later on, we started gathering a new defense strategy, which I mentioned before. And the outcome, as I said, was the creation of Gilat Defense because we did find lots of areas that can operate within, but we also find a lot of changes we need to do.

So you asked about how we position ourselves in the competitive market. I think if we look from 20,000 feet, 10 or 15 years ago, the defense technology was always 1 step or even 2 steps before the commercial market. I think this had changed. The commercial technology usually is much faster and less conservative than the defense market technology. Since I believe that Gilat has one of the best technologies in the world, and I'm not trying to be arrogant here, I truly believe in that, our main goal was to take the technology we already have, the experience and the expertise we already have in Gilat, and just make sure that we are adopting it the right way to the defense market.

I'm going to throw this question to both of you. I'll see who wants to take it first. But recently, I'll just mention 2, a $23 million Department of Defense contract for satellite transportation terminals, STT units, and an $11 million deal for DKET terminals. You can explain that one to the audience, the DKET acronym. Can you share what these contracts involve and the significance they have for Gilat going forward? And that's just 2 of the recent ones. So I'll throw it to whoever wants to take the ball from here.

Nicole, you start, and I'll complete.

That first one there, the STT, you're right, it's the satellite transportable terminal. This is the DataPath rapid deployment vehicle trailer mount SATCOM system. It's been deployed in the harshest of environments over the past, I'd say, 15 to 20 years. What's so significant about this program, and it was about $23 million in value, it shows an enduring need and reliance of our existing capability. So while we're innovating, we're going multi-orbit, we're going multi-frequency, we're delivering all that new value in keeping with what's taking place on the space side of things, reflecting that on the ground, our existing systems are still very much operationally critical. And so we're really proud to see that STT program, the satellite transportable terminal program, be executed.

The other one you mentioned there, too, the $11 million DKET award that we recently announced, DKET stands for defense Ka-band Earth Terminal (sic) [ Deployable KU-Band Earth Terminal ]. The acronym is actually not relevant anymore. These terminals now, this is a 4.2-meter class terminal. They're capable of going up to tri-band, even quad-band. So working with 3 and even 4 different satellite frequencies, they've really extended far beyond what that acronym previously meant.

In this particular program, it's about supporting one of the preeminent UAV operators as each of these relocatable 4.2-meter earth terminals can operate up to 4 UAVs at the same time. So it's really fascinating. You often think of UAVs from what's going on under the hood of the aircraft. But in our case, it's the ground system that really gives it the telemetry, the control, the operations, these platforms need. So 2 really exciting wins, and I know Gilad is just as excited about them as I am.

Yes. And if I just need to add to what Nicole said, I think those wins were significant for us as well. First, it symbols the trust that the DoD has with DataPath and the future relations and opportunities for DataPath as well. I think that deals like that gives DataPath -- due to the fact that they're on the ground with the customers, so it gives them a better understanding of the needs and builds future relations and opportunities with our customers. And in the end, the programs are long-term contracts, which are being translated to revenues, to constant revenues, for up to 5 years. And all of those are giving us stability revenue-wise.

Gilad, just a follow-up, building on those contracts, how is Gilat leveraging its NGSO constellation and its defense offerings? Are there specific technologies driving your growth in particular? I know, obviously, the DataPath relationship is one, but what are some of the technologies driving the growth now?

We are actually already actively operational in the NGSO constellations, whether it's through Gilat operations on mPOWER, that's the constellation that is managed by SES. We have Wavestream products. We didn't mention Wavestream until now, but Wavestream is a subsidiary of us, amazing expertise with solid-state power amplifiers. And we have their products already operational on different NGSO constellation.

And by the way, same for Stello Blu, that supports NGSO as well. All the time for those areas, we see a growth in the NGSO alongside constant revenue that can come from the GEO constellations as well. Two examples for that is we have the DPI 2.6 meters that we launched during a satellite show in March, which actually is a portable that supports both GEO, MEO and LEO. And another example for that is the GLT 1500, which is a multi-orbit SDR, multi-orbit, multi-waveform, and it was actually designed to be a defense solution from the first moment.

To our listeners, thank you for joining us. Gilat.com, to explore their latest updates and see why this is a stock to watch in 2025 and beyond. Stay tuned for more insights and keep investing smart. I'm Jay Woods, Freedom Capital Markets. Thanks for joining us.

Thank you again for joining us on our latest installment of Freedom fireside chat. I'm Jay Woods, Chief Global Strategist of Freedom Capital Markets. We are joined by not 1 but 2 industry leaders from Gilat, Gilad Landsberg, Nicole Robinson.

So we are living in an interesting time right now with the conflict going on. Are there any real-time examples of how critical defense operations in this real-world environment are being helped by your current technology? Is that something we can discuss? Or is it something that's just too much of a hot button issue right now?

We can certainly discuss it. I think actually, next year, DataPath will have been at the business of developing the terminal solutions and systems integration for 30 years. In the early 1990s, we had the Gulf War; we had Afghanistan in the early 2000s; Iraq, Ukraine more recently and a variety of missions that are not reported. DataPath terminals and systems have been leveraged all the way from manpacks systems and solutions to relocatable hub infrastructure to provide critical communications that, frankly, has been in the business of protecting lives, securing freedoms. I realize that may sound cheeky, but it's no overstatement. That's the business that we're in, and we're very proud to have served in all of those missions and those activities over the past 30 years. And the current operations are no exception.

Earlier, we talked about what was so inspiring and really drew me to DataPath and to Gilat's initiatives to really expand the capabilities in the U.S. A big part of that were the individuals here at DataPath that have been critical to all of those missions. When you sit down with some of these folks that have been here 25, in some cases, almost 30 years, and to hear their firsthand experience, to learn what they have contributed to the technology and the impact it's had on human life, it's chilling, it's inspiring and it's the kind of thing that gets you up every morning to say, "This is important, what we're doing." And today is no exception.

Not many people know all the hard work that goes behind the scenes just to get that communication and that network going and thriving. So thank you for sharing that.

And now with all these successes, I got to play devil's advocate, too. What are some of the biggest challenges that Gilat faces in the defense SATCOM market? And what are you looking and how do you address them? I'll go to you, Gilad, for that question.

Sure, Jay. It's the second question you're asking that I will not be able to share all the details due to obvious reasons. First one is obvious, which is competition. The market have changed in the past couple of years. We have the entry of significant players. We have the NGSO creation of verticals in the market. So all of those are creating obvious challenges and competition. On the other side, I do believe that especially within the defense market, there are still opportunities since those changes not necessarily affect the market the same way it affected the commercial market. We're aiming to be a solution provider and a one-stop shop to create solutions for our customers. That's one way to deal with this competition. So that's one challenge.

The second one is the fact that we're an Israeli company. Technological and operational experience, maybe it's a huge advantage for us, but in certain countries, it might be a disadvantage. And we have ways to deal with that. By the way, the acquirement of DataPath, and the collaboration we're doing now between DataPath and Gilat, was a very good way to solve some challenges that we met in order to start working with the Department of Defense in the United States.

The last one, which we're in the middle of dealing with, is the company focus. In the end, for many years, Gilat was a company that dealt with commercial solutions or products. Gilat did deal with the defense market, but it wasn't the main focus. Now taking a huge shift and turning it into working towards the defense market is a challenge. It affects our budgets. The people we recruit, the process we have internally and externally, the products that needs to be adopted, et cetera, all of those are challenging us for many months now, and I'm feeling very, very confident that we're solving most of them or we solved most of them in the past couple of months, and we'll complete solving all of them by the end of the year.

Now I'd be remiss if we didn't talk a little bit about the financial impact. Gilat, a publicly traded company, a nice uptrend, things have been going slowly and steadily along, the growth continues. Nicole, you've been part of that growth. Let me just ask you, we see how you support the defense operations. What kind of revenue impact do you think DataPath brings with the contracts that we've already acquired? Can you talk about the revenue stream side of things without going into any specifics, what you can share?

Yes. Maybe I'll speak in terms of percentages, and I'll keep us in a safe space here. But I think it's been a significant impact. And actually, a very strategic bet that Gilat made back in November of 2023 on DataPath to say, "This company here in Atlanta, Georgia has tremendous potential. We think we're barely scratching the surface here. Let's see what we can do to scale these products, help deliver into new markets, inject with new technologies." And in the first year of full financial reporting for the company, we've grown by 40% revenue. Who in the world wouldn't take a bet like that to say, "We're going to buy a company that in 1 year's time is going to deliver 40% growth." So just a thrilling ride it has been so far. I'm not so sure if it will be that high of a percentage going forward, but it will keep going up, and we're really excited about that and very proud.

Every quarter when we have our financial results with the parent company. We're just so very proud to show that this was the right investment to make. And certainly, we talked about scratching the surface of DataPath's potential. It's very rewarding for the men and women of this company to see the technology adopted the way it is and the scale that it's on.

And speaking of the technology side of things, Gilad, we've seen the Stello Blu acquisition. We touched on SkyEdge in defense. What are the key growth areas that you see in the Defense division and the trends that continue? I assume you're busy and the landscape is always changing. So what are the key trends that you're seeing for growth in your division?

Some of them are coming from Wavestream. We are more making some adoptions in order to make sure that Wavestream products are meeting the defense market as well. We are very, very focused on solutions to UAV. You can see the photo behind me, and it's there for a reason. Nicole mentioned the gateways for UAVs already being done in DataPath. But on the other side, we are doing airborne terminals on the side of Gilat. So we can actually provide a full solution for our customers. And not only one side of the equation, we can actually provide the whole equation and not let our customers do the integrations by themselves. So we do see the UAV or the UAS market as a significant market for us.

I mentioned before the GLT 1500. We believe that's the future. We hear it from the customers and from the market. The NGSO brought a lot of flexibility and opportunities for the war fighters. And everybody is looking for resiliency. Everybody is looking for a swap. Swap is size, weight and power. Everybody is looking to reduce those and those constellations are actually creating the opportunity to do so because they are closer to the earth.

You mentioned the GLT 1500 terminal. You recently showcased that at the Washington, D.C. event, Satellite 2025. Those must be exciting times to go to these events and deal with people that are, one, interested in your technology, what you're doing, probably trying to steal some of your secrets while they're there as well. But what was some of the buzz going around at that convention?

There were many buzz because actually, we came with 3 different products. The GLT 1500 was one of them. I mentioned the DPI 2.6 meter portable. And we also acquired DS family, which I can elaborate later on. But the GLT was a real star of the show because it really brings the future of SATCOM for land and airborne applications. The fact that you can use the same modem to deal with different constellations and different waveforms, it gives you a flexibility that in order to match today, you needed to have a rack of a few modems that needs power and the weight of it is huge. So I think solutions like this brings the new space era in the eyes of Gilat.

Got you. And now here's something that I'm not familiar with. So you're going to have to kind of explain the Department of Defense. They recently announced procurement reforms for 2025. Could you kind of explain what those reforms are, the purpose of those reforms and what impact they may have on the SATCOM market? Because I tried to research this one, and it was a little out of my pay grade as far as these reforms go.

In general, the reforms are really about streamlining processes, federal workforces, budgets, of course, and procurement. So in many cases, I think the efforts are viewed as a negative in the industry. They're seeing the impact of a reduction in certain spending. There's been delays of certain procurements. I do think there's a silver lining. However, maybe I don't have a popular opinion on this one. But at the heart of many of these efforts is really strengthening the defense industrial base of the United States.

And so for DataPath as a U.S. manufacturer of trusted defense satellite communication systems, that's key for us. Without even having the stated requirement, more than 75% of the elements of our solutions are U.S. manufactured. It's important to us. We study the federal acquisitions regulations and the defense chapters of it as well to make sure that we're bringing the very best and we're bringing maximum U.S. content available into our systems, not only to help our war fighters with having the most trusted technologies on the market, but also because it does help strengthen the industrial base of the United States. So there is a silver lining to this. I do think that some of the reforms are focused on streamlining, refining, optimizing. But the net of all of that could be very positive for companies like DataPath.

Well, I'm a silver linings guy, so you struck the right cord with me. I appreciate that. Gilad, was there anything you wanted to add to that?

I think Nicole nailed it. But I think one of the things we see on those reforms is trying to adopt commercial solutions in order to bring technology into the field the fastest. And as I mentioned before, that's actually what we're doing. We're adopting commercial technology in order to meet the defense requirement. And I think this is exactly meeting those reforms.

As we start to wrap up, I want to give you the opportunity to tell people watching this, what are some of the key milestones or events that investors should be watching out for in the Defense division over the next year?

I would like to see the constant growth relative to last year. We had a very strong beginning of the year, the first half of the year, and want to continue with that on the second part of the year. We do want to show already, in the next couple of months, our growth on our baseband business within the DoD. We are working on that very, very hard. And hopefully, it will happen in the next couple of months. There are some new product solutions and cooperation that we will announce during the year. So look for that. And the last one, but it's important as well, is the ribbon-cutting for Gilat Defense offices in Virginia.

This is an interesting time to be talking about defense, and your systems are being put to work literally as we speak. Are there any final thoughts as to the future of defense SATCOM or more particularly your role in shaping it? Are we learning on the fly right now by day-to-day events?

We're still learning, but there are many aspects that we know what we're planning to do and what we're about to do. But if I need to wrap it up in one sentence, as far as I see it, the space is the limit, and we have just begun.

I think we could drop the microphone there, Nicole. We could have scripted that, that wouldn't have been better. But Gilad Landsberg, Nicole Robinson. It's been a nice incredible deep dive into Gilat's Defense division. It's an ever-growing SATCOM market. We said $6.2 billion as we started. Given the world events, I can only see that market growing by leaps and bounds. And it's clear Gilat is poised to continue to grow with its innovative solutions and strategic wins. So to our listeners, thank you for joining us. Gilat.com, to explore their latest updates and see why this is a stock to watch in 2025 and beyond. Stay tuned for more insights and keep investing smart. I'm Jay Woods, Freedom Capital Markets. Thanks for joining us.

Ladies and gentlemen, thank you for standing by. Welcome to Gilat's Second Quarter 2025 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded August 26, 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 Mr. Alex Villalta of Alliance Advisors IR. Mr. Villalta, would you like to begin, please?

Thank you, operator, and good day to everyone. Thank you for joining us for Gilat Satellite Networks Earnings Conference Call for the second quarter of 2025. With us on today's call are Mr. Adi Sfadia, Gilat's CEO; and Mr. Gil Benyamini, Gilat's CFO. The earnings press release was issued earlier today, and if anyone has not received a copy, I invite you to visit the company's website at gilat.com, where you'll find the release in the Investor Relations section.

Before turning the call over to management, I'd like to remind everyone that some statements made during the conference call contain forward-looking statements based on current expectations. Actual results could differ materially from these projected as a result of various risks and uncertainties. The potential risks and uncertainties could cause actual results to differ materially include uncertain global economic conditions, reductions in revenues from key customers, delays or reductions in U.S. and foreign military spend, acceptance of our new products on a global basis and disruptions or delays in our supply of raw materials and components due to business conditions, global conflicts, weather or other factors not under our control.

The company cautions investors not to 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 could affect Gilat's financial results is included in the company's filings with the SEC, including the latest quarterly report on Form 10-Q. In addition, on today's call, management will refer to certain non-GAAP financial measures that management considers to be useful and differ from GAAP. These non-GAAP measures should be considered supplemental to corresponding GAAP figures.

With that, I would now like to turn the call over to Gilat's CEO, Adi.

Thank you, Alex, and good day, everyone. Thank you for joining us today to discuss Gilat's second quarter 2025 results. Please note that we are posting a PowerPoint presentation on our website with all the data we will discuss today. The second quarter not only showed strong performance but also validated our growth strategy across each of our growth engines. Our priorities in 2025 remains on capturing the growing opportunities emerging from our acquisition of Stellar Blu earlier this year and investing in Gilat Defense to better position to drive revenue growth in 2026. These drivers, along with our strong presence in VHTS and NGSO constellations continue to fuel our growth and strengthen our market leadership. Second quarter revenues reached $105 million, a 37% increase year-over-year, which includes about $36 million in revenues from Stellar Blu. Adjusted EBITDA was $11.8 million, 17% above the same quarter last year, including Stellar Blu's expected ramp-up losses of about $1.5 million. Excluding Stellar Blu loss, our adjusted EBITDA for the second quarter was about $13.3 million, representing a 32% year-over-year increase. Stellar Blu's yearly performance remains on track with revenue expectation of between $120 million and $150 million.

Now on to the business review. In the second quarter, our Defense division continued to set the foundation for future growth. Continuing geopolitical tension and shifting global security priorities are promoting governments to increase their defense spending and allocate more of their budget to secure satellite communications. This is generating increased interest in mission-critical SATCOM solutions, and Gilat Defense is well positioned to meet this evolving operational needs. We are seeing active engagement from customers across multiple regions, including North America, Europe and Asia Pacific. Gilat Defense is also extending our global footprint by leveraging top line synergies between Gilat DataPath and Wavestream by offering a broader range of solutions to defense customers.

In the second quarter, over $8 million of Gilat DataPath systems were ordered by the Israeli Ministry of Defense, demonstrating the strong value of our technology and the applicability of our solutions to diverse mission requirements. During the second quarter, Gilat DataPath was awarded a contract to provide the field service and technical services in support of the U.S. Army. The award includes an initial order of more than $7 million with an option to extend the program for up to 5 years, reaching estimated order of up to $70 million. With a clear strategy, a growing global presence and an unwavering focus on mission-critical connectivity, Gilat Defense is positioned for substantial growth and long-term impact in this essential sector.

Turning to our commercial business. Q2 was a milestone quarter, driven by strong booking strategic wins and continued adoption of our next-generation satellite communication platform. Our momentum reflects both the accelerating transformation of the industry and Gilat's success in aligning the technology and solutions with the needs of our customers. One of the most significant announcements this quarter was the signing of a $40 million contract for a virtualized SkyEdge IV platform. This landmark agreement not only demonstrates the trust our customers place in Gilat but also highlight the critical industry shift in our satellite communications infrastructure is being deployed. SkyEdge IV virtualization empowers operators to move to cloud-native software-defined environments designed for scale, agility and interoperability with next-generation satellites. Evolving to a software-only cloud-based platform elevates Gilat's positioning with higher value, improved margins and provides the option to sell through a platform as a service business model.

During the second quarter, we announced over $47 million in orders from Tier 1 satellite operators. These orders underscore the surging demand for Gilat multi-orbit ground segment technologies, driven by increasing demand for IFC solutions and the widespread adoption of GEO, MEO and LEO architectures. Operators are making substantial investments in ground systems that can seamlessly manage multi-orbit connectivity across a range of use cases, including fixed broadband mobility solutions and critical government services. These orders also span multiple regions and program types, including both network expansions and new deployments, highlighting the global relevance of our technology and the growing trust in our platform to support mission-critical services.

Moving on to Stellar Blu. We announced receiving $27 million in orders from our Stellar Blu portfolio. With more than 150,000 community flight hours and deployment of over 225 terminals, Gilat Sidewinder ESA terminal is exceeding expectations for performance, reliability and user experience. Production ramp-up is progressing slowly, and we expect to see more units delivered in Q3 and Q4 this year with better margins. Stellar Blu continues to work closely with its partners to secure new fleet wins. We are confident these efforts will yield positive results soon. Looking ahead, we remain focused on expanding our leadership across key verticals and deepening our relationship with strategic partners. With strong customer demand and differentiated technology portfolio, we believe Gilat is well positioned for continued growth in our commercial business.

Q2 was an outstanding quarter for Gilat Peru, highlighted by the award of more than $60 million in new orders from Pronatel. As a reminder, these orders were delayed last quarter. The awards are for upgrading the regional network infrastructure that was originally awarded to us in 2016, bringing high-speed Internet to more than 800 public institutions, including schools, health care and police stations across more than 280 localities. This award reflects Gilat Peru's continued partnership with the Peruvian state and our long-standing commitment to digital inclusion, demonstrating once again the key role Gilat Peru plays in delivering meaningful nationwide impact. Digital inclusion is a key priority worldwide and the expertise developed by Gilat Peru in connection in connecting remote and underserved communities is now being leveraged in other regions around the world, allowing us to replicate proven models and accelerate similar projects globally.

In Peru, we still expect to receive several large RFPs and orders from existing project expansions and renewals in the coming few quarters. I am pleased to say that we continue to have a strong backlog and a healthy pipeline of opportunities in all divisions. On the strength of our results year-to-date, improved visibility and business momentum, we are resetting our full year guidance. We are narrowing our revenue range to $435 to $455 million for a higher revenue growth rate of approximately 46% at the midpoint. We have also narrowed our adjusted EBITDA guidance range, now targeting between $50 million to $53 million for a higher growth rate of approximately 22% at the midpoint.

Gilat remains strategically well positioned for sustained growth, supported by strong demand for secure high-performance connectivity across commercial and defense markets. As satellite networks evolve, expanding in capacity shifting to multi-orbit GEO, MEO and LEO architectures and moving towards software-defined infrastructure, our portfolio is uniquely equipped to meet the emerging requirements with the scalability, flexibility and reliability our customers expect. Gilat Defense continued with a focused road map and expanding sales resources to broaden engagement and awareness of our technological expertise and our role in supporting the mission-critical satellite connectivity needs of governments and defense agencies in the U.S. and allied countries.

In our Commercial division, we are meeting the growing industry demand for virtualized software-defined ground infrastructure that enables more agile, scalable network deployments. Our multi-bit platform are delivering seamless connectivity across GEO, MEO and LEO constellations, positioning Gilat as a key enabler of next-generation satellite networks. At the same time, Gilat Sidewinder ISA terminal continues to gain traction with ongoing progress in integration and certification across multiple aviation segments. In Peru, we play a vital role in expanding access to digital inclusion services, strengthening public infrastructure and supporting long-term national connectivity growth. Our local presence and trusted partnership with the Peruvian state remains key differentiator as we help close the digital divide in underserved regions. We are very happy with the progress we are making across the company and remain focused on advancing our priorities, deepening customer relationships and delivering meaningful results as we support the evolving needs of a rapidly changing satellite communication market.

And with that, I will hand over the call to Gil Benyamini, our CFO. Gil, please go ahead.

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 GAAP and non-GAAP basis. I will now walk through our financial highlights for the second quarter of 2025. As Adi mentioned, we are very pleased with our second quarter performance. We closed the second quarter and the first half of the year, delivering sustained improvements in our results, giving us strong momentum going forward. In terms of our financial results, revenues for the second quarter were $105 million, a 37% increase compared to $76.6 million in Q2 '24. In terms of revenue breakdown by segments, Q2 '25 revenues for the Commercial segment were $69.1 million compared to $43.4 million in the same quarter last year. The 59% increase was primarily due to the contribution of Stellar Blu, which we acquired in early January this year. Stellar Blu generated $36 million, which was partially offset by the termination of our activity in Russia in 2024. '25 revenues for the Defense segment were $20 million, similar to the second quarter last year. Q2 '25 revenues for the Peru segment were $15.9 million compared to $13.9 million in Q2 '24.

Our GAAP gross margin in Q2 '25 decreased to 30.4% compared to 34.7% in Q2 '24. The decrease is primarily due to lower margins in Stellar Blu as it ramps up production as well as amortization of purchased intangibles. GAAP operating expenses in Q2 '25 were $26.2 million compared to $23.8 million in Q2 '24. The increase is primarily due to consolidation of Stellar Blu, amortization of purchased intangibles, partially offset by other income, which included proceeds from an arbitration that were recognized in Q2 '25. As a result, GAAP operating income in Q2 '25 was $5.7 million compared to GAAP operating income of $2.8 million in Q2 '24. GAAP net income in Q2 '25 was $9.8 million or a diluted income per share of $0.17 compared to GAAP net income of $1.3 million or diluted income per share of $0.02 in Q2 '24.

Moving to our non-GAAP results. Our non-GAAP gross margin in Q2 '25 decreased to 32.9% compared to 36.8% in Q2 '24. Non-GAAP operating expenses in Q2 '25 were $25.2 million compared to $20.9 million in Q2 '24. The non-GAAP operating income in Q2 '25 was $9.3 million compared to $7.3 million in Q2 '24. Non-GAAP net income in Q2 '25 was $12 million or a diluted income per share of $0.21 compared to a net income of $5.6 million or income per share of $0.10 in Q2 '24. Adjusted EBITDA in Q2 '25 was $11.8 million compared to an adjusted EBITDA of $10.1 million in Q2 '24. Our Q2 '25 organic adjusted EBITDA, excluding Stellar Blu losses, was approximately $13.3 million, a 32% increase compared with Q2 '24.

Moving to our balance sheet. On January 6, '25, the company secured a $100 million credit line from Bank Consortium from which we utilized $60 million to finance the acquisition of Stellar Blu. As a result, as of June 30, '25, total cash, cash equivalents and restricted cash were $65.4 million or approximately $5.5 million net of loans compared to $3.8 million on March 31, '25. In terms of cash flow, we provided $5.1 million from operating activities in Q2 '25. DSOs, which excludes receivables and revenue of our terrestrial network construction projects in Peru were 60 days, a decrease from 75 days in previous quarter. Our shareholders' equity as of June 30, '25 totaled to $316 million compared with $300 million at March 31, '25.

Looking ahead, as Adi mentioned, we are narrowing our guidance range and raising the guidance midpoints for 2025 revenue and EBITDA. Revenue is now expected to be between $435 million and $455 million, representing year-over-year growth of 46% at the midpoint. The adjusted EBITDA is expected to be between $50 million and $53 million, representing year-over-year growth of 22% at the midpoint.

That concludes my financial review. I would now like to open the call for questions. Operator, please.

[Operator Instructions] The first question is from Ryan Koontz of Needham & Co.

I wanted to ask about the ramp at Stellar Blu, obviously, doing well there. How are you feeling about the second half ramp, your ability to meet customer demand? And then from a margin perspective, improving margins on Stellar Blu, can you give us a rough idea of where those margins are at today and where you expect them to be at the end of the year and particularly on a non-GAAP basis would be really helpful.

So I think that the production ramp-up in Stellar Blu is progressing. As you remember, last quarter, we said that there is one specific component that our vendors are struggling with. So, we are seeing better results in the third quarter. And our internal solution is in the certification stages and will be ready for shipment towards the end of this quarter. So we definitely see a ramp-up in Stella Blu ability to deliver in the third quarter and even more in the fourth quarter. As for the overall margins, I will let Gil to give you the input.

So, our margins are ramping up a bit slower than expected, mainly due to the component challenge. We see them ramping. We started the year still at the low-rate pace, and now we're moving to a regular production pace. So, I guess that we'll see towards the third and even more in the fourth quarter and in the beginning of next year, we'll see a more material improvement in the margin of the product.

Great. That's helpful. And then on your virtualization win for SkyEdge IV, what's the fulfillment model look like there? Are you just shipping software to Cot's hardware? Are you having to ship appliances with that? And then how do you think about pricing and utilization there? Do you sell licenses? Can it be sold on a consumption-based or even a subscription-based model? What's happening with the virtualized SkyEdge IV, please?

So the initial order that we received is basically to operate our software on a cloud commercial off-the-shelf equipment. So, it will be from a revenue recognition perspective, it will be a license sale or a CapEx. It's a onetime sale plus ongoing maintenance services. Future upgrades will be also software -- the overall business is -- or the price is give or take the same price as if we sell the hardware. But in this case, the customer needs to bring its own hardware. In most of the cases, most of the customers will prefer to build their own private cloud, but it will be able also to run it on a public cloud. We also have flexible -- several flexible business models, including where we build the cloud for the customers, provide our licenses and do some kind of a platform or a service or a subscription-based or consumption-based model. Based on our history, most of the customers at the end wants to buy in a CapEx mode, but we are open for a recurring revenue business model as well.

That's great. Maybe just one last question on Peru. Are there any major decisions coming in the next -- in the second half of this year that you think can improve that business top line?

Yes. I think that -- the order that we received this quarter were delayed at least from late December and will help us ramping up Peru's revenues in 2025. But we do expect another large order in the next few weeks or the next 2 months. And in addition, there are several large RFPs that are expected to be issued by the Peruvian government, and we expect to participate in those RFPs. And even if we take some of them, it will help us to generate significant growth in Gilat Peru.

The next question is from Louie DiPalma of William Blair.

What are the main contributors to the improved outlook that weren't in the prior guidance or the different assumptions? And should we assume that the new programs that you've won in terms of the revenue carries over into 2026?

Can you repeat the first question? You were a bit disconnected.

Yes, no problem. What are the main contributors to the improved guidance?

So the main contributor, we started the year with a relatively high range of the guidance because of the acquisition of Stellar Blu and the unknown in this acquisition. Today, we have much better visibility both to Stellar Blu and Gilat. The last recent business award, the significant award that we announced and the backlog that we have, including the opportunities that we feel comfortable in our pipeline gave us the assurance that we can increase our guidance for the year. Now as for your second question, some of the awards that recently we received will be dragged as well into 2026 and some of it even further like Peru, which is building the network or upgrading the network and then another 4 to 5 years of recurring services.

And you discussed -- I believe you said that there are now 225 Stellar Blu sidewinder terminals that have been deployed, which I assume means are flying -- what is the backlog now for future shipments? It seems that you've won and you announced and you discussed on today's call, several new contracts, and you have original contracts with American Airlines, Air Canada and I believe also Alaska Airlines. So what is the backlog -- what was the backlog at the end of the quarter?

So we -- it's not a data that we are providing on a quarterly basis. But when we acquired Stellar Blu, we said that we have close to slightly below 1,000 aircraft in backlog. So you can do the math. There are additional awards that our customers already received but haven't placed a PO with Gilat. So we do expect to have large orders in the next few weeks or coming quarter.

And also related to Stellar Blue, what is the status of the different milestone payments associated with the acquisition?

Okay. So I'll remind everyone that we have 3 types of earn-outs. The first earn-out milestone ended at the end of the second quarter and was to reduce the operational risk and the new product introduction risk. Stellar Blu had to deliver 350 terminals before the end of the second quarter, which they failed or Gilat failed to do. We delivered only 225 aircraft because of several reasons, but mainly because of the production ramp-up and some vendors inability to deliver products on time. So the first earn-out payment is not going to be paid.

The second earnout is to get order -- new orders of summing to a range of between $120 million to $140 million. And it's until the end of the fourth quarter this year. And I think it's too early to tell if we will meet the earn-out milestone or not. We do see a strong pipeline with our customers. So we do expect to get a significant amount of orders before the end of the year. So I believe that there is a very good chance that Stellar Blu will be able to meet the milestone. Of course, it needs to be in the profitability that was set in the agreement. So the cost reduction initiatives that we are taking, including shifting some of the production internally and developing some substitute product to a very expensive one needs to take -- needs to happen, and we are on our way of doing so. The third earn-out is until mid-2026 and signing up to 4 strategic agreements. Each one is about $25 million. Strategic agreement need to be at least $25 million of orders in significantly better profitability than the existing one and to be a door opener to a new market. So it should be, for example, line fit with Airbus, significant order from defense customers and other Tier 1 vendors in the market. We have ongoing discussion with several strategic customers, but it's really too early to say. There is almost a year.

Great. And that is super helpful. And one final question. It seems that Eutelsat has signed agreements to raise significant funding from different parties to support OneWeb Gen 2 or the general OneWeb constellation. And what is your view of how OneWeb Gen 2 and Iris Square will proceed? Do you believe that OneWeb Gen 2 and Iris Square are going to be the same constellation? And what are the potential opportunities for Gilat associated with both of these plans?

So we -- based on the discussion we had with Eutelsat in the last several quarters, they want to integrate OneWeb Gen 2 and Iris Square together as the same as SES with their MO 100 and that OneWeb Gen 2 and Iris Square because Iris is going to be a multi-orbit constellation. So they want to tie it together. And they won't take any decision on OneWeb Gen 2 before they will know exactly what is going on with Iris Square. As for Iris Square, we received the first RFI this quarter for the end user terminal. And additional RFIs will follow. And then RFPs, we do believe that awards will be granted not before midyear next year.

Iris Square is, I think, is almost fully subsidized by the -- or financed by the EU regulator and the EUR 12 billion project, I think 40% or so comes from the operators from Eutelsat, SES and [indiscernible] and the rest is coming from the European committee. All in all, we believe that Iris Square will be a bit delayed, but they will launch the constellation. And then OneWeb Gen 2 will follow.

And one final one. The Intelsat-SES merger recently closed, and I know it only closed a few weeks ago, but have you observed any changes in customer behavior as both SES and Intelsat are fairly large customers of yours? And how would you assess the impact of the deal?

Yes. So I'll just add one small thing about Iris Square. I think it's extremely important and very large opportunity for Gilat. We have a decent EU presence, which will give us the right qualification to participate in the program. And as such, we received the RFI. So we do see this is a top priority for Gilat to get an award over there. As for Intelsat and SES merger, indeed, I think 3 or 4 weeks into the merger. But what we see today is that the people that we used to work on both sides are there. And from a customer perspective, the relationship are very strong. We keep on seeing a lot of interest on both sides, both from Intelsat and from SES for Gilat equipment on the terminals on the ISA side, on the SkyEdge IV side and also on the SkyEdge II-c for IFC side. So we do expect to see a significant business from the combined company in the next few months.

The next question is from Omri Efroni of Oppenheimer.

Congrats on the great quarter. I have a few questions about Stellar Blu as the other analysts. Last quarter, you said the guidance was for Stellar Blu from revenue between $120 million to $150 million and EBITDA positive in the second half of 2025. So to -- I only wanted to make sure that the guidance is still intact. That's the first one. And for the follow-up, I was wondering about if you can give some more color about the Defense division. And what are you seeing here? So -- and what do you see from demand, especially from the Israeli Defense Ministry and Europe?

So yes, the guidance for Stellar Blu still stay in place, $120 million to $150 million in revenues. We do expect them to significantly reduce the losses and to show a positive EBITDA. You saw in the announcement that in my script, I said that we reduced the losses from $3.5 million in the first quarter to $1.5 million this quarter, and we do expect them to progress quarter-over-quarter and show positive EBITDA on the second half of the year and even to be able to reach a 10% EBITDA ratio towards the end of the quarter. I'm not sure it will be a full quarter, but towards the end of the quarter once the cost reduction will be in place, and we will be able to start delivering the replacement for the component that is developed by another vendor, we will see a decent profitability from Stellar Blu.

As for the Defense, we do see a lot of interest from several countries. It's mainly discussions on capabilities and things like that. We're having a lot of proof of concept and demo sessions, not only in Europe but worldwide. In parallel, we are building our sales force, investing a lot of money in that. You see the increase in our OpEx also in new product and solutions for the defense. One of them is our next-generation tactical model, which will be one of the most advanced and resilient model in the industry. And in Israel, we announced several awards, and we still have ongoing interest. Of course, I cannot get into specific. Sometimes I don't know all the specifics because in some cases, it's a secured project. but we are progressing very well in all fronts. Also in the U.S., we announced several large orders on the service side, on the product side. And there is a lot of business going on that we'll see in the next quarter or 2.

Got it. So just if I may, just to be clear, even with the component change from the other vendor that is going to take place in the third -- and the end of the third quarter, still the guidance of the Stellar Blu acquisition is intact, even if -- with the new component.

Yes. It still stays in place. Most of the information that I'm giving you today, we knew in advance when we gave the guidance at the beginning of the year. Development and ramp-up of production sometimes take time. But I think that we are progressing on a monthly basis, and we see the progress. You saw the significant reduction in the losses this quarter, and I'm sure we'll move to a positive EBITDA during the second half of the year.

The next question is from Chris Quilty of Quilty Analytics.

I just wanted to follow up on the Stellar Blu and the order front. I know that I think last quarter, you were certified by Panasonic, which is, I think, one of your big lead customers. So fair to expect we should see something this quarter in terms of announcements. And additionally, where should we look for large follow-on orders? Are these done more directly with the airlines? Or do you have other partners you're working with?

So yes, indeed, we started to work on the certification with Panasonic last quarter. We are about to finish them. We already received from Panasonic prior to closing order of slightly below 100 aircraft. And we expect to see additional order. But Panasonic, Intelsat and other customers usually don't order in advance. They usually order back-to-back, and there is about 9 months lead time. So -- and they have a delivery schedule that they are committing to the airline. So we do expect to get in the coming few months order from both Intelsat and Panasonic. In parallel, we are working with other players in the market, but it's in early stages. So it's too early to discuss.

I think you also indicated that with the SES Intelsat acquisition, do you think there was in advance of the close, any activities hold up in orders as they process that may have created a little near-term backlog of potential orders going into the back half of the year? Or did you just see normal purchasing activity by both entities?

I think we saw normal purchasing activity. In some cases, we work together with our partners, helping them promoting their services and our equipment. And in relatively large number of cases, the order comes back-to-back when they get the orders from their customers. So we know the situation and business is continuing as usual. We do expect to have a strong second half with the merged company.

A follow-up question on the SkyEdge IV platform and maybe a specific end market in cellular backhaul, which seems to have slowed down in the last year to 1.5 years. Are there any specific dynamics that you're seeing there? And how does the new virtualized platform help, if at all, in that particular market?

So in general, I agree that there is a bit of a slowness in the cellular backhaul market, coupled by the promise of the direct-to-device and the LEO players that are also aiming this market. What we see right now is significantly less new RFPs and customer extensions customers waiting for the 5G NTN and to see how it's going to be integrated with the 5G network that they have today. Direct-to-device cannot provide the speed that standard cellular backhaul can provide. We do have -- with existing customers, we do get follow-on orders, not in the same magnitude that we saw in the past. We believe that it will take another, I would say, several few quarters until the market will return to normal on the cellular backhaul. SkyEdge IV, the virtuous platform is just running the SkyEdge IV software over cloud commercial the shelf, sorry, equipment. It's not going to add at least not in this space, additional features. But we will allow operators to have the agility and flexibility that they need and also will allow us to sell in more compelling business models.

Understand. I think did I hear you say that customers [indiscernible] so Gil, I was going to say, you mentioned that on those SkyEdge for sales that customers are generally making a CapEx acquisition, are you selling at the same price for the software only as you would have software hosted on a piece of hardware? Or is it something less than that? And how do we think about both revenue growth would slow if you're selling software only for less, but margins would change. Are we going to see that impact putting aside Stellar Blue in the model in '25? Or is that more out into a '26, '27 impact?

So with respect to pricing, there is no -- prices are similar between the CapEx hardware model and the software model. From our perspective, prices are the same. Can you repeat the second question, Chris?

The effect on the margins.

So the yes, the effect on the margins is very positive because once we develop the software, it will be more like software kind of margins rather than hard ones.

Chris, I want to add that even today with SkyEdge IV, the ratio between software and the hardware has changed significantly in comparison to SkyEdge II-c. Today, at the first day, we provide almost all the hardware the customer will need and all the expansions and the upgrades are almost entirely software. So -- and we are starting to see the effect in the commercial segment. But as you said, Stellar Blu takes it a bit down. I think we'll see a gradual progress in the next few years to increase the commercial business margins. But the Virtu platform will be ready 2 years from today. So the real effect, I would say, we will start to see towards, let's say, the end of 2027.

Got it. And final question on the amplifier Wavestream business. I know there's still a large NGSO order out there. Any progress on moving on that?

Yes, there is a lot of progress on this front. We already received more than $30 million. We are delivering -- in orders, we are delivering every quarter based on the customer needs. We do expect to get additional orders in the next few months. We see also around it also defense business that can be built. So we expect also defense order to this specific constellation. But it has its own pace. It's not everything at one day.

And I lied because I do have one final question for Gil. There were a number of gyrations on the balance sheet between contract assets, inventories, long-term receivables. Anything we should focus on there in terms of modeling?

I think that all the changes are mainly in the working capital related to deliveries. We had some reduction in the inventory due to timing of deliveries between Q1 and Q2. It also affected AR, of course. So the changes over there are relatively large. But more than that, I wouldn't say that there is something new to take into account when you model the company.

So no material changes in either the need or cash generation from working capital as we go through the balance of the year?

No, it always depends on the, I would say, POs that we get. Some of them like the Peruvian award that we just reported is usually associated with advanced payments. So I would expect this to positively affect the balance sheet in the next quarter or 2. But this is something that we're used to see from time to time. So I wouldn't describe it as unique, but just a reflection of orders and its timing on the balance sheet.

The next question is from Gunther Karger of Discovery Group.

I have a comment rather than a question. First, I'm particularly pleased with your progress in the defense business, which a long time ago, thought was a big piece of growth business. And secondly, is to congratulate you on excellent performance. That's my comment.

The next question is from Sergey Glinyanov.

My congratulations with your performance in second quarter. So we saw that operating margin has improved compared to first quarter of 2025. What is the primary reason your -- what is the primary effect for that improvement of operating margin if we exclude the effect from Stellar Blu, maybe you implemented some initiatives that may -- that could reduce the cost or something else?

First of all, Stellar Blu has the most, I would say, substantial effect on the changes in the gross margin comparing this year and previous year. And we also got some improvement in the gross margin of Stellar Blu compared to Q1. So I would say that this is one major driver of the change. We also had some better gross margin in Peru this quarter that also improved the weighted gross margin. So both together created a better gross margin. And of course, the revenue mix also affects the gross margin, although there are no other unique things to discuss, but it can vary in fluctuate between quarters.

And continuing the topic about your backlog, you obtained probably more than $1.5 million of new orders for second quarter. I get that is pretty much than a year ago and only $27 million for Stellar Blu antennas. What is the backlog volume in commercial and defense segments now and average exercise period excluding Stellar Blu?

So I discussed Stellar Blu before about entering into the deal with about 1,000 antennas. The nature of deals there are not a monthly kind of deals. Usually, it comes in large batches. And as Adi mentioned, we're expecting to see some pretty soon. With respect to the backlog of the commercial and the defense, so this is a number that we don't share. I can share with you that we usually have visibility for a year that we enter of at least 50% for the upcoming year and then some of the backlog is also relevant for the years after. So without stating any numbers, we have a decent amount of backlog that allows us to see future growth.

There are no further questions at this time. Mr. Benyamini, would you like to make your concluding statement?

Yes. Thank you. I would like to thank you all for joining us on this call and for your time and attention. We hope to see you soon or speak to you in our next call. Thank you very much and have a great day.

This concludes Gilat's Second Quarter 2025 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.

Hello. I'm Jay Woods, Chief Global Strategist of Freedom Capital Markets. Thank you for joining us again for our latest installment of Freedom Fireside Chats. And speaking of joining us again, we're very happy to have President of Gilat's Commercial Division, Ron Levin, joining us with a nice announcement. Ron, thanks for joining us.

Thanks for having me again, Jay.

You just announced a $40 million contract.

So yes, we just announced a milestone contract for Gilat, a $40 million deal for development and deployment of a virtual version of our market-leading SkyEdge IV system, and it's really exciting, exciting times.

Yes. I can't wait to learn more about it. So what exactly is the SkyEdge IV platform? And who is the end client?

So we can't really expose the client at this point. But to talk a bit about SkyEdge IV. So SkyEdge IV is Gilat's, as I said, market-leading satellite communication platform, a system comprised of a hub and terminals. In this case, we're talking about taking the hub system and moving it from a hardware-based platform to a software-based platform.

If I take it, maybe break it down a bit, basically that of 3 parts. So we have the RF part, the RF system, which actually communicates with the satellites. And then we have the data processing elements, and we have the network management. And we're taking all of those that are today based on dedicated hardware and moving them to a cloud-based architecture. I have to say that in my 13 years in Gilat, I've seen a few generations of our platform evolving. This is, I think, the biggest technological leap that we're taking on ourselves.

Wow. So yes, I was about to ask you about what kind of milestone is this for you? Someone that's been there for 13 years, you just answered my question. You seem very excited. The team sounds like they're ready to get going. And let's talk a little bit more about the technology behind it.

One of the things that makes the SkyEdge IV technology so special is the cloud-native architecture, that non-terrestrial network, that 5G non-terrestrial network. This is really going to speed this up. How significant is that increase? And is this becoming the gold standard now going forward in your eyes?

Yes. So the nice thing about SkyEdge IV is that it's already been selected by several of the market-leading satellite operators, and it's already delivering today as is on the hardware-based platform, gigabits and gigabits of capacity per terminal. We're supporting some of the largest cruise ships in the world and some of the largest airlines in the world with this platform.

The nice thing is that we're taking a step approach towards 5G NTN, which is the future. So initially, we're taking the platform as is and moving it to be software-based and cloud native. It means actually that the customers that have already made investments, those investments will carry them through to the future, meaning they'll be able to work simultaneously with software-based platform and hardware-based platform, no need for a forklift upgrade.

And then once everything is software-based, that gives us a very easy path towards changing the waveform and moving to a 5G NTN waveform, which is really what we're seeing our customers look for in the, let's say, midterm future.

Got you. Now the financial impact, I know you can't go into deep dives on this, but a $40 million contract should be great in terms of revenue going forward. It's being delivered over 24 months. Is this a timetable that is standard? Describe the timetable of 24 months, if you could.

Yes. So this is -- as I mentioned earlier, there are several steps to this development because we have the 3 elements of RF chain, data center and management. So it takes quite a while to transfer everything there to be software-based. So it takes about 24 months. And in terms of the revenue, we're recognizing it according to the progress of the work. So it's about -- over the 24, about a $20 million recognized per year. That's correct.

And I saw recently that you did reaffirm your guidance for the fiscal year, $415 million to $455 million. So this is after that reaffirmation, correct?

Yes, this is correct. We -- obviously, this is not a deal that happened overnight. We were negotiating for a while, and we took it into account in the guidance with the PWIN probability. So it was already calculated in, and we reaffirmed the guidance based on this and other projects that we have ongoing in deliveries.

And the last time we talked, it was after the Stellar Blue partnership. How has that been so far?

So it's progressing nicely. We haven't had many announcements on the market, but it is progressing nicely. We've seen the business pick up, and we're quite happy about that acquisition.

Yes. And as far as this contract goes, do you see any follow-on opportunities with this client?

Definitely. I mean when we look at this, it's a development of the next version of our SkyEdge IV platform. It's meant for deployment on upcoming satellites, and we definitely see room to grow once the development is finished to additional capacity by this client. But not only that, we see huge opportunities for this platform on most of the upcoming software-defined satellites, and there are several of those in the pipeline by several satellite operators.

So we see a huge opportunity there, not to mention the NGSO constellations, if I look at IRIS square or OneWeb Gen 2 and the GEO constellations, there's huge opportunity there. For this platform and the future 5G NTN. So yes, we see a huge opportunity in the market.

Well, you break news like we did with Stellar Blue and now this, the market does react positively. When that announcement came out on June 3rd, the stock was up 6.6%. I assume you're too busy to even worry about the stock performance, but the Street seemed to like it. So what do you think was behind the Street's positive reaction to that? You put yourself in the investors' seat, what do you think they expect from you now going forward?

So first of all, we're always looking at the stock prices like our shareholders. But for that reaction, it definitely shows the confidence in Gilat's technology and our ability to deliver and really the confidence that this, as I mentioned previously, unlocks a huge potential of new business going forward. And also moving to a software-based platform unlocks probably more efficiencies and new business models that we'll be able to support going forward. So I think the stock market is excited -- as excited as we are about this.

Yes. And it's been an interesting time. It's been very volatile in the stock market. One thing that we can never avoid is market volatility. The headlines have been a little crazy as everyone knows around the world. But what is the one thing that excites you the most going forward about Gilat? The first time I talked to you, it's Stellar Blue partnership. Now it's this contract. There's a lot going on. What excites you to come to work every day? And what are the things you look forward to next?

So I think, you're right, the market is a disruptive market, and there is a lot of volatility. But when I look at Gilat, I mean, look at this contract, this kind of puts a stake in the ground for Gilat to advance our technology and open up opportunities for us. The Stellar Blue acquisition, obviously allows us to grow into the in-flight connectivity terminal market. We're putting a lot of investment, and we're starting to see the results on the defense side. So all in all, I think Gilat is making the right move and it's a really exciting time for our industry and for Gilat.

And we're excited that you took the time out to just talk with us and share the good news. We've been talking with Ron Levin, the President of Gilat's Commercial Division. Thank you, Ron, and keep up the good work.

Thanks, Jay. Always glad to speak with you.