Ladies and gentlemen, thank you for standing by. Welcome to Gilat's third quarter 2023 results conference call. All participants are present in listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. For operator assistance during the conference, please press star zero. As a reminder, this conference is being recorded, November 7, 2023. By now, you should have all received the company's press release. If you have not received it, please contact Gilat's Investor Relations team at GK Global Investor Relations at 1-646-688-3599, or view it in the News section of the company's website, www.gilat.com. I would now like to hand over the call to Mr. Ehud Helft of GK Global Investor Relations. Mr. Helft, would you like to begin? Yeah. Good morning. Good afternoon, everyone. Thank you for joining us today for Gilat's third quarter 2023 results conference call and webcast. A recording of this call will be available beginning at approximately noon Eastern Time today, November nine... November seventh, so in the webcast on Gilat website for a period of 30 days. Also, please note that investors are urged to read the forward-looking statements in Gilat's earnings release, with a reminder that statements made on this earnings call that are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements, including statements regarding future financial operating results, involve risks, uncertainties, and contingencies, many of which are beyond the control of Gilat and which may cause actual results to differ materially from anticipated results. Gilat is under no obligation to update or alter these forward-looking statements, whether as a result of new information, future events, or otherwise, and the company expressly disclaims any obligation to do so. More detailed information about risk factors can be found in Gilat's reports filed with the Securities and Exchange Commission. With that said, let me turn to introduction. On the call today are Mr. Adi Sfadia, Gilat CEO, and Mr. Gil Benyamini, Gilat CFO. I would now like to turn over the call to Adi Sfadia. Adi, go ahead, sir. Thank you, Ehud, and good day to everyone. I want to thank you for joining us today for our third quarter of 2023 earnings call. I want to take a moment to comment on the tragic events of October 7 and the war in Israel. Our thoughts and prayers are with the victims and families of this horrific attack. We are very proud of our employees' response to this crisis and their dedication to the company during this time. We also want to thank our partners, customers, suppliers, and the world community at large for their full-hearted support. Before I discuss the business results of the quarter, I want to emphasize that Gilat is a strong global company with operation and development centers worldwide. Our operation remains unaffected by the recent events in Israel. We continue to closely monitor the situation and have implemented relevant measures and refreshed our business continuity plans to minimize any potential effects, if at all, on our business. Now, let's move to the business review of the third quarter of 2023. We are pleased with our results for the third quarter, particularly the continued revenue growth, combined with the continued improvement of our profitability. The good performance was due to growing interest in our solutions, as well as advancement in the satellite communication space in general. In particular, I would mention the in-flight connectivity market that contributed significantly to our revenue growth and profitability this quarter. We report significantly improved profitability and Adjusted EBITDA, demonstrating the operating leverage inherent in our business. In fact, our year-to-date adjusted EBITDA of $27 million already exceeds the adjusted EBITDA from the whole of 2022. We are very pleased with the progress made this year, and we expect this trend to continue. Looking ahead, we are narrowing our revenue and profitability expectations for the full year 2023. We expect revenues of between $265 million-$275 million. We are increasing our GAAP operating income to between $29 million-$31 million due to one-time income net that Gil Benyamini, our CFO, will discuss in his comments. And we expect adjusted EBITDA of between $35 million-$37 million, representing year-over-year growth of 43% at the midpoint. In the very high throughput satellite, the VHTS, and the non-geostationary satellite, the NGSO constellation business, we continue to lead with follow-on multimillion-dollar orders from our strategic partners, the satellite operators. Network extensions and delivery of Gilat multi-orbit acceleration platform, the SkyEdge IV, and their various VSATs are taking place globally in support of multiple applications such as in-flight connectivity, cellular backhaul, and enterprise. In the third quarter, we secured a new win for dollar millions for our multi-application platform to support new high-throughput satellite. This satellite will be used primarily for IFC, with maritime and cellular backhaul as secondary applications. In our SSPA product line, I am pleased to report that we continue to take progress in a major project with significant potential for a large NGSO constellation. We are on track and expect to pass qualification process in Q4 this year. This quarter continues to be a strong quarter for Gilat cellular backhaul solution over satellite. A significant award this quarter for approximately $20 million for a contract extension from a tier one MNO in the United States. Gilat continued to support this long-term tier one customer with a multi-year, end-to-end managed services contract for satellite-based cellular backhaul and emergency response services... Furthermore, a most exciting technical milestone was achieved with SkyEdge IV Aquarius VSAT for 5G cellular backhaul in India, with Reliance Jio over SES O3b mPOWER services. An outstanding performance of 1 gigabit per second was showcased in India's first satellite-based gigafiber service, called JioSpace Fiber, at the India Mobile Congress. The amazing success demonstrates high-speed backhauling services over satellite to deliver high throughput connectivity to previously inaccessible geographic within India. I couldn't be prouder of our team who made this happen. During the quarter, we built upon our ongoing activity with Intelsat, with an additional multimillion-dollar deal to enhance their global network and Taurus modem deployment that operates both on SkyEdge IV and SkyEdge II-c. In addition, we engaged in our SSPA business in several new opportunities for next-generation IFC equipment, which we hope will mature in the next few months. This success, in addition to our ongoing business with another large aerospace integrator, a long-time partner in the IFC market, will continually rely on Gilat transceivers. In March this year, we signed an agreement to acquire DataPath Inc., a leading U.S. defense satellite integrator. This is a major step in our initiative to increase our presence in the strategically growing defense market. The acquisition is an important step in the extension of Gilat business into the U.S. DoD and government sector, as well as into other international government and defense markets. We are progressing very well towards the closing of the transaction. We expect our revenues in the defense sector to increase by approximately $50 million on a yearly basis, following the imminent closing of this acquisition. We are now waiting final regulatory approval, which by recent indication, should arrive soon, following which we expect closing to happen this quarter. We further expect that the forthcoming closing of DataPath acquisition will provide a tailwind for major defense opportunities. As I have mentioned in the past, we are putting great focus on the defense market, and we are seeing slow but good progress in this area and expect this extra focus will bear fruit soon. In the third quarter, we already advanced a project with the Ministry of Defense of a country in Southeast Asia. We continue to grow our pipeline and are working on several exciting deals, which we hope will materialize in the near future. Furthermore, our enterprise customers worldwide continue to depend on us to enhance their business, and new opportunities continue to arise. For example, we received a managed service contract extension from a large government corporation in Asia Pacific to provide connectivity for multiple applications across the nation. This includes, but not limited to, enterprise applications with strong opportunities for several backhaul emergency response and mobility applications such as comms on the move and comms on the pause. Providing social inclusion is a big part of our strategy, and we have exemplified also a new deal in the Philippines. A new global network was deployed to provide connectivity to the unconnected, leveraging our SkyEdge II-c platform and Gemini VSAT. In Peru, we are progressing towards completing the construction of the Amazonas region, which is the sixth region awarded to Gilat back in 2018. We expect to enter our acceptance process soon, enabling us to deliver the network to Pronatel and to move into the operational phase in the first half of 2024. Furthermore, in Peru, we are expecting additional progress in the next few months. This includes the maturity of several large RFPs with Pronatel and the Peruvian government, as well as several project extensions. We are most pleased with the strong pipeline we have in Peru. To conclude, I am pleased with our ongoing support of our partners, as well as our ability to capture significant new opportunities. We continue to lead with our next-generation platform, SkyEdge IV, that support multiple orbits and verticals, including our strategic market of mobility, solar, vehicle, and defense. We also secured new opportunities for our SSPA business, especially in the IFC segment, and are seeing increased opportunities in that line of business. We have a strong pipeline and expect the materialization of important deals over the coming months. And with that, I hand over to Gil Benyamini, our CFO. Gil, please. Thank you, Adi. Good morning and good afternoon to everyone. I would like to remind everyone that our financial results are presented on both GAAP and non-GAAP basis. We regularly use supplemental non-GAAP financial measures internally to understand, manage, and evaluate our business and to make operating decisions. We believe these non-GAAP financial measures provide consistent and comparable measures to help investors understand our current and future operating performance. Non-GAAP financial measures mainly exclude the effect of non-cash stock-based compensation expenses, amortization of purchased intangibles, amortization of intangible assets related to acquisition transactions, lease incentive amortization, impairment of held-for-sale assets, income tax effect on adjustments, one-time changes of deferred tax assets, and other operating income or expenses. The reconciliation table in our press release highlights this data, and our non-GAAP information presented excluded, exclude, excludes these items. I will now move to our financial highlights for the third quarter of 2023. Overall, as Adi mentioned earlier, we are very pleased with the strong results of this quarter.... We reported a 6% year-over-year growth in revenue and a solid improvement in profitability. Non-GAAP gross margin was 41%, and our Adjusted EBITDA reached $9.5 million, higher by 30% compared to Q3 last year. Given the strong performance to date, alongside with expected timing of Q4 deliverables and our proximity to the end of the year, we narrowed our revenue and Adjusted EBITDA guidance and increased our GAAP operating income guidance, which I will cover later. In terms of our financial results, revenues for the third quarter were $63.9 million, 6% higher than those of third quarter of last year. This was driven by growth in the satellite network segment, mainly from the cellular backhaul, enterprise, and mobility verticals. In terms of revenue breakdown by segment, Q3 2023 revenues of the satellite network segment were $40.7 million, compared to $32.4 million in the same quarter last year. The significant increase mainly resulted from some large deals, which were delivered this quarter to our strategic customers in the mobility market, as well as the high volume with our enterprise and cellular backhaul customer base. Q3 2023 revenues of the integrated solutions segment were $11 million, compared to $15.7 million in the same quarter last year. The decline was mainly due to a transition period between strategic and large projects in the segment. Q3 2023 revenues of the networks infrastructure and services segment were $12.2 million, compared to $12.3 million in the same quarter last year. I would now like to summarize our third quarter, both GAAP and non-GAAP results. Our GAAP gross margin in Q3 2023 improved to 40.4%, compared to 38.2% in the same quarter last year. The improvement in our gross margin was mainly due to a favorable product and services revenue mix recognized this quarter and the higher level of revenue. I note that revenue margins and profitability may fluctuate between quarters as an outcome of the actual revenue volume and deal mix. GAAP operating expenses in Q3 2023 were $13.1 million in the quarter, or 20% of revenue, compared with $19.6 million, or 33% of revenue in the same quarter last year. The significant decline in GAAP operating expenses was due to a win of a Philippines lawsuit, which was settled this quarter and resulted in a one-time other income, as well as the sale of real estate in Bulgaria, and therefore a reduction in GAAP OpEx of $7.4 million. GAAP operating income for the quarter improved to $12.7 million, compared to $3.4 million in the same quarter last year. GAAP operating income in Q3 2023, excluding the one-time other income, was $5.3 million, higher by 55% compared to Q3 2022. GAAP net income in the third quarter was $10.2 million, or diluted earnings per share of $0.18. This is compared to a GAAP net income of $2.1 million, or diluted earnings per share of $0.04 in the same quarter last year. GAAP net income in Q3 2023, excluding the one-time other income, was $3.8 million, almost double that over the third quarter last year. Moving to the non-GAAP results. Our non-GAAP gross margin in Q3 2023 improved to 40.5%, compared to 38.3% in the same quarter last year. Non-GAAP operating expenses in Q3 2023 were $19.8 million, compared with $18.7 million in the same quarter last year. Non-GAAP operating income for the quarter improved to $6.1 million, compared to $4.4 million in the same quarter last year. Non-GAAP net income in the third quarter was $4.6 million, or diluted earnings per share of $0.08. This is compared with a non-GAAP net income of $3 million, or diluted earnings per share of $0.06 in the same quarter last year. Adjusted EBITDA for the quarter was $9.5 million, an improvement of 30%, compared with an adjusted EBITDA of $7.3 million in the same quarter last year. Moving to our balance sheet. As of September 30, 2023, our total cash and cash equivalents, including restricted cash, was $100.3 million, compared with $87.8 million on June 30, 2023, and compared to $69.9 million as of September 30, 2022. We do not hold any debt. In terms of cash flow, we generated $13.8 million from operating activities during the third quarter of 2023, which also includes the collection of the lawsuit award in the Philippines, as I mentioned earlier. DSOs, which exclude receivables and revenue from our terrestrial network construction projects in Peru, were 75 days, higher than the previous quarter DSO, which were 63 days. The increase was impacted by an increase in receivables, partially offset with increase in revenues, and is in line with our credit policy. Our shareholders' equity as of September 30, 2023, totals about $265 million, compared with $255 million at the end of June 2023. Looking ahead, as I already mentioned, due to our proximity to year-end, we have narrowed our revenue guidance and adjusted EBITDA guidance range for the year.... Given the one-time other income, as mentioned before, we are updating our GAAP operating income target for the year. Our updated expectations show a strong 2023, with revenue of between $265 million-$275 million, representing year-over-year growth of 30% at the midpoint. GAAP operating income of between $29 million-$31 million, representing year-over-year growth of around 3 x at the midpoint, and adjusted EBITDA of between $35 million-$37 million, representing year-over-year growth of 43% at the midpoint. All in all, as Adi mentioned, we are very pleased with our performance to date, and we expect to conclude 2023 as a strong year for Gilat. That concludes my financial review. I would now like to open the call and would be happy to take your questions. Operator, please. Thank you. Ladies and gentlemen, at this time, we will begin the question-and-answer session. If you have a question, please press star one. If you wish to cancel your request, please press star two. If you are using speaker equipment, kindly lift the handset before pressing the numbers. Your questions will be polled in the order they are received. Please stand by while we poll for your questions. The first question is from Ryan Koontz of Needham & Company. Please go ahead. Hi, thanks for the question, and I'm glad to hear everyone from the company is safe. Can we start maybe with gross margins and maybe talk through some of the puts and takes on gross margins? Looks like a nice step up sequentially in September, but maybe I'm reading into the implied guidance for December; it'll be another step down. Maybe is there some product mix issues there that are swinging gross margin around? Yeah. Hi, Ryan. So, as you know, gross margins are affected mainly by volume and mix. The changes during this year between quarters were mainly due to mix changes of our products. While delivering some of the products, for instance, in the IFC and NGSO, usually with higher profit margins and other products with lower ones. Plus, we have the Peru effect, which was more stronger in Q2 and lowered the gross margins a bit, so it fluctuates, but I think that what we see now is the trend throughout the year. So I would also say that, you know, looking at Gilat on a quarter-by-quarter basis may be a bit misleading, and I would look on a year-to-date basis or trailing 12 months, and I think that this would give a better picture. That's fair. Thanks for that clarification. And on your recent win in the backhaul, sounds like with a large U.S. operator, any timing around your expectations for when you might start to see revenue from that? Hi, Ryan. It's... Actually, we are seeing revenues already. It's the third extension of this project. It's, we are entering-- Actually, we already entered the seventh year, of doing business with that customer, and it's around $1.5 million per quarter, slightly more than that, with some upside, every quarter. Nice. Great. And sounds like, you know, IFC was strong in the quarter. Any more color you can share with us on your kind of progress in the IFC market here in the near term, the next, either in Q3 or in the next few quarters? In the IFC, what we see is a lot of interest. We have several main customers. The main one is Intelsat, and we have a large, very large U.S. integrator who bundles our SSPA with his terminals. And this business continue regular and see almost every quarter additional orders, may it be additional modems, network extensions or additional SSPAs. We do have some small customers for our baseband and modems and other customers for SSPA. We are seeing a lot of interest on our SSPA product line with some smaller works that soon will become very large customers. So we expect to have a strong year in 2023 in general and also a strong year in 2024 in the IFC. Great. That's really helpful. And in the types of planes these are going on to, is this more going down-market kind of business jets? Also, business jets, yes. Right now, the main focus is on the commercial, but also on the business jets. Got it. Helpful. I think that's all I had. I'll pass the call through. Yeah. Ryan, I just would like to mention another thing. If you remember last quarter, we announced our SATCOM Direct deal to develop an electronically steered antenna. So we are in the development process, and we expect to see revenue within, let's say, 18 months from today. ... So in 2025, we expect additional growth in this section. Great. And that's, that's for transmission- So that's for business jets, yeah. Yeah, this is for business jets. Got it. All right, great. Thanks for that. Thank you. The next question is from Chris Quilty of Quilty Analytics. Please go ahead. Speaking of business jets, you guys were the new entrant last quarter, with the SATCOM Direct announcement. And this quarter, we just got the announcement that Hughes is now, jumped into the ring with the, the Delta order. I'm assuming that's something you couldn't address timing-wise because of, of your new product, but, you know, from what you know competitively, how does the, SATCOM Direct, product you're developing stack up, against, the recent Hughes announcement? Yeah. So first of all, now, it's news that HNS is getting into the airborne service provider in IFC. Their main focus is on the regional jets, and they are using a flat panel antenna from ThinKom. SATCOM Direct. Their main focus is on business jets and military jets. And we are developing for them the ESA, the electronically steered antenna. So it's a completely different type of terminal. Understand. Do you see any other product line extensions? You know, you're starting at the biz jet level with the SATCOM Direct product. Does it scale up to commercial aircraft? The business jet has a smaller antenna, and SATCOM Direct antenna is focused on OneWeb constellation. For GEO, we will need a bigger antenna, and this is part of our roadmap as well, but this antenna for commercial aviation will be for GEO and LEO as well, not only for GEO. Gotcha. Switching gears, the Aquarius wasn't a product line you talked about much. I think you did a relaunch with SkyEdge for in 2021 or 2022. Is that correct? Yes. And so, you know, has that product line, you know, caught on in the way that the SkyEdge IV has? Or is it just such an ultra-high-performance, you know, product line that, you know, it just takes much longer for it to gain traction in the market? So, the Aquarius product portfolio is a new product portfolio dedicated for SkyEdge IV. We do have several SkyEdge IV modems that also works on SkyEdge IV, but the Aquarius is the new line of product. So, it started with cruises, with SES mPOWER, but not only. We're now seeing it on cellular backhaul, and we see more in the future. As I mentioned in my notes, we recently demo 1 GB/s with the SES and the Reliance Jio in India. This is a robust achievement, and those modems are supposed to be with a very high speed performance. Of course, fits to the 5G requirements. Right. Switching gears again. I think you mentioned... Well, first of all, could you just repeat the DataPath, revenue contribution for next year? But I think you indicated that's all classified as defense. There may be very small commercial sliver in there, but from a reporting perspective, can you remind us, Gil, does it all land in integrated networks, or does it get spread, you know, across multiple segments? So the DataPath revenues is around $50 million, like ±10%, and it's probably will land on the satellite networks, but it's still under accounting review. So it's a bit early to say. All right. Fair enough. And, in general, how... I mean, I know you don't provide, orders per se, you know, in terms of an order book, but, you know, what have you seen, you know, as you look through, look back, I guess, over 2023, what have you seen in the trend line towards order strength or weakness over the course of the year? And, and sort of what are you baking in, you know, as you go into Q4? So it really depends on the segment, but in general, I would say that our bookings and order intake are, give or take, as expected at the beginning of the year when we put the guidance. We are seeing a lot of traction in IFC and in cellular backhaul. In the defense, we are developing our pipeline. I'm sure you know that the sales cycle is very long in the defense. So we are seeing slow but very good progress, and we hope to have a tailwind once we close the DataPath acquisition. We are seeing some slowness in integrated solution orders, but we expect to ramp up in the next quarter or two. In Peru, it really depends on local RFPs, and we know that the government plans to launch several very large RFPs in the next few weeks, and we also expect some contract extensions. So we expect a strong close for the year in Peru. Gotcha. You mentioned integrated solutions, and obviously there's been a lot of weakness this year. Can you remind us? I mean, is that... Certainly, most of the defense companies that I deal with have talked about order slowness with the government. Do you think it is more related to the macro government purchasing environment, or is it, you know, specific to the programs that you're working on, that you've seen some delays? I think it's a combination of the two. But I would say that the majority of the slowness is the shift that we are seeing between several large projects which ended during 2022, early 2023, and the other large projects that we awarded, we expect them to uplift towards mid or end of next year. So it seems like a transition year. Oh, gotcha. That's, that's good color I wasn't aware of. And then I guess, final question, and sorry, this is a little esoteric, but, Gil, it looks like you're, crap, you've lost it in the model. I'll, I'll catch you on that one offline. Never mind. No problem. Thank you, Chris. The next question is from Gunther Karger of Discovery Group. Please go ahead. Yes, thank you. Excellent quarter. Congratulations. So, I didn't hear any comment on Peru. Could you give an update on Peru, please? And also, the second question is, I may have missed the comment. Do you expect to close on the DataPath this year? So, can you repeat your question again about Peru? Yeah. Just a general update on Peru. I missed- Sure. Hearing anything on that? Sure. So, in Peru, business as usual, we are close to the end of finishing the sixth region, the Amazonas region, that awarded back in 2018. We expect to start the acceptance procedures with the government before the end of the quarter, and to final, well, final acceptance by the mid of next year, and then to switch to operation phase. In parallel, we see a lot of other bids that are coming up soon in the quarter, and we are also expecting several contract extension and extensions, so we expect to have a strong, a strong booking quarter for Peru. As for DataPath, indeed, we are progressing towards closing this quarter. We already received CFIUS approval, and we still are waiting one last government approval, which by recent indication we expect to get it in the next, if not days, then weeks. There are some leftover of customary closing condition, which we expect to achieve as well in the next few weeks. So indeed, we are expecting to close the transaction this quarter. Thank you. And also regarding DataPath, do you anticipate keeping that operation as a separate subsidiary, or do you expect to integrate that into your military and defense operations? Combination of the two. Now, DataPath is going to be important leg in our defense strategy, but we do expect them to continue to work independently, and to grow their business while using Gilat and Wavestream resources in the defense in order to increase the overall defense presence of Gilat worldwide. Thank you very much, I'll leave. Thank you, Gunther. If there are any additional questions, please press star one. If you wish to cancel your request, please press star two. Please stand by while we poll for more questions. There are no further questions at this time. Mr. Benyamini, would you like to make your 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 to you in our next call. Thank you very much, and have a great day. Thank you. This concludes Gilat's third quarter, 2023 results conference call. Thank you for your participation. You may go ahead and disconnect.