Ladies and gentlemen, thank you for standing by. Welcome to Gilat's Q3 2024 results conference call. All participants are present in listen-only mode. Following management's formal presentation, instructions will be given for the question-and-answer session. For operator assistance during the conference, please press star zero. As a reminder, this conference is being recorded November 13th, 2024. 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 IR@gilat.com, please, 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 Ms. Mayrav Sher, head of finance and IR. Ms. Sher, would you like to begin, please? Yes. Thank you, operator. Good morning and good afternoon, everyone. Thank you for joining us today for Gilat's Q3 2024 results conference call and webcast. I am Ms. Sher, Gilat's head of finance and investor relations. The earnings press release that was issued can be found in the investor relations section of our website at www.gilat.com. Also, a recording of this call will be available beginning at approximately noon Eastern Time today, November 13th, and a webcast on Gilat's website for a period of 30 days. Also, please note 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 explicitly disclaims any obligation to do so. More detailed information about risk factors can be found in Gilat's report filed with the Securities and Exchange Commission. Also, on today's call, management will refer to non-GAAP measures. The company believes these non-GAAP measures assist management and investors in comparing the company's performance across reporting periods on a consistent basis by excluding these non-cash, non-recurring, or other charges that it does not believe are indicative of its core operating performance. The reconciliation of GAAP results to non-GAAP measures can be found in the Q3 of fiscal year 2024 earnings press release that the company issued and furnished to the SEC earlier today on Form 6K. With that, let me turn to introductions. On the call today are Mr. Adi Sfadia, Gilat CEO, and Mr. Gil Benyamini, Gilat CFO. I would now like to turn the call over to Adi Sfadia. Adi, go ahead, please. Thank you, Ms. Sher, and good day to everyone. Thank you for joining us today for our Q3 of 2024 earnings call. The Q3 of 2024 was another good quarter for Gilat, in which we continued to build year-over-year revenue growth. This growth was primarily due to our acquisition of DataPath and continued momentum in our defense and in-flight connectivity business. We expect to sustain this momentum in the future. In addition, we continue to drive profitability improvement. Our Adjusted EBITDA increased in the Q3 by 13% year-over-year, reaching $10.7 million. As for the 2024 outlook, we have narrowed our revenue guidance range, expecting revenue to range between $305-$315 million, representing year-over-year growth of 17% at the midpoint. The main effect on revenue guidance is the company's decision to terminate its activity in Russia due to the limitations and constraints that are imposed with regards to operations there. We raised and narrowed the range of our 2024 GAAP operating income guidance to between $24-$26 million, mainly due to approximately $10 million in proceeds from arbitration in Peru. We also have narrowed the range of our 2024 Adjusted EBITDA guidance, expecting Adjusted EBITDA to range between $41-$43 million, representing year-over-year growth of 15% at the midpoint. Now, let's move to the business review of the Q3 of 2024. I will start with a review of our defense business. The defense sector is a strategic pillar for Gilat, and our increased focus on this market is bearing fruit. We see a growing demand for defense outcome solutions in the market, driven by the proliferation of NGSO and macro-political events. Gilat is well positioned to leverage its innovative ground segment products and solutions to answer this growing need. During the quarter, we signed several contracts with the U.S. Department of Defense worth over $5 million for core terminals and related services, technology insertion, and upgrades to SATCOM systems. In addition, we were awarded approximately $4 million by the U.S. Department of Defense for Gilat DataPath DKET 3421 terminals. These portable SATCOM hubs provide the flexibility, capacity, connectivity, and control needed to ensure mission success anywhere in the world. We also received an award of approximately $3 million from the U.S. DoD for Gilat DataPath technical and field services. Gilat DataPath is deploying technical and field services in Europe, the Middle East, and the United States to support the U.S. defense end users' critical connectivity requirements. Another award of more than $2 million was for Gilat Wavestream by a leading defense integrator for our X/Ku- and Ka-band block up converters for communications-on-the-move systems, along with test, repair, upgrade, and engineering services. Gilat's cutting-edge satellite communication technologies and comprehensive services enhance mission-critical connectivity and operational capabilities for defense applications. A key application is the ability for fast deployment anywhere in the world. This demonstrates the strategic value of our communication-on-the-pause and communications-on-the-move defense product portfolio, which includes a range of transportable hubs, portable terminals, SSPAs, upgrades, and field services. As we continue to leverage core sales synergies between Gilat DataPath and our worldwide sales organization, we are opening the door to new opportunities and developing a pipeline of potential contracts. We believe we are well positioned to win our fair share on these opportunities in the coming months. Turning to in-flight connectivity business, we continue to execute well in the IFC market, another strategic pillar for Gilat, demonstrating solid year-over-year growth, developing more products, adding more customers, and supporting more verticals. During the Q3, we received an order for over $12 million from a leading satellite operator to extend the global SATCOM network utilizing Gilat SkyEdge family of VSAT platforms. This expansion will be used primarily to support the IFC offerings. The growing demand for free Wi-Fi is creating attractive growth potential for Gilat. We are well positioned to increase our market share, leveraging our presence in GEO and NGSO global networks and our wide portfolio, including baseband modems, ESA terminals, SSPAs, and additional auxiliary products. To strengthen our position in the IFC market, we signed a definite agreement last June to acquire Stellar Blu Solutions, a leader and first-to-market in delivering electronically steered antennas for the in-flight connectivity market. The closing of the acquisition is taking longer than we had anticipated, and we now expect to complete the transaction by the end of the year, pending government approvals. As part of our strategic activity in VHDS and NGSO constellation markets, we are making good progress with two very large initiatives. The first involves the transformation of SkyEdge IV to the cloud, and the second is developing ground segment systems for a next-generation LEO constellation. Gilat is offering a full set of capabilities for a communication system and integration services in order to expand our scope of services. Recently, we announced that the company secured approximately $15 million in orders from several major satellite operators for our advanced satellite communications solution for GEO, MEO, and LEO constellations. I would like to point out that Gilat is extremely well positioned to leverage the growing demand for NGSO and LEO constellations across several key product lines: our multi-orbit ESA antennas, as well as our ESA antenna for LEO only, SSPAs for LEO gateways, and our range of multi-orbit networking solutions that suit a variety of market applications. The recent award of the IRIS² contract by the EU to the SpaceRISE, which includes Eutelsat OneWeb, SES, and Hispasat, is a positive development that carries significant opportunities and potential for Gilat. Also, during Q3, we secured a $4 million contract to provide global connectivity, including banking transactions in Latin America, for a period of three years. Gilat is providing critical connectivity for people living in remote areas who rely on the bank for payment services, as well as support services for senior citizens, families, and other underserved populations. In Peru, we are progressing faster than planned in implementing the Amazonas region's expansion project. The implementation phase is now completed, and the expansion project is under supervision. The operational phase in the sixth region project of PRONATEL in the Amazonas region is now expected to begin towards the end of the year, after some delays in the supervision process. Looking ahead in Peru, we have a strong pipeline, including a number of opportunities on the horizon, including the maturity of several large RFPs with PRONATEL and the Peruvian government, as well as several project expansions and extensions. During the quarter, we collected an additional approximately $4 million payment from the arbitration we won against PRONATEL and the Peruvian Ministry of Communications from cases awarded in 2018 and 2020, totaling approximately $29 million. To conclude, the Q3 has been a good progress in our key growth engines, defense and IFC. We have a strong pipeline, and we expect the materialization of important deals over the coming months. We are continuing to work towards the closing of the acquisition of Stellar Blu Solutions and are awaiting the receipt of final regulatory approvals, documentation, and other customary closing conditions. I am pleased with our continued business with the U.S. DoD and LEO customers. We are progressing with two important opportunities: transforming the SkyEdge IV platform to the cloud and creating a next-generation ground segment for LEO. With that, I will 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. I will now move to our financial highlights for the Q3 of 2024. Overall, as Adi mentioned earlier, we are very pleased with another quarter, which shows year-over-year growth. We reported 17% year-over-year growth in revenue. This was mainly driven by our recent acquisition, DataPath. Excluding DataPath, our organic revenue decreased by 10% year-over-year. Non-GAAP gross margin was 38%, and our adjusted EBITDA reached $10.7 million, 13% growth over Q3 last year. Given the performance to date, alongside the 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 in more detail, revenue for the Q3 was $74.6 million, 17% higher than those of the Q3 of last year, which was $63.9 million. The improvement was driven by growth in the satellite networks and in the integrated solution segments. In terms of the revenue breakdown by segments, Q324 revenues of the satellite network segment were $51.7 million compared to $40.7 million in the same quarter last year. Q324 revenues of the integrated solution segment were $13 million compared to $11 million in the same quarter last year, and Q324 revenues of the network infrastructure and services segment were $9.8 million compared to $12.2 million in the same quarter last year. I would now like to summarize our Q3, both GAAP and non-GAAP results. Our GAAP gross margin for Q324 was 37.1% compared to 40.4% in the same quarter last year. The reduction in our gross margin was mainly due to DataPath gross margins, which are lower than Gilat's average, and the amortization of a backlog intangible asset associated with the acquisition of DataPath. This was partially offset by a favorable product and services mix in the current quarter compared to Q3 of last year. GAAP operating expenses in Q324 were $20.9 million, an increase of $7.9 million versus the same quarter last year. This quarter, we have other income net of approximately $1.3 million, which included $3.5 million received from arbitration in Peru, offset by adjustments related to M&A accounting compared to approximately $7.4 million in Q3 last year, mainly from a settlement of a legal proceeding in the Philippines. These impacts are included only in the GAAP number. I also note that the results of this quarter include operational expenses related to DataPath, which were not included in the Q3 of last year. GAAP operating income for the quarter is $6.7 million compared to $12.7 million in the same quarter last year, mainly due to the decrease in the other operating income described above. GAAP net income in the Q3 was $6.8 million, or $0.12 per diluted share. This is compared to a GAAP net income of $10.2 million, or diluted earnings per share of $0.18 in the same quarter last year. Moving to the non-GAAP results, our non-GAAP gross margin in Q324 was 38.1% compared to 40.5% in the same quarter last year. As I mentioned earlier, the difference is mainly due to DataPath's lower gross margin compared to Gilat's average. Non-GAAP operating expenses in Q324 were $20.2 million compared with $19.8 million in the same quarter last year. Non-GAAP operating income for the quarter improved to $8.3 million compared to $6.1 million in the same quarter last year. Non-GAAP net income in the third quarter was $8.1 million, or diluted earnings per share of 14%. This is compared with $4.6 million or diluted earnings per share of $0.08 in the same quarter last year. The Adjusted EBITDA for the quarter improved to $10.7 million, an increase of 13% compared with Adjusted EBITDA of $9.5 million in the same quarter last year. Moving to our balance sheet, as of September 30, 2024, our total cash and cash equivalents and restricted cash net of short-term debt were $108 million compared with $94.6 million on June 30, 2024, and compared to $100.3 million as of September 30, 2023. In terms of cash flow, we generated $14.7 million by operating activities during the Q3 of 2024. Short-term credit facility increased this quarter by $2.6 million net. DSOs, which exclude receivables and revenues of our terrestrial network construction projects in Peru, were 83 days, lower than the previous quarter DSO, which were of 88 days. This KPI is within our normal range of up to 90 days. Our shareholders' equity as of September 30, 2024, increased to $291 million compared to $283 million at the end of June 2024. Looking ahead, as already mentioned, due to our proximity to year-end, we have narrowed our revenue guidance and Adjusted EBITDA guidance rate for the year. Given the adjustment in the acquisition-related expenses of DataPath and the collections of the remaining $11 million from arbitration in Peru during Q3 and Q4 this year, we're increasing our GAAP operating income target for the year. Our updated expectations for 2024 revenues are between $305-$315 million, representing year-over-year growth of 17% at the midpoint. The main effect on the revenue guidance is the company's decision to terminate its activities in Russia due to limitations and constraints that are imposed with regards to operations there. We raised and narrowed the range of our 2024 GAAP operating income to between $24 and $26 million, mainly due to the receipt of the $11 million proceeds from the arbitration in Peru. We also narrowed our Adjusted EBITDA to a range of between $41-$43 million, representing year-over-year growth of 15% at the midpoint. 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're 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. Thanks for the question, and nice to see the DataPath business performing and the profitability still right on track. I wanted to ask about the organic business. I hear on the Russia pullout there, it sounds like my questions are, are you completely out of Russia now, so to speak, in terms of your guide forward? And if you exclude Russia from your past or say year to date, how has that fit that organic business tracking, excluding Russia? And then how should we think about that tracking over the next few quarters, the organic business? Yeah. So we are getting out of the country is a process, but now we are in the midst of the process, but we stopped selling. So we are not expecting any new revenues from Russia from Q3. Russia was a business of a range of, on average, around $10 million a year or so. So this is give or take if you want to compare prior years. This is give or take what you need to exclude, sorry. Perfect. And you had some interesting updates on the Peru business there. I wonder if you can maybe simplify that. I didn't have a hard time kind of crystallizing the big picture of what's going on in Peru. Can you kind of recap for us there? It'd be helpful. Thank you. So in Peru, we built and operate several networks to the government. Earlier or late last year, we received an expansion project of one of the regions that we got an award. So we had a construction phase during the year. And recently, a few weeks ago, we started the acceptance process with the government. In addition, we have five up-and-running regions that we operate. Another region should start operation any day now, hopefully by the end of the quarter. And in addition, we have other managed service business in Peru from social inclusion projects to other communication and satellite business over there. Most of the business in Peru is recurring revenues. I would say that 80% of the revenues in Peru is recurring revenues. Of course, in some cases, it depends on renewals, but it's recurring revenues, highly profitable. Got it. Great. That's helpful. And then any business update on Stellar Blu? I understand the delay in the close, but anything you can share from the company as far as their progress with some of their key business objectives? So yeah, in general, as I said, the closing takes slightly longer than we expected. We are working towards closing. We still await some regulatory approvals, mainly CFIUS in the U.S., some documentation, and other standard closing conditions. We already started to deliver commercial units to their customers. And as we said last quarter, we expect them to deliver revenues in the Q4 of $25-$35 million. And in 2025, we expect the revenues to be $120-$150 million and should be accretive to the non-GAAP results. And once they will reach their maximum or efficient production capacity towards the second half of next year, we expect to see more than 10% EBITDA ratio. Great. Thanks so much. It's really helpful. The next question is from Louie DiPalma of William Blair. Please go ahead. Adi and Gil, good afternoon. Hi. Hi, Louie. You discussed the positive developments in Europe with Iris Squared. Is Gilat positioned to be a major supplier for that constellation? And how would you view the competitive environment in terms of the procurement process? Yeah. So first of all, I think for the industry, it's a very good and positive development where we have a non-US LEO constellation. The EU would like most of the vendors to come from the EU itself. Gilat has several subsidiaries in the EU, the main one in Bulgaria and another one in Madrid, in Spain. The Bulgarian facility received the approval to participate and to be a vendor for the Iris Square initiative. We already answered several RFIs around six months ago. And now, when the EU awarded the Space RISE Consortium the project, we expect to see the RFPs soon and, of course, to answer. From a competition point of view, assuming they will stick with their only EU vendors, I think that ST Engineering iDirect, their new tech division in Belgium, might be one of the competitors over there on the baseband and on the modem side. On the terminal side, there are several European companies that can compete on a mechanical and electronically steered antenna. Great. And is there any implications with IRIS² for the OneWeb Gen2 procurement? And is there any update on the timing for OneWeb Gen2? This is a good question. I think you need to refer it mainly to Eutelsat. I think Eutelsat would like to see some synergies between the two. I'm not sure that it's doable, those synergies, because OneWeb Gen2 is mainly a commercial constellation, and Iris Square wants to start with defense applications. Of course, if it will be a synergy, it's an even greater potential. But at the end, we look at it as two separate projects and opportunities for Gilat. Great. Thank you very much. That's it for me. The next question is from Sergey Glinyanov. Please go ahead. Hello, everyone. I have a couple of questions, and most of them are related to guidance points. My first question: despite having a guidance narrowing, it beat expectations still around $42 million at the middle point, and so whether it may be connected with further manufacturing or operating cost cuts or all of the profitability improvements are in place in the Q3? Thank you. Hi, Sergey. It's a mix of the two. It's mainly a better or more favorable gross margin on the current mix of products with some operational efficiency, which was better than expected and also improved the EBITDA. All in all, this contributed some more profitability that compensates for the change in revenue. Again, I would like to emphasize that efficiency and increasing profitability is our top priority. This is something that is an ongoing process within the company. The procurement department has their own cost reduction targets, and we have a lot of initiatives how to make cost reductions also on the product side and see how can we increase internal efficiencies and synergies between our locations worldwide and our different companies. Yeah, it sounds great. And my second question is related to Stellar Blu. You stated guidance for Stellar Blu 2025 revenue in the range of $120 million-$100.5 million. But now we can look at the Boeing production rate and financial health, and it may impose some risk for Stellar Blu. Would you put some colors for this situation if you can? Thank you. The focus we gave to Stellar Blu is mainly based on actual backlog that they have, including additional opportunities that we see in the future. The market is evolving rapidly, and we see, on one hand, Stellar Blu customers win business. In other cases, they lose business, and we see growing demand for electronically steered antenna, both for multi-orbit, LEO, and GEO terminals, and also for LEO-only terminals for commercial aviation, both on retrofit and line fit opportunities, so I think that the strategic rationale of the acquisition is still in place, and we believe it will drive significant growth in the IFC, both top line and bottom line. Yeah, great news, and my final question is, in all that Gilat stated, that now Aquarius supports SCPC mode. How can it boost sales of that modem, and how can it affect the company revenue? Thank you. I think that in our guidance, we already accounted for the new product portfolio. The SCPC mode is another solution that we offer to some of our customers that need this kind of technology work mode. Usually, you use it for large trunking and for defense application, and since defense is one of our main focus markets, we believe that there is a great potential for the product, but in general, it's already part of our guidance to the market. Yeah, that's all. Thank you a lot for the answers. Thank you. The next question is from Chris Quilty of Quilty Analytics. Please go ahead. Thanks, guys. Congrats. I never thought, or I thought Iris Square was a goner, but they got it over the line. But the timeline on that program, I mean, we're looking at satellite builds that are a couple of years out in the service that's towards the end of the decade. Is there anything other than NRE that we'll see potentially in the next year or two with that program? I think you are right. I think that it's at least a three-to-four years development project before they launch the service, and I think for all the participants, it will be mainly NRE revenues, and probably towards the fourth year, we'll see some product revenues as well. I think that based on prior discussions from several months ago, the EU would like to launch the service as soon as possible, so I guess that they might consider an interim solution using Empower constellation, OneWeb constellation, and probably Eutelsat, Hispasat, and SES GEO satellites. But that might drive some revenues of our existing SkyEdge II-c business, but from Iris Square itself, product revenues, I would expect only towards the fourth year after getting awards. Gotcha. And as you mentioned, I mean, there's going to be some NRE involved in there, not to say you can use IRIS² to subsidize. But would there be a dovetailing of your efforts that you're doing in virtualization, which I do want to talk about? Is your assumption that that's the direction IRIS² is going to push for the ground network, and hence those two development efforts will happen in parallel? Based on the info that we have now, I think it will happen in parallel. There are some I can think of synergies between the two projects, but I think that each company has its own vision on the constellation. Iris, the EU regulator, has its own vision on Iris Square. I don't see it combined for the long term, at least not based on the information that we have today. Understand. And back to that question, I think you used the term cloud-based, but is that the same as using virtualization when we talk about the future SkyEdge IV roadmap? In general, yes. We would like to shift the SkyEdge-4 into a native cloud environment. This is the main effort. In addition, there are some initiatives to use a virtualized modem that will be able to run several companies' waveforms on the same hardware platform. Understand. And I know there's some government, some U.S. DoD programs in that area. Is that with the DataPath acquisition, is that something where you can use that as a mechanism for looking for some of those government projects? Yeah, we are exploring that in several fronts, both from DataPath and also from Wavestream. We see increased interest in Gilat solution within the DoD. We're trying to use and work closely with our partners, the satellite operators, who have also a defense business unit. And I think that in 2025, we'll see significant progress on that. Great. Just in general, we didn't really talk about the cellular backhaul market, so obviously nothing exciting happening right this moment. But overall, are you seeing the pipeline there stalling out, growing, projects shifting to the right, pulling forward? I mean, any discernible trend? What we see today in the market is mainly projects shifting to the right. No new big initiative over there. We do see some expansions here and there, technology refresh, but nothing big right now in this subsegment. Great. And final question. I know SES did report the other day, so they kind of spoke about the Empower program, but just that's obviously one that you've been working on for a long time, and it's transitioning into the kind of rollout operational phase. How is that progressing for you? I mean, obviously, the program's behind with the Boeing satellite issues, but how do you feel about the rate of ramp at this point? In general, I think we are in a good place. We are supporting SES with their service launch. A lot of work of the two R&D groups for quite some time. SES deployed our equipment in all of their gateways, and we see some expansions. Of course, once they will get the additional satellites and they will start with a significant selling process, we expect to see significant or more growth on this area. So that activity really is more of a 2025? Not necessarily. I think in 2025, we'll see even larger growth. But in the last few years, including in 2024, we are seeing significant business with SES on Empower, but also on GeoSatellite initiative. Great. Awesome. Thank you. Thank you, Chris. The next question is from Gunther Karger of Discovery Group. Please go ahead. Thank you for taking the question, Gunther Karger. The question is, I have two questions. Is there any particular reason for the delay of the Stellar Blu approval? Anything specific that comes to your mind? Nothing specific. CFIUS is taking longer than we anticipated. To be honest, it was the same timeframe when we bought a year ago DataPath. They have 45 days to react, and they can extend it with additional 45 days just because they have the ability to do so. And of course, they exercise their ability. We answered all their questions, and nothing specific was raised. And I think I believe we will see their approval before the lapse of the 45 days. Okay. Thank you. And the other question is, with the change in administration, the stakes on the election, particularly focused on DataPath, do you see a negative or a plus to that change in administration? I don't think that the change of administration affects DataPath's business. I think that the DoD budget is large enough, and DataPath and Gilat have the right potential over there for revenue growth. We need to remember that today we are not a big player in the U.S. DoD. We saw very nice success in the last year, and we expect to have even greater success next year selling DataPath solutions, but not only, also to sell Gilat networking equipment and modems to the U.S. Army and the DoD. Thank you very much. Good luck. Thank you, Gunther. There are no 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 Q3 2024 results conference call. Thank you for your participation. You may go ahead and disconnect.