GILT - Earnings call transcript Q2 2022 | Gilat Satellite Networks Ltd.

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to Gilat's Second Quarter 2022 Results Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded, August 9, 2022. By now, you should have all received the company's press release.

section received Investor contact X-XXX-XXX-XXXX and it the not team Investor or have website, in GK company's at Public news you it, Gilat's please Relations view www.gilat.com. If the of Relations at I to would call Mr. now hand the to like over of Investor GK Helft Ehud Relations. Mr. Helft, like please? begin, you would to

Ehud Helft

XXXX. me detailed introductions. do in the More With events and found let turn the otherwise, may differ results. call this filed so. with days. XX or morning, including beginning call good historical not may is about Gilat's Webcast. of everyone. control Gilat's future Results Gilat, Act involve approximately Call company to under release and Private which that read Thank can obligation operating results, a future Quarter any you, Time or X, Exchange beyond results Second actual be for joining Thank that contingencies, as forward-looking facts statements within today, statements XXXX Securities uncertainties Reform Litigation available anticipated which of and deemed information, Also, statements, the whether disclaims period on All and as on such operator. financial risks, you the recording obligation will of new to investors of earnings many noon are Commission. reports Eastern a this that A Good urged update a the statements, at to Gilat to earnings alter and for afternoon, regarding materially please of be of note of Securities result us risk that, from reminder Gilat's expressly today and meaning with August for are to be in information statements cause website factors forward-looking are a forward-looking Conference the made forward-looking no Gilat statements these webcast

over Adi Sfadia, are Gil to Gilat's I Adi, like Mr. Gilat's CFO. today now call the Adi would begin. Benyamini, call Mr. we CEO; are On to and Sfadia. the turn ready to

Adi Sfadia

everyone. earnings Thank you, Ehud, XXXX today thank and like call. of to for day for us second our good quarter you joining I would to

with our quarter. We second are for results the pleased

are our profitability in strong our solid We with happy with particularly a in EBITDA. and improvement adjusted growth

above revenues Second quarter a million, more $X.X revenues Adjusted year million, margin improved an quarter million X% last ago. ago. year double a to were $X.X EBITDA compared compared $XX.X year. to second slightly Adjusted EBITDA of the EBITDA represents X.X% of than of a of adjusted to

well on Gilat. More a importantly, for recovery turning ahead, looking year be is XXXX, for we expectations are strong track our to with which

IV. $XX SkyEdge Very capitalize quarter and has SkyEdge multi-service constellations. continued show opportunities of Throughput for the multi-orbit orders designed next-generation SkyEdge launch IV in additional on our during large of the and operators to satellite for built NGSO discuss acceptance second annual Satellites EBITDA. business are, adjusted We quarter excited of highlights. relationship and I strategic is revenues, our new I'm of of its therefore, some guidance reiterating will operating achievements in some on we recent the the satellite the Gilat with share communication. expanding about was to platform, market and received to and GEO strong strong the IV that million focus a now applications. era of XXXX income had current High

market with The this we communication, estimated for compete a operators. mega position VHTS and planned era a IFC we alone Maritime to reported a SSPA important on our quarter next segment We opportunity major with ground We dollars multibillion-dollar a segments. this potential industry growth continue to constellations. the large product is few opportunities track including saw analyst goal In according additional satellite see We as of NGSO for of NSR. on major hundreds for to strong and GEO potential pipeline, have meet of strong of capturing previously the the millions in over continue to X grown are for line, our and projects new years be satellite solid both in market. market, market of we mobility

to As line. the our business and orders we from dollar IV continued SSPA for pick received up, customers product platform SkyEdge both multimillion key our

aviation current expanded the travel for with Gilat. commercial As partnership booming, Intelsat strategic has air is demand its

experience Intelsat air expand in user travelers Additional Pacific. service and order we Asia for received to increase

dollar key In orders for solutions. we received from addition, multimillion customers IFC HSPA

Gilat. is growing the cellular expected the I'm Maritime projects provide a go to working of lead online will to travel in to both premium an operate solution transition support providing increase to for expand XG optimistic second leading constellation. and service the us coming technology hand-in-hand year, mobility to million $XX our to American to years. operators and next example Gilat The this market with also in On of that backhaul penetration is rely the This advantage during to to continue and year mobile solution is with take from excellent SES on the X Tier than segment, Asia Pacific. technology and back-end user SkyEdge and in existing are the be as will reliable, sites new NGSO first into with for to market. satellite GEO to increased America Gilat XG market that the Internet of and business a the initially needed the quarter Gilat's thousands market lines. for to their XG to XG the orders it strategic place continue expect in more the constellations. proven in Latin GEO Gilat's coverage In continued Gilat's transition ready experience. IV cellular service include facilitate first is the quarter. over the front, mPOWER cruise introduce we is plan a Maritime unique we connectivity to to ship capabilities MEO The leading will and

are excited will with that We share to optimistic opportunities on continued a for are and program. very defense Gilat. new that has business Gilat defense large good this progress making I'm business, to we focus the create

total sites services we digital our connection profitable XXX through remote revenues access deployed being Gilat than in rural Internet the the signed facilitate received services the well to bridging to enable In expand with In the new of providing for solutions Gilat Telefonica vision villages The of received defenseforce.com Gilat at an network existing others, network enterprise rural quarter, areas recurring services Peru, Peru. the with sites with contract progress provide product internet addition, large for Latin the the to of government we expansion demonstrates Gilat Todos address and to Furthermore, and to agreement subcon over this in and Asia. used assisting America. Central for vehicles. line device. as Facebook, aerial Para Internet as segment, is to to more expand business expand to access coverage provide XXX satellite. to making In Gilat's thus in tactical ability will to equipment network. the to execute This enable among contract in orders government digital significant more consortium will connectivity mission-critical than digital follow-on the over cellular to Asian in are backhaul be an will our [indiscernible] extension we needs. our unmanned

Finally, we continue a the I'm have pleased and to to a remainder into and XXXX. say strong good healthy that we backlog visibility pipeline have of

prepare This in even revenue is of see ahead. like chain opportunities strong growth go we both to show And second consider turmoil of the and half in as to our over please Gil R&D, and supply our for in worth the with the Benyamini. therefore, investment that, significant we We, year our expect the We ahead. enable annual hand reiterating such feel us the guidance. to challenges comfortable continued Gil, XXXX profitability. CFO, that to I'd as

Gil Benyamini

data, supplemental operating and I losses. of with merger, and we our The and in current these demonstrates improvement We're measures amortization Good leased investors and prospects our non-GAAP litigation margin we measures you, incentive, The on for guidance are and mainly held earlier, to consistent Thank track. compensation, understand, as of effect information of or second understand our move trade good amortization financial the with initial our profitability. the GAAP assets gross business everyone Adi. evaluate will to to release to the XXXX. related financial provide and the to highlights acquisition everyone. that recovery non-GAAP adjustments to future these Non-GAAP expenses and the in make decisions. press quarter strong performance. that these We settlement ahead, and this show in continued pleased stock-based we reiterate We recognition on results regularly financial items. exclude that litigation help quarters presented use deferred related mentioned quarter. respect results results the information reorganization table that in income measures now operating our remind non-GAAP for our the non-GAAP measures costs, the afternoon presented to financial and our Adi of for -- a reconciliation carryforward are improvement in are claims, of Overall, would costs, believe optimistic exclude revenue internally comfortable and I of and our purchased to intangibles, and both This continued remain for basis. a morning, manage like XXXX. secret tax our assets financial highlights sale about and

the remain board. was ongoing slightly last terms those second issues that component the to price very demonstrated to as there for solid the supply say, the pleased to I'm financial $XX.X in were million, While our which constraints have increases global that million. shows our able date including well of in without mitigate results. performance a however, second performance macroeconomic year, quarter our of these improvement, $XX.X we as of headwinds, electronic impact quarter significant quarter Revenue been above across

QX The QX market. last $X.X same driven the revenues segment, network's improvement million and improvement $XX.X connectivity for segment million due revenue 'XX services, non-GAAP of The same broadband during Integrated of in provides million I Services and ground segment provides systems results. The and last decrease during to the $XX.X construction satellite services 'XX those was this broadcast solutions of the higher NGSO compared the quarter in $XX.X would revenues mainly solutions, reason in managed including on-the-move and turnkey markets in the XXXX. by terrestrial summarize of year. higher backhaul, and million segment, revenues satellite in terms provides the operation QX associated segment, to delivered primarily products. the as Solutions to by quarter due In phase to construction breakdown large revenues as mobile enterprise communication advanced year. in the offset was $XX.X network $XX.X last in our communication the compared were network which which project, phase equipment, from and mission-critical decline quarter for QX revenues compared like and and 'XX by partially operating million mainly solutions second same Infrastructure recurring satellite new million quarter from services cellular revenues defense for mainly and in-flight the professional on-the-port the airborne product were defense a of was the year. and to satellite revenues deals operation and to now were IFC which networks the well advanced GAAP

favorable or due GAAP QX Our our recognized efforts operating $XX in to quarter million quarter year. improvement $X.X quarter. loss XX.X% QX current The in income in same an $X.X is second future million were to compared services the net margin expenses R&D growth. gross last quarter year. of with this the and that the is increase share million same of last was will operating 'XX to and mix to for the gross GAAP to in improved product improved diluted compared compared in strong due same support GAAP This last year. quarter margin XX.X% The GAAP same $X.X quarter in to in quarter income mainly operating compared $X.XX. $XX.X investment of year. the with quarter was million in million the 'XX net income million in per the the in $X.X last loss

Moving to results. non-GAAP

$X.X quarter quarter to improved $XX.X Non-GAAP improved same operating last year. in XX.X% gross non-GAAP the same year. for QX Non-GAAP last net in the $X.X quarter improved $X.XX 'XX Our million to margin year. million expenses quarter year. year. same the quarter XX.X% was of in the the compared Non-GAAP diluted income the income last million This to of in second adjusted of per quarter income the compared last operating with $X.XX. income quarter income share $XX.X a to compared of net of million same or to quarter QX last or with million operating in per an with for million Adjusted in 'XX EBITDA $X.X in an compared $X.X $X.X is $X.X compared the share in income same EBITDA million were of million

sheet. Moving to our balance

do XX, hold June compared equivalents, not million million with We $XX.X were $XX.X cash deposits March including any and our cash and of debt. restricted XXXX. XXXX, total As XX, on short-term cash

the previous compared Infrastructure days excludes activities to terms its revenue collection. similar to the Terrestrial XX has the second which company receivables during of In changed segment unfavorable change and see cash quarter. remain we level of in terms its DSO, used of customers, and operating million with for our XXXX. quarter Products do and our at quarter of not same the an credit were flow, The $X.X not days XX previous we

to We collection during next expected decrease the substantial will achieved. our milestones be to quarter as DSO the correlated schedule

equity to in $XXX March with totaled of shareholders' $XXX compared as XX, million million XX, XXXX, XXXX. Our June

the already Looking Adi ahead, we our as year. mentioned, guidance reiterated for

review. million would with a now please. to for $XX concludes $XXX and That Our to I between expectations Operator, adjusted between remain EBITDA my for million. financial open call revenues $XX $XXX like the million at strong million questions. XXXX, to

Operator

Instructions]. [Operator

first is Chris from from Analytics. The question Quilty Quilty

Christopher Quilty

for Congratulations demand the orders give seeing the Can of an from? on SkyEdge you you're idea IV. what us applications

Adi Sfadia

you Chris, connectivity, nice Actually, in-flight to application maritime the main cellular the backhaul. and again. year to from the was beginning talk of

right Consumer the is platform demand Enterprise because main a now, IFC, cellular multi-application course, is But Maritime and and applicable is Of the also platform. backhaul.

Christopher Quilty

Intelsat SkyEdge me can is one of for And the customers remind you IV?

Adi Sfadia

largest Yes. Intelsat the of others. is SES and customers, one

Christopher Quilty

speaking Intelsat. how obviously, sense a opportunities And their of give highly to you Intelsat new IFC, pursuing? of this year us Right. you're outside business hardware that and your leveraged of is you Can feel about deployment of

Adi Sfadia

on from the beginning Intelsat for plan. at announced satellite was we orders IS-XXe, year, the of currently As main there the is IFC, the the for new received especially and we deployment

Asia. for we this increased quarter expand Intelsat -- deployment addition, In worldwide our in

Christopher Quilty

Great.

merger on the we how So a quarter, high-level question here. you your company? Can Obviously, give in impact that thoughts us Intelsat-OneWeb had may your the announcement.

Adi Sfadia

a First we the of I large all, our in in Generally, mergers the that in and in more continued something -- It's because this see satellite And are seeing business is not happen and that was market. we OneWeb. could merger. investor kind consolidation Eutelsat more. us like say thought a for surprise of can market we

can a base And with we for have relationship the open that OneWeb We good us also with Eutelsat. . merger hope opportunities

dedicated the I this course, at we think them. Gilat for from we far mature. network LEO I IV a need be point think will optimal that. and need beginning, of But for network can just time, that SkyEdge GEO, this are is at they one in the switchover seeing And

Christopher Quilty

GEO Great. progress And speaking testing? the antenna terms LEO switchover of report networks, development steered to hybrid of on in or electronically customer any

Adi Sfadia

But make and finishing fits end, customer need -- sure exact aircraft. exact up of a can market. Last in that lot is the and quarter, our to -- a we willing those point design. is until it no the of demand antennas with continuing, is the there see the a right where specific the support program that but who trade you finished we kinds develop customer Development At we Airbus. hold announced now, you to

have as are we but -- continuing we progress, to wanted. not So we

Christopher Quilty

Great.

about defense more On opportunities managed of the mentioned both larger the and of those are this Can you market Or the large you've a market, you call. UAV opportunity suite? in would include talked primarily that a product line? these defense communication SSPA are some programs around clarify,

Adi Sfadia

becoming is competing a SSPA do of a We of lot see business business. defense the several for are segment But programs. general, Gilat. In on in we strategic line

products. a for platform that defense large SkyEdge and very more more SkyEdge mainly is is we for them IV of see worldwide. demand modem One both and network And organization

Christopher Quilty

question on like the ask do you funding there. see How Peru. I final of to add-on up better of access think most government environment sounds demand you've contracts programs. some It And picked perhaps Great. there some additional are environment for the programs, the or which

Adi Sfadia

Right.

regions. towards with we waiting that very a government to operation rate our target Peru, operation and network and we which -- Pronatel, working already recently of in is region during already during top in are be is We reached in million recurring QX. business. next our announced line. sixth mid of run the we'll be We we we'll good start that $XX probably is we to from revenues. announced mature on able and year hopefully, And the entity Most to to backlog, are XXXX. So the X finished fifth this have to see for the expected -- it We inspect region, in

funding, that is private there slow the halt with over significantly RPT the government fact are with is there. The say, that Peru. a sector either seeing the deal government, instability or for As in in let's RFPs we new in Peruvian

we saw So to there, in the demand see over continue we the regular that past.

Operator

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

Gil Benyamini

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

Operator

Conference Results Call. Thank XXXX concludes Thank Gilat's your Quarter you participation. you. This Second for

disconnect. and ahead go may You

Gilat Satellite Networks (GILT) 9 Aug 222022 Q2 Earnings call transcript