Gilat (GILT) Q1 2026 Earnings Call Transcript

Image source: The Motley Fool.

DATE

Wednesday, May 13, 2026 at 9:30 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Adi Sfadia
• Chief Financial Officer — Gil Benyamini

Need a quote from a Motley Fool analyst? Email pr@fool.com

TAKEAWAYS

• Revenue -- $110.5 million, a 20% increase year over year, with all three segments contributing to growth.
• Adjusted EBITDA -- $15.1 million, nearly double the year-ago period, showing higher operating leverage.
• Commercial Segment Revenue -- $72.8 million, a 13% increase, largely driven by in-flight connectivity demand.
• Defense Segment Revenue -- $25.4 million, up 10%, boosted by transportable Satcom orders in the U.S. Europe, and Israel.
• Peru Segment Revenue -- $12.3 million, rising from $4.8 million, supported by expansion from long-term upgrade projects in four of six regions.
• GAAP Gross Margin -- 34%, up from 31% last year, due to favorable deal mix and improved margins in Blu business.
• GAAP Operating Income -- $4.4 million, compared to a $2.7 million loss prior year, driven by sales growth and expense discipline.
• GAAP Net Income -- $5.2 million ($0.07 per diluted share), reversing a $6 million loss ($0.11 per share) a year ago.
• Non-GAAP Gross Margin -- 36%, compared to 32% in the prior year.
• Non-GAAP Net Income -- $13.6 million ($0.18 per diluted share), up from $1.8 million ($0.03 per share) last year.
• Liquidity Position -- $171 million in cash, cash equivalents, restricted cash, and short-term deposits at period end.
• Share Issuance -- 2.5 million shares issued at $15.45 per share for DataPath earnout settlement, with a remaining potential cash or share earnout capped at $9 million.
• Days Sales Outstanding (DSO) -- 112 days, excluding Peru construction, within target range.
• Order Highlights -- Secured $16 million from a European Ministry of Defense, $9 million from Israel's Ministry of Defense, $7 million for U.S. Wavestream amplifiers, and $6 million for U.S. Army field and technical service.
• Sidewinder Terminal Progress -- 750 units delivered, with 570+ installed; $39 million in new Sidewinder orders; Boeing line-fit certification and first deliveries expected in Q4; Airbus line-fit certification process initiated.
• SkyEdge IV Deployment -- Major multimillion-dollar strategic contract with Nelco in India to deploy SkyEdge IV for India's first Ka band service on JSAT N2 satellite.
• Full-Year 2026 Guidance Reiterated -- Revenue projected at $500 million to $525 million (13% growth at midpoint), with adjusted EBITDA expected at $61 million to $66 million (19% growth at midpoint).

SUMMARY

Gilat Satellite Networks Ltd. (NASDAQ:GILT) reported significant operational and financial improvement, with margin expansion and segment growth supported by robust demand for satellite-based connectivity across both commercial and defense markets. Portfolio expansion included progress in 5G non-terrestrial network integration, virtualization of Satcom gateways on AWS, and successful live demonstrations with key industry partners. Strategic contract wins in defense and commercial sectors expanded geographic reach and diversified the customer base. Capital allocation remained disciplined, and balance sheet strength was enhanced by cash generation and proactive share settlements. The company reaffirmed full-year guidance and highlighted sustained backlog and pipeline momentum.

• CEO Sfadia said, "we have delivered approximately 750 Sidewinder terminals of which more than 570 are already installed and in service."
• CFO Benyamini confirmed, "We ended the quarter with strong liquidity position of $171 million, comprised of cash, cash equivalents, restricted cash and short term deposits."
• Certification milestones were reached with Boeing for Sidewinder line-fit solutions, and Airbus line-fit certification is expected to finish by early 2027, with initial shipments targeted for the same year.
• CEO Sfadia stated, "We expect 2026 revenues of between $500 million and $520 million and adjusted EBITDA of between $61 million to $66 million."

INDUSTRY GLOSSARY

• IFC (In-Flight Connectivity): Broadband connectivity technology and services enabling internet and data communications for aircraft passengers and operations.
• NGSO (Non-Geostationary Satellite Orbit): Satellite constellations in orbits other than geostationary, such as low-Earth or medium-Earth orbits, supporting global and low-latency communications.
• VHTS (Very High Throughput Satellite): Satellite platforms designed to deliver substantially higher data throughput compared to traditional satellites, serving dense and broadband-rich applications.
• Satcom Gateway: Infrastructure enabling communication links between ground stations and satellite constellations for data transfer and connectivity management.
• ESA (Electronically Steered Antenna): Phased-array antennas allowing electronic beam steering without physical movement, supporting multi-orbit, mobile, and in-flight connectivity.
• Ka Band: Portion of the radio spectrum (26.5–40 GHz) widely used in satellite communication for high-throughput data links and emerging mobility solutions.
• 5G NTN (Non-Terrestrial Network): Integration of 5G mobile communications standards with satellite and aerial platforms to provide connectivity beyond terrestrial infrastructure.
• DSO (Days Sales Outstanding): Metric measuring the average number of days it takes a company to collect payment after a sale.
• DataPath: Subsidiary specializing in portable and transportable Satcom solutions, now integrated into Gilat's defense and mobility product lines.

Full Conference Call Transcript

Mr. Harry, would you like to begin, please? Thank you, Gilat. Good morning, everyone. Thank you for joining us for Gil Satellite Networks earnings conference call for the 2026. With us on the call today are Mr. Adi Sfadia, Gil's CEO, Mr. Gil Benyamini, Gil's chief financial officer. Before turning the call over to management, I would like to remind everyone that some statements made during this conference call contain forward looking statements based on current expectations. Actual results could differ materially from those projected as a result of various risks and uncertainties.

The potential risks and uncertainties that could cause actual results to differ materially include uncertain global economic conditions, reductions in revenues from key customers, delays or reductions in US and foreign military spending, acceptance of the company's new products on a global basis, and disruptions or delays in 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.

Gunther information on these factors and other factors that could affect Gil'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 would like to turn the call now to Gilat's CEO, Adi Sfadia. Please go ahead, Adi.

Adi Sfadia: Thank you, Sanjay, and good day, everyone. Thank you for joining us today to discuss Gil'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. As satellite operators, and government customers advance next generation programs, from VHTS satellites to NGSO constellations are seeing our capabilities 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, Gil Defense conducted a live demonstration of its virtualized Satcom Gateway modem architecture at Satellite 26 in Washington, DC, in collaboration with Amazon AWS, SES Space and Defense, and the Wave consortium. The demonstration showcased 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 non terrestrial 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 hybrid networks across both commercial and defense markets. First quarter revenues reached $110.5 million, 20% year-over-year revenue growth. First-quarter adjusted EBITDA reached $15.1 million almost double the same quarter last year. Overall, the first quarter reflects continued traction and positions us well for the remainder of the year. Now on to the business review. I will start with the defense business.

We are seeing 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 continues to strengthen. This demand translated 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 deployment of our solution and reinforcing our long term strategic partnership. The order includes next generation defense modems built 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 Wavestream solid state power amplifiers to support a U.S. Defense program. Wavestream 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 US Army.

During the quarter, we received an order of approximately $6 million for field and technical service reflecting our continued, reflecting the continued reliance on Gil 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 steady execution across our programs. As satellite operators, service providers move forward with next-generation networks, they are increasing their focus on platforms that offer scalability, flexibility and multi-orbit support for mobility applications.

Gil remains well positioned within this evolving landscape. In flight connectivity remains 1 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 Gil's technology roadmap and product portfolio. As of today, we have delivered approximately 750 Sidewinder terminals of which more than 570 are already installed and in service. During the quarter, Boeing and Gil reached an important key in-cabin milestone to offer Sidewinder 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 line-fit availability with Airbus. During the quarter, we announced $39 million in orders for our Sidewinder terminal. This award reinforce the market confidence in its performance, low profile design and multi-orbit capability. We have also expanded our ESA portfolio with the ESR2030 which is now commercially available. The ESR2030 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 the ESR2030 positions us well to support new programs and as operators move from network deployments towards commercial service. We also received a multimillion dollar order from a leading IFC integrator for solid state power amplifiers to support connectivity solutions for commercial aviation aircraft. Across the industry, operators are upgrading 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 multi service 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 represents an important growth market for Gil and a 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 remains healthy, supported by continued IFC demand alongside longer term investments in advanced satellite network architectures. Our Peru business continued to execute very well, with strong operational progress across our national connectivity programs.

We expect to complete an upgrade project that we announced few quarters ago ahead of schedule in 2026, demonstrating Gil 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 initiatives 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 continued to develop favorably and our strategic focus on mobility, multi-orbit architectures, and next generation systems is translating into tangible momentum across our business.

Gil 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 robust pipeline and ongoing investment in advanced architectures that address evolving defense requirements. IFC remain 1 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 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, a healthy pipeline and a continued investment in technology leadership, Gil 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.

Gil Benyamini: 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 on both GAAP and non GAAP basis. I will now walk through our financial highlights for the 2026. 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 3 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 3 segments.

The revenues for the Commercial segment 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 Q1 2026 were $25.4 million, 10% higher than $23 million in the same quarter last year. And Q1 26 revenues for the 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 4 of the 6 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 of 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 a diluted income per share of $0.07 compared with a 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 expense. 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 diluted income per share of $0.18 compared with a 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 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 2026. Under the original terms, this component called for Gil to issue up to 3.1 million shares tied to DataPath's 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 earn out at an average price of $15.45 per share. The remaining bonus earn out component capped at $9 million in cash or shares per Gil discretion is unchanged and continues to be evaluated each quarter based on the performance against agreed targets for its settlement by the 2026. Our shareholders' equity as of March 31, 2026, 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 2026 guidance. Revenues are expected to be between $500 million to $525 million, dollars 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. Would now like to open the call for questions. Operator, please go ahead.

Operator: Thank you. Ladies and gentlemen, at this time, we will begin the question-and-answer session. If you have a question, please press 1. If you wish to cancel or request, please press 2. If you are using speaker equipment, kindly leave the handset before pressing the number. Your questions will be formed in the order they are received. Please standby, and we will pull for your questions. The first question is from Ryan Koontz of Needham and Company. Please go ahead.

Analyst (Ryan Koontz): Maybe starting with the commercial segment here. Sounds like Stellar Blu is executing pretty well. You talked about better margin improvement. And how are you seeing the overall demand environment for the Stellar Blu products? You know, what is behind some of the gross margin improvements? And you know, how are you thinking about this business kind of over the medium term and into next year? How's the visibility looking relative to back backlog, etcetera? Thank you.

Adi Sfadia: Hi, Ryan. Stellar Blu is performing well. We are not 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 1 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 start delivering line fit units.

Analyst (Ryan Koontz): Great. And those line fits, is that starting initially with Boeing here?

Adi Sfadia: Correct. With Boeing, passed incoming 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.

Analyst (Ryan Koontz): Great, Adi. And then maybe continue on commercial. Relative to SkyEdge IV, you know, nice win in India here. As well as, you know, the demo for the virtualized with AWS. Yeah. How are you thinking about that transition from kind of hardware to a software-based platform. Any updates you can share with us about, you know, how you think that business evolves over the next year or 2?

Adi Sfadia: I think a year or 2, it is short-term. So not sure we will see significant involvement in a year or 2. SkyEdge IV is software defined platform, meaning at day 1, you get give or take all the hardware units for the gateway and all the upgrades and expansion is done through software licenses. Moving to commercial of the-shelf hardware and running on a virtualized platform. I guess it is 3 to 4 years from now, and it is combined together with the plans of shifting the waveform from DVB-S2X to 5G NTN.

Analyst (Ryan Koontz): Perfect. Makes sense on that. Then maybe shifting to defense, you know, 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. You know, a US need for your mobility defense products?

Adi Sfadia: I think it is a combination of the 2. I think that everyone understands, especially now after the war with Iran, that mobility solutions, portable and transportable solutions are crucial We saw that some of The US gateways over the Middle East got hit. 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 such a product portfolio.

We are 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 a 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 is important to remember that there is a time between booking to revenues. In the defense, it is typically projects and it takes 6 to 9 months from the order until you deliver the product.

And in some cases, if it is a big project, it can take much more than that. So we are very optimistic about our growth in defense in 2026 and more in 2027. Helpful, Adi. Thanks very much.

Gil Benyamini: Thank you, Ryan.

Operator: The next question is from Christopher Quilty of Quilty Analytics. Please go ahead.

Analyst (Chris Quilty): Thanks, Adi. Just to follow-up, you were saying 6 to 9 months from booking to shipment. 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-- you know, order-to-ship gap closing over time?

Adi Sfadia: It really depends 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 but those units are highly expensive and sometimes are made-to-build based on unique requirements. So it is not that easy, But definitely, if, with the negotiation with the customers, if we understand that, we have the ability to expedite.

Analyst (Chris Quilty): Great. And when you talk about the uptick in portable solutions, is it fair to assume that is all coming out of the data path portfolio of products?

Adi Sfadia: The portable and transportable solutions are mainly from DataPath product. But we do see also very nice business to our modem solutions. And we do hope to be able to penetrate to the DOW and the US Army with our modem, the SkyEdge IV modems and our highly resilient defense forum. Gotcha.

Analyst (Chris Quilty): And 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?

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

Analyst (Chris Quilty): And is it fair to assume this is a virtualized platform Correct.

Adi Sfadia: it is 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. You know, I guess back on the traditional geo side of the business, it appears that both Airbus and Telesat Lightspeed have now kind of gotten their act together with regard to the next-gen software-defined satellites. Think the first ones are going up next year. So at what point do you start to see an uptake in ground segment 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 am not sure we will need to deliver everything this year. But some of it is factored within our guidance already.

Analyst (Chris Quilty): 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 is profitable, but you were shooting for 10% EBITDA exiting you know, 25, did not happen. You know, do you have a sense of where in 2026 you expect to hit that milestone?

Gil Benyamini: So as Adi mentioned, Stellar Blu is now fully integrated into Gil. With the operations team and the R&D team and the so on. I guess that if we would you know, go back and measure it as a stand alone company, it would be very close to that. But we do not do it we do not do it anymore. So it is it is less relevant, but we definitely see this improvement there for 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.

Adi Sfadia: Christopher, I think it is important to mention that we did start investing in next generation ESA technology and terminals. So R and D expenses is shifting towards Stellar Blu, which is now part of Gil antenna and terminal subdivision. And the 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 applications. it is not big yet, but we do expect them to have more than $10 million business with defense this year.

Analyst (Chris Quilty): that is great. You know? And I know you did have, you know, in the original purchase agreement and earn out agreement, you know, 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 timeline that you were you were targeting?

Adi Sfadia: Yep. So we do have a significant progress with 1 of the strategic deals that initially we thought we would be able to close. it is progressing. Slower than expected. We do expect to close it within the coming year, within 2026. I am not sure we will be able to close it before the June. And I am not sure that the first order will be more than $35 million but definitely the potential can be north of $100 million Very good.

Analyst (Chris Quilty): Alright. Well, thank you, gentlemen.

Adi Sfadia: Thank you, Christopher. Thank you, Christopher.

Operator: The next question is from Sergey Glinyanov of Freedom Brokers. Please go ahead.

Analyst: Good day, gentlemen, and my congratulations. You provided a really great work on your gross margin side. So my question is, recently, you tapped on NTN solutions, and I am wondering, do you see any surge in demand on your 5G NTN solutions? Have this trend gotten better visibility?

Adi Sfadia: We do see a lot of traction in the market on 5G NTN. OneWeb with Gen 2 and Gen 1.5 is talking about the 5G modems, Iris is talking about 5G modems. And also other small LEO startups are talking about 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 already started the work on 5G network, mainly the main building blocks. But in order to launch it, we need to tightly work with 1 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 this technology? 5G NTN, full deployment, I guess-- yeah. Right now, the first, so the most advanced is IRIS². So I guess it is 4 to 5 years from today. Okay. Got it. And a little bit about Peru. In your statement about this segment, should we think the most part of the revenue will lean towards 2026? We do expect to get large awards in Peru. And once we get it, revenue will kick in. So I guess the second half of the year should have a higher revenue. than the first 1.

But in general, Peru can be very the revenue can be very volatile because of the nature of the business over there. 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. Yeah.

Gil Benyamini: And I would add to that. I think that 1 of the most important thing or takeaways about Peru is that the base level of the recurring revenues of Peru this year is higher than it used to be in previous years. And the construction and implementation are boosting it for the next year. So you can see that we are in a much better position over there.

Analyst: Okay. Thank you very much. Thank you for taking my questions.

Operator: The next question is from Louie DiPalma of William Blair. Please go ahead.

Analyst (Louie Dipalma): Hi, 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 timeline with Boeing?

Adi Sfadia: I think it will be slightly faster than that timeline with Boeing, because we gained some knowledge. And some of the tests are equivalent, so we can use the qualification and tests 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.

Analyst (Louie Dipalma): Do you have any sense for the timing should it take should we be thinking 2027, 2028, What is your thoughts there?

Adi Sfadia: I would say that we expect to finish the certification process early 2027. And ship first unit 2027.

Analyst (Louie Dipalma): Great. And earlier in the call, did you mention that you should ship the first units to Boeing in the fourth quarter of this year?

Adi Sfadia: Correct.

Analyst (Louie Dipalma): Great. And my second question, also relating to the Stellar Blu development, I think for the past year, you have been working on, like, multi-beam technology and it would also seem that like, the broader in flight connectivity industry is looking for multi-band 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 multi-beam or for multi-band? Thanks.

Adi Sfadia: So multibeam is mainly dependent on availability and customer requirements. I think today with the LEO constellation, especially with Telesat and Intelsat, we see fully 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 third-party cooperation with third parties. I think availability for such antenna is between 2 to 3 years, including development cycle and certification cycle. And I think it will be in line with the future service launch of the main IFC service providers.

Analyst (Louie Dipalma): Great. Excellent. Thanks, everyone.

Adi Sfadia: Thanks, Louie.

Operator: If there are any additional questions, please press 1. Please stand by. We will be polling for more questions. There are no further questions at this time. This concludes the meeting. Would you like to make a concluding statement?

Adi Sfadia: 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.

Operator: Thank you. This concludes Gil's first quarter 26 results conference call. Thank you for your participation. You may go ahead and disconnect.

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Parts of this article were created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.