Q4 2021 Gilat Satellite Networks Ltd Earnings Call
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Ladies and gentlemen, thank you for standing by.
Speaker 2: Ladies and gentlemen, thank you for standing by. Welcome to GILAD's fourth quarter 2021 results conference call.
Welcome to be lots fourth quarter 2021 results conference call.
All participants are at present in listen only mode.
Speaker 2: All participants are at present in listen-only mode. Following the management formal presentation, instruction will be given for the question and answer session.
Following minutes following the managements formal presentation instructions will be given for the question and answer session.
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Speaker 2: As a reminder, this conference is being recorded February 15, 2022. By now you should have all received the company's press release. If you have not received it, please contact Gilad's investor relations team at GK Investor and Public Relations at 1646-688-3559 or view it in the news section of the company's website www.gilad.com
As a reminder, this conference is being recorded February 15 2022 right.
By now you should have all received the Companys press release, if you have not received it please contact <unk> Investor relations team at GK, Investor and public relations at 164668883559 or view it in the news section of the company's website.
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I would now like to hand over the call to Mr. Aylward health of GK Investor Relations. Mr. Helft would you like to begin please.
Speaker 2: I would now like to hand over the call to Mr. Ewoud Helft of DK Investor Relations. Mr. Helft, would you like to begin, please?
Speaker 3: A recording of this call will be available beginning of February , approximately noon, Easter time today, February 15th, and will be available for a telephone replay until November 15th at noon.
A recording of this call will be made at the beginning at approximately noon eastern time today February 15, it will be available for telephone replay until November 15.
The webcast will be archived on the website for a period of citizens.
Speaker 3: Webcast will be archived on the GIRAS website for a period of 30 days.
Speaker 3: Also, please note that investors are urged to read the four Duking statements in Gilad's earnings release with a reminder that statements made on this earnings call are not historical facts, which are not historical facts, may be deemed four Duking statements within the meaning of the Private Security Integration Reform Act of 1995.
Also please note that investors are urged to read the forward looking statements.
The earnings release with a reminder, that statements made on this earnings call.
Now if you are not historical facts, which are not historical facts, maybe deemed forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
Speaker 3: All such forward-looking statements, including statements regarding future financial operation results, involve risks, uncertainties and contingencies, many of which are beyond control of GILAD and which may cause actual results to defer material from those anticipated results.
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 blood and which may cause actual results to differ materially from those anticipated results.
Speaker 3: Gilad 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 may expressly disclaim any obligation to the public.
<unk> 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 may expressly disclaims any obligation to do so.
Speaker 3: More detailed information about the risk factors can be found in GILAT's reports filed with the Securities and Exchange Commission.
More detailed information by the risk factors can be found in get access reports filed with the Securities and Exchange Commission.
With that said, let me turn to introductions on the call today are Mr. <unk>, <unk> CEO and Mr. <unk> <unk> CFO .
Speaker 3: With that said, let me turn to introductions. On the call today are Mr. Adis Fadia, Gilad CIO, and Mr. Gilbini Amini, Gilad CIF.
Speaker 3: I would now like to turn over the call to Adi Sadiya. Adi, we are ready.
I would now like to turn over the call to a decided yet we already speaking.
Speaker 4: Thank you, Ehud, and good day to everyone. I would like to thank you for joining us today for our fourth quarter and full year 2021 earning call. Our results in 2021 showed strong revenue growth with even stronger profitability growth. This kept off strong end to 2021, which we see as a transition year for Gilad and was a challenging year in many aspects.
Thank you Ruth and good day to everyone I would like to thank you for joining us today for our fourth quarter and full year 2021 earnings.
Our results in 2021 showed strong revenue growth was even stronger profitability growth. This capital strong end to 2021, which we see as a transition year for Gilead.
It was a challenging year in many aspects.
Fourth quarter revenues were $67 million.
Speaker 4: First quarter revenues were $67 million, up 58% year over year. Adjusted EBITDA was $10.6 million, up from only $1 million a year ago. For 2021, we reported revenue of $219 million, up 32% from 2020. And adjusted EBITDA of $15.7 million, versus an adjusted EBITDA loss of $3.3 million in 2020.
58% adjusted.
Adjusted EBITDA was $10 6 million up from only $1 million a year ago.
For 2021 reported revenue of $219 million up 32% from 2020, and adjusted EBITDA of $15 7 million.
Versus an adjusted EBITDA loss of three $4 million to $3 million in 2020.
Speaker 4: More importantly, looking ahead, we expect 2022 to be a stronger year. The improved visibility across our various business segments allow us to provide, for the first time in two years, full year guidance, which I will elaborate on at the end of my statement.
More importantly, looking ahead, we expect 2020 to be a stronger year named.
Visibility across our various business segments allow us to provide for the first time in two years full year guidance, which I will elaborate on at the end of my statement.
Speaker 4: I will now focus on some of the business achievements and discuss some of the recent highlights.
I will now focus on some of the business achievements and discuss some of the recent highlights.
Speaker 4: I'm excited to report that we recently launched Gilad Next Generation Platform, SkyH4, with a goal to increase our market share in the ground segment market of the new era of satellite communications consisting of non-geostationary orbit constellations known as NGSO and very high throughput satellites known as VHTS.
I am excited to report that we recently launched <unk> next generation platform Skype for with a goal to increase our market share in the ground segments market of the new era of satellite communications, consisting of non geostationary orbit constellation known as <unk> and GSO and the very high throughput satellites known as <unk>.
Yes.
Speaker 4: Today's new year consists of new multi-orbit constellations and very high-support satellites that meet the demands for connectivity everywhere, all the time. This market dynamic presents unique opportunities for Gilad since QIJ 4 is a software-centric platform. We therefore expect to see a favourable mix of software licenses in addition to hardware sales.
Today's new hero consist of new multi orbit constellation and very high throughput satellites that meet the demands for connectivity everywhere. All the time these market dynamics present unique opportunities for gilead to Skype for ease of software centric platform.
Definitely expect to see a favorable mix of software license sales. In addition to housing and since I am proud to report that we recently closed strategic Skype for deals with both Intelsat and Ses and we have a healthy pipeline as we move forward.
Speaker 4: I am proud to report that we recently closed strategic scratch for deals with both InterSAT and SES, and we have a healthy pipeline as we move forward.
Speaker 4: with Sky 4, our goal is to capture a leading position of this multi-billion dollar emerging market.
With Skype for our goal is to capture a leading position of this multibillion dollar of emerging market.
Speaker 4: Skyage 4 opens new markets and enhances our leadership in others. This includes fortifying our 4G cellular vehicle leadership and opening up 5G opportunities.
<unk> full opens new markets and enhanced our leadership in audience. This includes fortifying our forged sound little bit co leadership and opening up five G opportunities.
Speaker 4: Sky 4 is further growing ELAT leadership in mobility, both in IFC and maritime, as well as positioning us for enlarging our pipeline in the defence and enterprise market.
Chipotle is further growing leadership in mobility, both in IFC, and many time as well as positioning us for the lodging a pipeline in the defense and enterprise market.
Sky's fall is equipped with an elastic architecture built to deliver speeds of gigabit per second and unmatched Capex and Opex efficiency supporting next generation software defined satellites and simultaneously supporting any application even the most demanding situations.
Speaker 4: Scratch 4 is equipped with an elastic architecture built to deliver speeds of gigabits per second and unmatched CAPEX and OPEX efficiency, supporting next generation software-defined satellites and simultaneously supporting any application, even the most demanding situation.
Speaker 4: In addition to the exciting news about SkyH4, I would like to shed more light on two outstanding achievements in the NGSO and VHDS markets. The first achievement is that we entered into a multi-year contract with a potential of hundreds of millions of dollars to customize and provide our leading technology for NGSO constellations.
In addition to the exciting news about Sky's full I would like to shed more light on two outstanding achievements in the engine is sold into the HTS market.
The first achievement is that we entered into a multiyear contract with a potential of hundreds of millions of dollars to customize our product and provide a leading technology for LNG. So constellations.
Speaker 4: Upon signing this contract, we received the first multi-million dollar purchase order for initial units.
Upon signing of the Swan truck, we received the first multimillion dollar purchase order for initial units.
Speaker 4: And the second achievement is that we received orders totaling over $40 million for a leading satellite operator for our SSPA product line to support low Earth orbit constellation.
And the second achievement as we received orders totaling over $40 million for a leading satellite operator.
Its just be a product line to support low Earth orbit constellation.
Speaker 4: Gilad sees solid growth potential in the emerging VHDS and NGSO satellite communication market and is materializing its goal to benefit from this growing megamarket.
The last few solid growth potential in the emerging V. H D S and engineers, so satellite communication market and he is materializing its skull to benefit from this growing mega markets.
Speaker 4: I'm happy to report that in the mobility market segment, we continue to see market recovery. In the IFC segment, Girard expanded its strategic partnership with InterSAT for commercial aviation. As a reminder, at the end of 2020, InterSAT acquired global commercial aviation
We do report it in the mobility market segment, we continue to see market recovery.
The IFC segment get out expanded its strategic partnership with intercept for commercial aviation.
A reminder, at the end of 2020.
And does it acquired to commercial aviation business.
Speaker 4: InterSAT selects Gilad Skyage 4 as a platform to provide IFC services over North America with the latest IS-40E high throughput satellite that is expected to be launched during 2022. In addition, InterSAT's global IFC network will be expanded by Gilad to cater to the growing use of IFC over Asia. We expect additional significant revenue in this segment as InterSAT continues to enhance and expand their network.
Intersect select deluxe Sky's fall as a platform to provide IFC services, Although North America with the latest Ias 40 high throughput satellites that you'd expect it to be launched during 2022.
In addition into such global IFC network will be extended by Gilead to cater to the growing use of IFC over Asia. We expect additional significant revenue in this segment as interest has continued to enhance and expand their network.
Speaker 4: Moving on to maritime. We secured a deal in the fourth quarter with a new service provider in Eurasia for expanded maritime connectivity for commercial fishing and maritime transport markets.
Moving on to maritime.
We secured a deal in the fourth quarter was a new service provider in Eurasia. So I spent four expanded maritime connectivity for commercial fishing and maritime transport markets.
Speaker 4: This recent maritime success is on top of the reported multi-million dollar deal with SCS that we closed during 2021 for Skyage 4, which provides Gilad with access to top cruise lines and maritime service providers that will use SCS O3B M power as well as the Gale Stationary Satellite Fleet.
Recent M&A.
Anytime successes on top of the reported multimillion dollar deal with Ses that we closed during 2021 for Skyjack for which provides <unk> with access to top cruise lines and maritime service provider. So it really was FCS also empower as well as the stationary satellite fleet.
Speaker 4: I'm optimistic that Gilap Technology will continue to be the leading solution for Internet connectivity during travel in the air, at sea and on land.
I am optimistic that the <unk> technology will continue to be the leading solution for internet connectivity doing travel India at sea and on land.
Speaker 4: In the cellular backhaul segment, we had new accounts penetration with one of the world's largest mobile operators.
In the cellular backhaul segment, we had new account penetration with one of the world's largest mobile operators.
Speaker 4: This achievement has significant upside potential for Gilad as we continue to strengthen our proven global market leadership for 4G backhaul over satellite market.
This achievement has significant upside potential for gilead as we continue to strengthen our proven global market leadership for <unk> backhaul over the satellite market.
Speaker 4: In the fourth quarter, we also received the managed service contact extension from a leading operator in Mexico.
In the fourth quarter. We also received a managed service contract extension for my living operator in Mexico.
Speaker 4: Furthermore, in the last quarter of 2021, we received an award totaling millions of dollars from other tier-one mobile operators around the globe, which contributed to our strong performance in 2021 in the Seol Arbekel market segment.
In the last quarter of 2021, we received the award totalling millions of dollars from other tier one mobile operators around the globe with which contributed to our strong performance in 2021 in the cellular backhaul market segments.
Speaker 4: the last mobile operators continued to expand their network coverage to remote areas with galactose over satellite solutions
Mobile operators continue to expand our network coverage support to remote areas with Gila cellular backhaul over satellite solution.
Speaker 4: We also see them using our equipment for emergency response services as well as for IoT. We believe that we will continue to see additional business growth with the MNOs as this market is expected to significantly grow in the coming years. Gilad's further intent to support and lead the market transition to 5G with our newest technology.
We also see them using our equipment for emergency response services as well as for Iot. We believe it will continue to see additional business schools with them in those.
This market is expected to significantly grow in the coming years.
Further intends to support and lead the market transition to five <unk> with our newest technology.
Speaker 4: In the fourth quarter, we closed significantly multimillion dollar deals with one of the largest service providers in Eurasia.
In the fourth quarter, we closed significantly multi million dollar deal with one of the largest service providers in Eurasia.
Speaker 4: We were chosen as a ground segment provider to modernize and expand satellite communications throughout the region for a variety of applications, including maritime land mobility and consumer. Furthermore, we were awarded several additional contracts to extend broadband networks with thousands of research to assist people overcoming some of the pandemic consequences.
We were chosen as the golf segment provider to modernize and expand satellite communications throughout the region. So a variety of applications, including maritime land land mobility and consumer.
No. We were awarded several additional contracts to extend broadband network with thousands of resets to assist people overcoming some of the pandemic consequences.
Speaker 4: The defense market is a growing focus area for Gilad. During the last quarter of 2021, we secured over $5 million for solid-state power amplifiers from tier 1 US global military terminal providers.
The defense market is a growing focus area for <unk> during the last quarter of 2021, we secured over $5 million.
For solid state power amplifiers from tier one U S global military terminal provider.
Speaker 4: This contract was extension to initial $5 million order from this customer that we reported earlier this year. And we expect additional expansion for this project in 2022.
This contract was extension to initial 5 million dollar order from this customer that we reported earlier.
And we expect additional expansion for this project in 2022.
Speaker 4: Our defense segment received additional focus during the year and we saw several multi-million dollar global deals including the first commitment for a new multi-orbit next generation platform, SkyEdge4, to a defense customer.
Our defense segment receive additional focus during the year and we saw several multimillion dollar global deals, including the first commitment for a new multi all with next generation platform Skype for two of defense customers.
Speaker 4: In Peru, we are making progress in building the terrestrial networks in Ica and Amazonas and providing services in Juancavelica, Ayacucho, ApurÃmac and Cusco, while successfully executing on our strategy.
In parallel we are making progress in building the terrestrial networks any kind of Amazon us and providing services and conquer really got a good joke.
Well, we make in Cusco, we're successfully executing on our strategies. We have received orders for services services and bill during 2021 totaling more than $40 million and as such we achieved our goal of $50 million in annual recurring revenue run rate ahead of our stated objectives.
Speaker 4: We have received orders for services in Peru during 2021, totaling more than $40 million. And as such, we achieved our goal of $50 million in annual recurring revenue run rate ahead of our stated objective.
Speaker 4: In 2022, we expect to turn a corner in Peru and for our business in Peru to become significantly profited.
In 2020, do we expect to turn a corner in Peru, and for our business and be able to become significantly profitable.
Speaker 4: I'd like to conclude with sharing a few more points. We plan to continue to heavily invest in R&D to maintain our leadership position and be prepared for the world of opportunities ahead. We also are carefully monitoring the global supply chain crisis, and so far I am proud that in 2021, we have managed to meet our commitment.
I'd like to conclude with sharing a few more points. We plan to continue to heavily invest in R&D to maintain our leadership position and be prepared for the wealth of opportunities ahead.
We are also carefully monitoring the global supply chain crisis.
So far I am proud that in 2021, we have managed to meet our commitments. Finally, I am pleased to say that we have a strong backlog and a healthy pipeline and a good visibility into 2022, we therefore have decided to share with you our guidance for 2022.
Speaker 4: Finally, I am pleased to say that we have a strong backlog, and a healthy pipeline, and a good visibility into 2022. We therefore have decided to share with you our guidance for 2022. Our revenue guidance is between $245 to $265 million, which represents a growth of between 12% to 21% from our comparable 2021 results.
Our revenue guidance is between $245 million to $265 million, which.
The growth of between 12% to 21% from our comparable 2021 results. We expect GAAP operating income of between five to 9 million and.
Speaker 4: We expect GAAP operating income of between $5-9 million and adjusted EBITDA of between $20-24 million. This represents an adjusted EBITDA increase of between 27-53% year-over-year, even with significant increase in our investment in R&D.
And adjusted EBITDA of between $20 million to $24 million.
This represents an adjusted EBITDA increase of between 27% to 53% year over year, even with significant increase in our investment in R&D.
Speaker 4: We expect that as we move along the year and our visibility will further improve, we'll be able to narrow the range of our guidance.
We expect that.
We move along the year.
Our visibility will further improve we'll be able to narrow the range of our guidance.
Speaker 4: And with that, I'd like to hand over to our new CFO , Gil Biniamini. Welcome, Gil. Gil, we are now ready for your report. Please go ahead. Thank you, Adi. Good morning and good afternoon to everyone. I would like to remind everyone that our financial results are presented both on a gas and non-gas basis.
And with that I'd like to hand over to our new CFO <unk> welcome Gil Gil we are now ready for your report. Please go ahead.
Good morning, and good afternoon to everyone.
I'd like to remind everyone that our financial results are presented both on a 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.
Speaker 4: We regularly use supplemental non- GAAP financial measures internally to understand, manage and evaluate our business and to make operating decisions.
Speaker 4: We believe these non- GAAP financial measures provide consistent and comparable measures to help investors understand our current and future operating conditions.
We believe these non-GAAP financial measures provide consistent and comparable measures to help investors understand our current and future operating performance.
Speaker 4: Knowing up financial measures mainly exclude the effect of stock based compensation or more traditional person
non-GAAP financial measures, mainly exclude the effect of stock based compensation amortization of purchased intangibles amortization of lease incentive litigation expenses or income related to trade secret claims reorganization costs merger acquisition and related litigation costs.
Speaker 4: intangible, amortization of fleas incentives, litigation expenses or income related to trade secret claims, reorganization costs, merger, acquisition and related litigation costs, adjustments of assets that are held for sale and one-time changes in divert tax assets.
Adjustments of assets that are held for sale.
One time changes in deferred tax assets. The reconciliation table in our press release highlights this data and our non-GAAP information excludes these items I will now move to our financial highlights for the fourth quarter and full year 2021.
Speaker 4: The reconciliation table in our press release highlights this data, and our non-GAAP information excludes this item.
Speaker 4: I will now move to our financial highlights for the fourth quarter and full year 2020.
Speaker 4: Overall, as Adi mentioned earlier, we are very pleased with our improvement in our results for both the quarter and the year. The results demonstrate that as we exit 2021, we are on the right track and we can now be increasingly optimistic about our prospects in the quarters ahead.
Overall as Eddie mentioned earlier, we are very pleased with our improvement in our <unk>.
<unk> for both the quarter and the year the results demonstrate that as we exit 2021.
On the right track and we can now be increasingly optimistic about our prospects in the quarters ahead.
Speaker 4: While our performance demonstrates a very solid improvement, the remaining global macroeconomics headwinds related to COVID including the electronic component supply.
While our performance demonstrates a very solid improvement remain global macroeconomic headwinds related to COVID-19 , including the electronic component supply constraints.
Speaker 4: I'm pleased to say, however, that our performance in 2021 demonstrated that we have been able to mitigate the issue without any significant impact to date.
I am pleased to say, however that our performance in 2021 demonstrated that we've been able to mitigate the issue without any significant significant impact to date.
In terms of our financial results.
Speaker 4: Revenues for the fourth quarter were 67.3 million up 58% when compared to 42.6 million in the fourth quarter.
Revenues for the fourth quarter was $67 3 million up 58% when compared to $42 6 million unit fourth quarter of 2020 revenues were up 35% versus $49 9 million in the prior quarter.
Speaker 4: Revenues were up 35% versus 49.9 million in the
Speaker 4: For the year, revenues were $218.8 million, up 32% versus $165.9 million in 2020.
For the year revenues were $218 8 million up 32% versus $165 9 million in 2020.
Speaker 4: The improvements were driven by growth from enterprise broadband, cellular backhaul, NGSO and defense markets.
The improvements were driven by growth from enterprise broadband cellular backhaul and GSO and defense market.
In terms of the revenue breakdown by segment fixed networks segment revenues in Q4, 'twenty, one with $37 million compared to $25 1 million in the same quarter last year and $22 3 million in the prior quarter.
Speaker 4: Six network segments revenues in Q4-21 were 37 million compared to 25.1 million in the same quarter last year and 22.3 million in the prior quarter.
Speaker 4: Mobility solution segment revenues in Q4'21 were $25 million compared to $11.8 million in the same quarter last year and $21.6 million in the prior quarter. The improvement in the segment was primarily driven by strong revenue growth from the NGSO and defense markets.
Mobility solutions segment revenues in Q4, 'twenty, one with 25 million compared to $11 8 million same quarter last year and $21 6 million in the prior quarter.
The improvement in this segment was primarily driven by strong revenue growth from the <unk> and defense market.
Speaker 4: Terrestrial infrastructure project segment revenues, which include the construction revenues for projects for PRONATEL in Peru, were $5.3 million compared to $5.8 million in the same quarter last year and $6 million in the prior quarter.
So STR infrastructure projects segment revenues, which include the construction revenues for projects for chronically ill in Peru were $5 3 million compared to $5 8 million in the same quarter last year and $6 million in the prior quarter.
I would now like to summarize our fourth quarter non-GAAP results. You can you can view, our skew our full results, including our GAAP results in the press release, we issued earlier today.
Speaker 4: I would now like to summarize our fourth quarter non-GAAP results. You can view our full results, including our GAAP results, in the press release we issued earlier today.
Speaker 4: Our non-GAAP gross margin Q421 improved to 37.2% compared to 31.3% in the same quarter last year and 35.5% in the prior quarter.
Our non-GAAP gross margin in Q4, 'twenty, one improved to 37, 2% compared to 31, 3% in the same quarter last year and 35, 5% in the prior quarter.
non-GAAP operating expenses in Q4, 'twenty, one were $18 2 million in the quarter campaign, compared with $15 million in the fourth quarter of last year and $16 2 million in the previous quarter.
Speaker 4: expenses in Q4 21 were 18.2 million in the quarter compared with 15 million in the fourth quarter of last year and 16.2 million in the quarter of last year and 16.2 million in the
Speaker 4: I know that last year, due to the COVID-19 pandemic, we had made temporary cost reductions, which mainly consisted of a reduction of our global workforce to an 80% workforce.
I know that last year due to the COVID-19 pandemic, we had made temporary cost reductions, which mainly consisted of a reduction of our global workforce to an 80% well schooled in December 2020, we returned all of our employees back to 100%.
Speaker 4: December 2020, we returned all our employees back to one-
Speaker 4: I would also like to note that in the previous quarter, we've benefited from COVID-related grants.
I would also like to note that in the previous quarter, we benefited from Covid related grants.
Speaker 4: We increased the investment in R&D compared with last year to ensure timely delivery of the existing large projects we've been awarded mainly in the Leon Mill constellation and continued our investment in our new Skyage 4 Pro.
We are increasing the investment in R&D compared with last year to ensure timely delivery of vascular you've seen large projects. We've been awarded mainly in the Leo and MEO constellation and continued our investment in our new Skype for platform.
Speaker 4: non-GAAP operating income for the quarter was improved to $6.8 million compared with an operating loss of $1.6 million in the same quarter last year and an operating income of $1.5 million in this previous quarter.
non-GAAP operating income for the quarter was improved to $6 8 million compared with an operating loss of $1 6 million in the same quarter last year and an operating income of $1 5 million in previous quarter.
Speaker 4: non-GAAP net income in the fourth quarter was $5.9 million or diluted earning per share of $0.10. This is compared with net loss of $1.9 million or loss per share of $0.03 in the same quarter last quarter.
non-GAAP net income in the fourth quarter was $5 9 million.
Our diluted earnings per share of <unk> 10.
This is compared with net loss of $1 9 million or a loss per share of <unk> in the same quarter last year.
Speaker 4: In the previous quarter, we reported a non-gap net income of $0.7 million of earnings per share of 1%.
In the previous quarter, we reported a non-GAAP net income of $7 million of earnings per share of one.
Speaker 4: Adjusted EBITDA for the quarter improved to $10.6 million compared with an adjusted EBITDA of $1.1 million in the same quarter last year. In the previous quarter, we reported an
Adjusted EBITDA for the quarter improved to $10 6 million compared with an adjusted EBITDA of $1 1 million in the same quarter last year in the previous quarter, we reported an adjusted EBITDA of $4 million.
Speaker 4: For the year, adjusted EBITDA was 15.7 million compared with an adjusted EBITDA loss of 3.3 million.
For the year adjusted EBITDA was $15 7 million compared with an adjusted EBITDA loss of $3 $3 million in 'twenty one.
Speaker 4: Moving to our balance sheet, as of December 31, 2021, our total cash and equivalents including short-term deposits and restricted cash were $86.6 million, compared with $85.4 million on September 30, 2021. In terms of cash flow, we generated about $18.9 million from operating activity.
Moving to our balance sheet as of December 31, 2021, our total cash and equivalents, including short term deposits and restricted cash were $86 6 million compared with $85 4 million on September 32021.
In terms of cash flow, we generated about $18 9 million from operating activities in 2021.
Speaker 4: DSO, which includes our fixed networks and mobility solution segments and excludes receivables and revenue of our terrestrial infrastructure project segment, decreased to 60 days compared to 66 days in the previous year.
DSO, which include our fixed networks and mobility solutions segments, and exclude receivables and revenue of our terrestrial infrastructure projects segment decreased to 60 days compared to 66 days in the previous quarter.
Our shareholders equity at the end of 2021 totaled about 232 million compared with $234 million at the end of 2012.
Speaker 4: Our shareholders' equity at the end of 2021 totaled about 232 million, compared with 234 million at the end of 2020.
Looking ahead as the deal already mentioned, we're expecting a strong 2022 with revenue of between $1 $45 million to $265 million and adjusted EBITDA of between $20 million to $24 million.
Speaker 4: Looking ahead, as Adi already mentioned, we are expecting a strong 2020.
Speaker 4: with revenue of between $245 to $265 million and adjusted EBITDA between $20 to $25 million.
Speaker 4: That concludes my financial review. I would like now to open the call for questions.
That concludes my financial review I would like now to open the call for questions.
Okay.
Thank you.
Speaker 2: Ladies and gentlemen, at this time we will begin the question and answer session. If you have a question...
Ladies and gentlemen at this time, we will begin the question and answer session.
If you have a question please press star one.
Speaker 2: If you wish to cancel your request, please press star 2. 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.
If you wish to cancel your request please press star two if youre.
Speaking of speaker equipment kind of lift the handset before pressing the numbers youre questions will be pulled in the order of the Irish seats. Please stand by while we poll for your questions.
The first question is from Chris Quilty. Please go ahead.
Thank you.
Congratulations on some good results.
Wanted to get perhaps a little bit more detail at the segment level and looking specifically at the fixed networks business.
Where's the growth within that business, either on a sequential or year business was it driven.
Particularly by a.
Sorry.
By the cellular backhaul market.
Or.
Restaurant portion or was it fairly even across those end markets.
Speaker 4: Hi Chris, nice to talk to you again.
Hi, Chris.
Nice to talk to you again.
<unk>.
Speaker 4: I think that the main growth came both from the cellular backhaul, we had a very good year and a very good quarter with cellular backhaul, in addition to starting to provide we started to provide the operational phase in Peru, so it's also supported the revenue growth in the fourth quarter.
I think that the main growth came both from the cellular backhaul.
We had a very good year and a very good quarter with solar backhaul.
In addition to starting provide we started to provide.
The operational phase in Peru. So it has also supported the revenue growth in the fourth quarter.
I understand it and on that operational phase in Peru.
I know you don't break it out specifically, but.
Upon hitting the run rates that you had previously.
Talked about fair to assume that Youre doing.
North of 10 million or so exiting Q4.
And the second question on Peru networks can you give us some sense of break breakout.
[noise] announcements around separate agreements.
With partners, whether Facebook, which I think is pulling out of some of these activities.
Other.
Local carriers.
Does the revenue breakdown between those different.
Use of the network.
Speaker 4: OK, so as we said, we reached a yearly run rate of $50 million. Some of it will kick in only once we finish to build the network in Ica and Amazonas, which is expected towards the second half of this year, early 2023, depends on the network.
Okay. So.
As we said we reached to a yearly run rate.
$50 million.
Some of it will kick in only once we finished.
To build a network any kind of Amazon us.
Which is expected.
<unk>.
Second half of this year early 2023 depends on the network.
Speaker 4: So excluding that, we expect to have around $45 million. So on average, it's slightly above $10 million a quarter.
So excluding that we have we expect to have around $45 million.
So on average, it's slightly above $10 million a quarter.
Speaker 4: The agreement we have with IPT, Internet Para Todos, which is the consortium of Facebook and Telefonica in Peru, is aimed to provide terrestrial capacity for cellular backhaul.
The agreement, we have with our IPP Internet told US, which is the consortium of Facebook and Telefonica.
Peru is aimed to provide.
Terrestrial capacity for cellular backhaul.
And it's Oh.
Speaker 4: I don't remember if we gave the exact amount, but it's an agreement of north of $20 million for four or five years. And we are in the midst of providing the service or not. Everything is already up and running. We believe that we'll have more during 2022. Most of our business in Peru is with the government.
Remember if we gave the exact amount, but it is an agreement of north of $20 million for four five years and we are in the midst of.
Providing the service so not everything is already up and running we believe that the.
We live in.
No doing 2002.
'twenty two.
Most of our business.
Employees with the government.
Speaker 4: Pronatel is the main customer, which is a government-owned entity under the Ministry of Telecommunications, and the majority of our revenues come from working with the Ministry of Telecommunications.
One is the main customer which is.
Government owned entity under the Ministry of Telecommunication and the majority of our revenues comes from working with the Ministry of Telecommunications.
And just a clarification when you talk about the $50 million run rate is it the aggregation of both the government and telefonica or is the telefonica incremental.
Speaker 4: 50 million is all our business, both terrestrial services and satellite services business that we have in Peru, including the private and the public section.
$50 million is that all our business, both terrestrial services and satellite services business that we have in Peru, including.
The private and the public section.
Great.
And is it fair to assume that.
Separate terrestrial.
Segment that we will see a continual decline in those revenues as the infrastructure buildup raps out wraps up.
And do you expect it to continue into 2023 year should that closed out in 2022.
Speaker 4: Internally, our goal is to finish the construction as soon as possible. Knowing how complicated it is to work in Peru, I think it's fair to assume that we will be dragged into 2023, at least in one of the networks. I guess it will be Amazonas, because it's a much larger and more complicated area to work with.
Internally our goal is to.
To finish the construction as soon as possible.
<unk>.
How complicated it is to work in pivotal I think it's fair to assume that.
We will be dragged into 2023 at least in one of the in one of the networks I guess it will be Amazon is because it too much.
Much larger and more complicated area to work with.
I hope this answers.
Your question.
No that answered it.
Speaker 5: That answered it. Also, if I can just follow up on the
Also if I can just follow up on the specifically.
Specifically on SCS last year, you talked about.
Timing of the empower our constellation and the build out and you implied that that really wouldn't kick off until 2022.
Is this schedule still holding there.
And what sort of a material impact do you expect.
That specific contract to happen this year.
Speaker 4: And so the Empire Agreement was signed in 2019 and drive a significant shift in our R&D to start working on the next generation platform, which we
And so the entire agreement was signed in 2019 and drive a significant shift in our R&D to start working on the next generation platform, which we recently.
Speaker 4: recently uh officially launched unofficially we already started to sell it
Officially launched unofficially we already started to sell it.
Speaker 4: We delivered to SCS some of the operational gateways towards the end of 2000 and
We delivered to our CSR holiday operational gateways towards the end of 2000.
Speaker 4: So we are on track and we expect to continue to deliver during the first half of 2022. Part of the growth that we are going to see in 2022 will come from the backlog that we have with SES and other customers like Intercept and others.
'twenty one is that we are on track.
And we expect to continue to deliver.
During the first half of 2000 and.
'twenty two.
Part of the growth that we are going to see in 2022 will come from the backlog that we have with Ses and other customers like Intel and others.
Okay.
And circling back on the Sky edge too.
Can I ask four excuse me what happened to three first of all you have to explain what happened to three.
Speaker 4: That's a good question. That's a really good question. We had a month ago, two months ago, a discussion in management where SkyEdge3...
Thats a good question Thats a really good question, we had skies.
Hey.
Months ago, two months ago discussion, indeed in management, where sky three.
Speaker 4: So, actually we had SkyEdge 2 and then we, for some reason, we decided to go with SkyEdge 2C, which typically was the SkyEdge 3. And then we jumped to SkyEdge 4.
So actually we had sky, it's too and then we.
For some reason, we decided to go with Skype to see which typically was the sky three and then we jumped to Sky Sky.
Skype for so.
Speaker 4: So this is a, you know, it's just a marketing name.
It's just being named.
Okay, I'll give you a pass on that.
Speaker 5: you a pass on that one. Next time I'll drag the marketing guy with me so he can give an answer. Yeah, so can you give us a sense of the both the time...
Yeah.
Next time I'll drive the marketing Guy with me so he can.
Given answers.
Yeah.
So.
Can you give us a sense of.
The timing on that development and the overall cost.
And maybe just a refresher as you went through those increments from.
Two did you see to for them.
Development timeline.
Long, how often you've been refreshing the product lines.
Speaker 4: So first of all, today, most of our base band R&D, which is based in Israel, Moldova, and Bulgaria, is focused on the SkyEdge 4. I would say that close to 70% of the R&D.
So.
First of all today most of our.
The baseband R&D, which is based in Israel in Moldova, and Bulgaria is focused on the sky adds for that.
I would say that close to 70% of the R&D.
This does the sky is falling.
Speaker 4: The Sky-H4 is a significant improvement of Sky-H2, it's not just a simple evolution, it's a major leap that we did.
The significant improvement of Sky.
<unk> two is not just.
A simple evolutionary.
Major leap.
We developed a new.
Speaker 4: Usually once every seven.
Usually once every seven five to seven years.
Speaker 4: five to seven years, we released such a major enhancement to our platform. And this time, we also allow part of our modems to have interoperability or backward compatibility with SkyEdge, too. So some of our, you know, depend on the network. We'll have the opportunity to benefit from past investments. Thank you.
Yeah.
Release, such a major.
Enhancements to our platform.
And this time, we also allow.
Part of our more than two.
Have interoperability or backward compatibility with <unk> too so some of.
It depends on the network will have the opportunity to benefit from our past investments.
Gotcha.
Specific question around you mentioned, both in the press release and I think the script.
Uh huh.
Now the software revenue aspect of the product.
Speaker 5: software
Software licenses.
That's an.
An indication that you expect a higher percentage of recurring software support.
Or are you, implying that there's ways to flash the software on to older devices and.
And just you know.
We sell hardware, but just to sell software.
Speaker 4: I think it's a combination. We are not yet, you know, with the...
I think it's a combination we have not yet.
We know with the <unk>.
Speaker 4: subscription-based software. Probably it will take another few years for the industry to move to a total cloud solution on a subscription base.
Subscription based software probably it will take another few years for the industry to move to.
Total cloud solution on a subscription based this is mainly a hardware and software perpetual license sales and when you grow the network.
Speaker 4: This is mainly hardware and software, perpetual license.
Speaker 4: And when you grow the network, in most of the instances, you will need to buy a software upgrade without the need of increasing the hardware. It depends, again, on the size of the network and the number of gateways and data centers, but this is the main idea. So it's definitely going to drive our gross margin by several points higher.
In sum in most of these instances you will need to buy.
The software upgrade result, the need of increasing the hardware it depend again on the size of the network and the <unk>.
And number of gateways and data centers.
Main idea so it's definitely going to drive.
Gross margin.
By several points higher.
Perfect.
Speaker 5: I'll ask one more financial question and then pass. I noticed there was a little...
I'll ask one more financial question and then pass.
I noticed the there was a little bit of a step up in Capex and DNA.
Which I think was amortization of lease incentives can you give some details on that along with it.
The Q4 run rate on Capex, something we should use going into.
In 2022.
Do you have.
Speaker 4: In terms of capex, I think that the amount we saw in 2000 and
Back.
In terms of Capex I think that the amount we saw in 2000.
In 2021 will continue.
Speaker 4: In 2021, we'll continue plus-minus, I would say, $1 million to 2022. We are investing a lot in R&D and test equipment. If you had additional headcount and you want to accelerate, you need more test equipment. For the sake of the example, we are going to...
Minus I would say one 1 million to 2022, we are investing a lot in there.
R&D and test equipment.
If you had additional head count and you want to accelerate it even more test equipment for the sake of the example, we are going to.
Speaker 6: refresh our manufacturing facility in WaveStream as we have more and more SSPA orders.
Refresh.
The manufacturing facility.
In waste stream as we have more and more.
The orders in.
Speaker 4: and things like that. This is the main reasons for CAPEX. In addition, we had some, you know, earlier this year, for example, we got an award of a Wi-Fi hotspot in Peru.
Things like that.
These are the main.
The main.
For the full Capex. In addition, we had some.
Earlier this year for example, we got an award of a Wi Fi hotspot in Peru.
Speaker 4: where we provide the hardware as a CAPEX and then just provide the re-carrying services. So this also goes to a CAPEX. In those cases, some of the projects that we provide as a managed service...
We provide the outlook as the Capex and then just.
Provide a recurring services. So this is also goes to capex. So.
In those cases some of the projects that we provide as a managed service required capex investment and this might lead to fluctuation in our capex it depends on the project.
Speaker 4: require CAPEX investment, and this might lead to fluctuation in our CAPEX. It depends on the project. As for the GNP...
As for the.
G&A.
Speaker 4: I think that the main, there is no main reason for the increase year over year, it's mainly because in most of 2020 we had
I think that the main there is no.
Main reason for the increase.
Here, it's mainly because.
Most of 2020, we had.
Speaker 4: less employees, and most of the workforce work 80 percent. And in December , as Gil mentioned in his script, we returned to work at full force at 100 percent. So I don't see a specific increase. Beside the fact that the U.S.
Okay.
Less employees and most of the workforce work, 80% and in December as Gil mentioned in the script.
Return to work.
Full force at 100%, so I don't see.
Specific.
An increase beside the fact that the.
U S dollar and shekel exchange is a bit.
Speaker 4: Dollar and Shekel exchanges is a bit unfavorable in the last few years. Great. Thank you. Thank you, Chris.
Unfavorable in the last in the last few years.
Great. Thank you.
Thank you Chris.
Is there any additional questions. Please press star one.
If you wish to cancel your request please press star two.
Please standby, while we poll for more questions.
Speaker 2: There are no further questions at this time. Mr. Benjamini, would you like to make your concluding statement?
There are no further questions at this time, Mr. <unk> would you like to make your concluding statement. Thank you I want to thank you all for joining us on this call and for your time and attention.
Speaker 3: Thank you. I want to thank you all for joining us on this call and for your time and attention. We hope to see you soon or speak to you in our next call. Thank you very much and have a great day.
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 <unk> fourth quarter 2021 results conference call.
Speaker 2: This concludes Gillette's 4th quarter 2021 results conference.
Speaker 2: Thank you for your participation. You may go ahead and disconnect.
You for your participation you May go ahead and disconnect.
[music].