Q2 2023 Gilat Satellite Networks Ltd Earnings Call
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Ladies and gentlemen, thank you for standing by the conference will begin shortly.
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Ladies and gentlemen, thank you for standing by and welcome to the last second quarter 2023 results Conference call. All participants are present in listen only mode. Following management's formal presentation instructions will be given for the question and answer session.
For operator assistance during the conference. Please press Star Zero as a reminder, this conference is being recorded August eight 2023.
Now you should have all received the Companys press release, if you have not received it. Please contact me lots of Investor Relations team at 8-K Global Industrial relations at 1646688355 night or viewed in the news section of the company's website Www <unk>.
Dot Com I would now like to hand over the call to Mr. Ehud Helft of Ek Global Investor Relations. Mr. House would you like to begin. Please. Thank you operator, good morning, and good afternoon, everyone. Thank you for joining us today for <unk> second quarter 2023 results conference call and webcast.
And according of this call will be available beginning at approximately noon eastern time today August eight.
Got it.
Sorry to appear this Saturday.
Also please note that they can just to read the forward looking statements.
Anybody says with a reminder that statements made on this earnings that are not historical maybe deemed forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
All such forward looking statements, including statements regarding future financial operating results.
Risks uncertainties and contingencies, many of which are beyond our control and which may cause actual results differ materially from anticipated results.
<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 expressly expressly disclaims any obligation to do so.
More detailed information about risk factors can be found in <unk> reports filed with the Securities and Exchange Commission.
With that said, let me turn to introduction on the call today.
So do you see.
And we say Gee, you're still keeping your I mean <unk> CFO .
Now I'd like to turn over the course of identified yeah, Gee, we're ready to begin.
Thank you everyone.
Thank you everyone.
I want to thank you for joining us today for our second quarter of 2023 earnings call.
The second quarter of 2023 was another strong quarter in which we showed strong year over year revenue growth our growth was broad across multiple business areas and totaled 22% above the same quarter last year.
I think so that with significantly improved stability.
We more than tripled our GAAP operating income year over year and it has an adjusted EBITDA of $9 $2 million, which is 74% higher than the adjusted EBITDA of the second quarter of last year.
And as you can imagine I'm very pleased with the results for the second quarter and the first half of 2023.
We are increasing our revenue and profitability expectations for the full year 2023, we expect revenues of between $265 million to $285 million.
GAAP operating income of between $18 million to $22 million.
And adjusted EBITDA of between $33 million to $37 million.
2023 continues to demonstrate the strong and profitable year in Formula one.
I will now focus on our business achievements and open to opportunities in the quarter.
The massive industry activity in the new satellite communications continues to fuel <unk> growth engines, which have evolved at all very high throughput satellites and non geostationary satellite constellations.
Back in the last several quarters also this quarter we received.
So that was a holdover from our strategic partners the satellite operators.
That's all expenditures and delivery of Sky's fault and Aquarius visa.
Taking place globally in support of multiple applications, such as in flight connectivity soon or backhaul and enterprise.
You know anticipate product line I am pleased to report on continuous successful engagement in a major project with significant potential for large engines. So constellation we are on track and moving to production in the second quarter of this year.
I'm excited to report the important growth engine will be in flight connectivity, we are making significant progress with two important new strategic partnership.
As recently announced we signed an agreement with a new strategic partner Satcom direct to develop their supply of new low profile electronically steered antennas to operate over one with Leo constellations.
Sure.
<unk> is a leading provider of a fully integrated end to end global satellite communication solutions.
Lucius are in use today at over 7000 aircraft.
They are dedicated to delivering satcom connectivity to business and government aviation worldwide during.
During the quarter, we received the first orders valued the tens of millions of dollars.
As additional potential of several tens of millions of dollars over the next few years.
The development of an ultra low profile. He used to tell me that would enable you to increase your claims by entering new market segments, such as IFC for business Jets as well as connectivity for government and military aviation.
This project is an important turning point and an important future growth engine as we enter the new promising and going through some market.
Second we are extending the IFC business with another strategic partnership they're saving this quarter or the first multimillion dollar orders from tier one aerospace system integrator. We were support next generation IFC equipment do reinforce our industry, leading position as a premier supplier of SSP as well the IFC marketplace.
Following the signature of the agreement to acquire data bus Inc. At the end of the previous quarter. We are progressing in obtaining the necessary regulatory approvals together with data we submitted the required notices with fish and other U S agencies, and we already received and ask just kind of a set of questions.
Conditional upon the positive with respect to the conclusion, we anticipated the closing of the transaction will occur during Q4.
During the second quarter, we booked multi millions of dollars of orders in defence market. This includes in addition, although the overall antenna demonstrating confidence in our strategic partnership with a leading U Z customer. Furthermore, we received initial orders.
Before our skies for Aquarius modems from two leading defense system integrators in the U S.
These are the first step in establishing a significant channel for like generation module based on the U S government event.
So it all back on another strategic Los Angeles, We continued expanding our global presence will meet with multi millions of dollars. All this I'm pleased to say that the sky for a next generation platform.
Continuously chosen by the satellite operators to provide sooner because services. This is in addition to receiving orders from new and existing mobile network operators.
Expanding the network based on Sky to see our current leading soon a virtual platform over satellite.
An important example is in Mexico.
Was awarded millions of dollars to connect hundreds of 40 sites in the CSP telecommunication and Haynesville extra oil initiative led by the <unk>.
Mexican Federal agency.
We deal with this within this framework global satellite operators are walking with good luck to provide the best available solution.
Good luck, leading technology and local places us I think.
Momentum in our dressing, especially deployment requirements of the federal agency.
We made progress this quarter in the Amazonas regions. When we concluded the construction of about 75% of the access network nodes, we are moving towards finishing the construction of the networks. This year in line with the recent extension that we received from point of sale for the implementation of these sports.
In the eastern region, we passed acceptance and move to the operational phase.
This is the fifth region in operation out of six order to Gila.
I'll conclude we had a strong quarter in which we showed strong revenue growth and significantly improved profitability demonstrating the leverage in our business model. In addition, we had a strong bookings we saw some very important strategic deals, especially with our IFC business, which is one of our key growth areas.
There is a significant achievement not only important achievements for this quarter, but are you stepping stone for further expansion in the existing lives exciting IFC market as we embark on future growth engine and.
And enter into the new plummeting eastern market.
Thinking about our ability to continue our growth and improve profitability path in the coming quarters as reflected in our increased revenues and profitability guidance and with that I hand over to Gil Binyam Anyhow CFO Gil please thank.
Thank you.
Good morning, and good afternoon to everyone.
I would like to remind everyone that our financial results are presented both GAAP and non-GAAP basis, we regularly use supplemental non-GAAP financial measures internally to understand manage and evaluate our business and to make operating decisions.
These non-GAAP financial measures provide consistent and comparable measures to help investors understand our current and future operating performance.
non-GAAP financial measures, mainly exclude the effect of stock based compensation amortization of purchased intangible lease incentive amortization litigation income or expenses.
Income related to trade secret claims restructuring and reorganization cost merger acquisition and related litigation income or expenses impairment of held for sale assets.
Other expenses income tax effect on adjustments one time changes.
For tax assets, and one time tax expense related to the release of historical contract construct earnings.
The reconciliation table in our press release highlights this data and our non-GAAP information presented exclude these items.
I'll now move to our financial highlights for the second quarter of 2023.
Overall as I mentioned earlier, we are very pleased with our strong second quarter of 2020.
We reported 22% year over year growth in revenue and.
The improvement in profitability non-GAAP gross margin was 38% and our adjusted EBITDA reached $9 $2 million higher by 74% compared to Q2 last year.
Given the strong performance in H 123, and the robust pipeline. We see ahead of US we decided to increase our revenue targets for the year as well as our GAAP operating profit and adjusted EBITDA guidance, which I will cover later.
In terms of our financial results.
Revenues for the second quarter was $67 6 million, 22% higher than those of the second quarter of last year. The improvement was driven by growth in the satellite network segments, mainly from the <unk> side connectivity solar backhaul and enterprise vertical in terms of revenue breakdown by <unk>.
Segments Q2, 23 revenues of the satellite network segment were $47 million compared to $26 9 million dogs in the same quarter last year. The significant increase mainly resulted from large deals delivered this quarter to our strategic customers in the in flight connectivity market as well.
A high volume with our enterprise cellular backhaul customer base.
Q2, 'twenty three revenues of the integrated solutions segment were $12 7 million compared to $15 $7 million in the same quarter last year.
Q2, 'twenty three revenues of the network infrastructure and services segment were $14 2 million compared to $12 9 million dogs in the same quarter last year.
I would now like to summarize our second quarter, both GAAP and non-GAAP results. Our GAAP gross margin in Q2, 'twenty three improved to 37, 8% compared to 35, 6% in the same quarter last year.
The improvement in our gross margin was mainly due to a particularly favorable product and services revenue mix recognized this quarter.
Yeah Yeah.
The high level of revenue.
Be aware that the revenue margins and profitability may fluctuate between quarters as an outcome of the actual revenues volume and fuel mix.
GAAP operating expenses in Q2, 23 were $21 million in the quarter or 30% of revenue compared with $18 3 million or 43% of revenue in the same quarter last year.
GAAP operating income for the quarter improved to $5 $5 million compared to $1 $5 million in the same quarter last year.
GAAP net income in the second quarter was $4 3 million or diluted earning per share of eight cents. This is compared to a GAAP net income of zero point $5 million or diluted earning per shelf once than in the same quarter last year.
Moving to the non-GAAP results, our non-GAAP gross margin in Q2, 'twenty three improved to 37, 9% compared to 35, 6% in the same quarter last year.
non-GAAP operating expenses in Q2, 23 were $19 6 million compared with $17 $4 million seem to same quarter last year.
And non-GAAP operating income for the quarter improved to $6 1 million compared to $2 4 million in the same quarter last year.
non-GAAP net income in the second quarter was $4 9 million or diluted earnings per share of nine cents. This is compared with a non-GAAP net income of $1 4 million or diluted earning per share was <unk> in the same quarter last year.
Adjusted EBITDA for the quarter was $9 2 million, an improvement of 74% compared with an adjusted EBITDA of $5 3 million in the same quarter last year.
Moving to our balance sheet.
June 32023, our total cash and cash equivalents, including restricted cash were 87 $8 million compared with $89 $7 million on March 31st 2023, and compared to $71 5 million as of June 30, 'twenty two.
We do not hold any debt.
The decline in cash compared to the previous quarter was due to a voluntary payment of $10 3 million for the release of historical tax dropped earnings, which completed a talk that one time payment of approximately.
$12 $5 million for that purpose.
The company chose to take advantage of the temporary Israeli tax relief that expired in November 22, and two <unk> significantly reduced stock start to allow in the futures certain actions such as distribution of dividends share buyback or acquisition of foreign companies without paying an additional.
Corporate tax in terms of cash flow, we generated $2 million from operating activities. During the second quarter of 'twenty three excluding dimension $10 3 million onetime tax payment, we generated about $12 3 million.
Millions of dollars from operating activities this quarter.
Dsos, which exclude receivable and revenues of our terrestrial network construction projects in Peru, with 63 days lower than previous quarters, due so which were 77 days.
The decrease was impacted by an increase in revenue alongside with decrease in receivables due to a higher collection in the quarter.
Shareholders' equity as of June 30, 'twenty, three totaled about $265 million compared with $350 million.
End of March 23.
Looking ahead as I already mentioned, we've increased our revenue guidance for GAAP operating income and EBITDA guidance for the year, our expectations are even stronger than previously anticipated and show a strong 23 with revenue of between $265 million to $285 million representing.
A year over year growth of 50, 15% at the midpoint GAAP operating income of between $18 million to $22 million.
Representing year over year growth of 101% at the midpoint and an adjustment EBITDA of between $33 million to $37 million representing year over year growth of 39% at the midpoint.
That concludes my financial review.
Now like to open the call and we'll be happy to take your questions operator. Please.
Thank you.
Ladies and gentlemen at this time, we will begin the question and answer session. Do you have a question. Please press star one if you wish to cancel your request. Please press star two.
We're using speaker equipment.
Handset before pressing the numbers.
<unk> will be pulled in the order. They are received please standby while we poll for your questions.
The first question is from.
Ryan Koontz of Needham and company. Please go ahead.
Okay.
Hi, Congrats on the nice quarter, it's nice to be on the call.
I want to ask about the strength in the satellite networks segments, obviously really great results there.
And thanks for the color on the prepared remarks, it sounds like IFC was a big contributor there, but can you help us understand maybe what's going on inside that IFC segment. There is.
Is this primarily driven by.
The assays or the amplifier business.
And what sort of customers are driving that.
The strength here in the second quarter.
Hi, Ryan.
D a.
Strengthen the IFC is mainly related to the baseband and modems that goes to the commercial aviation.
You say agreements Ah.
It's a very strategic and important agreement, but it's a I would say future gross and generally require.
Give or take a year and a half 18 milestone development and certification so I want to expect.
Significant revenues before 2025.
We also have a decent revenue saw nice SBA. This is mainly.
It goes to our companies like Honeywell.
<unk>.
But this quarter it was mainly a debate than equipment.
Got it and as far as your comments, that's really helpful. Thank you and as far as your commentary around.
Kind of moving down into the smaller a smaller plane market is that again is that a near term driver. That's driving this years results for us or is that also more of an opportunity for the future I guess, that's your small form factor yesterday, it sounds like maybe that's a 2025 opportunity.
It's mainly the 'twenty to 'twenty five Oh, no revenue opportunities there is already a fruitful as you know we know that.
We just need to develop and then start to deliver it.
25 revenue.
Dream.
But you know this is the first step into the into the business jet.
We have other solutions that we expect to see some cell.
But it will take time.
That's great I'm sure that's a market that's lightly penetrated with high performance system, So sounds like a great opportunity.
I guess on the NFL.
Is there potential of more than 15000.
<unk> thousand aircraft and.
For broadband connectivity on the business Jets, and I'd say from our perspective, it's a it's a huge opportunity.
<unk> has a more than 7000 aircraft are connected not only to broadband, but theyre in general So I think the opportunity. We started on the directive is very high and also the overall market opportunities. These are really big.
That's great. Thanks for that and sounds like backhaul is also pretty strong in the quarter and you had some some new agreements signed some new orders coming in.
Is this primarily a consistent business that you're selling there with with sky edge, that's driving that that drove that strength.
Correct. So little basketball is there is a important growth engine for us.
We are a partner of choice for both N S C into southern Idaho loud satellite operators that are using our equipment.
Also on Skype to see and soon also over the skies for.
And we are working with the largest ER everybody knows worldwide.
Today, we have about 40% market share on the overall market and if you exclude gucci and switch and focus on the full G and a dollar we have more than 75% market share.
Great.
And specifically going back to your comment just circling back on the last the previous topic around the IFC and what you can always satcom. There can you remind us where one lab is in there and we're in the rollout of our lives today.
I think one is starting to provide global service.
Hmm.
On the I S. T J I noticed Saturday should provide rather provide the capacity and some zalviso to service providers.
No that says it all day.
Service providers booked capacity from one web.
Dot com directly engage with them in fill sites.
Yeah, he's engaged with them and also H N S. He's engaged with them. So it seems like that their.
There I have say a capacity sale is there is going to increase in the next few.
A few quarters.
That's great to hear and and lastly, just on the on the gross margin.
Great progress year over year, and a step down sequentially can.
Can you remind us maybe some of the product mix, that's driving the gross margin change there spoke year over year end and sequentially yes.
Yeah.
First hi, Ryan.
Yeah, you you have to remember that our gross margin fluctuate according to the product mix and volume.
Naturally our IFC related there.
Products have a higher ASP and.
Gross margin and then we have the cellular backhaul.
A downer in the list, we have the enterprise related product.
And you know, we almost don't sell any any consumer related products out and they have a lower a.
Gross margins are associated with them. If you look at the gross margin trends over time, you can see you can see an overall increase in the last few years in the gross margin of the company on top of that we have that the route business we are shifting.
From construction to.
To operation and the operation revenues are associated with higher gross margins than the construction that Oh, where we're expecting to and sometime in the next few quarters.
Right.
The skies for the next generation platform is more of a software based in Hangzhou based and we expect that it will drive our margins there.
And the next day in the next few quarters once we will see more and more deployment of Sky spoke so we provide the initial hardware and later on most of the operator expansions will be it will be done by a software only without the need of additional.
They're expensive.
Got it.
Really helpful. Thanks, Thanks, a J, thanks, Gil and nice quarter.
Thank you Ryan is Houston.
The next question is from Chris Quilty of Quilty analytics. Please go ahead.
Okay.
Hey, just.
Just to follow up on that question can.
Can you remind me is indeed that.
Going forward with the PUC or the before.
Yes.
And is that a when they acquire the global they got the largest.
Global network of Sky D to C.
And <unk> 48, they are quiet in our skies for.
In addition, we are providing them a taurus modem that can reach two 400 megabit per second that can sell both platforms. So it are backwards compatible with Sky's toothpaste.
And they can move it between the system. So from their perspective, it's a water management system in one module that can shift between between the systems, we hope to the skies for will be active there very soon.
Oh North America.
Gotcha.
For software defined satellites on water do you feel good about your position on there or are they still making a decision about what they're doing with the new satellites.
I feel confident quality density in our relationship with Intelsat.
As today, we are.
Probably the largest that's all of the ordinary.
The largest together with SP engineering that we have the two largest networks.
S. These mainly the flex solution and Austin solar backhaul and enterprise.
I feel comfortable that are in the next satellites do a deal that is oh.
Very strong candidates you know nothing is guaranteed but I feel very confident and.
Comfortable with our relationship and the solutions that we are providing for them to start the.
The fact that they have a solution.
Brilinta globally.
It's a.
In a way show a high stickiness to intercept.
And are you at this point with all the baseband equipment deployed and you're simply doing a per aircraft deployment or is there still more.
Please turn to the wall.
So.
Almost every quarter.
All baseband to all every time, they buy more capacity at Newport news that they like new gateways they need to increase.
Baseband every time, you know as the airlines that offer.
Free Wifi and they need to acquire more land capacity I need to increase the ground equipment in parallel.
<unk> Valley in Rolling our outdoors.
Amazon and placing our company Cornell modems.
For 200 megabit per second to 400 Megabits per second.
And you know as.
We expect that every few years, there will be a new rollout of the modems.
Great.
And where are you in that process I mean I think.
Do you see you around for a while but in terms of.
New orders in existing sales.
Yeah that certainly I think the sky edge for has only been on the market for about a year year and a half I mean.
Still kind of like at.
90%, 10%, whereas the old versus new or you're seeing a much quicker shift.
I know the shift is not that fast.
And a lot of satellite operators are shifting to sky's full although in some cases continue to buy our skies to see but we see a lot of interest in the market and they look.
The original the satellites that are going to be launching we are talking with the satellite operators and all the carries about the skies for sky to seize it and kicking in you know we have a continue.
We continue to develop the features and provide service so it will take a.
He hasn't sky to see will win.
It will disappear.
I remind you that empower is based on Sky is full.
And this is a new rollout, we expect them to start up.
Providing saturday stores.
During Q4.
So we are seeing a very large deployment of sky fall, but still the majority of the business today is a sky to see.
Usually it takes three to four years.
Two shifts between the new platform.
From the old platform to the new ones.
Great.
And if he hasn't come out publicly said there they're still planning deployment for the year.
Launch of the empowered by the end of the year, but given the problems.
We're happy with the first four satellites.
Have you guys sort of backed off some.
<unk>.
In this industry.
Don't tend to get resolved as quickly as <unk> companies would like.
Hum.
We are currently.
We have links those gateways to deploy together, yes, yes, so it doesn't.
At $50.
I'm Blessed.
Alwyn.
Making forward to us we talk to a lot of the upsides and downsides. So.
You know at the end at this point everything is faster.
<unk> guidelines.
Okay.
Uh huh.
Gil question for you and you May just say like it's the normal ups and downs in the quarter, but there was a lot of moving pieces on the balance sheet.
A little bit unusual.
Can you just kind of looking through the contract asset there continues to be down the trade payables were down significantly sequentially.
You got a nice bump up in advance from customers or other current liabilities were cut in half.
Thank you.
A simple explanation.
So what are the normal.
Earnings in the quarter.
So the one thing the one thing that we had this quarter, which was a bit.
I would say unique was the payment of a of attacks that I mentioned, the $10.3 million the that completed the $12 million the tax payment for four trapped profits and vis a vis effector Dara.
The other short term.
Liabilities I would say that all other changes are in the normal course.
Or is this a course of business we had a very very strong collection. This.
This quarter and this affected our var and DSO.
In a positive way and and other than that of the thing is the is in the normal course.
That's right.
And maybe just continuing that thought in terms of working capital trend through the balance of the year and the impact on cash flow.
Do you expect any kind of a significant draw down or buildup of working capital for contracts and customer rollouts or relatively.
Unchanged from current levels and I think that are you know in general you know looking at the results. This year you can see a quite a good correlation between.
The EBITDA an M b, a and the cash flows from from operating activities.
Sometimes in Peru, we have milestones of of payments, which are not a 100% correlated to revenues which are.
Recognized according to percentage of completion, so there might be some bumps.
Either way, but.
Other than that it should be pretty much correlated.
Okay.
Great.
Uh huh.
I've got that right.
I think you did say in the announcement around the D E and satcom direct relationship with that initial antenna ku or I mean are.
Are there plans for bold flavors. This specific flavor is a ku for weinreb.
We also have a.
The demo units of our <unk> solution and our for the future. We can also any flavor that the customer wants.
As a reminder.
Said several times in the past there is so much you can.
Well go through the day.
<unk>.
Isc's antenna without a customer because it's.
It really depends if it commands shallow or business jets if it's.
What is the best you want what is the base that you already had.
The existing installed base, so you need the customer in order to payload a solution.
Okay that was it.
Dumb question, because you did say one web so it won't kick in.
The form factor.
You said you guys were developing more of a commercial aviation.
You know aperture.
Uh huh.
How much of that residual development is just being parlay.
This weekend in Sydney, the smaller form factor for regional Jets.
It's a significantly smaller form factor than the commercial aviation and the know how and the experience that we have fully is will help us to accelerate the development and we have a very tight very tight schedule and everyone wants to determine that yesterday.
Gotcha.
<unk> four and handles all the S. T E school to different aircraft types that you are satcom direct as you start going direct we provide them the antennas and they are responsible for all the relevant certifications.
Great.
<unk>.
Final question. This one is.
Correct.
We're hoping to get data path down in Q3, and it looks like it's slipping a little bit are there any major issues, you're seeing there or just normal.
Questions and answers coming back from the government.
I think it's a normal <unk>.
And question is it took us some time to file all the relevant documents to see excuse because we have to gather a lot of information from shareholders.
All the more than 5% and it's not an easy exercise for private investors.
To provide such information about themselves and are there.
Given the rectal so it took us a bit more time than initially expected and because we are a public company. We couldnt start the process before we announce that.
Once we submitted.
The fives.
And timely a response from the Houston either.
Agencies and are well.
We are seeing almost.
The method of 48 hours. So it seems like to progress as expected and we wanted to close as soon as we can.
Great.
Final question and integrated networks I think you said in your script.
Do you expect to see meaningful.
Good memory.
Q3 for your customer.
Customer to start shipping in power amplifiers is that correct.
Can we get them sorted out as well I guess, it's reflected in the guidance, but we'll do it.
Intuitive, where we expect.
Innovate networks, maybe not for this year, but as we look out to next year that starts to scale.
Yeah, I think it will start to scan mainly towards the second half over the next deal we are moving to production. So up until now we deliver some units, but it's mainly I would call. It tends to me the only thing not a N S. Halloween.
Production unit, so we are moving to production.
And Oh.
Well, I mean scaling depending on their customer deployment.
And I would expect it to be taken off of our next deal.
With much larger.
Deliveries over 2025 onwards.
Yes.
Right.
I think I forgot to say great great quarter.
Chris Thank you Chris.
Yeah.
The next question is from Gunther Karger of Discovery Group. Please go ahead.
Yeah. So thank you for taking a call on a couple of questions on our comment a question I wanted to ask.
We're gonna, Nevada banks, a past acquisition.
Any comment on how you how this is gonna be paid for.
Gosh all combinations.
That's a bus acquisition is.
Is it mainly and stuff we are taking on upon ourselves about $15 million of our debt to banks and shareholders.
And we are paying upon closing about $3 million in Gila shares and then there is a I don't know if its mechanism of up to an additional $27 million.
That will be paid mostly with Gila shelves.
<unk>.
There are no 20% can be paid in cash it depends on the some tax.
The requirements of our data both shareholders in India.
In the U S, but I would say that it's mainly going to paid with Gila shows.
I think your second question any comment on the defense and military sector.
Yes. This is a very it's becoming more and more strategic we are waiting for the closing of the acquisition, but we have amazing progress. We have several very large rfps that we are bidding and we expect to get awards during the year.
We increased our business with one of the UAV, our strategic partners and what are the additional units and we have.
They have an agreement with <unk> to.
To our U S local integrators.
All of those are glorious small desk.
To start integration and this is one of our channels into the into the V O D.
<unk>.
We had a decent quarter of state what the numbers are relatively low and we expect that once the acquisition will.
We'll close will increase significantly all of that and DFAST presence.
Thank you and my comment S up.
With all of the Kellogg's, Pennsylvania, So I'm around 11 song and I've got to tell you.
You should be congratulated on.
Growing the company and leading into the right direction and thank you very much.
Okay. Thank you for the compliment vantiv and looking to talk to you soon.
Thank you.
If there are 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.
There are no further questions at this time, Mr. Binyam any when you like to make your concluding statement.
Yes. 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.
Thank you. This concludes the allot second quarter 2023 results conference call. Thank you for participation you May go ahead and disconnect.
Yeah.
[noise].