Q3 2024 Gilat Satellite Networks Ltd Earnings Call
Speaker Change: Ladies and gentlemen, thank you for standing by. The conference will begin shortly.
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E.R.
Speaker Change: Ladies and gentlemen, thank you for standing by. Welcome to GILOT's third quarter 2024 results conference call.
Speaker Change: All participants are present in listen-only mode. Following management's formal presentation, instructions will be given for the question-and-answer session. For operator assistance during the conference, please press star zero. As a reminder, this conference is being recorded November 13, 2024.
Speaker Change: By now, you should have all received the company's press release. If you have not received it, please contact the Elots Investor Relations Team at ek... at... please...
Speaker Change: or view it in the news section of the company's website, www.geelot.com. I would now like to hand over the call to Ms. Mayraab Sher, Head of Finance and IR. Ms. Sher, would you like to begin, please?
Speaker Change: Yes, thank you operator. Good morning and good afternoon everyone. Thank you for joining us today for Gilad's third quarter 2024 results conference call and webcast. I am Rav Sher, Gilad's Head of Finance and Investor Relations.
Speaker Change: Also, a recording of this call will be available beginning at approximately noon Eastern Time today, November 13, and a webcast on Gilad's website for a period of 30 days.
Speaker Change: Also, please note that statements made on this Earnings Call that are not historical facts may be deemed forward-looking statements within the meaning of the Private Security Litigation Reform Act of 1995.
Speaker Change: 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 GILAD, and which may cause actual results to differ materially from anticipated results.
Speaker Change: Giv'at is under no obligation to update or alter these forward-looking statements, whether as a result of new information, future events, or other ones.
Speaker Change: and the company explicitly disclaim any obligation to do so. More detailed information about risk factors can be found in Gilad's report filed with the Security and Exchange Commission.
Speaker Change: Also, on today's call, management will refer you to non-GAAP measures.
Speaker Change: The company believes these non-gap measures assist management and investors in comparing the company's performance across reporting periods on a consistent basis by excluding these non-cash, non-recurring, or other charges that it does not believe are indicative of its core operating performance.
Speaker Change: The reconciliation of GAAP results to non-GAAP measures can be found in the third quarter of fiscal year 2024 earnings press release that the company issued and furnished to the SEC earlier today on Form 6K.
Speaker Change: With that, let me turn to introductions. On the call today are Mr. Adi Sfadia, GILAD CEO, and Mr. Gideon Benyamini, GILAD CFO. I would now like to turn the call over to Adi Sfadia. Adi, go ahead please.
Adi Sfadia: Thank you, Mirav, and good day to everyone. Thank you for joining us today for our third quarter of 2024 Eranin Call.
Adi Sfadia: The third quarter of 2024 was another good quarter for GILAD, in which we continued to build year-over-year revenue growth. This growth was primarily due to our acquisition of DataPath and continued momentum in our defense and in-flight connectivity business.
Adi Sfadia: We expect to sustain this momentum in the future. In addition, we continue to drive profitability improvement. Our adjusted EBITDA increased in the third quarter by 13% year-over-year, reaching $10.7 million.
Adi Sfadia: As of the 2024 outlook, we have narrowed our revenue guidance range, expecting revenue to range between $305 million and $315 million, representing year-over-year growth of 17 percent at the midpoint.
Adi Sfadia: The main effect on revenue guidance is the company's decision to terminate its activity in Russia due to the limitations and constraints that are imposed with regard to operations.
Adi Sfadia: We raised and narrowed the range of our 2024 GAAP Operating Income Guidance to between $24 and $26 million, mainly due to approximately $10 million in proceeds from arbitration in Peru.
Adi Sfadia: We also have narrowed the range of our 2024 Adjusted EBITDA guidance, expecting Adjusted EBITDA to range between $41 and $43 million, representing yield growth of 15% at the midpoint.
Adi Sfadia: Now let's move to the business review of the sales quarter of 2024. I will start with the review of our defense business.
Adi Sfadia: The defense sector is a strategic pillar for Gilad, and our increased focus on this market is bearing fruit.
Adi Sfadia: We see a growing demand for defense outcome solutions in the market, driven by the proliferation of NGSO and macro-political events.
Adi Sfadia: Gilad is well positioned to leverage its innovative ground segment products and solutions to answer this growing need.
Adi Sfadia: During the quarter, we signed several contracts with the U.S. Department of Defense worth over $5 million for core terminals and related services, technology insertion, and upgrades to SATCOM systems.
Adi Sfadia: In addition, we were awarded approximately $4 million by the U.S. Department of Defense for GILAD Data Pass Ticket 3421 Terminus.
Adi Sfadia: These portable SATCOM hubs provide the flexibility, capacity, connectivity, and control needed to ensure mission success anywhere in the world. We also received an award of approximately $3 million from the U.S. DOD for Gilad Datapath technical and field services.
Adi Sfadia: GILAD datapath is deploying technical and field services in Europe, the Middle East and the United States to support the U.S. defense end-users' critical connectivity requirements.
Adi Sfadia: Another award of more than $2 million was for Gilad WaveStream by a leading defense integrator for our ex-KU and KA band block-up converters for communications on the move systems, along with tests, repairs, upgrades, and engineering services.
Adi Sfadia: Gilad's cutting-edge satellite communication technologies and comprehensive services enhance mission-critical connectivity and operational capabilities for defense applications.
Adi Sfadia: A key application is the ability for fast deployment anywhere in the world.
Adi Sfadia: This demonstrates the strategic value of our communication on-the-post and communication on-the-move defense product portfolio, which includes a range of transportable hubs, portable terminals, SFPAs, upgrades, and field services.
Adi Sfadia: As we continue to leverage cross-sell synergies between Gilad DataPult and our worldwide sales organization,
Adi Sfadia: We are opening the door to new opportunities and developing a pipeline of potential contracts. We believe we are well positioned to win our fair share on these opportunities in the coming months.
Adi Sfadia: We continue to execute well in the IFC market, another strategic pillar for GILAD, demonstrating solid euro billion growth, developing more products, adding more customers, and supporting more verticals.
Adi Sfadia: During the third quarter, we received an order for over $12 million from the leading satellite operators to extend their global SATCOM network, utilizing Gilad's SkyEdge family of vSAT platforms. This extension will be used primarily to support their ISP offerings.
Speaker Change: The growing demand for free Wi-Fi is creating attractive growth potential for Milan. We are well positioned to increase our market share, leveraging our presence in Jio and NGSO global networks.
Speaker Change: and our wide portfolio including basement, modems, ISA terminals, SSPAs and additional auxiliary products.
Speaker Change: To strengthen our position in the IFP market, we signed a definite agreement last June to acquire Stellar Blue Solutions, a leader and first to market in delivering electronically steered antennas for the in-flight connectivity market.
Speaker Change: The closing of the acquisition is taking longer than we had anticipated.
and we now expect to complete the transaction.
by the end of the year.
Pending Government Approval
Speaker Change: A part of our strategic activity in VHDS and NGSO constellation markets, we are making good progress with two very large initiatives.
Speaker Change: The first involves the transformation of SkyEdge4 to the cloud, and the second is developing ground segment systems for a next-generation LEO constellation.
Speaker Change: Gilak is offering a full set of capabilities for communication systems and integration services in order to expand our scope of services.
Speaker Change: Recently, we announced that the company secured approximately $15 million in orders from several major satellite operators.
Speaker Change: for Advanced Satellite Communications Solutions for GEO, MEO, and LEO Constellations.
Speaker Change: I would like to point out that GILAD is extremely well positioned to leverage the growing demand for NGSO and NEO constellations across several key product lines.
Speaker Change: Our multi-orbit ISA antennas, as well as our ISA antenna for LEO only, SSPAs for LEO gateways, and our range of multi-orbit networking solutions that fit a variety of market applications.
Speaker Change: The recent award of the highest square contract by the EU to the spaceflight consortium which includes Eurosat-1 with SCS and ISPASat is a positive development that carries significant opportunities and potential for E-light.
Speaker Change: Also, during Q3, we secured a $4 million contract to provide rural connectivity including banking transactions in Latin America for a period of three years.
Speaker Change: Gilad is providing critical connectivity for people living in remote areas who rely on the bank for payment services as well as support services for senior citizens, families and other underserved populations.
Speaker Change: In Peru, we are progressing faster than planned in implementing the Amazonas region's expansion project. The implementation phase is now completed and the expansion project is under supervision.
Speaker Change: The operational phase in the six-region project of PRONATEL in the Amazonas region is now expected to begin towards the end of the year after some delays in the supervision process.
Speaker Change: Looking ahead in Peru, we have a strong pipeline, including a number of opportunities on the horizon, including the maturity of several large RFPs with PUNATEL and the Peruvian government, as well as several project extensions and extensions.
Speaker Change: During the quarter, we collected an additional approximately $4 million payment from the arbitration we won against Parantel and the Peruvian Ministry of Communications from cases awarded in 2018 and 2020, totaling approximately $29 million.
Speaker Change: To conclude, the Third Quarter has been a good progress in our key growth engines, defense and IFC. We have a strong pipeline.
Speaker Change: and we expect the materialization of important deals over the coming months. We are continuing to work towards the closing of the acquisition of stellar blue solutions.
Speaker Change: and are awaiting the receipt of final regulatory approvals, documentation, and other customary closing conditions. I am pleased with our continued business with the U.S. DOD and LEO customers.
Speaker Change: We are progressing with two important opportunities, transferring the SkyEdge4 platform to the cloud and creating a next-generation ground segment for Lyon. With that, I will hand over to Gil Benyamini, MCFO. Gil, please.
Gil Benyamini: Thank you, Adi. Good morning and good afternoon to everyone. I would like to remind everyone that our financial results are presented on both GAAP and non-GAAP basis.
Gil Benyamini: I will now move to our financial highlight for the third quarter of 2024.
Gil Benyamini: Overall, as Adi mentioned earlier, we are very pleased with another quarter, which shows year-over-year growth.
Gil Benyamini: We reported 17% year-over-year growth in revenue. This was mainly driven by our recent acquisition, Datapack. Excluding Datapack, our organic revenue decreased by 10% year-over-year.
Gil Benyamini: Non-GAAP gross margin was 38% and our adjusted EBITDA reached $10.7 million, 13% growth over Q3 last year.
Gil Benyamini: Given the performance to date alongside with expected timing of Q4 deliverables and our proximity to the end of the year, we narrowed our revenue and adjusted EBITDA guidance and increased our GAAP operating income guidance which I will cover later.
in terms of our financial results in more detail.
Gil Benyamini: Revenue for the third quarter was $74.6 million, 17% higher than those of the third quarter of last year, which was $63.9 million.
Gil Benyamini: The improvement was driven by growth in the satellite network and in the integrated solution segments.
Gil Benyamini: In terms of the revenue breakdown by segment, Q3-24 revenues of the satellite network segment were $51.7 million compared to $40.7 million in the same quarter last year.
Gil Benyamini: Q3-24 revenues of the integrated solutions segment were $13 million compared to $11 million in the same quarter last year.
Gil Benyamini: and Q3-24 revenues of the network infrastructure and services segment were $9.8 million compared to $12.2 million in the same quarter last year.
Gil Benyamini: I would now like to summarize our sales quarter, both GAAP and non-GAAP results. Our GAAP gross margin for Q3-24 was 37.1% compared to 40.4% in the same quarter last year.
Gil Benyamini: The reduction in our growth margin was mainly due to data path growth margins, which are lower than GILAD's average, and the amortization of the backlog in tangible assets associated with acquisition of data paths.
Gil Benyamini: This was partially offset by favorable product and services mix in the current quarter compared to Q3 of last year.
Gil Benyamini: Gap operating expenses in Q3-24 were $20.9 million, an increase of $7.9 million versus the same quarter last year.
Gil Benyamini: This quarter we have other income, net, of approximately $1.3 million, which included $3.5 million received from arbitration in Peru.
Gil Benyamini: offset by adjustments related to M&A accounting compared to approximately $7.4 million in Q3 last year, mainly from a settlement of a legal proceeding in the Philippines.
These impacts are included only in the GAP number.
Speaker Change: I also note that the results of this quarter include operational expenses-related data path which were not included in the third quarter of last year.
Speaker Change: Gap operating income for the quarter is $6.7 million compared to $12.7 million in the same quarter last year, mainly due to the decrease in the other operating income described above.
Speaker Change: Gap net income in the third quarter was $6.8 million or $0.12 per diluted share. This is compared to a gap net income of $10.2 million or diluted earnings per share of $0.18 in the same quarter last year.
Speaker Change: Moving to the non-GAAP results, our non-GAAP growth margin in Q3-24 was 38.1% compared to 48.5% in the same quarter last year. As I mentioned earlier, the difference is mainly due to data-packed low growth margins compared to the last average.
Speaker Change: Non-GAAP operating expenses in Q3-24 were $20.2 million compared with $19.8 million in the same quarter last year.
Speaker Change: Non-GAAP operating income for the quarter improved to $8.3 million compared to $6.1 million in the same quarter last year.
Speaker Change: and OneGap net income in the third quarter was $8.1 million or diluted earning per share of 14%. This is compared with $4.6 million or diluted earning per share of $0.08 in the same quarter last year.
Speaker Change: and the adjusted EBITDA for the quarter improved to $10.7 million, an increase of 13% compared with adjusted EBITDA of $9.5 million in the same quarter last year.
Speaker Change: Moving to our balance sheet, as of September 30, 2024, our total cash and cash equivalents and restricted cash net of short-term debt were $108 million, compared with $94.6 million on June 30, 2024, and compared to $100.3 million on June 30, 2021.
as of September 30, 2023.
Speaker Change: In terms of cash flow, we generated $14.7 million by operating activities during the third quarter of 2024. Short-term credit facility increased this quarter by $2.6 million net.
Speaker Change: DSO which excludes receivables and revenues of our terrestrial network construction projects in Peru were 83 days lower than the previous quarter DSO which were of 88 days. This KPIs is within our normal range of up to 90 days.
Speaker Change: Our shareholders' equity as of September 30th, 2024 increased to $291 million compared to $283 million at the end of June 24th.
Speaker Change: looking ahead. As already mentioned, due to our proximity to year-end, we have narrowed our revenue guidance and adjusted EBITDA guidance rates for the year.
Speaker Change: given the adjustment in the acquisition related expenses of data path and
Speaker Change: Our updated expectations for 2024 revenues are between $305 million to $315 million, representing year-over-year growth of 17% at the midpoint.
Speaker Change: The main effect on the revenue guidance is the company's decision to terminate its activities in Russia due to limitations and constraints that are imposed with revised cooperation lists.
Speaker Change: We raised and narrowed the range of our 2024 GAAP operating income to between 24 and 26 million dollars, mainly due to the receipt of the 11 million dollars proceeds from the arbitration in Peru.
Speaker Change: We also narrowed our adjusted EBITDA to a range of between $41 to $43 million, representing here a very good growth of 15% at the midpoint.
Speaker Change: That concludes my financial review. I would now like to open the call and would be happy to take your questions.
Operator, please.
Speaker Change: Thank you. Ladies and gentlemen, at this time we will begin the question and answer session. If you have a question, please press star 1.
Speaker Change: to cancel your request, please press star 2. If you are 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.
Speaker Change: The first question is from Ryan Kuntz of Needham & Company. Please go ahead.
Thanks for the question and
Speaker Change: Nice to see the data path of business performing and the profitability still.
right on track.
Speaker Change: I want to ask about the organic business. I hear on the Russia poll out there, my questions are, are you completely out of Russia now, so to speak, in terms of your guide forward? And if you exclude Russia, what are you going to do?
Speaker Change: from your past or say year-to-date, you know, how is that that organic business tracking excluding Russia? And then how should we how should we think about that, you know, tracking over the next few quarters to organic business?
a range of, on average, around $10 million a year.
Speaker Change: Also, this is a give or take if you want to compare a prior year, this is a give or take what you need to include, to exclude, sorry.
Speaker Change: Perfect. And you had some interesting updates on on the Peru business there. I wonder if you can maybe simplify that. I didn't have a hard time kind of crystallizing the big picture of what's going on in Peru. Can you kind of recap for us there? It'd be helpful. Thank you.
Speaker Change: So, in Peru we build and operate several networks to the government.
Speaker Change: Earlier, or late last year, we received an expansion project of one of the regions that we got an award. So we had a construction phase during the year and we are now, recently, a few weeks ago, we started
They
acceptance process with the government
Speaker Change: In addition, we have five up and running regions that we operate.
Speaker Change: Another region should start operation any day now, hopefully by the end of the quarter. And in addition, we have other managed service business in Peru from,
Speaker Change: Social Inclusion Project to other communication and satellite business over there. Most of the business in Peru is requiring revenues. I would say that 80% of the revenues in Peru is requiring revenues.
Speaker Change: In some cases it depends on renewals, but with recurring revenues, it's highly profitable.
Speaker Change: Got it. Great. That's helpful. And then, any business update on Stellar Blue? I understand the delay in the close, but anything you can share from the company as far as their progress with some of their key business objectives?
Ba Shukla
Speaker Change: Yeah, in general, as I said, the closing takes slightly longer than we expected. We are working towards closing. We still await some regulatory approvals, mainly CSUS in the U.S., some documentation and other standard closing conditions.
Speaker Change: And as we said last quarter, we expect them to deliver revenues in the fourth quarter of between 25 to 35 million dollars, and in 2025, we expect
Speaker Change: The revenue is to be between $120 to $150 million and should be accretive to the non-GAAP results. And once they will reach their maximum or efficient...
Speaker Change: production capacity for the second half of next year. We expect to see more than 10% EBITDA ratio.
Great. Thanks so much. It's really helpful.
Speaker Change: The next question is from Louis Titalna of William Blair. Please go ahead.
Ehud Helft, Adi Sfadia
Adi and Gil, good afternoon. Hi. Hi Luis.
You discussed the positive developments in Europe with Iris Squared.
Speaker Change: Gilop positioned to be a major supplier for that constellation and how do you view the competitive environment in terms of the procurement process?
most of the vendors to come from the EU itself.
Gilad has several subsidiaries.
in the EU, the main one in Bulgaria.
Speaker Change: and another one in Madrid, in Spain. The Bulgarian facility received the approval to participate and to be a vendor for the Iris Square initiative.
We already answered several RFIs around six months ago.
Speaker Change: And now, when the EU awarded the Space Flight Consortium the project, we expect to see the RFPs soon, and of course to answer.
from
Speaker Change: Only EU vendors, I think that the ST Engineering IDIRECT, the new tech division in Belgium might be one of the competitors over there, on the basement and on the modern side.
Speaker Change: On the terminal side, there are several European companies that can compete on a mechanical and electronically steered antenna.
Great, and is there...
Any implications with IRIS?
Speaker Change: for the OneWeb Gen 2 procurement and is there any update on the timing for OneWeb Gen 2?
Boom!
Speaker Change: This is a good question. I think you need to refer it mainly to you, Tessa.
Speaker Change: OnewebGen2 is mainly a commercial constellation and IrisSquare wants to start with defense applications.
Speaker Change: Of course, if it will be a synergy, it's an even greater potential, but at the end, we look at it as two separate projects and opportunities for GILAD.
Great. Thank you very much. That's it for me.
Adi Sfadia
Speaker Change: So whether it may be connected with further manufacturing or operating cost cuts or all of the profitability improvements are in place.
Speaker Change: So it's a mix of the two. It's mainly a better or more favorable growth margin on the current mix of products.
some more profitability to compensate for the change in revenue.
Speaker Change: I would like to emphasize that efficiency and increasing profitability is our top priority.
priority, and this is something that is an ongoing
Speaker Change: process within the company. The procurement department has their own cost reduction targets and
Speaker Change: We have a lot of initiatives how to make cost reductions also on the product side and see how can we increase internal efficiencies and synergies between our locations worldwide and our different companies.
Speaker Change: Yeah, sounds great. And my second question is related to Cerro Blue. You pre-stated a guidance for Cerro Blue 2025 revenue in the range $120 to $125 million.
Speaker Change: But now we can look at the Boeing production rate and financial health, and it may impose some risk for Stellar Blue.
Speaker Change: We need some colors for this situation, if you can. Thank you.
Ehud Helft, Adi Sfadia
you know the
Speaker Change: Focus we gave to Stellar Blue is mainly based on actual backlogs that they have, including additional opportunities that we see in the future. The market is evolving rapidly and we see, on one hand,
Speaker Change: Adi Sfadia, Ehud Helft, Adi Sfadia, Adi Sfadia, Ehud Helft, Adi Sfadia, Ehud Helft, Adi Sfadia,
Drone, Demand,
Speaker Change: for electronically steered antenna both for multi-orbit LEO and GEO terminals and also for LEO-only terminals for commercial aviation, both on retrofit and line-fit opportunities. So I think that...
Speaker Change: The strategic rationale of the acquisition is still in place and we believe it will drive significant growth in the ISP, both top line and bottom line.
Speaker Change: Great news. And my final question. In August, Gilad stated that now Aquarius supports SDPC mode. How can it boost sales of that modem and how can it affect the company revenue?
Speaker Change: In our guidance, we already accounted for the new product portfolio.
Speaker Change: SDPC mode is another solution that we offer to some of our customers that need this kind of technology, work mode, usually you use it for...
Speaker Change: large trunking and for defense application. And since defense is one of our main focus markets, we believe that there is a great potential for the product. But in general, it's already part of our guidance to the market.
Yeah, that's all. Thank you all for the answers.
Thank you.
Speaker Change: The next question is from Chris Quilty of Quilty Analytics. Please go ahead.
Oh!
Speaker Change: Thanks guys, congrats. I never thought, or I thought Iris Squared was a goner, but they got it over the line. But the timeline on that program, I mean, we're looking at...
Speaker Change: you know, satellite builds that are a couple years out in the service that's, you know,
eventually in the next year or two.
with that program.
[inaudible]
Bye.
Speaker Change: I think you are right, I think it's at least three to four years development project before they launch the service and I think for all the participants it will be mainly NRE revenues and probably towards the fourth year we'll see some product revenues as well.
Speaker Change: I think that based on prior discussions from several months ago, the EU would like to launch
Ehud Helft, Adi Sfadia
from Irish Square, Italy.
Speaker Change: You know, product revenues I would expect only the fourth year after getting an award.
Speaker Change: Gotcha. And, you know, as you mentioned, I mean, there's going to be some NRE involved in there, not to say, you know, you can use Iris Square to subsidize, but, you know, would there be a dovetailing of...
Speaker Change: you know, your efforts that you're doing in virtualization, which I do want to talk about, is your assumption that that's the direction, you know, Iris squared is going to push for the ground network and hence those two development efforts will happen in parallel?
Speaker Change: Based on the info that we have now, I think it's...
[inaudible]
Speaker Change: Each company has its own vision on the constellation and the EU regulator has its own vision on Iris Square, so I don't see it combined for the long term, at least not based on the information that we have today.
Speaker Change: I understand and you know back to that question I think you use the term cloud-based but you know is that the same as using virtualization you know when we talk about the future SkyEdge 4 roadmap?
In general, yes, we would like to...
This is the main effort.
In addition, there are some initiatives.
Speaker Change: I understand. I know there's some government, some U.S. DOD programs in that area. Is that, you know, with, you know, the data path acquisition, is that something where, you know, you can use that as a mechanism for, you know, looking for some of those government projects?
Yeah, we are exploring that.
in several fronts, both from DataPath and also from
from WaveStream. We see increased interest in the GILADS solution.
to keel. Thank you.
Speaker Change: and business units, and I think that in 2025 we'll see significant progress on that.
Ehud Helft, Adi Sfadia
any discernible trend.
and Adi Sfadia.
Adi Sfadia: What we see today in the market is mainly projects shifting to the right. No new big initiatives over there. We do see some...
Adi Sfadia: extensions, here and there, technology refresh, but nothing big right now in this sub-segment.
Speaker Change: Great. And final question, I know SES did report the other day, so they kind of spoke about the Empower program, but just...
Speaker Change: you know, that's obviously one that you've been working on for a long time and it's transitioning into the
Ehud Helft, Adi Sfadia
Speaker Change: In general, I think we are in a good place. We are supporting SES with their service launch. A lot of work of the two R&D groups.
Speaker Change: for quite some time. STS deployed our equipment in all of their gateways and we see some expansions.
And...
Speaker Change: Of course once they will get additional satellites and they will start with a significant selling process, we expect to see a significant or more growth on this area.
So that activity really is more of a 20-25.
Speaker Change: Not necessarily. I think in 2025 we will see even larger growth, but in the last few years, including in 2024, we are seeing significant business with FCS on Empire, but also on geo-satellite initiative.
Awesome, thank you. Thank you Chris.
Speaker Change: The next question is from Gunther Carter of Discovery Group. Please go ahead.
Gunther Carter: Watching this, I have two questions. Is there any particular reason for the delay of the installable approval? Anything specific that comes to your mind?
We bought a year ago a datapad.
Speaker Change: They have 45 days to react and they can extend it with additional 45 days.
Speaker Change: that's because they have the ability to do so, and of course they exercise their ability. We answered all their questions, and nothing specific was raised, but I think we are in a...
Speaker Change: I believe we will see their approval before the lapse of the 45 days.
Speaker Change: Okay, thank you. And the other question is, with the change in administration, you know, despite the election,
particularly focused on a data path, do you see a
Speaker Change: is a negative or a plus to that change in administration.
Thank you. Bye. Bye. Bye.
Speaker Change: I don't think the change of the administration affects data for business. I think the DOD budget is...
Speaker Change: is large enough and Datapath Angular has high potential over there for revenue growth. We need to remember that today we are not a big player in the U.S. DoD. We saw very nice success in the last year and we expect to have even
Speaker Change: and greater success next year selling data path solutions, but not only, also to sell GILAD networking equipment and modems to the U.S. Army and the GEOD.
Thank you very much. Good luck. Thank you, Gunther.
Speaker Change: There are no questions at this time. Mr. Benyamini, would you like to make your concluding statement?
Ehud Helft, Adi Sfadia
Gil Benyamini: I want to thank you all for joining us on this call and for your time and attention. We hope to see you soon. We'll speak to you in our next call. Thank you very much and have a great day.