Chris Quilty: Right. Shifting gears, can you quantify – I don’t think you have huge exposure to the American market, but it’s pretty ugly out there with Starlink. I just wanted to see whether you have seen any impact on that business? Or is it too small to matter?
Adi Sfadia: First of all, it’s too small to matter. We are newcomers to this market segment, and mainly serving SES cruise line. It’s relatively not material and we – from our perspective, regardless, we expect it to grow, because it’s very small and in initial phases. But definitely, we see more and more Starlink getting traction in this market.
Chris Quilty: Right. Shifting gears back to DataPath. You’ve had a couple of announcements. I think when you closed it last quarter, you had mentioned that post-closing, you picked up a $20 million order, and it seems like there’s more. Is that still on track for — I think you’ve quantified around $50 million a year run rate? Or has it improved from there since post-acquisition?
Adi Sfadia: Yes. So, we received this quarter several large orders through the DataPath. And at the beginning of the quarter or the beginning – of the year, we said that in 2024, we expect DataPath to be around $45 million in revenues. We decided to be a bit conservative, because it’s the first year of integration. And sometimes you have hiccups at the beginning. I can say that the first quarter went well. We are on track of achieving guidelines, and we expect to see a significant growth in years to come. We are recruiting several executives in order to strengthen our U.S. defense presence. Nothing that I can share now, but hopefully, we’ll be able to share with everyone. And I think that the defense, especially in the U.S., will be a significant growth engine for us.
Chris Quilty: And final question for Gil. Just looking at the OpEx. It looks like the last two quarters, you’ve run around $25 million of OpEx and obviously a partial quarter for Gilat for DataPath in Q4. But there was also a pretty big step up in G&A here in the first quarter. I’m assuming is that timing related? Or is that sort of $25 million quarter OpEx a good run rate?
Gil Benyamini: So I can say that this Q1 OpEx expenses are representative ones. And this, of course, includes a full year of DataPath’s acquisition. You should also remember that in our GAAP reports, we include the purchase price allocation expenses and some share-based compensation expenses related to the acquisition and some of these expenses are volatile and may go up or down due to changes in Gilat’s share price during the quarter. So this is, of course, relevant only in the GAAP reports. But as a bottom line, this quarter is representing the ongoing expenses in Gilat.
Chris Quilty: Thanks for all the feedback and great quarter.
Adi Sfadia: Thank you very much, Chris.
Operator: The next question is from Gunther Karger of Discovery Group. Please go ahead.
Gunther Karger: Yes, so thank you for taking the call, and congratulations on an excellent quarter. Two questions and one comment. Question number one has to do with satellite backhaul, is there any new developments in that area? And the second question has to do with the status of the high-speed trains as they seem to be evolving worldwide any comment. And any comment on those two questions?
Adi Sfadia: Okay. So Gunther, nice to speak with you again. So on the cellular backhaul, we continue to lead the market. We are seeing a lot of opportunities in 4G, and we are starting to see some traction on the 5G. Recently, we demonstrate together with one of the largest MNOs in the world on SES satellites more than one gigabyte per second to the modem and more than 500 megabit per second to the handset. Those are extremely high speeds of 5G speed. So our equipment is ready, and we have initial sales, but we expect that 5G revenues will ramp up within, let’s say, two years. I have say that first, you take Manhattan. So first, you will have 5G in the cities and only then the operators will handle the rural connectivity. But what we see in the meantime is a lot of orders on the 4G over there, everyone wants to get a decent Internet speed and we see a lot of deployment on the 4G.
As for high-speed trains, five or six years ago, there was a lot of traction around it. And then it’s relaxed a bit. We are delivering to two high-speed trains terminals. But I cannot say right now that I see a lot of traction. And I expect it to be a significant growth engine. But we have the solution. Our electronically steered antenna will be also be a solution that will fit to that. But if you remember, six or seven years ago, the main problem was that not every antenna can sit on the train, because of the vibration. So it’s not that simple but it’s a market or market segment that we are following. You said you have another question?
Gunther Karger: Of course, my comment is long range having observed the Gilat – nearly beginning and through now, you should be congratulated on an excellent growth path and outlook for the future. Thank you very much Adi.
Adi Sfadia: Thank you, Gunther. Talk to you soon.
Operator: The next question is from Omri Efroni of Oppenheimer. Please go ahead.
Omri Efroni: Hi guys, thanks for taking the call. I have a bit of questions about the new constellations that are coming out. We have three of them that are really big. We’re talking about Kuiper, IRIS and OneWeb. So I wanted to know if – a bit of talking about the time line that Gilat is supposed to get some answers about the product and services they’re going to provide?
Adi Sfadia: Okay. So I’ll start with IRIS square in Europe. They initiated the RFI process, and we expect them to wrap the information and move to RFP process towards the second half of the year. I believe that the award is expected not before the end of the year, probably the first half of 2025. We need to remember, it’s a European governmental project, 20-something countries, everyone has something to say. So we expect it to take some time. OneWeb NextGen or Gen2 is the RFP is ongoing. Gilat is one of two short-listed vendors for the ground segment. And as I said at the beginning of the year, we expect to have more insight towards the midyear. They said that they will announce the award before the end of the second quarter, usually those kind of large RFPs tend to delay a bit.
