Gilat Satellite Networks - 20-F annual report 2025

 We are a leading global provider of satellite-based broadband communications. We design and manufacture ground-based satellite communications equipment and provide comprehensive secure end-to-end solutions, end-to-end services for mission-critical operations, powered by our innovative technology. Our portfolio includes a satellite network platform, Very Small Aperture Terminals, or VSATs, amplifiers, high-speed modems, high-performance on-the-move antennas, and high efficiency, high power Solid State Power Amplifiers, or SSPAs, Block Upconverters, or BUCs, and Transceivers. We develop and market ground-based satellite communications equipment.

Following our acquisitions of Stellar Blu Solutions LLC, or SBS, in January 2025 and DataPath Inc., or DataPath, in 2023, our portfolio also includes next-generation In-Flight Connectivity, or IFC, Satellite Communication, or SATCOM, terminal solutions and transportable and portable terminals for defense forces and field services. Our comprehensive solutions support multiple applications with a full portfolio of products to address key applications, including broadband internet access, cellular backhaul over satellite, enterprise, digital inclusion solutions, IFC, maritime, land mobility, defense, and public safety, all while meeting the most stringent service level requirements. We have a large installed base and currently operate hundreds of active networks. We have proven experience in delivering complex projects and services worldwide, in addition to providing managed networks and services through satellite and terrestrial networks. Moreover, we offer complete turnkey integrated solutions.

On June 17, 2024, we, through our Wavestream Corporation subsidiary, entered into a Membership Interest Purchase Agreement with Stellar Blu Solutions LLC, or SBS, a leading US-based provider of next-generation SATCOM terminal solutions, and the owners of its membership interests, which was amended on December 11, 2024. Pursuant to the purchase agreement, Wavestream agreed to purchase from the sellers 100% of the membership interests of SBS. The acquisition was completed on January 6, 2025, and the initial closing cash payment of $98 million ($108 million as adjusted) was funded through a combination of existing cash resources, and $60 million from a new secured credit agreement that we entered into with HSBC Bank USA, NA and Bank Hapoalim B.M., and that was fully repaid on December 30, 2025. Pursuant to the purchase agreement, the total cash consideration in connection with the acquisition could have originally increased by up to an additional $147 million payable in cash, subject to achievement of future performance milestones. Following the determination that the first and second performance milestones were not achieved, the remaining contingent consideration was adjusted in accordance with the purchase agreement. As a result, the total cash consideration in connection with the acquisition may increase by up to an additional $99 million, payable in cash, subject to the achievement of future performance milestones.

We have sales and support offices worldwide, two Network Operation Centers, or NOCs, and R&D centers in Israel, the U.S. and Europe. Our products are sold to communication service providers, satellite operators, Mobile Network Operators, or MNOs, and system integrators that use satellite communications to serve enterprise, digital inclusion solutions, government and residential users,  and system integrators that use our technology. Our solutions and services are also sold to defense and homeland security organizations. In addition, we provide services directly to end-users in various market segments, including in certain countries in Latin America.

From 2022 through 2024, we operated in three operating segments, Satellite Networks, Integrated Solutions and Network Infrastructure and Services.

Commencing January 1, 2025, as we increased our focus on the defense market segment and the IFC sector as primary growth engines, to better target the diverse and attractive end markets we serve, and to provide investors with greater insight into our business lines and strategic growth opportunities, we operate in three operating segments as follows:

Gilat Defense Division. Our Gilat Defense Division provides secure, rapid-deployment solutions for military organizations, government agencies, defense integrators, and other strategic governmental customers, with a strong focus on the U.S. Department of Defense resulting from our strategic acquisition of DataPath. By integrating technologies from Gilat, Gilat DataPath, and Gilat Wavestream, the Gilat Defense Division delivers resilient battlefield and mission-critical connectivity with multiple layers of communication redundancy for high availability.

Gilat Commercial Division.Our Gilat Commercial Division provides advanced broadband satellite communication networks for IFC, Enterprise, and Cellular Backhaul, supporting High Throughput Satellites, or HTS, Very High Throughput Satellites, or VHTS, and Non-Geostationary Satellite Orbit, or NGSO, constellations with turnkey solutions for service providers, satellite operators, and enterprises. Our acquisition of SBS, serves as the cornerstone of this division, strengthening our position in the IFC market and enabling us to provide cutting-edge connectivity solutions that meet the demands of passengers, airlines, and service providers worldwide.

Our ordinary shares are traded on the NASDAQ Global Select Market and on the Tel Aviv Stock Exchange, or the TASE, under the symbol “GILT”. As used in this annual report, the terms “we”, “us”, “the company”, “Company”, “our company”, “Gilat” and “our” mean Gilat Satellite Networks Ltd. and its subsidiaries, unless otherwise indicated.

 “Gilat®” “SkyEdge®”, “Wavestream®”, “Raysat®”, “DataPath ®”, “Stellar Blu®” and other marks appearing in this annual report on Form 20-F are trademarks of our company and its subsidiaries. Other trademarks appearing in this annual report on Form 20-F are owned by their respective holders.

This annual report on Form 20-F contains various “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and within the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements reflect our current view with respect to future events and, financial results of operations. Forward-looking statements usually include the verbs, “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “projects,” “understands” and other verbs suggesting uncertainty. We remind readers that forward-looking statements are merely predictions and therefore inherently subject to uncertainties and other factors and involve known and unknown risks that could cause the actual` results, performance, levels of activity, or our achievements, or industry results to be materially different from any future results, performance, levels of activity, or our achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. We undertake no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. We have attempted to identify additional significant uncertainties and other factors affecting forward-looking statements in the Risk Factors section which appears in Item 3D: “Key Information–Risk Factors”.

Our consolidated financial statements appearing in this annual report are prepared in U.S. dollars and in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. All references in this annual report to “dollars” or “$” are to U.S. dollars and all references in this annual report to “NIS” are to New Israeli Shekels.

Statements made in this annual report concerning the contents of any contract, agreement or other document are summaries of such contracts, agreements or documents and are not complete descriptions of all of their terms. If we filed any of these documents as an exhibit to this Annual Report or to any registration statement or annual report that we previously filed, you may read the document itself for a complete description of its terms.

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Investing in our ordinary shares involves a high degree of risk and uncertainty. You should carefully consider the risks and uncertainties described below before investing in our ordinary shares. If any of the following risks actually occur, our business, prospects, financial condition, and results of operations could be materially harmed. In that case, the value of our ordinary shares could decline substantially, and you could lose all or part of your investment. These risks include, but are not limited to, the following:

We depend on a limited number of customers for a significant portion of our revenue, and the loss of any such customer, or a reduction in purchases, could materially adversely affect our business, financial condition, and results of operations. This customer concentration risk increased in 2025 following the acquisition of our major U.S. satellite telecommunications customer by our major European satellite telecommunications customer. In 2025, a significant portion of our revenue was attributable to the major European customer, the major U.S. customer, and the Peruvian customer, PRONATEL. Sales to PRONATEL, to the European customer, and to the U.S. customer accounted for approximately 14%, 24%, and 20% of our revenue for the year ended December 31, 2025, respectively, with sales to the U.S. customer attributable to the period prior to the acquisition. Collectively, the European and the U.S. customers accounted for approximately 44% of our revenue in 2025.

If we fail to deliver in a timely manner upon any of our large contracts or if any of these or other large customers were to terminate their existing contracts with us or substantially reduce the services or quantity of products they purchase from us, our revenues and operating results could be materially adversely affected.

We have been awarded a number of large-scale projects by our customers, including foreign governments, such as the Peruvian PRONATEL Regional Projects in 2015 and in 2018, and the recent 2025 upgrade project of Regional Broadband Infrastructure, as well as contracts with a major U.S. satellite telecommunication company, and with a large U.S. system integrator and a government-owned Telco. As a result of the acquisition of SBS, we have increased the number of large-scale projects with an existing major U.S. satellite telecommunication customer, which recently completed its merger with a major European telecommunications customer. While we have successfully implemented large-scale network infrastructure projects and operations, PRONATEL Regional Projects, as well as other projects, are complex and require third-party cooperation. Additionally, the delivery of our large-scale projects requires us to invest significant funds in order to obtain bank guarantees and requires us to incur significant expenses before we receive full payment from our customers. Furthermore, SBS, is required to meet high-volume production and delivery demands. Failure to execute these projects in an economical manner within the projects’ budgets and schedules could result in significant penalties, impact our ability to receive and recognize the expected revenues, reduce our cash balance, and cause us losses, which would significantly adversely impact our operating results. If we fail to complete or deliver on time in accordance with our commitments, we could incur significant penalties, which would have a material adverse effect on our business and financial results.

Our SBS subsidiary depends on its ability to meet high-volume and delivery requirements for its Sidewinder IFC terminal to achieve its revenue goals. This requires SBS to ramp up production and allocate sufficient resources and management time to reach manufacturing and delivery levels, while maintaining quality goals and budget constraints. Failure to ramp up production to meet existing and growing demand may result in penalties, reputational damage, limitations on our ability to enter new contracts, and even the termination of existing contracts. If we fail to effectively and economically scale our production and delivery capabilities to meet the needs of existing and future customers, our business, financial condition, and operating results could be adversely affected.

The communications and satellite communications markets are likely to experience rapid technological change, including increased adoption of AI and automation across network planning, optimization, operations, and customer-support functions. AI-enabled tools may reduce technical expertise, development time, and capital required to design, integrate, and operate network solutions. As a result, new entrants, potentially including software-focused companies, non-traditional communications providers, and well-capitalized technology firms, may be able to enter certain segments of our markets more quickly and compete more effectively against established providers.

AI may also enable our existing competitors, customers, and end-users to narrow technological gaps, accelerate product development cycles, and deploy "home-grown" solutions that reduce or eliminate their reliance on third-party vendors such as us. For example, satellite operators, service providers, system integrators, and enterprises or governmental customers may increasingly seek to develop or internalize functions currently performed by our products and services (including network management, performance optimization, automation, and certain operational or support activities), or may leverage AI to integrate alternative solutions more efficiently. If we are unable to anticipate these shifts, maintain the competitiveness of our offerings, or demonstrate differentiated value in this evolving environment, our revenues, margins, and market position could be materially adversely affected.

In addition, increased use of AI across our operations and product development may introduce new operational, legal, and reputational risks. AI-related incidents could include use of third-party models or data in ways that raise intellectual property or contractual issues; errors or unintended outcomes in AI-assisted design, testing, or operational processes; and increased cybersecurity threats from AI-enabled attack techniques. Any of these developments could increase our costs, require changes to our business practices, impair our ability to serve customers, or expose us to claims, regulatory scrutiny, or reputational harm.

We achieved net income in the fiscal years 2023 through 2025, but incurred major losses in a number of years prior to 2023. As of December 31, 2025, we have an accumulated deficit of $614.7 million. We cannot assure you that we can operate profitably in the future. If we do not continue to operate profitably, our share price will decline, and our company's viability will be in question.

Our cash, cash equivalents, short-term deposits, and restricted cash as of December 31, 2025, were $185.4 million compared to $120.2 million as of December 31, 2024. Our positive cash flow (including restricted cash) from operating activities was approximately $20.7 million, $31.7 million, and $31.9 million in the years ended December 31, 2025, 2024 and 2023, respectively. If we do not generate sufficient cash from operations, including from our large-scale projects, our cash balance will decline, and the unavailability of cash could have a material adverse effect on our business, operating results, and financial condition.

Our available cash balance increased substantially in late 2025, primarily due to the successful completion of two private placements totalling approximately $66 million in September and $100 million in December 2025. A portion of the proceeds from these private placements was used to fully repay the loan that had been taken to partly fund the acquisition of SBS.

SBS is expected to continue and require significant working capital, which may reduce our available cash balance and adversely affect our cash flow and operating results.

The delivery of our large-scale projects requires us to invest significant funds to obtain bank guarantees and surety bonds, and may also require us to incur significant expenses before we receive full payment from our customers.  If we fail to obtain such funds on favorable terms in the future, we will not be able to meet our commitments, and our cash flow and operational results may be adversely affected.

The movement towards NGSO satellite constellation networks, particularly SpaceX’s Starlink and Amazon Leo (previously Amazon’s Project Kuiper), may significantly reduce the market size for geostationary satellite, or  GEO, technology and services. These NGSO networks offer high-speed, low-latency internet services globally, including in underserved and remote areas, posing a substantial competitive threat to our customers.

Starlink has rapidly expanded its presence, with over 9 million active customers at the end of 2025. Its ability to provide competitive bandwidth and latency at reasonable prices has disrupted traditional internet service providers, compelling them to reevaluate their pricing structures and upgrade existing infrastructure. This disruption poses a substantial risk to our customers, who may struggle to maintain their market positions and profitability in the face of such aggressive competition.

Amazon Leo plans to deploy more than 3,000 satellites in Low Earth Orbit, or LEO,  with commercial service expected to commence following the deployment of the initial tranche of its satellite constellation, potentially beginning in the coming years. The anticipated rollout and expansion of Amazon Leo could further intensify the competitive landscape, challenging our customers’ ability to retain their market share and attract new users.

Growth in terrestrial capacity,  especially fiber-optic and point-to-point microwave networks, may cause fixed network customers to shift from satellite services or limit our ability to attract new customers. Because terrestrial transmission is generally less expensive, its continued expansion may reduce demand for certain fixed satellite-based services. optic and point-to-point microwave networks, may cause fixed-network customers to shift from satellite services or limit our ability to attract new customers. Because terrestrial transmission is generally less expensive, its continued expansion may reduce demand for certain fixed satellite-based services.

If commercial satellite communications markets do not expand, or if we fail to grow our NGSO presence, our business could be materially harmed. Expansion of NGSO markets may also reduce demand for GEO satellite capacity. As most of our revenues depend on satellite-based networks, equipment, and related services, any significant market decline or replacement of VSAT and other satellite technologies by alternatives could materially harm our business and the value of our shares.

A significant portion of our revenue is derived from large-scale contracts that we are awarded from time to time in competitive bidding processes. The bidding process sometimes requires us to make significant investments upfront, while the final award is not assured. These large-scale contracts sometimes involve the installation of thousands of VSATs or massive fiber-optic transport and access networks or the production of customized products. The number of major bids for these large-scale contracts in any given year is limited and the competition is intense. Losing or defaulting on a relatively small number of bids each year could have a significant adverse impact on our operating results.

In March and December 2015, the Peruvian government awarded us the PRONATEL Regional Projects under four separate bids for the construction of networks, operation of the networks for a defined period and their transfer to the government. In 2018, we were awarded two additional PRONATEL Regional Projects with initial contractual values of $395 million and $154 million, respectively. An additional $17 million and $88 million for the expansions of the Regional Projects were awarded in 2023 and 2025, respectively. The remaining revenues from these projects are expected to be generated over an additional period of 4 to 9 years. Any resumption of political turmoil in Peru could negatively impact our operations there, causing further delays to existing projects and potentially postponing PRONATEL’s decision to enter into new ones.

Agreements with governments typically include unilateral early termination clauses and involve other risks, such as the imposition of new government regulations and taxation that could pose additional financial burdens on us. Changes in the political or economic situation in Latin America could result in the early termination of our business there, or materially adversely affect our ability to successfully complete our projects. Any termination of our business in this region or breach of contractual obligations by our customers could have a significant adverse impact on our business.

In January 2025 and November 2023, we acquired SBS and DataPath, respectively, and we may pursue additional acquisitions. These transactions may be difficult to integrate, could disrupt our business, and may dilute shareholder value. These acquisitions expanded our capabilities, but we may be unable to identify future targets on acceptable terms or obtain required regulatory approvals. We may also be unable to consummate future transactions, integrate the acquired businesses, or realize expected benefits such as sales growth, cost synergies, or margin improvements. Acquisition financing may be restricted by our debt agreements or market conditions. Even if integrated, acquired businesses may not achieve anticipated revenue, profitability, or productivity levels, which could adversely affect our business, financial condition, and results of operations.

Acquisitions and mergers involve numerous risks, including:

Any of these risks could materially and adversely impact our results of operations, cash flows, or financial position.

We rely heavily on our information technology systems, networks, satellite communications platforms, and third-party services to operate our business, develop and deliver products, and support customers, including telecommunications operators, enterprises, and government and defense agencies. These systems, and the systems of our customers, partners and vendors, are subject to an increasing range of cybersecurity threats and operational risks, including cyberattacks, unauthorized access, malware, ransomware, computer viruses, supply chain compromises, social engineering attacks, power or telecom failures, and disruptions caused by natural or manmade disasters, geopolitical events, or acts of terrorism or war. The frequency, sophistication, and severity of cyber threats, including those leveraging artificial intelligence and those attributable to state-sponsored actors, continue to increase across the communications and defense industries.

We have experienced, and expect to continue to experience, attempts to breach the security of our networks, products, and IT infrastructure, including through phishing, malware, credential harvesting, exploitation of software vulnerabilities, and other evolving techniques that may not be recognized or detectable until after they occur. Although prior incidents have not had a material adverse effect on our business, we cannot assure that future incidents will not be material, particularly as threat actors increasingly target satellite communications infrastructure, cloud environments, and government-related systems.

A significant cybersecurity incident, system disruption, or security vulnerability, whether affecting our equipment, our cloud providers, or other third-party vendors, could impair our ability to manufacture components, operate facilities, deliver services, or support customers. Such an event could also lead to the loss, theft, misuse, or unauthorized disclosure of proprietary, personal, confidential, or classified information. Incidents affecting government related products or networks may expose us to additional scrutiny, contractual penalties, loss of security clearances, or disqualification from future procurements.

We maintain cybersecurity controls and obtain cyber insurance; however, these measures may be insufficient to prevent or mitigate all incidents, may not cover all types of losses, including regulatory penalties, and may not be available on commercially reasonable terms in the future. Our insurance coverage may also be inadequate to compensate for all damages or operational disruptions.

We are subject to extensive and evolving global data protection, cybersecurity and privacy laws, including the EU General Data Protection Regulation, or GDPR, U.S. federal and state privacy and security laws (including the California Consumer Privacy Act and California Privacy Rights Act and other state level comprehensive privacy statutes), Brazil’s LGPD, Israel’s Privacy Protection Regulations, and India’s Digital Personal Data Protection Act, among others. These laws impose stringent obligations, including requirements relating to data security controls, breach notification, individual rights, and cross-border data transfers, and provide for significant fines, penalties, or other sanctions for non-compliance. As additional jurisdictions adopt or expand privacy and cybersecurity regimes, our compliance obligations, operational complexity, and costs are likely to increase. Non-compliance with applicable laws could result in investigations, litigation, regulatory penalties, restrictions on data processing, loss of customer trust, or reputational damage. Under recently adopted SEC rules, we are required to disclose in our annual report our board’s oversight of cybersecurity risks, management’s role and processes for assessing and managing such risks, and material cybersecurity incidents. Failure to maintain effective governance, controls, and processes to meet these obligations could increase the likelihood and impact of a cybersecurity event or result in regulatory scrutiny. These laws impose stringent obligations, including requirements relating to data security controls, breach notification, individual rights, and

Any of the events described above could materially adversely affect our business operations, cash flows, reputation, and financial condition.

In November 2023, we completed the acquisition of DataPath, a U.S.-based expert systems integrator supporting trusted communications for the U.S. Department of Defense and other U.S. governmental customers. Because DataPath is a U.S. contractor performing on classified programs while under foreign ownership, its operations are subject to the U.S. Government’s FOCI mitigation framework administered by the Defense Counterintelligence and Security Agency, or DCSA.

In June 2025, DataPath transitioned from operating under a Special Security Agreement, or SSA to a Proxy Agreement, a more stringent form of FOCI mitigation required for companies with higher levels of foreign ownership or control. Under this structure, governance and operational oversight of DataPath’s classified business must be exercised exclusively by U.S. proxy holders who are independent of Gilat and who meet the Defense Counterintelligence and Security Agency, or DCSA, eligibility and clearance requirements. The Proxy Agreement imposes enhanced restrictions on our ability, as the foreign parent, to access certain classes of information, influence classified-related decision-making, or participate in aspects of DataPath’s management relating to classified contracts. Failure to comply with the Proxy Agreement, or any determination by DCSA that DataPath is inadequately mitigated or is in violation of its FOCI obligations, could result in suspension or revocation of DataPath’s Facility Security Clearance. Such an outcome would prevent DataPath from performing on classified programs, could lead to contract termination or ineligibility for future awards, and would materially and adversely affect our business, financial condition, and results of operations.

The export of certain satellite communication products, technical data, and services is subject to U.S. export control and sanctions laws, including the International Traffic in Arms Regulations, or ITAR, the Export Administration Regulations, or EAR, and regulations administered by the U.S. Department of the Treasury. These laws may restrict access by our non-U.S. employees, including employees in Israel, to controlled technical information of our U.S. subsidiaries, including DataPath and Wavestream, unless appropriate licenses or authorizations are obtained. Some of our subcontractors and vendors are also subject to these laws and are required to flow down applicable restrictions to us. Failure to obtain or maintain required authorizations could prevent us from transferring technical information or equipment to non-U.S. persons, including our own personnel, and could result in fines, penalties, injunctions, or other enforcement actions.

DataPath participates in classified U.S. government programs and is therefore subject to U.S. national security and foreign‑ownership, control, or influence, or FOCI mitigation requirements. In June 2026, DataPath transitioned from operating under a Special Security Agreement to a Proxy Agreement, a more restrictive mitigation regime. Under the Proxy Agreement, governance and operational oversight of DataPath’s classified business must be exercised by independent U.S. proxy holders, significantly limiting our ability, as the foreign parent, to influence certain aspects of DataPath’s operations. Any failure to comply with the Proxy Agreement or other DCSA requirements could result in suspension or loss of DataPath’s facility security clearance, which would prevent it from performing on classified contracts and could materially adversely affect our business, financial condition, and results of operations.

In addition, U.S., EU, and UK sanctions and export controls, including those in response to the Russia-Ukraine conflict, continue to evolve. These measures restrict exports, technology transfers, and dealings with certain Russian and Chinese entities. Our decision to withdraw from our operations in Russia, completed in 2024, continued to affect our financial results in 2025 and may have ongoing implications depending on future sanctions developments. Broader trade policy changes, including tariffs, retaliatory measures, and restrictions arising from U.S. and foreign government actions, could also reduce demand, increase costs, or disrupt our supply chain.

We are also subject to Israeli export control laws administered by the Ministry of Defense and the Ministry of Economy. Certain of our products, including those with encryption or potential dual‑use characteristics, require export licenses. Changes in the classification of existing products or determinations that new products require licensing may impose additional burdens and constraints on our sales processes. Failure to obtain or maintain required Israeli export licenses could prevent us from exporting equipment or technical information and could adversely impact our ability to meet customer commitments.

Certain investments involving the acquisition of a U.S. business or assets with a nexus to U.S. interstate commerce may be subject to review and approval from the Committee on Foreign Investment in the United States, or CFIUS, an inter-agency committee authorized to review certain transactions involving a “U.S. business” and a “foreign person,” including certain real estate transactions. Significant CFIUS reform legislation and regulations, which became effective in February and October of 2020, among other things, expanded CFIUS’ jurisdiction to cover more types of transactions, empowered CFIUS to scrutinize more closely investments in U.S. assets, including non-controlling, “non-passive investments” and made certain CFIUS filings legally mandatory. Failure to notify CFIUS of a transaction where such notification was required or otherwise warranted based on the national security considerations exposes the transaction parties to significant financial penalties as well as potential legal restrictions on future investments, costs, and/or other adverse reputational and financial effects, thus potentially diminishing the value of such investments. CFIUS is actively pursuing transactions that were not notified to it and may ask questions regarding, or impose restrictions or mitigation on, transactions post-closing.  On February 21, 2025, the Trump Administration released the America First Investment Policy National Security Presidential Memorandum, or NSPM, introducing potential changes to the CFIUS regulations, which could significantly impact foreign investment activities. he NSPM directs the creation of an expedited "fast-track" process to ease investment reviews for allies, while focusing resources to make it harder for foreign adversaries, defined as China (including Hong Kong and Macau), Cuba, Iran, North Korea, Russia and Venezuela, to gain access to sensitive technologies. Noncompliance with U.S. or Israeli export control, sanctions, or national security laws, whether by us or by our suppliers, or by us, could result in material penalties, increased compliance costs, loss of access to certain markets, and restrictions on our ability to conduct business, any of which could materially adversely affect our business, financial condition and results of operations.

In order to prepare our financial statements in conformity with Generally Accepted Accounting Principles in the United States, or U.S. GAAP, our management is required to make estimates and assumptions, as of the date of the financial statements, which affect the reported values of assets and liabilities, revenues and expenses, and disclosures of contingent assets and liabilities. Our actual results could materially differ from, and could require adjustments to, those estimates.

We are subject to taxation in the United States, Israel, Peru and numerous other jurisdictions, including with respect to income taxes, obligations to withhold taxes and other tax matters. Determining our provision for the various taxes requires significant management judgment. In addition, our provision for income taxes could be adversely affected by many factors, including, among other things, changes to our operating structure, changes in the amounts of earnings in jurisdictions with different statutory tax rates, changes in the valuation of deferred tax assets and liabilities and changes in tax laws.

We are subject to ongoing tax examinations and audits in various jurisdictions. Tax authorities may disagree with our intercompany charges, claimed credits, cross-jurisdictional transfer pricing, deduction of withholding taxes, or other matters and assess additional taxes. While we regularly evaluate the likely outcomes of these examinations to determine the adequacy of our provision for income taxes, there can be no assurance that the outcomes of such examinations will not have a material impact on our results of operations and cash flows.

In recent years, many changes have been made to applicable tax laws, such as those caused by the recent enactment of the One Big Beautiful Bill Act in the U.S., or OBBBA, and changes are likely to continue to occur in the future. It cannot be predicted whether, when, in what form, or with what effective dates, new tax laws may be enacted, or regulations and rulings may be enacted, promulgated or issued under existing or new tax laws, which could result in an increase in our tax liability or require changes in the manner in which we operate in order to minimize or mitigate any adverse effects of changes in tax law or in the interpretation thereof.

While we follow the guidelines of the relevant tax authority, where available, there is no assurance that such guidelines will ultimately be determined to be binding by the relevant authorities or acceptable in the local courts of law. Although we believe our tax estimates are reasonable, the final determination of any tax audit or litigation could be materially different from our historical tax provisions and accruals, which could have a material adverse effect on our results of operations or cash flows in the period or periods for which a determination is made. Further, subsequent legislations, guidance, court rulings, or regulations that differ from our prior assumptions and interpretations, or other factors which were not anticipated at the time we estimated our tax provision, payments, and deduction of withholdings, could have a material adverse effect on our business, cash flow, results of operations, or financial condition.

We operate in a highly competitive network communications industry, both in the sales of our products and our services. Due to the rapid technological changes that characterize our industry, we face intense worldwide competition to capitalize on new opportunities, introduce new products, and obtain proprietary and standard technologies perceived by the market as superior to those of our competitors.

The network communication market is dominated by larger corporations. As part of the consolidation trend in the market, we are in competition with greater consolidated corporations. Some of our competitors have greater financial resources, providing them with greater research and development and marketing capabilities. Our competitors may also be more experienced in obtaining regulatory approvals for their products and services and marketing them. Our relative position in the network communications industry may place us at a disadvantage in responding to our competitors’ pricing strategies, technological advances and other initiatives. Our principal competitors in the supply of VSAT networks are Hughes Network Systems LLC (owned by EchoStar Corporation), or HNS, ViaSat Inc., or ViaSat, Singapore Technologies Engineering Ltd., or ST Engineering iDirect, Comtech Telecommunications Corp, or Comtech, and Kratos Defense & Security, or Kratos. Our primary competitors with respect to our SSPAs, BUCs and other Wavestream products are Communications & Power Industries LLC, or CPI, General Dynamics Satcom Technologies, Paradise Datacom, Comtech Xicom Technology Inc., or Xicom, and Mission Microwave Technologies, or Mission.

Our low-profile in-motion ground, aero, and maritime antennas target a competitive market with multiple players such as SpaceX’s Starlink, Intellian Ltd., or Intellian, Get Sat Communication Ltd. or GetSat, HNS, Farcast Corp, or Farcast, Qest Quantum Electronic Systems GmbH, or QEST, Viasat and others. If these new entrants and/or new technologies are able to penetrate the market significantly, our business could be negatively affected. In addition, ViaSat and HNS have launched their own satellites, which enable them to offer vertically integrated solutions to their customers. This may further change the competitive environment in which we operate and could adversely affect our business.

In areas where we operate public rural telecom services (voice, data, and internet) and are engaged in the construction of fiber-optic transport and access networks based on wireless systems, we typically encounter competition on government-subsidized bids from various service providers, system integrators, and consortiums. Some of these competitors offer solutions based on VSAT technology and some on terrestrial technologies (typically, fiber-optic and wireless technologies). In addition, as competing technologies such as cellular networks and fiber optics become available in rural areas where not previously available, our business could be adversely affected. We may not be able to compete successfully against current or future competitors. Such competition may adversely affect our future revenues and, consequently, our business, operating results and financial condition.

The time between the initial contact with a potential customer or sponsor and the execution of a contract may be lengthy and vary significantly depending on the nature of the arrangement. During any given sales cycle, we may expend substantial funds and management resources and not obtain significant revenue, resulting in a negative impact on our operating results. In some cases, we have seen longer sales cycles across all the regions in which we do business. In addition, we have seen projects delayed or even cancelled, which would also have an adverse impact on our sales cycles. As a result, it may be difficult for us to accurately forecast sales due to the uncertainty around these projects and their award and starting periods.

We operate in a rapidly evolving market driven by advances in cloud-based technologies, 5G Non-Terrestrial Networks, or 5G NTN,  and next-generation satellite architectures. Our competitiveness depends on our ability to anticipate technological changes, develop and enhance our products, and meet evolving customer requirements in satellite ground equipment, low-profile antennas, and high-power transceivers.

The HTS, VHTS and emerging NGSO markets require close alignment between ground equipment and specific satellite technologies. As these markets mature, successful vendors are increasingly those with strong partnerships with satellite operators. If we are unable to secure such partnerships or reduce our VSAT costs sufficiently, our competitive position could decline.

In addition, the growth of LEO and Medium Earth Orbit, or MEO, satellite constellation networks may challenge existing GEO-based solutions and require significant adaptation of our technologies. If we fail to respond in a timely and cost-effective manner to new technologies or if our products are not accepted by the market, our business, financial condition, and operating results could be materially adversely affected.

Many of the components used in our VSAT units, hub systems, Electronically Steered Array/Phased Array Antenna, or ESA, terminals and other products are sourced from a limited number of suppliers, and in some cases from a single supplier. This concentration exposes us to risks relating to availability, quality, pricing, and lead times. Some suppliers have discontinued specific component lines in the past, and others may do so in the future. Substituting a manufacturer or redesigning affected products could require significant time and expense.

Global supply chain pressures, including increased component and labor costs, extended lead times, and higher logistics costs, continue to affect our operations. In addition, geopolitical instability, including the risk of a renewed armed conflict between Israel and Iran, may materially disrupt transportation routes, manufacturing capacity, and the operations of certain suppliers or contract manufacturers located in Israel or reliant on Israeli infrastructure. Although our manufacturers currently report no material disruption to their operations, future developments may impair our ability to obtain critical components on acceptable terms or in required volumes.

Our reliance on a small number of key suppliers also creates capacity‑allocation risk. During periods of high global demand or supply scarcity, these suppliers may prioritize other customers, including larger industry participants, thereby limiting our access to components needed for our products. If we are unable to secure sufficient quantities of components at competitive prices or meet customer delivery schedules, our production could be reduced or delayed, our costs could increase, and our revenues and operating results could be materially adversely affected.

Our success depends in part upon the continued services of our executive officers and other key members of management, and especially managers of our large entities around the world. From time to time, there may be changes in our executive management team resulting from the hiring or departure of executives. Such changes in our executive management team may be disruptive to our business.

Our success also depends on sales, marketing, and development personnel, and our continuing ability to attract and retain highly qualified personnel, including with respect to our acquired companies. There is an increasing competition for the services of such personnel in Israel and elsewhere. The loss of senior or mid-level management and qualified personnel, and the failure to attract highly qualified personnel in the future, may negatively impact our business. Moreover, our competitors may hire and gain access to the expertise of our former employees or our former employees may compete with us. There is no assurance that former employees will not compete with us or that we will be able to find replacements for departing key employees in the future.

Our business is based mainly on our proprietary technology and related products and services. We establish and protect proprietary rights and technology used in our products by the use of patents, trade secrets, copyrights, and trademarks. We also utilize non-disclosure and intellectual property assignment agreements. Because of the rapid technological changes and innovation that characterize the network communications industry (for example, shift to Cloud and 5G NTN standards), our success will depend in large part on our ability to protect and defend our intellectual property rights. Our actions to protect our proprietary rights in our VSATs, hubs, SSPAs, and antenna technology, as well as other products, may be insufficient to protect our intellectual property rights and prevent others from developing products similar to our products. In addition, the laws of many foreign countries do not protect our intellectual property rights to the same extent as the laws of the U.S., or we may have failed to enter into non-disclosure and intellectual property assignment agreements with certain persons, or the agreements we entered into may be found inadequate, or we may encounter difficulties in enforcing our legal or contractual rights. If we are unable to protect our intellectual property, our ability to operate our business and generate expected revenues may be harmed.

There are numerous patents, both pending and issued, in the network communications industry, and the technical standards relevant to our products are continually evolving. As a result, third parties may assert that our technologies or products infringe their intellectual property rights. From time to time, we receive allegations of this nature. For example, in 2025, our subsidiary Wavestream received a letter alleging patent infringement, which Wavestream strongly rejected and continues to believe is without merit. Receiving such claims, even when unfounded, may require management attention and resources.

We may face infringement claims in connection with our use of artificial intelligence and machine learning within our product development, testing, and deployment, or other business functions. Such claims may arise in the context of both third-party litigation and regulatory exposure from use of third-party content contained in generation results from large-language models or other algorithmic results or outcomes that are utilized in our products or services without required attribution or permission. Such claims, if successful, may combine to (a) make it more costly for us to apply artificial intelligence and machine learning within our business, (b) lead to regulatory fines or penalties, (c) result in payments of monetary damages, or (d) require us to alter our product offerings or business practices.

We may also need to litigate to protect our intellectual property, determine the validity or scope of others’ rights, or defend against claims of invalidity or infringement. An adverse outcome could require us to pay substantial damages, cease using certain technologies, obtain licenses on unfavorable terms, or develop alternative technology, any of which could require significant time and financial resources. Such litigation could be costly, divert management attention, and materially affect our business, financial condition, and operating results.

Our business includes risks, only some of which are covered by our insurance. For example, in our satellite capacity agreements, we do not have a backup for satellite capacity, and we do not have indemnification or insurance in the event that our supplier’s satellite malfunctions or data is lost. Liabilities in connection with our products, services, managed network services, premises, construction and deployment projects, or in connection with risks associated with potential cyber-attacks may not be covered by insurance or may be covered only to a limited extent. Our third-party suppliers do not always have back-to-back liability or insurance coverage to the same extent guaranteed by us towards our customers. In addition, our insurance does not provide coverage for acts of fraud or theft. Our business, financial condition and operating results could be materially adversely affected if we incur significant costs resulting from these exposures.

We conduct sales, manufacturing, and service activities worldwide, including in the U.S., Latin America, Asia, and Europe. As we continue to expand internationally, our business is subject to numerous risks inherent to global operations, including changes in foreign regulations and tariffs, tax exposures, inflationary pressures, political and economic instability, currency fluctuations, longer payment cycles, and difficulties in managing and staffing foreign operations. We are also subject to anti-corruption laws, such as the Foreign Corrupt Practices Act, or FCPA, and similar laws in other jurisdictions, and violations by employees or third parties could materially impact our reputation and financial results.

Foreign zoning restrictions and increased regulation of satellite antenna installations may also limit market access.

In addition, disruptions at key facilities, such as our R&D and manufacturing sites in Bulgaria, Moldova, Poland, Spain, California, and Texas, whether due to natural disasters, lockdowns, or other events, could materially affect our operations and financial condition.

Any of these factors could disrupt our operations, reduce demand for our products, or increase our costs, adversely affecting our business, financial condition, and results of operations.

Our results of operations may be adversely affected by global or regional economic, political, security, and health conditions. These include changes in inflation and interest rates, instability in financial markets, supply‑chain disruptions, civil unrest, and outbreaks of disease, such as the COVID‑19 pandemic, which caused travel restrictions, facility shutdowns, supply‑chain delays, and reduced commercial activity in many of the countries in which we operate. Such events may again negatively impact our operations, our suppliers, or our customers.

Armed conflicts and geopolitical instability continue to create significant uncertainty. The war and hostilities involving Israel, Hamas, Hezbollah, Iran, and the Houthis in Yemen persisted through 2025 with fluctuating intensity and continued risks of escalation. These developments have affected transportation routes, increased shipping and logistics costs, and raised the risk of workforce disruptions. Although our operations in Israel have remained functional, further deterioration in regional security conditions may adversely affect our operations, suppliers, or customers.

The Russia-Ukraine conflict also continues to impact global markets. Sanctions and export control measures imposed by the United States, the European Union, the United Kingdom, and other jurisdictions, as well as countermeasures taken by Russia, have contributed to supply‑chain volatility, increased component prices, and heightened uncertainty in global financial markets.

We are also affected by inflationary pressures in wages, benefits, materials, and other inputs. Wage increases in certain emerging markets may exceed those in developed markets, increasing our cost base. If we are unable to pass increased costs on to our customers, our margins and profitability may decline.

Any of these global or regional developments could disrupt our commercial activities or those of our suppliers, contract manufacturers, or customers, reduce demand for our products, increase our operating costs, or otherwise adversely affect our business, financial condition, and results of operations.

Our public image and reputation are important to maintaining our strong brands. Our results of operations and financial position could be adversely impacted by a negative perception regarding our products or company practices, positions, or public statements, even if unfounded, negative claims and comments on social media or the press, or a data breach. Actions of activist shareholders could impact the pursuit of our business strategies and adversely affect our results of operations, financial condition, and/or share price. Furthermore, stakeholders are increasingly scrutinizing companies’ Environmental, Social, and Governance, or ESG, practices, and stakeholders’ expectations regarding ESG practices are diverse and rapidly changing. We may not be able to align our ESG practices with such evolving expectations within the timeframes stakeholders expect, or without incurring significant costs. In addition, we may not be able to achieve our aspirational goals related to our ESG initiatives, which are and may continue to be impacted by many complexities and variables, such as renewable energy infrastructure and availability, changes to the labor market, a challenging economic environment, changes to our operations, changes to our portfolio of businesses via acquisitions or divestitures, and adjustments to our job levels and managerial headcount. A failure or perceived failure by us in this regard may damage our reputation and adversely impact our results of operations and financial position.

Certain of our telecommunication operations and connectivity products require licenses and approvals from regulatory authorities, including the Israeli Ministry of Communication, the U.S. Federal Communications Commission, or FCC, and equivalent authorities in other jurisdictions. In Israel, the United States, and various other countries, the operation of satellite earth stations and VSAT systems is prohibited without such licenses.

Our airborne products require certifications and approvals from aviation regulators such as the U.S. Federal Aviation Administration, or FAA, the Luftfahrt‑Bundesamt, or LBA, the European Union Aviation Safety Agency, or  EASA, or other regional aviation authorities. These certifications are obtained by our customers or by our subsidiaries Wavestream or SBS, depending on the specific product.

We must also obtain regulatory approvals in each country in which we intend to provide network services or operate VSATs or connectivity terminals. In several regions, including in parts of Latin America, the approval process can be lengthy and resource intensive. Any licenses or approvals we obtain may be subject to operational conditions or limitations that restrict our activities. Regulatory authorities may also impose new requirements after licenses are granted. Failure to obtain required licenses, to renew them, or to comply with evolving regulatory obligations could result in significant monetary penalties or restrictions on our business activities. In addition, many of our products require certification of compliance with local technical and safety standards. Delays in obtaining such certifications could postpone product deployment or limit our ability to supply certain markets.

Currency exchange rates and fluctuations may adversely affect our results of operations, liabilities, and assets. Operating in several countries, we are impacted by various currency exchange rates. Although partially mitigated by hedging activities, we are affected in several ways:

We also face other foreign currency risks, including repatriation restrictions in certain countries, particularly in Latin America. While we enter hedging transactions to limit the impact of currency fluctuations, these may only provide partial protection, leaving some exchange rate-related losses and risks uncovered. Therefore, our business and profitability may be harmed by such fluctuations.

We may be subject to liability claims relating to the products we sell or the services we provide. Potential liability claims could include, among others, claims for exposure to electromagnetic radiation from the antennas we provide or use. We endeavor to include in our agreements with our business customers provisions designed to limit our exposure to potential claims. We also maintain a product liability insurance policy. However, we may fail to include limitations of our liability in our contracts, or our contractual limitations of liability may be rejected or limited in certain jurisdictions. Additionally, our insurance does not cover all relevant claims, such as claims for exposure to electromagnetic radiation, and does not provide sufficient coverage. To date, we have not been subject to any material product liability claim. Our business, financial condition and operating results could be materially adversely affected if costs resulting from future claims are not covered by our insurance or exceed our coverage.

Our operations are subject to various Israeli, U.S. federal, state, and local as well as certain other foreign environmental laws and regulations within the countries in which we operate relating to the discharge, storage, treatment, handling, disposal, and remediation of certain materials, substances, and wastes used in our operations. New laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or the imposition of new clean-up requirements may require us to incur a significant amount of additional costs in the future and could decrease the amount of cash flow available to us for other purposes, including capital expenditures, research and development and other investments and could have a material adverse effect on our business, financial condition, results of operations, cash flows and future prospects. We may identify deficiencies in our compliance with local legislation within countries in which we operate. Failure to comply with such legislation could result in sanctions by regulatory authorities and could adversely affect our operating results. Examples of these laws and regulations include the E.U. Restriction on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment Directive, and the E.U. Waste Electrical and Electronic Equipment Directive.

The Sarbanes-Oxley Act of 2002 and related Securities and Exchange Commission, or SEC and  Public Company Accounting Oversight Board, or PCAOB rules require us to maintain, evaluate, and report on the effectiveness of our Internal Control Over Financial Reporting, or ICFR. Our management is required to assess the effectiveness of our ICFR, and our independent registered public accounting firm is required to attest to management’s assessment. Compliance with these requirements involves significant costs and places demands on management’s time and resources.

Although management concluded that our ICFR was effective as of December 31, 2025, we may identify material weaknesses or significant deficiencies in the future. Any failure to maintain effective ICFR could result in regulatory inquiries or sanctions, could adversely affect our ability to report accurate financial results on a timely basis, and could reduce investor confidence in our financial reporting, which may adversely affect the market price of our ordinary shares.

The trading price of our shares as well as the market generally has fluctuated widely in the past and may continue to do so in the future as a result of a number of factors, many of which are outside our control. During the period from January 2, 2025, to March 10, 2026, our ordinary shares traded in a range from $5.47 to a high of $19.97, based on the closing price, and the daily trade volume on NASDAQ ranged from 116,245 shares to 3.8 million shares. In addition, the stock market has experienced extreme price and volume fluctuations that have affected the market prices of many technology companies, particularly telecommunication and internet-related companies, and that have often been unrelated or disproportionate to the operating performance of these companies or stimulated by market rumors. These broad market fluctuations could adversely affect the market price of our shares. In the past, following periods of volatility in the market price of a particular company’s securities, securities class action litigation has often been brought against that company. Securities class action litigation against us could result in substantial costs and a diversion of our management’s attention and resources.

Our operating results have and may continue to vary significantly from quarter to quarter. The causes of fluctuations include, among other things:

The quarterly variation of our operating results may, in turn, create volatility in the market price for our shares. Other factors that may contribute to wide fluctuations in our market price, many of which are beyond our control, include, but are not limited to:

In addition to the volatility of the market price of our shares, the stock market in general and the market for technology companies in particular has been highly volatile and at times thinly traded. Investors may not be able to resell their shares during and following periods of volatility.

U.S. holders of our ordinary shares may face income tax risks. There is a risk that we will be treated as a “passive foreign investment company” in the future. Our treatment as a PFIC could result in a reduction in the after-tax return to the holders of our ordinary shares and would likely cause a reduction in the value of such shares. A foreign corporation will be treated as a PFIC for U.S. federal income tax purposes if either (1) at least 75% of its gross income for any taxable year consists of “passive income,” or (2) at least 50% of the average value of the corporation’s gross assets are of a type that produces, or is held for the production of, such types of “passive income.” For purposes of these tests, “passive income” includes dividends, interest, gains from the sale or exchange of investment property, and rents and royalties other than rents and royalties that are received from unrelated parties in connection with the active conduct of a trade or business. For purposes of these tests, income derived from the performance of services does not constitute “passive income”. If we are treated as a PFIC, U.S. Holders of shares (or rights) would be subject to a special adverse U.S. federal income tax regime with respect to the distributions they receive from us, and the gain, if any, they derive from the sale or other disposition of their ordinary shares (or rights). In particular, any dividends paid by us, if any, would not be treated as “qualified dividend income” eligible for preferential tax rates in the hands of non-corporate U.S. shareholders, and could be subject to an “interest” charge under the “excess distributions regime”. We believe that we were not a PFIC for the 2023, 2024 or 2025 taxable years. However, since PFIC status depends upon the composition of our income and the market value of our assets from time to time, there can be no assurance that we will not become a PFIC in any future taxable year. Our treatment as a PFIC could result in a reduction in the after-tax return to the holders of our ordinary shares and would likely cause a reduction in the value of such shares. U.S. Holders should carefully read Item 10E. “Additional Information – Taxation” for a more complete discussion of the U.S. federal income tax risks related to owning and disposing of our ordinary shares (or rights).

In August 2025, we filed a shelf registration statement with the SEC, allowing for the issuance and sale of up to $150 million of ordinary shares and other securities. In addition, in September and December 2025, we issued an aggregate of approximately 15.9 million ordinary shares in Regulation S offerings to Israeli institutional investors, which increased the number of shares available for resale. We cannot predict what effect, if any, future sales of our ordinary shares by us or by our significant shareholders, or the availability of additional shares for sale (including shares issuable upon the exercise of outstanding options), will have on the market price of our ordinary shares.

Sales of substantial amounts of our ordinary shares, or the perception that such sales may occur, could adversely affect the market price of our ordinary shares and could make it more difficult for investors to sell their shares at a time or price they deem appropriate.

We have distributed dividends in the past; however, we have not adopted a general dividend policy and cannot assure that we will distribute dividends in the future. Any decision to declare dividends is at the discretion of our board of directors and depends on our results of operations, cash needs, financial condition, contractual restrictions, and other relevant factors. In addition, under Israeli law, except in limited cases, dividends may be paid only out of retained earnings and only if the distribution does not create a reasonable concern that we will be unable to meet our obligations as they become due. Accordingly, investors should not rely on receiving dividend income from our shares. For information regarding taxation of dividend, see ITEM 10.E – “Additional Information - Taxation - Israeli Tax Consequences of Holding Our Shares - Dividends”.

Our ordinary shares are traded on the NASDAQ Global Select Market, or NASDAQ, and on the TASE. Trading in our ordinary shares on these markets is made in different currencies (U.S. dollars on the NASDAQ, and NIS on the TASE), and at different times (resulting from different time zones, different trading days and different public holidays in the U.S. and Israel). Consequently, the trading prices of our ordinary shares on these two markets often differ. Any decrease in the trading price of our ordinary shares on one of these markets could cause a decrease in the trading price of our ordinary shares on the other market.

We are incorporated in Israel and maintain our headquarters, principal R&D facilities, and certain manufacturing activities there. As a result, our business, financial condition, and results of operations are directly affected by political, economic, and military conditions in Israel. Any significant deterioration in these conditions may materially adversely affect our ability to produce and sell our products.

Since October 2023, Israel has been engaged in sustained armed conflict following the Hamas attack on Israel, which resulted in extensive casualties, kidnappings, and widespread rocket fire. Hostilities subsequently expanded to additional fronts, including Hezbollah in Lebanon, militias operating from Syria, and the Houthis in Yemen. In 2025, Israel and Iran were engaged in an intense 12‑day exchange of attacks, including missile strikes, cyberattacks, and aviation disruptions.

On February 28, 2026, the United States and Israel launched preemptive strikes against Iran, publicly described as targeting Iran’s nuclear and ballistic missile program and related military capabilities, and Iran responded with missile and drone attacks against Israel, U.S. forces and interests in the region, and locations in certain Gulf countries. Since that time, the armed conflict has resumed and remains ongoing, with repeated missile and drone attacks and heightened risk of escalation, including through cyber and other asymmetric activities. In addition, Hezbollah, the Iran-aligned armed group in Lebanon, has resumed attacks against Israel, further increasing regional instability and the risk of additional escalation on Israel’s northern border.

Although ceasefires were previously announced between Israel and Hamas, the overall regional situation remains volatile and unpredictable. In particular, the ceasefire arrangements and negotiations relating to Gaza have faced recurring strain, and there is continuing uncertainty regarding the potential for renewed and expanded hostilities between Israel and Hamas.

These events have created, and may continue to create, uncertainty and operational risks for Israeli companies. The Israel Defense Forces have mobilized large numbers of reservists at various points, including employees of our Company and their close family members. Significant or prolonged absences of key personnel could disrupt our operations.

Ongoing hostilities and regional tensions have affected commercial aviation routes, shipping lanes, and overland transport. Since February 28, 2026, the conflict has contributed to disruptions to regional air travel and to maritime traffic through critical routes, including increased risk and disruption around the Strait of Hormuz, and broader impacts on energy and freight markets. In addition, following the February 28, 2026 strikes, Houthi officials indicated an intent to resume missile and drone attacks against commercial shipping in and around the Red Sea and Gulf of Aden, which could lead to diversions, longer transit times, and higher shipping and insurance costs.  Such circumstances may delay the receipt of raw materials or components, disrupt logistics, or increase our operating costs. While our production facilities in Israel have operated without material interruption to date, there is no assurance that future events will not adversely affect our manufacturing capacity or that of our Israeli suppliers or contractors.

Armed conflicts, ongoing security threats, and geopolitical tensions may adversely affect Israel’s economy, currency exchange rates, credit markets, investor confidence, and general business activity. Additionally, cyberattacks targeting Israeli entities have increased in frequency and sophistication, potentially heightening operational and security risks for Israeli technology companies.

Although the Abraham Accords expanded commercial opportunities in certain regional markets, a number of countries, primarily in the Middle East, as well as Malaysia and Indonesia, continue to restrict business with Israel or Israeli companies. These restrictions limit our ability to sell products in those jurisdictions directly from Israel. There are also increasing calls in certain markets for boycotts of Israeli products or of companies perceived to be associated with Israel, which may adversely affect demand for our products.

Commercial insurance available to Israeli companies may not cover losses resulting from acts of war or terrorism. While Israeli law currently provides a governmental compensation mechanism for certain direct damages caused by hostilities, there is no assurance that such protection will continue to be available in its current form or will adequately cover our potential losses.

In addition, the current Israeli government has continued to pursue extensive changes to Israel’s judicial system. Public debate around these proposed reforms has been significant, and periods of political instability related to these initiatives have, at times, affected Israel’s economic environment. Actual or perceived instability regarding changes to Israel’s judicial framework may adversely affect investor confidence, Israel’s credit profile, or the broader business climate, any of which could negatively impact our operations, financial condition, and share price.

Although the hostilities and geopolitical developments described above have not had a material adverse effect on our business to date, the situation remains unpredictable. We continue to closely monitor political and military developments. Any significant escalation of regional hostilities, prolonged mobilization of Israeli reservists, interruption of transportation routes, or material compromise to Israel’s economic stability could negatively impact our business, financial condition, and results of operations.

Because we are an Israeli company, the rights and responsibilities of our shareholders are governed by our Articles of Association and by Israeli law. These rights and responsibilities differ in some respects from the rights and responsibilities of shareholders in a Delaware corporation. In particular, a shareholder of an Israeli company has a duty to act in good faith towards the company and other shareholders and to refrain from abusing his, her or its power in the company, including, among other things, in voting at the general meeting of shareholders on certain matters. Israeli law provides that these duties are applicable to shareholder votes on, among other things, amendments to a company’s articles of association, increases in a company’s authorized share capital, mergers and interested party transactions requiring shareholder approval. In addition, a shareholder who knows that it possesses the power to determine the outcome of a shareholders’ vote or to appoint or prevent the appointment of a director or executive officer in the company has a duty of fairness towards the company. However, Israeli law does not define the substance of this duty of fairness. There is little case law available to assist in understanding the implications of these provisions that govern shareholder behavior.

As a foreign private issuer whose shares are listed on the NASDAQ, we are permitted to follow certain home country corporate governance practices instead of certain requirements of The NASDAQ Marketplace Rules. We follow Israeli law and practice instead of The NASDAQ Marketplace Rules with respect to the director nominations process and the requirement to obtain shareholder approval for the establishment or material amendment of certain equity-based compensation plans and arrangements. As a foreign private issuer listed on the NASDAQ, we may also follow home country practice with regard to, among other things, the requirement to obtain shareholder approval for certain dilutive events (such as for an issuance that will result in a change of control of the company, certain transactions other than a public offering involving issuances of a 20% or more interest in the company and certain acquisitions of the stock or assets of another company). A foreign private issuer that elects to follow a home country practice instead of NASDAQ requirements must submit to NASDAQ in advance a written statement from an independent counsel in such issuer’s home country certifying that the issuer’s practices are not prohibited by the home country’s laws. In addition, a foreign private issuer must disclose in its annual reports filed with the SEC each such requirement that it does not follow and describe the home country practice followed by the issuer instead of any such requirement. Accordingly, our shareholders may not be afforded the same protection as provided under NASDAQ’s corporate governance rules.

We are incorporated in Israel. All of our directors and executive officers reside outside the U.S., and a significant portion of our assets and the personal assets of most of our directors and executive officers are located outside the U.S. Therefore, it may be difficult to effect service of process upon any of these persons within the U.S. In addition, a judgment obtained in the U.S. against us, or against such individuals, including but not limited to judgments based on the civil liability provisions of the U.S. federal securities laws, may not be collectible within the U.S.

Additionally, it may be difficult for an investor or any other person or entity, to assert U.S. securities law claims in original actions instituted in Israel. Israeli courts may refuse to hear a claim based on a violation of U.S. securities laws on the ground that Israel is not the most appropriate forum in which to bring such a claim. Even if an Israeli court agrees to hear a claim, it may determine that Israeli law is applicable to the claim. Certain matters of procedures will also be governed by Israeli law.

We currently generally include non-competition clauses in the employment agreements of our employees in certain regions. The provisions of such clauses prohibit our employees, if they cease working for us, from directly competing with us or working for our competitors for a certain period of time. Israeli labor courts have required employers, seeking to enforce non-compete undertakings against former employees, to demonstrate that the competitive activities of the former employee will cause harm to one of a limited number of material interests of the employer recognized by the courts (for example, the confidentiality of certain commercial information or a company’s intellectual property). In the event that any of our employees chooses to leave and work for one of our competitors, we may be unable to prevent our competitors from benefiting from the expertise of our former employee obtained from us, if we cannot demonstrate to the court that our interests as defined by case law would be harmed. Non-competition clauses may be unenforceable or enforceable only to a limited extent in other jurisdictions as well.

We were incorporated in Israel in 1987 and are subject to the laws of the State of Israel. We are a public limited liability company under the Israeli Companies Law and operate under that law and associated legislation. Our corporate headquarters, executive offices, and main research and development and engineering facilities, as well as facilities for product assembly, are located at Gilat House, 21 Yegia Kapayim Street, Kiryat Arye, Petah Tikva 4913020, Israel. Our telephone number is (972) 3-925-2000. Our address in the U.S. is c/o Wavestream Corporation at 545 West Terrace Drive, San Dimas, California 91773. Our website address is www.gilat.com. The information on our website, or that can be accessed through, is not incorporated by reference into this Annual Report.

We are a global provider of satellite-based broadband communications, developing and manufacturing ground-segment equipment, including our cloud-based network platform, VSAT terminals, modems, on-the-move and IFC ESA antennas, SSPAs, BUCs, and transceivers, and delivering integrated end-to-end connectivity solutions for broadband, mobility, enterprise, government, and defense applications. We also provide managed connectivity services over networks we deploy and operate, primarily under BOT and BOO models. Our customers include satellite operators, communication and mobile network providers, system integrators, and government and defense organizations worldwide, supported by global sales and service offices, Network Operations Centers, and R&D centers in Israel, the United States, and Europe.

We shipped our first generation VSAT in 1989, and since then, we have been among the technological leaders in the satellite ground equipment industry. Our continuous investment in research and development has resulted in the development of new and industry leading products and our intellectual property portfolio includes 68 issued patents (50 U.S. and 18 foreign) relating to our VSAT and other systems as well as 4 issued patents in the U.S. relating to our satellite communication on the move antenna solutions and 14 issued patents (4 U.S. and 10 foreign) for our high power SSPAs, and other systems.

On June 17, 2024, we, through our subsidiary Wavestream Corporation, entered into a Membership Interest Purchase Agreement with SBS, a leading U.S. based provider of next-generation SATCOM terminal solutions, and the owners of its membership interests, which was amended on December 11, 2024 (the “Purchase Agreement”). Pursuant to the Purchase Agreement, Wavestream agreed to purchase from the sellers 100% of the membership interests of SBS.

The acquisition was completed on January 6, 2025, and the initial closing cash payment of $98 million ($108 million as adjusted) was funded through a combination of existing cash resources and $60 million drawn under a new secured credit line that we entered into with HSBC Bank USA, N.A., and Bank Hapoalim B.M. As of December 31, 2025, this credit line had been repaid in full. Following the determination that the first and second performance milestones were not achieved, the remaining contingent consideration was adjusted in accordance with the purchase agreement. As a result, the total cash consideration in connection with the acquisition may increase by up to an additional $99 million, payable in cash, subject to the achievement of future performance milestones.

We are a leading provider of ground-based satellite communications and other network communications solutions and services. We believe in the right of all people to be connected. Our mission is to create and deliver deep technology solutions for satellite, ground, and new space connectivity.

We design and manufacture ground-based satellite networking communications equipment, which we sell to our customers as network components (modems, BUCs, antennas), complete network solutions (including hubs, related terminals, and services), or turnkey projects. We develop the equipment that includes commercial VSAT systems, defense and homeland security satellite communications systems, SSPAs, BUCs, transceivers, low-profile antennas, IFC ESA antennas and terminals, on-the-Move and on-the-Pause terminals, and modems. Our equipment is used by satellite operators, service providers, telecommunications operators, MNOs, system integrators, government and defense organizations, large corporations, and enterprises. We sell and distribute our products and provide our services internationally in North America, Latin America, Asia, Asia Pacific, Africa, and Europe. In particular, we provide connectivity services, internet access, and telephony to enterprise, government, and residential customers over our own networks, built using both our equipment and equipment purchased from other manufacturers in various technologies and over other networks that we install, mainly based on BOT and BOO contracts. We build telecommunication infrastructure in these projects, typically using fiber-optic and wireless technologies for broadband connectivity. We also provide NOC services and hub services. Following the acquisition of DataPath and SBS, our portfolio also includes defense ground systems and field services, and IFC ESA terminals.

We have diversified revenue streams that result from both sales of products, which include construction of networks, and services. In the year ended December 31, 2025, approximately 73% of our revenues were derived from sales of products and 27% from services. During the same period, we derived 61%, 15% and 2% of our revenues from the U.S., Peru and Israel, respectively.

Satellite-based communications continue to play a critical role in delivering broadband connectivity across regions that lack reliable terrestrial infrastructure and in supporting mobility, defense, enterprise, and government applications. Satellite networks provide global reach, rapid deployment, resilience, and highly reliable service availability, making them an essential complement to fiber, cellular, and wireless networks in many markets.

Broadband satellite networks typically operate using GEO satellites, and NGSO satellite constellations, including MEO and LEO satellite constellations. Leading operators in these markets include SES (which in 2025 completed the acquisition of Intelsat), Viasat, Hispasat, and emerging NGSO constellations such as SpaceX’s Starlink, Amazon Leo, SES’s O3b mPOWER, Telesat Lightspeed, and Eutelsat OneWeb. These systems provide wide geographic coverage and support high capacity, multibeam architectures, geostationary constellations, earth‑orbit capacity, and multi‑beam architectures.

Ground segment equipment, including Hubs, VSATs,  amplification systems such as SSPAs and BUCs, and mechanical and ESAs terminals that enable two-way broadband communications. These systems connect remote sites, mobility platforms, and mission-critical applications through a centralized hub or distributed architecture. Industry research continues to highlight the importance of innovations such as software-defined satellites, cloud-integrated ground networks, ESA technology, and multi-orbit networking segment equipment

The demand for satellite-based solutions is driven by several long-term trends:

Capacity expansion.Industry analyses indicate that satellite capacity continues to expand, particularly through NGSO deployments, which are expected to contribute significantly to total global capacity in the coming years. Increasing available capacity has also contributed to reductions in effective capacity pricing.

Mobility and in-flight connectivity. Connectivity requirements for aviation, maritime, and land mobility continue to grow as airlines, vessel operators, and transportation networks adopt high-speed broadband solutions for passengers, crew, and operational systems. ESAs and compact in-motion terminals are increasingly required to support multi-orbit, low-latency connectivity.

Enterprise and government applications. Enterprises, financial institutions, government ministries, and defense organizations rely on satellite networks for secure communications, SCADA, backup connectivity, corporate networking, emergency response, and mission-critical operations.

Digital inclusion initiatives. Governments worldwide continue to invest in programs aimed at connecting underserved or remote populations, for which satellite technology remains a cost-effective and rapidly deployable solution.

Defense.Defense agencies increasingly require resilient, mobile, high-throughput solutions, including transportable terminals, UAV communications, and protected tactical networks, many of which leverage multi-orbit architectures and advanced RF technologies.

Multi Orbit.  Multi‑orbit architectures (LEO, MEO and GEO) are driving demand, as operators seek seamless global coverage, lower latency, and higher resiliency across diverse mission needs.

We believe these trends will continue to support the long-term demand for satellite communications equipment, mobility solutions, and managed network services. Although specific market growth rates vary across product segments and geographies, publicly available industry commentary indicates that the SATCOM sector demonstrated resilience in recent years and is expected to benefit from continued NGSO expansion, growth in enterprise backhaul, and the increasing adoption of mobility and cloud-based applications.

Market presence across diverse geographies and applications. Since inception, we have deployed millions of VSATs and thousands of BUCs, SSPAs, and transceivers to hundreds of customers. Our customer base includes satellite operators, communication service providers, MNOs, system integrators, defense entities, and government agencies.

Proven technology and product innovation. For nearly four decades, we have developed advanced satellite network platforms and RF technologies for broadband, mobility, enterprise, cellular backhaul, government, and defense applications. Our platforms, including SkyEdge IIc and SkyEdge IV, support HTS, VHTS, NGSO, and multi-orbit architectures, with high throughput, efficient spectrum utilization, and flexible service management. Our ESA and IFC terminals offering, was significantly enhanced through the SBS acquisition. Amplifiers and RF product lines including SSPA, FCU and defense grade integrated SATCOM solutions such as Deployable Ku/Ka/X-band Earth Terminal, or DKET, and SkyEdge IV, support HTS, VHTS and NGSO. Our SBS acquisition provided us with new capabilities of Aero terminals integration and certifications in the Aero industry.

Global footprint and support capabilities. We operate through sales and service offices, R&D centers, and network operations centers across multiple regions, enabling us to provide localized deployment, integration, and support. This structure enhances operational reliability and customer responsiveness.

Integrated solutions and turnkey delivery. We provide complete, end-to-end solutions that integrate satellite network equipment, RF amplifiers, antennas, and managed services. Our offerings include design, deployment, operation, and maintenance of communication networks, including complex governmental and rural connectivity projects.

Diversified revenue model. For the year ended December 31, 2025, approximately 73% of our revenues were derived from equipment sales and 27% from services. Equipment revenues include ESA antennas, IFC terminals, VSATs, hubs, RF amplifiers, and construction phase project revenues. Services revenues include managed networks, connectivity, maintenance, and field services, providing recurring and predictable revenue streams. phase project revenues. Services revenues include managed networks, connectivity and maintenance.

Our operating segments, Gilat Commercial, Gilat Defense, and Gilat Peru, accounted for 62%, 22%, and 16% of our revenues, respectively.

Execution capabilities in remote and challenging environments. We have extensive experience deploying and operating communication networks in remote, rural, and logistically challenging areas. This experience supports our ability to execute multi-year government-funded and infrastructure projects.

As of January 1, 2025, the Company adopted a new organizational structure and reporting segments. This structure aims to better align with the diverse and attractive end markets we serve and to enhance investor insight into our business lines and strategic growth opportunities. As of January 1, 2025, the Company reports its financial results based on the following three divisions: Gilat Defense, Gilat Commercial, and Gilat Peru.

Gilat Defense Division. Our defense division aims to provide secure, rapid-deployment solutions for military organizations, government agencies, defense integrators, and other strategic governmental customers, with a strong emphasis on the U.S. Department of Defense, following our strategic acquisition of DataPath. By integrating technologies from Gilat, Gilat DataPath, and Gilat Wavestream, the division is uniquely positioned to deliver resilient battlefield and mission-critical connectivity with multiple layers of communication redundancy to ensure high availability.

Gilat Commercial Division. Our commercial division offers advanced broadband satellite communication networks for IFC, Enterprise, and Cellular Backhaul, supporting HTS, VHTS, and NGSO constellations. Our acquisition of SBS serves as a cornerstone of this division, bolstering our position in the IFC market and enabling us to provide cutting-edge connectivity solutions that meet the demands of passengers, airlines, and service providers worldwide.

Gilat Peru Division. Our Peru division specializes in end-to-end telecommunications solutions, including the operation and implementation of large-scale network projects. With expertise in terrestrial fiber optic, wireless, and satellite networks, Gilat Peru offers technology integration, managed networks and services, connectivity solutions, and reliable internet and voice access across the region.

Expand our presence in the IFC market. Following the acquisition of SBS in January 2025, our portfolio also includes next-generation Satcom ESA terminal solutions, such as SBS’ Sidewinder terminal, which includes scalable subarrays and can support GEO satellites and LEO satellite constellations. These solutions are designed to support the rapid growth of IFC services in the commercial aviation and business aviation markets. We continue to develop our hub and modem technology and our Ka and Ku airborne BUCs, Transceivers, Frequency Conversion Units, or FCU and Power supplies to serve the connectivity needs of aviation service providers. We are also placing a focus on developing a flat Electronically Steered antenna leveraging our unique in-house developed ally technology.

Our products and solutions portfolio spans the full range of technologies supporting our Commercial division. At its core is our SkyEdge family of multi-orbit satellite networking platforms. Complemented by our SCPC modem solutions for high-capacity, dedicated links, our VSAT product families, IFC terminals, and antenna systems including mechanically steered antennas and ESA solutions, enable broadband and mobility services across aviation, maritime, land mobility, and government markets. In parallel, our RF Power Amplifier, BUC, FCU product lines provide the high power, high efficiency RF chains required for mission-critical commercial applications. Together, these product families form the technological foundation of our end-to-end connectivity solutions across our global Commercial segments.

Gilat’s SkyEdge family is our core portfolio of satellite networking platforms, designed to deliver high-speed, reliable connectivity across enterprise, mobility, cellular backhaul, government, maritime, and IFC markets. These platforms enable customers to deploy and operate broadband networks efficiently and at scale.

SkyEdge II-c.          SkyEdge IIc is a proven multi-service platform used globally by service providers. It supports single-beam and multi-beam satellites and is designed for large-scale broadband deployments. The platform enables a broad range of applications, including enterprise connectivity, broadband, cellular backhaul, and mobility, supported through centralized,  management across multiple gateways and terminals.

SkyEdge IV.          SkyEdge IV is Gilat’s next‑generation multi‑orbit platform supporting HTS, VHTS, and NGSO constellations within a unified network. Built on Gilat’s Elastix Architecture, it is designed to provide higher capacity and improved space‑segment efficiency and is being enhanced to support evolving standards.

Our SkyEdge platforms are complemented by a range of VSAT products that address specific customer requirements:

Gemini. Compact broadband VSATs serving residential, small business, and enterprise applications, including retail, banking, ATMs, and government-funded digital inclusion programs.

Capricorn.High-performance VSATs tailored for enterprise networks, mobility, and 2G/3G/4G/5G cellular backhaul, supporting high user density and advanced acceleration technologies.

Taurus.          VSATs are designed for in-flight connectivity, supporting broadband IFC.

Aquarius.     Our latest VSAT family, supporting speeds up to 1.5 Gbps, is designed for high-speed mobility, maritime, and 5G-ready applications. Aquarius enables roaming across NGSO and GEO satellites and is available in indoor, outdoor, symmetric‑SCPC, and cost-optimized enterprise versions.

Both SkyEdge II-c and SkyEdge IV are managed through a unified, system that provides full visibility and centralized control from a Network Operations Center. This includes monitoring, configuration, performance management, and security. The platform supports multiple operator business models, integrates with operations support system/business support system, or OSS/BSS, and enables coordinated operations across multi-orbit networks.

We also provide a range of Single-Channel-Per-Carrier, or SCPC modems, designed for dedicated, high-capacity, point-to-point satellite links. These solutions provide reliable connectivity for enterprise and government applications, optimized for bandwidth efficiency and service continuity. Available models include the Aquarius Pro SCPC, GLT 1000, and GLT 1500, supporting high throughput, multi-orbit operation, and secure, robust performance in demanding environments.

Sidewinder.A full ESA terminal solution that is optimized to enable the performance and cost advantages of multi-orbit service, LEO and GEO. It has already been selected by satellite operators and airlines to provide next-generation satcom solution offerings. Through these collaborations, Sidewinder has been embraced by some of the world’s largest airlines.

ESR 2030. is an ultra-slim, low-profile ESA antenna for business aviation that operates in LEO constellations.

Our portfolio includes high-performance RF power amplifiers, SSPAs, BUCs, transceivers, and FCUs, used in satellite communications across commercial markets. These products form a core part of the ground segment infrastructure and are designed to deliver reliable, efficient operation in demanding environments.

We apply our proprietary Spatial AdvantEdge™ technology across this portfolio. This architecture enables high power output in compact form factors, improves energy efficiency and thermal performance, and reduces lifecycle costs.

Our solid-state power amplifiers, or SSPAs are field-proven in Ka, Ku, and X bands and are designed to meet stringent environmental and vibration standards required for mission-critical applications. These products support a variety of use cases, including satellite gateways, airborne and maritime communications, transportable terminals, and broadcast systems.

The product family includes several SSPA lines, such as EnduroStream, PowerStream®, TerraStream, AeroStream®, and MicroStream, offered in multiple power levels and configurations. AeroStream® is our transceiver line designed for in-flight satellite connectivity. It is certified to leading commercial aviation and military standards and integrates seamlessly with modems and antenna control units. AeroStream® leverages Spatial AdvantEdge™ technology to deliver high power and efficiency for aeronautical communications. Our integrated solutions approach allows these transceivers to operate with our broader portfolio of VSATs, antennas, and BUCs.

Our products and solutions portfolio spans the full range of technologies supporting our Defense division. At its core is our SkyEdge family of multi-orbit satellite networking platforms, complemented by our SCPC modem solutions for high-capacity, dedicated links, our VSAT product families, IFC terminals, and antenna systems, including mechanically steered antennas and ESA solutions, transportable, and portable antenna systems, enable resilient and secure broadband and mobility services across defense markets. In parallel, our RF Power Amplifier, BUC, FCU product lines provide the high power, high efficiency RF chains required for mission-critical defense applications. Together, these product families form the technological foundation of our end-to-end connectivity solutions across our global Defense segment.

Gilat’s SkyEdge family is our core portfolio of satellite networking platforms, designed to deliver high-speed, reliable connectivity for defense networking needs. These platforms enable customers to deploy and operate broadband defense networks efficiently and on a scale. The Defense portfolio includes additional features that are making the platform secure and immune. For example, TRANSEC and VLSNR.

SkyEdge II-c.          SkyEdge IIc is a proven multi-service platform used globally by service providers. It supports single-beam and multi-beam satellites and is designed for large-scale broadband deployments. The platform enables a broad range of defense applications, including fixed and mobile, and is supported by centralized management across multiple gateways and terminals.

SkyEdge IV.          SkyEdge IV is Gilat’s next‑generation multi‑orbit platform supporting HTS, VHTS, and NGSO constellations within a unified network. Built on Gilat’s Elastix Architecture, it is designed to provide higher capacity and improved space‑segment efficiency and is being enhanced to support evolving standards.

Our SkyEdge platforms are complemented by a range of VSAT products that address specific customer defense requirements:

 Taurus-M.High-performance Mil-Standard VSATs tailored for fixed and mobile defense networks, supporting advanced security and acceleration technologies.

Taurus.          VSATs are designed for in-flight connectivity, supporting broadband IFC.

Aquarius and Aquarius DS.          Our latest VSAT family, supporting speeds up to 1.5 Gbps, is designed for high-speed mobile and maritime applications. Aquarius enables roaming across NGSO and GEO satellites and is available in indoor, outdoor, and SCPC configurations.

Both SkyEdge II-c and SkyEdge IV are managed through a unified system that provides full visibility and centralized control from a Network Operations Center. This includes monitoring, configuration, performance management, and security. The platform supports multiple operator business models, integrates with operations support system/business support system, or OSS/BSS, and enables coordinated operations across multi-orbit networks.

We provide a range of Single-Channel-Per-Carrier, or SCPC modems, designed for dedicated, high-capacity, point-to-point satellite links. These solutions provide reliable connectivity for defense applications optimized for security, resiliency, bandwidth efficiency, and service continuity. Available models include the Aquarius Pro SCPC, MLT  1000, and GLT 2000, supporting high throughput, multi-orbit operation, and secure, robust performance in demanding environments.

Sidewinder.A full ESA terminal solution that is optimized to enable the performance and cost advantages of multi-orbit service LEO and GEO for defense aviation markets.

ESR 2030. is an ultra-slim, low-profile ESA antenna for business aviation that operates in LEO constellations. This antenna can be used in ISR defense missions and over narrow-body aircraft in the defense market segment.

BRP-60.is a lightweight, airborne SATCOM terminal, used for UAV applications.

Our defense portfolio includes high-performance RF power amplifiers, SSPAs, BUCs, and transceivers, used in satellite communications across defense markets. These products form a core part of the ground segment infrastructure and are designed to deliver reliable, efficient operation in demanding environments.

We apply our proprietary Spatial AdvantEdge™ technology across this portfolio. This architecture enables high power output in compact form factors, improves energy efficiency and thermal performance, and reduces lifecycle costs.

Our solid-state power amplifiers, or SSPAs, are field-proven in Ka, Ku, X, and V (under development) bands and are designed to meet stringent environmental and vibration standards required for mission-critical applications. These products support a variety of use cases, including satellite gateways (GEO, MEO, and LEO), airborne and maritime communications, and transportable terminals.

The product family includes several SSPA lines, such as EnduroStream - optimised for high power and extra resiliency, PowerStream® - TWTA replacement, TerraStream, AeroStream®, and MicroStream, offered in multiple power levels and configurations. Our integrated solutions approach allows these transceivers to operate with our broader portfolio of VSATs, antennas, and BUCs.

We provide end-to-end system integration and turnkey implementation services t, enabling customers to rely on a single provider for complex, interdisciplinary communication projects. Our turnkey capabilities encompass full project management, satellite network design, deployment logistics, integration of Gilat and third-party equipment, operational services, 24/7 maintenance and support, and, when required, the provision of satellite space segment. This comprehensive approach enables us to deliver complete solutions that meet customer requirements on scope, schedule, and budget. We provide on-site field services to our defense customers globally.

Our products are designed and tested at our facilities in Israel as well as our number of other R&D facilities around the world. We outsource a significant portion of the VSAT and hub products manufacturing to third parties. We also work with third-party vendors for the development and manufacture of components integrated into our products, as well as for the assembly of components for our products.

We offer a customer care program for our products, which we refer to as SatCare or SkyCare, and professional services programs that improve customer network availability through ongoing support and maintenance cycles.

We use both direct and indirect sales channels to market our products, solutions, and services. Our Fixed Networks segment has organized its sales activities by geographic areas, with groups or subsidiaries covering most regions of the world. Our sales teams are comprised of account managers and sales engineers who establish account relationships and determine technical and business requirements for the customer’s network. These teams also support the other distribution channels with advanced technical capabilities and application experience. Sales cycles in the VSAT and IFC network market, and in the defense market, vary significantly, with some sales requiring 18 months and even more, from an initial lead through signing of the contract, while sales stemming from an immediate need for product delivery can be completed within two to three months for VSAT products and within nine to twelve months for our IFC ESA terminals. The sales process includes gaining an understanding of customer needs, several network design iterations and network demonstrations.

We provide our Satellite Communication solutions mainly to satellite operators, governments, MNOs, telecommunication service providers, ISPs, and homeland security and defense agencies.

We sell and distribute our products and provide services internationally, particularly in the U.S., Latin America, Asia, Asia Pacific,  Africa and Europe.

Satellite Operators.Use our products for HTS and VHTS GEO and NGSO satellite networks. In this case, our platforms are used for a variety of applications and services. For example, we provide to SES platforms for GEO and MEO constellations. Our products are used extensively for the IFC and maritime markets.

Defense and Homeland Security Agencies. Our products and solutions are used by defense and homeland security agencies to provide connectivity and control in the net-centric battlefield. That includes transportable and portable terminals, VSATs, Modems, Antenna products, including ESA, RF Power amplifiers, and transceivers.

Governments.Some of the rural communication projects are for government customers. Our platforms are used for projects of digital inclusion that are funded by governments.

ISP.We sell VSAT communications networks and solutions primarily to service providers that mostly serve the enterprise consumers, government agencies, and the mobility market. We have hundreds of such customers worldwide.

Enterprises.Use our networks for internet access, broadband data, voice and video connectivity and for applications such as online banking, corporate intranet, distance learning, retail point of-sale, inventory control, supervisory control data acquisition and IoT services.

Our Peruvian subsidiary has offices in Lima, Peru as well as in the principal cities in the regions awarded.

The telecommunications industry operates in a competitive, rapidly changing market. In some cases, our competitors can also be our customers or partners. Accordingly, maintaining an open and cooperative relationship is essential.

In the equipment market, we face direct competition from providers of satellite communications systems, products, and services, such as HNS, ViaSat, ST Engineering iDirect, Comtech, Kratos, and a few other smaller providers.

We compete in some HTS and VHTS markets with competitors such as HNS that have launched high-throughput satellites. Although we have entered the HTS and VHTS market with competitive technology, we expect competition in this market to continue to increase.

Our low-profile on the move and ESA antennas directly compete with products from competitors such as, GetSat, QEST, Orbit, Thales, HNS, Intellian, Thinkom, C-Com Satellite Systems Inc, or C-Com. Indirectly, our customers compete with SpaceX's Starlink.

Our primary competitors with respect to our Wavestream subsidiary's BUCs and other products include CPI, Xicom, Mission, General Dynamics Satcom Technologies, and Paradise Datacom.

Our primary competitors with respect to our DataPath subsidiary’s large-aperture terminal offerings (greater than 1 meter) include Airbus DS Government Solutions, Inc. or Airbus, Lite Coms LLC, or Lite Coms, AvL Technologies, Inc. or AVL, and L3Harris Technologies, Inc, or L3.

Where we primarily operate public rural telecom services (voice, data, and internet) and are engaged in construction of fiber-optic transport and access networks based on wireless systems, we typically encounter competition on government subsidized bids from various service providers, system integrators, and consortiums. Some of these competitors offer solutions based on VSAT technology and some on terrestrial technologies (typically, fiber-optic and wireless technologies). In addition, as competing technologies such as cellular networks and fiber-optic become available in rural areas where not previously available, our business could be adversely affected.

The following table sets forth our revenues from operations by geographic area for the periods indicated below as a percent of our total sales:

Our headquarters are located in a modern office park, which we own in Petah Tikva, Israel. This facility consists of approximately 380,000 square feet, a substantial part of which are currently used by us and the remainder is subleased or offered for sublease to third parties. We have local and Global NOC sites in Moldova and Peru, from which we perform network services and customer support functions.

We own 13,500 square feet of research and development facilities and rent 12,200 square feet of manufacturing facilities in Sofia, Bulgaria, which lease will expire on June 1, 2027 and rent 17,300 square feet in Moldova for research and development, global services and global NOC activities, which lease will expire on December 30, 2026. Our Wavestream subsidiary currently leases 32,500 square feet of office space, research and development and manufacturing facilities in San Dimas CA, USA. The San Dimas lease agreement will expire on January 31, 2030. Our subsidiaries in Peru currently occupy 35,000 square feet of office space, and NOC facilities in Lima, which leases will expire between 2026 and 2028 Our DataPath subsidiary currently leases 108,707 square feet of office, integration and warehouse space in Duluth, Georgia, USA. The lease agreement will expire on September 30, 2026. Our SBS subsidiary currently leases 6,200 square feet of office in San Diego, California, USA, which lease will expire on July 31, 2026, and 33,700 square feet of office, integration, and warehouse space in Fort Worth, Texas, USA, which lease will expire on October 15, 2026. We intend to renew or replace the leases that expire in 2026. We also maintain facilities and representative offices in other jurisdictions we operate in. We believe that our current office space, research and development, and manufacturing facilities are sufficient to meet our anticipated needs for the foreseeable future and are suitable for conducting our business.

There are no unresolved staff comments.

We are a leading global provider of satellite-based broadband communications. We design and manufacture ground-based satellite communications equipment and provide comprehensive secure end-to-end solutions, end-to-end services for mission-critical operations, powered by our innovative technology. Our portfolio includes a satellite network platform, VSATs, amplifiers, high-speed modems, high-performance on-the-move antennas, and high efficiency, high power SSPAs, BUCs, and Transceivers, furthermore, following the acquisitions of SBS in January 2025 and DataPath in 2023 our portfolio also includes next-generation IFC, Satellite Communication, terminal solutions and transportable and portable terminals for defense forces and field services. Our comprehensive solutions support multiple applications with a full portfolio of products to address key applications, including broadband internet access, cellular backhaul over satellite, enterprise, digital inclusion solutions, IFC, maritime, land mobility, defense, and public safety, all while meeting the most stringent service level requirements. We have a large installed base and currently operate hundreds of active networks.

 We develop and market ground-based satellite communications equipment. We have proven experience in delivering complex projects and services worldwide, in addition to providing managed networks and services through satellite and terrestrial networks. Moreover, we offer complete turnkey integrated solutions.

We have a large installed base and have shipped more than 1.6 million satellite terminals spanning over 100 countries since 1989 and currently have hundreds of active networks. We have sales and support offices worldwide, 3 NOCs which provide Global NOC services, and R&D centers, in Israel, the U.S. and Europe.

Our products are sold to communication service providers, satellite operators, MNOs and system integrators that use satellite communications to serve enterprise, digital inclusion solutions, government and residential users, MNOs and system integrators that use our technology. Our solutions and services are also sold to defense and homeland security organizations. In addition, we provide services directly to end-users in various market segments, including in certain countries in Latin America.

From 2022 through 2024, we operated in three operating segments:

Commencing January 1, 2025, as we increased our focus on the defense market segment and the IFC sector as primary growth engines, to better target the diverse and attractive end markets we serve, and to provide investors with greater insight into our business lines and strategic growth opportunities, we operate in three operating segments as follows:   

Since October 2023, Israel has been engaged in sustained armed conflict following the Hamas attack on Israel, which resulted in extensive casualties, kidnappings, and widespread rocket fire. Hostilities subsequently expanded to additional fronts, including Hezbollah in Lebanon, militias operating from Syria, and the Houthis in Yemen. In 2025, Israel and Iran were engaged in an intense 12‑day exchange of attacks, including missile strikes, cyberattacks, and aviation disruptions.

On February 28, 2026, the United States and Israel launched preemptive strikes against Iran, publicly described as targeting Iran’s nuclear and ballistic missile program and related military capabilities, and Iran responded with missile and drone attacks against Israel, U.S. forces and interests in the region, and locations in certain Gulf countries. Since that time, the armed conflict has resumed and remains ongoing, with repeated missile and drone attacks and heightened risk of escalation, including through cyber and other asymmetric activities. In addition, Hezbollah, the Iran-aligned armed group in Lebanon, has resumed attacks against Israel, further increasing regional instability and the risk of additional escalation on Israel’s northern border.

Although ceasefires were previously announced between Israel and Hamas, the overall regional situation remains volatile and unpredictable. In particular, the ceasefire arrangements and negotiations relating to Gaza have faced recurring strain, and there is continuing uncertainty regarding the potential for renewed and expanded hostilities between Israel and Hamas.

These events have created, and may continue to create, uncertainty and operational risks for Israeli companies. The Israel Defense Forces have mobilized large numbers of reservists at various points, including employees of our Company and their close family members. Significant or prolonged absences of key personnel could disrupt our operations.

The currency of the primary economic environment in which most of our operations are conducted is the U.S. dollar and therefore, we use the U.S. dollar as our functional and reporting currency. Transactions and balances originally denominated in U.S. dollars are presented at their original amounts. Gains and losses arising from non-U.S. dollar transactions and balances are included in the consolidated statements of income. The financial statements of one of our foreign subsidiaries, whose functional currency has been determined to be its local currency, have been translated into U.S. dollars. The assets and liabilities of this subsidiary have been translated using the exchange rates in effect at the balance sheet date. Statements of income amounts have been translated using specific rates. The resulting translation adjustments are reported as a component of shareholders’ equity in accumulated other comprehensive loss.

We generate revenues mainly from the sale of products (including construction of networks), satellite-based communications networks services, and from providing connectivity, internet access, and telephony services. We sell our products and services to enterprises, government, and residential customers under large-scale contracts that utilize both our own networks, and other networks that we install, mainly based on BOT and BOO contracts. These large-scale contracts sometimes involve the installation of thousands of VSATs or construction of massive fiber-optic and wireless networks. Revenues from sale of products includes mainly the sale of VSATs, hubs, low-profile antennas on-the-move/on-the-pause terminals, SSPAs and construction and installation of large-scale networks based on BOT and BOO contracts. Sale of services includes access to and communication via satellites (“space segment”), installation of equipment, telephone services, internet services, consulting, on-line network monitoring, network maintenance, field services, and repair services. We sell our products primarily through our direct sales force and indirectly through resellers or system integrators.

In 2025, 2024, and 2023, PRONATEL, a customer of our Gilat Peru operating segment, accounted for 14%, 15% and 15% of our revenue, respectively. Following the merger of a major European customer and a major U.S. customer in 2025, both primarily associated with our Gilat Commercial operating segment, the European customer accounted for 24%, 12% and 14% of our revenue in 2025, 2024 and 2023, respectively, and the U.S. customer accounted for 20%, 11% and 15% of our revenue in 2025, 2024 and 2023, respectively. Collectively, these two customers accounted for approximately 44% of our revenue in 2025, compared to 23% and 29% in 2024 and 2023, respectively.

Cost of revenues, primarily includes the cost of system design, equipment, inventory write-off costs, satellite capacity, salaries, and related costs, allocated overhead costs, depreciation and amortization, customer service, interconnection charges and third-party maintenance and installation.

Our research and development expenses, net of grants received, primarily consist of salaries and related costs, raw materials, subcontractor expenses, related depreciation costs and overhead allocated to research and development activities.

Our selling and marketing expenses consist primarily of salaries and related costs, commissions earned by sales and marketing personnel, commissions to agents, trade show expenses, promotional expenses and overhead costs allocated to selling and marketing activities, as well as depreciation expenses and travel costs.

Our general and administrative expenses consist primarily of salaries and related costs, allocated overhead costs, office supplies and administrative costs, credit losses, fees and expenses of our directors, depreciation, and professional service fees, including legal, insurance and audit fees, net of rental income.

Our other operating income, net, consist primarily of non-recurring incomes and expenses. For further details, see note 14 in our consolidated financial statements, which appear elsewhere in this Annual Report.

Our operating results are significantly affected by, among other things, the timing of contract awards and the performance of agreements. As a result, our revenues and income may fluctuate substantially from quarter to quarter, and we believe that comparisons over longer periods of time may be more meaningful. The nature of certain of our expenses is mainly fixed or partially fixed, and any fluctuation in revenues will generate a significant variation in gross profit and net income.

Revenues. Revenues for the years ended December 31, 2025 and 2024 for our three operating segments were as follows:

Our total revenues for the years ended December 31, 2025, and 2024 were $451.7 million and $305.4 million, respectively. The increase is attributable to $126.0 million, $2.7 million, and $17.5 million increases in Gilat Commercial, Gilat Defense, and Gilat Peru revenues, respectively.

The increase in Gilat Commercial revenues in 2025 is primarily attributable to the contribution of SBS, acquired in January 2025, partially offset by the termination of our activity in the Russian market during 2024.

The increase in Gilat Peru’s revenues in 2025 is primarily attributable to higher revenues driven by expansion projects awarded under the Regional PRONATEL Projects, as well as the recognition of revenues from services provided, following the resolution of variable considerations constraint.

Gross profit. The gross profits and the gross margins of our three operating segments for the years ended December 31, 2025 and 2024 were as follows:

Our gross profit and gross margin are affected year-to-year by revenue volume, the mix of products sold, the mix of revenues between products and services, the regions in which we operate, the size of our transactions, and the timing of their consummation. Moreover, from time to time, we may have large-scale projects which can cause material fluctuations in our gross profit. We recognize revenue from the construction performance obligations related to the PRONATEL Regional Projects and other projects using the percentage-of-completion method, and as such, any changes to our estimated profits in these projects may cause material fluctuations in our gross profit and gross margin. As such, we are subject to significant year-to-year fluctuations in our gross profit.

Our gross margin decreased to 30% in 2025 from 37% in 2024. The decrease in our gross margin in the year ended December 31, 2025 is mainly as a result of the following:

Research and development expenses, net were incurred by our Commercial and Defense operating segments. R&D expenses, net increased by approximately $8.5 million in 2025 compared to 2024. The increase is mainly attributable to our newly acquired subsidiary, SBS, and was partially offset by an increased number of engineers performing work at customers’ request in connection with ongoing projects.

Selling and marketing expenses increased by approximately $7.7 million in the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase is mainly attributable to our newly acquired subsidiary, SBS, as well as the amortization of purchased intangibles related to this acquisition.

General and administrative expenses increased by approximately $4.5 million in the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase is mainly attributable to our newly acquired subsidiary, SBS.

Other operating income, net amounted to approximately $3.2 million in the year ended December 31, 2025, compared to approximately $6.8 million in the year ended December 31, 2024. The change was driven primarily by lower income from arbitration funds, which was partially offset by higher net income from the revaluation of the DPI and SBS earn-out considerations in the year ended December 31, 2025.

In the year ended December 31, 2025, we incurred financial expenses, net of $4.5 million, compared to financial income, net of $1.5 million for the year ended December 31, 2024. The change is primarily attributable to interest expenses and associated costs related to the loan we took for the SBS acquisition.

Taxes on income are dependent upon where our profits are generated, such as the location and taxation of our subsidiaries, as well as changes in deferred tax assets and liabilities, and changes in valuation allowance attributable to changes in our profit estimates in different regions. In the year ended December 31, 2025, we had a tax benefit of approximately $1.8 million compared to tax expenses of approximately $4.4 million in the year ended December 31, 2024. The tax benefit for the year ended December 31, 2025, was primarily related to the Company’s recognition of deferred tax assets in the U.S.

Our revenues and profitability may vary from quarter to quarter and in any given year, depending primarily on the sales mix of our family of products and the mix of the various components of the products, sale prices, and production costs, as well as on entering into new service contracts, the termination of existing service contracts, or different profitability levels between different service contracts. Sales of our products to a customer typically consist of numerous VSATs and related hub equipment, low-profile antennas, and SSPAs, BUCs, which carry varying sales prices and margins.

Annual and quarterly fluctuations in our results of operations may be caused by the timing and composition of orders by our customers and the timing of our ability to recognize revenues. Our future results may also be affected by a number of factors, including our ability to continue to develop, introduce and deliver new and enhanced products on a timely basis and expand into new product offerings at competitive prices, to integrate our recent acquisitions, to anticipate customer demands effectively, and to manage future inventory levels in line with anticipated demand. Our results may also be affected by currency exchange rate fluctuations and economic conditions in the geographical areas in which we operate. In addition, our revenues may vary significantly from quarter to quarter as a result of, among other factors, the timing of new product announcements and releases by our competitors and us. We cannot be certain that revenues, gross profit and net income (or loss) in any particular quarter will not vary from the preceding or comparable quarters. Our expense levels are based, in part, on expectations as to future revenues. If revenues are below expectations, operating results are likely to be adversely affected. In addition, a substantial portion of our expenses are fixed (e.g. lease payments) and adjusting expenses in the event revenues drop unexpectedly often takes considerable time. As a result, we believe that period-to-period comparisons of our results of operations are not necessarily meaningful and should not be relied upon as indications of future performance. Due to all of the foregoing factors, it is possible that in some future quarters our revenues or operating results will be below the expectations of public market analysts or investors. In such an event, the market price of our shares would likely be materially adversely affected.

We are organized under the laws of the State of Israel, where we also maintain our headquarters and a material portion of our laboratory capacity and principal research and development facilities. See Item 3.D. “Key Information – Risk Factors – Risks Related to Our Location in Israel” for a description of governmental, economic, fiscal, monetary, or political factors that have materially affected or could materially affect our operations.

While most of our sales and service contracts are denominated in U.S. dollars or are linked to the U.S. dollar, and most of our expenses are in U.S. dollars and NIS, portions of our projects in Latin America as well as our operations in Asia, Europe and to a lesser extent Australia, are linked to their respective local currencies. The foreign exchange risks are often significant due to fluctuations in local currencies relative to the U.S. dollar.

The influence on the U.S. dollar cost of our operations in Israel relates primarily to the cost of salaries in Israel, which are paid in NIS and constitute a substantial portion of our expenses in NIS. In 2025, the U.S. dollar depreciated in relation to the NIS at a rate of 14%, from NIS 3.65 per $1 on December 31, 2024 to NIS 3.19 per $1 on December 31, 2025. In 2025 and 2024, we entered into hedging agreements to cover certain of our NIS to U.S. dollar exchange rate exposures. For more information, see Item 11 – “Quantitative and Qualitative Disclosures about Market Risk” to this Annual Report.

The annual rate of inflation in Israel was 2.6% in 2025 and 3.2% in 2024.

Our monetary balances that are not linked to the U.S. dollar impacted our financial expenses during the 2025 and 2024 periods, resulting in an approximately $173 thousand gain and $839 thousand loss, respectively. This is due to fluctuations in currency rates in certain regions in which we do business, mainly in Europe and Latin America. There can be no assurance that our results of operations will not be materially adversely affected by other currency fluctuations in the future.

Please refer to summary of “Significant Accounting Policies” in Note 2 of our consolidated financial statements included elsewhere in this Annual Report for more information.

Since our inception, our financing requirements have been met through cash from funds generated by private equity investments, public offerings, issuances of convertible subordinated notes, bank loans and credit facilities, operations, as well as funding from research and development grants. We have used available funds primarily for working capital, capital expenditures and strategic investments. As of December 31, 2025, and 2024, we had cash and cash equivalents, short-term deposits and restricted cash of $185.4 million and $120.2 million, respectively. We believe that our working capital is sufficient for our present requirements.

In 2025, we completed two private placements of ordinary shares to Israeli institutional and accredited investors (as defined under the Securities Law), generating aggregate net proceeds of approximately $164 million. On September 16, 2025, we issued 7,058,820 ordinary shares at a purchase price of $9.35 per share, resulting in net proceeds of approximately $65.3 million. On December 30, 2025, we issued 8,888,889 ordinary shares at a purchase price of $11.25 per share, resulting in net proceeds of approximately $98.7 million. Both offerings were conducted exclusively in Israel in reliance on Regulation S under the U.S. Securities Act of 1933.

The acquisition of SBS was partly funded by a new $100 million secured credit line from HSBC Bank USA and Bank Hapoalim. We drew $60 million under this facility to fund the initial cash consideration payable at closing. The remaining $40 million was available to fund potential future earn-out payments. The loan bore interest at a rate of SOFR plus 2.75% to 3.5% and was subject to customary covenants that, under certain circumstances, limited our ability to incur indebtedness, create liens, make investments, merge with other companies, dispose of assets, prepay other indebtedness, or make dividends and other distributions. The outstanding balance under this facility was fully repaid on December 31, 2025.

As of December 31, 2025, DataPath's debt was $2 million in current maturities of a long-term loan. The long-term loan was obtained from DataPath’s former shareholders and bears an interest of 14%.

At times, we guarantee the performance of our work for some of our customers, primarily government entities. Guarantees are often required for our performance during the installation and operational periods of long-term rural telephony projects, such as in Latin America, and for the performance of other projects worldwide. The guarantees typically expire upon meeting certain operational milestones. In addition, from time to time, we provide corporate guarantees to guarantee the performance of our subsidiaries.

The aggregate amount of the financial guarantees outstanding to secure our various obligations, issued on our behalf mainly by HSBC, and the First International Bank of Israel, or FIBI, as of December 31, 2025, was approximately $87.6 million, including an aggregate of approximately $83.7 million related to our business in Peru. To secure these guarantees, we provided a floating charge over our assets, as well as pledges, including a fixed pledge, over certain assets and property. Under the arrangements with HSBC and FIBI, we are required to observe certain conditions. Our credit and guarantee agreements also contain various restrictions and limitations that may impact us. These restrictions and limitations relate to incurrence of indebtedness, contingent obligations, negative pledges, liens, mergers and acquisitions, change of control, asset sales, dividends and distributions, redemption or repurchase of equity interests and certain debt payments. As of December 31, 2025, we were in compliance with such conditions. The agreements also stipulate a floating charge on our assets to secure the fulfilment of our obligations to FIBI and HSBC as well as other pledges, including a fixed pledge, on certain assets and property.

The following table summarizes our cash flows for the periods presented:

Our cash, cash equivalents, and restricted cash increased by approximately 48.7$ million during the year ended December 31, 2025 primarily as a result of the following:

Operating activities. Cash provided by our operating activities was approximately $20.7 million in 2025 compared to approximately $31.7 million in 2024. The change was primarily attributable to higher arbitration funds collected in 2024, interest payments made in 2025 in connection with the SBS acquisition, and increased investment in working capital, mainly related to SBS as it ramps up production.

Investing activities. Cash used in investing activities was approximately $136.4 million in 2025 compared to approximately $6.6 million in 2024. The change is mainly attributable to the cash used to acquire SBS, as well as investment in short term deposits in 2025 compared to 2024.

Financing activities. Cash provided by financing activities was approximately $163.2 million in 2025 compared to cash used in financing activities of approximately $8.1 million in 2024. The change reflects mainly the net proceeds from private placements totalling approximately $164 million completed in 2025.

For a discussion of our cash flow for the year ended December 31, 2024, including a year-to-year comparison between 2024 and 2023, refer to Item 5. “Operating and Financial Review and Prospects” in our Annual Report on Form 20-F for the year ended December 31, 2024, filed with the SEC on March 27, 2025, as retrospectively revised to reflect recast segment information, and filed with the SEC on August 28, 2025.

We devote significant resources to research and development projects designed to enhance our hubs, VSATs, Satellite Communication on-the-move antennas, ESA antennas, our DKET solutions, BUCs, SSPAs, and Transceivers products, In particular, we continue to invest in expanding our portfolio to address HTS, VHTS and NGSO satellites constellations solutions, mobility applications, both IFC and maritime, as well as defense solutions. We intend to continue to devote substantial resources to complete the development of certain features, including improving functionality, supporting higher throughput, improving space segment utilization and network resilience, thereby contributing to reducing the cost of proposed solutions for our customers.

We have devoted significant research and development resources over the last few years to the development of our SkyEdge family of products, including the development of our own hardware platforms for both baseband equipment and software. In 2025, we invested heavily in improving space spectral efficiency, including release of the new VSAT platform supporting advanced coding schemas, in developing new enhanced functionality for IFC application and global bandwidth management. We continued to invest in optimizing solutions for cellular backhaul and other applications, improving throughput, supported security, and resilience. We develop our own network software and software for our VSATs. We have made a significant investment in a new modular product architecture involving hot-swappable RF amplifier modules, power supply modules and block up conversion modules for military and commercial teleport providers. This architecture will allow us to mix and match components for faster system product development and better supply chain resilience. In 2025, we also invested in the development of our ESA for IFC applications. In addition, we invested in developing SatCom terminals for UAVs.

Our software and our internally developed hardware are proprietary, and we have implemented protective measures both of a legal and practical nature. We have obtained and registered patents in the U.S. and in various other countries in which we offer our products and services. We rely on copyright laws to protect against unauthorized copying of the object code of our software and on copyright and trade secret laws to protect the source code of our software. We derive additional protection for our software by generally licensing only the object code to customers and keeping the source code confidential. In addition, we enter into confidentiality agreements with our customers and other business partners to protect our software technology and trade secrets. We have also obtained trademark registrations in the U.S. and in various other countries to provide additional protection to our intellectual property. Despite all of these measures, it is possible that competitors could copy certain aspects of our technology or obtain information that we regard as a trade secret in violation of our legal rights.

We participate in various programs under which we have received and are eligible to receive research and development grants to finance research and development projects in Israel, pursuant to the provisions of The Encouragement of Industrial Research and Development Law, 1984. We are also participating in grant research programs of the European Union, Horizon 2020, and from time to time, we participate in programs through bilateral R&D foundations such as the BIRD foundation. With respect to some of our funding programs, we are obligated to pay royalties from the revenues derived from products developed within the framework of such programs. However, most of our programs are non-royalty-bearing programs.

We also participate in joint programs with academic institutions, which are partially funded by the Israeli Innovation Authority. In the event of a commercial use of specific academic knowledge, we are obligated to pay the academic institution royalties from the revenues derived from products developed within the framework of such programs.

For a discussion of our research and development expenses for the year ended December 31, 2024, including a year-to-year comparison between 2024 and 2023, refer to Item 5. “Operating and Financial Review and Prospects” in our Annual Report on Form 20-F for the year ended December 31, 2024, filed with the SEC on March 27, 2025, as retrospectively revised to reflect recast segment information, and filed with the SEC on August 28, 2025.

The preparation of the consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (U.S. GAAP) requires us to make estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Main areas that require significant estimates and assumptions by us include contract costs, revenues (including variable consideration, determination of contracts duration, establishing stand-alone selling price for performance obligations), application of percentage-of-completion accounting, impairment of inventories, impairment and useful life of long-lived assets, goodwill impairment, valuation allowance in respect of deferred tax assets, uncertain tax positions, accruals for estimated liabilities, including litigation and insurance reserves, contingent considerations and intangibles from business combination transaction and stock-based compensation. We base our estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the financial information included in this annual report.

Revenues. For further details, see note 2(m) in our consolidated financial statements, which appear elsewhere in this Annual Report.

Income Taxes. 

For further details, see note 2(s) in our consolidated financial statements, which appear elsewhere in this Annual Report.

Inventory Valuation. For further details, see note 2(g) in our consolidated financial statements, which appear elsewhere in this Annual Report.

Goodwill. For further details, see note 2(k) in our consolidated financial statements, which appear elsewhere in this Annual Report.

Intangible assets. For further details, see note 2(i) in our consolidated financial statements, which appear elsewhere in this Annual Report.

In the years ended December 31, 2025, 2024 and 2023 we performed assessments to continue to support our conclusion that no impairment of goodwill was required for any of our reporting units.

Contingencies. Liabilities related to legal proceedings, demands and claims are recorded in accordance with ASC 450, “Contingencies”, or ASC 450, which defines a contingency as “an existing condition, situation, or set of circumstances involving uncertainty as to possible gain or loss to an enterprise that will ultimately be resolved when one or more future events occur or fail to occur.” In accordance with ASC 450, accruals for exposures or contingencies are being provided when the expected outcome is probable and when the amount of loss can be reasonably estimated. It is possible, however, that future results of operations for any particular quarter or annual period could be materially affected by changes in our assumptions, the actual outcome of such proceedings or as a result of the effectiveness of our strategies related to these proceedings. For further details, see note 2(l) in our consolidated financial statements, which appear elsewhere in this Annual Report.

Business Combination. Accounting for business combination requires us to make significant estimates and assumptions in determining the fair value of contingent consideration that is part of the consideration transferred and the fair values of assets acquired and liabilities assumed, especially with respect to intangible assets. Critical estimates in valuing the acquired intangible assets and the contingent consideration include, but are not limited to, projected revenues and results in the forecasted years. Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based, in part, on historical experience and information obtained from management of the acquired companies and are inherently uncertain. For further details, see notes 2, 17 and 18 in our consolidated financial statements, which appear elsewhere in this Annual Report.

The following table sets forth the name, age, position(s), and a brief account of the business experience of each of the directors and executive officers as of March 10, 2026:

Amiram Boehm has served on our Board of Directors since December 2012 and as Chairman of the Board since March 2023. From 2004 through November 2022, Mr. Boehm had been a Partner in the FIMI Opportunity Funds, Israel’s largest group of private equity funds. In February 2023, Mr. Boehm was appointed as Chairman of the Board of BrainsWay Ltd. (NASADQ and TASE), and between May 2023 and October 2025, Mr. Bohem was a member of the Board of Directors of Leumi Partners. While he was a Partner in the FIMI Opportunity, Mr. Boehm served as the Chairman of the Board of  director of DelekSon Ltd. and a director at, Hadera Paper Ltd. (TASE), Rekah Pharmaceuticals Ltd. (TASE), KAMADA Ltd. (NASDAQ and TASE), TAT Technologies Ltd. (NASDAQ and TASE), PCB Technologies Ltd. (TASE), and Galam Ltd. Mr. Boehm previously served as the Managing Partner and Chief Executive Officer of FITE GP (2004), and as a director among others of Ormat Technologies Inc. (NYSE, TASE), Scope Metal Trading, Ltd. (TASE), Inter Industries, Ltd. (TASE), NOVOLOG (Pharm-Up 1966) Ltd. (TASE), Global Wire Ltd. (TASE), Telkoor Telecom Ltd. (TASE), Dimar Cutting Tools Ltd and Solbar Industries Ltd. (previously traded on the TASE). Prior to joining F1IMI, from 1999 until 2004, Mr. Boehm served as Head of Research of Discount Capital Markets, the investment arm of Israel Discount Bank. Mr. Boehm holds a B.A. degree in Economics and a LL.B. degree from Tel Aviv University, Israel and a Joint M.B.A. degree from Northwestern University and Tel Aviv University, Israel.

Adi Sfadia has served as our Chief Executive Officer since November 2020. Prior to that, Mr. Sfadia served as Interim Chief Executive Officer from July 2020 and as our Chief Financial Officer since November 2015. Prior to joining Gilat, Mr. Sfadia served as CFO of Starhome Ltd., a Fortissimo Capital owned company, from January 2013. From 2008 to 2013, Mr. Sfadia served as CFO of Radvision Ltd. (previously traded on NASDAQ and TASE). From 2004 until 2008, Mr. Sfadia served as Radvision’s Corporate Controller and Vice President of Finance. Prior to that, Mr. Sfadia served in several senior financial positions at Israeli companies, where he gained wide financial and managerial experience. Mr. Sfadia served five years in a public accounting firm Kost Forer Gabbay & Kasierer, a member of EY Global. Mr. Sfadia is a Certified Public Accountant (Israel) and holds a B.A. degree in Business Administration and an M.B.A. degree (magna cum laude) from The College of Management in Tel Aviv and Rishon Lezion, and is a Certified Public Accountant in Israel.

Hilla Hadad Chmelnik has served on our Board of Directors since August 2025. Ms. Hadad Chmelnik is a senior executive with extensive experience in the public and private sectors, specializing in strategic leadership of complex projects in the fields of innovation, transportation, and space technologies. Since May 2023, she has served as Co-Founder and Chief Strategy Officer of Moonshot, a startup developing an innovative electromagnetic launcher for raw materials and cargo to space. Ms. Hadad Chmelnik also led strategic and fundraising efforts at DOTS, an agri-tech company and since August 2023 has served as an external director at NextGen Biomed Ltd. (TASE). From November 2021 to February 2023, Ms. Hadad Chmelnik served as the Director-General of the Israeli Ministry of Innovation, Science, and Technology. Prior to that, she held senior roles at Israel National Roads Company and the Ministry of Transport, including Vice President of Strategy and Innovation and Head of the National Infrastructure Directorate. Earlier in her career, she held key positions in Israel’s Ministry of Defence. Ms. Hadad Chmelnik holds a B.Sc. degree in Aerospace Engineering from the Technion, an M.A. in Diplomacy and an MBA from Tel Aviv University, and an M.A. degree in Public Policy from the Hebrew University of Jerusalem.

Amir Ofek has served on our Board of Directors since June 2023 and previously served as a director of our company from 2014 to 2019. Mr. Ofek has more than 20 years of professional experience in management and board positions in technology-based companies. Since 2021, Mr. Ofek serves as CEO of AxoniusX, an Axonius’ company. Prior to that, between 2019 and 2021, Mr. Ofek was the CEO of Alcide IO Ltd. (acquired by Rapid7 Inc. – NASDAQ: RPD).  Prior to that, between 2016 and 2019 Mr. Ofek served as the CEO of CyberInt Ltd. Mr. Ofek also held various leadership positions at Amdocs Ltd. (NASDAQ: DOX) and Elbit Systems Ltd. (NASDAQ and TASE: ESLT). Mr. Ofek was a Captain in the IDF 8200 Unit and holds a BSc. degree (Cum Laude) in IT Engineering from the Technion and an M.B.A. degree from INSEAD.

Dana Porter Rubinshtein has served on our Board of Directors since August 2025. Ms. Porter Rubinshtein has more than 20 years of professional experience as a marketing, product and strategy executive in the high-tech industry. Ms. Porter Rubinshtein had served as a Board member of Rafael Advanced Defense Systems Ltd. between 2015 and 2017, and as a Board observer of Inception XR between May 2022 and March 2025, an XR platform which she co-founded in 2016 and was later sold to a training company for the healthcare industry. Ms. Porter Rubinshtein also serves on the Advisory Board of Sapiens International Corp NV (NASDAQ: SPNS) since February 2023, and as a Board member at Elem, Israel’s leading non-profit supporting youth in distress, since May 2021. Prior to that, Ms. Porter Rubinshtein held senior management positions, including Head of Strategy and Marketing at the ILDC of Microsoft Corporation (NASDAQ: MSFT) between 2013 and 2016, and as Chief Marketing Officer of Amdocs Limited (NASDAQ: DOX) between 2010 and 2013, and other senior roles at Amdocs between 2003 and 2010. Prior to Amdocs, Ms. Porter Rubinshtein was an international consultant at Deloitte and Teffen. Ms. Porter Rubinshtein holds a B.Sc. degree in Industrial Engineering from Ben-Gurion University and an MBA degree from New York University (NYU).

Aylon (Lonny) Rafaeli has served on our Board of Directors since May 2016. Mr. Rafaeli is a strategy and business development manager and consultant. From 2007 through 2012, Mr. Rafaeli was Director of Business Development at MST, a concentrated photo voltaic company. Prior to joining MST, Mr. Rafaeli was Managing Partner at E. Barak Associates, a strategic consulting company. Mr. Rafaeli is a member of the board of directors of the TALI Education Fund and a veteran association of an IDF elite unit. Mr. Rafaeli also served in the past as a director of Lenox Investment and Azimuth Technologies. Mr. Rafaeli holds an Executive M.B.A. degree in Strategic Management from The Hebrew University of Jerusalem.

Dafna Sharir has served on our Board of Directors since May 2016. Since 2005, Ms. Sharir has served as an independent consultant in the areas of mergers and acquisitions and business development. Ms. Sharir has served as a director of Ormat Technologies Inc. (NYSE, TASE) since 2018, and as a director of Cognyte Software Ltd (NASDAQ, TASE) since 2022. She served as Senior Vice President Investments of Ampal Corp. between 2002 and 2005. Before that she served as Director of Mergers and Acquisitions at Amdocs (until 2002). Between 1994 and 1996, Ms. Sharir worked as a tax attorney with Cravath, Swaine & Moore in New York. Ms. Sharir is a director of Ormat Technologies Inc., Minute Media Inc. and served in the past as a director of Frutarom Industries Ltd. Ms. Sharir holds a B.A. degree in Economics and a LL.B degree, both from Tel Aviv University, a LL.M. degree in Tax Law from New York University and M.B.A. degree from INSEAD.

Major General (ret.) Elyezer Shkedy, has served on our Board of Directors since June 2017. Mr. Shkedy is a business development manager and consultant. From January 2010 to March 2014, Mr. Shkedy was the Chief Executive Officer of El-Al Israel Airlines. Prior to joining El-Al, Mr. Shkedy served as Commander of the Israeli Air Force, from April 2004 until May 2008, after a long career as a fighter pilot, and several command positions in the Israeli Air Force. Mr. Shkedy serves as an outside director in Ashtrom Group Ltd. (TASE), and is a member of managing boards at several other non-profit companies and organizations. Previously, in 2018- 2019, Mr. Shkedy served as board member in Paz Oil Company, Ltd. (TASE), and between 2015 – 2020 served as chairman of the board (pro bono) at Osim Shinui Shamaym Vearetz Ltd., a company for a public cause. Mr. Shkedy holds an M.A. degree (with distinction) in Systems Management from NPS, the Naval Postgraduate School in Monterey, California and a B.Sc. degree in Mathematics and Computer Science (with distinction) from Ben Gurion University.

Major General (ret.) Amikam (Ami) Shafran, has served on our Board of Directors since January 2021. Mr. Shafran has since 2018 served as a venture partner at Moneta Capital. Since 2020 through October 2024, Mr. Shafran has served as director at Gencell (TASE). Since 2013, Mr. Shafran has served as the head of the Cyber Innovation Center at Ariel University and since 2021 as Chairman of the Executive Committee of the University. Mr. Shafran served as Chairman of the Board at Native Alpha Cybertech Management Ltd. during 2021. From 2006 through 2011, Mr. Shafran served as Commander of the information, communications and cyber command (C4I of the Israel Defense Force). In 2002, Mr. Shafran served as head of the research and development unit of the Israeli Ministry of Defense, MAFAT (chief of science) and chief of staff of the Ministry of Defense and the Research and Development Attaché at the Israeli Embassy in Washington D.C. Mr. Shafran had also served as director of Rafael Advance Defense Systems Ltd. for three years and as a director at ISI - ImageSat International N.V. Since 2017, Mr. Shafran serves as a director of Paz Group (TASE), as a non-executive chair of Elsight (Australian Stock Exchange or ASX), and as head of the advisory board at Security Matters (ASX). Mr. Shafran has served as Chairman of the Board of Pazkar Ltd. and Paz Lub Ltd., as a member of the board of directors of Waterfall Security Solutions, and as President of Enigmatos Ltd., an automotive cyber security company and other non-public companies. Mr. Shafran holds a B.Sc. degree in Electrical Engineering from the Ben Gurion University and a M.B.A. degree from the Tel Aviv University.

Gil Benyamini has served as our Chief Financial Officer since February 2022. From November 2017 through January 2022, Mr. Benyamini served as CFO at Panaxia Pharmaceutical Industries (TASE). From 2009 through 2016, Mr. Benyamini served as CFO at Walla Communications, and from 2006 until 2009 served as CFO at Exent Technologies. Mr. Benyamini also held finance positions at Tecnomatix Technologies (previously traded on NASDAQ) and served four years in a public accounting firm  PwC, Israel. Mr. Benyamini is a Certified Public Accountant (Israel) and holds a B.A. degree in economics, statistics and operations research, a B.A. degree in accounting and an M.B.A. (major in finance) degree, all from Tel-Aviv University.

Ron Levin has served as President of our Commercial Division since January 2025. Previously, Mr. Levin served as our Chief Commercial Officer since March 2023, as our Chief Operations Officer from August 2021 until March 2023, and as Vice President, Mobility and Global Accounts since 2016. Prior to joining our company, he headed Strategic Sales at ECI Telecom, a leading telecom equipment provider. Previously, Mr. Levin headed product management at Jungo Software Technologies, a software company of home and small business gateways, which was later acquired by NDS and Cisco. Mr. Levin holds a M.Sc. degree in Management from the University of Tel Aviv and a B.Sc. degree in Computer Engineering from the Technion, Israel Institute of Technology.

Gilad Landsberg has served as President of our Defense Division since January 2025. Previously, Mr. Landsberg served as our Chief Operations Officer since June 2023. Mr. Landsberg is a multi-dimensional executive with over 20 years of business, technical and management experience. Previously, Mr. Landsberg served from 2020 until June 2023 as Vice President, Head of the Tactical & MALE UAS Division of Aeronautics Ltd., a world leader in designing, developing and manufacturing Unmanned Aerial Systems (UAS) for the global defense and HLS markets.  Previously, until 2020 Mr. Landsberg spent over 15 years at RAFAEL Advanced Defense Systems Ltd., in various leadership roles, among others, Director, Head of a Business Unit. Mr. Landsberg holds a B.S.c degree in Industrial and Management Engineering, specializing in Information Technology from the Technion, Israel Institute of Technology.

Arieh Rohrstockhas served as President of our Gilat Peru Division Since January 2025. Mr. Rohrstock joined Gilat Satellite Networks in 1998. Since 2008 he has served as General Manager of Gilat Peru. Previously, Mr. Rohrstock has held the positions of COO of Spacenet Rural, COO of Gilat Latin America, and Planning and Development Manager, among other management positions.  Mr. Rohrstock is an electronic engineer from Ort Brauda University, Israel.

Lior Moyal has served as our Chief People Officer since July 2020. Prior to that and since March 2017, Ms. Moyal served as Director of Human Resources of Wavestream, our U.S. based subsidiary, and before that, as our Global Organization Development Manager & HR Business Partner since January 2016. Prior to joining our company, Ms. Moyal was HR Business Lead at Amdocs after serving in several positions since 2002, and served as a Human Capital Captain in the IDF before that. Ms. Moyal holds an M.A. degree in Organization Development from the Polytechnic University Israeli Branch and B.A. degree in Social Science from the Open University.

Hagay Katz has served as our Chief Product and Marketing Officer since August 2021. Prior to that and since 2017, Mr. Katz served as VP Strategic Accounts - Cyber Security at Allot Communications (NASDAQ – ALLT). Previously, he served as our Head of the VSAT Line of Business. Earlier in his career, Mr. Katz held senior positions in Sales, Marketing and Product Management at Modu Mobile, PacketLight Networks, which he co-founded, and Telstra Research Laboratories. Mr. Katz started his career in an elite technology unit of the IDF and is a co-author of nine granted patents. Mr. Katz holds B.Sc. and M.Sc. degrees in Electronic Engineering from Tel-Aviv University and an M.B.A. degree from Monash University.

Aharon Mullokandov has served as our Chief R&D Officer since January, 2024, and prior to that as our Senior Vice President for R&D since May 2022. Prior to joining our company, Mr. Mullokandov served as Vice President Global R&D Cyber Security at Allot Communications (Nasdaq – ALLT). Before joining Allot, Mr. Mullokandov was the Head of Global Customer Service at Here Mobility. Prior thereto, Mr. Mullokandov served as the Head of the Drive Division at Servotronix Motion Control. Mr. Mullokandov began his career at Gilat, serving in many different positions over a nine-year period, including Assistant Vice President, Global Cloud Operations Services, R&D Director, Global QA, and System Engineering. Mr. Mullokandov holds a Bachelor of Science (B.Sc.) degree in Electrical, Electronics and Communications Engineering from Ariel University.

Doron Kerbel has served as our Chief Legal Officer and Corporate Secretary since September 2025 and has served as our General Counsel and Corporate Secretary since September 2022. Prior to joining our company Mr. Kerbel served from 2015 to September 2022 as General Counsel and Company Secretary at Senstar Technologies Ltd. (NASDAQ - SNT), previously known as Magal Security Systems Ltd. From 2007 to 2015, Mr. Kerbel served as legal counsel at Elbit Systems Ltd. (TASE and NASDAQ). From 2003 to 2005, Mr. Kerbel served as a senior legal counsel for international law at Israel's embassy to the Hague. Mr. Kerbel also served as an associate in prominent Israeli law firms. Mr. Kerbel holds a LL.B. degree from the Richman University and a LL.M degree in public international law (with distinction) from the University of Amsterdam.

Ronen (Roni) Stoleru has served as our Chief Corporate Development Officer since August 2023. Mr. Stoleru joined our company over 26 years ago. Prior to his role as Senior Vice President, Mr. Stoleru held a variety of senior positions in product management, technical marketing, sales, and corporate business development. Before joining Gilat, Mr. Stoleru served as an officer in the Israeli Air-Force (IAF), working as a Project Officer in RAFAEL Advanced Defense Systems Ltd. Mr. Stoleru holds a Master of Business Administration degree with a major in Information Systems and Technologies Management from Tel Aviv University and a Bachelor of Science degree in Electrical Engineering from Ben Gurion University.

The following table sets forth the aggregate compensation paid to or accrued on behalf of all of our directors and officers as a group for the year ended December 31, 2025:

In accordance with Israeli law requirements, the table below sets forth the compensation paid to our five most highly compensated senior office holders (as defined in the Companies Law) with respect to the year ended December 31, 2025, in accordance with the expenses recorded in our financial statements for the year ended December 31, 2025. We refer to the five individuals for whom disclosure is provided herein as our “Covered Executives.”

For purposes of the table and the summary below, and in accordance with the above-mentioned securities regulations, “compensation” includes base salary, bonuses, equity-based compensation, retirement or termination payments, benefits and perquisites such as car, phone and social benefits and any undertaking to provide such compensation.

In accordance with the approval of our shareholders and in accordance with Israeli corporate law regarding compensation of external directors, each of our non-employee directors and external directors (all of our current directors except for our Chairman of the Board of Directors) is entitled to receive annual compensation payable quarterly of approximately NIS 93,690 (approximately $25,250), and an additional fee of approximately NIS 1,924 (approximately $519) for each board or committee meeting attended. In addition, Board members are compensated for video or telephone participation in board and committee meetings in an amount of 60% of what would be received for physical attendance and for written resolutions in an amount equal to 50% of same. All the above amounts are linked to changes in the Israeli consumer price index as of September 2014 and subject to changes in the amounts payable pursuant to Israeli law from time to time.

As of December 31, 2025, our directors and executive officers, as a group, consisting of 18 persons, held, in the aggregate, 468,000 Restricted (Performance) Share Units, or RSUs. The RSUs were granted under our 2008 Option Plan and vest over four years. As of December 31, 2025, our directors and executive officers, as a group, held options to purchase an aggregate of 1,255,416 ordinary shares, with exercise prices ranging from $5.53 to $11.0 (adjusted for dividend distributions in April 2019, December 2020, and January 2021). Generally, the options granted to our directors, vest ratably each quarter over a three-year, except in the case of the grant to our Chairman of the Board of Directors, in which the options vest over a four-year period. The options granted to our executive officers vest over a four-year period. The options will expire between 2027 and 2031. All of such options were awarded under our stock option plans described in Item 6E - “Directors, Senior Management and Employees - Share Ownership - 2008 Share Incentive Plan”.

Chairman Services. Mr. Boehm has served as Chairman of our company's Board of Directors since March 2023. Mr. Boehm is entitled to: (i) a monthly fee in the amount of NIS 50,000 (approximately $15,920), which includes the cash value of various fringe benefits (which is equal to the employer’s cost that would have been incurred by us for such benefits if the Chairman served in an employee status), and (iii) office space and secretarial assistance and reimbursement for out-of-pocket expenses incurred by him in connection with his service. Mr. Boehm is also entitled to an annual cash bonus of up to NIS 300,000 (approximately $95,500) for the years 2023 to 2026, upon achievement of a threshold of 80% of the company’s target operating profit metric. Additionally, Mr. Boehm is eligible for an annual overachievement bonus of up to NIS 150,000 (approximately $47,750). Mr. Boehm was granted options to purchase 500,000 of our ordinary shares, with an exercise price of $5.85 per share. The options were granted under our 2008 Option Plan and are subject to a four-year vesting period. The options remain exercisable for 12 months following cessation or termination of service (other than for cause) and are subject to acceleration upon a change in control event. The options will expire on the sixth anniversary of the date of the grant.

CEO. Mr. Sfadia has served as our Chief Executive Officer since November 2020. Since April 2024, Mr. Sfadia is entitled to a monthly salary of NIS 125,000 (approximately $39,800) and fringe benefits, including social benefits, annual vacation, and reimbursement of expenses, and an education fund payment (employee and employer) with respect to 50% of his full monthly salary. Mr. Sfadia is also entitled to an annual cash bonus plan of six (6) base monthly salaries for the years 2024 to 2026, upon achievement of a threshold of 80% of the company’s target operating profit metric (with 85% attributable measurable quantitative performance as example Adjusted EBITDA and Booking targets and 15% attributable to non-measurable quantitative performance targets, each as set by the Compensation Committee and the Board at the beginning of the applicable fiscal year). Additionally, Mr. Sfadia may be eligible for an overachievement bonus of up to four (4) base monthly salaries. In January 2021, Mr. Sfadia was granted options to purchase 400,000 ordinary shares at an exercise price of $6.22 per share (following a subsequent adjustment due to the distribution of a $0.63 per share cash dividend in 2021). The options were granted under our 2008 Option Plan and will vest over a period of four years. The options will remain exercisable for 12 months following cessation or termination of service (other than for cause). All options are subject to acceleration upon a change in control event. The options will expire on the sixth anniversary of the date of the grant. In February 2023, Mr. Sfadia was granted options to purchase 100,000 ordinary shares at an exercise price of $5.68 per share, with similar terms as described above, which grant was approved by the Company’s shareholders in June 2023. In February 2025, Mr. Sfadia was granted 180,000 Restricted (Performance) Share Units, or RSUs, which grant was approved by the Company’s shareholders in August 2025. The RSUs were granted under our 2008 Option Plan and will vest over a period of four years. In February 2026 Mr. Sfadia was granted 10,180 RSUs. The RSUs were granted under our 2008 Option Plan and will vest over a period of four years and are still subject to the approval of the Company’s shareholders. All RSUs are subject to acceleration upon a change in control event.

In accordance with the Israeli Companies Law, we adopted an Executive Compensation Policy for our executive officers and directors. The purpose of the policy is to describe our overall compensation strategy for our executive officers and directors and to provide guidelines for setting their compensation, as prescribed by the Israeli Companies Law. In accordance with the Israeli Companies Law, the Executive Compensation Policy must be reviewed and readopted at least once every three years. The policy was last amended in August 2025.

Approval by the Compensation Committee, the Board of Directors and our shareholders, in that order, is required for the adoption of the Executive Compensation Policy. The shareholders’ approval must include the majority of shares voted at the meeting. In addition to the majority vote, the shareholders’ approval must satisfy either of two additional tests:

In the event that the Executive Compensation Policy is not approved by our shareholders, the compensation committee and the board of directors may still approve the policy, if the compensation committee and the board of directors determine, based on specified reasons and following further discussion of the matter, that the compensation policy is in the best interests of the company.

Under the Israeli Companies Law, the compensation arrangements for “office holders” (other than the Chief Executive Officer) who are not directors require the approval of the Compensation Committee and the Board of Directors; provided, however, that if the compensation arrangement is not in compliance with our Executive Compensation Policy, the arrangement may only be approved by the Compensation Committee and the Board of Directors for special reasons to be noted, and the compensation arrangement shall also require a special shareholder approval. If the compensation arrangement is an immaterial amendment to an existing compensation arrangement of an “office holder” who is not a director and is in compliance with our Executive Compensation Policy, the approval of the Compensation Committee is sufficient. An “office holder” is defined under Israeli Companies Law as a general manager, chief executive officer, chief business manager, deputy general manager, vice general manager, any other person assuming the responsibilities of any of the foregoing positions without regard to such person’s title, a director and a manager directly subordinate to the chief executive officer.

Arrangements regarding the compensation of directors require the approval of the Compensation Committee, the Board, and our shareholders, in that order.

Arrangements regarding the compensation of the Chief Executive Officer require the approval of the Compensation Committee, the Board and our shareholders by special majority, in that order. In certain limited cases, the compensation of a new Chief Executive Officer who is not a director may be approved without approval of our shareholders.

Our Articles of Association provide that our Board of Directors shall consist of not less than five and not more than nine directors as shall be determined from time to time by a majority vote at the general meeting of our shareholders. Our shareholders resolved to set the size of our Board of Directors at eight members, including two external directors. Our Board currently consists of eight members, including three external directors.

Pursuant to our Articles of Association, each beneficial owner of 14% or more of our issued and outstanding ordinary shares is entitled to appoint, at each annual general meeting of our shareholders, one member to our Board of Directors, provided that a total of not more than four directors are so appointed. In the event that more than four qualifying beneficial owners notify us that they desire to appoint a member to our board of directors, only the four shareholders beneficially owning the greatest number of shares shall each be entitled to appoint a member to our Board of Directors. So long as our ordinary shares are listed for trading on NASDAQ, we may require that any such appointed director qualify as an “independent director” as provided in the NASDAQ rules then in effect. Our Board of Directors has the right to remove any such appointed director when the beneficial ownership of the shareholder who appointed such director falls below 14% of our issued and outstanding ordinary shares.

Our Articles of Association provide that a majority of the voting power at the annual general meeting of our shareholders will elect the remaining members of the board of directors, including external directors as required under the Companies Law. At any annual general meeting at which directors are appointed pursuant to the preceding paragraph, the calculation of the vote of any beneficial owner who appointed a director pursuant to the preceding paragraph shall not take into consideration, for the purpose of electing the remaining directors, ordinary shares constituting 14% of our issued and outstanding ordinary shares held by such appointing beneficial owner.

Each of our directors (except for external directors) serve, subject to early resignation or vacation of office in certain circumstances as set forth in our Articles of Association, until the adjournment of the next annual general meeting of our shareholders following the general meeting in which such director was elected. The holders of a majority of the voting power represented at a general meeting of our shareholders in person or by proxy will be entitled to (i) remove any director(s), other than external directors and directors appointed by beneficial holders of 14% or more of our issued and outstanding ordinary shares as set forth above, (ii) elect directors instead of directors so removed, or (iii) fill any vacancy, however created, in the board of directors. Our board of directors may also appoint additional directors, whether to fill a vacancy or in order to bring the total number of serving directors to the number determined by our shareholders. Such directors will serve until the next general meeting of our shareholders following such appointment.

Currently, no shareholder beneficially holding 14% or more of our issued and outstanding ordinary shares has exercised its right to appoint a director.

External Directors. Under the Israeli Companies Law, public companies are required to elect at least two external directors who must meet specified standards of independence. External directors may not have had during the two years preceding their appointment, directly or indirectly through a relative, partner, employer or controlled entity, any affiliation with (i) the company, (ii) those of its shareholders who are controlling shareholders at the time of appointment and/or their relatives, or (iii) any entity controlled by the company or by its controlling shareholders.

The term “affiliation” includes an employment relationship, a business or professional relationship maintained on a regular basis, control and services as an office holder. The term “controlling shareholder” is defined as a shareholder who has the ability to direct the activities of a company, other than if this power derives solely from the shareholder’s position on the board of directors or any other position with the company. The definition also includes shareholders that hold 25% or more of the voting rights if no other shareholder holds more than 50% of the voting rights in the company.

In addition, an individual may not be appointed as an external director in a company that does not have a controlling shareholder, in the event that he has an affiliation, at the time of his appointment, to the chairman, chief executive officer, a 5% shareholder, or the chief financial officer. An individual may not be appointed as an external director if his relative, partner, employer, supervisor, or an entity he controls, has other than negligible business or professional relations with any of the persons with which the external director himself may not be affiliated.

No person can serve as an external director if the person’s other positions or business creates or may create conflicts of interest with the person’s responsibilities as an external director. Until the lapse of two years from termination of office, a company may not engage an external director as an employee or otherwise. If, at the time an external director is to be appointed, all current members of the board of directors, who are not controlling shareholders of the company or their relatives, are of the same gender, then at least one external director appointed must be of the other gender.

The Israeli Companies Law further requires that external directors have either financial and accounting expertise or professional competence, as determined by the company’s board of directors. Under relevant regulations, a director having financial and accounting expertise is a person who, due to his or her education, experience and talents, is highly skilled in respect of, and understands, business and accounting matters and financial reports, in a manner that enables him or her to have an in-depth understanding of the company’s financial information and to stimulate discussion in respect of the manner in which the financial data is presented. Under the regulations, a director having professional competence is a person who meets any of the following criteria: (i) has an academic degree in either economics, business administration, accounting, law or public administration; (ii) has a different academic degree or has completed higher education in an area relevant to the company’s business or in an area relevant to his or her position; or (iii) has at least five years’ experience in any of the following, or has a total of five years’ experience in at least two of the following: (a) a senior position in the business management of a corporation with a substantial scope of business, (b) a senior public position or a senior position in public service, or (c) a senior position in the main field of the company’s business.

At least one of the external directors is required to qualify as a financial and accounting expert, as determined by the board of directors. Our Board of Directors has determined that both Mr. Ami Shafran and Mr. Elyezer Shkedy have “accounting and financial expertise” as defined by the Israeli Companies Law.

External directors serve for an initial three-year term. The initial three-year term of service can be extended, at the election of a company subject to certain conditions, by two additional three-year terms. External directors will be elected by a majority vote at a shareholders’ meeting, provided that either the majority of shares voted at the meeting, including at least half of the shares held by non-controlling shareholders voted at the meeting, vote in favor; or the total number of shares held by non-controlling shareholders voted against does not exceed two percent of the aggregate voting rights in the company.

The term of office of external directors of Israeli companies traded on certain foreign stock exchanges, including the NASDAQ Global Select Market, may be further extended, indefinitely, in increments of additional three-year terms, in each case provided that, in addition to re-election in such manner described above, (i) the audit committee and subsequently the board of directors of the Company confirm that, in light of the external director’s expertise and special contribution to the work of the board of directors and its committees, the re-election for such additional period is beneficial to the Company, and (ii) prior to the approval of the re-election of the external director, the Company’s shareholders have been informed of the term previously served by such nominee and of the reasons why the board of directors and audit committee recommended the extension of such nominee’s term.

External directors can be removed from office only by the court or by the same special majority of shareholders that can elect them, and then only if the external directors cease to meet the statutory qualifications with respect to their appointment or if they violate their fiduciary duty to the company. The court may additionally remove external directors from office if they were convicted of certain offenses by a non-Israeli court or are permanently unable to fulfill their position.

An external director is entitled to compensation as provided in regulations adopted under the Companies Law and is otherwise prohibited from receiving any other compensation, directly or indirectly, in connection with such service.

The Companies Law requires external directors to submit to the company, prior to the date of the notice of the general meeting convened to elect the external directors, a declaration stating their compliance with the requirements imposed by Companies Law for the office of external director.

Our Board of Directors currently has three external directors under Israeli law: Mr. Ami Shafran, whose term expires in May 2027, Mr. Elyezer Shkedy, whose term expires in June 2026 and Ms. Hilla Haddad Chmelnik, whose term expires in August 2028.

Independent Directors. In general, NASDAQ Marketplace Rules require that the board of directors of a NASDAQ-listed company have a majority of independent directors within the meaning of the NASDAQ rules. Our Board of Directors has determined that six out of the eight members of our Board of Directors are independent directors under NASDAQ requirements. Pursuant to the Israeli Companies Law, a director may be qualified as an independent director if such director is either (i) an external director; or (ii) a director that served as a board member less than nine years and the audit committee has approved that he or she meets the independence requirements of an external director. A majority of the members serving on the audit committee and the compensation committee must be independent under the Israeli Companies Law.

Under the Companies Law, the Chief Executive Officer (referred to as a “general manager” under the Companies Law) or a relative of the Chief Executive may not serve as the chairman of the board of directors, and the chairman or a relative of the chairman may not be vested with authorities of the Chief Executive Officer without shareholder approval consisting of a majority vote of the shares present and voting at a shareholders meeting, provided that either:

In addition, a person subordinated, directly or indirectly, to the Chief Executive Officer may not serve as the chairman of the board of directors; the chairman of the board may not be vested with authorities that are granted to those subordinated to the Chief Executive Officer; and the chairman of the board may not serve in any other position in the company or a controlled company, but he may serve as a director or chairman of a subsidiary.

Our Articles of Association provide that the Board of Directors may delegate its powers to committees of the Board of Directors as it deems appropriate, to the extent permitted by Israeli Companies Law. All of the external directors must serve on our audit committee and compensation committee (including one external director serving as the chair of the audit committee and compensation committee), and at least one external director must serve on each other committee that may be established by our Board of Directors.

Audit Committee. Under the Israeli Companies Law, publicly traded companies must establish an audit committee. The audit committee must consist of at least three members, and must include all of the company’s external directors, including one external director serving as chair of the audit committee. A majority of an audit committee must be comprised of “independent directors” (as such term is defined in the Companies Law). The chairman of the board of directors, directors employed by, or that provide services on a regular basis to, the company or to a controlling shareholder or a company controlled by a controlling shareholder (or whose main livelihood depends on a controlling shareholder), any controlling shareholder and any relative of a controlling shareholder may not be a member of the audit committee. An audit committee may not approve an action or a transaction with an officer or director, a transaction in which an officer or director has a personal interest, a transaction with a controlling shareholder and certain other transactions specified in the Companies Law, unless at the time of approval two external directors are serving as members of the audit committee and at least one of the external directors was present at the meeting in which approval was granted.

In addition, the NASDAQ Marketplace Rules require us to establish an audit committee comprised of at least three members, all of whom must be independent directors, each of whom is financially literate and satisfies the respective “independence” requirements of the Securities and Exchange Commission and NASDAQ and one of whom has accounting or related financial management expertise at senior levels within a company.

Our Audit Committee oversees (in addition to the Board of Directors) the accounting and financial reporting processes of our company and audits of our financial statements, including the integrity of our financial statements, compliance with legal and regulatory requirements, our independent auditors’ qualifications, independence, compensation, and performance, and the performance of our internal audit function. Our Audit Committee is also required to determine whether there are deficiencies in the business management of our company and, in such event, propose to our Board of Directors the means of correcting such deficiencies, determine whether certain related party actions and transactions are “material” or “extraordinary” in connection with their approval procedures, approve related-party transactions as required by Israeli law and establish whistleblower procedures (including in respect of the protections afforded to whistleblowers). The Audit Committee may consult from time to time with our independent auditors and internal auditor with respect to matters involving financial reporting and internal accounting controls.

Our Audit Committee consists of Mr. Shafran, Ms. Sharir, Mr. Shkedy, and Ms. Hilla Haddad Chmelnik. All of the members of our Audit Committee satisfy the respective “independence” requirements of the Securities and Exchange Commission and NASDAQ, and the composition of our Audit Committee satisfies the audit committee composition requirements of the Israeli Companies Law. Our Board of Directors has determined that Ms. Haddad Chmelnik, Mr. Shafran, and Mr. Shkedy qualify as Audit Committee financial experts, as required by the rules of the Securities and Exchange Commission and NASDAQ.

Compensation Committee. Under the Israeli Companies Law, publicly traded companies must establish a compensation committee, including an external director serving as chair of the compensation committee. The compensation committee must consist of at least three members and must include all of the company’s external directors. The additional members of the compensation committee must satisfy the criteria for remuneration applicable to the external directors.

Our Compensation Committee consists of Mr. Shafran, Mr. Shkedy, Ms. Haddad, and Mr. Rafaeli. All of the members of our Compensation Committee are independent directors, within the meaning of NASDAQ rules, and the composition of our Compensation Committee complies with the compensation committee composition requirements of the Israeli Companies Law.

Under Israeli Companies Law, the compensation committee is responsible for: (i) making recommendations to the Board of Directors with respect to the approval of the Executive Compensation Policy; (ii) providing the Board of Directors with recommendations with respect to any amendments or updates to the Executive Compensation Policy and periodically reviewing the implementation thereof; (iii) reviewing and approving arrangements with respect to the terms of office and employment of office holders; and (iv) determining whether or not to exempt a transaction with a candidate for Chief Executive Officer from shareholder approval.

In addition, our Compensation Committee offers recommendations to the Board of Directors regarding equity compensation issues (with the Board also approving the compensation of our executive officers), and administers our option plans, subject to general guidelines determined by our Board of Directors from time to time. The Compensation Committee also makes recommendations to our Board of Directors in connection with the terms of employment of our Chief Executive Officer and all other executive officers.

ESG and Nomination Committee. Under the Israeli Companies Law, a company may appoint additional committees to enhance the Board of Directors' oversight and operational efficiency. Accordingly, our Board of Directors has established the ESG and Nomination Committee. The Committee must consist of at least three directors, each of whom must satisfy the independence requirements of the NASDAQ Marketplace Rules, subject to any available exception.

Our ESG and Nomination Committee consists of Mr. Rafaeli, Ms. Sharir, Mr. Ofek, and Ms. Porter Rubinshtein.

The committee’s primary responsibilities include: (i) identifying individuals qualified to become Board members consistent with criteria approved by the Board; (ii) recommending director nominees for the next annual general meeting of shareholders; (iii) developing and recommending Corporate Governance Guidelines to the Board of Directors; and (iv) overseeing our policies, programs, and strategies related to environmental, and social, and governance, or ESG, matters.

Pursuant to the Israeli Companies Law Regulations, an Israeli company traded on NASDAQ that does not have a “controlling shareholder” (as defined in the Israeli Companies Law), such as our company, is able to elect not to appoint External Directors to its Board of Directors and not to comply with the Audit Committee and Compensation Committee composition and chairman requirements of the Israeli Companies Law (as described above); provided, the company complies with the applicable NASDAQ independent director requirements and the NASDAQ Audit Committee and Compensation Committee composition requirements.

To date, we have not elected to benefit from the relief provided by these Israeli regulations.

The Israeli Companies Law requires the Board of Directors of a public company to appoint an internal auditor nominated by the audit committee. The internal auditor must meet certain statutory requirements of independence. The role of the internal auditor is to examine, among other things, the compliance of the company’s conduct with applicable law and orderly business practice. Our internal auditor is Mr. Doron Cohen, CPA of Fahn Kanne, Grant Thornton.

There are no arrangements or understandings with any of our directors providing for benefits upon termination of their employment or service as directors of our company or any of our subsidiaries.

The Israeli Companies Law codifies the fiduciary duties that “office holders,” including directors and executive officers, owe to a company. An office holder’s fiduciary duties consist of a duty of care and a duty of loyalty. The duty of care requires an office holder to act at a level of care that a reasonable office holder in the same position would employ under the same circumstances. This includes the duty to utilize reasonable means to obtain: (i) information regarding the business feasibility of a given action brought for his approval or performed by him by virtue of his position; and (ii) all other information of importance pertaining to the foregoing actions. The duty of loyalty requires that an office holder act in good faith and for the benefit of the company, including: (i) avoiding any conflict of interest between the office holder’s position in the company and any other position he holds or his personal affairs; (ii) avoiding any competition with the company’s business; (iii) avoiding exploiting any business opportunity of the company in order to receive personal gain for the office holder or others; and (iv) disclosing to the company any information or documents relating to the company’s affairs that the office holder has received by virtue of his position as an office holder.

The Israeli Companies Law requires that an office holder promptly, and no later than the first board meeting at which such transaction is considered, disclose any personal interest that he or she may have and all related material information known to him or her and any documents in their possession, in connection with any existing or proposed transaction relating to our company. In addition, if the transaction is an extraordinary transaction, that is, a transaction other than in the ordinary course of business, other than on market terms, or likely to have a material impact on the company’s profitability, assets or liabilities, the office holder must also disclose any personal interest held by the office holder’s spouse, siblings, parents, grandparents, descendants, spouse’s descendants and the spouses of any of the foregoing (“relatives”), or by any corporation in which the office holder or a relative is a 5% or greater shareholder, director or general manager or in which he or she has the right to appoint at least one director or the general manager.

Under the Israeli Companies Law, all arrangements as to compensation of office holders who are not directors other than the chief executive officer require approval by both the compensation committee and the board of directors. The terms of office and employment of the chief executive officer and the directors require the approval of the compensation committee, the board of directors and shareholders. See also “Item 6.C-Board Practices; Compensation of Office Holders”.

Some other transactions, actions, and arrangements involving an office holder (or a third party in which an office holder has an interest) must be approved by the board of directors, or as otherwise provided for in a company’s articles of association. However, a transaction that is not for the benefit of the company may not be approved. In some cases, such a transaction must be approved by the audit committee and by the board of directors, and under certain circumstances, shareholder approval may be required as well. Generally, in all matters in which a director has a personal interest, he or she shall not be permitted to vote on the matter or be present at the meeting in which the matter is considered, except in case of a transaction that is not extraordinary or for the purpose of presenting the proposed transaction, if the chairman of the audit committee or board of directors (as applicable) determines it necessary. Should a majority of the audit committee or of the board of directors have a personal interest in the matter, then: (a) all of the directors are permitted to vote on the matter and attend the meeting at which the matter is considered; and (b) the matter requires approval of the shareholders at a general meeting.

The disclosure requirements that apply to an office holder also apply to a transaction in which a controlling shareholder of the company has a personal interest. The Israeli Companies Law provides that extraordinary transactions with a controlling shareholder or in which a controlling shareholder has a personal interest, and agreements relating to employment and compensation of a controlling shareholder, generally require the approval of the audit committee (or with respect to terms of office and employment, the compensation committee), the board of directors and the shareholders. Shareholders’ approval shall either include at least half of the shares held by disinterested shareholders participating in the vote, or, alternatively, the total shareholdings of disinterested shareholders voting against the transaction must not represent more than two percent of the voting rights. Agreements relating to engagement or provision of services for a period exceeding three years, must generally be approved once every three years.

For these purposes, a shareholder that holds 25% or more of the voting rights in a company is considered a controlling shareholder if no other shareholder holds more than 50% of the voting rights.

Under the Companies Regulations (Relief regarding Related Party Transactions), 5760-2000, promulgated under the Israeli Companies Law, as amended, certain extraordinary transactions between a public company and its controlling shareholder(s) do not require shareholders’ approval. In addition, under such regulations, directors’ compensation and employment arrangements in a public company do not require the approval of the shareholders if both the compensation committee and the board of directors agree that such arrangements are solely for the benefit of the company or if the directors’ compensation does not exceed the maximum amount of compensation for external directors determined by applicable regulations. Also, employment and compensation arrangements for an office holder that is a controlling shareholder of a public company do not require shareholders’ approval if certain criteria are met. The foregoing exemptions from shareholders’ approval will not apply if one or more shareholders holding at least 1% of the issued and outstanding share capital of the company or of the company’s voting rights, objects to the use of these exemptions, provided that such objection is submitted to the company in writing not later than fourteen days from the date of the filing of a report regarding the adoption of such resolution by the company. If such objection is duly and timely submitted, then the transaction or compensation arrangement of the directors will require shareholders’ approval as detailed above.

The Israeli Companies Law provides that an acquisition of shares in a public company must be made by means of a tender offer if, as a result of the acquisition, a person would become a 25% or greater shareholder of the company. This rule does not apply if there is already another 25% or greater shareholder of the company. Similarly, the Israeli Companies Law provides that an acquisition of shares in a public company must be made by means of a tender offer if as a result of the acquisition, a person would hold greater than a 45% interest in the company unless there is another shareholder holding more than a 45% interest in the company. These requirements do not apply if (i) in general, the acquisition was made in a private placement that received shareholders’ approval, (ii) was from a 25% or greater shareholder of the company, which resulted in the acquirer becoming a 25% or greater shareholder of the company, if there is not already a 25% or greater shareholder of the company, or (iii) was from a shareholder holding a 45% interest in the company which resulted in the acquirer becoming a holder of a 45% interest in the company if there is not already a 45% or greater shareholder of the company.

If, as a result of an acquisition of shares, a person will hold more than 90% of a public company’s outstanding shares or a class of shares, the acquisition must be made by means of a full tender offer for all of the outstanding shares or a class of shares. If less than 5% of the outstanding shares are not tendered in such full tender offer, all of the outstanding shares or class of shares will be transferred to the acquirer. The Israeli Companies Law provides for appraisal rights if any shareholder files a request in court within six months following the consummation of a full tender offer. However, the acquirer may stipulate in the tender offer that any shareholder tendering his shares will not be entitled to appraisal rights. If more than 5% of the outstanding shares are not tendered in the tender offer, then the acquirer may not acquire shares in the tender offer that will cause his shareholding to exceed 90% of the outstanding shares.

Under the Companies Law, a company may not exempt an office holder from liability with respect to a breach of his fiduciary duty, but may exempt in advance an office holder from his liability to the company, in whole or in part, with respect to a breach of his duty of care. However, a company may not exculpate in advance a director from his or her liability to the company with respect to a breach of his duty of care in connection with distributions (as defined in the Companies Law) or for certain breaches listed below.

Pursuant to the Companies Law, a company may indemnify an office holder against: (i) a financial obligation imposed on him in favor of another person by a court judgment, including a compromise judgment or an arbitrator’s award approved by court; (ii) reasonable litigation expenses, including attorney’s fees, expended by the office holder as a result of an investigation or proceeding instituted against him by a competent authority, provided that such investigation or proceeding concluded without the filing of an indictment against him and either (A) concluded without the imposition of any financial liability in lieu of criminal proceedings or (B) concluded with the imposition of a financial liability in lieu of criminal proceedings but relates to a criminal offense that does not require proof of criminal intent; and (iii) expenses, including reasonable litigation expenses and legal fees, incurred by an office holder as a result of a proceeding instituted against such office holder in relation to (A) infringements that may impose financial sanction pursuant to the provisions of Chapter H’3 under the Securities Law, or (B) administrative infringements pursuant to the provisions of Chapter H’4 under the Securities Law, or (C) infringements pursuant to the provisions of Chapter I’1 under the Securities Law.

The indemnification of an office holder must be expressly permitted in the articles of association, under which the company may (i) undertake in advance to indemnify its office holders with respect to certain types of events that can be foreseen at the time of giving such undertaking and up to an amount determined by the board of directors to be reasonable under the circumstances, or (ii) provide indemnification retroactively in amounts deemed to be reasonable by the board of directors.

A company may also procure insurance for an office holder’s liability in consequence of an act performed in the scope of his office in the following cases: (i) a breach of the duty of care of such office holder, (ii) a breach of fiduciary duty, only if the office holder acted in good faith and had reasonable grounds to believe that such act would not be detrimental to the company, or (iii) a monetary obligation imposed on the office holder for the benefit of another person. Subject to the provisions of the Companies Law and the Securities Law, a company may also enter into a contract for procurement of insurance for an office holder for (a) expenses, including reasonable litigation expenses and legal fees, incurred by the office holder as a result of a proceeding instituted against such office holder in relation to (A) infringements that may impose financial sanction pursuant to the provisions of Chapter H’3 under the Securities Law, or (B) administrative infringements pursuant to the provisions of Chapter H’4 under the Securities Law, or (C) infringements pursuant to the provisions of Chapter I’1 under the Securities Law and (b) payments made to the injured parties of such infringement under Section 52ND(a)(1)(a) of the Securities Law.

A company may not indemnify an office holder against, nor enter into an insurance contract which would provide coverage for, any monetary liability incurred as a result of any of the following:

Under the Companies Law, exemption and indemnification of, and procurement of insurance coverage for, a company’s office holders, must be approved under the same terms that apply to approval of the terms of office and employment of the office holders. For more information, see Item 6.B - “Directors, Senior Management and Employees – Compensation of Directors and Officers”.

Our Articles of Association allow us to exempt any office holder to the maximum extent permitted by law, before or after the occurrence giving rise to such exemption. Our Articles of Association also provide that we may indemnify any office holder, to the maximum extent permitted by law, against any liabilities he or she may incur in such capacity, limited with respect (i) to the categories of events that can be foreseen in advance by our Board of Directors when authorizing such undertaking, and (ii) to the amount of such indemnification as determined retroactively by our Board of Directors to be reasonable in the particular circumstances. Similarly, we may also agree to indemnify an office holder for past occurrences, whether or not we are obligated under any agreement to provide such indemnification. Our Articles of Association also allow us to procure insurance covering any past or present officer holder against any liability which he or she may incur in such capacity, to the maximum extent permitted by law. Such insurance may also cover the company for indemnifying such office holder. We have obtained directors’ and officers’ liability insurance covering our officers and directors and those of our subsidiaries for certain claims. In addition, we have provided our directors and officers with letters providing them with exemption and indemnification to the fullest extent permitted under Israeli law (except that we are not required to exempt our directors and officers from liability for damages caused as a result of a breach of the office holder’s duty of care in transactions in which a controlling shareholder or an office holder has a personal interest).

Under the Securities Law, the Israeli Securities Authority, or ISA, may take certain administrative enforcement actions against a company or a person, including a director, officer or shareholder of a company, if carrying out certain transgressions designated in the Securities Law.

The Securities Law also requires that the chief executive officer of a company supervise and take all reasonable measures to prevent the company or any of its employees from breaching certain provisions of the Securities Law. The chief executive officer is presumed to have fulfilled such supervisory duty if the company adopts internal enforcement procedures designed to prevent such breaches, appoints a representative to supervise the implementation of such procedures and takes measures to correct the breach and prevent its reoccurrence. The ISA is authorized to impose fines on any person or company breaching certain provisions designated under the Companies Law.

We have adopted several codes and policies, which contain various corporate governance principles, including a Code of Ethics (which includes Whistle Blower procedures), Insider Trading Policy and a Policy Prohibiting Bribery and Corruption, all of which are available on our website at www.gilat.com. See “Item 16B – Code of Ethics” of this Annual Report.

We consider our employees our most valuable asset. We offer competitive compensation and comprehensive benefits to attract and retain our employees. The remuneration and rewards include retention through share-based compensation and performance-based bonuses to our key employees.

We believe that an engaged workforce is key to maintaining our ability to innovate. We invest in our employees’ career growth and development is an important focus for us. We offer learning opportunities and training programs including workshops, guest speakers and various conferences to enable our employees to advance in their chosen professional paths.

We are committed to providing a safe work environment for our employees in compliance with applicable regulations.

As of December 31, 2025, we had 1,159 full-time employees, including 370 employees in engineering, research and development, 367 employees in manufacturing, operations and technical support, 87 employees in marketing and sales,119 employees in administration and finance and 216 in other departments. Of these employees, 283 were based in our facilities in Israel, 293 were employed in the U.S., 276 were employed in Latin America, and 307 were employed in Asia, the Far East, and other parts of the world.

As of December 31, 2024, we had 1,118 full-time employees, including 339 employees in engineering, research and development, 348 employees in manufacturing, operations and technical support, 86 employees in marketing and sales, 110 employees in administration and finance and 235 in other departments. Of these employees, 306 were based in our facilities in Israel, 279 were employed in the U.S., 293 were employed in Latin America, and 240 were employed in Asia, the Far East, and other parts of the world.

As of December 31, 2023, we had 1,183 full-time employees, including 346 employees in engineering, research and development, 436 employees in manufacturing, operations, and technical support, 81employees in marketing and sales, 108 employees in administration and finance, and 212 employees in other departments. Of these employees, 313 were based in our facilities in Israel, 228 were employed in the U.S. (including 82 employed by DataPath), 319 were employed in Latin America, and 324 were employed in Asia, the Far East, and other parts of the world.

We also utilize temporary employees, as necessary, to supplement our manufacturing and other capabilities.

We provide our employees worldwide with benefits in accordance with applicable labor laws, and we operate under diverse labor practices across the jurisdictions in which we do business. In Israel, although neither our employees nor we are party to collective bargaining agreements and our workforce is not unionized, certain provisions of nationwide collective agreements, extended by the Israeli Minister of Economy and Industry, apply to all Israeli employees. These provisions address matters such as working hours, minimum wages, pension contributions, work-related injury insurance, dismissal procedures, and severance terms, and may be updated from time to time. Under Israeli law, employees are generally entitled to severance pay upon termination, certain resignations, or death, and we fund most of our severance obligations through monthly contributions to approved severance funds or insurance policies, with any remainder recorded as a long‑term liability. Israeli employees and employers are also required to contribute to the National Insurance Institute, similar to U.S. Social Security. Our permanent employees in Israel typically receive life and pension insurance that provides customary retirement and severance-related benefits.

Our U.S. subsidiaries sponsor a retirement plan for eligible employees. Their 401(k) Plan is a “safe harbor” 401(k) Plan and allows eligible employees to defer compensation up to the maximum amount allowed under the current Internal Revenue Code. As a “safe harbor” plan, our U.S. subsidiary must make a mandatory contribution to the 401(k) Plan to satisfy certain non-discrimination requirements under the Internal Revenue Code. This mandatory contribution is made for all eligible employees. In addition to 401(k) Plan, our U.S subsidiaries provides healthcare and life insurance coverage to all eligible employees.

None of our directors and executive officers beneficially owns more than 1% of our outstanding shares.

As of December 31, 2025, our directors and executive officers as a group (18 persons) held options to purchase 1,255,416 of our ordinary shares under our share option plan (described below), exercisable at a weighted average exercise price of $6.93 per share (adjusted for the distribution of dividends in April 2019, December 2020, and January 2021). These options have expiration dates ranging from 2027 to 2031. As of December 31, 2025, our directors and executive officers held, in the aggregate, 468,000 Restricted (Performance) Share Units, or RSUs. The RSUs were granted under our 2008 Option Plan and vest over four years.

In October 2008, our Board of Directors adopted the 2008 Stock Incentive Plan, or the 2008 Plan, for issuance of options, restricted share units, or RSUs, and other forms of equity-based awards to our directors, officers, consultants, and employees. The term of the 2008 Plan had been extended in October 2015 and subsequently in August 2025 until October 28, 2035. Our Board of Directors also adopted a sub-plan to enable qualified optionees certain tax benefits under the Israeli Income Tax Ordinance. Following increases approved by our Board of Directors, the total number of ordinary shares reserved for issuance of options under the 2008 Plan, as of December 31, 2025, is 15.99 million shares. As of December 31, 2025, we have granted options to purchase 10.5 million ordinary shares under the 2008 Plan (excluding options that were granted and cancelled), pursuant to which 3.9 million ordinary shares have been issued as of December 31, 2025. As of December 31, 2025, we had outstanding options to purchase 5.0 million ordinary shares, with exercise prices ranging from $4.92 to $11 per share (adjusted due to the distribution of dividends in April 2019, December 2020, and January 2021).  Such options expire at various times through March 2026 to August 2031.  As of December 31, 2025, there were 1.18 million outstanding Restricted (Performance) Share Units, or RSUs, under this plan.

In February 2019, the 2008 Plan was amended to include a dividend adjustment, whereby unless otherwise is resolved by the Board of Directors, the exercise price of each outstanding share option (whether vested or not) (as such term is defined in the 2008 Plan), shall be reduced by an amount equal to the cash dividend per share distributed on the applicable distribution date. Following the dividend distribution in April 2019, the exercise price of each outstanding share option was reduced by $0.45, and following the dividend distributions in December 2020 and January 2021, the exercise price of each outstanding share option was reduced by $0.36 and $0.63, respectively. In addition, the amendment stipulates that the administering committee may apply a “net exercise” payment method, whereby a certain number of ordinary shares to which a participant is entitled may be withheld according to the formula set forth in the amendment.

The term of options and RSUs granted under the 2008 Plan is six years, subject to the terms of the specific plan and grant letter.

Options granted under the 2008 Plan to our executives generally vest over a four-year period. RSUs granted under the 2008 Plan to our executives generally vest over four-year or three-year periods. Equity incentives granted under the 2008 Plan to our directors generally vest ratably each quarter over a three-year period, except for the grant to our Chairman of the Board of Directors, which vests over a four-year period.

The purpose of the 2008 Plan is to enable us to attract and retain qualified persons as employees, officers, directors, consultants, and advisors, and to motivate such persons by providing them with equity participation in our company. The Section 102 Plans are designed to afford qualified optionees certain tax benefits under the Israeli Income Tax Ordinance.

The 2008 Plan is administered by the Compensation Committee appointed by our Board of Directors. The Compensation Committee recommends to our Board, or in case of office holders, approves, the persons entitled to receive options and RSUs, the terms and conditions on which options or rights to purchase are granted, and the number of shares subject thereto. The grants of options and RSUs are approved by our Board.

Options and RSUs issued pursuant to the 2008 Plan may be granted to our and our subsidiaries’ directors, officers, consultants and employees. Pursuant to the terms of the 2008 Plan, the exercise price of incentive share options must be not less than the closing price of our ordinary shares on NASDAQ on the date of grant of the options or, if the closing price is not quoted on such date, on the preceding trading day.

Options and RSUs are exercisable, and restrictions on the disposition of shares lapse, according to the terms of the applicable plan and of the individual agreements under which such options or RSUs were granted or awards issued.

Not applicable.

The following table sets forth certain information regarding the beneficial ownership of our ordinary shares, as of March 10, 2026, by each person who we believe beneficially owns 5% or more of our outstanding ordinary shares and all of our directors and executive officers as a group.

Beneficial ownership of shares is determined under rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power. The percentage ownership of each such person is based on the number of ordinary shares outstanding as of March 10, 2026, and includes the number of ordinary shares underlying options and RSUs that are exercisable within sixty (60) days from the date of March 10, 2026. Ordinary shares subject to these options and RSUs are deemed to be outstanding for the purpose of computing the ownership percentage of the person holding these options and RSUs, but are not deemed to be outstanding for the purpose of computing the ownership percentage of any other person. The information in the table below is based on 75,470,948 ordinary shares outstanding as of March 10, 2026. Each of our outstanding ordinary shares has identical rights in all respects. The information in the table below with respect to the beneficial ownership of shareholders is based on the public filings of such shareholders with the SEC through March 10, 2026, and information provided to us by such shareholders.

As of March 10, 2026, our major shareholders were Phoenix Financial Ltd. beneficially owning 8,325,123 ordinary shares (approximately 11.38% ownership), Migdal Insurance and Financial Holdings Ltd. beneficially owning 7,800,503 ordinary shares (approximately 10.66% ownership), Yelin Lapidot Holdings Management Ltd. beneficially owning 5,175,188 ordinary shares (approximately 7.08% ownership), Clal Insurance Enterprise Holdings, beneficially owning 4,084,120 ordinary shares (approximately 5.58% ownership), and Harel Insurance Investments & Financial Services Ltd. beneficially owning 3,873,305 ordinary shares (approximately 5.29% ownership).

As of March 19, 2025, our major shareholders were Phoenix Holdings Ltd. beneficially owning 10,584,500 ordinary shares (approximately 18.56% ownership).

As of March 13, 2024, our major shareholders were Phoenix Holdings Ltd. beneficially owning 11,999,849 ordinary shares (approximately 21.05% ownership) and Meitav Investment House Ltd. beneficially owning 4,321,089 ordinary shares (approximately 7.58% ownership). On November 14, 2024, Phoenix  Holdings Ltd. reported 9,803,657 ordinary shares (approximately 17.19% ownership).

The voting rights of our major shareholders do not differ from the voting rights of other holders of our ordinary shares, except to the extent that they hold more than 14% and as such, they will have a right to appoint a director, subject to certain conditions set forth in our Articles of Association.

Based on a review of the information provided to us by our transfer agent, as of March 9, 2026, there were 64 holders of record of our ordinary shares, of which 49 record holders holding approximately 94% of our ordinary shares had registered addresses in the U.S. These numbers are not representative of the number of beneficial holders of our shares nor is it representative of where such beneficial holders reside since many of these ordinary shares were held of record by brokers or other nominees, including CEDE & Co., the nominee for the Depositary Company (the central depositary for the U.S. brokerage community), which held approximately 92% of our outstanding ordinary shares as of said date.

None.

Not applicable.

See the consolidated financial statements, including the notes thereto, and the exhibits listed in Item 18 hereof and incorporated herein by this reference.

For information on our revenues breakdown for the past three years, see Item 5 - “Operating and Financial Review and Prospects”

We are a party to various legal proceedings incident to our business. Except as noted below, there are no material legal proceedings pending or, to our knowledge, threatened against us or our subsidiaries, and we are not involved in any legal proceedings that our management believes, individually or in the aggregate, would have a material adverse effect on our business, financial condition or operating results.

In 2003, the Brazilian tax authority filed a claim against our inactive subsidiary in Brazil, SPC International Ltda, for the payment of taxes allegedly due from the subsidiary. After numerous hearings and appeals at various appellate levels in Brazil, the Supreme Court ruled against the subsidiary in final non-appealable decisions published in June 2017. As of December 31, 2025, the total amount of this claim, including interest, penalties, and legal fees, is approximately $7.2 million, of which approximately $0.7 million is the principal. The Brazilian tax authorities initiated foreclosure proceedings against the subsidiary and certain of its former managers. The court cancelled the foreclosure proceedings against the former managers in a final and not appealable decision issued in July 2017. While foreclosure and other collection proceedings are pending against the subsidiary, based on Brazilian external counsel’s opinion, we believe that the subsidiary has solid arguments to sustain its position that further collection proceedings and inclusion of any additional co-obligors in the tax foreclosure certificate are barred due to statute of limitation and that the foreclosure procedures cannot legally be redirected to other group entities and managers who were not initially cited in the foreclosure proceeding due to the passage of the statute of limitation. Accordingly, we believe that the chances that such redirection will lead to a loss recognition are remote.

In 2014, our Peruvian subsidiary, Gilat To Home Peru, or GTH Peru, initiated arbitration proceedings in Lima against the Ministry of Transport and Communications of Peru, or MTC, and PRONATEL. The arbitration was related to the PRONATEL projects awarded to us in 2000-2001. Under these projects, GTH Peru provided fixed public telephony services in rural areas of Peru. Our subsidiary’s main claim was related to damages caused by the promotion of mobile telephony in such areas by the Peruvian government in the years 2011-2015. In June 2018, the arbitration tribunal issued an arbitration award ordering MTC and PRONATEL to pay our subsidiary approximately $13.5 million plus legal interest. The arbitration award in favor of our subsidiary was confirmed by the Peruvian Superior Court, which ordered MTC and PRONATEL in November 2020 to pay the arbitration award amount. Following the Superior Court’s decision, PRONATEL requested a constitutional protection writ (constitutional amparo), and our subsidiary has initiated collection procedures against MTC and PRONATEL. In 2023, and 2024 our subsidiary received payments of approximately $3.2 million and $10.6 million respectively.

In October 2019, our Peruvian subsidiary GTH Peru initiated additional arbitration proceedings against MTC and PRONATEL based on similar grounds for the years 2015-2019. In June 2022, the arbitration tribunal issued an arbitration award ordering MTC and PRONATEL to pay GTH Peru approximately $15 million plus procedural costs and legal interests. In September 2022 MTC filed an annulment action against the award and in parallel, in October 2022, GTH Peru, initiated an enforcement process for collection of the awarded amount. The arbitration award in favor of our subsidiary was confirmed by the Peruvian Superior Court, which ordered MTC and PRONATEL to pay the arbitration-award amount. Following the Superior Court’s decision PRONATEL requested a constitutional protection writ (constitutional amparo), and our subsidiary has initiated collection procedures against MTC and PRONATEL. In 2024 our subsidiary received the first payment of approximately $3.1 million. In 2025, our subsidiary received the second and third payments of approximately $4.55 million.

In April 2024, our Peruvian subsidiary, Gilat Networks Peru S.A. (“GNP”), initiated arbitration proceedings against PRONATEL at the ANKAWA International Arbitration and Dispute Resolution Center, Lima, relating to PRONATEL projects awarded in 2015. Under these projects, GNP constructed telecommunications transport networks in rural areas of Ayacucho, Apurímac and Huancavelica. Although GNP completed the construction phase, PRONATEL has not formally accepted the network, and GNP has continued to operate and maintain the network at its own cost. GNP’s principal claim sought payment for these operation and maintenance services. In April 2025, the arbitral tribunal issued awards ordering PRONATEL to pay GNP approximately $9.6 million, plus procedural costs and legal interest. PRONATEL has filed annulment requests, and GNP has initiated collection proceedings against PRONATEL and the Ministry of Transport and Communications of Peru (“MTC”).

PRONATEL continues to dispute responsibility for ongoing operation and maintenance costs. Accordingly, in November 2025, GNP commenced a second arbitration seeking payment for services provided since January 1, 2025, that are not covered by the prior awards, with claims currently totaling approximately $9 million.

In addition, we are in the midst of different stages of audits and disputes with various tax authorities in different parts of the world. Further, we are defendant in various other lawsuits, including employment-related litigation claims and may be subject to other legal proceedings in the normal course of our business. While we intend to defend the aforementioned matters vigorously, we believe that a loss in excess of our accrued liability with respect to these claims is not probable.

We presently do not have a dividend policy.

In April 2019, we distributed for the first time a cash dividend of $0.45 per share (approximately $24.9 million in the aggregate). Following receipt of the settlement amount from Comtech, in December 2020 we distributed a cash dividend of $0.36 per share (approximately $20 million in total), and in January 2021 (following receipt of court approval) we distributed an additional cash dividend of $0.63 per share (approximately $35 million). We have not adopted a general policy regarding the distribution of dividends and make no statements as to the distribution of dividends in the foreseeable future. The terms of some of our financing arrangements restrict us from paying dividends to our shareholders and require prior approval of certain banks which provide us with credit facilities and guarantees. Israeli law limits the distribution of cash dividends to the greater of retained earnings or earnings generated over the two most recent years, in either case provided that we reasonably believe that the dividend will not render us unable to meet our current or foreseeable obligations when due. Notwithstanding the foregoing, dividends may be paid with the approval of a court (such as in the case of the January 2021 dividend), provided that there is no reasonable concern that such dividend distribution will prevent the company from satisfying its current and foreseeable obligations, as they become due. Our Articles of Association provide that no dividends shall be paid otherwise than out of our profits and that any such dividend shall carry no interest. For information regarding taxation of dividend, see Item 10.E – “Additional Information - Taxation - Israeli Tax Consequences of Holding Our Shares - Dividends” of this Annual Report.

None

Our ordinary shares are listed on the NASDAQ Global Select Market under the symbol “GILT” and are also traded on the TASE.

Not applicable.

Our ordinary shares are listed on the NASDAQ Global Select Market under the symbol “GILT” and are also traded on the TASE.

Not applicable.

Not applicable.

Not applicable.

Not applicable.

Set out below is a description of certain provisions of our Articles of Association and of the Israeli Companies Law related to such provisions. This description is only a summary, does not purport to be complete and is qualified by reference to the full text of the Articles of Association, which are incorporated by reference as exhibits to this annual report, and to Israeli law.

We are an Israeli public company registered with the Israel companies register, registration No. 52-003893-6.

Under the Companies Law, a company may define its purpose as to engage in any lawful business and may broaden the scope of its purpose to the grant of reasonable donations for any proper charitable cause, even if the basis for any such donation is not dependent upon business considerations. Our Articles of Association provide that our purpose is to engage in any business permitted by law and that we may also grant reasonable donations for any proper charitable cause.

Under the provisions of the Israeli Companies Law and our Articles of Association, a director cannot vote on a proposal, arrangement or contract in which he or she has a personal interest, nor attend a meeting during which such transaction is considered, except in event of a transaction that is not extraordinary or for the purpose of presenting the proposed transaction, if the chairman of the audit committee or board of directors (as applicable) determines it necessary. In addition, the terms of office and employment of the directors require the approval of the compensation committee, the board of directors and shareholders. For more information regarding the requirements for approval of certain transactions, see Item 6B - “Directors, Senior Management and Employees – “Compensation of Directors and Officers”.

Please refer to Exhibit 2.1 for Items 10.B.3, B.4, B.6, B.7, B.8, B.9 and B.10.

On June 17, 2024, we, through our subsidiary Wavestream Corporation entered into a Membership Interest Purchase Agreement with Stellar Blu Solutions LLC, a leading U.S. based provider of next-generation SATCOM terminal solutions, and the owners of its membership interests, which was amended on December 11, 2024. Pursuant to the Purchase Agreement, Wavestream agreed to purchase from the sellers 100% of the membership interests of SBS.  The acquisition was completed on January 6, 2025, and the initial closing cash payment of $98 million ($108 million as adjusted) was funded through a combination of existing cash resources and $60 million drawn under a new secured credit line that we entered into with HSBC Bank USA, N.A., and Bank Hapoalim B.M. As of December 31, 2025, this credit line had been repaid in full. Following the determination that the first and second performance milestones were not achieved, the remaining contingent consideration was adjusted in accordance with the purchase agreement. As a result, the total cash consideration in connection with the acquisition may increase by up to an additional $99 million, payable in cash, subject to the achievement of future performance milestones.

In March and December 2015, the Peruvian government awarded us the PRONATEL Regional Projects for the construction of networks, operation of the networks for a defined period and their transfer to the government, which are expected to generate aggregate revenues of $395 million to be recognized over approximately 14-16 years. In accordance with the bid conditions, we established a subsidiary in Peru, GNP, to enter into written agreements with the Peruvian government for each of the four regional projects that were awarded. In 2018, we were awarded two additional PRONATEL Regional Projects with contractual value of approximately $154 million. Additional amounts of $17 million  and $88 million for expansions of the Regional Projects were awarded in 2023 and 2025, respectively. Remaining revenues from these projects are expected to be generated over an additional period of 4 to 9 years for the construction of networks, operation of the networks for a defined period, and transfer of the transport networks to the government. See Item 4.B. – “Information on the Company – Business Overview”. In order to guarantee our performance obligations and the down payment we received under the PRONATEL Regional Projects, we issued bank guarantees and surety bonds for the benefit of PRONATEL in the amount of $62.1 million in aggregate.

There are no Israeli currency control restrictions on payments of dividends or other distributions with respect to our ordinary shares or the proceeds from the sale of the shares. However, legislation remains in effect pursuant to which currency controls can be imposed by administrative action at any time.

Non-residents of Israel who purchase our securities with non-Israeli currency will be able to repatriate dividends (if any), liquidation distributions and the proceeds of any sale of such securities, into non-Israeli currencies at the rate of exchange prevailing at the time of repatriation, provided that any applicable Israeli taxes have been paid (or withheld) on such amounts. Neither our Articles of Association nor the laws of the State of Israel restrict in any way the ownership or voting of ordinary shares by non-residents of Israel, except with respect to citizens of countries that are in a state of war with Israel.

Holders of our ordinary shares should consult their own tax advisors as to the U.S., Israeli or other tax consequences of the purchase, ownership and disposition of ordinary shares, including, in particular, the effect of any foreign, state or local taxes.

The following is a summary of certain Israeli income tax and capital gains tax consequences for non-Israeli residents as well as Israeli residents holding our ordinary shares. The summary is based on provisions of the Israeli Income Tax Ordinance (new version), 1961 and regulations promulgated thereunder, as well as on administrative and judicial interpretations, all as currently in effect, and all of which are subject to change (possibly with retroactive effect) and to differing interpretations. There might be changes in the tax rates and in the circumstances in which they apply, and other modifications which might change the tax consequences to you. The summary is intended for general purposes only and does not relate to all relevant tax aspects. The discussion is not intended and should not be construed as legal or professional tax advice sufficient for decision making. This summary does not discuss all aspects of Israeli income and capital gain taxation that may be applicable to investors in light of their particular circumstances or to investors who are subject to special status or treatment under Israeli tax law.

FOR THE FOREGOING AND OTHER REASONS, YOU ARE URGED TO CONSULT YOUR OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF YOUR HOLDINGS. WE ARE NOT MAKING ANY REPRESENTATIONS REGARDING THE PARTICULAR TAX CONSEQUENCES AS TO ANY HOLDER, NOR ARE WE OR OUR ADVISORS RENDERING ANY FORM OF LEGAL OPINION OR PROFESSIONAL TAX ADVICE AS TO SUCH TAX CONSEQUENCES.

Generally, income of Israeli companies is subject to corporate tax. The Israeli corporate tax rate since January 1, 2018 is 23%.

Non-Israeli residents are subject to tax on income accrued or derived from Israeli sources. These include, inter alia, dividends, royalties and interest, as well as other types of income (e.g., from provision of services in Israel). We are required to withhold income tax on any such payments we make to non-residents. Israel presently has no estate or gift tax.

Israeli law generally imposes tax on capital gains derived from the sale of securities and other Israeli capital assets, including shares in Israeli resident companies, unless a specific exemption is available or a treaty between Israel and the country of the non-resident provides otherwise. Capital gains from sales of our ordinary shares will be tax exempt for non-Israeli residents provided certain conditions are met (one of these conditions is that the gains are not derived through a permanent establishment that the non-resident maintains in Israel).

Subject to the exemptions provided by the Israeli law, as described above, pursuant to the tax treaty between Israel and the U.S., or the Treaty, U.S. residents are generally exempt from Israeli capital gains tax on capital gain derived from the sale of our shares. This exemption does not apply to U.S. residents holding (at the time of the sale or in the preceding 12 months) 10% or more of the voting power in the Company.

The statutory withholding tax rate for dividends distributed by an Israeli company to non-resident shareholders is generally 25%. The rate is reduced to 15% for dividends distributed out of income generated by an Approved or Benefitted Enterprise. A different withholding tax rate may apply as a result of a tax treaty between Israel and shareholder’s country of residence.

Under the Treaty, the maximum Israeli tax rate on dividends paid to a corporate holder of our ordinary shares who is a U.S. resident is 25%. However, generally dividends paid to a U.S. corporation holding at least 10% of our voting power in the year of the sale and in the entire preceding tax year shall be subject to a 15% tax withholding rate, if the dividend is generated by an Approved or Benefitted Enterprise or 12.5% if the dividends are not generated by an Approved or Benefitted Enterprise, under certain conditions stipulated in the treaty.

Non-Israeli residents who receive interest, dividend or royalty income derived or accrued in Israel, from which Israeli tax was withheld, are generally exempt from Israeli tax filing obligations, provided that: (i) such income was not derived from a business conducted in Israel, (ii) the taxpayer has no other taxable sources of income in Israel with respect to which a tax return is required to be filed and (iii) the taxpayer is not obliged to pay excess tax (as further explained below).

Israeli law imposes capital gains tax on capital gains derived from the sale of securities and other capital assets, including ordinary shares. Generally, gains from sale of ordinary shares acquired prior to January 1, 2012 are subject to a 20% capital gains tax for individuals. The tax rate is increased to 25% for sale of shares by an individual shareholder holding 10% or more of the shares or voting power in the company (i.e., a substantial shareholder). Corporate shareholders are subject to a 25% capital gains tax rate.

Following enactment of the Tax Burden Law, starting January 1, 2012, the capital gains tax rate applicable to individuals upon the sale of our shares is such individual’s marginal (income) tax rate but not more than 25% (or 30% with respect to a substantial shareholder at the time of the sale or at any time during a 12 month period prior to the sale). With respect to corporate investors, the rate of capital gains tax imposed on the sale of shares is equal to the corporate tax rate, which is 23% since January 1, 2018.

Individual shareholders dealing with securities in Israel are taxed at their marginal tax rates applicable to business income (and up to 47% in 2023, 2024, 2025, and 2026, excluding excess tax).

Subject to the provisions of an applicable tax treaty, individuals who are subject to tax in Israel (whether any such individual is an Israeli resident or non-Israeli resident) are also subject to an additional tax at a rate of 3% on annual income (including, but not limited to, dividends, interest and capital gain) exceeding NIS 721,560 for  2025,2026 and 2027. Additionally, Effective January 1, 2025, a surtax of 2% applies exclusively to taxable income from a capital origin (including dividend distribution and sale of shares) exceeding NIS 721,560.

Distribution of dividend income, other than bonus shares (stock dividends), to Israeli residents holding our ordinary shares is generally subject to income tax at a rate of 25% for individuals and 30% for a substantial individual shareholder. Israeli resident corporations are exempt from income tax on dividends, provided the dividend was paid out of income generated in Israel.

Generally, dividends distributed from taxable income accrued during the period of benefits of Approved or Benefitted Enterprise are taxable at a rate of 15% or 20% (depending on the commencement date of the benefit period applicable to the distributed profits), if the dividend is distributed during the tax benefit period, or within an additional 12 years after the lapse of that period.

The Law for the Encouragement of Capital Investments, 1959, or Investments Law, provides that a capital investment in eligible facilities may, upon application to the Authority for Investments and Development of the Industry and Economy of the Ministry of Economy and Industry of the State of Israel, be designated as an “Approved Enterprise”.

An Approved Enterprise is eligible for tax benefits on taxable income derived from its approved enterprise programs. We have been granted “Approved Enterprise” status under the Investment Law for nine investment programs.

On April 1, 2005, a comprehensive amendment to the Investment Law came into effect, (the “Amendment”). The Amendment includes revisions to the criteria for investments qualified to receive tax benefits as an Approved Enterprise. The Amendment applies to new investment programs and investment programs commencing after 2004 and does not apply to investment programs approved prior to December 31, 2004.

As a result of the Amendment, it was no longer necessary for a company to apply to the Authority for Investments and Development of the Industry and Economy in order to acquire Approved Enterprise status. Instead, a company whose facilities meet the criteria for tax benefits set out by the Amendment, may receive the tax benefits afforded to a “Benefitted Enterprise” by independently selecting the tax year from which the period of benefits under the Investment Law are to commence and notifying the Israeli Tax Authority within 12 months of the end of that year.

Generally, tax benefits under the Amendment are available to production facilities (or other eligible facilities), that derive more than 25% of their business income from exports. In order to receive the tax benefits, the company must make a certain minimum investment in the acquisition of manufacturing assets such as machinery and equipment. Such an investment may be made over a period of no more than three years ending at the end of the year in which the company requested to have the tax benefits apply to its Benefitted Enterprise.

We were eligible under the terms of minimum qualification investment and elected 2011 to have the tax benefits apply.

Tax benefits are available until the earliest 7 or 10 years from the date that the period of benefits commenced, and the lapse of 12 years from the first day of the year in which the election was made. Our periods of benefits as a Benefitted Enterprise under the 2011 election expired in 2023.

The tax benefits include exemption from corporate tax on undistributed income for a period of two to ten years, depending on the geographic location of the Benefitted Enterprise within Israel, and a reduced corporate tax rate of 10% to 25% for the remainder of the benefits period, depending on the level of foreign investment in the company. We would be required to withhold tax at a rate of 15% from any dividends distributed from income derived from the Benefitted Enterprise. The reduced rate of 15% is limited to dividends and distributions out of income attributed to a Benefited Enterprise during the benefits period and actually paid at any time up to 12 years thereafter except with respect to a Foreign Investment Company, in which case the 12-year limit does not apply.

Under an amendment to the Investment Law effective January 1, 2011, upon an irrevocable election made by the company, a uniform corporate tax rate will apply to all qualifying income of the company, as opposed to the previous law’s tax incentives that were limited to income only from Benefitted Enterprises during their benefit period (Preferred Enterprise). Under the amended law, the uniform tax rate was 7% in geographical areas in Israel designated as Development Zone A and 12.5% elsewhere in Israel in 2013 The uniform tax rate from 2014 and onwards is set to 9% in areas in Israel designated as Development Zone A and 16% elsewhere in Israel.

A dividend distributed from income which is attributed to a Preferred Enterprise will be subject to withholding tax at the following rates: (i) Israeli resident corporation – 0%, (ii) Israeli resident individual – 20% in 2014 and onwards (iii) non-Israeli resident - 20% in 2014 and onwards, subject to a reduced tax rate under the provisions of an applicable double tax treaty.

According to an Amendment from December 2016, a preferred enterprise located in development area A will be subject to a tax rate of 7.5% instead of 9% effective from January 1, 2017, and thereafter (the tax rate applicable to preferred enterprises located in other areas remains at 16%).

Under the transitory provisions of the January 1, 2011 legislation, we may opt whether to irrevocably implement the Amendment and waive benefits provided under the prior law or keep the prior benefits. This decision may be taken at any stage. We will consider in the future whether to opt for the benefits under the Amendment.

The December 2016 amendment also prescribes special tax tracks for technological enterprises. The new tax tracks under the amendment are as follows:

Technological preferred enterprise - an enterprise whose total consolidated revenues (parent company and all subsidiaries) are less than NIS 10 billion. A technological preferred enterprise, as defined in the Law, which is located in the center of Israel will be subject to tax at a rate of 12% on profits deriving from intellectual property (in development area A - a tax rate of 7.5%).

Special technological preferred enterprise - an enterprise whose total consolidated revenues (parent company and all subsidiaries) exceed NIS 10 billion. Such an enterprise will be subject to tax at a rate of 6% on profits deriving from intellectual property, regardless of the enterprise’s geographical location.

Subject to certain conditions prescribed within the Law, dividends distributed to “foreign resident companies”, deriving from Preferred Technological Income will be subject to tax at a rate of 4%.

 On November 2, 2021, the Economic Efficiency Law (Legislative Amendments for the Purpose of Achieving the Objectives of the 2021–2022 Budget) (“2021 Budget Law”) was enacted, introducing a dividend ordering rule under which dividend distributions are deemed to be paid proportionally from both previously tax-exempt earnings (“Trapped Earnings”) and taxed earnings, potentially giving rise to additional corporate tax liability. The law also included a temporary provision allowing the release of Trapped Earnings at a reduced corporate tax rate (subject to a minimum of 6%) during a one-year period beginning November 15, 2021. In 2022, the Company elected to apply this temporary provision and released all of its Trapped Earnings.

Israeli transfer pricing legislation generally provides that all cross-border transactions carried out between related parties be conducted on an arm’s length basis and be taxed accordingly. The transfer pricing regulations are not expected to have a material effect on our company.

The following is a general discussion of the material U.S. federal income tax consequences of the acquisition, ownership and disposition of our ordinary shares. This discussion addresses only the U.S. federal income tax considerations that may be relevant to U.S. Holders (as defined below) who hold our ordinary shares as capital assets. This summary is based on the U.S. Internal Revenue Code of 1986, as amended, or the Code, Treasury regulations promulgated thereunder, judicial and administrative interpretations thereof, and the U.S.-Israel Tax Treaty, or the Treaty, all as in effect on the date hereof and all of which are subject to change either prospectively or retroactively or to differing interpretations. There can be no assurance that the U.S. Internal Revenue Service, or the IRS, will not take a different position concerning the tax consequences of the acquisition, ownership and disposition of our ordinary shares or that such a position would not be sustained. This discussion does not address all tax considerations that may be relevant with respect to an investment in our ordinary shares. In addition, this description does not account for the specific circumstances of any particular investor, such as:

If a partnership or an entity treated as a partnership for U.S. federal income tax purposes owns our ordinary shares, the U.S. federal income tax treatment of a partner in such a partnership will generally depend upon the status of the partner and the activities of the partnership. A partnership that owns our ordinary shares and the partners in such partnership should consult their tax advisors about the U.S. federal income tax consequences of holding and disposing of ordinary shares.

This summary does not address the effect of any U.S. federal taxation (such as estate and gift tax) other than U.S. federal income taxation. In addition, this summary does not include any discussion of state, local or non-U.S. taxation.

For purposes of this summary, as used herein, the term “U.S. Holder” means a person that is eligible for the benefits of the Treaty and is a beneficial owner of an ordinary share. This generally includes:

Unless otherwise indicated, it is assumed for the purposes of this discussion that the Company is not, and will not become, a “passive foreign investment company,” or a PFIC, for U.S. federal income tax purposes. See ”Passive Foreign Investment Companies” below.

Taxation of Distributions

Subject to the discussion below under the heading ”Passive Foreign Investment Companies,” the gross amount of any distributions received with respect to our ordinary shares, including the amount of any Israeli taxes withheld therefrom, will constitute dividends for U.S. federal income tax purposes when such distribution is actually or constructively received, to the extent such distribution is paid out of our current or accumulated earnings and profits, as determined for U.S. federal income tax purposes. Because we do not expect to maintain calculations of our earnings and profits under U.S. federal income tax principles, it is expected that the entire amount of any distribution will generally be reported as dividend income to you. Dividends are included in gross income as ordinary income unless such dividends meet the requirements of “qualified dividend income” as set forth in more detail below. Distributions in excess of our current or accumulated earnings and profits would be treated as a non-taxable return of capital to the extent of your adjusted tax basis in our ordinary shares and any amount in excess of your tax basis would be treated as gain from the sale of ordinary shares. See “Sale, Exchange or Other Disposition of Ordinary Shares” below for a discussion of the taxation of capital gains. Our dividends would not qualify for the dividends-received deduction generally available to corporations under section 243 of the Code but may qualify for a dividends-received deduction under Code Section 245A.

Dividends that we pay in NIS, including the amount of any Israeli taxes withheld therefrom, will be included in your income in a U.S. dollar amount calculated by reference to the exchange rate in effect on the day such dividends are received, regardless of whether the payment is in fact converted into U.S. dollars. A U.S. Holder who receives payment in NIS and converts NIS into U.S. dollars at an exchange rate other than the rate in effect on such day may have a foreign currency exchange gain or loss that would generally be treated as U.S.-source ordinary income or loss. U.S. Holders should consult their own tax advisors concerning the U.S. tax consequences of acquiring, holding and disposing of NIS.

Subject to complex limitations, some of which vary depending upon the U.S. Holder’s circumstances, any Israeli withholding tax imposed on dividends paid with respect to our ordinary shares, may be a foreign income tax eligible for credit against a U.S. Holder’s U.S. federal income tax liability (or, alternatively, for deduction against income in determining such tax liability). Israeli taxes withheld in excess of the applicable rate allowed by the Treaty (if any) will not be eligible for credit against a U.S. Holder’s federal income tax liability. The limitation on foreign income taxes eligible for credit is calculated separately with respect to specific classes of income. Dividends paid with respect to our common stock generally will be treated as foreign-source passive category income or, in the case of certain U.S. Holders, general category income for U.S. foreign tax credit purposes. Further, there are special rules for computing the foreign tax credit limitation of a taxpayer who receives dividends subject to a reduced tax rate. A U.S. Holder may be denied a foreign tax credit with respect to Israeli income tax withheld from dividends received on our ordinary shares if such U.S. Holder fails to satisfy certain minimum holding period requirements or to the extent such U.S. Holder’s position in ordinary shares is hedged. An election to deduct foreign taxes instead of claiming foreign tax credit applies to all foreign taxes paid or accrued in the taxable year. The rules relating to the determination of the foreign tax credit are complex, and you should consult with your own tax advisors to determine whether and to what extent you would be entitled to this credit.

Subject to certain limitations (possibly including the PFIC rules discussed below), “qualified dividend income” received by a non-corporate U.S. Holder may be subject to tax at the lower long-term capital gain rates (currently, a maximum rate of 20%). Distributions taxable as dividends paid on our ordinary shares should qualify for a reduced rate if we are a “qualified foreign corporation,” as defined in Code section 1(h)(11)(C). We will be a qualified foreign corporation if either: (i) we are entitled to benefits under the Treaty, or (ii) our ordinary shares are readily tradable on an established securities market in the United States and certain other requirements are met. We believe that we are entitled to benefits under the Treaty and that our ordinary shares currently are readily tradable on an established securities market in the United States (see discussion below). However, no assurance can be given that our ordinary shares will remain readily tradable. The rate reduction does not apply unless certain holding period requirements are satisfied, nor does it apply to dividends received from a PFIC (see discussion below), in respect of certain risk-reduction transactions, or in certain other situations. U.S. Holders of our ordinary shares should consult their own tax advisors regarding the effect of these rules in their particular circumstances.

Subject to the discussion of PFIC rules below, if you sell or otherwise dispose of our ordinary shares (other than with respect to certain non-recognition transactions), you will generally recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the amount realized on the sale or other disposition and your adjusted tax basis in our ordinary shares, in each case determined in U.S. dollars. Such gain or loss will generally be capital gain or loss and will be long-term capital gain or loss if you have held the ordinary shares for more than one year at the time of the sale or other disposition. Long-term capital gain realized by a non-corporate U.S. Holder is generally eligible for a preferential tax rate (currently at a maximum of 20%). In general, any gain that you recognize on the sale or other disposition of ordinary shares will be U.S.-source for purposes of the foreign tax credit limitation; losses will generally be allocated against U.S. source income. Deduction of capital losses is subject to certain limitations under the Code.

In the case of a cash basis U.S. Holder who receives NIS in connection with the sale or disposition of our ordinary shares, the amount realized will be based on the U.S. dollar value of the NIS received with respect to the ordinary shares as determined on the settlement date of such exchange. A cash basis U.S. Holder who receives payment in NIS and converts NIS into U.S. dollars at a conversion rate other than the rate in effect on the settlement date may have a foreign currency exchange gain or loss, based on any appreciation or depreciation in the value of the foreign currency against the U.S. dollar, which would be treated as U.S.-source ordinary income or loss.

An accrual basis U.S. Holder may elect the same treatment required of cash basis taxpayers with respect to a sale or disposition of our ordinary shares that are traded on an established securities market, provided that the election is applied consistently from year to year. Such election may not be changed without the consent of the IRS. In the event that an accrual basis U.S. Holder does not elect to be treated as a cash basis taxpayer (pursuant to the Treasury regulations applicable to foreign currency transactions), such U.S. Holder is required to calculate the value of the proceeds as of the “trade date” and may have a foreign currency gain or loss for U.S. federal income tax purposes in the event of any difference between the U.S. dollar value of NIS prevailing on the trade date and on the settlement date. Any such currency gain or loss generally would be treated as U.S.- source ordinary income or loss and would be subject to tax in addition to the gain or loss, if any, recognized by such U.S. Holder on the sale or disposition of such ordinary shares.

We believe that we were not a PFIC for U.S. federal income tax purposes for the taxable year of 2025. However, since PFIC status depends upon the composition of our income and assets and the market value of our assets from time to time, there can be no assurance that our analysis prevails or that we will not be considered a PFIC for any future taxable year. If we were a PFIC for any taxable year during which a U.S. Holder owned ordinary shares, certain adverse consequences could apply to the U.S. Holder. Specifically, unless a U.S. Holder makes one of the elections mentioned below, gain recognized by the U.S. Holder on a sale or other disposition of ordinary shares would be allocated ratably over the U.S. Holder’s holding period for the ordinary shares. The amounts allocated to the taxable year of the sale or other disposition and to any year before we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable year, and an interest charge would be imposed on the resulting tax liability. Further, any distribution in excess of 125% of the average of the annual distributions received by the U.S. Holder on our ordinary shares during the preceding three years or the U.S. Holder’s holding period, whichever is shorter, would be subject to taxation as described immediately above. In addition, if we were a PFIC for a taxable year in which we pay a dividend or the immediately preceding taxable year, the preferential dividend rates discussed above with respect to dividends paid to certain non-corporate U.S. Holders would not apply. If we were a PFIC for any taxable year in which a U.S. Holder owned our shares, the U.S. Holder would generally be required to file Form 8621 with the IRS with its annual return.

If we are treated as a PFIC with respect to a U.S. Holder for any taxable year, such U.S. Holder will be deemed to own shares in any entities in which we own equity that are also PFICs (“lower tier PFICs”), and may be subject to the tax consequences described above with respect to the shares of such lower tier PFIC the U.S. Holder would be deemed to own.

If we are a PFIC for any taxable year during which a U.S. Holder holds ordinary shares, then in lieu of being subject to the tax and interest charge rules discussed above, such U.S. Holder may make an election to include gain on the ordinary shares as ordinary income under a mark-to-market method, provided that such ordinary shares are “marketable.” The ordinary shares will be marketable if they are “regularly traded” on a qualified exchange or other market, as defined in applicable U.S. Treasury regulations, such as the New York Stock Exchange (or on a foreign stock exchange that meets certain conditions). For these purposes, the ordinary shares will be considered regularly traded during any calendar year during which they are traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. Any trades that have as their principal purpose meeting this requirement will be disregarded. However, because a mark-to-market election cannot be made for any lower tier PFICs that we may own, U.S. Holders will generally continue to be subject to the PFIC rules discussed above with respect to their indirect interest in any investments we own that are treated as an equity interest in a PFIC for U.S. federal income tax purposes. As a result, it is possible that any mark-to-market election with respect to the ordinary shares will be of limited benefit.

If a U.S. Holder makes an effective mark-to-market election, in each year that we are a PFIC, the U.S. Holder will include in ordinary income the excess of the fair market value of its ordinary shares at the end of the year over the adjusted tax basis in the ordinary shares. U.S. Holder will be entitled to deduct as an ordinary loss in each such year the excess of its adjusted tax basis in the ordinary shares over their fair market value at the end of the year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. If a U.S. Holder makes an effective mark-to-market election, in each year that we are a PFIC, any gain that it recognizes upon the sale or other disposition of its ordinary shares will be treated as ordinary income and any loss will be treated as ordinary loss, but only to the extent of the net amount of previously included income as a result of the mark-to-market election.

A U.S. Holder’s adjusted tax basis in the ordinary shares will be increased by the amount of any income inclusion and decreased by the amount of any deductions under the mark-to-market rules discussed above. If a U.S. Holder makes an effective mark-to-market election, it will be effective for the taxable year for which the election is made and all subsequent taxable years unless the ordinary shares are no longer regularly traded on a qualified exchange or the IRS consents to the revocation of the election. U.S. Holders should consult with a tax advisor about the availability of the mark-to-market election, and whether making the election would be advisable in your particular circumstances.

In certain circumstances, a U.S. equity holder in a PFIC may avoid the adverse tax and interest charge regime described above by making a “qualified electing fund” election to include in income its share of the corporation’s income on a current basis. However, a U.S. Holder may make a qualified electing fund election with respect to the ordinary shares only if we agree to furnish U.S. Holders annually with a PFIC annual information statement as specified in the applicable U.S. Treasury regulations. We do not intend to provide the information necessary for U.S. Holders to make a qualified electing fund election if we are classified as a PFIC. Therefore, U.S. Holders should assume that they will not receive such information from us and would therefore be unable to make a qualified electing fund election with respect to any of our ordinary shares were we to be or become a PFIC.

In addition to the income taxes described above, U.S. Holders that are individuals, estates or trusts and whose income exceeds certain thresholds may be subject to a 3.8% Medicare contribution tax on net investment income, which includes dividends and capital gains from the sale or exchange of our ordinary shares.

Backup Withholding and Information Reporting

Payments in respect of our ordinary shares may be subject to information reporting to the IRS and to U.S. backup withholding tax at the rate (currently) of 24%. Backup withholding will not apply, however, if you (i) fall within certain exempt categories, and demonstrate the fact when so required, or (ii) furnish a correct taxpayer identification number and make any other required certification.

Backup withholding is not an additional tax. Amounts withheld under the backup withholding rules may be credited against a U.S. Holder’s U.S. tax liability. A U.S. Holder may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the IRS.

U.S. citizens and individuals taxable as resident aliens of the United States that own “specified foreign financial assets” (as defined in Section 6038D of the Code and the regulations thereunder) with an aggregate value in a taxable year in excess of certain thresholds (as determined under rules in Treasury regulations) and that are required to file a U.S. federal income tax return generally will be required to file an information report with respect to those assets with their tax returns. IRS Form 8938 has been issued for that purpose. “Specified foreign financial assets” include any financial accounts maintained by foreign financial institutions, foreign stocks held directly, and interests in foreign estates, foreign pension plans or foreign deferred compensation plans. Under those rules, our ordinary shares, whether owned directly or through a financial institution, estate or pension or deferred compensation plan, would be “specified foreign financial assets.” Under Treasury regulations, the reporting obligation applies to certain U.S. entities that hold, directly or indirectly, specified foreign financial assets. Penalties can apply if there is a failure to satisfy this reporting obligation. In addition, in the event a U.S. Holder that is required to file IRS Form 8938 does not file such form, the statute of limitations on the assessment and collection of all or a part of the U.S. federal income taxes of such U.S. Holder for the related tax year may not close until three years after the date that the required information is filed. A U.S. Holder is urged to consult the U.S. Holder’s tax advisor regarding the reporting obligation.

Any U.S. Holder who acquires or holds 10% or more in vote or value of our ordinary shares may be subject to certain additional U.S. information reporting requirements.

Proposed legislation in the U.S. Congress, including changes in U.S. tax law, may adversely impact the company and the value of the Ordinary Shares. Changes to U.S. tax laws (which changes may have retroactive application) could adversely affect the company or holders of Ordinary Shares. In recent years, many changes to U.S. federal income tax laws have been proposed and made, and additional changes to U.S. federal income tax laws are likely to continue to occur in the future.

The One Big Beautiful Bill ActOn July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was signed into U.S. law. The Act extends and modifies several provisions originally introduced under the Tax Cuts and Jobs Act of 2017, while also implementing additional changes to U.S. federal tax law. Key provisions of the Act include (i) the permanent extension of 100% bonus depreciation for qualifying assets, (ii) the elimination of the requirement to capitalize and amortize U.S.-based research and experimental expenditures, allowing for immediate expensing, (iii) changes to the limitation on the deductibility of interest expense, and (iv) modifications to the taxation of foreign earnings and other international income tax provisions. The Act contains multiple effective dates, with certain provisions taking effect beginning in calendar year 2025 and others phased in through calendar year 2027.

We are subject to certain of the reporting requirements of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, as applicable to “foreign private issuers” as defined in Rule 3b-4 under the Exchange Act. As a foreign private issuer, we are exempt from certain provisions of the Exchange Act. Accordingly, our proxy solicitations are not subject to the disclosure and procedural requirements of Regulation 14A under the Exchange Act, and transactions in our equity securities by our officers and directors are exempt from reporting and the “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, we file with the Securities and Exchange Commission an annual report on Form 20-F containing financial statements audited by an independent accounting firm. We also submit to the Securities and Exchange Commission reports on Form 6-K containing (among other things) press releases and unaudited financial information. We post our annual report on Form 20-F on our website (http://www.gilat.com) promptly following the filing of our annual report with the Securities and Exchange Commission. The information on our website is not incorporated by reference into this annual report.

The Securities and Exchange Commission maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the Securities and Exchange Commission using its EDGAR (Electronic Data Gathering, Analysis, and Retrieval) system.

The documents concerning our company that are referred to in this annual report may also be inspected at our offices located at Gilat House, 21 Yegia Kapayim Street, Kiryat Arye, Petah Tikva, Israel.

Not applicable.

A significant portion of our revenues are generated in U.S. dollars or linked to the dollar. In addition, a substantial portion of our costs are incurred in U.S. dollars. We believe that the U.S. dollar is the primary currency of the economic environment in which our Company and most of our subsidiaries operate. Thus, the functional and reporting currency of our Company and most of our subsidiaries is the U.S. dollar.

Accordingly, monetary accounts maintained in currencies other than the U.S. dollar are remeasured into U.S. dollars in accordance with ASC 830, “Foreign Currency Matters” (“ASC 830”). All transaction gains and losses of the remeasurement of monetary balance sheet items are reflected in the consolidated statements of income as financial income or expenses, net, as appropriate.

The financial statements of one of our foreign subsidiaries, whose functional currency has been determined to be its local currency, have been translated into U.S. dollars. Assets and liabilities have been translated using the exchange rates in effect at the consolidated balance sheets date. Consolidated statements of income amounts have been translated using specific rates. The resulting translation adjustments are reported as a component of shareholders' equity in accumulated other comprehensive loss.

While a significant portion of our revenues and expenses are generated in U.S. dollars, a portion of our expenses are denominated in NIS, and to a lesser extent, other non-U.S. dollar currencies which lead us to be exposed to financial market risk associated with changes in foreign currency exchange rates. In order to reduce the impact of foreign currency rate volatility of future cash flows caused by changes in foreign exchange rates, in some cases we use currency hedging contracts. If our currency hedging contracts meet the definition of a cash flow hedge as defined by ASC 815, “Derivatives and Hedging”, gains and losses on the derivatives instruments that are designated and qualify as a cash flow hedge are recorded in accumulated other comprehensive loss and reclassified into earnings in the same period in which the designated forecasted transaction or hedged item materialized. Our hedging reduces, but does not eliminate, the impact of foreign currency rate movements, and due to such movements, the results of our operations may be adversely affected.

The following sensitivity analysis illustrates the impact on our non-dollar cash and cash equivalent assuming an instantaneous 10% change in foreign currency exchange rates from year-end levels, with all other variables held constant. At December 31, 2025, a 10% strengthening of the U.S. dollar versus other currencies would have resulted in a decrease of approximately $2.6 million in our cash and cash equivalent, while a 10% weakening of the dollar versus all other currencies would have resulted in an increase of approximately $2.6 million in our net monetary assets.

During the year ended December 31, 2025, we recognized income of $3.1 million related to the effective portion of our hedging instruments. The effective portion of the hedged instruments was included as a reduction to payroll expenses in the statement of income.

As of December 31, 2025, we had no outstanding hedging contracts that did not meet the requirement for hedge accounting.

Not applicable.

None

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness for future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting, as of December 31, 2025. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on that assessment, our management concluded that as of December 31, 2025, our internal control over financial reporting is effective. Our management assessment of and conclusion on the effectiveness of internal control over our financial reporting did not include the internal controls of SBS which is included in our 2025 consolidated financial statements and constituted 5% of the total assets (excluding acquired intangibles and goodwill), as of December 31, 2025 and 28% of revenues for the year then ended.

The effectiveness of management’s internal control over financial reporting as of December 31, 2025 has been audited by Kost Forer Gabbay & Kasierer, a member of EY Global, an independent registered public accounting firm as stated in their report included in Item 18. Financial Statements. As indicated, the evaluation of the effectiveness of our internal control over financial reporting did not include an evaluation of the internal control over financial reporting of a subsidiary acquired in 2025.

There have been no significant changes in our internal control over financial reporting that have occurred during the period covered by this Annual Report that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Our Board of Directors has determined that each of Mr. Shafran and Mr. Shkedy meets the definition of an audit committee financial expert as defined by rules of the Securities and Exchange Commission. Our Board also determined that each of Mr. Shafran and Mr. Shkedy is independent under the requirements of the NASDAQ Marketplace Rules. For a brief listing of Mr. Shafran and Mr. Shkedy’s relevant experience, see Item 6.A. “Directors, Senior Management and Employees - Directors and Senior Management.”

We have adopted a Code of Ethics for executive and financial officers that also applies to all of our employees. The Code of Ethics is publicly available on our website at www.gilat.com. Written copies are available upon request. If we make any substantive amendments to the Code of Ethics or grant any waivers, including any implicit waiver, from a provision of this code to our chief executive officer, chief financial officer or corporate controller, we will disclose the nature of such amendment or waiver on our website. Our Code of Ethics includes a whistleblower policy which provides an anonymous means for employees to communicate with various bodies within our company, including our Audit Committee.

The following table sets forth, for each of the years indicated, the fees billed or expected to be billed to us by our independent auditors and the percentage of each of the fees out of the total amount billed or expected to be billed by the auditors.

Our Audit Committee has adopted a policy and procedures for the approval of all audit and non-audit services rendered by our principal accountants, Kost Forer Gabbay & Kasierer, a member of EY Global and other members of EY Global. The policy generally requires the Audit Committee’s approval of the scope of the engagement of our principal accountants or on an individual engagement basis.

Not applicable.

In the year ended December 31, 2025, neither we nor any affiliated purchaser purchased any of our securities.

None.

Under NASDAQ Marketplace Rule 5615(a)(3) or Rule 5615(a)(3), foreign private issuers, such as our company, are permitted to follow certain home country corporate governance practices in lieu of certain requirements of Listing Rule 5600 Series, with the exception of those rules which are required to be followed pursuant to the provisions of Listing Rule 5615(a)(3).

We have elected to follow Israeli law and practice instead of the requirements of Listing Rule 5600 Series, as described below:

Not applicable.

 

Not applicable.