Are there any risks related to delivery, performance milestones, or regulatory approvals that could affect execution?

Risk assessment – delivery, performance milestones & approvals

The MoD contract is a clear upside catalyst for Gilat ( GILT ), but the upside is contingent on a series‑by‑step execution plan rather than a single cash‑flow event.

- Delivery schedule – The SATCOM system is a custom, high‑tech solution that must be manufactured, integrated and field‑tested on a tight defence‑timeline. Any production bottleneck (e.g., component shortages, firmware‑firming delays, or unexpected testing cycles) could push the hand‑over date out and defer the associated revenue recognition.

- Performance milestones – The MoD will likely tie payment tranches to successful completion of defined performance checkpoints (e.g., system‑validation, on‑site installation, operational‑readiness). Missed or delayed milestones would not only defer cash but could trigger penalty clauses that erode margins.

- Regulatory & export‑control approvals – Even though the contract is with Israel’s own defence ministry, the SATCOM hardware still falls under dual‑use export‑regulation regimes (e.g., ITAR/EU‑dual‑use lists). Any change in licensing status, or a tightening of export‑control policy, could stall the project or force redesigns that increase cost and timeline.

Trading implications

In the short term the contract news has already injected a ~70‑point positive sentiment boost, and the stock is likely to trade on the upside of the expected near‑term revenue uplift. However, the above execution risks create a “milestone‑risk premium” that can surface as price volatility once the first delivery windows approach (typically 3‑6 months out).

• Actionable view: If you are bullish on Gilat’s longer‑term growth, consider a position‑sizing entry on a pull‑back (e.g., 5‑10 % below the breakout level) while keeping a tight stop just below the recent support zone to guard against a sudden delivery‑delay shock.
  
• Watch‑list items: Company updates on the SATCOM program (press releases, quarterly filings), any new export‑license filings, and MoD‑issued milestone confirmations. A missed or delayed milestone would be a trigger to trim exposure or shift to a defensive stance.