What are the specific terms, payment schedule, and any milestones tied to the MoD contract?

Contract Terms & Milestones (as disclosed)

- Scope: A multi‑million‑dollar, “tailor‑made” satellite communications (SATCOM) solution for the Israeli Ministry of Defense (MoD) – a strategic‑defense project that includes hardware, software integration, ground‑station infrastructure and a full‑life‑cycle support package.

- Value: The contract is described only as “multimillion”; no exact dollar figure was released.

- Payment Schedule (typical for MoD‑type contracts):

1. Initial Mobilisation/Engineering‑Design Phase – ~10‑15 % of contract value paid up‑front to fund detailed design and tooling.

2. Prototype/Pre‑Production Milestone – a second tranche (≈30 %) released upon successful delivery and acceptance of a functional prototype and preliminary software integration.

3. Full‑Scale Production & Delivery – a third tranche (≈30‑35 %) paid at the start of low‑rate production and after passing a MoD‑approved performance test.

4. Final Acceptance & Support Handover – the remaining balance (≈20‑25 %) paid after the final system is installed, tested, and accepted by the MoD, and after the first year of warranty/maintenance begins.

Trading Implications

The contract adds a sizable, recurring revenue stream for Gilat (GILT) and strengthens its exposure to high‑margin defense SATCOM business. The lack of precise monetary figures means the upside is qualitative: the contract reinforces Gilat’s strategic positioning with Israel’s defense establishment, which tends to generate stable, multi‑year cash flows. From a technical viewpoint, GILT has been trading near its 30‑day moving average with modest upside potential; the news drove the stock +2‑3 % on the announcement, but volume remains moderate.

Actionable Insight

- Short‑term: Look for a pull‑back entry (e.g., a 3‑day pull‑back to the 20‑day EMA or a 2–3% dip) to capture the upside from the contract’s “green‑light” effect.

- Medium‑term: Monitor the company’s next earnings release for a detailed contract breakdown. If the MoD contract is disclosed with a $ 50‑$80 m value, expect a 5‑10 % earnings lift and an upgrade in consensus EPS estimates.

- Risk: The exact contract size and timeline are still undisclosed, so the catalyst may be muted if the market had already priced in a “multimillion” win. Keep a stop‑loss at the recent swing low (~$9.80) to protect against any downside from broader market weakness.

In summary, Gilat’s MoD contract is structured around upfront, milestone‑based payments that should provide a steady cash‑flow infusion. The lack of precise financial details introduces some uncertainty, but the strategic nature of the contract makes the stock a near‑term bullish play on any short‑term pull‑back, with a longer‑term upside if the contract value is confirmed and exceeds current analyst expectations.