FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the quarterly period ended: March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 0-28082 KVH Industries, Inc. (Exact Name of Registrant as Specified in its Charter) (State or Other Jurisdiction of Incorporation o ...

Financial Data and Key Metrics Changes - Revenue for the first quarter declined year over year to $25.4 million, primarily due to lower revenue from VSAT airtime service, including the loss of U.S. Coast Guard revenue [6][12] - Airtime gross margin increased to 31.5% from 28.2% in the prior quarter, with adjusted EBITDA for the quarter at $1 million [14][17] - Ending cash balance was $48.6 million, down approximately $2 million from the beginning of the quarter [17] Business Line Data and Key Metrics Changes - Subscriber base increased by 5%, reaching over 7,400 subscribing vessels, recovering from the decline experienced in 2023 [8][15] - Quarterly shipments of connectivity terminals exceeded 1,300 units, marking the fifth consecutive record quarter, with significant increases in Starlink terminals [7][10] - Product gross profit was breakeven compared to a positive $300,000 in the prior quarter, with expectations for product margins to remain about breakeven [16] Market Data and Key Metrics Changes - Starlink revenue continued to increase as a percentage of total revenue, driven by strong demand in commercial and leisure markets [6][8] - The company is seeing significant interest in OneWeb terminals, especially outside the U.S. [11][12] Company Strategy and Development Direction - The company is transitioning from a GEO-focused business model to a primarily LEO-based mobile connectivity market, with ongoing double-digit annual growth in subscribers [18] - The launch of the Commvox Edge Secure Suite aims to enhance cybersecurity for vessel communications [10][11] - The company is managing GEO bandwidth commitments carefully, anticipating continued pressure on GEO margins while focusing on strong LEO margins [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic initiatives, highlighting record-breaking subscriber growth and increased product shipments [13][14] - The company is optimistic about generating positive cash flow moving forward, despite challenges in the GEO segment [18] Other Important Information - The company expects to close the sale of its headquarters before the end of the quarter and anticipates the factory sale to close in Q3 [12] - Share buybacks were initiated, with over 30,000 shares purchased at a cost of approximately $163,000 [13] Q&A Session Summary Question: LEO margins breakdown - The majority of the margin comes from actual airtime, with strong underlying LEO bandwidth margins [20][21] Question: Optimization of plans for customers - Current plans are well optimized, but changes in pricing and terminal access charges are expected later this year [22][23] Question: Potential saturation in the maritime market - The market is much larger than before, and saturation is not anticipated in the foreseeable future [25][26] Question: Expansion beyond maritime applications - The existing sales team is handling land-based applications, with no new hires but efforts to identify service providers for land opportunities [27][28] Question: Coast Guard contract revenue roll-off - Negative variance from the Coast Guard contract is expected through the third quarter, with minimal revenue in the fourth quarter [29][32] Question: Future buyback efforts - The company is continuing to buy back shares, with larger numbers expected to be disclosed in the next quarter [33]

Revenue Performance - Total revenues decreased by 13% in Q1 2025 to $25.4 million from $29.3 million in Q1 2024, primarily due to the transition to LEO satellite services and the downgrade of the U.S. Coast Guard contract[7] - Airtime revenue decreased by $3.5 million, or 15%, to $20.0 million in Q1 2025 compared to Q1 2024, with the U.S. Coast Guard contract downgrade accounting for a $2.5 million reduction[7] - Service revenues for Q1 2025 were $21.6 million, a decrease of $3.4 million compared to Q1 2024, primarily due to the decline in airtime service sales[9] - Product revenues for Q1 2025 were $3.8 million, a decrease of 11% compared to Q1 2024, with notable declines in TracVision and accessory sales[10] Profitability and Loss - Net loss in Q1 2025 was $1.7 million, or $0.09 per share, an improvement from a net loss of $3.2 million, or $0.16 per share, in Q1 2024[7] - GAAP net loss improved from $(3,163) thousand in Q1 2024 to $(1,710) thousand in Q1 2025, representing a reduction of about 46%[29] - Non-GAAP adjusted EBITDA was $1.0 million in Q1 2025, down from $2.0 million in Q1 2024[7] - Non-GAAP adjusted EBITDA decreased from $1,971 thousand in Q1 2024 to $1,007 thousand in Q1 2025, a decline of approximately 48.9%[29] Operational Metrics - Subscribing vessels increased by 5% sequentially, with service now delivered to over 7,400 active vessels, marking an all-time high[6] - Quarterly connectivity terminal shipments exceeded 1,300 units, representing the fifth consecutive quarter of record terminal shipments[6] Expenses and Cost Management - Operating expenses decreased by $4.0 million to $9.7 million in Q1 2025 compared to $13.7 million in Q1 2024, driven by a reduction in salaries and benefits[11] - Employee termination and other variable costs significantly decreased from $2,177 thousand in Q1 2024 to $3 thousand in Q1 2025, a reduction of approximately 99.9%[29] Balance Sheet and Financial Position - Total assets decreased from $155,081 million in December 2024 to $151,434 million in March 2025, a decline of approximately 2.1%[27] - Total current liabilities decreased from $15,872 million in December 2024 to $13,057 million in March 2025, a reduction of about 17.7%[27] - Stockholders' equity slightly decreased from $138,625 million in December 2024 to $137,811 million in March 2025, a decline of approximately 0.6%[27] - Accounts receivable increased from $21,624 million in December 2024 to $23,197 million in March 2025, an increase of about 7.3%[27] - Inventories decreased from $22,953 million in December 2024 to $21,982 million in March 2025, a decline of approximately 4.2%[27] - Deferred revenue increased from $1,039 million in December 2024 to $1,806 million in March 2025, an increase of approximately 73.6%[27] Financial Performance Indicators - Interest income improved from $(911) thousand in Q1 2024 to $(567) thousand in Q1 2025, indicating a positive change in financial performance[29] - KVH launched its OneWeb service, providing a second LEO option to customers worldwide, alongside increased shipments of the CommBox Edge Communications Gateway[6]

MIDDLETOWN, R.I., May 07, 2025 (GLOBE NEWSWIRE) -- Today, KVH Industries, Inc. (Nasdaq: KVHI) unveiled the newest expansion to its CommBox™ Edge Communications Gateway–the Secure Suite threat detection and response service. Focused on detecting, preventing, and reporting cybersecurity threats, CommBox Edge Secure Suite actively identifies and blocks harmful traffic in real time to reduce the risks to vessel communications, operations, and network security. Secure Suite is fully compatible with both the Comm ...

MIDDLETOWN, R.I., May 07, 2025 (GLOBE NEWSWIRE) -- KVH Industries, Inc. (Nasdaq: KVHI), reported financial results for the quarter ended March 31, 2025 today. The company will hold a conference call to discuss these results at 9:00 a.m. ET today, which can be accessed at investors.kvh.com. Following the call, a replay of the webcast will be available through the company's website. First Quarter 2025 Highlights Commenting on the company's first quarter results, Brent C. Bruun, KVH's Chief Executive Officer, ...

MIDDLETOWN, R.I., May 05, 2025 (GLOBE NEWSWIRE) -- KVH Industries, Inc. (Nasdaq: KVHI), will announce its financial results for the first quarter that ended on March 31, 2025, on Wednesday, May 7, 2025. In conjunction with the release, the company will conduct its investor conference call at 9:00 a.m. ET, hosted by Mr. Brent Bruun, CEO, and Mr. Anthony Pike, CFO. A live broadcast of the call will be available online at investors.kvh.com. In addition, an audio replay of the conference call will be available ...

Sales Performance - Global high-throughput satellite (HTS) airtime service sales accounted for 71% of consolidated net sales in 2024, down from 81% in 2023[17] - Product sales represented 15% of consolidated net sales in 2024, an increase from 13% in 2023[17] Business Strategy - The company plans to wind down capital-intensive manufacturing activities by the end of 2025 due to reduced demand and increased competition[21] - The company plans to discontinue most manufacturing activities by the end of 2025, transitioning to third-party hardware for its solutions[59] - Significant inventory is held to support customer demand, with a ramp-up in production to meet anticipated needs before ceasing manufacturing[64] Product Offerings - The KVH ONE OpenNet Program allows vessels with non-KVH VSAT antennas to subscribe to KVH's global HTS network without hardware exchanges[27] - An exclusive multi-year agreement with Kognitive Networks was signed to integrate enterprise-grade network management tools into maritime communication services[28] - The company offers AgilePlans, a Connectivity as a Service (CaaS) model, which includes satellite communication hardware and services for a single monthly fee[24] - KVH Media Group distributes licensed entertainment content, contributing to the company's content service sales[30] - The global HTS network utilizes 182 Ku-band transponders on 31 satellites, with 138 transponders on high-throughput satellites[26] - TracNet H-series terminals offer data speeds of up to 20/3 Mbps for the H90 model, supporting a wide range of vessels from 40 feet to superyachts[38] - TracNet Coastal, introduced in late 2024, provides data speeds up to 300 Mbps and enables automatic switching from satellites to shore-based Wi-Fi[41] - The company began selling Starlink terminals in March 2023 and became an authorized reseller in September 2023, offering a hybrid solution with KVH's services[45] - A distribution agreement with Eutelsat OneWeb was announced in January 2024, aiming to expand multi-orbit hybrid network services with over 630 LEO satellites[46] - The company offers a range of products including TracPhone V30 and TracVision UHD7, catering to both leisure and commercial vessels[40][49] Market Competition - Competition is intensifying, particularly from SpaceX's Starlink and Eutelsat OneWeb, which are entering the high-speed marine market[68] - The company is facing increased competition from providers offering fully managed IT services, which may complicate its competitive position[74] Workforce and Operations - The global turnover rate for the company in 2024 was 37%, primarily driven by a reduction-in-force cost savings initiative[85] - Approximately 40 team members, or 15%, are directly involved in supporting technology in roles such as engineers, technicians, or software developers[84] - The company's total headcount as of December 31, 2024, was 260, including 247 full-time employees[81] - The average length of employee service at the company is 9 years, indicating a stable workforce[86] - The company has established relationships with major universities and professional associations to attract talent, hiring 15 professional level team members in 2024[92] Safety and Compliance - The company's OSHA total recordable incident rate in 2024 was 1.1%, compared to the national average of 2.4%[90] Research and Development - The company is focusing on research and development related to cellular products and emerging non-geostationary satellite orbit (NGSO) products and services[75] - The company anticipates ongoing demand for hybrid connectivity solutions offering GEO, LEO, and 5G/LTE Cellular connectivity in 2025[74] - The company expects to continue offering KVH-manufactured VSAT and satellite TV terminals through 2025 and potentially into 2026[72] Intellectual Property - The patent portfolio includes approximately seven issued patents and one pending application, with expiration dates between May 2031 and May 2037[55]

KVH Industries, Inc. (NASDAQ:KVHI) Q4 2024 Results Conference Call March 6, 2025 9:00 AM ET Company Participants Anthony Pike - CFO & Chief Accounting Officer Brent Bruun - President, CEO & Director Conference Call Participants Caleb Henry - Quilty Space Chris Quilty - Quilty Space Operator Good day. Thank you for standing by. Welcome to KVH Industries Fourth Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. To ask a question during the session, you will need t ...

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was $26.9 million, a decrease of approximately 4.5% from Q4 2023 and effectively flat sequentially when excluding a $1.7 million revenue reduction from the U.S. Coast Guard [16][17] - Airtime gross margin for Q4 was 28.2%, down from 36.5% in the prior quarter, while excluding depreciation, it was 41.4%, compared to 48.6% in the prior quarter [21][22] - Adjusted EBITDA for Q4 was $0.5 million, with capital expenditures of $0.8 million, resulting in adjusted EBITDA less CapEx of negative $0.3 million [23][24] - Ending cash balance was $50.6 million, up approximately $0.8 million from the beginning of the quarter [25] Business Line Data and Key Metrics Changes - The company shipped over 1,000 Starlink units and approximately 200 VSAT terminals in Q4, marking a record for terminal shipments [8][9] - Active maritime Starlink terminals reached over 2,300 by the end of 2024, with around 1,000 terminals awaiting activation [9][10] - Demand for the CommBox Edge communication gateway remains strong, with Q4 activations doubling compared to Q3 [12] Market Data and Key Metrics Changes - Non-U.S. Coast Guard GEO Airtime revenue contracted by around $1 million in Q4, offset by increased Starlink revenues [16] - The total subscribing vessels at the end of Q4 were just below 7,100, representing a 4% increase from the prior quarter [22] Company Strategy and Development Direction - The company is transitioning from a focus solely on VSAT services to offering multi-orbit multichannel solutions, including LEO solutions like Starlink and a high-speed cellular solution [7] - Strategic initiatives include the addition of OneWeb to the satellite communications service portfolio and the launch of the TrackNet Coastal cellular Wi-Fi system [14][15] Management's Comments on Operating Environment and Future Outlook - Management anticipates that Starlink and other new revenue sources will outpace the decrease in GEO airtime revenue [17] - The company has implemented cost reduction initiatives, bringing recurring operating expenses down by almost 10% for the full year [17] - Management believes the company is in a stronger position now than a year ago and is on a path toward renewed growth and profitability [19] Other Important Information - The company is preparing to roll out new capabilities for the CommBox Edge, including cybersecurity features [13] - The company has made hard decisions to reconfigure operations and streamline costs, focusing on core strengths [19] Q&A Session Summary Question: Expectations for Starlink activations - The company shipped 1,000 terminals in Q4, with approximately 700 Starlink Maritime Terminals activated during the quarter [28][29] Question: Reasons for activation delays - Delays can occur due to terminals being installed on boats not yet taken over by owners or held by OEMs [32][33] Question: Customer base for Starlink - Activations include both new and existing customers, with new customers often transitioning from lower bandwidth systems [34][35] Question: Market response to emerging constellations - Anticipated market response to new constellations, but it is still early for significant impact [37] Question: Challenges with terminal pricing relative to competitors - OneWeb terminals are more expensive than Starlink, but customers seek diversity in network options [40][41] Question: CommBox traction and competitive features - The feature set of CommBox is expanding, particularly in cybersecurity, making it competitive in the market [45][46] Question: Cost management with VSAT terminal losses - The churn rate has decelerated, and the company is managing costs effectively alongside terminal losses [49][50]

Revenue Performance - Fourth quarter 2024 total revenues decreased by 14% to $26.9 million from $31.5 million in the fourth quarter of 2023[6]. - Airtime revenue for the fourth quarter of 2024 decreased by $5.1 million, or 20%, to $20.8 million compared to the same quarter in 2023[5]. - Full year 2024 revenue was $113.8 million, a decrease of 14% compared to $132.4 million for the year ended December 31, 2023[10]. - Full year 2024 service revenues were $96.4 million, a decrease of 16% compared to the previous year, primarily due to a $17.1 million decrease in airtime service sales[11]. - Net sales for Q4 2024 were $26,917 million, a decrease of 14.5% compared to $31,455 million in Q4 2023[23]. Profitability and Loss - The net loss for the fourth quarter of 2024 was $4.3 million, or $0.22 per share, an improvement from a net loss of $12.2 million, or $0.63 per share, in the fourth quarter of 2023[6]. - The net loss for Q4 2024 was $4,310 million, compared to a net loss of $12,193 million in Q4 2023, showing a significant improvement[23]. - Non-GAAP adjusted EBITDA for the fourth quarter of 2024 was $0.5 million, down from $2.3 million in the fourth quarter of 2023, impacted by a $2.2 million reduction due to the U.S. Coast Guard contract downgrade[5]. - The company reported a non-GAAP adjusted EBITDA of $512 million for Q4 2024, compared to $2,284 million in Q4 2023, highlighting ongoing operational challenges[27]. Cost Management - Operating expenses decreased by $8.1 million to $47.1 million for the year ended December 31, 2024, compared to $55.2 million in 2023[13]. - Total costs and expenses for the year ended December 31, 2024, were $125,711 million, down from $149,724 million in 2023, reflecting cost-cutting measures[23]. - Research and development expenses for the year ended December 31, 2024, were $8,439 million, down from $9,399 million in 2023, indicating a focus on cost management[23]. Asset and Liquidity Position - Total assets decreased to $155,081 million in 2024 from $172,634 million in 2023, reflecting a reduction in cash and cash equivalents[25]. - Cash, cash equivalents, and marketable securities decreased to $50,572 million in 2024 from $69,771 million in 2023, indicating liquidity pressures[25]. - Interest income for the year ended December 31, 2024, was $3,039 million, down from $3,646 million in 2023, indicating a decline in interest-earning assets[23]. Future Outlook - For full year 2025, the company anticipates revenue in the range of $115 million to $125 million and adjusted EBITDA between $9 million and $15 million[5]. - Starlink terminals shipped exceeded 1,000 in the fourth quarter, with over 2,300 activations in 2024, marking it as the fastest growing product line in the company's history[4]. - Product revenues for the fourth quarter of 2024 increased by 24% to $4.6 million, driven by a $1.2 million increase in Starlink product sales[8]. Goodwill and Asset Valuation - The company incurred a goodwill impairment charge of $5,333 million in 2023, which was not repeated in 2024, suggesting improved asset valuation[23]. - The weighted average number of common shares outstanding for Q4 2024 was 19,453 million, slightly up from 19,250 million in Q4 2023[23].