KVH | 10-Q: FY2025 Q3 Revenue Misses Estimate at USD 28.45 M

Revenue: As of FY2025 Q3, the actual value is USD 28.45 M, missing the estimate of USD 28.52 M.

EPS: As of FY2025 Q3, the actual value is USD -0.36, missing the estimate of USD 0.01.

EBIT: As of FY2025 Q3, the actual value is USD -8.312 M.

Service Sales: $25.4 million for the three months ended September 30, 2025, compared to $24.4 million for the same period in 2024, representing a 4% increase. For the nine months ended September 30, 2025, service sales were $70.1 million, down from $74.1 million in 2024, a 5% decrease.
Product Sales: $3.1 million for the three months ended September 30, 2025, compared to $4.6 million for the same period in 2024, representing a 33% decrease. For the nine months ended September 30, 2025, product sales were $10.4 million, down from $12.8 million in 2024, a 19% decrease.

Net Loss: - $6.9 million for the three months ended September 30, 2025, compared to - $1.2 million for the same period in 2024. For the nine months ended September 30, 2025, net loss was - $7.7 million, compared to - $6.7 million in 2024.
Gross Margin: Costs of service sales were 66% of service sales for the three months ended September 30, 2025, compared to 61% for the same period in 2024. Costs of product sales were 321% of product sales for the three months ended September 30, 2025, compared to 103% for the same period in 2024.
Operating Costs: Research and development expenses were $1.0 million for the three months ended September 30, 2025, down from $1.4 million in 2024. Sales, marketing, and support expenses were $4.9 million for the three months ended September 30, 2025, compared to $4.9 million in 2024. General and administrative expenses were $3.7 million for the three months ended September 30, 2025, compared to $3.8 million in 2024.

Operating Cash Flow: Net cash generated in operations was $13.7 million for the nine months ended September 30, 2025, compared to net cash used in operations of - $13.6 million for the same period in 2024.
Free Cash Flow: Net cash provided by investing activities was $9.8 million for the nine months ended September 30, 2025, compared to $16.5 million for the same period in 2024.

Inventory Write-Down: Recorded a $5.5 million inventory write-down in the third quarter of 2025 due to reduced demand for certain hardware products and price reductions for TracNet H-series terminals.

Core Business Focus: The company plans to continue its product manufacturing activities to generate a targeted amount of inventory of maritime satellite connectivity and satellite television terminals to meet anticipated demand into 2026 and will cease substantially all manufacturing activity by the end of 2026. The company will facilitate customer transition to third-party hardware products compatible with its mobile satellite communications services.
Non-Core Business: The company completed the sale of 75 Enterprise Center and 50 Enterprise Center in 2025, generating net cash of $7.8 million and $4.9 million, respectively. The company also plans to relocate its operations to a new facility in early 2026.
Priority: The company anticipates purchasing another large block of Starlink Global Priority data in the fourth quarter of 2025, with an upfront payment of a material portion of the purchase price and periodic payments continuing over the contract period.