Company: KVHI
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001007587-25-000012
Chunk: 157

Company: KVH INDUSTRIES INC \DE\
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 8
Chunk 157
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 June 30, 2024. Service sales decreased by $1.6 million, or 7%, to $23.0 million for the three months ended June 30, 2025 from $24.7 million for the three months ended June 30, 2024. The decrease in service sales was primarily due to a $1.9 million decrease in our airtime service sales, which reflected a $2.5 million reduction in sales related to the U.S. Coast Guard contract downgrade in the third quarter of 2024, as well as a decrease in other VSAT subscribers. These decreases in VSAT service sales were partially offset by an increase in LEO service sales. For the three months ended June 30, 2025, LEO services sales represented over 30% of airtime services sales, as compared to less than 10% for the three months ended June 30, 2024. The increase in LEO service sales as a percentage of total airtime sales resulted from both a substantial increase in LEO service sales and a substantial decrease in VSAT service sales. Alternative solutions offered by recent LEO entrants have heightened competition in the global leisure segment and in commercial and government markets.

26

Product sales decreased by $0.4 million, or 11%, to $3.6 million for the three months ended June 30, 2025 from $4.0 million for the three months ended June 30, 2024. The decrease in product sales was primarily due to a $0.5 million decrease in Starlink product sales and a $0.2 million decrease in TracVision product sales, partially offset by a $0.3 million increase in OneWeb product sales and a $0.2 million increase in VSAT Broadband product sales. The decrease in product sales was primarily due to discounted pricing on Starlink products. Competition from low-cost alternatives to VSAT, which include streaming capabilities, has had a significant impact on sales of our TracVision products.

Costs of Sales

Costs of sales consists of costs of service sales and costs of product sales. Costs of sales decreased by $2.3 million, or 12%, in the three months ended June 30, 2025 to $17.5 million from $19.8 million in the three months ended June 30, 2024. The decrease in costs of sales was driven by a $1.3 million decrease in costs of service sales and a $