Company: KVHI
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001007587-25-000022
Chunk: 164

Company: KVH INDUSTRIES INC \DE\
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 164
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 H-series terminals. We implemented this price reduction at the end of the third quarter of 2025 and, as a result, reduced the value of our remaining inventory of those products to net realizable value based on lower customer pricing. If demand continues to decline, we may need to record additional inventory write-downs.

26

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based upon our consolidated interim financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these interim financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosure at the date of our interim financial statements. Our significant accounting policies are summarized in Note 1 to the consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2024.

Critical accounting estimates are those estimates made that involve a significant level of estimation uncertainty and have had or are reasonably likely to have an impact on our statement of operations. We believe that our accounting estimates for intangible assets and other long-lived assets are the only estimates critical to an understanding and evaluation of our financial results for the nine months ended September 30, 2025, as discussed below.

Results of Operations

The following table provides, for the periods indicated, certain financial data relating to our operations expressed as a percentage of net sales:

Three Months EndedNine Months Ended September 30,September 30, 2025202420252024Sales:Service89.2 %84.3 %87.1 %85.3 %Product10.8 15.7 12.9 14.7 Net sales100.0 100.0 100.0 100.0 Cost and expenses:Costs of service sales58.7 51.7 56.1 51.2 Costs of product sales34.6 16.3 21.0 16.5 Research and development3.4 4.9 3.8 7.8 Sales, marketing and support17.2 17.0 18.5 18.0 General and administrative13.0 13.1 13.4 15.2 Long-lived assets impairment charge— 3.9 — 1.3 Total costs and expenses126.9 106.9 112.8 110.