Company: KVHI
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001007587-25-000012
Chunk: 74

Company: KVH INDUSTRIES INC \DE\
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 74
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 Coast Guard contract downgrade. In addition, there was a decrease in other VSAT subscribers, which was partially offset by an increase in LEO service sales. For the six months ended June 30, 2025, LEO services sales represented over 25% of airtime services sales, as compared to less than 10% for the six 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.

Product sales decreased by $0.9 million, or 11%, to $7.3 million for the six months ended June 30, 2025 from $8.2 million for the six months ended June 30, 2024. The decrease in product sales was primarily due to a $0.7 million decrease in TracVision product sales, a $0.4 million decrease in Starlink product sales and a $0.3 million decrease in accessory and service parts 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 decline in product sales was primarily driven by product sales mix and discounted pricing on Starlink units. 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 decreased by $3.7 million, or 9%, in the six months ended June 30, 2025 to $35.5 million from $39.1 million in the six months ended June 30, 2024. The decrease in costs of sales was driven by a $2.6 million decrease in costs of product sales and a $1.1 million decrease in costs of service sales. As a percentage of net sales, costs of sales were 68% for both the six months ended June 30, 2025 and 2024.

For the six months ended June 30, 2025, costs of service sales decreased by $1.1 million, or 4%, to $28.4 million from $29.5 million for the six months ended June 30, 2024, primarily due to a $1.1 million decrease in airtime