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

Company: KVH INDUSTRIES INC \DE\
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 2
Chunk 10
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EO services sales represented over 30% of airtime services sales, as compared to less than 10% for the nine months ended September 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. LEO service providers have continued to expand their product and service offerings, further heightening competition in the global leisure segment and in commercial and government markets.

Product sales decreased by $2.4 million, or 19%, to $10.4 million for the nine months ended September 30, 2025 from $12.8 million for the nine months ended September 30, 2024. The decrease in product sales was primarily due to a $1.2 million decrease in TracVision product sales, a $1.1 million decrease in Starlink product sales, a $0.4 million decrease in VSAT Broadband product sales and a $0.4 million decrease in accessory and service parts product sales, partially offset by a $0.8 million increase in OneWeb product sales. The decline in Starlink product sales was primarily driven by discounted pricing, whereas declines in other product sales was primarily driven by product mix and discounted pricing on VSAT Broadband 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 increased by $3.2 million, or 5%, in the nine months ended September 30, 2025 to $62.0 million from $58.8 million in the nine months ended September 30, 2024. The increase in costs of sales was driven by a $2.5 million increase in costs of product sales and a $0.6 million increase in costs of service sales. As a percentage of net sales, costs of sales were 77% and 68% for the nine months ended September 30, 2025 and 2024, respectively.

For the nine months ended September 30, 2025, costs of service sales increased by $0.6 million, or 1%, to $45.1 million from $44.5 million for the nine months ended September 30, 2024, primarily due to a $0.5 million increase in content services cost of services sales and a $0.4 million increase in airtime cost of