Company: KVHI
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001007587-25-000022
Chunk: 79

Company: KVH INDUSTRIES INC \DE\
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 79
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4.0 million increase in various manufacturing and other unabsorbed expenses and a $0.7 million increase in OneWeb cost of product sales, partially offset by a $0.9 million decrease in Starlink cost of product sales and a $0.9 million decrease in TracVision cost of product sales. The manufacturing and other unabsorbed costs included a $5.5 million inventory writedown related primarily to further reduced demand for certain of our hardware products as well as a reduction in the prices we charge for certain TracNet H-series terminals. As a percentage of product sales, costs of product sales were 162% and 112% for the nine months ended September 30, 2025 and 2024, respectively. Cost of product sales increase as a percentage of product sales primarily due to the increase in various manufacturing and other unabsorbed expenses.

30

Operating Expenses

Research and development expense for the nine months ended September 30, 2025 decreased by $3.7 million, or 55%, to $3.1 million from $6.8 million for the nine months ended September 30, 2024. The decrease in research and development expense resulted primarily from a $3.1 million decrease in salaries, benefits and taxes, after giving effect to $0.9 million in costs incurred during the nine months ended September 30, 2024 related to the reduction in our workforce, and a $0.3 million decrease in facilities expense allocated to our research and development operations. As a percentage of net sales, research and development expense was 4% and 8% for the nine months ended September 30, 2025 and 2024, respectively.

Sales, marketing and support expense for the nine months ended September 30, 2025 decreased by $0.8 million, or 5%, to $14.9 million from $15.7 million for the nine months ended September 30, 2024. The decrease in sales, marketing and support expense resulted primarily from a $0.6 million decrease in salaries, benefits and taxes, after giving effect to $0.3 million in costs incurred during the nine months ended September 30, 2024 related to the reduction in our workforce. In addition, there was a $0.6 million decrease in facilities expense allocated to our sales, marketing and support operations, partially offset by a $0.3 million increase in warranty expense and a $0.3 million increase in