KVH Industries reported second-quarter total revenue of $33.7 million, representing a 4% increase sequentially from the first quarter and a 27% gain compared to the same period in the prior year, driven by expanding demand for low-Earth-orbit connectivity services.
Chief Executive Officer Brent Bruun stated that the quarterly financial results reflect sustained progress in the company’s ongoing transition toward low-Earth-orbit (LEO) based connectivity, according to an earnings call filed with the U.S. Securities and Exchange Commission on Form 8-K and detailed by MarketBeat.
Subscriber Growth and Terminal Shipments
KVH shipped approximately 2,500 communication terminals during the second quarter, dipping from the record 3,100 terminals shipped in the first quarter while still indicating solid market demand. According to company management, KVH ended the quarter with roughly 10,700 subscribing vessels, adding more than 1,000 net new vessels during the period.
Chief Financial Officer Anthony Pike reported that subscribing vessels increased 11% sequentially, up from 7% growth in the previous quarter. On a year-to-date basis, subscribing connectivity vessels have expanded by 18%. During the earnings call Q&A session, Bruun noted that the company anticipates quarterly terminal shipments generally ranging between 2,000 and 3,000 units, though he cautioned that broader market conditions remain subject to change.
Multi-Network Offerings and Starlink Integration
Starlink remains the dominant connectivity choice among KVH customers, though vessel operators continue to seek network redundancy by combining services such as Starlink, OneWeb, and traditional VSAT. KVH continues to ship VSAT terminals primarily alongside Starlink or OneWeb hardware.
To address this multi-network demand, KVH introduced new service plans during the quarter allowing customers to purchase data blocks delivered across Starlink, OneWeb, or VSAT networks. Bruun described this rollout as a key step toward simplifying connectivity management and providing customers with greater flexibility across satellite networks.
New Services and Land-Based Expansion
The company’s Link streaming service entered beta trials during the second quarter in preparation for an upcoming commercial launch. The service is designed to add streamed entertainment to the Link Content platform to support crew welfare and onboard experiences.
KVH is also converting early managed IT service evaluations into commercial customer relationships utilizing its CommBox Edge platform. Bruun stated that these conversions are expected to contribute to recurring revenue in the coming months and provide a steady increase in average revenue per user over time.
Outside of maritime markets, KVH expanded its land-based Starlink initiative to approximately 1,600 sites by the end of the quarter, adding roughly 500 sites during the three-month period. The company also strengthened its regional footprint by adding a Latin America sales leader, expanding its Athens, Greece team, and opening its first retail location in Fort Lauderdale to serve commercial and recreational customers.
Margins, Expenses, and Financial Position
Service gross profit reached $10.6 million for the second quarter, marking an increase of $0.8 million from the first quarter. Service gross margin climbed to 36%, up from 35% in the prior period. Pike noted that non-cash airtime depreciation expense accounted for 7% of service revenue in both the first and second quarters.
Operating expenses rose to $10.4 million, compared to $9.7 million in the first quarter. Pike explained that this increase included $200,000 in severance costs associated with employees who departed the business during the period.
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