Fubotv earnings beat by $0.10, revenue topped estimates
KVH Industries, with a market capitalization of $104.27 million, reported its second-quarter 2025 earnings, revealing a mixed financial performance. The company posted earnings per share (EPS) of $0.05, surpassing the forecasted loss of $0.05. Revenue fell short of expectations, coming in at $26.6 million against a forecast of $29.19 million. The stock showed a slight uptick of 1.92% in pre-market trading, closing at $5.22, reflecting investor optimism despite the revenue miss. According to InvestingPro analysis, the company maintains a strong balance sheet with more cash than debt, positioning it well for future growth opportunities.
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Key Takeaways
- KVH Industries exceeded EPS expectations by 200%.
- Revenue fell short of the forecast by 8.87%.
- The company reported a sequential revenue increase from Q1 2025.
- Stock price increased by 1.92% in pre-market trading.
Company Performance
KVH Industries demonstrated resilience in its Q2 2025 performance, with a notable improvement in EPS compared to forecasts. The company managed a sequential revenue increase of $1.2 million from Q1 2025, despite a year-over-year decline of 13.75%. This reflects the company’s strategic efforts to bolster its financial position amidst a challenging market environment. InvestingPro data shows the company maintains an impressive current ratio of 9.31, indicating strong short-term liquidity, with liquid assets well exceeding short-term obligations.
Financial Highlights
- Revenue: $26.6 million (down year-over-year, up sequentially)
- Earnings per share: $0.05 (beat forecast by $0.10)
- Adjusted EBITDA: $2.7 million (up $1.7 million from Q1)
- Ending cash balance: $55.9 million (increased by $7.3 million from quarter start)
Earnings vs. Forecast
KVH Industries reported an EPS of $0.05, significantly surpassing the forecasted loss of $0.05, marking a 200% positive surprise. However, revenue was $26.6 million, missing the expected $29.19 million by 8.87%. This mixed performance highlights the company’s ability to control costs and improve profitability despite revenue challenges.
Market Reaction
Following the earnings announcement, KVH Industries’ stock experienced a 1.92% increase in pre-market trading, reaching $5.22. This price movement suggests that investors are optimistic about the company’s future profitability, despite the revenue shortfall. The stock remains within its 52-week range, with a high of $6.16 and a low of $4.35. InvestingPro analysis indicates the stock is currently undervalued, trading at a relatively low revenue multiple with generally low price volatility (Beta: 0.83).
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Outlook & Guidance
KVH Industries updated its 2025 guidance with revenue projections between $107 million and $114 million, and adjusted EBITDA of $8 million to $12 million. The company plans to focus on expanding its Low Earth Orbit (LEO) service offerings and maintaining service margins within the 35-40% range. Additionally, KVH Industries expects reduced capital expenditures in the latter half of 2025.
Executive Commentary
CEO Brent Bruin stated, "We reached a significant inflection point in the second quarter." CFO Anthony Pipes added, "Our LEO business continues to grow and growth has actually accelerated in the second quarter." These comments highlight the company’s strategic focus on transitioning from geo-based to multi-orbit LEO services.
Risks and Challenges
- Revenue shortfall: Continued revenue misses could impact investor confidence.
- Market transition: Shifting from geo-based to LEO services presents operational challenges.
- Competitive pressures: Increasing competition in the connectivity solutions market.
- Economic conditions: Macroeconomic pressures could affect demand in key markets.
Q&A
During the earnings call, analysts inquired about the addition of Starlink terminals, which totaled nearly 4,000. Questions also focused on the diversity of OneWeb’s customer network and the introduction of monthly Starlink terminal access charges. KVH Industries reported a 24% increase in Commvox Edge subscribers, indicating strong demand for its innovative solutions.
Full transcript - KVH Industries Inc (KVHI) Q2 2025:
Operator: Thank you for standing by. My name is Roselle, and I will be your operator today. At this time, I would like to welcome everyone to the q two twenty twenty five KVH Industries Inc. Earnings conference call. All lines have been placed on mute to prevent any background noise.
After the speaker remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I will now turn the call over to Anthony Pipes, chief financial officer.
Please go ahead.
Anthony Pipes, Chief Financial Officer, KVH Industries: Thank you, operator. Good morning, everyone, and thank you for joining us today for KVH Industries’ second quarter results, which are included in the earnings release we published earlier this morning. Joining me on the call is the company’s Chief Executive Officer, Brent Bruin. Before I get into the numbers, a few standard statements. Firstly, if you would like a copy of the earnings release or if you would like to listen to a recording of today’s call, both will be available on our website.
And if you are listening via the web, please feel free to submit questions to irkvh.com. Further, this conference call will contain certain forward looking statements that are subject to numerous assumptions and uncertainties that may cause our actual results to differ materially from those expressed in these statements. We undertake no obligation to update or revise any of these statements. We will also discuss adjusted EBITDA, which is a non GAAP financial measure. You will find a definition of this measure in our press release, as well as a reconciliation to comparable GAAP numbers.
We encourage you to review the cautionary statements made in our SEC filings, specifically those under the heading Risk Factors in our Q2 twenty twenty five Form 10 Q, which will be filed later today. The company’s other SEC filings are available directly from the Investor Information section of our website. Now, to talk you through the highlights of our second quarter, I’ll turn the call over to Brent.
Brent Bruin, Chief Executive Officer, KVH Industries: Thank you, Anthony, and good morning, everyone. Our second quarter results reflect our successful ongoing efforts to transform our business model and operations. Compared to the first quarter of this year, revenue is up, adjusted EBITDA is up and our subscriber base is up, up more than 8%, resulting in more than 8,000 subscribing vessels for the first time. Looking at our high level results in more detail, our revenue declined year over year in the second quarter to $26,600,000 primarily due to the loss of revenue from our VSAT airtime service, which includes the loss of the U. S.
Coast Guard. However, we returned to sequential airtime and service revenue growth for the first time since the 2023. This led to a $1,200,000 increase in total revenue over our first quarter twenty twenty five results. Airtime gross margin rose more than 4% sequentially and our adjusted EBITDA rose to $2,700,000 a $1,700,000 increase compared to the first quarter. We also shipped more than 1,300 communication terminals for the second consecutive quarter.
These shipments included Starlink terminals, ongoing orders for our TrackNet and TrackPhone VSATs and OneWeb terminals. By delivering on initiatives, we believe we have reached an inflection point in our transition from a geo based hardware and service company to a multi orbit LEO focused service provider. For the first time, the increase in our LEO revenue more than offset the decline in revenue from our legacy VSAT business. Starlink terminals and service demand remained strong across the commercial maritime and leisure marine markets during the second quarter. We’re also rapidly expanding our Starlink land sales, especially in Latin America to support schools, villages and other municipal and commercial facilities.
We remain on target to deplete our prepaid STARLINK data pool by year end as planned. The prepaid pool has been a vital contributor to improvement in our profitability. We are now in discussions with Starlink regarding renewal. We are also pleased with the steady growth we are achieving in OneWeb following the launch of the service at the January. Our Commvox Edge communications gateway also continued to thrive in the second quarter, due in part to its easy integration with Starlink and OneWeb along with our VSAT and cellular services.
In addition, we have started to deploy our Commvox Edge Secure Suite for commercial fleets, expanding the value of this product. Compared to the 2025, we increased Commvox Edge subscribers by 24%. Commercial maritime demand for crew welfare and content also remained strong. We now have more than 1,000 vessels subscribing to our KVH Link entertainment and news service. Looking at our overall business operations, we completed the sale of our headquarters facility at the June and expect to complete the sale of our factory facility in September.
We have recently leased a new combined headquarters, production and warehouse facility in Bristol, Rhode Island and expect to relocate there in early twenty twenty six. And lastly, we bought back shares during the second quarter under the terms of the stock repurchase program approved by our Board in December 2024. Through the end of the second quarter, we purchased more than 242,000 shares at a cost of roughly $1,250,000 So, in conclusion, we reached a significant inflection point in the second quarter. Our transformation as an integrated service provider accelerated. Our LEO revenue growth more than offset the decline in our legacy GEO based VSAT business.
New services continue to grow continued new services contributed to growth in subscribers, revenue, gross profit and cash. We reduced our operating expenses significantly and we have the resources and new service pipeline needed for an exciting future. Now I’ll turn the call back to Anthony to discuss the numbers. Anthony?
Anthony Pipes, Chief Financial Officer, KVH Industries: Thank you, Brent. As a reminder, I would like to note that similar to our call for Q1, I will not restate data that is in the earnings release or clearly described in our 10 Q. I will focus my comments on information that either elaborates on or clarifies the published data. So with respect to our second quarter financial results, airtime gross margin, which is not reported in our earnings release, was 35.8%, which as Brent mentioned, is up more than 4% compared to the prior quarter gross margin of 31.5%. Excluding depreciation, our airtime gross margin for the second quarter was 46.4 compared to 44.1% in the prior quarter.
This increase was partly driven by the ongoing change in airtime revenue mix between LEO and GEO, with LEO, which has stronger margins, continuing to grow to become a larger portion of our revenue. However, there was also a positive impact from lower GEO bandwidth capacity costs, which may rise slightly in the second half of the year. Total subscribing vessels at the end of Q2 were just above 8,000, which as Brent mentioned, is 8.3% up from the prior quarter and 13.5% up from the beginning of the year. Reported Q2 product gross profit was $300,000 compared to breakeven in the prior quarter, and we continue to expect product margins to be relatively modest as the real value of our mobile connectivity hardware shipments is the airtime revenue they generate in the future. The Q2 operating expenses of $9,500,000 was $200,000 or 2% lower than the prior quarter and $1,700,000 or 15% lower than the 2024 on a like for like basis, excluding non recurring charges.
Our adjusted EBITDA for the quarter was $2,700,000 and our earnings release has a usual reconciliation of that. Capital expenditures for the quarter were $2,400,000 and so adjusted EBITDA less CapEx, which we believe is a good proxy for free cash flow generated from our ongoing business, was 300,000.0 This compares to an adjusted EBITDA less CapEx of negative $100,000 in the 2025, with adjusted EBITDA of 1,000,000 less capital expenditure of 1,100,000.0 The spike in CapEx in the second quarter from $1,100,000 to $2,400,000 was driven by OneWeb units on our AgilePlans program, which accounted for around 50% of the quarter’s CapEx. We anticipate this CapEx to reduce in the second half of the year as the majority of the OneWeb AgilePlans CapEx in Q2 was related to a specific large fleet rollout. Our ending cash balance of $55,900,000 was up approximately $7,300,000 from the beginning of the quarter. Net proceeds from the sale of our property at Middletown, Rhode Island were $4,900,000 and we also spent approximately $1,100,000 on our stock repurchase program in Q2.
Excluding these two items, our cash balance was up approximately $3,500,000 Overall, we are very pleased with the second quarter results, which build on the progress made in the first quarter. Our LEO business continues to grow and growth has actually accelerated in the second quarter. We are managing the transition of our GEO business well and in line with expectations. And revenue is up quarter on quarter as are our gross margins, adjusted EBITDA and cash balance. We are updating and narrowing our guidance on the basis of ARPUs being slightly less than anticipated.
However, gross profit margins being better than expected. Therefore, our updated guidance for 2025 is revenue of 107,000,000 to $114,000,000 and adjusted EBITDA of 8,000,000 to $12,000,000 This concludes our prepared remarks, and I will now turn the call over to the operator to open the line for the Q and A portion of this morning’s call. Operator?
Operator: At this time, I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. Your first question comes from the line of Chris Quilty with Quilty Space. Please go ahead.
Chris Quilty, Analyst, Quilty Space: Thanks, guys. Some good progress in the quarter. You didn’t give the total number of activated StarLink terminals, which you have done in the past. Where did you finish out the quarter in terms of net adds in total?
Brent Bruin, Chief Executive Officer, KVH Industries: I’ll turn that question over to Anthony.
Anthony Pipes, Chief Financial Officer, KVH Industries: Yes. I’ll just get you the so in terms of total new Starlink standalone additions in the quarter Bear with me one second. We were up to about two and a half thousand standalone, but we do have an awful lot which were included as hybrids, which I think we quoted combined previously. So all in, it was just short of 4,000.
Brent Bruin, Chief Executive Officer, KVH Industries: Is that the question or was it activate? I think he asked how many activations. Can you clarify, Chris, please?
Chris Quilty, Analyst, Quilty Space: Yeah. Activations also would be great.
Anthony Pipes, Chief Financial Officer, KVH Industries: Yeah. So And Activations. So activations are purely on a terminal basis because, of course, you know, we count vessels and terminals separately now. But that’s the number for that for the quarter.
Brent Bruin, Chief Executive Officer, KVH Industries: Yeah. I guess that excuse me for interrupting. I think it’s a bit irrelevant because it’s going to skew the numbers if we have more than two terminals on board a vessel. So, I think you can just back into the net adds Chris based on what we provided previously.
Chris Quilty, Analyst, Quilty Space: Fair enough. And I think you mentioned when you added those OneWeb units, was using AgilePlans. Does that mean you still have you’ve sort of shifted the AgilePlans onto OneWeb? And are you doing that for Starlink also or just OneWeb because of the higher cost of the terminal?
Brent Bruin, Chief Executive Officer, KVH Industries: We we we do offer it for Starlink, but with the cost of the terminal in mind, many most most customers choose to purchase the units.
Chris Quilty, Analyst, Quilty Space: Gotcha. And the customers who are purchasing OneWeb, how do they differ from your Starlink subscribers and what are you seeing in terms of network service and performance?
Brent Bruin, Chief Executive Officer, KVH Industries: Yeah, network is performing well. As I’m sure you’re aware, they don’t have complete global coverage. So that it definitely opens up the door to have a hybrid solution until they get their complete global coverage. You know, and as far as the differentiation, it’s just more of customers wanting diversity and diversity from from Starlink. You know, there’s no real rhyme or reason to why they would choose one over the other from our perspective.
Chris Quilty, Analyst, Quilty Space: Understand. Anthony, you mentioned that the geo costs may go up in the second half of the year. I thought those were relatively fixed over the course of the year or are there new? Yes, was just going on.
Anthony Pipes, Chief Financial Officer, KVH Industries: No, they are, I’d just say broadly fixed. What we were saying there is that we had a slight dip in the cost in Q2, and so Q3 and Q4 might be slightly higher than Q2, but the overall cost for the year is fixed. And I think as we’ve discussed previously, our commitments are disclosed in full in our 10 ks.
Chris Quilty, Analyst, Quilty Space: I understand. And when you look at the margin outlook, are you still and this is on the service margin, are you still targeting that sort of 35% to 40% range? Or what are you seeing in terms of the mix changes between OneWeb, StarLink and legacy geo products?
Anthony Pipes, Chief Financial Officer, KVH Industries: So I think we are certainly looking to keep in the range you described. But as we said in the prepared remarks, really what’s happening is as LEO becomes a bigger proportion of the overall airtime revenue, that’s driving the margins a little bit. And obviously, as the GEO revenue declines with a fixed broadly or a significant amount of fixed costs in the cost of sales for GEO, that’s going to put pressure on the GEO margin. But the two broadly offsetting each other, we’re hopeful to retain in that sort of range that you described.
Chris Quilty, Analyst, Quilty Space: Great. And I think for you said the renewal or you’re in discussions with your pre purchase on Starlink. So two questions. One, do you anticipate doing the same with OneWeb? And number two, as you look at the prior deal, you caught with StarLink, how has the market or market demand changed or their pricing plans?
And do you anticipate in other words, do you anticipate a similar sort of arrangement? Or has the plan pricing changed significantly that this deal might look significantly different?
Brent Bruin, Chief Executive Officer, KVH Industries: We’re not at liberty to discuss the OneWeb, what pricing we might be doing with them. And we’re also quite limited to what we can say in regard to Starlink. What I will say is that the terminal access charge which they’ve introduced to all end users will be included in our follow-up.
Chris Quilty, Analyst, Quilty Space: And is that a one time access charge, or is that done on a monthly basis?
Brent Bruin, Chief Executive Officer, KVH Industries: A monthly charge.
Chris Quilty, Analyst, Quilty Space: Got you. And presumably that would just accrue to the gross margins directly?
Brent Bruin, Chief Executive Officer, KVH Industries: I mean, it’s part of our cost.
Chris Quilty, Analyst, Quilty Space: Well, it’s a cost to the customer that you’re adding on.
Anthony Pipes, Chief Financial Officer, KVH Industries: I’m not
Brent Bruin, Chief Executive Officer, KVH Industries: quite sure I understand the question, maybe.
Anthony Pipes, Chief Financial Officer, KVH Industries: Yeah, no, sorry, can you just clarify that question, Chris?
Chris Quilty, Analyst, Quilty Space: So the access charge to the customer is a monthly fee you’re charging for access to the network. Is that how you’re classifying it?
Brent Bruin, Chief Executive Officer, KVH Industries: Yeah. I mean, there’s no big secrets here. If you go to the the Starlink website, they clearly show what what plans they offer, you know, and how it works. Yep. So it’s an incremental charge, but they they’ve also, you know, at the lower end, they’ve changed the pricing at at their at the lower end from a pure on a per gigabyte basis.
But when you put the access charge on top of that, it gets you back to that where they were at the lower end.
Anthony Pipes, Chief Financial Officer, KVH Industries: So I think it’ll increase revenue, but gross profit will be fairly flat in $1 sense, which will inevitably drive down the margin percentage ever so slightly. But obviously, the terminal access charges are fairly small portion of general ARPUs, so it shouldn’t drive the margin percent out a great deal.
Chris Quilty, Analyst, Quilty Space: Got it. And, are you seeing any changes in the plans that your customers are choosing, over time?
Brent Bruin, Chief Executive Officer, KVH Industries: Not necessarily. It’s been pretty consistent as far as the split.
Chris Quilty, Analyst, Quilty Space: Got it. Question on Commvox. Looks like you’ve had good growth in that.
Anthony Pipes, Chief Financial Officer, KVH Industries: But
Chris Quilty, Analyst, Quilty Space: what type of attachment rates are you seeing with subscribers and where do you think you will get to in the longer term?
Brent Bruin, Chief Executive Officer, KVH Industries: Well, the attachment rate right now is one eighth. And last quarter it was much higher than that. Right? So we disclosed that we have over a thousand subscribers. Or I don’t know if we did disclose that.
How many do we disclose the percentage increase. It’s right around it’s right around a thousand. So, you know, we have about 8,000 vessels. We would anticipate that growing quite a bit as a percentage because of the interest of what’s going on, because of the need for hybrid solutions, the need for the secure suite. So, you know, the attachment rate on on a go forward basis, on a quarterly basis, some new activations from a commercial maritime perspective should be, you know, in close anywhere from a quarter to a half of our customers, but that’s a bit of guesswork on my part.
Chris Quilty, Analyst, Quilty Space: Got it. And maybe a final question here on just the end market. Obviously, you don’t see a huge impact from tariffs. But have you seen any changes in customer demand or patterns in sort of global shipping that are impacting the take up rate in your view?
Brent Bruin, Chief Executive Officer, KVH Industries: We haven’t seen any impact.
Chris Quilty, Analyst, Quilty Space: Got it. And the overall commercial maritime market in terms of container rates and fuel prices and everything relatively stable from your perspective?
Brent Bruin, Chief Executive Officer, KVH Industries: At this point, yes.
Chris Quilty, Analyst, Quilty Space: Great. All right. Well, thanks guys.
Brent Bruin, Chief Executive Officer, KVH Industries: Appreciate Just a one point of clarification, Chris. I overstated the number
Anthony Pipes, Chief Financial Officer, KVH Industries: of
Brent Bruin, Chief Executive Officer, KVH Industries: Combox subs out there by a bit. It’s actually closer to about six seven hundred at the end of the quarter. It’s a number that we look at every day.
Chris Quilty, Analyst, Quilty Space: Very good. All right. Well, you, gentlemen.
Brent Bruin, Chief Executive Officer, KVH Industries: Thanks, Chris.
Operator: That concludes our Q and A session. I will now turn the call back over to Anthony Pipes for closing remarks.
Anthony Pipes, Chief Financial Officer, KVH Industries: Just well, just to thank everyone really for joining the call. And if anyone has any follow-up questions, please feel free to, reach out at IR@KVH.com. Thank you.
Brent Bruin, Chief Executive Officer, KVH Industries: Thank you. And, gentlemen,
Operator: that concludes today’s call. Thank you all for joining. You may now disconnect.
Brent Bruin, Chief Executive Officer, KVH Industries: Okay. Thank you.
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