• Total Revenue: $28.7 million, a 15% decrease from the previous year.

• Airtime Revenue: $23.0 million, down $3.9 million from Q2 2023.

• Airtime Gross Margin: 36.0%, down from 41.8% in the prior quarter.

• Product Gross Profit: Negative $0.3 million, including $0.5 million in severance charges; excluding charges, positive $0.2 million.

• Operating Expenses: $11.8 million, including $0.7 million in severance charges; down 7% from the prior quarter excluding charges.

• Adjusted EBITDA: $2.6 million.

• Capital Expenditures: $2.6 million.

• Ending Cash Balance: $49.3 million, down approximately $17 million due to payments to Starlink.

• Subscriber Vessels: Just below 6,700, approximately 1% increase from the prior quarter.

• Annualized Operating Expense Savings: Expected to be approximately $5 million from reorganization efforts.

• 2024 Revenue Guidance: Expected to be in the range of $117 million to $127 million.

• 2024 Adjusted EBITDA Guidance: Expected to be in the range of $6 million to $12 million.

• Warning! GuruFocus has detected 3 Warning Signs with KVHI.

Release Date: August 01, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• KVH Industries Inc (NASDAQ:KVHI) completed its reorganization efforts, which are expected to result in annualized operating expense savings of approximately $5 million.

• The company achieved a slight increase in its subscriber vessel count in the second quarter, reversing the decline experienced in the first quarter.

• KVH Industries Inc (NASDAQ:KVHI) signed a bulk data distribution agreement with Starlink, offering increased flexibility in developing and selling custom data plans.

• The company shipped a record number of communication antennas for the second consecutive quarter and increased shipments of its CommBox Edge Gateway.

• KVH Industries Inc (NASDAQ:KVHI) is expanding its value-added services, including vessel-based telephone connections using its global voice over IP service offering.

Negative Points

• Second-quarter airtime revenue was $23.0 million, down $3.9 million from the second quarter of 2023.

• Total revenue for the quarter was $28.7 million, representing a roughly 15% decrease from a year ago due to a decline in VSAT product sales and corresponding service revenue.

• Airtime gross margins declined slightly due to a shift in the airtime subscriber base.

• The company's ending cash balance of $49.3 million was down approximately $17 million from the beginning of the quarter due to payments to Starlink.

• Standalone VSAT service subscriptions have declined faster than anticipated, impacting the company's revenue.