KVH Industries Reports Second Quarter 2024 Results
KVH Industries (Nasdaq: KVHI) reported Q2 2024 results with total revenues decreasing 15% to $28.7 million. The company recorded a net loss of $2.4 million, or $0.12 per share, compared to net income of $0.8 million in Q2 2023. Airtime revenue decreased by $3.9 million to $23.0 million. KVH implemented cost-saving measures, including a workforce reduction, expecting annualized operating expense savings of $5.0 million. Despite challenges, KVH saw increased Starlink terminal activations and record antenna shipments. The company maintained its 2024 guidance for revenue and adjusted EBITDA, focusing on adapting to market changes in maritime communications driven by LEO networks.
KVH Industries (Nasdaq: KVHI) ha riportato i risultati del secondo trimestre 2024, con un calo dei ricavi totali del 15% a 28,7 milioni di dollari. L'azienda ha registrato una perdita netta di 2,4 milioni di dollari, ovvero 0,12 dollari per azione, rispetto a un utile netto di 0,8 milioni di dollari nel secondo trimestre 2023. I ricavi da servizi di comunicazione sono diminuiti di 3,9 milioni di dollari a 23,0 milioni di dollari. KVH ha attuato misure di riduzione dei costi, inclusa una riduzione della forza lavoro, prevedendo risparmi annualizzati sulle spese operative di 5,0 milioni di dollari. Nonostante le difficoltà, KVH ha registrato un aumento delle attivazioni dei terminali Starlink e spedizioni record di antenne. L'azienda ha mantenuto le previsioni per il 2024 riguardo ai ricavi e all'EBITDA rettificato, concentrandosi sull'adattamento ai cambiamenti del mercato delle comunicazioni marittime guidati dalle reti LEO.
KVH Industries (Nasdaq: KVHI) reportó los resultados del segundo trimestre de 2024, con una disminución del 15% en los ingresos totales a 28,7 millones de dólares. La compañía registró una pérdida neta de 2,4 millones de dólares, o 0,12 dólares por acción, en comparación con una ganancia neta de 0,8 millones de dólares en el segundo trimestre de 2023. Los ingresos por servicios de comunicación disminuyeron en 3,9 millones de dólares a 23,0 millones de dólares. KVH implementó medidas de reducción de costos, incluida una reducción de personal, esperando ahorros anuales en gastos operativos de 5,0 millones de dólares. A pesar de los desafíos, KVH vio aumentos en las activaciones de terminales Starlink y envíos récord de antenas. La compañía mantuvo su guía para 2024 en ingresos y EBITDA ajustado, enfocándose en adaptarse a los cambios del mercado de comunicaciones marítimas impulsados por redes LEO.
KVH 산업 (Nasdaq: KVHI)는 2024년 2분기 결과를 보고하며 총 수익이 15% 감소하여 2870만 달러에 이르렀습니다. 회사는 240만 달러의 순손실을 기록했으며, 주당 0.12달러로 2023년 2분기에는 80만 달러의 순이익을 올렸습니다. 유선전화 수익이 390만 달러 감소하여 2300만 달러가 되었습니다. KVH는 인력을 줄이는 등 비용 절감 조치를 시행하였고, 연간 운영비 절감액을 500만 달러로 예상하고 있습니다. 어려움에도 불구하고 KVH는 스타링크 단말기 활성화가 증가하고 안테나 출하량이 기록적으로 증가했습니다. 회사는 LEO 네트워크에 의해 이끌리는 해양 통신 시장의 변화에 적응하는 데 집중하여 2024년 수익 및 조정 EBITDA에 대한 가이드를 유지했습니다.
KVH Industries (Nasdaq: KVHI) a annoncé les résultats du deuxième trimestre 2024, avec une baisse des revenus totaux de 15% pour atteindre 28,7 millions de dollars. L'entreprise a enregistré une perte nette de 2,4 millions de dollars, soit 0,12 dollar par action, par rapport à un bénéfice net de 0,8 million de dollars au deuxième trimestre 2023. Les revenus du service de communication ont diminué de 3,9 millions de dollars pour atteindre 23,0 millions de dollars. KVH a mis en œuvre des mesures d'économie, y compris une réduction d'effectifs, s'attendant à des économies annuelles de 5,0 millions de dollars sur les frais d'exploitation. Malgré les défis, KVH a constaté une augmentation des activations de terminaux Starlink et des expéditions d'antennes à un niveau record. L'entreprise a maintenu ses prévisions pour 2024 concernant les revenus et l'EBITDA ajusté, se concentrant sur l'adaptation aux changements du marché des communications maritimes entraînés par les réseaux LEO.
KVH Industries (Nasdaq: KVHI) hat die Ergebnisse für das zweite Quartal 2024 bekannt gegeben, wobei die Gesamteinnahmen um 15% auf 28,7 Millionen US-Dollar gesunken sind. Das Unternehmen verzeichnete einen Nettoverlust von 2,4 Millionen US-Dollar, oder 0,12 US-Dollar pro Aktie, im Vergleich zu einem Nettogewinn von 0,8 Millionen US-Dollar im zweiten Quartal 2023. Die Einnahmen aus Kommunikationsdiensten sanken um 3,9 Millionen US-Dollar auf 23,0 Millionen US-Dollar. KVH setzte Kosteneinsparungsmaßnahmen um, einschließlich einer Reduzierung der Belegschaft, und erwartet jährliche Einsparungen bei den Betriebskosten von 5,0 Millionen US-Dollar. Trotz dieser Herausforderungen verzeichnete KVH ein Anstieg der Aktivierungen von Starlink-Terminals und einen Rekord bei den Antennensendungen. Das Unternehmen hielt an seinen Prognosen für die Einnahmen und das bereinigte EBITDA für 2024 fest und konzentrierte sich darauf, sich an die Veränderungen des Marktes für maritime Kommunikation, die durch LEO-Netzwerke vorangetrieben werden, anzupassen.
- Record antenna shipments for the second consecutive quarter
- Activated over 1,000 new Starlink terminals since the start of the year
- Slight increase in total subscribing vessel count in Q2, reversing Q1 decline
- New bulk data distribution agreement with Starlink offers increased flexibility
- Anticipates annualized operating expense savings of $5.0 million from reorganization
- Total revenues decreased by 15% to $28.7 million in Q2 2024
- Airtime revenue decreased by $3.9 million (15%) compared to Q2 2023
- Net loss of $2.4 million in Q2 2024 compared to net income of $0.8 million in Q2 2023
- Non-GAAP adjusted EBITDA decreased to $2.6 million from $4.0 million in Q2 2023
- $1.2 million in employee termination costs due to manufacturing wind-down
Insights
KVH Industries' Q2 2024 results reveal significant challenges for the company. Total revenues decreased by
The maritime communications industry is undergoing significant changes due to the emergence of LEO networks, particularly Starlink. KVH's response includes a reorganization expected to yield annual operating expense savings of approximately
Despite the overall decline, there are some positive indicators. The company activated over 1,000 new Starlink terminals, shipped a record number of antennas and increased shipments of their CommBox Edge Communications Gateway. These developments could potentially lead to future airtime and service subscription growth.
However, the transition to new technologies is clearly impacting KVH's traditional revenue streams. The company's ability to adapt to this changing landscape will be important for its long-term success. Investors should closely monitor KVH's ability to leverage its new Starlink partnership and transition its business model effectively.
The maritime communications industry is at a pivotal juncture with the rise of Low Earth Orbit (LEO) satellite networks, particularly Starlink. This shift is significantly impacting traditional players like KVH Industries.
KVH's activation of over 1,000 new Starlink terminals since the start of the year is a clear indicator of the rapid adoption of this new technology. The company's decision to partner with Starlink through a bulk data distribution agreement is a strategic move to stay relevant in this evolving market.
The record shipments of antennas and increased deliveries of the CommBox Edge Communications Gateway suggest that KVH is attempting to position itself as an integrator and value-added service provider in the new LEO-dominated landscape. This could be a viable strategy, leveraging KVH's existing relationships and expertise in maritime communications.
However, the transition is not without challenges. The
The success of KVH's adaptation will depend on how effectively it can integrate Starlink and other LEO services into its portfolio while maintaining its value proposition in areas like customer support, specialized maritime applications and multi-network integration.
MIDDLETOWN, R.I., Aug. 01, 2024 (GLOBE NEWSWIRE) -- KVH Industries, Inc. (Nasdaq: KVHI), reported financial results for the quarter ended June 30, 2024 today. The company will hold a conference call to discuss these results at 9:00 a.m. ET today, which can be accessed at investors.kvh.com. Following the call, a replay of the webcast will be available through the company’s website.
Second Quarter 2024 Highlights
- Total revenues decreased by
15% in the second quarter of 2024 to$28.7 million from$33.6 million in the second quarter of 2023. - Airtime revenue decreased
$3.9 million , to$23.0 million , or15% , in the second quarter of 2024 compared to the second quarter of 2023. - We recorded
$1.2 million of employee termination costs in the second quarter of 2024 as a result of the staged wind-down of our manufacturing activities in our facility in Middletown, Rhode Island. - Net loss in the second quarter of 2024 was
$2.4 million , or$0.12 per share, compared to net income of$0.8 million , or$0.04 per share, in the second quarter of 2023. - Non-GAAP adjusted EBITDA was
$2.6 million in the second quarter of 2024, compared to$4.0 million in the second quarter of 2023.
Commenting on the company’s second quarter results, Brent C. Bruun, KVH’s Chief Executive Officer, said, “The maritime communications industry continues to undergo significant changes driven by the emergence of LEO networks. We have taken aggressive steps this year, both in anticipation of and in response to these changes, in order to position the company to adapt to new market realities. In addition to better positioning the company for the future, we anticipate that our recently completed reorganization should result in annualized operating expense savings of approximately
We had a slight increase in our total subscribing vessel count in the second quarter, reversing the decline in subscribers that we experienced during the first quarter. Since the start of the year we have activated more than 1,000 new Starlink terminals for new and existing customers, making it the fastest-growing service in the company’s history. We shipped a record number of antennas for the second consecutive quarter. In addition, we substantially increased shipments of our CommBox Edge Communications Gateway. Many of the new products shipped in the second quarter are being installed and awaiting activation. Historically, the number of shipments has been a strong leading indicator of future airtime and service subscription growth. Finally, our new bulk data distribution agreement with Starlink offers us increased flexibility in developing and selling custom plans. We are on our way to achieving our strategic, financial, and operational goals for 2024, and we believe we are on the path to emerge from our reorganization as a world-class solution provider built on global airtime and superior service and support.”
At this time, we are not making any adjustments to our guidance for revenue and adjusted EBITDA for 2024.
Financial Highlights - (in millions, except per share data)
| Three Months Ended | Six Months Ended | |||||||||||||
| June 30, | June 30, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||
| GAAP Results | ||||||||||||||
| Revenue | $ | 28.7 | $ | 33.6 | $ | 57.9 | $ | 67.7 | ||||||
| (Loss) income from operations | $ | (2.9 | ) | $ | 0.2 | $ | (6.7 | ) | $ | — | ||||
| Net (loss) income | $ | (2.4 | ) | $ | 0.8 | $ | (5.5 | ) | $ | 1.1 | ||||
| Net (loss) income per share | $ | (0.12 | ) | $ | 0.04 | $ | (0.29 | ) | $ | 0.06 | ||||
| Non-GAAP Adjusted EBITDA | $ | 2.6 | $ | 4.0 | $ | 4.6 | $ | 7.7 | ||||||
Second Quarter Financial Summary
Revenue was
Service revenues for the second quarter were
Product revenues for the second quarter were
Our operating expenses increased
Six Months Ended June 30 Financial Summary
Revenue was
Service revenues for the six months ended June 30, 2024 were
Product revenues for the six months ended June 30, 2024 were
Our operating expenses increased
Other Recent Announcement
- June 25, 2024 – KVH Signs Pooled Data Agreement with Starlink
Conference Call Details
KVH Industries will host a conference call today at 9:00 a.m. ET through the company’s website. The conference call can be accessed at investors.kvh.com and listeners are welcome to submit questions pertaining to the earnings release and conference call to ir@kvh.com. The audio archive will be available on the company website within three hours of the completion of the call.
Non-GAAP Financial Measures
This release provides non-GAAP financial information as a supplement to our condensed consolidated financial statements, which are prepared in accordance with generally accepted accounting principles (“GAAP”). Management uses these non-GAAP financial measures internally in analyzing financial results to assess operational performance. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. The non-GAAP financial measures used in this press release adjust for specified items that can be highly variable or difficult to predict. Management generally uses these non-GAAP financial measures to facilitate financial and operational decision-making, including evaluation of our historical operating results and comparison to competitors’ operating results. These non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with GAAP results and the reconciliations to corresponding GAAP financial measures, may provide a more complete understanding of factors and trends affecting our business.
Some limitations of non-GAAP adjusted EBITDA include the following: non-GAAP adjusted EBITDA represents net income (loss) from continuing operations before, as applicable, interest income, net, income tax expense (benefit), depreciation, amortization, stock-based compensation expense, goodwill impairment charges, long-lived assets impairment charges, charges for disposal of discontinued projects, loss on unfavorable future contracts, employee termination and other variable costs, executive separation costs, transaction-related and other variable legal and advisory fees, irregular inventory write-downs, excess purchase order obligations, gains and losses on sale of subsidiaries, and foreign exchange transaction gains and losses.
Other companies, including companies in KVH’s industry, may calculate these non-GAAP financial measures differently or not at all, which will reduce their usefulness as a comparative measure.
Because non-GAAP financial measures exclude the effect of items that increase or decrease our reported results of operations, management strongly encourages investors to review our consolidated financial statements and publicly filed reports in their entirety. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables accompanying this release.
About KVH Industries, Inc.
KVH Industries, Inc. is a global leader in maritime and mobile connectivity delivered via the KVH ONE network. The company, founded in 1982, is based in Middletown, RI, with research, development, and manufacturing operations in Middletown, RI, and more than a dozen offices around the globe. KVH provides connectivity solutions for commercial maritime, leisure marine, military/government, and land mobile applications on vessels and vehicles, including the TracNet, TracPhone, and TracVision product lines, the KVH ONE OpenNet Program for non-KVH antennas, AgilePlans Connectivity as a Service (CaaS), and the KVH Link crew wellbeing content service.
This press release contains forward-looking statements that involve risks and uncertainties. For example, forward-looking statements include statements regarding projected financial results, the anticipated benefits of our restructuring and other initiatives, anticipated cost savings, our investment plans, our development goals, and the potential impact of our future initiatives on revenue, competitive positioning, profitability, and orders. Actual results could differ materially from the results projected in or implied by the forward-looking statements made in this press release. Factors that might cause these differences include, but are not limited to: continued increasing competition, particularly from lower-cost providers, low earth orbit satellite systems and other telecommunications systems, especially in the global leisure market, which is reducing demand for geosynchronous satellite services, including ours; potentially lower product and service margins from reseller arrangements; the risk that sales of Starlink terminals will slow down or decrease; potential hardware and software competition for our new CommBox product offerings; unanticipated obstacles to implementation of our manufacturing wind-down, unanticipated costs and expenses arising from the wind-down; unanticipated effects of the wind-down on our ongoing business; the risks associated with increased customer reliance on third-party hardware; the lack of future product differentiation; new service offerings from hardware providers; potential customer delays in selecting our services; the uncertain impact of continuing industry consolidation; the risk that our OpenNet program will lead to further reductions in sales of our satellite products; the risk that our current and future non-exclusive arrangements with Starlink and OneWeb will not provide material benefits; uncertainty regarding customer responses to new product and service introductions; challenges and potential additional expenses in retaining our employees, particularly in the current competitive labor market characterized by rising wages; uncertainties created by our new business strategy, which may impact customer recruitment and retention; the uncertain impact of ongoing disruptions in our supply chain and associated increases in our costs; the uncertain impact of inflation, particularly with respect to fuel costs, and fears of recession; the uncertain impact of the wars in Ukraine and the Middle East; unanticipated changes or disruptions in our markets; technological breakthroughs by competitors; changes in customer priorities or preferences; potential customer terminations; unanticipated liabilities; the potential that competitors will design around or invalidate our intellectual property rights; a history of losses; continued fluctuations in quarterly results; the uncertain impact of changes in trade policy, including actual and potential new or higher tariffs and trade barriers, as well as trade wars with other countries, all of which could change materially under a new presidential administration or a change in control of Congress; unanticipated obstacles in our product and service development, cost engineering and manufacturing efforts; adverse impacts of currency fluctuations; our ability to successfully commercialize our new initiatives without unanticipated additional expenses or delays; potential reduced sales to companies in or dependent upon the turbulent oil and gas industry; the impact of extended economic weakness on the sale and use of marine vessels and recreational vehicles; the potential inability to increase or maintain our market share in the market for airtime services; the risk that declining sales of the TracNet H-series and TracPhone V-HTS series products and related services will reduce airtime gross margins; the risk that reduced product sales will continue to erode product gross margins and lead to increased losses; potential declines or changes in customer demand, due to economic, weather-related, seasonal, and other factors, particularly with respect to the TracNet H-series and TracPhone V-HTS series; exposure for potential intellectual property infringement; changes in tax and accounting requirements or assessments; and export restrictions, delays in procuring export licenses, and other international risks. These and other factors are discussed in more detail in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2024. Copies are available through our Investor Relations department and website, investors.kvh.com. We do not assume any obligation to update our forward-looking statements to reflect new information and developments.
KVH Industries, Inc., has used, registered, or applied to register its trademarks in the USA and other countries around the world, including but not limited to the following marks: KVH, KVH ONE, TracPhone, TracVision, AgilePlans, CommBox, and TracNet. Other trademarks are the property of their respective companies.
| Contact: | KVH Industries, Inc. Chris Watson 401-845-2441 IR@kvh.com |
| KVH INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts, unaudited) | |||||||||||||||
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Sales: | |||||||||||||||
| Service | $ | 24,674 | $ | 28,746 | $ | 49,712 | $ | 57,486 | |||||||
| Product | 3,999 | 4,840 | 8,228 | 10,243 | |||||||||||
| Net sales | 28,673 | 33,586 | 57,940 | 67,729 | |||||||||||
| Costs and expenses: | |||||||||||||||
| Costs of service sales | 15,469 | 15,534 | 29,513 | 31,610 | |||||||||||
| Costs of product sales | 4,299 | 6,218 | 9,607 | 11,531 | |||||||||||
| Research and development | 2,326 | 2,416 | 5,364 | 4,981 | |||||||||||
| Sales, marketing and support | 5,334 | 5,124 | 10,718 | 10,832 | |||||||||||
| General and administrative | 4,134 | 4,122 | 9,425 | 8,772 | |||||||||||
| Total costs and expenses | 31,562 | 33,414 | 64,627 | 67,726 | |||||||||||
| (Loss) income from operations | (2,889 | ) | 172 | (6,687 | ) | 3 | |||||||||
| Interest income | 876 | 885 | 1,787 | 1,663 | |||||||||||
| Other expense, net | (366 | ) | (238 | ) | (564 | ) | (462 | ) | |||||||
| (Loss) income before income tax (benefit) expense | (2,379 | ) | 819 | (5,464 | ) | 1,204 | |||||||||
| Income tax (benefit) expense | (3 | ) | 46 | 75 | 64 | ||||||||||
| Net (loss) income | $ | (2,376 | ) | $ | 773 | $ | (5,539 | ) | $ | 1,140 | |||||
| Net (loss) income per common share | |||||||||||||||
| Basic | $ | (0.12 | ) | $ | 0.04 | $ | (0.29 | ) | $ | 0.06 | |||||
| Diluted | $ | (0.12 | ) | $ | 0.04 | $ | (0.29 | ) | $ | 0.06 | |||||
| Weighted average number of common shares outstanding: | |||||||||||||||
| Basic | 19,381 | 19,153 | 19,333 | 19,018 | |||||||||||
| Diluted | 19,381 | 19,275 | 19,333 | 19,161 | |||||||||||
| KVH INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, unaudited) | ||||||
| June 30, 2024 | December 31, 2023 | |||||
| ASSETS | ||||||
| Cash, cash equivalents and marketable securities | $ | 49,260 | $ | 69,771 | ||
| Accounts receivable, net | 27,326 | 25,670 | ||||
| Inventories, net | 22,715 | 19,046 | ||||
| Prepaid expenses and other current assets | 19,191 | 4,331 | ||||
| Total current assets | 118,492 | 118,818 | ||||
| Property and equipment, net | 44,784 | 47,680 | ||||
| Intangible assets, net | 1,014 | 1,194 | ||||
| Right of use assets | 1,396 | 1,068 | ||||
| Other non-current assets | 2,996 | 3,618 | ||||
| Deferred income tax asset | 221 | 256 | ||||
| Total assets | $ | 168,903 | $ | 172,634 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| Accounts payable and accrued expenses | $ | 22,552 | 22,412 | |||
| Deferred revenue | 1,586 | 1,774 | ||||
| Current operating lease liability | 964 | 786 | ||||
| Total current liabilities | 25,102 | 24,972 | ||||
| Long-term operating lease liability | 421 | 289 | ||||
| Deferred income tax liability | 2 | 1 | ||||
| Stockholders’ equity | 143,378 | 147,372 | ||||
| Total liabilities and stockholders’ equity | $ | 168,903 | $ | 172,634 | ||
| KVH INDUSTRIES, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP NET (LOSS) INCOME TO NON-GAAP EBITDA AND NON-GAAP ADJUSTED EBITDA (in thousands, unaudited) | |||||||||||||||
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net (loss) income - GAAP | $ | (2,376 | ) | $ | 773 | $ | (5,539 | ) | $ | 1,140 | |||||
| Income tax (benefit) expense | (3 | ) | 46 | 75 | 64 | ||||||||||
| Interest income, net | (876 | ) | (885 | ) | (1,787 | ) | (1,663 | ) | |||||||
| Depreciation and amortization | 3,738 | 3,459 | 6,985 | 6,920 | |||||||||||
| Non-GAAP EBITDA | 483 | 3,393 | (266 | ) | 6,461 | ||||||||||
| Stock-based compensation expense | 722 | 578 | 1,244 | 874 | |||||||||||
| Employee termination and other variable costs | 1,183 | — | 3,360 | — | |||||||||||
| Transaction-related and other variable legal and advisory fees | — | — | — | 234 | |||||||||||
| Foreign exchange transaction loss | 248 | 56 | 269 | 110 | |||||||||||
| Non-GAAP adjusted EBITDA | $ | 2,636 | $ | 4,027 | $ | 4,607 | $ | 7,679 | |||||||
FAQ
What were KVH Industries' Q2 2024 financial results?
How did KVH's airtime revenue perform in Q2 2024?
What cost-saving measures has KVH implemented?
How many new Starlink terminals has KVH activated in 2024?
Has KVH adjusted its 2024 financial guidance?
