KVH Industries, Inc. Q4 FY2025 earnings call

• The maritime connectivity market is undergoing a transformation with the arrival of LEO constellations. KVH positioned its business around LEO airtime, subscriber growth, and high-value managed services.
• In Q4, service revenue grew 27% from 2024, contracted for a second Starlink data pool with a $45 million 18-month commitment.
• Full-year service revenue grew 2%, and underlying service revenue grew 11% when excluding U.S. Coast Guard revenue. Subscriber base grew by 28% to over 9,000 vessels.
• Surpassed 1,000 CommBox Edge subscribers, expanded global footprint by integrating Asia-Pacific customer base.
• Achieved $8.1 million adjusted EBITDA for full year, including $3.1 million in Q4. Reduced operating costs by 17% and sold Middletown facility.
• Board authorized increase in share repurchase program from $10 million to $15 million.
• Plan to introduce vessel-based managed IT solution, and LEO industry is in early stages of transformation.

In the fourth quarter, service revenue grew to $28.3 million, a 27% increase from 2024. For the full year, service revenue grew 2% to $98.4 million. Stripping out the $7.7 million in U.S. Coast Guard revenue that did not reoccur in 2025, underlying service revenue grew 11%. The company grew its subscriber base by approximately 2,000 vessels, a 28% increase, ending the year with more than 9,000 vessels under contract. It surpassed 1,000 CommBox Edge subscribers. The company also expanded its global footprint, successfully completing the integration of a maritime communications customer base in the Asia-Pacific region, adding more than 800 vessels and more than 4,400 land-based subscribers. Adjusted EBITDA was $8.1 million for the full year, including $3.1 million in the fourth quarter alone.

2026 guidance: revenue of $130 million to $145 million and adjusted EBITDA of $11 million to $16 million.

Q: Thanks, gentlemen. Good results here. I had a question for you just first on the acquisition. I cannot remember when you bought it in the quarter. Is that $2.5 million sort of a good run rate that we should assume for that business on a go-forward basis?

A: Yes. The business is actually a bit larger, Chris. But yes, $2.5 million is really the net impact. We did have a number of vessels that we were providing our VSAT service through this particular customer, and obviously, we will pick up the incremental margin on that, but $2.5 million per quarter is a pretty accurate close estimate.