Are there specific customer patterns or segmentations for those choosing Starlink, OneWeb, or VSAT?

Starlink is the dominant choice, but customers often seek network redundancy, with many vessels having two or more communication solutions, including combinations of Starlink, OneWeb, and VSAT. “Starlink is definitely the dominating force as far as connectivity. Customers are still looking for redundancy of network. In particular cases, customers are looking to an alternative to Starlink, which would then be OneWeb.”

Do geo VSAT terminals stay on vessels or are they removed when service is discontinued?

If customers own the VSAT, its disposition is unknown. If it's part of an Agile rental program, customers are required to de-install and return it. “Well, if they own it, I'm not sure what you're doing with it, if you're leaving it on board. it's an agile you know or rental program they're required to de-install it and ship it back to us.”

What is the timeline for geo capacity contracts rolling off, and will it materially impact gross margins?

Major GEO bandwidth commitments end by the end of FY26, with a small commitment for FY27. The increasing LEO revenue (55% of airtime) de-risks margin impact from compressed GEO margins, and management feels comfortable going forward. “from our tank cases, you can see that predominantly our commitment on the geo bandwidth comes to an end at the end of this year. You know, we have a small commitment for next year. And then, you know, on top of that, you know, with including the press release, or if not being a K later, that 55% of our revenue on the airtime now is driven from Leo.”

KVHI

KVH Industries (KVHI) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Information Technology· Aug 6, 2026

Source: earnings call transcript

Executive summary

KVH Industries, Inc. Q2 FY26 — Strong LEO Transition and Service Revenue Growth

KVH Industries continued its strong transition to LEO-based connectivity in Q2 FY26, driven by robust service revenue growth and an expanding subscriber base. The company successfully introduced multi-network service plans and expanded its land-based Starlink initiative, while actively managing the shift from VSAT capacity. Management remains positive about future momentum, focusing on disciplined execution and recurring revenue growth.

Highlights

Total revenue increased 27% year-over-year to $33.7 million, up 4% sequentially.
Service revenue grew 29% year-over-year to $29.7 million, up 6% sequentially.
Subscribing vessels increased by over 1,000 net vessels in the quarter, reaching approximately 10,700, an 11% QoQ increase.
Land-based Starlink sites expanded by approximately 500 during the quarter, totaling 1,600 sites.
Adjusted EBITDA for the quarter was $3.0 million, up from $2.8 million in Q1 FY26.

Concerns

Communication terminal shipments were approximately 2,500, below the record 3,100 units shipped in Q1 FY26.
Cash balance decreased by $1.4 million, primarily driven by $2.3 million in stock repurchases.
Operating expenses increased to $10.4 million from $9.7 million in the prior quarter, including $0.2 million in severance costs.

Guidance & targets

Category	Target	Timeline	Confidence
ERP project completion	Completed low materiality	FY26	High
Stock repurchase authorization	Conclude full $15 million authorization medium materiality	Current month (August 2026) · FY26	High
Terminal shipments	2,000 to 3,000 range medium materiality	Go-forward basis	Medium
VSAT obligations and gross margins	No anticipated exposure medium materiality	Entering 2027 · FY27	High

Orderbook & backlog

Subscribing vessels Approximately 10,700 End of Q2 FY26

Up over 1,000 net vessels in Q2; Up 11% QoQ; Up 18% YTD

Reflects the total number of vessels subscribing to KVH's services.

Communication terminals shipped Approximately 2,500 Q2 FY26

Down from 3,100 in Q1 FY26

Units shipped during the quarter, supporting future subscriber growth.

Land-based Starlink sites Approximately 1,600 End of Q2 FY26

Up approximately 500 during Q2

Total number of land-based sites utilizing Starlink services managed by KVH.

Combox unit shipments 200 to 300 Per quarter

Consistent for 6-7 quarters

Number of Combox units shipped quarterly.

Product announcements

Product	Type	Timeline
Multi-network service plans	launch	Q2 FY26
LINK streaming service	milestone	Expected to launch very soon
Managed IT service offering	update	Over the coming months

Capital programs

ERP project underway

Period spend: $0.4 million

Part of capital expenditure in Q2 FY26.

New US headquarters fit-out completed

Period spend: Part of $0.4 million

Completed in Q2 FY26, part of capital expenditure.

Risks & headwinds

Terminal shipment volatility Next few quarters

2,500 units shipped in Q2 FY26, down from 3,100 in Q1 FY26

Mitigation:Management expects shipments to normalize in the 2,000-3,000 range, acknowledging shifting market dynamics.

Increased operating expenses Q2 FY26

Operating expenses increased to $10.4 million in Q2 FY26 from $9.7 million in Q1 FY26, including $0.2 million in severance costs.

Mitigation:Increase was in line with expectations; severance costs are temporary in nature.

VSAT capacity obligations Entering FY27

Major GEO bandwidth commitments end by end of FY26, small commitment for FY27.

Mitigation:Management anticipates no exposure from mismatched obligations, citing increasing LEO revenue (55% of airtime) as a de-risking factor.

What to watch in Q3 FY26

ERP project completion

End of FY26

Current Underway, $0.4 million spent in Q2 FY26

Target Completed

Why it matters

Completion of the ERP project is important for operational efficiency and internal systems.

The ERP project will be completed by the end of the year

Find out whether KVHI delivers this. Inve re-checks your case every morning.

Q&A highlights

What is driving the fluctuation in terminal shipments, and what is the outlook for the next few quarters?

Management stated that Q1's 3,100 shipments were a high watermark and they expect future shipments to be in the 2,000 to 3,000 range per quarter, acknowledging market dynamics.

“I think in the realm where we see now, which is about 25%. 500, we should be able to do somewhere in the 2000 to 3000 range on a go-forward basis, but that's hard to say as market dynamics are shifting constantly.”

asked by Caleb Henry · answered by Unknown Speaker

2 min read 5 chapters

Detailed narrative

LEO Transition and Multi-Network Strategy

KVH Industries reported continued strong momentum in its transition to LEO-based connectivity, with results demonstrating effective execution of its strategy. The company introduced new multi-network service plans in Q2 FY26, offering customers flexibility to subscribe to data across Starlink, OneWeb, or VSAT networks. This initiative aims to simplify connectivity and provide greater flexibility, marking a key milestone in their strategic evolution.

Service Revenue and Subscriber Growth

The company experienced robust growth in its recurring revenue base, with service revenue reaching $29.7 million, a 29% increase year-over-year and 6% sequentially. This growth was driven by the continued expansion of its subscriber base, adding over 1,000 net vessels during the quarter to reach approximately 10,700 subscribing vessels. Year-to-date, subscribing connectivity vessels have grown by 18%, reinforcing the strength of KVH's recurring revenue model.

Product Development and Expansion Initiatives

KVH is expanding its LINK content platform, with the new LINK streaming service currently in beta trials and expected to launch soon, enhancing crew welfare. Progress is also being made in converting early customer evaluations of its managed IT service offering into commercial relationships, which is anticipated to boost recurring revenue.

The land-based Starlink initiative continues to expand, ending the quarter with approximately 1,600 sites, an increase of 500 during the period, broadening the recurring revenue base beyond maritime.

Geographic and Channel Expansion

Geographic expansion remains a priority, with KVH strengthening its presence in Latin America by adding a dedicated regional sales leader and expanding its team in Athens, Greece, to better support European markets. The company also broadened its market reach by opening its first retail location in Fort Lauderdale, offering a portfolio of communication equipment and connectivity solutions to commercial and recreational maritime customers.

VSAT Capacity Management and Margin Outlook

Management addressed concerns regarding VSAT capacity obligations, noting that major GEO bandwidth commitments largely conclude by the end of FY26, with only a small commitment remaining for FY27. The increasing portion of airtime revenue derived from LEO (55%) is de-risking the impact of compressed GEO margins.

The company anticipates being able to further balance VSAT costs with revenue as it enters FY27, expecting no significant exposure from mismatched obligations.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.