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What changed in KVH INDUSTRIES INC \DE\'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of KVH INDUSTRIES INC \DE\'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+284 added−259 removedSource: 10-K (2026-03-10) vs 10-K (2025-03-10)

Top changes in KVH INDUSTRIES INC \DE\'s 2025 10-K

284 paragraphs added · 259 removed · 218 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

61 edited+9 added−14 removed73 unchanged
Biggest changeMore recently, SpaceX’s Starlink has emerged as a significant competitor with flat-panel, electronically steered array (ESA) terminals and its new LEO network. Other LEO services, such as Eutelsat OneWeb, are also entering the market. In addition, we face some competition from providers of low-speed data services, which include Viasat/Inmarsat and Iridium Satellite LLC.
Biggest changeIn the marine market for high-speed Internet, voice, fax, and data services, we compete primarily with Marlink, Navarino, Speedcast, Viasat/Inmarsat, Elcome, Station Satcom and Network Innovations. More recently, SpaceX’s Starlink has emerged as a significant competitor with flat-panel, electronically steered array (ESA) terminals and its new LEO network. Other LEO services, such as Eutelsat OneWeb, are also entering the market.
Temporary suspensions of our airtime services typically increase in the fourth and first quarters of each year as boats are placed out of service during the winter months. Competition 10 Table of Contents We encounter intense competition in the markets we serve, and we expect the intensity of competition to continue to increase in the future.
Temporary suspensions of our airtime services typically increase in the fourth and first quarters of each year as boats are placed out of service during the winter months. 10 Table of Contents Competition We encounter intense competition in the markets we serve, and we expect the intensity of competition to continue to increase in the future.
We also continue to service and support our legacy TracPhone VSAT-only terminals. Together with our airtime services, these products provide an end-to-end solution for offshore mobile connectivity to commercial, leisure, and government customers seeking an integrated hardware and service solution for mobile communications and seamless region-to-region roaming. We manufacture the TracNet and TracPhone terminals and provide 24/7/365 after-sale support.
We also continue to service and support our legacy TracPhone VSAT-only terminals. Together with our airtime services, these products provide an end-to-end solution for offshore mobile connectivity to commercial and leisure customers seeking an integrated hardware and service solution for mobile communications and seamless region-to-region roaming. We manufacture the TracNet and TracPhone terminals and provide 24/7/365 after-sale support.
The majority of these services are available via third-party services and networks we offer as part of our KVH ONE multi-orbit, multi-channel network, including Starlink, OneWeb, and 5G/cellular. Maritime Products In the marine market, we currently offer a range of communications and mobile satellite TV products.
The majority of these services are available via third-party services and networks we offer as part of our KVH ONE multi-orbit, multi-channel network, including Starlink, Eutelsat OneWeb, and 5G/cellular. Maritime Products In the marine market, we currently offer a range of communications and mobile satellite TV products.
Specifically: • We provide employee wages that we believe are competitive and consistent with employee positions, skill levels, experience, knowledge, and geographic location. • We review compensation and benefits surveys to obtain relevant industry data in order to benchmark our practices against those of industry peers. • We seek to align the interests of our executives with those of our shareholders by paying a significant portion of our executives’ total compensation in the form of equity awards, which increase in value as the price of our common stock increases. • Annual salary increases and incentive compensation include adjustments based on merit, which is communicated to employees through our annual review process and upon internal transfers and/or promotions. 13 Table of Contents • All U.S. employees are eligible for health insurance, paid and unpaid leaves, a retirement plan and life and disability/accident coverage, subject to applicable regulations.
Specifically: • We provide employee wages that we believe are competitive and consistent with employee positions, skill levels, experience, knowledge, and geographic location. • We review compensation and benefits surveys to obtain relevant industry data in order to benchmark our practices against those of industry peers. • We seek to align the interests of our executives with those of our shareholders by paying a significant portion of our executives’ total compensation in the form of equity awards, which increase in value as the price of our common stock increases. • Annual salary increases and incentive compensation include adjustments based on merit, which is communicated to employees through our annual review process and upon internal transfers and/or promotions. • All U.S. employees are eligible for health insurance, paid and unpaid leaves, a retirement plan and life and disability/accident coverage, subject to applicable regulations.
In October 2023, we signed an exclusive multi-year agreement with Kognitive Networks through which we are integrating Kognitive’s diverse suite of enterprise-grade network and bandwidth management tools, private-labeled as CommBox Edge, into our maritime mobile communication service offerings. CommBox Edge is an integral element of our multi-orbit, multi-channel marine communication solutions, enabling more diverse hybrid configurations.
In October 2023, we signed a multi-year agreement with Kognitive Networks through which we are integrating Kognitive’s suite of enterprise-grade network and bandwidth management tools, private-labeled as CommBox Edge, into our maritime mobile communication service offerings. CommBox Edge is an integral element of our multi-orbit, multi-channel marine communication solutions, enabling more diverse hybrid configurations.
VSAT data speeds offered by the TracNet systems vary by antenna diameter: TracNet H30 offers maximum speeds of 6/2 Mbps (down/up), TracNet H60 offers maximum speeds of 10/3 Mbps (down/up), and the TracNet H90 offers maximum speeds of 20/3 Mbps (down/up).
VSAT data speeds offered by the TracNet systems vary by antenna diameter: TracNet H30 offers maximum speeds of 6/2 Mbps (down/up) and the TracNet H60 and H90 offers maximum speeds of 20/3 Mbps (down/up).
Our current research and development activities relate to cellular products and value-added services supporting platforms and emerging non-geostationary satellite orbit (NGSO) products and services, specifically Starlink and OneWeb, and efforts to integrate these into our overall maritime offering. 11 Table of Contents Government Regulation Our manufacturing operations are subject to various laws governing the protection of the environment and our employees.
Our current research and development activities relate to value-added services supporting platforms and emerging non-geostationary satellite orbit (NGSO) products and services, specifically Starlink and Eutelsat OneWeb, and efforts to integrate these into our overall maritime offering. 11 Table of Contents Government Regulation Our manufacturing operations are subject to various laws governing the protection of the environment and our employees.
Introduction We are a leading global provider of innovative and technology-driven connectivity solutions to primarily maritime commercial, leisure, and military/government customers. We provide global high-speed Internet and Voice over Internet Protocol (VoIP) services via satellite and integrated 5G/LTE cellular communications to mobile users at sea and on land.
Introduction We are a leading global provider of innovative and technology-driven connectivity solutions to primarily maritime commercial and leisure customers. We provide global high-speed Internet and Voice over Internet Protocol (VoIP) services via satellite and integrated 5G/LTE cellular communications to mobile users at sea and on land.
The HTS high-speed network incorporates Intelsat satellite services, including Epic satellites, and the IntelsatOne Flex platform, a global managed service designed to optimize bandwidth allocations and provide flexible coverage where it is needed. Our global HTS network also benefits from Japanese satellite capacity provided by SKY Perfect JSAT.
The HTS high-speed network incorporates SES satellite services, including Epic satellites, and the IntelsatOne Flex platform, a global managed service designed to optimize bandwidth allocations and provide flexible coverage where it is needed. Our global HTS network also benefits from Japanese satellite capacity provided by SKY Perfect JSAT.
Each TracNet H-series terminal includes a belowdeck hub that includes a Wi-Fi router along with support for intelligent automatic channel switching among as many as five discreet Wide Area Networks (WANs), including the integrated VSAT, 6 Table of Contents 5G/cellular, and shore-based Wi-Fi services. Automatic switching is managed based on an array of performance and service cost parameters.
Each TracNet H-series terminal includes a belowdeck hub that includes a Wi-Fi router along with support for intelligent automatic channel switching among as many as five discreet Wide Area Networks (WANs), including the integrated VSAT, 5G/cellular, and shore-based Wi-Fi services. Automatic switching is managed based on an array of performance and service cost parameters.
Satellite Internet and Phone. Our TracNet hybrid terminals (TracNet H-series) offer an end-to-end, multichannel connectivity solution. Every TracNet H-series terminal includes an integrated Ku-band VSAT antenna, high-efficiency 5G/LTE cellular antenna, and high-powered Wi-Fi bridge for connections to shore-based Wi-Fi channels. These same cellular and Wi-Fi technologies are also integral components of our TracNet Coastal products.
Our TracNet hybrid terminals (TracNet H-series) offer an end-to-end, multichannel connectivity solution. Every TracNet H-series terminal includes an integrated Ku-band VSAT antenna, high-efficiency 5G/LTE cellular antenna, and high-powered Wi-Fi bridge for connections to shore-based Wi-Fi channels. These same cellular and Wi-Fi technologies are also integral components of our TracNet Coastal products.
Our brands include: • AgilePlans® – Connectivity as a Service Program • CommBox™ – data management software for maritime communications • CommBox™ Edge – advanced maritime network optimization and management solution • KVH Elite™ – unlimited HD-quality streaming service for leisure yachts • KVH Link – crew wellbeing content subscription service employing over-the-air and secure drive delivery mechanisms • KVH ONE® – global hybrid communication network supporting Internet, VoIP, content delivery, and more • KVH OneCare® – global services and support for TracNet and TracPhone systems • MOVIElink™ – movie distribution through a variety of means • MUSIClink™ – music and karaoke delivered through a variety of means • NEWSlink™ – maritime news delivery service through a variety of means • OpenNet – delivering KVH VSAT data services to non-KVH Ku-band VSAT terminals • TracNet™ – integrated hybrid two-way communication terminals with VSAT, 5G/LTE, and shore-based Wi-Fi • TracPhone® – two-way VSAT-only satellite communications systems • TracVision® – satellite television systems for vessels and vehicles • TVlink™ – television programming delivered through a variety of means We sell our products directly and through an international network of independent retailers, chain stores, distributors, and service providers as well as to manufacturers of vessels, maritime equipment, and vehicles.
Our brands include: • AgilePlans® – Connectivity as a Service Program • CommBox™ – data management software for maritime communications • CommBox™ Edge – advanced maritime network optimization and management solution • KVH Link – crew wellbeing content subscription service employing over-the-air and secure drive delivery mechanisms • KVH ONE® – global hybrid communication network supporting Internet, VoIP, content delivery, and more • KVH OneCare® – global services and support for TracNet and TracPhone systems • MOVIElink™ – movie distribution through a variety of means • MUSIClink™ – music and karaoke delivered through a variety of means • NEWSlink™ – maritime news delivery service through a variety of means • OpenNet – delivering KVH VSAT data services to non-KVH Ku-band VSAT terminals • TracNet™ – integrated hybrid two-way communication terminals with VSAT, 5G/LTE, and shore-based Wi-Fi • TracPhone® – two-way VSAT-only satellite communications systems • TracVision® – satellite television systems for vessels and vehicles • TVlink™ – television programming delivered through a variety of means We sell our products directly and through an international network of independent retailers, chain stores, distributors, and service providers as well as to manufacturers of vessels, maritime equipment, and vehicles.
However, there can be no assurance that we will continue to do so. For 2025, we anticipate ongoing demand for our hybrid connectivity solutions offering GEO, LEO, and 5G/LTE Cellular connectivity.
However, there can be no assurance that we will continue to do so. For 2026, we anticipate ongoing demand for our hybrid connectivity solutions offering LEO, GEO and 5G/LTE Cellular connectivity.
We also manufacture in-motion, stabilized antennas that provide receive-only satellite television services. Product sales accounted for 15% and 13% of our consolidated net sales for 2024 and 2023, respectively. In the global maritime market, we believe that there is significant demand for mobile access to the Internet, operational data, voice services, entertainment content, and satellite television.
We also manufacture in-motion, stabilized antennas that provide receive-only satellite television services. Product sales accounted for 11% and 15% of our consolidated net sales for 2025 and 2024, respectively. In the global maritime market, we believe that there is significant demand for mobile access to the Internet, operational data, voice services, entertainment content, and satellite television.
Under this all-in-one CaaS model, we charge subscribers a single monthly fee in exchange for which we provide either TracNet or TracPhone satellite communication hardware, subsidized shipping and installation, maintenance and support, airtime and VoIP services, a service management portal and certain basic content services with no minimum commitment and no long-term contract.
Under this all-in-one CaaS model, we charge subscribers a single monthly fee in exchange for which we provide satellite communication hardware, subsidized shipping and installation, maintenance and support, airtime and VoIP services, a service management portal and certain basic content services with no minimum commitment and no long-term contract.
KVH Team Member Recruitment We work diligently to attract the best available talent from a diverse range of sources to meet the current and future demands of our business. We have established relationships with major universities, professional associations, and industry groups to proactively attract talent. In 2024, we hired 15 professional level team members.
KVH Team Member Recruitment We work diligently to attract the best available talent from a diverse range of sources to meet the current and future demands of our business. We have established relationships with major universities, professional associations, and industry groups to proactively attract talent. In 2025, we hired 37 professional level team members.
TracVision TV-series products also offer configuration, status, and service capabilities via the optional, free TracVision application for use on iOS and Android mobile devices. 7 Table of Contents Our TracVision UHD7 satellite TV antenna offers a high-definition TV experience comparable to that available to a home DIRECTV HDTV subscriber.
TracVision TV-series products also offer configuration, status, and service capabilities via the optional, free TracVision application for use on iOS and Android mobile devices. Our TracVision UHD7 satellite TV antenna offers a high-definition TV experience comparable to that available to a home DIRECTV HDTV subscriber.
For more information, see “Risk Factors – Risks related to government regulation.” KVH Team Demographics KVH team members are essential to the success of KVH. We had 260 team members as of December 31, 2024, including full-time employees, part-time employees, and long-term contractors. The figures in this section provide information as of December 31, 2024.
For more information, see “Risk Factors – Risks related to government regulation.” KVH Team Demographics KVH team members are essential to the success of KVH. We had 300 team members as of December 31, 2025, including full-time employees, part-time employees, and long-term contractors. The figures in this section provide information as of December 31, 2025.
Our unlimited use data plans offer plans based on maximum upload and download speeds. All TracNet, TracPhone, and OpenNet 60 cm to 1 meter antennas support simultaneous high-speed and unlimited use plans for optimal flexibility, while all 37 cm terminals offer a single high-speed data channel.
Our unlimited use data plans offer plans based on maximum 4 Table of Contents upload and download speeds. All TracNet, TracPhone, and OpenNet 60 cm to 1 meter antennas support simultaneous high-speed and unlimited use plans for optimal flexibility, while all 37 cm terminals offer a single high-speed data channel.
We currently expect to continue to offer KVH-manufactured VSAT and satellite TV terminals through 2025 and potentially into 2026 as part of our plan to gradually transition customers to third-party hardware.
We currently expect to continue to offer KVH-manufactured VSAT and satellite TV terminals through 2026 as part of our plan to gradually transition customers to third-party hardware.
While Starlink offers a fast and lower-cost data pipe, we believe that a KVH and Starlink hybrid deployment offers a more robust solution thanks to our intelligent channel switching, KVH ONE global hybrid network, integrated services, enterprise-grade cybersecurity, and other features.
While Starlink offers a fast and lower-cost data pipe, we believe that a hybrid deployment of KVH and Starlink systems offers a more robust solution due to our intelligent channel switching, KVH ONE global hybrid network, integrated services, enterprise-grade cybersecurity, and other features.
On the hardware side of our business, we currently manufacture and distribute a comprehensive family of mobile satellite antenna products that provide two-way access to the Internet and VoIP services using Ku-band VSAT service with integrated 5G/LTE cellular service and support for shore-based Wi-Fi. We distribute products manufactured by third-parties that support low-earth-orbit (LEO) satellite services.
On the hardware side of our business, we primarily distribute products manufactured by third-parties that support LEO satellite services. In addition, we currently manufacture and distribute a comprehensive family of mobile satellite antenna products that provide two-way access to the Internet and VoIP services using Ku-band VSAT service with integrated 5G/LTE cellular service and support for shore-based Wi-Fi.
Our TracVision TV-series satellite TV antennas are designed with the full spectrum of vessel sizes in mind, ranging from recreational vessels as small as 20 to 25 feet to large commercial vessels. The TV-series incorporate an Internet Protocol (IP)-enabled control unit to allow access to system information from any Wi-Fi device.
Our TracVision TV-series satellite TV antennas are designed with the full spectrum of vessel sizes in mind, ranging from recreational vessels to large commercial vessels. The TV-series incorporate an Internet Protocol (IP)-enabled control unit to allow access to system information from any Wi-Fi device.
We are winding down our product manufacturing operations and currently plan to discontinue the majority of our capital-intensive manufacturing activities by the end of 2025 an d concentrate instead on growing sales of our multi-orbit, multi-channel, integrated communications solutions, including a transition to rely increasingly, and eventually exclusively, on third-party hardware compatible with our solutions.
We are winding down our product manufacturing operations and currently plan to discontinue substantially all manufacturing activities by the end of 2026 an d concentrate instead on growing sales of our multi-orbit, multi-channel, integrated communications solutions, including a transition to rely increasingly, and eventually exclusively, on third-party hardware compatible with our solutions.
Overall, our global HTS network currently uses a combination of 182 Ku-band transponders (5 of which we directly contract for) on 31 satellites to provide Ku-band coverage throughout the northern and southern hemispheres. Of the 31 satellites, 5 are considered high-throughput satellites that provide coverage via overlapping high-powered spot beams. Of the 182 Ku-band transponders, 138 are on high-throughput satellites.
Overall, our global HTS network currently uses a combination of 185 Ku-band transponders (4 of which we directly contract for) on 28 satellites to provide Ku-band coverage throughout the northern and southern hemispheres. Of the 28 satellites, 5 are considered high-throughput satellites that provide coverage via overlapping high-powered spot beams. Of the 185 Ku-band transponders, 141 are on high-throughput satellites.
In January 2024, we announced a distribution agreement with Eutelsat OneWeb that will enable us to expand our multi-orbit hybrid network to include Eutelsat OneWeb’s high-speed, low-latency service. Under the terms of the agreement, KVH will offer Eutelsat OneWeb’s LEO connectivity services supporting terminals for commercial and leisure vessels via Eutelsat OneWeb’s LEO satellite constellation.
In January 2024, we announced a distribution agreement with Eutelsat OneWeb that enables us to expand our multi-orbit hybrid network to include Eutelsat OneWeb’s high-speed, low-latency service. Under the terms of the agreement, KVH offers Eutelsat OneWeb’s LEO connectivity services supporting terminals for commercial and leisure vessels via Eutelsat OneWeb’s 6 Table of Contents LEO satellite constellation.
These sales channels vary and evolve from time to time, but currently include targeted efforts to reach the commercial and leisure maritime markets; the RV, high-end automotive, and bus markets; and the commercial, industrial, and government markets. As our business evolves, we may pursue additional sales channels, including direct sales, in various markets.
These sales channels vary and evolve from time to time, but currently include targeted efforts to reach the commercial and leisure maritime markets. As our business evolves, we may pursue additional sales channels, including direct sales, in various markets.
Benefits for international employees vary by country. Health and Safety We are committed to protecting the health and safety of our employees and others who enter our facilities. In 2024, KVH’s Occupational Safety and Health Administration (OSHA) total recordable incident rate was 1.1%, which is favorable compared to the 2024 OSHA national average of 2.4%.
Benefits for international employees vary by country. 13 Table of Contents Health and Safety We are committed to protecting the health and safety of our employees and others who enter our facilities. In 2025, KVH’s Occupational Safety and Health Administration (OSHA) total recordable incident rate was 0.0%, which is favorable compared to the 2025 OSHA national average of 2.6%.
Available tools and reports include, among other features, terminal status, real-time data reporting and the ability to manage data access by application category, configure the KVH terminal, optimize performance with Tracking Avoidance Zones, set data usage alerts and get real-time vessel tracking reports with up to one year of historical data.
KVH Manager offers a suite of tools and reports, among other features, terminal status, real-time data reporting activation, and the ability to manage data access by application category, configure the KVH terminal, improve performance with Tracking Avoidance Zones, set data usage alerts and get real-time vessel tracking reports with up to one year of historical data.
Along with our Ku-band HTS network, we offer airtime services via other networks, such as Starlink and Iridium. We began making Eutelsat OneWeb services available for commercial and leisure vessel deployment starting in January 2025. In May 2023, we announced a new program for leisure and commercial vessels: the KVH ONE OpenNet Program.
Along with our Ku-band HTS network, we offer airtime services via other networks, such as Starlink, Eutelsat OneWeb, Inmarsat and Iridium. In May 2023, we announced a new program for leisure and commercial vessels: the KVH ONE OpenNet Program.
Under our CaaS model, we retain ownership of the hardware and do not sell it to subscribers, who must return it to us if they terminate our service. Returned units may be refurbished and redeployed for new AgilePlans subscriptions.
We offer AgilePlans customers the same range of airtime data plans as non-AgilePlan customers. Under our CaaS model, we retain ownership of the hardware and do not sell it to subscribers, who must return it to us if they terminate our service. Returned units may be refurbished and redeployed for new AgilePlans subscriptions.
Because we sell and support our products globally, we have a globally distributed workforce to manufacture products in the U.S. and support our customers in the U.S. and internationally: 12 Table of Contents KVH Team Member Headcount Country Number at December 31, 2024 United States 102 Philippines 57 United Kingdom 50 Denmark 10 Singapore 12 India 10 Norway 3 Greece 3 Brazil 2 Hong Kong 2 Other 9 Total 260 Approximately 40 team members, or 15%, are directly involved in supporting our technology in positions such as engineers, technicians, or software developers.
Because we sell and support our products globally, we have a globally distributed workforce to manufacture products in the U.S. and support our customers in the U.S. and internationally: 12 Table of Contents KVH Team Member Headcount Country Number at December 31, 2025 United States 110 United Kingdom 68 Philippines 64 Singapore 25 India 9 Greece 6 Denmark 4 Norway 3 Brazil 2 Hong Kong 2 Other 7 Total 300 Approximately 53 team members, or 17.7%, are directly involved in supporting our technology in positions such as engineers, technicians, or software developers.
KVH Team Member Headcount Category Number at December 31, 2024 Full-time employees 247 Part-time employees 6 Long-term contractors/consultants 7 Total 260 Our team members are directly responsible for the creation, development, manufacture, marketing, sale, repair and support of our products and services.
KVH Team Member Headcount Category Number at December 31, 2025 Full-time employees 258 Part-time employees 27 Long-term contractors/consultants 10 Temporary employees 5 Total 300 Our team members are directly responsible for the creation, development, manufacture, marketing, sale, repair and support of our products and services.
We expect that, as customers subscribe to our AgilePlans service, our revenues from product sales will continue to decline, and our provision of this equipment to subscribers will continue to comprise the majority of our capital expenditures. In October 2017, we launched our next-generation, advanced maritime broadband network with Intelsat.
As customers have subscribed to our AgilePlans service, our revenues from product sales have declined, and we expect this trend to continue. We expect that our provision of this equipment to subscribers will continue to comprise the majority of our recurring capital expenditures. In October 2017, we launched our maritime broadband network with SES.
For mobile access to the Internet and VoIP services, which we refer to collectively as our airtime services, we offer communication services using global VSAT service, 5G/LTE cellular service, and shore-based Wi-Fi, which are marketed under the KVH ONE hybrid network brand.
For mobile access to the Internet and VoIP services, which we refer to collectively as our airtime services, we offer communication services using global satellite service (including Ku-band VSAT using the SES HTS network along with Starlink, Eutelsat OneWeb, Iridium, Inmarsat and other satellite services), 5G/LTE cellular service, and shore-based Wi-Fi access, which are marketed under the KVH ONE hybrid network brand.
We also register our trademarks in the United States and other key international markets where we do business. Our patents will expire at various dates between May 2031 and May 2037. We enter into confidentiality agreements with our consultants, key employees, and sales representatives and maintain controls over access to and distribution of our technology, software, and other proprietary information.
Our patents will expire at various dates between May 2031 and May 2032. We enter into confidentiality agreements with our consultants, key employees, and sales representatives and maintain controls over access to and distribution of our technology, software, and other proprietary information.
We are winding down our product manufacturing operations and currently plan to discontinue the majority of our capital-intensive manufacturing activities by the end of 2025. We are headquartered in Middletown, Rhode Island, with active operations in Denmark, the United Kingdom, the Philippines, and Singapore.
We are winding down our product manufacturing operations and currently plan to discontinue substantially all manufacturing activities by the end of 2026. We are headquartered in Middletown, Rhode Island and plan to migrate to Bristol, Rhode Island in the spring of 2026. We have active operations in Denmark, the United Kingdom, the Philippines, and Singapore.
In addition to satellite communications-based services, we also offer TracNet Coastal, a 5G/cellular and Wi-Fi based solution intended for use along coastal waterways with cellular service offered in more than 130 countries.
We are also an authorized reseller of airtime and terminals supporting the Starlink and Eutelsat OneWeb LEO services. In addition to satellite communications-based services, we also offer TracNet Coastal, a 5G/cellular and Wi-Fi based solution intended for use along coastal waterways with cellular service offered in more than 130 countries.
Unlike our VSAT Broadband airtime, where we control and sell the airtime, we purchase Starlink, OneWeb, Viasat/Inmarsat, Iridium, and regional cellular data directly from these companies and resell it to our customers. Maritime Satellite TV .
Optional routing enables onboard data to switch between our KVH ONE hybrid network services and Iridium Certus. Unlike our VSAT Broadband airtime, where we control and sell the airtime, we purchase Starlink, Eutelsat OneWeb, Viasat/Inmarsat, Iridium, and regional cellular data directly from these companies and resell it to our customers. Maritime Satellite TV .
We manufacture, warehouse and distribute our products at our facilities in Middletown, Rhode Island. Our manufacturing processes are controlled by an ISO 9001:2015-certified quality standards program.
We manufacture, warehouse and distribute our products at our facilities in Middletown, Rhode Island. Our manufacturing processes are controlled by an ISO 9001:2015-certified quality standards program. We plan to migrate to a new facility in Bristol, Rhode Island in the spring of 2026.
Our customer portal, myKVH, is a secure site that offers KVH customers easy access to technical support, product warranty and 4 Table of Contents user documentation, billing, and our system and network tools.
Our customer portal, myKVH, is a secure site that offers KVH customers access to technical support, product warranty and user documentation, billing, and direct access to KVH Manager.
In addition, we have increased our inventory substantially as we ramp up production in order to generate a targeted amount of inventory of maritime satellite connectivity and satellite television terminals to meet anticipated demand, as we intend to cease substantially all manufacturing activity at the Middletown, Rhode Island facility by the end of 2025.
In addition, we have increased our inventory substantially as we ramp up production in order to generate a targeted amount of inventory of maritime satellite connectivity and satellite television terminals to meet anticipated demand, as we are winding down our product manufacturing operations at our Middletown, Rhode Island location.
Historically, we have generated the majority of our marine leisure product revenues during the first and second quarters of each year, and these revenues typically decline in the third and fourth quarters of each year.
Our leisure marine business is highly seasonal, and seasonality can also impact our commercial marine business, particularly in the commercial fishing market. Historically, we have generated the majority of our marine leisure product revenues during the first and second quarters of each year, and these revenues typically decline in the third and fourth quarters of each year.
On the services side of our business, sales of our global high-throughput satellite (HTS) airtime service accounted for 71% and 81% of our consolidated net sales for 2024 and 2023, respectively. Sales of content services accounted for 3% of our consolidated net sales for both 2024 and 2023.
On the services side of our business, sales of our low-earth-orbit (LEO) and global high-throughput satellite (HTS) airtime service accounted for 82% and 80% of our consolidated net sales for 2025 and 2024, respectively. Sales of content services accounted for 4% and 3% of our consolidated net sales for 2025 and 2024, respectively.
We offer a content subscription service, exclusively for the commercial maritime sector, called KVH Link. This service 5 Table of Contents can be delivered either over the air, via the recipient vessel’s satellite communications system, or via encrypted USB drives.
The digital content can be printed onboard or viewed on a TV (via a set-top box), tablet, smartphone, or laptop. We offer a content subscription service, exclusively for the commercial maritime sector, called KVH Link. This service can be delivered either over the air, via the recipient vessel’s satellite communications system, or via encrypted USB drives.
Many of our primary competitors are large, well-established companies, many have substantially greater financial, managerial, technical, marketing, operational, and other resources than we do, and others have entered the markets with significantly disruptive new technology and services. In the marine market for high-speed Internet, voice, fax, and data services, we compete primarily with Viasat/Inmarsat, Marlink, Speedcast, Viasat and Network Innovations.
Many of our primary competitors are large, well-established companies, many have substantially greater financial, managerial, technical, marketing, operational, and other resources than we do, and others have entered the markets with significantly disruptive new technology and services.
These products are compatible with Ku-band SDTV and HDTV programming as well as high-powered regional satellite TV services around the globe, based on the available signal strength and antenna size requirements.
Our family of marine TracVision 7 Table of Contents products includes the 60 cm diameter TracVision TV6, 81 cm TracVision TV8, and 1 meter TracVision TV10. These products are compatible with Ku-band SDTV and HDTV programming as well as high-powered regional satellite TV services around the globe, based on the available signal strength and antenna size requirements.
Our KVH Media Group, which is based in the United Kingdom, distributes commercially licensed entertainment, including movies, television programming, news, music and other crew-focused content to customers in the commercial maritime sector. Sales from KVH Media Group are included as part of content service sales.
Content Services We offer a variety of value-added services to our maritime customers. The vast majority of these value-added services are subscription-based. 5 Table of Contents Our KVH Media Group, which is based in the United Kingdom, distributes commercially licensed entertainment, including movies, television programming, news, music and other crew-focused content to customers in the commercial maritime sector.
In the marine market for voice, fax, data, and Internet communications equipment, we compete primarily with Intellian and Cobham satcom with regard to parabolic antennas. The emergence of ESA terminals from companies like Starlink has significantly increased competitive pressure on traditional parabolic antennas. In the markets for media content, we compete primarily with Swank Motion Pictures, Baze Technology, and PressReader.
In addition, we face some competition from providers of low-speed data services, which include Viasat/Inmarsat and Iridium. In the marine market for voice, fax, data, and Internet communications equipment, we compete primarily with Intellian and Cobham with regard to parabolic antennas. The emergence of ESA terminals from companies like Starlink has significantly increased competitive pressure on traditional parabolic antennas.
OneWeb’s network compromises more than 630 satellites in low earth orbit that can deliver enterprise-grade broadband connectivity services. Eutelsat OneWeb is expanding its network and ground infrastructure to meet maritime's global requirements.
Eutelsat OneWeb’s network compromises more than 630 satellites in low earth orbit that can deliver enterprise-grade broadband connectivity services. Eutelsat OneWeb is expanding its network and ground infrastructure to meet maritime's global requirements. We currently source Eutelsat OneWeb-compatible flat-panel terminals from a third party, and we commenced shipments of terminals and service activations in the second quarter of 2025.
Although we currently plan to continue to conduct maintenance, service, warehousing, shipping and receiving activities at the Middletown, Rhode Island location, we are assessing alternate locations where we can provide ongoing support. Airtime Services We provide subscription plans that enable customers to obtain Internet and VoIP airtime services.
We also plan to continue to conduct maintenance, service, warehousing, shipping and receiving activities at the Middletown, Rhode Island location until our anticipated relocation in the spring of 2026. Airtime Services We provide subscription plans that enable customers to obtain Internet and VoIP airtime services.
In the marine market for satellite TV equipment, we compete primarily with Intellian, Cobham satcom and Raymarine (Intellian-made). Traditional satellite TV products and services in the marine market also face pressure from the rising use of streaming services, which are more practical in marine applications following the launch of high-speed, lower-cost LEO services.
Traditional satellite TV products and services in the marine market also face pressure from the rising use of streaming services, which are more practical in marine applications following the launch of high-speed, lower-cost LEO services. In the markets for airtime services, the principal competitive factors are price, geographic coverage, data speed, and value-added services.
We currently offer three terminals compatible with Iridium Certus service – the Thales VesseLINK 200 (data speeds as fast as 176/176 Kbps down/up), the Thales VesseLINK 700 (data speeds as fast as 704/352 Kbps down/up), and the Cobham Sailor 4300 (data speeds as fast as 704/176 Kbps down/up).
We also offer Iridium Certus, a next-generation L-band solution providing pole-to-pole global coverage. We currently offer two terminals compatible with Iridium Certus service – the Thales VesseLINK 200 (data speeds as fast as 176/176 Kbps down/up), and the Thales VesseLINK 700 (data speeds as fast as 704/352 Kbps down/up).
For movie and television content, we are an approved distributor of licensed content for certain Hollywood, Bollywood, and independent studios worldwide. Our "news from home" digital newspaper service includes more than 100 daily newspapers in more than 20 languages. The digital content can be printed onboard or viewed on a TV (via a set-top box), tablet, smartphone, or laptop.
Sales from KVH Media Group are included as part of content service sales. For movie and television content, we are an approved distributor of licensed content for certain Hollywood, Bollywood, and independent studios worldwide. Our "news from home" digital newspaper service includes more than 100 daily newspapers in more than 20 languages.
During the third quarter of 2024, we commenced our plan to sell the warehouse building and surface parking lot located at 75 Enterprise Center in Middletown, Rhode Island.
During the third quarter of 2024, we commenced our plan to sell the warehouse building and surface parking lot located at 75 Enterprise Center in Middletown, Rhode Island. The sale was completed in September 2025. The Company also entered into an agreement with the buyer to lease this property until the end of March 2026.
In September 2023, we became an authorized hardware and airtime reseller for Starlink. We currently offer Starlink on its own and also as a KVH ONE global network companion service.
Satellite Internet and Phone. In March 2023, we began selling Starlink terminals as companion terminals for new and existing installations of our own TracNet and TracPhone systems. In September 2023, we became an authorized hardware and airtime reseller for Starlink. We currently offer Starlink as a stand-alone service and also as a KVH ONE global network companion service.
When appropriate, we seek to file patent applications to protect innovations arising from our research, development and design activities. As of December 31, 2024, our patent portfolio included approximately seven U.S. and foreign issued patents, including utility patents, design patents and others and one pending U.S. patent application.
When appropriate, we seek to file patent applications to protect innovations arising from our research, development and design activities. As of December 31, 2025, our patent portfolio included approximately three U.S. issued utility patents. We also register our trademarks in the United States and other key international markets where we do business.
We expect to continue to facilitate customer transition to third-party hardware products compatible with our mobile satellite communications services. Our leisure marine business is highly seasonal, and seasonality can also impact our commercial marine business.
We expect to continue to facilitate customer transition to third-party hardware products compatible with our mobile satellite communications services and our LEO offerings, including Starlink and Eutelsat OneWeb.
As noted above, we are winding down our product manufacturing operations at our Middletown, Rhode Island location and ceased substantial manufacturing activity in late 2024. We expect to continue to facilitate customer transition to third-party hardware products compatible with our mobile satellite communications services.
We plan to migrate to a new facility in Bristol, Rhode Island in the spring of 2026 and intend to cease substantially all manufacturing activity by the end of 2026. We expect to continue to facilitate customer transition to third-party hardware products compatible with our mobile satellite communications services.
Employee Engagement We believe we generally have strong relationships with our workforce. In 2024, our global turnover rate was 37%, which was primarily driven by our reduction-in-force cost savings initiative. Excluding the effect of this reduction-in-force, our global turnover rate was 14%.
Employee Engagement We believe we generally have strong relationships with our workforce. In 2025, our global turnover rate was 8.3%. There was no executive leadership turnover for 2025. The average length of employee service is 9.75 years.
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In addition, we offer a 37 cm parabolic VSAT-only TracPhone V30 antenna and support our legacy family of other VSAT-only terminals marketed under the TracPhone brand and using our global HTS network. We are also an authorized reseller of airtime and terminals supporting the Starlink and OneWeb LEO services.
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We expect that we will continue our product manufacturing activities in order to generate a targeted amount of inventory of maritime satellite connectivity and satellite television terminals to meet anticipated demand and that we will cease substantially all manufacturing activity by the end of 2026.
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We significantly scaled back our manufacturing activity by the end of the second quarter of 2024 and reduced our manufacturing headcount and capacity to a level intended to enable us to meet lower anticipated demand through 2025 and beyond. We expect to continue to facilitate customer transition to third-party hardware products compatible with our mobile satellite communications services.
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This wind-down has been extended because our reduced workforce has been prioritizing fulfilling LEO product orders and refurbishing AgilePlans terminals over manufacturing new units. We expect to continue to facilitate customer transition to third-party hardware products compatible with our mobile satellite communications services.
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AgilePlans customers may also choose to add a Starlink, OneWeb, or TracNet Coastal terminal and data plan to a new or existing AgilePlans subscription.
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These tools and functionalities also support and help customers manage KVH’s LEO offerings. We are a Starlink Authorized Tier 1 reseller.
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We offer AgilePlans customers a variety of airtime data plans with varying data allotments and fixed data usage levels with our exclusive dual-channel configuration, with dual channel airtime plans delivering both a high-speed channel and an unlimited use data channel.
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We offer a suite of terminals, which can be activated on either Global Priority, suitable for maritime and global connectivity, with coverage across all Starlink service areas, or Local Priority service, suitable for fixed and mobile businesses on land and inland waterways, including lakes and rivers.
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Network and bandwidth configuration are controlled via onboard services and both cloud-based and mobile applications. Content Services We offer a variety of value-added services to our maritime customers. The vast majority of these value-added services are subscription-based.
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In addition to airtime activation, self-service online activations for our Starlink service are available for new customers via a link and for existing customers through their KVH Manager portal. Our Eutelsat OneWeb service operates on Eutelsat OneWeb’s near-global network, providing high-performance, low-latency service with a choice of Intellian compact or enterprise terminals. Plans range from 50 GB to 15 TB.
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We also offer Iridium Certus, a next-generation L-band solution providing pole-to-pole global coverage.
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Network and bandwidth configuration are controlled via onboard services and both cloud-based and mobile applications. As part of this suite of tools, we have added the CommBox Edge Core, a communication gateway and Wi-Fi router for leisure and light commercial vessels that need reliable network management, easy-to-deploy Wi-Fi, enhanced security, and a broad license and feature set.
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Optional routing enables onboard data to switch between our KVH ONE hybrid network services and Iridium Certus. In addition to our TracNet hybrid and TracPhone VSAT-only products and associated airtime services service, we also offer the Viasat/Inmarsat-compatible TracPhone FleetOne product that provides in-motion access to global satellite communications.
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As noted above, we are winding down our product manufacturing operations at our Middletown, Rhode Island location. We plan to migrate to a new facility in Bristol, Rhode Island in the spring of 2026 and intend to cease substantially all manufacturing activity by the end of 2026.
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The FleetOne terminals are manufactured by Cobham and distributed on an original equipment manufacturer basis by us in North America under our TracPhone brand and distributed in other markets on a non-exclusive basis. In March 2023, we began selling Starlink terminals as companion terminals for new TracNet installations as well as for existing TracNet and TracPhone systems.
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The new facility is currently scheduled to be audited for its ISO 9001:2015-certification in the second quarter of 2026.
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We currently plan to source Eutelsat OneWeb-compatible flat-panel terminals from a third party, and we expect to commence shipments of terminals and service activations in the second quarter of 2025.
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In the markets for media content, we compete primarily with Swank Motion Pictures, FrontM, Baze Technology, and PressReader. In the marine market for satellite TV equipment, we compete primarily with Intellian, Cobham satcom and Raymarine (Intellian-made).
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Our family of marine TracVision products includes the 37 cm diameter TracVision TV3, 45 cm diameter TracVision TV5, 60 cm diameter TracVision TV6, 81 cm TracVision TV8, and 1 meter TracVision TV10.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur results of operations can fluctuate for many reasons, including the impact of competition and resulting changes in demand for our products and services; delays in order fulfillment, including as a result of shortages of components and raw materials; the mix of services and products we sell, including the mix of fixed rate and metered contracts for airtime services; our ability to manufacture, test and deliver products in a timely and cost-effective manner; the timing of new service and product introductions by us or our competitors; the scope and success of our investments in research and development; expenses incurred in pursuing acquisitions and investments; expenses incurred in expanding, maintaining, or improving our global HTS network; market and competitive pricing pressures; unanticipated charges or expenses, such as the aggregate $6.0 million impairment charges to goodwill and long-lived assets we recorded in the third quarter of 2023; the $1.1 million impairment charges to long-lived assets we recorded in the third quarter of 2024; the $5.2 million charge related to an inventory write-down, the $3.6 million provision for excess purchase order obligations and the $2.1 million charge for the discontinuation of a project for implementing a new manufacturing-centric accounting system that we recorded in the fourth quarter of 2023; expenses incurred in responding to stockholder activism; general economic climate; seasonality of pleasure boat and recreational vehicle usage; and the impact of supply chain disruptions.
Biggest changeOur results of operations can fluctuate for many reasons, including the impact of competition and resulting changes in demand for our products and services; the impact of tariffs on goods and services we purchase; delays in order fulfillment, including as a result of shortages of components and raw materials; the mix of services and products we sell, including the mix of fixed rate and metered contracts for airtime services; our ability to manufacture, test and deliver products in a timely and cost-effective manner; the timing of new service and product introductions by us or our competitors; the scope and success of our investments in research and development; the expenses associated with relocating our facilities from Middletown, Rhode Island to Bristol, Rhode Island; expenses incurred in pursuing acquisitions and investments; expenses incurred in expanding, maintaining, or improving our global HTS network; market and competitive pricing pressures; unanticipated charges or expenses, such as the aggregate $6.0 million impairment charges to goodwill and long-lived assets we recorded in the third quarter of 2023; the $5.5 million charge related to an inventory write-down in the third quarter of 2025; the $5.2 million charge related to an inventory write-down in the fourth quarter of 2023; the $3.6 million provision for excess purchase order obligations; the $2.1 million charge for the discontinuation of a project for implementing a new manufacturing-centric accounting system that we recorded in the fourth quarter of 2023 and the $1.1 million impairment charges to long-lived assets we recorded in the third quarter of 2024; expenses incurred in responding to stockholder activism; general economic climate; seasonality of pleasure boat and recreational vehicle usage; and the impact of supply chain disruptions.
Some of our competitors are well-established companies that have substantially greater financial, managerial, technical, marketing, personnel, and other resources than we do, which may help them to compete more effectively against us. We depend on sole or limited source suppliers, and any disruption in supply could impair our ability to deliver our products on time or at expected cost.
Some of our competitors are well-established companies that have substantially greater financial, managerial, technical, marketing, personnel, and other resources than we do, which may help them to compete more effectively against us. We depend on sole or limited source suppliers, and any disruption in supply could impair our ability to deliver products on time or at expected cost.
For example, in February 2024 we announced a staged wind-down of our manufacturing operations and a related reduction-in-force of 75 employees, as a result of which we have incurred aggregate charges of approximately $14.8 million, consisting of a $5.2 million non-cash charge related to an inventory write-down, a $3.6 million provision for excess purchase order obligations, approximately $3.9 million of severance charges, and a $2.1 million charge for the discontinuation of a project for implementing a new manufacturing-centric accounting system.
For example, in February 2024 we announced a staged wind-down of our manufacturing operations and a related reduction-in-force of 75 employees, as a result of which we have incurred aggregate charges of approximately $14.8 million, consisting of a $5.2 million non-cash charge related to an inventory write-down in 2023, approximately $3.9 million of severance charges, a $3.6 million provision for excess purchase order obligations, and a $2.1 million charge for the discontinuation of a project for implementing a new manufacturing-centric accounting system.
If we are unable to sustain growth, it would have a material adverse effect on our revenue, profitability, and cash flow. In the marine market for high-speed Internet, voice, and data services, we have historically competed primarily with Marlink, Speedcast, Viasat/Inmarsat, and Network Innovations, along with smaller, single-hub regional services to deliver VSAT service.
If we are unable to sustain growth, it would have a material adverse effect on our revenue, profitability, and cash flow. In the marine market for high-speed Internet, voice, and data services, we have historically competed primarily with Marlink, Navarino, Speedcast, Viasat/Inmarsat, and Network Innovations, along with smaller, single-hub regional services to deliver VSAT service.
If we are unable to reach economical agreements with third-party satellite providers to support our global satellite services and its technology or if transponder capacity is unavailable to meet growing demand in a given region, our ability to provide airtime services will be at risk and could reduce the attractiveness of our products and services.
If we are unable to reach economical agreements with third-party satellite providers to support our global satellite services and its technology or if transponder capacity is unavailable to meet demand in a given region, our ability to provide airtime services will be at risk and could reduce the attractiveness of our products and services.
Further, some of the companies that we depend on to supply us with capacity on satellite communications networks may vertically integrate by introducing their own products and services to compete with ours, which might motivate them to stop providing satellite network capacity to us, or to make it available on less favorable terms.
Some of the companies that we depend on to supply us with capacity on satellite communications networks may vertically integrate by introducing their own products and services to compete with ours, which might motivate them to stop providing satellite network capacity to us, or to make it available on less favorable terms.
If we were to experience a resurgence in demand for our products, we may be unable to restart internal production or to engage a third party to reliably manufacture and deliver them on time and at an affordable cost.
If we were to experience an unexpected resurgence in demand for our products, we may be unable to restart internal production or to engage a third party to reliably manufacture and deliver them on time and at an affordable cost.
Any failure on the part of third-party service providers to achieve or maintain expected performance levels, stability, security, or adequate data service coverage in key regions could harm our relationships with our customers, result in claims for credits or damages, damage our reputation, significantly reduce customer demand for our solution and seriously harm our financial condition and operating results.
Any failure on the part of third-party service providers to achieve or maintain expected performance levels, stability, security, or adequate data service coverage in key regions could harm our relationships with our customers, result in claims for credits or damages, damage our reputation, significantly reduce customer demand for our solutions and seriously harm our financial condition and operating results.
To manage changes in our business effectively, we must, among other things, successfully complete the wind-down of our manufacturing operations, including correctly estimating the number of units to produce; secure appropriate satellite capacity to match demand for airtime services; manage our inventory more effectively, particularly in light of the substantial provision for excess and obsolete inventory that we recorded in the fourth quarter of 2023; effectively manage our working capital; ensure robust cybersecurity protection of KVH and customer data and systems; and ensure that our procedures and internal controls are revised and updated to remain effective for our smaller workforce and the reduced size and scale of our business operations.
To manage changes in our business effectively, we must, among other things, successfully complete the wind-down of our manufacturing operations, including correctly estimating the number of units to produce; secure appropriate satellite capacity to match demand for airtime services; manage our inventory effectively, particularly in light of the substantial provision for excess and obsolete inventory that we recorded in the third quarter of 2025 and the fourth quarter of 2023; effectively manage our working capital; ensure robust cybersecurity protection of KVH and customer data and systems; and ensure that our procedures and internal controls are revised and updated to remain effective for our smaller workforce and the reduced size and scale of our business operations.
These laws and regulations are continually changing, making compliance complex. We incur significant costs identifying and maintaining compliance with applicable licensing and regulatory requirements. Our training and compliance programs and our other internal control policies 22 Table of Contents may be insufficient to protect us from acts committed by our employees, agents or third-party contractors.
These laws and regulations are continually changing, making compliance complex. We incur significant costs identifying and maintaining compliance with 23 Table of Contents applicable licensing and regulatory requirements. Our training and compliance programs and our other internal control policies may be insufficient to protect us from acts committed by our employees, agents or third-party contractors.
Although we are adapting to this transition by becoming an authorized reseller of Starlink, OneWeb, and cellular data services and related products, there can be no assurance that we will generate the same level of revenue or gross margin from these sources that we derived from sales of VSAT airtime and related products.
Although we are adapting to this transition by becoming an authorized reseller of Starlink, Eutelsat OneWeb, and cellular data services and related products, there can be no assurance that we will generate the same level of revenue or gross margin from these sources that we previously derived from sales of VSAT airtime and related products.
Like others in our industry, we are experiencing reduced demand for our traditional satellite communications services and products, which we expect will continue.
Like others in our industry, we are experiencing significantly reduced demand for our traditional satellite communications services and products, which we expect will continue.
Intelsat and SKY Perfect JSAT currently provide the satellite capacity to support our global high-throughput satellite (HTS) broadband service, our TracNet H-series and TracPhone V-HTS series products and third-party products compatible with our services. Vodafone currently provides the 5G/LTE services used by our TracNet H-series terminals and compatible third-party products to provide cellular service in 150+ countries.
SES and SKY Perfect JSAT currently provide the satellite capacity to support our global high-throughput satellite (HTS) broadband service, our TracNet H-series and TracPhone V-HTS series products and third-party products compatible with our services. Vodafone currently provides the 5G/LTE services used by our TracNet H-series terminals and compatible third-party products to provide cellular service in 150+ countries.
Ongoing or new trade wars or other governmental action related to tariffs or international trade agreements or policies could reduce demand for our services and products, increase our costs, reduce our profitability, adversely impact our supply chain or otherwise have a material adverse effect on our business and results of operations.
Ongoing or new trade wars or other governmental action related to tariffs or international trade agreements or policies could substantially reduce demand for our services and products, increase our costs, materially reduce our profitability, adversely impact our supply chain or otherwise have a material adverse effect on our business and results of operations.
The traditional geosynchronous satellite communications industry is experiencing significant disruption arising from customers’ rapid transition to less expensive LEO services, including Starlink, as well as increased reliance on other forms of data transmission, including Wi-Fi and cellular data services.
The traditional geosynchronous satellite communications industry is experiencing significant disruption arising from customers’ rapid transition to less expensive LEO services, including Starlink and Eutelsat OneWeb, as well as increased reliance on other forms of data transmission, including Wi-Fi and cellular data services.
For our TracNet Coastal products launched in December 2024, we purchase 5G/LTE cellular data from T-Mobile for service in the U.S. and Vodaphone for service globally. Additionally, we purchase cellular data from Flexiroam, a Mobile Virtual Network Operator (MVNO) with connectivity in over 200 countries.
For our TracNet Coastal products launched in December 2024, we purchase 5G/LTE cellular data from T-Mobile for service in the U.S. and Vodafone for service globally. Additionally, we purchase cellular data from Flexiroam, a Mobile Virtual Network Operator (MVNO) with connectivity in over 200 countries.
Although our leisure business accounts for less than 15% of our total revenue, competition from Starlink from various sources has had some adverse impact on our commercial business as well, particularly our growth in that segment and our overall VSAT subscriber base.
Although our leisure business accounts for less than 15% of our total revenue, competition from Starlink from various sources has had an adverse impact on our commercial business as well, particularly our growth in that segment and our overall VSAT subscriber base.
In the marine market for satellite TV equipment, we compete primarily with Intellian, Cobham satcom and Raymarine (Intellian-made). In the marine market for two-way communications equipment, we compete primarily with Intellian and Cobham satcom. In the markets for media content, the KVH Media Group competes primarily with Swank Motion Pictures, Baze Technology, and PressReader.
In the marine market for satellite TV equipment, we compete primarily with Intellian, Cobham and Raymarine (Intellian-made). In the marine market for two-way communications equipment, we compete primarily with Intellian and Cobham. In the markets for media content, the KVH Media Group competes primarily with Swank Motion Pictures, Baze Technology, FrontM and PressReader.
Unpredictable and shifting priorities in U.S. trade policy are generating significant turmoil in international trade relations, and it is unclear what future actions governments will or will not take with respect to tariffs or other international trade agreements and policies.
Unpredictable and frequently shifting priorities in U.S. trade policy are generating significant turmoil in international trade relations, and it is unclear what actions governments will or will not take with respect to tariffs or other international trade agreements and policies.
Further, our approach to acquisitions and strategic relationships may involve a number of special financial and business risks, such as entry into new and unfamiliar lines of business or markets, which may present challenges or risks that we did not anticipate; entry into new or unfamiliar geographic regions, including exposure to additional tax and regulatory regimes; increased expenses associated with the amortization of acquired intangible assets; increased exposure to fluctuations in foreign currency exchange rates; charges related to any abandoned acquisition; diversion of our management’s time, attention, and resources; loss of key personnel; increased costs to improve or coordinate managerial, operational, financial, and administrative systems, including internal control over financial reporting; dilutive issuances of equity securities; the assumption of legal liabilities; and losses arising from impairment charges associated with goodwill or intangible assets.
Further, our approach to acquisitions and strategic relationships may involve a number of special financial and business risks, such as entry into new and unfamiliar lines of business or markets, which may present challenges or risks that we did not anticipate; entry into new or unfamiliar geographic regions, including exposure to additional tax and regulatory regimes; increased expenses associated with the amortization of acquired intangible assets; increased exposure to fluctuations in foreign currency exchange rates; charges related to any abandoned acquisition; diversion of our management’s time, attention, and resources; loss of key personnel; loss or termination of acquired contracts; increased reliance on third parties; increased costs to improve or coordinate managerial, operational, financial, and administrative systems, including internal control over financial reporting; dilutive issuances of equity securities; the assumption of legal liabilities; and losses arising from impairment charges associated with goodwill or intangible assets.
While we did increase our subscriber count in the second, third and fourth quarters of 2024, spurred by an increase in subscribers for Starlink service provided by KVH, the total number of our subscribers declined in the third and fourth quarter of 2023 and the first quarter of 2024.
While we did increase our subscriber count in every quarter of 2025 and the second, third and fourth quarters of 2024, spurred by an increase in subscribers for Starlink service provided by KVH, the total number of our subscribers declined in the third and fourth quarter of 2023 and the first quarter of 2024.
Although we take certain protective measures and endeavor to modify them as we believe circumstances warrant, invasive technologies and techniques continue to evolve rapidly, and increasingly sophisticated hacking organizations are targeting business systems.
Although we take certain protective measures and endeavor to modify them as we believe circumstances warrant, invasive technologies and techniques continue to evolve rapidly, and increasingly sophisticated hacking organizations are targeting business systems, including ours.
Although KVH is a tier 1 reseller of Starlink terminals and services, we continue to face competitive challenges both from Starlink direct sales as well as from an expanding network of other Starlink retailers.
Although KVH is a Tier 1 reseller of Starlink terminals and services, we continue to face competitive challenges both from Starlink direct sales as well as from an expanding network of other Starlink resellers.
In addition, the unexpected failure of a satellite could disrupt the availability of programming and services, which could reduce the demand for, or customer satisfaction with, the services or products we offer. We depend on cloud-based data services operated by third parties, and any disruption in the operation of these services could harm our business.
In addition, the unexpected failure of a satellite could disrupt the availability of programming and services, which could reduce the demand for, or customer satisfaction with, the services or products we offer. 20 Table of Contents We depend on cloud-based data services operated by third parties, and any disruption in the operation of these services could harm our business.
For example, in 2023, we recorded a $5.2 million inventory write-down charge and a $3.6 million charge for excess purchase order obligations, both relating to the reduced demand for our hardware products, which led to the staged wind-down of our manufacturing activities at our facility in Middletown, Rhode Island that we began in 2024.
In 2023, we recorded a $5.2 million inventory write-down charge and a $3.6 million charge for 19 Table of Contents excess purchase order obligations, both relating to the reduced demand for our hardware products, which led to the staged wind-down of our manufacturing activities at our facility in Middletown, Rhode Island that we began in 2024.
Risks related to government regulation Our international operations complicate our business and require us to comply with multiple regulatory environments. Historically, sales to customers outside the United States have accounted for an increasingly significant portion of our net sales. We derived 73% and 68% of our revenues in 2024 and 2023, respectively, from sales to these foreign customers.
Risks related to government regulation Our international operations complicate our business and require us to comply with multiple regulatory environments. Historically, sales to customers outside the United States have accounted for an increasingly significant portion of our net sales. We derived 78% and 73% of our revenues in 2025 and 2024, respectively, from sales to these foreign customers.
Historically, we have generated the majority of our leisure marine product revenues during the first and second quarters of each year, and these revenues typically decline in the third and fourth quarters of each year, compared to the first two quarters.
Historically, we have generated the majority of our leisure marine product revenues during the first and second quarters of each year, and these revenues typically decline in the third and fourth quarters of each year, 17 Table of Contents compared to the first two quarters.
The protective measures on which we rely may be inadequate to prevent or detect all material cybersecurity breaches or determine the extent of any material breach, and there can be no assurance that material undetected breaches have not already occurred.
The protective measures on which we rely, including training of our personnel, may be inadequate to prevent or detect all material cybersecurity breaches or determine the extent of any material breach, and there can be no assurance that material undetected breaches have not already occurred.
These factors vary in intensity by region. For example, the war in the Middle East has resulted in periodic disruptions to global shipping, which could intensify and result in significant delays in shipments of products or supplies, materially increased shipping costs and loss of revenues.
These factors vary in intensity by region. For example, conflict in the Middle East 21 Table of Contents has resulted in periodic disruptions to global shipping, which could intensify and result in significant delays in shipments of products or supplies, materially increased shipping costs and loss of revenues.
Even if available, delays caused by switching our systems to another 19 Table of Contents service provider, if available, and qualifying this new service provider could materially harm our customer relationships, business, financial condition, and operating results.
Even if available, delays caused by switching our systems to another service provider and qualifying this new service provider could materially harm our customer relationships, business, financial condition, and operating results.
Our results of operations are adversely affected by unseasonably cold weather, prolonged winter conditions, disasters or similar events. Our leisure marine business is highly seasonal, and seasonality can also impact our commercial marine business.
Our results of operations are adversely affected by unseasonably cold weather, prolonged winter conditions, disasters or similar events. Our leisure marine business is highly seasonal, and seasonality can also impact our commercial marine business, particularly in the commercial fishing market.
Our stock price has historically been volatile. During the period from January 1, 2020 to December 31, 2024, the trading price of our common stock ranged from $4.17 to $15.29.
Our stock price has historically been volatile. During the period from January 1, 2021 to December 31, 2025, the trading price of our common stock ranged from $4.17 to $15.29.
If we are unable to efficiently operate both VSAT and LEO services and cost-effectively manage the ongoing transition to the latter, the expenses we incur may exceed associated revenues and thereby increase our losses. Fluctuations in our quarterly net sales and results of operations could depress the market price of our common stock.
If we are unable to efficiently operate both VSAT and LEO services and cost-effectively manage the ongoing transition to the latter, the expenses we incur will continue to exceed our revenues and thereby increase our losses. 14 Table of Contents Fluctuations in our quarterly net sales and results of operations could depress the market price of our common stock.
Additionally, we are facing meaningful competition from new LEO-focused providers such as SpaceX’s Starlink and an emerging group of smaller providers, such as Clarus, Pivotel and Elcome. We also face competition from providers of low-speed data services, which include Viasat/Inmarsat and Iridium Satellite LLC.
Additionally, we are facing meaningful competition from new LEO-focused providers such as SpaceX’s Starlink and Eutelsat OneWeb and an emerging group of smaller providers, such as Clarus, Pivotel, Elcome and Station Satcom. We also face competition from providers of low-speed data services, which include Viasat/Inmarsat and Iridium.
This multi-year strategy entails significant risks, including the loss of competitive differentiation as a leading manufacturer of award-winning products, the potentially irreversible loss of manufacturing expertise and know-how, increased dependence on third-party manufacturers and suppliers, the loss of control over technological innovations and improvements, significantly lower profit margins on third-party product resales, potential technological incompatibility with third-party hardware, potential additional significant provisions for excess and obsolete inventory and other charges, unanticipated expenses, and increased competition for service customers from product manufacturers.
This multi-year strategy entails significant risks, including the loss of competitive differentiation as a leading manufacturer of award-winning products, the potentially irreversible loss of manufacturing expertise and know-how, increased dependence on third-party manufacturers and suppliers, the loss of control over technological innovations and improvements, significantly lower profit margins on third-party product resales, potential technological incompatibility with third-party hardware, potential additional significant provisions for excess and obsolete inventory and other charges (such as our $5.5 million charge related to an inventory write-down in the third quarter of 2025), unanticipated expenses, and increased competition for service customers from product manufacturers.
We evaluate opportunities to acquire other businesses and pursue other strategic relationships as they arise. The expenses we incur evaluating and pursuing acquisitions and strategic relationships could have a material adverse effect on our results of operations. If we acquire a business, we may be unable to manage it profitably or successfully integrate its operations with our own.
The expenses we incur evaluating and pursuing acquisitions and strategic relationships could have a material adverse effect on our results of operations. If we acquire a business, we may be unable to manage it profitably or successfully integrate its operations with our own.
The U.S. has imposed significant tariffs on a wide range of foreign goods and may continue to increase tariffs or impose new ones, and certain foreign governments have retaliated and may continue to do so. We derive a majority of our revenues from international sales, which makes us especially vulnerable to increased tariffs.
The U.S. has imposed, suspended, reinstated, reduced, increased or otherwise modified significant tariffs on a wide range of foreign goods and may continue to do so. Certain foreign governments have retaliated and may continue to do so. We derive a majority of our revenues from international sales, which makes us especially vulnerable to increased tariffs.
Temporary suspensions of our airtime services typically increase in the fourth and first quarters of each year as boats are placed out of service during winter months. Our leisure marine business is also significantly affected by the weather.
Historically, we have generated the majority of our leisure marine service revenues during the second and third quarters of each year, as temporary suspensions of our airtime services typically increase in the fourth and first quarters of each year as boats are placed out of service during winter months. Our leisure marine business is also significantly affected by the weather.
We have foreign offices in Denmark, the United Kingdom, Singapore, Japan, Norway and the Philippines, as well as a subsidiary in Brazil that manages local sales. Nonetheless, substantially all of our operations and a significant number of our key personnel are located in the United States.
We have foreign offices in Denmark, the United Kingdom, Singapore, Japan, Norway, the Philippines and Brazil. Nonetheless, substantially all of our operations and a significant number of our key personnel are located in the United States.
We plan to discontinue our capital-intensive manufacturing activities by the end of 2025 and concentrate instead on growing sales of our multi-orbit, multi-channel, integrated communications solutions, including a transition to rely increasingly, and eventually exclusively, on third-party hardware compatible with our solutions.
We plan to discontinue substantially all manufacturing activities by the end of 2026 and concentrate instead on growing sales of our multi-orbit, multi-channel, integrated communications solutions, including a transition to rely increasingly on third-party hardware compatible with our solutions.
Customers or others with access to our proprietary or licensed media content could copy that content without permission or otherwise violate the terms of our customer agreements, which would adversely affect our revenues and could impair our relationships with content providers.
Our patents will eventually expire and could be challenged, invalidated or circumvented. Customers or others with access to our proprietary or licensed media content could copy that content without permission or otherwise violate the terms of our customer agreements, which would adversely affect our revenues and could impair our relationships with content providers.
Market or competitive changes, such as a continuation of the decline in demand for our hardware products that we experienced in 2023 and 2024, could lead to future charges for excess or obsolete inventory or losses on fixed assets, especially if we are unable to appropriately adjust the supply of material from our vendors, as we were unable to do in 2023.
Market or competitive changes, such as a continuation of the decline in demand for our hardware products that we have been experiencing for the last three years, could lead to additional charges for excess or obsolete inventory or losses on fixed assets, especially if we are unable to appropriately adjust the supply of material from our vendors, as we were unable to do in 2023.
We recorded substantial losses in each of the last five fiscal years (notwithstanding the income we recognized in 2022 from the sale of the inertial navigation business and in 2021 from the forgiveness of a PPP loan).
We recorded substantial losses in each of the last six fiscal years (notwithstanding the income we recognized in 2025 from the sale of 50 Enterprise Center and 75 Enterprise Center, in 2022 from the sale of the inertial navigation business and in 2021 from the forgiveness of a PPP loan).
We currently plan to discontinue the majority of our capital-intensive manufacturing activities by the end of 2025. Some of our production processes are complex, and we may be unable to respond rapidly to the loss of the use of our production facility.
We currently plan to discontinue substantially all manufacturing activities by the end of 2026. Some of our production processes are complex, and we may be unable to respond rapidly to the loss of the use of our production facility.
Moreover, our VSAT services require a separate infrastructure, which generates certain costs that are relatively fixed for a period of time. As customers transition away from VSAT services, our remaining VSAT services become less profitable and may eventually become insufficiently profitable to continue.
Moreover, our VSAT services require a separate infrastructure, which generates certain costs that are relatively fixed for a period of time, including certain minimum annual purchase obligations for VSAT airtime services through 2027. As customers transition away from VSAT services, our remaining VSAT services become less profitable and may eventually become insufficiently profitable to continue, especially considering our fixed commitments.
We currently offer our global HTS VSAT service in the Americas, Europe, the Middle East, Africa, Asia-Pacific, Indian, and Australian and New Zealand waters. We may need to expand capacity in existing coverage areas to support our subscriber base.
We currently offer our global HTS VSAT service and LEO services in the Americas, Europe, the Middle East, Africa, Asia-Pacific, Indian, and Australian and New Zealand waters, as permitted by local regulatory authorities and licensing. We may need to maintain or expand capacity in existing coverage areas to support our subscriber base.
As a result, the computer systems, software and networks that we use are vulnerable to disruption, shutdown, unauthorized access, misuse, erasure, alteration, employee error, phishing, computer viruses, ransomware or other malicious code, and other events that could have a material security impact.
As a result, the computer systems, software and networks that we use are vulnerable to disruption, shutdown, unauthorized access, misuse, erasure, alteration, employee error, phishing, computer viruses, ransomware or other malicious code, and other events that could have a material security impact. Some cyberattacks, such as phishing, exploit human vulnerabilities that cannot necessarily be addressed through protective technology.
Economic and political conditions in the geographic markets we serve have experienced significant turmoil over the last several years, including recent changes in U.S. geopolitical priorities, a potential global recession, slow economic activity, war and refugee crises in the Middle East and Europe, tight credit markets, inflation and deflation concerns, increased interest rates, low consumer confidence, limited capital spending, adverse business conditions, terrorist attacks, changes in government priorities, 20 Table of Contents trade wars, anti-globalization movements, efforts to combat climate change, restrictions on commercial fishing, a government shutdown, gridlock from a divided Congress, and liquidity concerns.
Economic and political conditions in the geographic markets we serve have experienced significant turmoil over the last several years, including significant disruptions to long-standing international relationships, government shutdowns, U.S. military strikes on seafaring vessels, the capture and imprisonment of a foreign head of state, U.S. military operations in international waters, recent and ongoing changes in U.S. geopolitical priorities, a potential global recession, slow economic activity, war and refugee crises in the Middle East and Europe, tight credit markets, inflation and deflation concerns, changing interest rates, low consumer confidence, limited capital spending, adverse business conditions, terrorist attacks, changes in government priorities, trade wars, anti-globalization movements, efforts to combat climate change, restrictions on commercial fishing, gridlock from a polarized Congress, and liquidity concerns.
Our ability to compete depends in part upon our patents, copyrights, source code, and other proprietary technology. The steps we have taken to protect our technology may be inadequate to prevent others from using what we regard as our technology to compete with us. Our patents will eventually expire and could be challenged, invalidated or circumvented.
Our business may suffer if we cannot protect our proprietary technology. Our ability to compete depends in part upon our patents, copyrights, source code, and other proprietary technology. The steps we have taken to protect our technology may be inadequate to prevent others from using what we regard as our technology to compete with us.
We are facing significant competition from companies that seek to compete primarily on price as well as new, emerging LEO services, such as Starlink and OneWeb, as well as future LEO services such as Kuiper, Telesat, and others.
We are facing significant competition from companies that seek to compete primarily on price and from both current LEO services, such as SpaceX's Starlink and Eutelsat OneWeb, and future LEO services, such as Amazon Leo (previously Kuiper), Telesat, and others.
Our net sales or results of operations in a quarter may fall below the expectations of securities analysts or investors. If this occurs, the market price of our common stock could fall significantly.
You should not rely on quarter-to-quarter comparisons of our results of operations as an indication of future performance. Our net sales or results of operations in a quarter may fall below the expectations of securities analysts or investors. If this occurs, the market price of our common stock could fall significantly.
In February 2024, we announced a staged wind-down of our product manufacturing operations, which was driven by reduced demand for our hardware products in the face of intensifying competition.
Risks related to our operations Our planned transition to reliance on third-party hardware products may be unsuccessful. In February 2024, we announced a staged wind-down of our product manufacturing operations, which was driven by reduced demand for our hardware products in the face of intensifying competition.
Any of these changes could be disruptive to our business and could result in significant expense, including losses on any asset disposition or divestiture, accounting charges for any inventory or technology-related write-offs or any workforce reduction costs, such as those described elsewhere in risk factors. We could incur significant transaction costs, including for potential transactions that do not proceed.
Any changes such as these could be disruptive to our business and could result in significant expense, including losses on any asset disposition or divestiture (such as the $0.3 million loss on the sale of 75 Enterprise Center), accounting charges for any inventory or technology-related write-offs or any workforce reduction costs, such as those described elsewhere in risk factors.
For example, President Trump recently imposed tariffs ranging from 10% to 25% on an array of imports from Canada, Mexico and China. In response, these countries have imposed or announced intentions to impose retaliatory tariffs on U.S. exports and other restrictions on trade with the U.S.
For example, President Trump previously imposed tariffs ranging from 10% to 145% on an array of imports from Canada, Mexico, China and other countries. Many of those tariffs remain in place, often with modifications. In response, these countries have imposed or are considering imposing retaliatory tariffs on U.S. exports and other restrictions on trade with the U.S.
Substantial expense or charges resulting from restructuring activities, dispositions of assets or divestitures could adversely affect our results of operations and use of cash in the periods in which we take these actions.
We could incur significant transaction costs, including for potential transactions that do not proceed. Substantial expense or charges resulting from restructuring activities, the relocation of our facilities, dispositions of assets or divestitures could adversely affect our results of operations and use of cash in the periods in which we take these actions.
Recent inflation in the prices of goods and services, including wages, has also hampered our ability to improve profitability. In order to maintain and improve our competitive position, generate revenue and achieve sustained profitability, we must continue to grow our airtime subscriber base, reduce our bandwidth costs, and continue to introduce new and improved solutions.
In order to maintain and improve our competitive position, generate revenue and achieve sustained profitability, we must continue to grow our airtime subscriber base, reduce our bandwidth and other costs, and continue to introduce new and improved solutions.
Competition for senior management is intense, and they could terminate their employment with us at any time. We do not maintain key-person life insurance on any of our personnel.
Competition for senior management is intense, and they could terminate their employment with us at any time. We do not maintain key-person life insurance on any of our personnel. Accordingly, the loss of one or more of our executive officers or key employees could have a material adverse effect on our business.
To the extent that the mix of airtime services we sell shifts away from VSAT services, our gross profit dollars will decline, perhaps materially, if we are unable to significantly increase revenue on non-VSAT airtime services, which will reduce our profitability. Risks related to our operations Our planned transition to reliance on third-party hardware products may be unsuccessful.
To the extent that the mix of airtime services we sell continues to shift away from VSAT services, our gross profit dollars may continue to decline materially if we are unable to significantly increase revenue on non-VSAT airtime services, which will reduce our profitability.
We may be unable to identify or employ qualified personnel for any such position on acceptable terms, if at all. We may also need to pay higher compensation than we expect, which would make it more difficult to achieve our goal of sustained profitability. Future strategic activities could disrupt our business and affect our results of operations.
We may also need to pay higher compensation than we expect, which would make it more difficult to achieve our goal of sustained profitability. Future strategic activities could disrupt our business and affect our results of operations.
If we cannot adjust expenses in response to changes in our operations, our results of operations may be harmed. For example, the relatively fixed costs associated with our manufacturing operations prevented us from reducing those costs quickly in response to recent, rapid reductions in demand, resulting in negative product margins.
For example, the relatively fixed costs associated with our manufacturing operations sometimes prevent us from reducing those costs quickly in response to reductions in demand, resulting in negative product margins.
During the third quarter of 2024, we commenced plans to sell the warehouse building and surface parking lot located at 75 Enterprise Center in Middletown, Rhode Island, and the property, building, improvements, and land located at 50 Enterprise Center in Middletown, Rhode Island. These efforts may not succeed in improving profitability.
In the second quarter of 2025, we completed the sale of the property, building, improvements, and land located at 50 Enterprise Center in Middletown, Rhode Island. These efforts may not succeed in improving profitability.
Changes in foreign currency exchange rates may negatively affect our financial condition and results of operations. We face significant exposure to movements in exchange rates for foreign currencies, particularly the pound sterling and the euro.
Changes in foreign currency exchange rates may negatively affect our financial condition and results of operations. We face significant exposure to movements in exchange rates for foreign currencies, particularly the pound sterling. When the U.S. dollar strengthens against certain foreign currencies, this adversely affects revenues reported in U.S. dollars and decreases the reported value of our assets in foreign countries.
Our efforts may not result in any viable service or product offerings or may result in service or product offerings whose performance, features, price or availability may not be attractive to customers or that we cannot sell profitably. Our business may suffer if we cannot protect our proprietary technology.
The financial resources that we devote to our research and development efforts have been decreasing significantly. Our efforts may not result in any viable service or product offerings or may result in service or product offerings whose performance, features, price or availability may not be attractive to customers or that we cannot sell profitably.
For example, we are facing significant competition from new LEO networks such as Starlink and Eutelsat OneWeb. If we fail to make innovations in our existing services and products, reduce the costs of our services and products, or successfully integrate third-party services and products into our portfolio, our market share will likely continue to decline.
If we fail to make innovations in our existing services and products, reduce the costs of our services and products, or successfully integrate ancillary or third-party services and products into our portfolio to differentiate our service offerings, our market share will likely continue to decline.
While we currently expect to consume all of this pooled data within the contract period, if at any time we were to determine that it is more likely than not that we would not consume a portion of the pooled data, we may expense the applicable portion at the time of each such determination. 16 Table of Contents Our ability to compete in the maritime airtime services market will be impaired if we are unable to provide sufficient service capacity to meet customer demand.
While we currently expect to consume all of this pooled data within the contract period, if at any time we were to determine that it is more likely than not that we would not consume a portion of the pooled data, we would expect to expense the applicable portion at the time of each such determination.
We also have an arrangement with Iridium for additional satellite communications services that we make available to our customers as a backup option to provide communications redundancy with our primary service offerings. In addition, we have agreements with various teleports and Internet service providers around the globe to support our global HTS broadband service.
We also have an arrangement with Iridium for additional satellite communications services for handheld devices, as well as services that we make available to our customers as a backup option to provide communications redundancy with our primary service offerings.
Starlink provides the data services for Starlink LEO services, while Eutelsat OneWeb provides the data connectivity for OneWeb LEO service, which we began providing for maritime use in the January 2025. We rely on Viasat/Inmarsat for satellite communications services for our FleetBroadband-compatible and FleetOne-compatible products.
SpaceX's Starlink provides the data services for Starlink LEO services, while Eutelsat OneWeb and SES provide the data connectivity for Eutelsat OneWeb LEO services, which we began providing for maritime use in January 2025.
When the U.S. dollar strengthens against certain foreign currencies, this adversely affects revenues reported in U.S. dollars and decreases the reported value of our assets in foreign countries. Conversely, when the U.S. dollar weakens against certain foreign currencies, this positively affects revenues reported in U.S. dollars and increases the reported value of our assets in foreign countries.
Conversely, when the U.S. dollar weakens against certain foreign currencies, this positively affects revenues reported in U.S. dollars and increases the reported value of our assets in foreign countries. We also have intragroup receivables and liabilities, such as loans, that can generate significant foreign currency effects.
It is unclear what further action the presidential administration will take with respect to tariffs.
It is unclear what further action the presidential administration will take with respect to tariffs, but future tariff rates may be substantially higher than historical averages.
In addition, lead times for certain products or components can increase significantly due to imbalances in overall market supply and demand.
In addition, lead times for certain products or components can increase significantly due to imbalances in overall market supply and demand. This, in turn, could limit our ability to satisfy demand for the products we sell and could result in the cancellation of customer orders.
In the third quarter of 2024, we received and processed the anticipated service downgrade request from the U.S. Coast Guard, which reduces anticipated revenue from this customer for 2025 through 2027 by approximately 95%. As a result, we expect to generate substantially less revenue from the U.S. Coast Guard. For example, revenue from the U.S.
The majority of our customers have no long-term commitment and can switch providers without penalty. For example, AgilePlans customers are on month-to-month agreements. In the third quarter of 2024, we received and processed the anticipated service downgrade request from the U.S. Coast Guard, which reduces anticipated revenue from this customer for 2025 through 2027 by approximately 95%.
Competition from these sources increased dramatically in 2023 and 2024 and continues in 2025, leading to material 17 Table of Contents reductions in our VSAT subscriber base.
Competition from these sources increased dramatically in the last three years and continues in 2026, leading to material and ongoing reductions in our VSAT subscriber base.
We may also choose to dispose of assets or make strategic divestitures, such as the sale of our inertial navigation business in August 2022.
We may also choose to dispose of assets or make strategic divestitures, such as the sale of our inertial navigation business in August 2022. In the third quarter of 2025, we completed the sale of the warehouse building and surface parking lot located at 75 Enterprise Center in Middletown, Rhode Island.
We also have intragroup receivables and liabilities, such as loans, that can generate significant foreign currency effects. Changes in exchange rates, particularly the U.S. dollar against the pound sterling, could lead to the recognition of unrealized foreign exchange losses.
Changes in exchange rates, particularly the U.S. dollar against the pound sterling, could lead to the recognition of unrealized foreign exchange losses.
This, in turn, could limit our ability to satisfy demand for the products we sell and could result in the cancellation of customer orders. 18 Table of Contents Changes in the competitive environment, customer demand, supply chain issues, and the transition to new products may require inventory write-downs and/or the disposal of AgilePlans revenue-generating fixed assets.
Changes in the competitive environment, customer demand, supply chain issues, and the transition to new products may require inventory write-downs and/or the disposal of AgilePlans revenue-generating fixed assets. From time to time, we have recorded significant inventory charges and/or inventory write-offs as a result of substantial declines in customer demand.
These companies may continue to implement price reductions and discounts for both products and services, which have required us to reduce our prices or offer discounts in an effort to prevent erosion of our market share. The majority of our customers have no long-term commitment and can switch providers without penalty. For example, AgilePlans customers are on month-to-month agreements.
These companies may continue to implement price reductions and discounts for both products and services, which have required us to reduce our prices or offer discounts in an effort to mitigate erosion of our market share. Additional price reductions or discounts may cause us to record additional write-downs to the value of our inventory.
During the second quarter of 2024, we prepaid $17.0 million for access to a large block of Starlink Mobile Priority data at favorable rates. If the volume of services sales is not significant enough to consume this pooled data within the applicable period, our gross margins will suffer.
If the volume of services sales is not significant enough to consume this pooled data within the applicable period, our gross margins will suffer.
Although our business was profitable in the fourth quarter of 2022 and second quarter of 2023, we may continue to incur losses as we face increasingly stiff competition. Our recent restructuring, workforce reductions and other cost-reduction measures may be insufficient to offset recent and accelerating reductions in our revenues.
We may continue to incur losses as we face increasingly stiff competition. Our recent restructuring, workforce reductions and other cost-reduction measures may be insufficient to offset reductions in our revenues, which are continuing. Recent inflation in the prices of goods and services, including wages, has also hampered our ability to improve profitability.
Our quarterly net sales and results of operations could continue to vary significantly for various reasons, many of which are 14 Table of Contents outside our control.
Our quarterly net sales and results of operations could continue to vary significantly for various reasons, many of which are outside our control. For example, service sales declined 6.6% in the second quarter of 2025 compared to the second quarter of 2024, and product sales decreased 52.3% in the fourth quarter of 2025 compared to the fourth quarter of 2024.
We cannot predict the timing, duration, or ultimate impact of turmoil on our markets or our suppliers. We expect our business would be adversely impacted by any significant turmoil, to varying degrees and for varying amounts of time, in all our geographic markets.
We expect our business would be adversely impacted by any significant turmoil, to varying degrees and for varying amounts of time, in all our geographic markets. Changes in U.S. trade policy, including the ongoing threat and imposition of significant tariffs and resulting changes in international trade relations, may have a material adverse effect on us.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeCybersecurity We have established procedures to assess, identify, and manage material risks from cybersecurity threats and have integrated those procedures into our overall risk management systems and processes. 23 Table of Contents We have implemented a written information security program ("WISP") to create administrative, technical and physical safeguards at KVH for the protection of confidential information of KVH and its employees and customers and other third parties.
Biggest changeWe have implemented a written information security program ("WISP") to create administrative, technical and physical safeguards at KVH for the protection of confidential information of KVH and its employees and customers and other third parties.
In the case of a security incident, the ISO will report the incident directly to the Chief Executive Officer, Chief Financial Officer, CISO and Senior Vice President, General Counsel & Compliance Officer. The breach will then be communicated to the audit committee dependent on the materiality of the incident.
In the case of a security incident, the ISO will report the incident directly to the Chief Executive Officer, Chief Financial Officer and Senior Vice President, General Counsel & Compliance Officer. The breach will then be communicated to the audit committee dependent on the materiality of the incident.
However, we cannot provide any assurance that they will not be materially affected by such threats or incidents in the future.
However, we cannot provide any assurance that they will not be materially affected by such threats or incidents in the future. 25 Table of Contents
At KVH, the CISO has been lead on security as a service for customer implementations. We have also implemented an Incident Response Plan (“IRP”), which provides a set of guidelines on the appropriate responsive actions to take in the event of a cybersecurity incident, depending on the particular facts and circumstances of the incident.
We have also implemented an Incident Response Plan (“IRP”), which provides a set of guidelines on the appropriate responsive actions to take in the event of a cybersecurity incident, depending on the particular facts and circumstances of the incident. The audit committee assists the Board of Directors in overseeing our cybersecurity program.
Our Information Security Officer (“ISO”) is responsible for implementing, supervising and maintaining the WISP, including the implementation of prevention measures. The ISO reports directly to the VP Network Systems/Services Engineering, who is also our Chief Information Security Officer (“CISO”). The CISO establishes the company-wide system security plan and defines the parameters of users’ access privileges.
Our Information Security Officer (“ISO”) is responsible for implementing, supervising and maintaining the WISP, including the implementation of prevention measures. The ISO reports directly to the Chief Executive Officer.
The audit committee assists the Board of Directors in overseeing our cybersecurity program. Both the Board of Directors and the audit committee receive regular reports regarding material cybersecurity developments.
Both the Board of Directors and the audit committee receive regular reports regarding material cybersecurity developments. The discussion of cybersecurity issues is on the agenda of each quarterly Board of Directors' meeting.
Under our procedures, we perform an annual risk assessment to identify and prioritize key cybersecurity risks, and we update this assessment when we receive information about material new cybersecurity risks. Once we identify material cybersecurity risks, we seek to identify and implement prevention measures.
Once we identify material cybersecurity risks, we seek to identify and implement prevention measures.
Removed
The CISO has over 30 years in the network, security systems engineering fields and has been with KVH for 15 years. Before KVH, the CISO worked in the telecom and ISP spaces covering transport, design and implementations. In these roles, the CISO was responsible for all network-oriented security and developed in-depth experience on core security platforms.
Added
ITEM 1C. Cybersecurity 24 Table of Contents We have established procedures to assess, identify, and manage material risks from cybersecurity threats and have integrated those procedures into our overall risk management systems and processes.
Added
Under our procedures, we review the scope of the security measures in the WISP at least annually, or whenever there is a material change in our business practices or we receive information about material new cybersecurity threats or risks, that may implicate the security or integrity of records.
Added
The ISO has over 30 years of experience in the information technology field, including experience in healthcare system information technology, which included cybersecurity responsibilities, and then in project management office leadership for information technology managed services providers.
Added
The ISO is supported by our former Chief Information Security Officer, who remains with KVH in an individual contributor capacity through mid-2026 and continues to provide cybersecurity expertise to the program.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of that date, both properties were classified as assets held for sale. 24 Table of Contents Location Type Principal Uses Approximate Square Footage Ownership Lease Expiration Middletown, Rhode Island Office Corporate headquarters, research and development, sales and service, marketing and administration 75,000 Owned — Middletown, Rhode Island Plant and warehouse Manufacturing and warehousing 75,300 Owned —
Biggest changeThe following table provides information about our principal facilities as of December 31, 2025. Location Type Principal Uses Approximate Square Footage Ownership Lease Expiration Middletown, Rhode Island Office, plant and warehouse Corporate headquarters, research and development, sales and service, marketing, administration, manufacturing and warehousing 75,300 Leased March 31, 2026
Removed
ITEM 2. Properties The following table provides information about our principal facilities as of December 31, 2024.
Added
ITEM 2. Properties We are currently headquartered in Middletown, Rhode Island. On July 23, 2025, we entered into a new seven-year lease agreement for approximately 32,000 square feet of office and warehouse space in Bristol, Rhode Island. We currently plan to migrate our Rhode Island operations to this leased facility in the spring of 2026.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeUnder the program, at management’s discretion, we may repurchase shares from time to time through various means, including on the open market, in privately negotiated transactions or block transactions, or through an accelerated repurchase agreement.
Biggest changeOn March 6, 2026, our Board of Directors authorized an increase in the size of the repurchase program from $10 million to $15 million. Under the program, at management’s discretion, we may repurchase shares from time to time through various means, including on the open market, in privately negotiated transactions or block transactions, or through an accelerated repurchase agreement.
We may elect to make purchases under Rule 10b-18 under the Securities Exchange Act of 1934, as amended, which imposes certain volume limitations, and/or under Rule 10b5-1 under that act, which would permit repurchases to occur during periods when we might otherwise be precluded from making purchases under insider trading laws or KVH policy.
We may elect to make purchases under Rule 10b-18 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which imposes certain volume limitations, and/or under Rule 10b5-1 under that act, which would permit repurchases to occur during periods when we might otherwise be precluded from making purchases under insider trading laws or KVH policy.
We currently intend to retain any future earnings to finance our operations and future growth. Issuer Purchases of Equity Securities . On December 9, 2024, our Board of Directors authorized a share repurchase program pursuant to which we may purchase outstanding shares of our common stock for an aggregate purchase price of up to $10 million.
We currently intend to retain any future earnings to finance our operations and future growth. Issuer Purchases of Equity Securities . On December 10, 2024, our Board of Directors announced a share repurchase program pursuant to which we may purchase outstanding shares of our common stock for an aggregate purchase price of up to $10 million.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information. Our common stock trades on the Nasdaq Global Select Market under the symbol “KVHI.” Stockholders. As of March 3, 2025, we had 58 holders of record of our common stock.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information. Our common stock trades on the Nasdaq Global Select Market under the symbol “KVHI.” Stockholders. As of March 4, 2026, we had 56 holders of record of our common stock.
The program does not obligate us to repurchase any minimum number or dollar amount of shares, and the program may be modified, suspended or terminated at any time without prior notice.
The program does not obligate us to repurchase any minimum number or dollar amount of shares, and the program may be modified, suspended or terminated at any time without prior notice. The program’s expiration date has been extended to December 2026 and may be further extended.
Removed
During the fourth quarter of 2024, we did not repurchase any shares of common stock, nor did we acquire any shares of common stock, whether through surrender or withholding, to pay any exercise price or satisfy any tax withholding obligations.
Added
In 2025, we repurchased approximately 327,000 shares of common stock in open market transactions at a cost of approximately $1.7 million.
Added
Except as noted above, there were no other repurchase programs outstanding. 26 Table of Contents Period (1) Total Number of Shares Purchased Average Price Paid per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3) October 1 - October 31 266 $ 5.30 266 $ 13,626,646 November 1 - November 30 37,853 5.86 37,853 13,403,681 December 1 - December 31 24,378 5.97 24,378 13,257,502 Total 62,497 5.90 62,497 (1) The paragraphs preceding the table provide information about the date the share repurchase program was announced, the dollar amount approved and the anticipated expiration date of the program.
Added
No other share repurchase program expired, was terminated or was abandoned during the period covered by the table. (2) Does not reflect brokerage commissions. (3) Gives effect to the increase in the size of the repurchase program authorized by our Board of Directors on March 6, 2026. ITEM 6. Reserved

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

55 edited+24 added−21 removed22 unchanged
Biggest changeResults of Operations The following table provides, for the periods indicated, certain financial data expressed as a percentage of net sales: Year Ended December 31, 2024 2023 Sales: Service 84.7 % 86.6 % Product 15.3 13.4 Net sales 100.0 100.0 Costs and expenses: Costs of service sales 52.7 49.4 Costs of product sales 16.3 22.0 Research and development 7.4 7.1 Sales, marketing and support 18.5 15.8 General and administrative 14.5 14.3 Goodwill impairment charge — 4.0 Long-lived assets impairment charge 1.0 0.5 Total costs and expenses 110.4 113.1 Loss from operations (10.4) (13.1) Interest income 2.7 2.8 Interest expense — — Other expense, net (1.6) (1.1) Loss before income taxes expense (9.3) (11.4) Income tax expense 0.4 0.2 Net loss (9.7) % (11.6) % 28 Table of Contents Years ended December 31, 2024 and 2023 Our net sales for 2024 and 2023 were as follows: Change Year Ended December 31, 2024 vs. 2023 2024 2023 $ % (in thousands) Service sales $ 96,446 $ 114,622 $ (18,176) (16) % Product sales 17,382 17,757 (375) (2) % Net sales 113,828 132,379 (18,551) (14) % Net sales decreased by $18.6 million, or 14%, in 2024 as compared to 2023.
Biggest changeThese transactions may take the form of purchases of individual customer contracts, purchases of multiple customer contracts, larger asset acquisitions, or other business combination transactions. 29 Table of Contents Results of Operations The following table provides, for the periods indicated, certain financial data expressed as a percentage of net sales: Year Ended December 31, 2025 2024 Sales: Service 88.6 % 84.7 % Product 11.4 15.3 Net sales 100.0 100.0 Costs and expenses: Costs of service sales 57.4 52.7 Costs of product sales 17.4 16.3 Research and development 3.1 7.4 Sales, marketing and support 18.4 18.5 General and administrative 13.8 14.5 Long-lived assets impairment charge — 1.0 Total costs and expenses 110.1 110.4 Loss from operations (10.1) (10.4) Interest income 2.3 2.7 Interest expense — — Other income (expense), net 1.0 (1.6) Loss before income tax (benefit) expense (6.8) (9.3) Income tax (benefit) expense (0.1) 0.4 Net loss (6.7) % (9.7) % Years ended December 31, 2025 and 2024 Our net sales for 2025 and 2024 were as follows: Change Year Ended December 31, 2025 vs. 2024 2025 2024 $ % (in thousands) Service sales $ 98,407 $ 96,446 $ 1,961 2 % Product sales 12,602 17,382 (4,780) (27) % Net sales 111,009 113,828 (2,819) (2) % Net sales decreased by $2.8 million, or 2%, in 2025 as compared to 2024.
Our actual results could differ materially from those anticipated in the forward-looking statements as a result of a variety of factors, including those discussed under the heading “Item 1A. Risk Factors” and elsewhere in this annual report. Overview We are a leading global provider of innovative and technology-driven connectivity solutions to primarily maritime commercial, leisure, and military/government customers.
Our actual results could differ materially from those anticipated in the forward-looking statements as a result of a variety of factors, including those discussed under the heading “Item 1A. Risk Factors” and elsewhere in this annual report. Overview We are a leading global provider of innovative and technology-driven connectivity solutions to primarily maritime commercial and leisure customers.
Other Matters We intend to continue to invest in our global networks on a worldwide basis. From time to time, we have entered into multi-year agreements to lease satellite capacity, as well as prepaid for access to a large block of mobile data at favorable rates. These agreements can involve millions of dollars.
Other Matters We intend to continue to invest in our global networks on a worldwide basis. From time to time, we have entered into multi-year agreements to lease satellite capacity, as well as prepaid for access to large blocks of mobile data at favorable rates. These agreements can involve millions of dollars.
For 2024 and 2023, the effective tax rates differed from the statutory tax rate primarily due to our maintaining a valuation allowance reserve on our U.S. deferred tax assets, impairment of goodwill, discrete tax adjustments and the composition of income from foreign jurisdictions taxed at varying rates.
For 2025 and 2024, the effective tax rates differed from the statutory tax rate primarily due to our maintaining a valuation allowance reserve on our U.S. deferred tax assets, impairment of goodwill, discrete tax adjustments and the composition of income from foreign jurisdictions taxed at varying rates.
Please see Note 5 to our accompanying audited consolidated financial statements for additional information on our satellite service capacity obligations. Recently Issued Accounting Pronouncements See Note 1 of our accompanying audited consolidated financial statements for a description of recently issued accounting pronouncements including the dates of adoption and effects on our results of operations, financial position and disclosures.
Please see Note 6 to our accompanying audited consolidated financial statements for additional information on our satellite service capacity obligations. Recently Issued Accounting Pronouncements See Note 1 of our accompanying audited consolidated financial statements for a description of recently issued accounting pronouncements including the dates of adoption and effects on our results of operations, financial position and disclosures.
Our satellite-only and hybrid products enable marine customers to receive data, VoIP, and value-added services via satellite, cellular, and shore-based Wi-Fi networks onboard commercial, leisure, and military/government vessels. In addition, our in-motion television terminals permit customers to receive live digital television via regional satellite services in marine vessels, recreational vehicles, buses and automobiles.
Our satellite-only and hybrid products enable marine customers to receive data, VoIP, and value-added services via satellite, cellular, and shore-based Wi-Fi networks onboard commercial and leisure vessels. In addition, our in-motion television terminals permit customers to receive live digital television via regional satellite services on marine vessels and on recreational vehicles, buses and automobiles.
Off-Balance Sheet Arrangements As of December 31, 2024, we had certain satellite service capacity obligations that are not considered operating or financing leases under ASC 842.
Off-Balance Sheet Arrangements As of December 31, 2025, we had certain satellite service capacity obligations that are not considered operating or financing leases under ASC 842.
Seasonality Our marine leisure business has been highly seasonal, and seasonality can also impact our commercial marine business. Temporary suspensions of our airtime services typically increase in the third and fourth quarters of each year as boats are placed out of service during the winter months.
Seasonality Our marine leisure business has been highly seasonal, and seasonality can also impact our commercial marine business, particularly in the commercial fishing market. Temporary suspensions of our airtime services typically increase in the third and fourth quarters of each year as boats are placed out of service during the winter months.
We generate revenues in the United States and various international locations, including primarily Singapore, Canada, South American countries, European Union countries and other European countries, and countries in Africa, the Middle East and Asia/Pacific, including India. Sales to customers outside the United States accounted for 73% and 68% of our consolidated net revenues for 2024 and 2023, respectively.
We generate revenues in the United States and various international locations, including primarily Singapore, Canada, South American countries, European Union countries and other European countries, and countries in Africa, the Middle East and Asia/Pacific, including India. Sales to customers outside the United States accounted for 78% and 73% of our consolidated net revenues for 2025 and 2024, respectively.
We believe that our accounting estimates for intangible assets and other long-lived assets are the only estimates critical to an understanding and evaluation of our financial results for 2024, as discussed below. 31 Table of Contents Intangible Assets and other Long-Lived Assets Intangible assets with finite lives and other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
We believe that our accounting estimates for goodwill, intangible assets and other long-lived assets are the only estimates critical to an understanding and evaluation of our financial results for 2025, as discussed below. 32 Table of Contents Intangible Assets and other Long-Lived Assets Intangible assets with finite lives and other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
During 2024, there were no events or changes in circumstances that indicated any of the carrying amounts of our intangible assets or other long-lived assets may not be recoverable. See Note 8 to our accompanying audited consolidated financial statements for further discussion.
During 2025, there were no events or changes in circumstances that indicated any of the carrying amounts of our intangible assets or other long-lived assets may not be recoverable. See Note 9 to our accompanying audited consolidated financial statements for further discussion.
We sell our products through an extensive international network of dealers and distributors. We also sell and lease products to service providers and end users. Product sales accounted for 15% and 13% of our consolidated net sales for 2024 and 2023, respectively.
We sell our products through an extensive international network of dealers and distributors. We also sell and lease products to service providers and end users. Product sales accounted for 11% and 15% of our consolidated net sales for 2025 and 2024, respectively.
Under the agreement, we prepaid $17.0 million for access to a large block of Starlink Mobile Priority data at favorable rates. The new agreement offers us increased flexibility in the development and sale of custom airtime plans using Starlink’s Mobile Priority service.
Under the agreement, we prepaid $17.0 million for access to a large block of Starlink Global Priority data at favorable rates. The agreement provided us flexibility in the development and sale of custom airtime plans using Starlink’s Global Priority service.
We expect that we will continue our product manufacturing activities in order to generate a targeted 26 Table of Contents amount of inventory of maritime satellite connectivity and satellite television terminals to meet anticipated demand through 2025 and potentially into 2026 and that we will cease substantially all manufacturing activity by the end of 2025.
We expect that we will continue our product manufacturing activities in order to generate a targeted amount of inventory of maritime satellite connectivity and satellite television terminals to meet anticipated demand and that we will cease substantially all manufacturing activity by the end of 2026.
Operating Expenses Research and development expense consists of direct labor, materials, external consultants, and related overhead costs that support our internally funded product development and product sustaining engineering activities. Research and development expense for 2024 decreased by $1.0 million, or 10%, to $8.4 million from $9.4 million in 2023.
Operating Expenses Research and development expense consists of direct labor, materials, external consultants, and related overhead costs that support our internally funded product development and product sustaining engineering activities. Research and development expense for 2025 decreased by $5.0 million, or 59%, to $3.5 million from $8.4 million in 2024.
As a percentage of net sales, general and administrative expense was 15% and 14% for 2024 and 2023, respectively. This increase resulted primarily from a reduction in net sales. Interest and Other Expense, Net Interest income represents interest earned on our cash and cash equivalents, as well as from investments and our sale-type lease receivables.
As a percentage of net sales, general and administrative expense was 14% and 15% for 2025 and 2024, respectively. Interest and Other Income (Expense), Net Interest income represents interest earned on our cash and cash equivalents, as well as from investments and our sale-type lease receivables.
Income Tax Expense Income tax expense for 2024 and 2023 was $0.4 million and $0.3 million, respectively, and related to taxes on income earned in foreign jurisdictions. The effective tax rate for 2024 and 2023 was (4.0)% and (2.1)%, respectively.
Income Tax (Benefit) Expense Income tax (benefit) expense for 2025 and 2024 was $(0.1) million and $0.4 million, respectively, and related to taxes on income earned in foreign jurisdictions. The effective tax rate for 2025 and 2024 was 1.7% and (4.0)%, respectively.
At December 31, 2024, we had outstanding non-cancellable satellite service capacity and other purchase obligations with future minimum payments of $46.3 million. 32 Table of Contents Operating Activities Operating activities used $13.2 million of net cash in 2024 and provided $2.5 million of net cash in 2023, an increase in net cash used by operating activities of $15.7 million.
At December 31, 2025, we had outstanding non-cancellable satellite service capacity and other purchase obligations with future minimum payments of $72.5 million. 33 Table of Contents Operating Activities Operating activities provided net cash of $17.1 million in 2025 and used net cash of $13.2 million in 2024, an increase in net cash provided by operating activities of $30.3 million.
In December 2024, we entered into an agreement to sell 50 Enterprise Center, subject to the buyer’s right to terminate the agreement during an inspection period. In January 2025, before the end of the inspection period, we received notice of termination from the buyer. 50 Enterprise Center remains held for sale as we continue to search for a suitable buyer.
In December 2024, we entered into an agreement to sell 50 Enterprise Center, subject to the buyer’s right to terminate the agreement during an inspection period. In January 2025, before the end of the inspection period, we received notice of termination from the buyer.
We determined that all of the criteria to classify 50 Enterprise Center as held for sale had been met as of September 30, 2024. The estimated fair value of 50 Enterprise Center exceeds its carrying value.
As of September 30, 2024, 50 Enterprise Center had a carrying value of approximately $3.6 million. We determined that all of the criteria to classify 50 Enterprise Center as held for sale had been met as of September 30, 2024. The estimated fair value of 50 Enterprise Center at that date exceeded its carrying value.
It is possible that the rate of reduction will continue to accelerate. Product sales decreased by $0.4 million, or 2%, to $17.4 million in 2024 from $17.8 million in 2023.
It is possible that the rate of reduction will accelerate. Product sales decreased by $4.8 million, or 27%, to $12.6 million in 2025 from $17.4 million in 2024.
As a percentage of net sales, research and development expense was 7% in both 2024 and 2023.
As a percentage of net sales, research and development expense was 3% and 7% in 2025 and 2024, respectively.
Sales, marketing and support expense also includes the operating expenses of our sales office subsidiaries in Denmark, Singapore, Brazil, and Japan. Sales, marketing, and support expense increased by $0.1 million, or less than 1%, to $21.0 million in 2024 from $20.9 million in 2023.
Sales, marketing and support expense also includes the operating expenses of our sales office subsidiaries in Denmark, Singapore, Brazil, and Japan. Sales, marketing, and support expense decreased by $0.6 million, or 3%, to $20.4 million in 2025 from $21.0 million in 2024.
The decline in product sales was primarily driven by product sales mix. Competition from low-cost alternatives to VSAT, which include streaming capabilities, has had a significant impact on sales of both TracVision and VSAT Broadband products. In the first quarter of 2024, the U.S.
The decline in Starlink product sales was primarily driven by discounted pricing, whereas declines in other product sales was primarily driven by product mix and discounted pricing on VSAT Broadband products. Competition from low-cost alternatives to VSAT, which include streaming capabilities, has had a significant impact on sales of our TracVision products.
Investing Activities Net cash provided by investing activities for 2024 was $52.4 million as compared to net cash used by investing activities of $14.7 million for 2023.
Investing Activities Net cash provided by investing activities for 2025 was $3.9 million as compared to net cash provided by investing activities of $52.4 million for 2024.
In recent years, we have funded our operations primarily from the sale of two businesses in 2022, the sale of a business in 2019, a PPP loan, cash flows from operations, bank financings and proceeds received from exercises of stock options and the issuance of stock.
In recent years, we have funded our operations primarily from the sale of two businesses in 2022, the sale of 50 Enterprise Center, the sale of 75 Enterprise Center, cash flows from operations and proceeds received from exercises of stock options and the issuance of stock.
Alternative solutions offered by recent low-earth-orbit (LEO) entrants have heightened competition in the global leisure segment and in commercial and government markets. We expect that the trend of intensifying competition from LEO satellite service providers will continue and that our revenues from VSAT service sales will continue to decline on a year-over-year basis.
LEO service providers have continued to expand their product and service offerings, further heightening competition in the global commercial markets and in the leisure segment. We expect that the trend of intensifying competition from LEO satellite service providers will continue and that our revenues from VSAT service sales will continue to decline on a year-over-year basis.
The decrease in product sales was primarily the result of a $2.2 million decrease in VSAT Broadband product sales, a $2.0 million decrease in TracVision product sales and a $1.3 million decrease in accessory and service product sales, partially offset by a $5.0 million increase in Starlink product sales and a $0.5 million increase in CommBox Edge product sales.
The decrease in product sales was primarily due to a $2.2 million decrease in Starlink product sales, a $1.6 million decrease in TracVision product sales, a $1.1 million decrease in VSAT Broadband product sales and a $0.8 million decrease in accessory and service parts product sales, partially offset by a $1.0 million increase in Eutelsat OneWeb product sales.
The $67.1 million increase in net cash provided by investing activities was primarily the result of a $61.3 million decrease in net investment in marketable securities, which was driven by the liquidation of our marketable securities held by Wells Fargo, a $3.2 decrease in capital expenditures, a $1.4 million increase in proceeds from the sale of fixed assets and a $1.2 million decrease in cash paid for the acquisition of intangible assets.
The $48.5 million decrease in net cash provided by investing activities was primarily the result of a $58.5 million decrease in proceeds from net sales of marketable securities, which was driven by the liquidation of our marketable securities held by Wells Fargo in 2024, $3.8 million of cash paid for a business combination in 2025, partially offset by proceeds of $7.8 million for the sale of 75 Enterprise Center, proceeds of $4.9 million for the sale of 50 Enterprise Center, a $0.9 million increase of proceeds from the sale of fixed assets and a $0.1 million decrease in capital expenditures.
Our service sales also include the distribution of entertainment, including movies, television programming, news and music, to commercial customers in the maritime market through KVH Media Group, along with supplemental value-added services. Sales of content services accounted for 3% of our consolidated net revenues for both 2024 and 2023.
We also generate service revenue from product repairs and extended warranty sales. 27 Table of Contents Our service sales also include the distribution of entertainment, including movies, television programming, news and music, to commercial customers in the maritime market through KVH Media Group, along with supplemental value-added services.
The decrease in service sales was primarily due to a $17.1 million decrease in our airtime service sales, driven primarily by a decrease in VSAT-only subscribers, partially offset by an increase in LEO service sales. $2.7 million of this decrease was related to the U.S. Coast Guard contract downgrade.
This increase in LEO service sales was largely offset by a substantial decrease in VSAT service sales, which was driven primarily by a decrease in VSAT subscribers, as well as a $7.7 million reduction in sales related to the U.S. Coast Guard contract downgrade in the third quarter of 2024.
The increase was primarily due to a $0.5 million increase in foreign exchange losses and a $0.4 million expense incurred in 2024 for a prior period Brazil tax settlement, partially offset by a $0.3 million loss in 2023 on an unfavorable future contract and a $0.1 million decrease in the loss on the disposal of fixed assets.
This change was driven primarily by a $1.3 million gain on the sale of 50 Enterprise Center in June 2025, a $1.3 million decrease in non-cash losses related to the disposal of AgilePlans revenue-generating fixed assets, a $0.5 million decrease in foreign exchange losses, and a $0.4 million expense incurred in 2024 for a prior period Brazil tax settlement, partially offset by a $0.3 million loss on the sale of 75 Enterprise Center in September 2025 and a $0.3 million loss on the disposal of a discontinued project in 2025.
In mid-2022, we launched our KVH ONE hybrid network, which integrates global satellite service (including Ku-band VSAT using the Intelsat HTS network along with Starlink, Iridium, and other satellite services), KVH-provided cellular service in more than 150 countries, and shore-based Wi-Fi access.
We provide, for monthly fixed fees and per-usage fees, satellite connectivity encompassing broadband Internet, data and VoIP services, to customers via our KVH ONE hybrid network, which integrates global satellite service (including Starlink, Ku-band VSAT using the SES HTS network, Eutelsat OneWeb, Iridium, and other satellite services), KVH-provided cellular service in more than 130 countries, and shore-based Wi-Fi access.
In December 2024, we introduced our TracNet Coastal and TracNet Coastal Pro terminals, expanding our extensive multi-channel portfolio of maritime products and services with a 5G/cellular and Wi-Fi system. We expect to earn usage fees from our offering of OneWeb service, which we launched in January 2025. We also generate service revenue from product repairs and extended warranty sales.
In December 2024, we introduced our TracNet Coastal and TracNet Coastal Pro terminals, expanding our extensive multi-channel portfolio of maritime products and services with a standalone 5G/cellular and Wi-Fi system.
Historically, our Ku-band VSAT communications service has been the primary driver of revenue growth. However, these services represent a declining percentage of our revenues in the face of competition from emerging LEO services.
Sales of content services accounted for 4% and 3% of our consolidated net revenues for 2025 and 2024, respectively. Historically, our Ku-band VSAT communications service was the primary driver of revenue growth. However, in recent years these services have represented a declining percentage of our revenues in the face of increased demand for and competition from emerging LEO services.
The $15.7 million increase in net cash used by operations was primarily the result of a $11.5 million increase in cash outflows relating to accrued compensation, product warranty and other expenses, a $10.4 million increase in cash outflows relating to prepaid expenses and other current assets, a $7.6 million increase in cash outflows relating to inventories, a change of $5.6 million related to non-cash items, a $1.1 million decrease in cash inflows relating to deferred revenue, and a $1.1 million increase in cash outflows relating to other non-current assets.
The $30.3 million increase in net cash provided by operations was primarily the result of a $19.7 million decrease in cash outflows related to prepaid expenses and other current assets, which reflected the $5.0 million and $17.0 million purchases of Starlink pooled data in 2025 and 2024, respectively, a $12.6 million decrease in cash outflows relating to inventories, an $8.2 million decrease in cash outflows relating to accrued compensation, product warranty and other expenses, a $3.7 million decrease in net loss, a $0.8 million increase in cash inflows relating to deferred revenue, a $0.7 million increase in cash inflows relating to other non-current assets, and a $0.6 million decrease in cash outflows related to accounts payable, partially offset by an $8.1 million decrease in cash inflows relating to accounts receivable and a $7.9 million reduction in non-cash items.
Interest income decreased by $0.6 million to $3.0 million from $3.6 million for 2023. Of the current period interest income of $3.0 million, $2.6 million is attributable to interest earned on cash and cash equivalents, while the remaining $0.5 million was attributable to interest from lease receivables. Interest declined primarily due to lower cash balances.
Of the current period interest income of $2.6 million, $2.2 million is attributable to interest earned on cash and cash equivalents, and $0.4 million was attributable to interest from lease receivables. Other income (expense), net changed by $2.9 million to other income, net of $1.1 million for 2025 from other expense, net of $1.8 million for 2024.
As a percentage of net sales, costs of sales were 69% and 71% for 2024 and 2023, respectively. Our costs of service sales consist primarily of satellite service capacity, depreciation, service network overhead expense associated with our VSAT Broadband network infrastructure, direct network service labor, product installation costs, media distribution costs, and service repair materials.
Our costs of service sales consist primarily of satellite service capacity, depreciation, service network overhead expense associated with our HTS Broadband network infrastructure, direct network service labor, product installation costs, media materials and distribution costs, and service repair materials. For 2025, costs of service sales increased by $3.7 million, or 6%, to $63.7 million from $60.0 million in 2024.
Additionally, in the third quarter of 2024, we commenced our plan to sell the property, building, improvements, and land located at 50 Enterprise Center in Middletown, Rhode Island (“50 Enterprise Center”). As of September 30, 2024, 50 Enterprise Center had a carrying value of approximately $3.6 million.
In September 2025, we also entered into an agreement with the buyer to lease this property until the end of March 2026 for approximately $0.1 million. 28 Table of Contents Additionally, in the third quarter of 2024, we commenced our plan to sell the property, building, improvements, and land located at 50 Enterprise Center in Middletown, Rhode Island (“50 Enterprise Center”).
The decrease in research and development expense resulted primarily from a $1.6 million decrease in salaries, benefits and taxes, excluding costs related to the previously mentioned reduction in workforce, and a $0.3 million decrease in expensed materials. These decreases were partially offset by $1.4 million in costs incurred related to the reduction in our workforce.
The decrease in research and development expense resulted primarily from a $4.3 million decrease in salaries, benefits and taxes, after giving effect to $1.4 million in costs incurred during 2024 related to the reduction in our workforce, and a $0.4 million decrease in 31 Table of Contents facilities expense allocated to our research and development operations.
For 2024, costs of product sales decreased by $10.5 million, or 36%, to $18.6 million from $29.1 million in 2023, primarily due to an $8.7 million decrease in various manufacturing and other unabsorbed expenses, a $3.6 million decrease in excess purchase order obligations, a $1.5 million decrease in TracVision cost of product sales, a $0.9 million decrease in VSAT Broadband cost of product sales and a $0.3 million decrease in accessory cost of product sales, partially offset by a $4.5 million increase in LEO cost of product sales and a $0.4 million increase in CommBox Edge cost of product sales.
For 2025, costs of product sales increased by $0.7 million, or 4%, to $19.3 million from $18.6 million in 2024, primarily due to a $4.3 million increase in various manufacturing and other unabsorbed expenses and a $0.9 million increase in Eutelsat OneWeb cost of product sales.
As part of this restructuring, we reduced our headcount by approximately 75 employees, or approximately 20% of our total workforce as of the time we announced the restructuring. As of June 30, 2024, all employee terminations had been completed. During 2024, we incurred an aggregate of $3.9 million of severance charges for this and other restructurings.
As of June 30, 2024, all employee terminations were completed. During 2024, we incurred $3.9 million of severance charges for this and other restructurings.
Revenue from our cellular airtime service has supplemented, and we expect will continue to supplement, our satellite-only airtime revenue. In addition, we earn monthly usage fees from sales of third-party satellite connectivity for VoIP, data and Internet services to our Inmarsat, Iridium, and Starlink customers who choose to activate their subscriptions with us.
We are also now earning usage fees from our offering of Eutelsat OneWeb maritime service, which we launched in January 2025. Revenue from our cellular airtime service supplements our satellite-only airtime revenue. In addition, we earn monthly usage fees from sales of third-party satellite connectivity for VoIP and supplemental services to our Inmarsat, Iridium, Starlink and Eutelsat OneWeb customers.
This increase resulted primarily from a reduction in net sales. 30 Table of Contents General and administrative expense consists of costs attributable to management, finance and accounting, information technology, human resources, certain outside professional services, and other administrative costs. General and administrative expense for 2024 decreased by $2.4 million, or 13%, to $16.5 million from $18.9 million for 2023.
As a percentage of net sales, sales, marketing and support expense was 18% in both 2025 and 2024. General and administrative expense consists of costs attributable to management, finance and accounting, information technology, human resources, certain outside professional services, and other administrative costs.
As of December 31, 2024, we had $50.6 million in cash and cash equivalents, of which $3.8 million in cash equivalents was held in local currencies by our foreign subsidiaries. Our foreign subsidiaries held no marketable securities as of December 31, 2024. As of December 31, 2024, we had $106.7 million in working capital.
Our foreign subsidiaries held no marketable securities as of December 31, 2025. As of December 31, 2025, we had $101.1 million in working capital.
Financing Activities Net cash provided by financing activities for 2024 was $0.1 million as compared to net cash provided by financing activities in 2023 of $2.3 million.
Financing Activities Net cash used in financing activities for 2025 was $1.7 million as compared to net cash provided by financing activities in 2024 of $0.1 million. The $1.8 million increase in net cash used in financing activities is primarily attributable to a $1.7 million increase in cash outflows related to the purchase of treasury stock.
Costs of sales decreased by $15.9 million, or 17%, in 2024 to $78.6 million from $94.5 million in 2023. The decrease in costs of sales was driven by a $5.4 million decrease in costs of service sales and a $10.5 million decrease in costs of product sales.
Costs of Sales Costs of sales consists of costs of service sales and costs of product sales. Costs of sales increased by $4.4 million, or 6%, in 2025 to $83.0 million from $78.6 million in 2024.
In 2024, we incurred $0.7 million in costs related to the reduction in our workforce, which was partially offset by a $0.4 million decrease in external commissions. As a percentage of net sales, sales, marketing and support expense was 18% and 16% in 2024 and 2023, respectively.
The decrease in sales, marketing and support expense resulted primarily from a $0.9 million decrease in facilities expense allocated to our sales, marketing and support operation and a $0.4 million decrease in costs incurred related to the reduction in our workforce, partially offset by a $0.4 million increase in professional fees.
For 2024, costs of service sales decreased by $5.4 million, or 8%, to $60.0 million from $65.4 million in 2023. Costs of service sales decreased primarily due to a $5.5 million decrease in airtime costs of service sales. As a percentage of service sales, costs of service sales were 62% and 57% for 2024 and 2023, respectively.
As a percentage of service sales, costs of service sales were 65% and 62% for 2025 and 2024, respectively.
Cost of product sales decreased as a percentage of product sales primarily due to the decrease in various manufacturing and other unabsorbed expenses. This decrease resulted primarily from the additional expenses incurred in 2023 related to the wind-down of the Company's manufacturing activities, as well as the 2024 reduction in headcount of manufacturing employees.
As a percentage of product sales, costs of product sales were 153% and 107% for 2025 and 2024, respectively. Cost of product sales increased as a percentage of product sales primarily due to the increase in various manufacturing and other unabsorbed expenses.
In March 2023, we began selling Starlink terminals and, in September 2023, we became a Starlink authorized hardware and airtime reseller offering Mobile Priority data plans for maritime use. In October 2024, we expanded our portfolio to include Starlink Business Priority data plans, which will primarily be used for stationary commercial use on land.
Sales of our low-earth-orbit (LEO) and global high-throughput satellite (HTS) airtime services accounted for 82% and 80% of our consolidated net sales for 2025 and 2024, respectively. In March 2023, we began selling Starlink terminals and, in September 2023, we became a Starlink authorized hardware and airtime reseller offering Global Priority data plans for maritime use.
Despite this higher gross margin on Starlink airtime services, the overall gross margin on service sales was negatively impacted by fixed costs associated with the VSAT Broadband network. 29 Table of Contents Our costs of product sales consist primarily of materials, manufacturing overhead, and direct labor used to produce our products.
Our costs of product sales consist primarily of materials, manufacturing overhead, and direct labor used to produce our products.
The decrease in general and administrative expense resulted primarily from the $2.1 million charge incurred in 2023 for the discontinuation of a project for implementing a new manufacturing-centric accounting system, a $1.0 million decrease in professional fees, driven by additional accounting and consulting costs incurred in 2023 to prepare our 2022 annual filings, a $0.6 million decrease in salaries, benefits and taxes, excluding costs related to the previously mentioned reduction in workforce, and a $0.4 million decrease in computer expenses.
The decrease in general and administrative expense resulted primarily from a $0.9 million decrease in salaries, benefits and taxes, after giving effect to a $0.6 million decrease in costs incurred related to the reduction in our workforce, a $0.5 million decrease in dues and subscriptions expense and a $0.4 million decrease in depreciation expense, partially offset by a $1.0 million increase in facilities expense allocated to our general and administrative operations.
Excess and Obsolete Inventory and Excess Purchase Orders In 2023, we recorded a $5.2 million charge related to the inventory write-down and a $3.6 million charge for excess purchase order obligations, both relating to the reduced demand for our hardware products, which led to the staged wind-down of our manufacturing activities at our facility in Middletown, Rhode Island noted above.
Excess and Obsolete Inventory During 2025, we recorded a $5.5 million inventory write-down related to further reduced demand for certain of our hardware products as well as a reduction in the prices we charge for certain TracNet H-series terminals.
We expect to continue to facilitate customer transition to third-party hardware products compatible with our mobile satellite communications services. We also plan to continue to conduct maintenance, service, warehousing, shipping and receiving activities at the Middletown, Rhode Island location.
We also plan to continue to conduct maintenance, service, warehousing, shipping and receiving activities at the Middletown, Rhode Island location until our anticipated relocation in the spring of 2026. As part of this restructuring, we reduced our headcount by approximately 75 employees, or approximately 20% of our total workforce as of the time we announced the restructuring.
Removed
We generate a substantial majority of our revenues from sales of satellite Internet airtime services. We provide, for monthly fixed fees and per-usage fees, satellite connectivity encompassing broadband Internet, data and VoIP services, to customers via our global HTS network. Sales of our airtime services accounted for 79% and 81% of our consolidated net sales for 2024 and 2023, respectively.
Added
We generate a substantial majority of our revenues from sales of satellite Internet airtime services.
Removed
Consummation of the transaction is subject to customary closing conditions. Under the purchase agreement, the buyer has six months to obtain specified zoning approvals, with up to three 30-day extensions, as well as a 60-day inspection period, subject to potential extension.
Added
In October 2024, we expanded our portfolio to include Starlink Local Priority data plans, which is suitable for fixed and mobile uses on land and inland waterways, including lakes and rivers. In 2025, Starlink products and services were our fastest growing products and services.
Removed
The buyer may terminate the agreement at any time before the expiration of the inspection period and may also terminate the agreement if the specified zoning approvals are denied before the expiration of the zoning approval period.
Added
This wind-down has been extended because our reduced workforce has been prioritizing fulfilling LEO product orders and refurbishing AgilePlans terminals over manufacturing new units. We expect to continue to facilitate customer transition to third-party hardware products compatible with our mobile satellite communications services.
Removed
Upon consummation of the sale, we will remain in possession of the property as a tenant under a triple-net lease having an initial term of six months, which we can extend for up to an additional three months. Rent during the initial term is approximately $25,000 per month, which would increase to approximately $44,000 per month during any extension.
Added
We began drawing from this prepaid pooled data in the third quarter of 2024 and this data was fully consumed by the end of 2025. In the fourth quarter of 2025, we entered into an agreement to purchase a substantially larger block of Starlink Global Priority data.
Removed
Impairment Charge In 2023, aggregate impairment charges of $6.0 million were taken against goodwill and long-lived assets for the Mobile Broadband reporting unit and the KVH Media Group reporting unit.
Added
We made a prepayment of $5.0 million related to this agreement in the fourth quarter of 2025, an additional $10.0 million in January 2026 and an additional $6.0 million in February 2026. We must pay the remaining balance of $24.0 million in periodic payments through the first quarter of 2027.
Removed
The $6.0 million impairment charges were driven by the 27 Table of Contents significant decline in our stock price that followed the August 9, 2023 announcement of our financial results for the second quarter of 2023. Under applicable accounting rules, this circumstance required us to evaluate our goodwill and long-lived assets for impairment.
Added
The sale was completed in September 2025, resulting in a loss of $0.3 million, which is included in other income (expense), net in our consolidated statement of operations for 2025. The sale generated $7.8 million of net cash.
Removed
Given the sustained decline in the market value of our outstanding equity and the uncertain impact of ongoing competition, we concluded that this impairment charge was appropriate as of September 30, 2023.
Added
In March 2025, we entered into an agreement with another buyer to sell 50 Enterprise Center for $5.3 million. The sale was completed in June 2025, resulting in a gain of $1.3 million, which is included in other income (expense), net in our consolidated statement of operations for 2025. The sale generated $4.9 million of net cash.
Removed
Please see Note 14 of our accompanying financial statements for additional details surrounding the wind-down of our manufacturing activities. Supply Chain During 2023, we continued to experience delays in the availability and delivery of certain raw material components. We also experienced increased raw material costs.
Added
We implemented this price reduction at the end of the third quarter of 2025 and, as a result, reduced the value of our remaining inventory of those products to net realizable value based on lower customer pricing. If demand continues to decline, we may need to record additional inventory write-downs.
Removed
We are continuing to monitor global developments, including the impact of inflation, and are prepared to implement actions that we determine to be necessary to sustain our business.
Added
Business Combination On October 8, 2025, we purchased the maritime satellite service business of a satellite services provider operating in the Asia-Pacific region.
Removed
Service sales decreased by $18.2 million, or 16%, to $96.4 million in 2024 from $114.6 million in 2023.
Added
The aggregate purchase price consideration transferred from us to the seller totaled $4.7 million, which consisted of cash payments at closing totaling $3.8 million and non-cash consideration in form of the settlement of certain receivables owed to us by the seller and valued at $0.9 million.
Removed
Coast Guard, which accounted for approximately $11 million of our service sales in 2023, advised us that it intended to transition its primary satellite service relationship on the vessels we served to SpaceX Starshield. In the third quarter of 2024, we received and processed the anticipated service downgrade request from the U.S.
Added
As a result of the business combination, we recognized intangible assets of $3.4 million and goodwill of $0.7 million. Please see Note 18 of our accompanying financial statements for additional details surrounding the business combination. We plan to continue to explore additional opportunities to increase our revenue through strategic customer acquisition transactions.
Removed
Coast Guard, which reduces anticipated revenue from this customer for 2025 through 2027 by approximately 95%. As a result, we expect to generate substantially less revenue from the U.S. Coast Guard. Costs of Sales Costs of sales consists of costs of product sales and costs of service sales.
Added
Service sales increased by $2.0 million, or 2%, to $98.4 million in 2025 from $96.4 million in 2024. 30 Table of Contents The increase in service sales was primarily due to a $0.9 million increase in CommBox Edge service sales, a $0.6 million increase in our content services sales, and a $0.5 million increase in our airtime service sales.
Removed
During the second quarter of 2024, we purchased from Starlink access to a large block of data at favorable rates. As a result of this purchase, our gross margin percentage on Starlink airtime services improved.

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