KVH Industries (NASDAQ:KVHI) Posts Earnings Results, Misses Expectations By $0.03 EPS

Key Points

• KVH Industries missed earnings expectations: Q2 EPS was $0.01 versus the $0.04 consensus estimate, while revenue of $33.72 million was essentially in line with forecasts.
• Growth and profitability improved: Revenue increased 27% year over year to $33.7 million, service revenue rose 29%, and adjusted EBITDA grew to $3.6 million. Subscribing vessels increased 11% sequentially, supported by continued expansion of LEO connectivity services.
• Investor sentiment remains cautious: Shares fell to $8.03, analysts’ average rating is “Sell,” and a major shareholder recently sold shares. The company expects to complete its remaining $15 million share-repurchase authorization this month.

KVH Industries (NASDAQ:KVHI - Get Free Report) posted its quarterly earnings results on Thursday. The communications equipment provider reported $0.01 earnings per share for the quarter, missing the consensus estimate of $0.04 by ($0.03), FiscalAI reports. KVH Industries had a negative return on equity of 0.76% and a negative net margin of 4.68%.The company had revenue of $33.72 million during the quarter, compared to analysts' expectations of $33.70 million.

Here are the key takeaways from KVH Industries' conference call:

• Revenue and recurring service growth accelerated: Q2 revenue rose 27% year over year to $33.7 million, while service revenue increased 29% to $29.7 million. Subscribing vessels grew 11% sequentially to approximately 10,700, with 18% year-to-date growth.
• KVH continued expanding its LEO connectivity business, with Starlink remaining the dominant offering and 55% of airtime revenue now coming from LEO services. New multi-network plans combining Starlink, OneWeb, and VSAT are intended to improve customer flexibility and network redundancy.
• Strategic initiatives broadened the company’s addressable market, including roughly 1,600 land-based Starlink sites, beta trials of the Link streaming service, early managed IT and cybersecurity engagements, expanded international sales coverage, and a new Fort Lauderdale retail location.
• Profitability and cash generation improved sequentially, with service gross profit rising to $10.6 million, gross margin reaching 36%, and adjusted EBITDA increasing to $3.6 million from $2.8 million. Management expects GEO bandwidth obligations to be largely completed by year-end, reducing exposure to declining VSAT margins.
• Terminal shipments declined from a record 3,100 in Q1 to approximately 2,500 in Q2, although management characterized 2,000–3,000 units per quarter as a sustainable forward range. The company expects to complete its remaining $15 million share-repurchase authorization during the current month, which will reduce further buyback support after the program ends.

KVH Industries Price Performance

Shares of KVHI traded down $0.26 on Friday, reaching $8.03. The company's stock had a trading volume of 240,526 shares, compared to its average volume of 205,410. The stock has a market capitalization of $156.57 million, a P/E ratio of -26.77 and a beta of 0.44. The stock's 50 day simple moving average is $8.94 and its two-hundred day simple moving average is $8.52. KVH Industries has a 12-month low of $5.09 and a 12-month high of $13.00.

Analyst Ratings Changes

A number of brokerages recently issued reports on KVHI. Wall Street Zen cut shares of KVH Industries from a "buy" rating to a "hold" rating in a research note on Saturday, June 13th. Weiss Ratings reaffirmed a "sell (d-)" rating on shares of KVH Industries in a report on Wednesday, June 24th. One research analyst has rated the stock with a Sell rating, According to data from MarketBeat, KVH Industries has an average rating of "Sell".

Insider Buying and Selling

In other KVH Industries news, major shareholder Bradley Louis Radoff sold 35,000 shares of the stock in a transaction that occurred on Wednesday, May 27th. The shares were sold at an average price of $11.20, for a total value of $392,000.00. Following the transaction, the insider directly owned 290,000 shares in the company, valued at approximately $3,248,000. This trade represents a 10.77% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Insiders have sold 39,092 shares of company stock worth $423,099 over the last three months. 21.40% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On KVH Industries

Several hedge funds and other institutional investors have recently added to or reduced their stakes in KVHI. Jane Street Group LLC boosted its stake in KVH Industries by 134.0% during the first quarter. Jane Street Group LLC now owns 33,227 shares of the communications equipment provider's stock valued at $176,000 after buying an additional 19,026 shares during the last quarter. Mink Brook Asset Management LLC lifted its position in KVH Industries by 84.5% in the second quarter. Mink Brook Asset Management LLC now owns 153,683 shares of the communications equipment provider's stock worth $819,000 after buying an additional 70,382 shares during the last quarter. Orion Porfolio Solutions LLC lifted its position in KVH Industries by 3.3% in the second quarter. Orion Porfolio Solutions LLC now owns 68,829 shares of the communications equipment provider's stock worth $367,000 after buying an additional 2,222 shares during the last quarter. Squarepoint Ops LLC boosted its stake in KVH Industries by 27.8% during the third quarter. Squarepoint Ops LLC now owns 27,303 shares of the communications equipment provider's stock worth $153,000 after buying an additional 5,935 shares during the period. Finally, NewEdge Advisors LLC purchased a new position in KVH Industries during the third quarter worth $90,000. 73.66% of the stock is owned by hedge funds and other institutional investors.

KVH Industries Company Profile

KVH Industries, Inc develops and manufactures mobile connectivity, inertial navigation, and stabilization systems for maritime, land mobile and defense markets. Its Satellite Communications Group delivers a range of mobile VSAT and broadband systems under the TracPhone and TracNet brands, offering high-speed data, voice and TV programming for commercial and leisure vessels. The company pairs its hardware offerings with the OneCare global network and service platform, providing 24/7 support and coverage across major satellite constellations.

The Inertial Systems Group at KVH produces fiber-optic and hemispherical resonator gyros, inertial measurement units (IMUs) and related inertial navigation products for aerospace, unmanned platforms and precision stabilization applications.

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