What KVH Industries (KVHI) Said on Its Q3 Earnings Call

Key Points

• Q3 revenue rose 35% year over year to $38.4 million, while service revenue climbed 30% to $33 million and adjusted EBITDA increased to $3.9 million. Active subscribing vessels grew 6% from the prior quarter to approximately 9,300.
• KVH shipped more than 4,000 connectivity terminals, including over 1,600 Starlink high-performance units, helping product revenue rise 79% to $5.5 million. A December Starlink price increase is expected to lift service revenue but reduce service gross margin as a percentage, with little change to gross profit.
• KVH raised the low ends of its 2026 outlook, forecasting revenue of $137 million–$143 million and adjusted EBITDA of $13 million–$15 million. It ended the quarter with $50.7 million in cash and no debt.

KVH Industries NASDAQ: KVHI reported 35% year-over-year revenue growth in the third quarter of 2026, as demand for low Earth orbit satellite connectivity and managed services helped lift recurring service revenue.

The company generated total revenue of $38.4 million, up 14% from the second quarter. Service revenue rose 30% from a year earlier to $33 million, while adjusted EBITDA increased to $3.9 million from $1.4 million. Adjusted EBITDA is a non-GAAP measure.

Chief Executive Officer Brent Bruun said fleets are increasingly seeking connectivity providers that also offer tools to manage bandwidth, protect against cyber threats and keep crews connected. “Our third quarter results reflect the work we have done to reshape KVH around LEO connectivity and managed services,” he said.

Service Growth and Vessel Reporting

LEO airtime accounted for 58% of service revenue in the quarter, Chief Financial Officer Anthony Pike said. Service gross profit grew 28% year over year to $11.1 million, although the service gross margin declined to 34% from 36% in the second quarter as several large, high-usage customers moved onto lower-margin plans.

KVH began reporting active subscribing vessels in the third quarter, excluding suspended vessels and those on plans with very low monthly recurring fees. Under that definition, the company ended the quarter with approximately 9,300 active vessels, up 6% from about 8,800 in the prior quarter.

Bruun said the excluded low-fee vessels consist primarily of approximately 1,000 small fishing vessels in one regional market and are not material to recurring revenue, gross profit or EBITDA. Pike said the active count will show some seasonality, particularly in leisure and fishing markets. Bruun added that suspensions typically rise in the fourth quarter.

The company’s first customers began subscribing to its managed IT service during the quarter. KVH also added cybersecurity and IT tools to its CommBox Edge Pro offering in September and launched Link Live, a live TV streaming addition to its crew content service. Beyond maritime, KVH said it supports more than 1,800 land-based sites.

Terminal Shipments and Starlink Pricing

KVH shipped more than 4,000 connectivity terminals in the quarter, including over 1,600 Starlink high-performance terminals, up from approximately 1,000 in the second quarter. Product revenue increased 79% year over year to $5.5 million.

Product gross profit included a $2.3 million non-cash write-down of TV receive-only inventory because of reduced demand and pricing. The charge was excluded from adjusted EBITDA.

KVH plans to reprice its Starlink plans effective December 1 after Starlink announced increases across its maritime services. Bruun said KVH expects the change to raise service revenue and lower service gross margin as a percentage, without materially changing gross profit.

During the question-and-answer session, Bruun said the company was still modeling the margin effect, but that it could be a few hundred basis points. He also said it was too early to assess customer reaction: KVH had informed its channel of the increase but had not yet officially introduced it.

Bruun said KVH had seen some business softness in the Middle East, particularly Dubai, but described the region as a small part of its overall market and said the effect was not material.

Cash and Outlook

KVH ended the quarter with $50.7 million in cash and no debt. Cash fell by approximately $7 million during the quarter, primarily reflecting $10.7 million in share repurchases that completed its $15 million program. Pike said the company does not currently have a repurchase authorization in place.

For full-year 2026, KVH narrowed its guidance and raised the low end of both ranges. It now expects revenue of $137 million to $143 million and adjusted EBITDA of $13 million to $15 million.

At the midpoint, the forecast implies approximately 26% revenue growth and roughly 73% adjusted EBITDA growth from the prior year, Pike said. The revenue outlook includes a modest lift from the December Starlink repricing.

Pike also said service gross profit should benefit in 2027 from a reduction in the company’s legacy geostationary satellite network commitment, with a material decrease in GEO bandwidth costs expected next year.

About KVH Industries (NASDAQ:KVHI)

KVH Industries is a technology company that develops connectivity and navigation solutions for maritime, land-based, and government customers. The company is best known for satellite communications systems that provide broadband internet, voice, and data services to commercial vessels, leisure boats, and other mobile platforms.

KVH's maritime offerings have included the TracNet and TracPhone product families, which combine satellite, cellular, and onboard communications capabilities. The company has also provided network management, cybersecurity, content, and support services designed to help vessel operators maintain reliable connectivity at sea.

In addition to communications, KVH develops inertial navigation and stabilization technologies, including fiber-optic gyros and related guidance systems.

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