What changed in this filing

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Item 1. Financial Statements

2025-08-07 compared with 2025-05-07 · 190 added, 120 removed, 465 unchanged (40% of the section changed)

4 unchanged sentences

(in thousands, except share and per share amounts)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

ASSETS (unaudited)

1 unchanged sentence

Cash and cash equivalents $ 55,931 $ 50,572

Accounts receivable, net of allowance for credit losses of $ 1,018 and $ 1,006 as of March 31, 2025 and December 31, 2024, respectively

Accounts receivable, net of allowance for credit losses of $ 987 and $ 1,006 as of June 30, 2025 and December 31, 2024, respectively

25,350 21,624

31 unchanged sentences

Authorized 30,000,000 shares;

21,220,157 and 21,240,525 shares issued at March 31, 2025 and December 31, 2024, respectively;

and 19,733,230 and 19,784,416 shares outstanding at March 31, 2025 and December 31, 2024, respectively

21,223,892 and 21,240,525 shares issued at June 30, 2025 and December 31, 2024, respectively;

and 19,525,435 and 19,784,416 shares outstanding at June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 168,082 167,287

2 unchanged sentences

151,730 150,715

treasury stock at cost, common stock, 1,486,927 and 1,456,109 shares as of March 31, 2025 and December 31, 2024, respectively.

treasury stock at cost, common stock, 1,698,457 and 1,456,109 shares as of June 30, 2025 and December 31, 2024, respectively.

( 13,346 ) ( 12,090 )

6 unchanged sentences

(in thousands, except earnings per share amounts, unaudited)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

Service $ 23,049 $ 24,674 $ 44,691 $ 49,712

10 unchanged sentences

Interest income 579 876 1,146 1,787

Other expense, net ( 9 ) ( 198 )

Loss before income tax expense ( 1,685 ) ( 3,085 )

Income tax expense 25 78

Net loss $ ( 1,710 ) $ ( 3,163 )

Net loss per common share

Other income (expense), net 826 ( 366 ) 817 ( 564 )

Income (loss) before income tax expense (benefit) 1,035 ( 2,379 ) ( 650 ) ( 5,464 )

Income tax expense (benefit) 105 ( 3 ) 130 75

Net income (loss) $ 930 $ ( 2,376 ) $ ( 780 ) $ ( 5,539 )

Net income (loss) per common share

Basic $ 0.05 $ ( 0.12 ) $ ( 0.04 ) $ ( 0.29 )

6 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands, unaudited)

Three Months Ended

Net loss $ ( 1,710 ) $ ( 3,163 )

Other comprehensive loss, net of tax:

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

Net income (loss) $ 930 $ ( 2,376 ) $ ( 780 ) $ ( 5,539 )

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustment 278 ( 35 ) 1,000 194

Other comprehensive income, net of tax (1)

Total comprehensive loss $ ( 988 ) $ ( 2,934 )

Other comprehensive income (loss), net of tax (1)

278 ( 35 ) 1,000 194

Total comprehensive income (loss) $ 1,208 $ ( 2,411 ) $ 220 $ ( 5,345 )

(1) Tax impact was nominal for all periods.

9 unchanged sentences

Shares Amount Shares Amount

Balance at March 31, 2025 21,220 $ 212 $ 167,624 $ ( 14,462 ) $ ( 3,310 ) ( 1,487 ) $ ( 12,253 ) $ 137,811

Net income — — — 930 — — — 930

Other comprehensive income — — — — 278 — — 278

Stock-based compensation — — 434 — — — — 434

Acquisition of treasury stock — — — — — ( 211 ) ( 1,093 ) ( 1,093 )

Exercise of stock options and issuance of restricted stock awards, net of forfeitures 4 — 24 — — — — 24

Balance at June 30, 2025 21,224 $ 212 $ 168,082 $ ( 13,532 ) $ ( 3,032 ) ( 1,698 ) $ ( 13,346 ) $ 138,384

Common Stock Additional

Capital Retained Deficit Accumulated

Comprehensive Loss Treasury Stock Total

Stockholders’

Shares Amount Shares Amount

Balance at December 31, 2024 21,241 $ 212 $ 167,287 $ ( 12,752 ) $ ( 4,032 ) ( 1,456 ) $ ( 12,090 ) $ 138,625

4 unchanged sentences

Exercise of stock options and issuance of restricted stock awards, net of forfeitures ( 17 ) — 24 — — — — 24

Balance at June 30, 2025 21,224 $ 212 $ 168,082 $ ( 13,532 ) $ ( 3,032 ) ( 1,698 ) $ ( 13,346 ) $ 138,384

Common Stock Additional

Capital Retained Deficit Accumulated

Comprehensive Loss Treasury Stock Total

Stockholders’

Shares Amount Shares Amount

Balance at March 31, 2024 21,205 $ 212 $ 165,768 $ ( 4,867 ) $ ( 3,956 ) ( 1,456 ) $ ( 12,090 ) $ 145,067

Net loss — — — ( 2,376 ) — — — ( 2,376 )

Other comprehensive loss — — — — ( 35 ) — — ( 35 )

Stock-based compensation — — 722 — — — — 722

Exercise of stock options and issuance of restricted stock awards, net of forfeitures ( 35 ) — — — — — — —

Balance at June 30, 2024 21,170 $ 212 $ 166,490 $ ( 7,243 ) $ ( 3,991 ) ( 1,456 ) $ ( 12,090 ) $ 143,378

Common Stock Additional

9 unchanged sentences

Exercise of stock options and issuance of restricted stock awards, net of forfeitures 79 1 11 — — — — 12

Balance at March 31, 2024 21,205 $ 212 $ 165,768 $ ( 4,867 ) $ ( 3,956 ) ( 1,456 ) $ ( 12,090 ) $ 145,067

Balance at June 30, 2024 21,170 $ 212 $ 166,490 $ ( 7,243 ) $ ( 3,991 ) ( 1,456 ) $ ( 12,090 ) $ 143,378

See accompanying Notes to Unaudited Consolidated Financial Statements.

3 unchanged sentences

(in thousands, unaudited)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

5 unchanged sentences

(Gain) loss on disposals of fixed assets ( 8 ) 1,211

Gain on sale of fixed assets located at 50 Enterprise Center Middletown, Rhode Island

Compensation expense related to stock-based awards and employee stock purchase plan

8 unchanged sentences

Accrued compensation, product warranty and other ( 2,258 ) ( 4,666 )

Net cash used in operating activities $ ( 1,277 ) $ ( 792 )

Net cash provided by (used in) operating activities $ 3,819 $ ( 15,457 )

Cash flows from investing activities:

2 unchanged sentences

Proceeds from sale of fixed assets 1,200 —

Proceeds from the sale of fixed assets located at 50 Enterprise Center Middletown, Rhode Island 4,926 —

Purchases of marketable securities — ( 1,426 )

Maturities and sales of marketable securities — 21,000

Net cash (used in) provided by investing activities $ ( 557 ) $ 871

Net cash provided by investing activities $ 2,611 $ 14,448

Cash flows from financing activities:

3 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents 157 ( 24 )

Net (decrease) increase in cash and cash equivalents ( 1,972 ) 147

Net increase (decrease) in cash and cash equivalents 5,359 ( 937 )

Cash and cash equivalents at beginning of period 50,572 11,294

9 unchanged sentences

KVH Industries, Inc.

(together with its subsidiaries, the Company or KVH) designs, develops, manufactures and markets mobile connectivity services and products for the marine and land markets.

(together with its subsidiaries, the Company or KVH) develops, markets, and supports mobile connectivity and managed services and products for the marine and land markets.

KVH’s service sales primarily represent revenue earned from satellite Internet airtime services.

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KVH also sells and leases products to service providers and end users.

KVH’s marine leisure business is highly seasonal.

Seasonality can also impact the Company’s commercial marine business, although typically to a lesser degree.

Temporary suspensions of the Company’s airtime services typically increase in the fourth and first quarters of each year as boats are placed out of service during the winter months.

Historically, the Company has generated the majority of its 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, compared to the first two quarters.

In February 2024, the Company announced a staged wind-down of its product manufacturing operations at its Middletown, Rhode Island location.

The Company expects that it will continue its 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 it will cease substantially all manufacturing activity by the end of 2025.

The wind-down has been extended from the end of 2025 because the reduced workforce has been prioritizing fulfillment of LEO product orders and refurbishing AgilePlan terminals over manufacturing new units.

The Company expects to continue to facilitate customer transition to third-party hardware products compatible with its mobile satellite communications services.

8 unchanged sentences

These consolidated interim financial statements do not include all disclosures associated with annual financial statements and accordingly should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2024 filed on March 10, 2025 with the Securities and Exchange Commission.

The results for the three months ended March 31, 2025 are not necessarily indicative of operating results for the remainder of the year.

The results for the three and six months ended June 30, 2025 are not necessarily indicative of operating results for the remainder of the year.

Significant Estimates and Assumptions and Other Significant Non-Recurring Transactions

17 unchanged sentences

Foreign currency exchange gains and losses are recognized within “other expense, net” in the accompanying consolidated statements of operations.

The Company recorded net foreign currency exchange losses, which are comprised of both realized and unrealized foreign currency exchange gains and losses, in its accompanying consolidated statements of operations of $( 31 ) and $( 21 ) for the three months ended March 31, 2025 and 2024, respectively.

The Company recorded net foreign currency exchange losses, which are comprised of both realized and unrealized foreign currency exchange gains and losses, in its accompanying consolidated statements of operations of $( 101 ) and $( 248 ) for the three months ended June 30, 2025 and 2024, respectively, and $( 132 ) and $( 269 ) for the six months ended June 30, 2025 and 2024, respectively.

The financial statements of the Company’s foreign subsidiaries located in the United Kingdom, Norway, India and Japan use the foreign subsidiaries’ respective local currencies as the functional currency.

23 unchanged sentences

In the fourth quarter of 2024, the balance of our marketable securities held by Wells Fargo was liquidated and transferred to an interest-bearing account held by Bank of America, N.A.

Interest income from marketable securities was $ 0 and $ 720 during the three months ended March 31, 2025 and 2024, respectively.

We held no marketable securities as of March 31, 2025 and December 31, 2024.

Interest income from marketable securities was $ 0 and $ 706 during the three months ended June 30, 2025 and 2024, respectively, and $ 0 and $ 1,426 during the six months ended June 30, 2025 and 2024, respectively.

We held no marketable securities as of June 30, 2025 and December 31, 2024.

(5) Stockholder's Equity

1 unchanged sentence

The Company recognizes stock-based compensation in accordance with the provisions of ASC Topic 718, Compensation-Stock Compensation .

Stock-based compensation expense was $ 335 and $ 517 , excluding $ 2 and $ 5 of compensation shares related to the employee stock purchase plan (ESPP), for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, there was $ 2,005 of total unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted-average period of 3.20 years.

As of March 31, 2025, there was $ 1,227 of total unrecognized compensation expense related to restricted stock awards, which is expected to be recognized over a weighted-average period of 1.83 years.

Stock-based compensation expense was $ 432 and $ 721 , excluding $ 2 and $ 1 of compensation expense related to our Amended and Restated 1996 Employee Stock Purchase Plan, or the ESPP, for the three months ended June 30, 2025 and 2024, respectively, and $ 767 and $ 1,238 , excluding $ 4 and $ 6 of compensation expense related to ESPP, for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, there was $ 1,808 of total unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted-average period of 3.12 years.

As of June 30, 2025, there was $ 935 of total unrecognized compensation expense related to restricted stock awards, which is expected to be recognized over a weighted-average period of 2.06 years.

Stock Options

During the three months ended March 31, 2025, the Company issued less than 1 shares of common stock upon the exercise of stock options.

Additionally, during the three months ended March 31, 2025, 525 stock options were granted and 63 stock options expired, were canceled or were forfeited.

During the three months ended March 31, 2024, no shares of common stock were issued upon the exercise of stock options.

Additionally, during the three months ended March 31, 2024, 266 stock options were granted and 14 stock options expired, were canceled or were forfeited.

During the three months ended June 30, 2025, 6 shares of common stock were issued upon the exercise of stock options.

No shares were surrendered to the Company to satisfy minimum tax withholding obligations.

Additionally, during the three months ended June 30, 2025, 50 stock options were granted and 64 stock options expired, were canceled or were forfeited.

During the three months ended June 30, 2024, no shares of common stock were issued upon the exercise of stock options.

No shares were surrendered to the Company to satisfy minimum tax withholding obligations.

Additionally, during the three months ended June 30, 2024, no stock options were granted and 257 stock options expired, were canceled or were forfeited.

During the six months ended June 30, 2025, 6 shares of common stock were issued upon the exercise of stock options.

No shares were surrendered to the Company to satisfy minimum tax withholding obligations.

Additionally, during the six months ended June 30, 2025, 575 stock options were granted and 127 stock options expired, were canceled or were forfeited.

During the six months ended June 30, 2024, no shares of common stock were issued upon the exercise of stock options.

No shares were surrendered to the Company to satisfy minimum tax withholding obligations.

Additionally, during the six months ended June 30, 2024, 266 stock options were granted and 271 stock options expired, were canceled or were forfeited.

The Company has historically estimated the fair value of each option grant on the date of grant using the Black-Scholes option-pricing model.

The weighted average assumptions utilized to determine the fair value of options granted during the three months ended March 31, 2025 and 2024 are as follows:

Three Months Ended March 31,

The weighted average assumptions utilized to determine the fair value of options granted during the six months ended June 30, 2025 and 2024 are as follows:

Six Months Ended June 30,

Risk-free interest rate 3.95 % 4.36 %

2 unchanged sentences

Dividend yield 0 % 0 %

As of March 31, 2025, there were 1,415 options outstanding with a weighted average exercise price of $ 7.33 per share and 531 options exercisable with a weighted average exercise price of $ 9.02 per share.

As of March 31, 2024, there were 1,482 options outstanding with a weighted average exercise price of $ 8.75 per share and 641 options exercisable with a weighted average exercise price of $ 9.86 per share.

As of June 30, 2025, there were 1,397 options outstanding with a weighted average exercise price of $ 7.19 per share and 510 options exercisable with a weighted average exercise price of $ 8.96 per share.

As of June 30, 2024, there were 1,225 options outstanding with a weighted average exercise price of $ 8.64 per share and 599 options exercisable with a weighted average exercise price of $ 9.84 per share.

Restricted Stock

During the three months ended March 31, 2025, no shares of restricted stock were granted and 21 shares of restricted stock were forfeited.

Additionally, during the three months ended March 31, 2025, 83 shares of restricted stock vested.

During the three months ended March 31, 2024, 122 shares of restricted stock were granted with a weighted average grant date fair value of $ 5.03 per share and 8 shares of restricted stock were forfeited.

Additionally, during the three months ended March 31, 2024, 66 shares of restricted stock vested.

As of March 31, 2025 and 2024, the Company had no unvested outstanding options and no outstanding shares of restricted stock that were subject to performance-based or market-based vesting conditions.

During the three months ended June 30, 2025, no shares of restricted stock were granted and 1 shares of restricted stock were forfeited.

Additionally, during the three months ended June 30, 2025, 63 shares of restricted stock vested.

During the three months ended June 30, 2024, no shares of restricted stock were granted and 35 share of restricted stock were forfeited.

Additionally, during the three months ended June 30, 2024, 76 shares of restricted stock vested.

During the six months ended June 30, 2025, no shares of restricted stock were granted and 22 shares of restricted stock were forfeited.

Additionally, during the six months ended June 30, 2025, 146 shares of restricted stock vested.

During the six months ended June 30, 2024, 122 shares of restricted stock were granted with a weighted average grant date fair value of $ 5.03 per share and 43 shares of restricted stock were forfeited.

Additionally, during the six months ended June 30, 2024, 142 shares of restricted stock vested.

As of June 30, 2025 and 2024, the Company had no unvested outstanding options and no outstanding shares of restricted stock that were subject to performance-based or market-based vesting conditions.

(b) Employee Stock Purchase Plan

The Company's ESPP affords eligible employees the right to purchase common stock, via payroll deductions, through various offering periods at a purchase price equal to 85 % of the fair market value of the common stock on the first or last day of the offering period, whichever is lower.

During the three months ended March 31, 2025 and 2024, 0 and 24 shares were issued under the ESPP plan, respectively.

The Company recorded compensation charges related to the ESPP of $ 2 and $ 5 for the three months ended March 31, 2025 and 2024, respectively.

During the three months ended June 30, 2025 and 2024, no shares were issued under the ESPP.

During the six months ended June 30, 2025 and 2024, 0 and 24 shares were issued under the ESPP, respectively.

The Company recorded compensation charges related to the ESPP of $ 2 and $ 1 for the three months ended June 30, 2025 and 2024, respectively, and $ 4 and $ 6 for the six months ended June 30, 2025 and 2024, respectively.

The following table presents stock-based compensation expense, including expense for the ESPP, in the Company's consolidated statements of operations for the three months ended March 31, 2025 and 2024, respectively:

Three Months Ended March 31,

The following table presents stock-based compensation expense, including expense for the ESPP, in the Company's consolidated statements of operations for the six months ended June 30, 2025 and 2024, respectively:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Cost of service sales $ 6 $ 7 $ 13 $ 14

3 unchanged sentences

General and administrative 305 462 602 808

$ 434 $ 722 $ 771 $ 1,244

(d) Accumulated Other Comprehensive Loss (AOCL)

1 unchanged sentence

The components of the Company’s comprehensive income (loss) and the effect on earnings for the periods presented are detailed in the accompanying consolidated statements of comprehensive income (loss).

The balances for the three months ended March 31, 2025 and 2024 are as follows:

The balances for the three months ended June 30, 2025 and 2024 are as follows:

Foreign Currency Translation Total Accumulated Other Comprehensive Loss

Balance, December 31, 2024 $ ( 4,032 ) $ ( 4,032 )

Balance, March 31, 2025 $ ( 3,310 ) $ ( 3,310 )

Other comprehensive income 278 278

Net other comprehensive income 278 278

Balance, June 30, 2025 $ ( 3,032 ) $ ( 3,032 )

Foreign Currency Translation Total Accumulated Other Comprehensive Loss

Balance, March 31, 2024 $ ( 3,956 ) $ ( 3,956 )

Other comprehensive loss ( 35 ) ( 35 )

Net other comprehensive loss ( 35 ) ( 35 )

Balance, June 30, 2024 $ ( 3,991 ) $ ( 3,991 )

The balances for the six months ended June 30, 2025 and 2024 are as follows:

Foreign Currency Translation Total Accumulated Other Comprehensive Loss

2 unchanged sentences

Net other comprehensive income 1,000 1,000

Balance, March 31, 2024 $ ( 3,956 ) $ ( 3,956 )

(6) Net Loss per Common Share

Basic net loss per share is calculated based on the weighted average number of common shares outstanding during the period.

Balance, June 30, 2025 $ ( 3,032 ) $ ( 3,032 )

Foreign Currency Translation Total Accumulated Other Comprehensive Loss

Balance, December 31, 2023 $ ( 4,185 ) $ ( 4,185 )

Other comprehensive income 194 194

Net other comprehensive income 194 194

Balance, June 30, 2024 $ ( 3,991 ) $ ( 3,991 )

(6) Net Income (Loss) per Common Share

Basic net income (loss) per share is calculated based on the weighted average number of common shares outstanding during the period.

Diluted net income per share incorporates the dilutive effect of common stock equivalent options, warrants and other convertible securities, if any, as determined with the treasury stock accounting method.

For the three months ended March 31, 2025 and 2024 since there was a net loss, the company excluded 1,141 and 1,584 shares, respectively, in outstanding stock options and non-vested restricted shares from its diluted loss per share calculation, as inclusion of these convertible securities would have reduced the net loss per share.

The computation of diluted weighted-average common shares outstanding excludes 1,396 weighted average anti-dilutive stock-based awards outstanding for the three-month period ended June 30, 2025.

For the six months ended June 30, 2025, since there was a net loss, the company excluded 1,252 shares underlying outstanding stock options and non-vested restricted shares from its diluted loss per share calculation as inclusion of these convertible securities would have reduced the net loss per share.

For the three and six months ended June 30, 2024, since there was a net loss, the company excluded 1,375 and 1,297 shares, respectively, in outstanding stock options and non-vested restricted shares from its diluted loss per share calculation, as inclusion of these convertible securities would have reduced the net loss per share.

A reconciliation of the basic and diluted weighted average common shares outstanding is as follows:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

Weighted average common shares outstanding—basic 19,401 19,381 19,446 19,333

3 unchanged sentences

Inventories are stated at the lower of cost or net realizable value using the first-in first-out costing method.

Inventories as of March 31, 2025 and December 31, 2024 include the costs of material, labor, and factory overhead.

Inventories as of June 30, 2025 and December 31, 2024 include the costs of material, labor, and factory overhead.

Components of inventories consist of the following:

14 unchanged sentences

(9) Property and Equipment

Property and equipment, net, as of March 31, 2025 and December 31, 2024 consist of the following:

Property and equipment, net, as of June 30, 2025 and December 31, 2024 consist of the following:

2025 December 31,

7 unchanged sentences

$ 24,071 $ 27,014

Depreciation expense was $ 2,784 and $ 3,147 for the three months ended March 31, 2025 and 2024, respectively.

Depreciation expense was $ 2,500 and $ 3,637 for the three months ended June 30, 2025 and 2024, respectively, and $ 5,284 and $ 6,784 for the six months ended June 30, 2025 and 2024, respectively.

Certain revenue-generating hardware assets are utilized by the Company in the delivery of the Company's airtime services, media and other content.

As of March 31, 2025 and December 31, 2024, the long-lived tangible assets related to the Company’s international subsidiaries were less than 10% of the Company’s long-lived tangible assets.

As of June 30, 2025 and December 31, 2024, the long-lived tangible assets related to the Company’s international subsidiaries were less than 10% of the Company’s long-lived tangible assets.

In the third quarter of 2024, the Company commenced its plan to sell the warehouse building and surface parking lot located at 75 Enterprise Center in Middletown, Rhode Island (“75 Enterprise Center”).

6 unchanged sentences

The Company 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.

In December 2024, the Company 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, the Company received notice of termination from the buyer.

The estimated fair value of 50 Enterprise Center at that date exceeded its carrying value.

In March 2025, the Company entered into an agreement with another buyer to sell 50 Enterprise Center for $ 5.3 million.

Consummation of the transaction is subject to customary closing conditions.

Under the purchase agreement, the buyer has a 60-day inspection period and may terminate the agreement at any time before the end of the inspection period.

The sale was completed in June 2025, resulting in a gain of $ 1.3 million, which is included in other income (expense), net in the Company's consolidated statement of operations for the three and six months ended June 30, 2025.

(10) Product Warranty

4 unchanged sentences

Warranty and related costs are reflected within sales, marketing and support in the accompanying consolidated statements of operations.

As of March 31, 2025 and December 31, 2024, the Company had accrued product warranty costs of $ 707 and $ 607 , respectively.

As of June 30, 2025 and December 31, 2024, the Company had accrued product warranty costs of $ 828 and $ 607 , respectively.

The following table summarizes product warranty activity during 2025 and 2024:

Three Months Ended

Six Months Ended

Beginning balance $ 607 $ 828

14 unchanged sentences

Unobservable inputs that are supported by little or no market activity and are developed based on the best information available given the circumstances.

No financial assets or liabilities were measured at fair value based upon the ASC 820 fair value hierarchy as of March 31, 2025 or December 31, 2024.

No financial assets or liabilities were measured at fair value based upon the ASC 820 fair value hierarchy as of June 30, 2025 or December 31, 2024.

The carrying amount of certain financial instruments approximates fair value due to their short-term, highly liquid nature.

3 unchanged sentences

The Company's non-financial assets, such as intangible assets, and other long-lived assets resulting from business combinations, are measured at fair value using income approach valuation methodologies at the date of acquisition and subsequently re-measured if indications of impairment exist.

There was no impairment of the Company's non-financial assets noted during the three months ended March 31, 2025 or 2024.

There was no impairment of the Company's non-financial assets noted during the six months ended June 30, 2025 or 2024.

The Company does not have any liabilities that are recorded at fair value on a non-recurring basis.

6 unchanged sentences

Accordingly, the Company's asset groups were determined to be its reporting units (MBB and Media).

The changes in the carrying amount of intangible assets during the three months ended March 31, 2025 are as follows:

The changes in the carrying amount of intangible assets during the six months ended June 30, 2025 are as follows:

Balance at December 31, 2024

1 unchanged sentence

Intangible assets acquired in asset acquisition 17

Balance at March 31, 2025

Foreign currency translation adjustment 1

Balance at June 30, 2025

Intangible assets arose from the purchase of distribution rights from Kognitive Networks Inc.

8 unchanged sentences

Acquired intangible assets are subject to amortization.

The following table summarizes acquired intangible assets at March 31, 2025 and December 31, 2024, respectively:

The following table summarizes acquired intangible assets at June 30, 2025 and December 31, 2024, respectively:

Gross Carrying Amount Accumulated Amortization Net Carrying Value

March 31, 2025

June 30, 2025

Subscriber relationships $ 68 $ 24 $ 44

7 unchanged sentences

$ 3,585 $ 2,757 $ 828

Amortization expense related to intangible assets was $ 104 and $ 100 for the three months ended March 31, 2025 and 2024, respectively.

Amortization expense related to intangible assets was $ 106 and $ 101 for the three months ended June 30, 2025 and 2024, respectively, and $ 210 and $ 201 for the six months ended June 30, 2025 and 2024, respectively.

Amortization expense was categorized as general and administrative expense.

As of March 31, 2025, the total weighted average remaining useful lives of the definite-lived intangible assets was 1.8 years.

Estimated future amortization expense for intangible assets recorded by the Company at March 31, 2025 is as follows:

As of June 30, 2025, the total weighted average remaining useful lives of the definite-lived intangible assets was 1.5 years.

Estimated future amortization expense for intangible assets recorded by the Company at June 30, 2025 is as follows:

Years ending December 31, Amortization

4 unchanged sentences

Disaggregation of Revenue

The following table summarizes net sales from contracts with customers for the three months ended March 31, 2025 and 2024:

Three Months Ended

The following table summarizes net sales from contracts with customers for the six months ended June 30, 2025 and 2024:

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

Service - over time $ 23,049 $ 24,674 $ 44,691 $ 49,712

3 unchanged sentences

For service sales, the delivery of the Company’s performance obligations is transferred to the customer, and associated revenue is recognized, over time.

Revenues for these service agreements are recognized over time using an output method based upon the passage of time, as this provides a faithful depiction of the pattern of transfer of control.

Revenues for these service agreements are recognized over time using an output method based upon the passage of time, as this provides a faithful depiction of the pattern

of transfer of control.

The Company's performance is impacted by the levels of activity in the marine and land mobile markets, among other factors.

1 unchanged sentence

The Company offers a comprehensive family of mobile satellite antenna services and products that provide access to the Internet, television, and VoIP services while on the move.

Service sales of airtime service accounted for approximately 79 % and 81 % of the Company's consolidated net sales for the three months ended March 31, 2025 and 2024, respectively.

Service sales of airtime service accounted for 79 % and 80 % of the Company's consolidated net sales for the three months ended June 30, 2025 and 2024, respectively, and 79 % and 80 % of the Company's consolidated net sales for the six months ended June 30, 2025 and 2024, respectively.

The balance of service sales are comprised of distribution of commercially licensed entertainment and news, product repairs, and extended warranty sales.

Product sales accounted for 15 % and 14 % of the Company's consolidated net sales for the three months ended March 31, 2025 and 2024, respectively.

Product sales accounted for 13 % and 14 % of the Company's consolidated net sales for the three months ended June 30, 2025 and 2024, respectively, and 14 % of the Company's consolidated net sales for the both the six months ended June 30, 2025 and 2024.

No other single product class accounts for 10% or more of the Company's consolidated net sales.

1 unchanged sentence

Revenues from international locations primarily include Singapore, Canada, South American countries, European Union countries and other European countries, and countries in Africa, the Middle East and Asia/Pacific, including India.

Revenues are based upon customer location, and revenues from international locations represented 80 % and 72 % of consolidated net sales for the three months ended March 31, 2025 and 2024, respectively.

Sales to Singapore customers represented 23 % and 22 % of the Company's consolidated net sales for the three months ended March 31, 2025 and 2024, respectively.

No other individual foreign country represented 10% or more of the Company's consolidated net sales for the three months ended March 31, 2025 or 2024.

Revenues are based upon customer location, and revenues from international locations represented 78 % and 71 % of consolidated net sales for the three months ended June 30, 2025 and 2024, respectively, and 79 % and 72 % of consolidated net sales for the six months ended June 30, 2025 and 2024, respectively.

Sales to Singapore customers represented 21 % and 20 % of the Company's consolidated net sales for the three months ended June 30, 2025 and 2024, respectively.

No other individual foreign country represented 10% or more of the Company's consolidated net sales for the three months ended June 30, 2025 or 2024.

Sales to Singapore customers represented 22 % and 21 % of the Company's consolidated net sales for the six months ended June 30, 2025 and 2024, respectively.

No other individual foreign country represented 10% or more of the Company's consolidated net sales for the six months ended June 30, 2025 or 2024.

Business and Credit Concentrations

2 unchanged sentences

The Company establishes allowances for credit losses and evaluates, on a monthly basis, the adequacy of those reserves based upon expected losses, historical experience and its expectation for future collectability concerns.

One customer accounted for 13 % and 11 % of consolidated net sales for the three months ended March 31, 2025 and 2024, respectively.

No other customers accounted for 10% or more of consolidated net sales for the three months ended March 31, 2025 and 2024.

One customer accounted for approximately 21 % and 19 % of accounts receivable at March 31, 2025 and December 31, 2024, respectively.

One customer accounted for 39 % and 45 % of long-term accounts receivable included in other non-current assets on the consolidated balance sheets related to sales-type leases at March 31, 2025 and December 31, 2024, respectively.

One customer accounted for 12 % and 11 % of consolidated net sales for the six months ended June 30, 2025 and 2024, respectively.

No other customers accounted for 10% or more of consolidated net sales for the six months ended June 30, 2025 and 2024.

One customer accounted for approximately 20 % and 19 % of accounts receivable at June 30, 2025 and December 31, 2024, respectively.

One customer accounted for 35 % and 45 % of long-term accounts receivable included in other non-current assets on the consolidated balance sheets related to sales-type leases at June 30, 2025 and December 31, 2024, respectively.

Certain components from third parties used in the Company’s products are procured from single sources of supply.

1 unchanged sentence

(15) Income Taxes

The Company’s effective tax rate for the three months ended March 31, 2025 was ( 1.5 )%, compared with ( 2.5 )%, for the corresponding period in the prior year.

The Company’s effective tax rate for the three and six months ended June 30, 2025 was 10.1 % and ( 20.0 )%, respectively, compared with 0.1 % and ( 1.4 )%, for the corresponding periods in the prior year.

The effective income tax rate is based on estimated income for the year, the estimated composition of the income in different jurisdictions and discrete adjustments, if any, in the applicable periods, including retroactive changes in tax legislation, settlements of tax audits or assessments, and the resolution or identification of tax position uncertainties.

For the three months ended March 31, 2025 and 2024, the effective tax rates differed from the statutory tax rate primarily due to the Company maintaining a valuation allowance reserve on its U.S.

For the three and six months ended June 30, 2025 and 2024, the effective tax rates differed from the statutory tax rate primarily due to the Company maintaining a valuation allowance reserve on its U.S.

deferred tax assets, discrete tax adjustments and the composition of income from foreign jurisdictions taxed at lower rates.

As of March 31, 2025 and December 31, 2024, the Company had reserves for uncertain tax positions of $ 745 and $ 724 , respectively.

There were no material changes during the three months ended March 31, 2025 to the Company’s reserve for uncertain tax positions.

The Company estimates that it is reasonably possible that the balance of unrecognized tax benefits as of March 31, 2025 may decrease $ 15 in the next twelve months as a result of a lapse of statutes of limitations and settlements with taxing authorities.

As of June 30, 2025 and December 31, 2024, the Company had reserves for uncertain tax positions of $ 767 and $ 724 , respectively.

There were no material changes during the six months ended June 30, 2025 to the Company’s reserve for

uncertain tax positions.

The Company estimates that it is reasonably possible that the balance of unrecognized tax benefits as of June 30, 2025 may decrease $ 16 in the next twelve months as a result of a lapse of statutes of limitations and settlements with taxing authorities.

The Company’s tax jurisdictions include the United States, the United Kingdom, Denmark, Cyprus, Norway, Brazil, Singapore, Japan and India.

2 unchanged sentences

The Company has operating leases for office facilities, equipment, and satellite service capacity and related equipment.

Lease expense was $ 271 and $ 353 for the three months ended March 31, 2025 and 2024, respectively.

Short-term operating lease costs were $ 22 and $ 19 for the three months ended March 31, 2025 and 2024, respectively.

Maturities of lease liabilities as of March 31, 2025 under operating leases having an initial or remaining non-cancelable term of one year or more are as follows:

Lease expense was $ 235 and $ 366 for the three months ended June 30, 2025 and 2024, respectively, and $ 506 and $ 719 for the six months ended June 30, 2025 and 2024, respectively.

Short-term operating lease costs were $ 24 and $ 20 for the three months ended June 30, 2025 and 2024, respectively, and $ 46 and $ 39 for the six months ended June 30, 2025 and 2024, respectively.

Maturities of lease liabilities as of June 30, 2025 under operating leases having an initial or remaining non-cancelable term of one year or more are as follows:

Remainder of 2025 $ 468

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The practical expedient also allows a lessor to account for the combined lease and non-lease components under ASC 606, Revenue from Contracts with Customers, when the non-lease component is the predominant element of the combined component.

The current portion of the net investment in these leases was $ 3,067 as of March 31, 2025 and the non-current portion of the net investment in these leases was $ 3,036 as of March 31, 2025.

The current portion of the net investment in the leases is included in accounts receivable, net of allowance for doubtful accounts on the accompanying consolidated balance sheets, and the non-current portion of the net investment in these leases is included in other non-current assets on the accompanying consolidated balance sheets.

Interest income from sales-type leases was $ 102 and $ 129 during the three months ended March 31, 2025 and 2024, respectively.

The future undiscounted cash flows from these leases as of March 31, 2025 are:

The current portion of the net investment in these leases was $ 3,110 as of June 30, 2025 and the non-current portion of the net investment in these leases was $ 2,918 as of June 30, 2025.

consolidated balance sheets.

Interest income from sales-type leases was $ 101 and $ 117 during the three months ended June 30, 2025 and 2024, respectively, and $ 203 and $ 246 during the six months ended June 30, 2025 and 2024, respectively.

The future undiscounted cash flows from these leases as of June 30, 2025 are:

Remainder of 2025 $ 2,165

2 unchanged sentences

Difference between undiscounted cash flows and discounted cash flows $ 481

In 2021, the Company began entering into three-year leases for its TracPhone VSAT systems, in which ownership of the hardware does not transfer to the lessee by the end of the lease term.

As a result, and in light of other factors indicated in ASC 842, these leases are classified as operating leases.

As of March 31, 2025, the gross costs and accumulated depreciation associated with these operating leases are included in revenue generating assets and amounted to $ 1,767 and $ 1,352 , respectively.

They are depreciated on a straight-line basis over a five-year estimated useful life.

Depreciation expense for these operating leases was $ 89 for the three months ended March 31, 2025.

Lease revenue recognized was $ 19 for the three months ended March 31, 2025, respectively, in service sales in the consolidated statements of operations.

As of March 31, 2025, minimum future lease payments to be recognized on the operating leases are as follows:

Remainder of 2025 $ 6

(17) Restructuring

2 unchanged sentences

The Board concluded that the Company should discontinue its capital-intensive manufacturing activities and concentrate its efforts on growing sales of its multi-orbit, multi-channel, integrated communications solutions, which in recent years have constituted the largest portion of the Company’s overall revenues.

The Company expects that it will continue its product manufacturing activities for a period of time in order to generate a targeted amount of inventory of maritime satellite connectivity and satellite television terminals to meet anticipated demand and that it will cease substantially all manufacturing activity at the Middletown, Rhode Island facility by the end of 2025.

The Company expects to continue to facilitate customer transition to third-party hardware products compatible with the Company’s mobile satellite communications services.

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This is reviewed against budgeted expectations to assess segment performance and allocate resources.

The Company’s segment net income for the three months ended March 31, 2025 and 2024 consisted of the following:

Three Months Ended

The Company’s segment net income for the six months ended June 30, 2025 and 2024 consisted of the following:

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

Service $ 23,049 $ 24,674 $ 44,691 $ 49,712

7 unchanged sentences

Cost of product sales

VSAT 590 362 1,184 982

LEO 1,133 1,478 2,588 2,750

TracVision & land mobile

700 876 1,320 1,943

Other (2) 854 1,583 1,925 3,932

3,277 4,299 7,017 9,607

Research and development

2 unchanged sentences

Other (3) 82 304 280 648

916 2,326 2,103 5,364

Sales, marketing and support

2 unchanged sentences

Other (4) 1,251 1,413 2,760 3,047

5,010 5,334 9,970 10,718

General and administrative

2 unchanged sentences

Other (5) 1,166 1,144 2,187 2,385

3,580 4,134 7,115 9,425

Other segment items (6) ( 1,300 ) ( 513 ) ( 1,833 ) ( 1,148 )

Net loss $ ( 1,710 ) $ ( 3,163 )

Net income (loss) $ 930 $ ( 2,376 ) $ ( 780 ) $ ( 5,539 )

(1) Includes costs related to Inmarsat, service activations, content service, CommBox Edge and other miscellaneous

4 unchanged sentences

(6) Other segment items includes interest income;

other expense, net;

and income tax expense line items on the face of the income statement

Regarding the Company's long-lived assets of $ 25,948 , $ 4,719 of these assets are located inside of the United States, while the remaining $ 21,229 are located outside of the United States.

other income (expense), net;

and income tax expense (benefit) line items on the face of the income statement

Regarding the Company's long-lived assets of $ 25,346 , $ 5,595 of these assets are located inside of the United States.

Regarding the assets located outside of the United States, $ 6,813 are located in Singapore.

6 unchanged sentences

The program does not obligate the Company 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.

During the three months ended March 31, 2025, the Company repurchased 31 shares of common stock in open market transactions at a cost of approximately $ 163 .

During the three months ended June 30, 2025, the Company repurchased 211 shares of common stock in open market transactions at a cost of approximately $ 1,093 .

During the six months ended June 30, 2025, the Company repurchased 242 shares of common stock in open market transactions at a cost of approximately $ 1,256 .

Except as noted above, there were no other repurchase programs outstanding.

(20) Subsequent Events

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

We are currently assessing its impact on our consolidated financial statements.

On July 23, 2025, the Company entered into a new lease agreement for approximately 32,000 square feet of office and warehouse space in Bristol, Rhode Island.

The Company currently plans to migrate its Rhode Island operations to this leased facility in the spring of 2026, at which point its general and administrative expense will include lease expense at the rate of approximately $ 0.6 million for the first year of the lease (excluding three months of free rent), with fixed annual increases thereafter.

The lease agreement is for a term of 87 months with an option to extend the lease an additional 10 years.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements