What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-07 compared with 2025-05-07 · 122 added, 62 removed, 105 unchanged (64% of the section changed)

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In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or the negative of these terms or other comparable terminology.

Any expectations based on these forward-looking statements are subject to risks and uncertainties and other important factors, including those discussed in the section entitled “Risk Factors” in Item 1A of Part I of our annual report on Form 10-K for the year ended December 31, 2024.

These and many other factors could affect our future financial and operating results and could cause actual results to differ materially from expectations based on forward-looking statements made in this document or elsewhere by us or on our behalf.

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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.

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, OneWeb, Iridium, and other satellite services), KVH-provided cellular service in more than 150 countries, and shore-based Wi-Fi access.

In mid-2022, we launched our KVH ONE hybrid network, which integrates global satellite service (including Ku-band VSAT using the Intelsat (acquired by SES in July 2025) HTS network along with Starlink, OneWeb, Iridium, and other satellite services), KVH-provided cellular service in more than 150 countries, and shore-based Wi-Fi access.

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.

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.

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.

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We concluded that we should discontinue our capital-intensive manufacturing activities and concentrate our efforts on growing sales of our multi-orbit, multi-channel, integrated communications solutions.

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 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 into 2026 and that we will cease substantially all manufacturing activity by the end of 2026.

This wind-down has been extended from the end of 2025 because the reduced workforce has been prioritizing fulfilling LEO product orders and refurbishing AgilePlan 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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Rent during the initial term is approximately $25,000 per month, which would increase to approximately $44,000 per month during any extension.

We anticipate that this sale will be completed in September 2025 and we plan to lease this property until the end of March 2026.

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”).

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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.

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

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.

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In March 2025, we 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.

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.

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, compared to the first two quarters.

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 the three and six months ended June 30, 2025.

The sale generated $4.9 million of net cash.

Critical Accounting Estimates

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Critical accounting estimates are those estimates made that involve a significant level of estimation uncertainty and have had or are reasonably likely to have an impact on our statement of operations.

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 the three months ended March 31, 2025, as discussed below.

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 the six months ended June 30, 2025, as discussed below.

Results of Operations

The following table provides, for the periods indicated, certain financial data relating to our operations expressed as a percentage of net sales:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

Service 86.6 % 86.1 % 85.9 % 85.8 %

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Interest income 2.2 3.1 2.2 3.1

Other expense, net — (0.7)

Loss before income tax expense (6.6) (10.6)

Income tax expense 0.1 0.3

Net loss (6.7) % (10.9) %

Three months ended March 31, 2025 and 2024

Our net sales for the three months ended March 31, 2025 and 2024 were as follows:

For the three months ended March 31, 2025 vs.

Other income (expense), net 3.1 (1.3) 1.6 (1.0)

Income (loss) before income tax expense (benefit) 4.0 (8.2) (1.3) (9.5)

Income tax expense (benefit) 0.4 — 0.2 0.1

Net income (loss) 3.6 % (8.2) % (1.5) % (9.6) %

Three months ended June 30, 2025 and 2024

Our net sales for the three months ended June 30, 2025 and 2024 were as follows:

For the three months ended June 30, 2025 vs.

2025 2024 $ %

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Net sales $ 26,623 $ 28,673 $ (2,050) (7) %

Net sales decreased by $3.9 million, or 13%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Service sales decreased by $3.4 million, or 14%, to $21.6 million for the three months ended March 31, 2025 from $25.0 million for the three months ended March 31, 2024.

The decrease in service sales was primarily due to a $3.5 million decrease in our airtime service sales, of which $2.5 million was related to the U.S.

Coast Guard contract downgrade.

In addition, there was a decrease in VSAT-only subscribers, partially offset by an increase in LEO service sales.

Net sales decreased by $2.1 million, or 7%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024.

Service sales decreased by $1.6 million, or 7%, to $23.0 million for the three months ended June 30, 2025 from $24.7 million for the three months ended June 30, 2024.

The decrease in service sales was primarily due to a $1.9 million decrease in our airtime service sales, which reflected a $2.5 million reduction in sales related to the U.S.

Coast Guard contract downgrade in the third quarter of 2024, as well as a decrease in other VSAT subscribers.

These decreases in VSAT service sales were partially offset by an increase in LEO service sales.

For the three months ended June 30, 2025, LEO services sales represented over 30% of airtime services sales, as compared to less than 10% for the three months ended June 30, 2024.

The increase in LEO service sales as a percentage of total airtime sales resulted from both a substantial increase in LEO service sales and a substantial decrease in VSAT service sales.

Alternative solutions offered by recent LEO entrants have heightened competition in the global leisure segment and in commercial and government markets.

Product sales decreased by $0.5 million, or 11%, to $3.8 million for the three months ended March 31, 2025 from $4.2 million for the three months ended March 31, 2024.

The decrease in product sales was primarily due to a $0.5 million decrease in TracVision product sales and a $0.2 million decrease in accessory and land mobile connectivity product sales, partially offset by a $0.2 million increase in Starlink product sales and a $0.2 million increase in CommBox Edge product sales.

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.

Product sales decreased by $0.4 million, or 11%, to $3.6 million for the three months ended June 30, 2025 from $4.0 million for the three months ended June 30, 2024.

The decrease in product sales was primarily due to a $0.5 million decrease in Starlink product sales and a $0.2 million decrease in TracVision product sales, partially offset by a $0.3 million increase in OneWeb product sales and a $0.2 million increase in VSAT Broadband product sales.

The decrease in product sales was primarily due to discounted pricing on Starlink products.

Competition from low-cost alternatives to VSAT, which include streaming capabilities, has had a significant impact on sales of our TracVision products.

Costs of Sales

Costs of sales consists of costs of service sales and costs of product sales.

Costs of sales decreased by $1.4 million, or 7%, in the three months ended March 31, 2025 to $18.0 million from $19.4 million in the three months ended March 31, 2024.

The decrease in costs of sales was driven by a $1.6 million decrease in costs of product sales, partially offset by a $0.2 million increase in costs of service sales.

As a percentage of net sales, costs of sales were 71% and 66% for the three months ended March 31, 2025 and 2024, respectively.

Costs of sales decreased by $2.3 million, or 12%, in the three months ended June 30, 2025 to $17.5 million from $19.8 million in the three months ended June 30, 2024.

The decrease in costs of sales was driven by a $1.3 million decrease in costs of service sales and a $1.0 million decrease in costs of product sales.

As a percentage of net sales, costs of sales were 66% and 69% for the three months ended June 30, 2025 and 2024, 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 materials and distribution costs, and service repair materials.

For the three months ended March 31, 2025, costs of service sales increased by $0.2 million, or 1%, to $14.2 million from $14.0 million for the three months ended March 31, 2024, primarily due to a $0.2 million increase in content services cost of service sales.

As a percentage of service sales, costs of service sales were 66% and 56% for the three months ended March 31, 2025 and 2024, respectively, driven primarily by fixed costs.

For the three months ended June 30, 2025, costs of service sales decreased by $1.3 million, or 8%, to $14.2 million from $15.5 million in the three months ended June 30, 2024, primarily due to a $1.2 million decrease in airtime costs of service sales.

As a percentage of service sales, costs of service sales were 62% and 63% for the three months ended June 30, 2025 and 2024, respectively.

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, during the three months ended June 30, 2025 our gross margin percentage on Starlink airtime services improved year over year.

Our costs of product sales consist primarily of materials, manufacturing overhead, and direct labor used to produce our products.

For the three months ended March 31, 2025, costs of product sales decreased by $1.6 million, or 30%, to $3.7 million from $5.3 million in the three months ended March 31, 2024, primarily due to a $1.2 million decrease in various manufacturing and other unabsorbed expenses, a $0.4 million decrease in TracVision cost of product sales and a $0.2 million decrease in accessory cost of product sales, partially offset by a $0.2 million increase in Starlink cost of product sales.

As a percentage of product sales, costs of product sales were 99% and 126% for the three months ended March 31, 2025 and 2024, respectively.

For the three months ended June 30, 2025, costs of product sales decreased by $1.0 million, or 24%, to $3.3 million from $4.3 million in the three months ended June 30, 2024, primarily due to a $0.8 million decrease in various manufacturing and other unabsorbed expenses and a $0.6 million decrease in Starlink cost of product sales.

These decreases were partially offset by a $0.3 million increase in OneWeb cost of product sales.

As a percentage of product sales, costs of product sales were 92% and 108% for the three months ended June 30, 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 expense.

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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 the three months ended March 31, 2025 decreased by $1.9 million, or 61%, to $1.2 million from $3.0 million for the three months ended March 31, 2024.

The decrease in research and development expense resulted primarily from a $1.7 million decrease in salaries, benefits and taxes, after giving effect to $0.8 million in costs incurred during the three months ended March 31, 2024 related to the reduction in our workforce.

As a percentage of net sales, research and development expense was 5% and 10% for the three months ended March 31, 2025 and 2024, respectively.

Research and development expense for the three months ended June 30, 2025 decreased by $1.4 million, or 61%, to $0.9 million from $2.3 million for the three months ended June 30, 2024.

The decrease in research and development expense resulted primarily from a $1.2 million decrease in salaries, benefits and taxes, after giving effect to $0.3 million in costs incurred during the three months ended June 30, 2024 related to the reduction in our workforce.

As a percentage of net sales, research and development expense was 3% and 8% for the three months ended June 30, 2025 and 2024, respectively.

Sales, marketing, and support expense consists primarily of salaries and related expenses for sales and marketing personnel, commissions for both in-house and third-party representatives, costs related to the co-development of certain content, other sales and marketing support costs such as advertising, literature and promotional materials, product service personnel and support costs, warranty-related costs and bad debt expense.

Sales, marketing and support expense for the three months ended March 31, 2025 decreased by $0.4 million, or 8%, to $5.0 million from $5.4 million for the three months ended March 31, 2024.

The decrease in sales, marketing and support expense resulted primarily from a $0.4 million decrease in salaries, benefits and taxes, after giving effect to $0.3 million in costs incurred during the three months ended March 31, 2024 related to the reduction in our workforce.

As a percentage of net sales, sales, marketing and support expense was 20% and 18% for the three months ended March 31, 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 for the three months ended June 30, 2025 decreased by $0.3 million, or 6%, to $5.0 million from $5.3 million for the three months ended June 30, 2024.

The decrease in sales, marketing and support expense resulted primarily from a $0.3 million decrease in salaries, benefits and taxes and a $0.3 million decrease in facilities expense, partially offset by a $0.2 million increase in professional fees and a $0.2 million increase in warranty expense.

As a percentage of net sales, sales, marketing and support expense was 19% for both the three months ended June 30, 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.

General and administrative expense for the three months ended March 31, 2025 decreased by $1.8 million, or 33%, to $3.5 million from $5.3 million for the three months ended March 31, 2024.

The decrease in general and administrative expense resulted primarily from a $1.6 million decrease in salaries, benefits and taxes, after giving effect to $0.6 million in costs incurred during the three months ended March 31, 2024 related to the reduction in our workforce, and a $0.3 million decrease in depreciation expense.

As a percentage of net sales, general and administrative expense was 14% and 18% for the three months ended March 31, 2025 and 2024, respectively.

Interest and Other Expense, Net

Interest income decreased by $0.3 million to $0.6 million for the three months ended March 31, 2025 from $0.9 million for the three months ended March 31, 2024.

General and administrative expense for the three months ended June 30, 2025 decreased by $0.6 million, or 13%, to $3.6 million from $4.1 million for the three months ended June 30, 2024.

The decrease in general and administrative expense resulted primarily from a $0.5 million decrease in salaries, benefits and taxes, after giving effect to $0.3 million in costs incurred during the three months ended June 30, 2024 related to the reduction in our workforce.

In addition, there was a $0.2 million decrease in depreciation expense.

These decreases in expense were partially offset by a $0.4 million increase in facilities expense.

As a percentage of net sales, general and administrative expense was 13% and 14% for the three months ended June 30, 2025 and 2024, respectively.

We currently plan to migrate our Rhode Island operations to a leased facility in the spring of 2026, at which point our 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).

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.

Interest income decreased by $0.3 million to $0.6 million for the three months ended June 30, 2025 from $0.9 million for the three months ended June 30, 2024, primarily as a result of lower cash balances in 2025 as a result of the $17.0 million prepayment in June 2024 for access to a large block of Starlink Mobile Priority data at favorable rates.

Of the current period interest income of $0.6 million, $0.5 million is attributable to interest earned on cash and cash equivalents, while the remaining $0.1 million was attributable to interest from lease receivables.

Other income (expense), net changed by $1.2 million to other income, net of $0.8 million for the three months ended June 30, 2025 from other expense, net of $0.4 million for the three months ended June 30, 2024.

This change was driven primarily by a $1.3 million gain on the sale of 50 Enterprise Center in June 2025.

Income Tax Expense

Income tax expense for the three months ended June 30, 2025 was $0.1 million and primarily related to withholding taxes imposed in foreign jurisdictions.

Income tax benefit for the three months ended June 30, 2024 was less than $0.1 million and related to taxes on income earned in foreign jurisdictions.

Six months ended June 30, 2025 and 2024

Our net sales for the six months ended June 30, 2025 and 2024 were as follows:

For the six months ended June 30, 2025 vs.

2025 2024 $ %

(dollars in thousands)

Service $ 44,691 $ 49,712 $ (5,021) (10) %

Product 7,346 8,228 (882) (11) %

Net sales $ 52,037 $ 57,940 $ (5,903) (10) %

Net sales decreased by $5.9 million, or 10%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

Service sales decreased by $5.0 million, or 10%, to $44.7 million for the six months ended June 30, 2025 from $49.7 million for the six months ended June 30, 2024.

The decrease in service sales was primarily due to a $5.4 million decrease in our airtime service sales, of which $4.9 million related to the U.S.

Coast Guard contract downgrade.

In addition, there was a decrease in other VSAT subscribers, which was partially offset by an increase in LEO service sales.

For the six months ended June 30, 2025, LEO services sales represented over 25% of airtime services sales, as compared to less than 10% for the six months ended June 30, 2024.

The increase in LEO service sales as a percentage of total airtime sales resulted from both a substantial increase in LEO service sales and a substantial decrease in VSAT service sales.

Alternative solutions offered by recent LEO entrants have heightened competition in the global leisure segment and in commercial and government markets.

Product sales decreased by $0.9 million, or 11%, to $7.3 million for the six months ended June 30, 2025 from $8.2 million for the six months ended June 30, 2024.

The decrease in product sales was primarily due to a $0.7 million decrease in TracVision product sales, a $0.4 million decrease in Starlink product sales and a $0.3 million decrease in accessory and service parts product sales, partially offset by a $0.3 million increase in OneWeb product sales and a $0.2 million increase in VSAT broadband product sales.

The decline in product sales was primarily driven by product sales mix and discounted pricing on Starlink units.

Competition from low-cost alternatives to VSAT, which include streaming capabilities, has had a significant impact on sales of our TracVision products.

Costs of Sales

Costs of sales decreased by $3.7 million, or 9%, in the six months ended June 30, 2025 to $35.5 million from $39.1 million in the six months ended June 30, 2024.

The decrease in costs of sales was driven by a $2.6 million decrease in costs of product sales and a $1.1 million decrease in costs of service sales.

As a percentage of net sales, costs of sales were 68% for both the six months ended June 30, 2025 and 2024.

For the six months ended June 30, 2025, costs of service sales decreased by $1.1 million, or 4%, to $28.4 million from $29.5 million for the six months ended June 30, 2024, primarily due to a $1.1 million decrease in airtime cost of service sales, partially offset by a $0.4 million increase in content services cost of services sales.

As a percentage of service sales, costs of service sales were 64% and 59% for the six months ended June 30, 2025 and 2024, respectively.

For the six months ended June 30, 2025, costs of product sales decreased by $2.6 million, or 27%, to $7.0 million from $9.6 million in the six months ended June 30, 2024, primarily due to a $1.9 million decrease in various manufacturing and other unabsorbed expenses, a $0.5 million decrease in TracVision cost of product sales and a $0.5 million decrease in Starlink cost of product sales, partially offset by a $0.3 million increase in OneWeb cost of product sales.

As a percentage of product sales, costs of product sales were 96% and 117% for the six months ended June 30, 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 expense.

Operating Expenses

Research and development expense for the six months ended June 30, 2025 decreased by $3.3 million, or 61%, to $2.1 million from $5.4 million for the six months ended June 30, 2024.

The decrease in research and development expense resulted primarily from a $2.8 million decrease in salaries, benefits and taxes, after giving effect to $1.1 million in costs incurred during the six months ended June 30, 2024 related to the reduction in our workforce.

As a percentage of net sales, research and development expense was 4% and 9% for the six months ended June 30, 2025 and 2024, respectively.

Sales, marketing and support expense for the six months ended June 30, 2025 decreased by $0.7 million, or 7%, to $10.0 million from $10.7 million for the six months ended June 30, 2024.

The decrease in sales, marketing and support expense resulted primarily from a $0.7 million decrease in salaries, benefits and taxes, after giving effect to $0.4 million in costs incurred during the six months ended June 30, 2024 related to the reduction in our workforce.

In addition, there was a $0.3 million decrease in facilities expense and a $0.3 million decrease in expensed materials, partially offset by a $0.3 million increase in warranty expense.

As a percentage of net sales, sales, marketing and support expense was 19% for both the six months ended June 30, 2025 and 2024.

General and administrative expense for the six months ended June 30, 2025 decreased by $2.3 million, or 25%, to $7.1 million from $9.4 million for the six months ended June 30, 2024.

The decrease in general and administrative expense resulted primarily from a $2.1 million decrease in salaries, benefits and taxes, after giving effect to $0.9 million in costs incurred during the six months ended June 30, 2024 related to the reduction in our workforce, and a $0.5 million decrease in depreciation expense, partially offset by a $0.6 million increase in facilities expense.

As a percentage of net sales, general and administrative expense was 14% and 16% for the six months ended June 30, 2025 and 2024, respectively.

Interest and Other Income (Expense), Net

Interest income decreased by $0.6 million to $1.1 million for the six months ended June 30, 2025 from $1.8 million for the six months ended June 30, 2024, primarily as a result of lower cash balances in 2025 as a result of the $17.0 million prepayment in June 2024 for access to a large block of Starlink Mobile Priority data at favorable rates.

Of the current period interest income of $1.1 million, $0.9 million is attributable to interest earned on cash and cash equivalents, and $0.2 million was attributable to interest from lease receivables.

Other expense, net decreased by $0.2 million to other expense, net of less than $0.1 million for the three months ended March 31, 2025 from other expense, net of $0.2 million for the three months ended March 31, 2024.

This decrease was driven by a $0.2 million decrease in the loss on disposal of fixed assets.

Other income (expense), net changed by $1.4 million to other income, net of $0.8 million for the six months ended June 30, 2025 from other expense, net of $0.6 million for the six months ended June 30, 2024.

This change was driven primarily by a $1.3 million gain on the sale of 50 Enterprise Center in June 2025.

Income Tax Expense

Income tax expense for the three months ended March 31, 2025 was less than $0.1 million and related to states taxes and taxes on income earned in foreign jurisdictions.

Income tax expense for the three months ended March 31, 2024 was $0.1 million and related to taxes on income earned in foreign jurisdictions.

Income tax expense for the six months ended June 30, 2025 was $0.1 million and primarily related to state taxes and withholding taxes imposed in foreign jurisdictions.

Income tax expense for the six months ended June 30, 2024 was $0.1 million and related to taxes on income earned in foreign jurisdictions.

Liquidity and Capital Resources

Our primary liquidity needs have been to fund general business requirements, including working capital requirements and capital expenditures.

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 a business in 2019, the sale of 50 Enterprise Center, a PPP loan, cash flows from operations, bank financings and proceeds received from exercises of stock options and the issuance of stock.

On August 9, 2022, we sold our inertial navigation business to EMCORE Corporation for net proceeds of $54.9 million, less specified deductions.

As of March 31, 2025, we had $48.6 million in cash and cash equivalents, of which $3.5 million in cash and cash equivalents was held in local currencies by our foreign subsidiaries.

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

As of March 31, 2025, we had $108.5 million in working capital.

As of June 30, 2025, we had $55.9 million in cash and cash equivalents, of which $3.0 million in cash and cash equivalents was held in local currencies by our foreign subsidiaries.

We held no marketable securities as of June 30, 2025 as all excess cash has been invested in an interest-bearing account with Bank of America, N.A.

since the fourth quarter of 2024.

As of June 30, 2025, we had $109.9 million in working capital.

Based upon our current working capital position, current operating plans and expected business conditions, we expect to have sufficient funds, through at least twelve months from the date that this report is filed with the SEC, to fund our short-term and long-term working capital requirements, including capital expenditures and contractual obligations.

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In addition, if we raise funds by issuing equity securities, our stockholders may experience dilution.

Net cash used in operations was $1.3 million for the three months ended March 31, 2025 compared to net cash used in operations of $0.8 million for the three months ended March 31, 2024.

The $0.5 million increase in net cash used in operations was primarily the result of a $3.1 million increase in cash outflows related to accounts payable, a $1.3 million decrease in cash inflows relating to accounts receivable, a change of $0.7 million related to non-cash items and a $0.5 million increase in cash outflows related to prepaid expenses and current assets, partially offset by a $2.5 million decrease in cash outflows relating to accrued compensation, product warranty and other expenses, a $1.5 million decrease in net loss and a $1.0 million decrease in cash outflows relating to inventories.

Net cash used in investing activities was $0.6 million for the three months ended March 31, 2025 compared to net cash provided by investing activities of $0.9 million for the three months ended March 31, 2024.

The $1.4 million change in net cash provided by investing activities was primarily the result of a $3.3 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, partially offset by a $1.3 million decrease in capital expenditures and a $0.6 million increase in proceeds from the sale of fixed assets.

Net cash used in financing activities was $0.2 million for the three months ended March 31, 2025 compared to net cash provided by financing activities of $0.1 million for the three months ended March 31, 2024.

The $0.3 million change in net cash used in financing activities is primarily attributable to a $0.2 million increase in cash outflows related to the repurchase of treasury stock and $0.1 million decrease in cash inflows relating to proceeds from the exercise of stock options and purchases under our employee stock purchase plan.

Net cash generated in operations was $3.8 million for the six months ended June 30, 2025 compared to net cash used in operations of $15.5 million for the six months ended June 30, 2024.

The $19.3 million change in net cash provided by operations was primarily the result of an $17.3 million decrease in cash outflows related to prepaid expenses and current assets, which included the $17.0 million purchase of the Starlink data pool, a $6.4 million decrease in cash outflows relating to inventories, a $4.8 million decrease in net loss, a $2.4 million decrease in cash outflows relating to accrued compensation, product warranty and other expenses, and a $0.5 million increase in cash inflows relating to deferred revenue, partially offset by a $5.9 million increase in cash outflows related to accounts payable, a change of $3.8 million related to non-cash items, a $2.0 million decrease in cash inflows relating to accounts receivable, and a $0.3 million increase in cash outflows relating to other non-current assets.

Net cash provided by investing activities was $2.6 million for the six months ended June 30, 2025 compared to net cash provided by investing activities of $14.4 million for the six months ended June 30, 2024.

The $11.8 million decrease in net cash provided by investing activities was primarily the result of a $19.6 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, partially offset by proceeds of $4.9 million for the sale of 50 Enterprise Center, a $1.6 million decrease in capital expenditures and $1.2 million of proceeds from the sale of fixed assets.

Net cash used in financing activities was $1.2 million for the six months ended June 30, 2025 compared to net cash provided by financing activities of $0.1 million for the six months ended June 30, 2024.

The $1.3 million increase in net cash used in financing activities is primarily attributable to a $1.3 million increase in cash outflows related to the purchase of treasury stock and $0.1 million decrease in cash inflows relating to proceeds from the exercise of stock options and purchases under our employee stock purchase plan.

Other Matters

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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.

During the three months ended March 31, 2025, we repurchased 30,818 shares of common stock in open market transactions at a cost of $0.2 million.

During the three months ended June 30, 2025, we repurchased 211 shares of common stock in open market transactions at a cost of approximately $1.1 million.

During the six months ended June 30, 2025, we repurchased 242 shares of common stock in open market transactions at a cost of approximately $1.3 million.

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

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 2. Management’s Discussion and Analysis