KVH INDUSTRIES INC \DE\ 10-Q

ITEM 1. Financial Statements KVH INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) September 30, 2025 December 31, 2024 ASSETS (unaudited) Current assets: Cash and cash equivalents $ 72,804 $ 50,572 Accounts receivable, net of allowance for credit losses of $ 833 and $ 1,006 as of September 30, 2025 and December 31, 2024, respectively 24,302 21,624 Inventories 13,394 22,953 Prepaid expenses and other current assets 9,200 16,016 Current assets held for sale — 11,410 Total current assets 119,700 122,575 Property and equipment, net 22,295 27,014 Intangible assets, net 537 828 Right of use assets 4,636 1,361 Other non-current assets 2,972 3,146 Deferred income tax asset 141 157 Total assets $ 150,281 $ 155,081 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 4,012 $ 4,316 Accrued airtime 1,365 745 Accrued compensation and employee-related expenses 4,253 4,728 Accrued loss on future firm purchase commitments — 919 Accrued other 2,105 2,134 Accrued product warranty costs 754 607 Deferred revenue 1,346 1,039 Current operating lease liability 591 660 Liability for uncertain tax positions 788 724 Total current liabilities 15,214 15,872 Long-term operating lease liability 4,017 569 Deferred income tax liability 3 15 Total liabilities $ 19,234 $ 16,456 Commitments and contingencies (Notes 2, 11, and 16) Stockholders’ equity: Preferred stock, $ 0.01 par value. Authorized 1,000,000 shares; none issued — — Common stock, $ 0.01 par value. Authorized 30,000,000 shares; 21,293,839 and 21,240,525 shares issued at September 30, 2025 and December 31, 2024, respectively; and 19,573,517 and 19,784,416 shares outstanding at September 30, 2025 and December 31, 2024, respectively 213 212 Additional paid-in capital 168,470 167,287 Accumulated deficit ( 20,466 ) ( 12,752 ) Accumulated other comprehensive loss ( 3,708 ) ( 4,032 ) 144,509 150,715 Less: treasury stock at cost, common stock, 1,720,322 and 1,456,109 shares as of September 30, 2025 and December 31, 2024, respectively. ( 13,462 ) ( 12,090 ) Total stockholders’ equity 131,047 138,625 Total liabilities and stockholders’ equity $ 150,281 $ 155,081 See accompanying Notes to Unaudited Consolidated Financial Statements. 3 KVH INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except earnings per share amounts, unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Sales: Service $ 25,388 $ 24,410 $ 70,079 $ 74,122 Product 3,065 4,561 10,411 12,789 Net sales 28,453 28,971 80,490 86,911 Costs and expenses: Costs of service sales 16,694 14,983 45,139 44,496 Costs of product sales 9,846 4,714 16,863 14,321 Research and development 969 1,407 3,072 6,771 Sales, marketing and support 4,884 4,932 14,854 15,650 General and administrative 3,691 3,789 10,806 13,214 Long-lived assets impairment charge — 1,137 — 1,137 Total costs and expenses 36,084 30,962 90,734 95,589 Loss from operations ( 7,631 ) ( 1,991 ) ( 10,244 ) ( 8,678 ) Interest income 681 629 1,827 2,416 Interest expense — 2 — 2 Other income (expense), net 32 216 849 ( 348 ) Loss before income tax expense ( 6,918 ) ( 1,148 ) ( 7,568 ) ( 6,612 ) Income tax expense 16 51 146 126 Net loss $ ( 6,934 ) $ ( 1,199 ) $ ( 7,714 ) $ ( 6,738 ) Net loss per common share Basic $ ( 0.36 ) $ ( 0.06 ) $ ( 0.40 ) $ ( 0.35 ) Diluted $ ( 0.36 ) $ ( 0.06 ) $ ( 0.40 ) $ ( 0.35 ) Weighted average number of common shares outstanding: Basic 19,361 19,433 19,418 19,367 Diluted 19,361 19,433 19,418 19,367 See accompanying Notes to Unaudited Consolidated Financial Statements. 4 KVH INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands, unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Net loss $ ( 6,934 ) $ ( 1,199 ) $ ( 7,714 ) $ ( 6,738 ) Other comprehensive (loss) income, net of tax: Foreign currency translation adjustment ( 676 ) 134 324 328 Other comprehensive (loss) income, net of tax (1) ( 676 ) 134 324 328 Total comprehensive loss $ ( 7,610 ) $ ( 1,065 ) $ ( 7,390 ) $ ( 6,410 ) (1) Tax impact was nominal for all periods. See accompanying Notes to Unaudited Consolidated Financial Statements. 5 KVH INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in thousands, unaudited) Common Stock Additional Paid-in Capital Retained Deficit Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders’ Equity Shares Amount Shares Amount Balance at June 30, 2025 21,224 $ 212 $ 168,082 $ ( 13,532 ) $ ( 3,032 ) ( 1,698 ) $ ( 13,346 ) $ 138,384 Net loss — — — ( 6,934 ) — — — ( 6,934 ) Other comprehensive loss — — — — ( 676 ) — — ( 676 ) Stock-based compensation — — 366 — — — — 366 Issuance of common stock under employee stock purchase plan 4 — 17 — — — — 17 Acquisition of treasury stock — — — — — ( 22 ) ( 116 ) ( 116 ) Exercise of stock options and issuance of restricted stock awards, net of forfeitures 66 1 5 — — — — 6 Balance at September 30, 2025 21,294 $ 213 $ 168,470 $ ( 20,466 ) $ ( 3,708 ) ( 1,720 ) $ ( 13,462 ) $ 131,047 Common Stock Additional Paid-in Capital Retained Deficit Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders’ Equity Shares Amount Shares Amount Balance at December 31, 2024 21,241 $ 212 $ 167,287 $ ( 12,752 ) $ ( 4,032 ) ( 1,456 ) $ ( 12,090 ) $ 138,625 Net loss — — — ( 7,714 ) — — — ( 7,714 ) Other comprehensive income — — — — 324 — — 324 Stock-based compensation — — 1,137 — — — — 1,137 Issuance of common stock under employee stock purchase plan 4 — 17 — — — — 17 Acquisition of treasury stock — — — — — ( 264 ) ( 1,372 ) ( 1,372 ) Exercise of stock options and issuance of restricted stock awards, net of forfeitures 49 1 29 — — — — 30 Balance at September 30, 2025 21,294 $ 213 $ 168,470 $ ( 20,466 ) $ ( 3,708 ) ( 1,720 ) $ ( 13,462 ) $ 131,047 Common Stock Additional Paid-in Capital Retained Deficit Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders’ Equity Shares Amount Shares Amount Balance at June 30, 2024 21,170 $ 212 $ 166,490 $ ( 7,243 ) $ ( 3,991 ) ( 1,456 ) $ ( 12,090 ) $ 143,378 Net loss — — — ( 1,199 ) — — — ( 1,199 ) Other comprehensive loss — — — — 134 — — 134 Stock-based compensation — — 385 — — — — 385 Exercise of stock options and issuance of restricted stock awards, net of forfeitures 85 1 ( 1 ) — — — — — Balance at September 30, 2024 21,255 $ 213 $ 166,874 $ ( 8,442 ) $ ( 3,857 ) ( 1,456 ) $ ( 12,090 ) $ 142,698 Common Stock Additional Paid-in Capital Retained Deficit Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders’ Equity Shares Amount Shares Amount Balance at December 31, 2023 21,067 $ 211 $ 165,140 $ ( 1,704 ) $ ( 4,185 ) ( 1,456 ) $ ( 12,090 ) $ 147,372 Net loss — — — ( 6,738 ) — — — ( 6,738 ) Other comprehensive income — — — — 328 — — 328 Stock-based compensation — — 1,629 — — — — 1,629 Issuance of common stock under employee stock purchase plan 24 — 95 — — — — 95 Exercise of stock options and issuance of restricted stock awards, net of forfeitures 164 2 10 — — — — 12 Balance at September 30, 2024 21,255 $ 213 $ 166,874 $ ( 8,442 ) $ ( 3,857 ) ( 1,456 ) $ ( 12,090 ) $ 142,698 See accompanying Notes to Unaudited Consolidated Financial Statements. 6 KVH INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, unaudited) Nine Months Ended September 30, 2025 2024 Cash flows from operating activities: Net loss $ ( 7,714 ) $ ( 6,738 ) Adjustments to reconcile net loss to net cash used in operating activities: Provision for credit losses 67 35 Depreciation and amortization 8,126 10,250 Impairment charge to goodwill and long-lived assets — 1,137 Deferred income taxes 4 36 (Gain) loss on disposals of fixed assets ( 365 ) 1,850 Gain on sale of fixed assets located at 50 Enterprise Center Middletown, Rhode Island ( 1,319 ) — Loss on sale of fixed assets located at 75 Enterprise Center Middletown, Rhode Island 300 — Compensation expense related to stock-based awards and employee stock purchase plan 1,137 1,629 Unrealized currency translation loss 306 280 Changes in operating assets and liabilities: Accounts receivable ( 2,704 ) 896 Inventories 9,559 ( 6,157 ) Prepaid expenses and other current assets 6,866 ( 16,128 ) Other non-current assets 278 692 Accounts payable ( 310 ) 5,404 Deferred revenue 232 ( 270 ) Accrued compensation, product warranty and other ( 748 ) ( 6,489 ) Net cash provided by (used in) operating activities $ 13,715 $ ( 13,573 ) Cash flows from investing activities: Capital expenditures ( 5,012 ) ( 6,570 ) Cash paid for acquisition of intangible asset ( 26 ) ( 31 ) Proceeds from sale of fixed assets 2,033 — Proceeds from the sale of fixed assets located at 50 Enterprise Center Middletown, Rhode Island 4,926 — Proceeds from the sale of fixed assets located at 75 Enterprise Center Middletown, Rhode Island 7,838 — Purchases of marketable securities — ( 1,892 ) Maturities and sales of marketable securities — 25,000 Net cash provided by investing activities $ 9,759 $ 16,507 Cash flows from financing activities: Proceeds from stock options exercised and employee stock purchase plan 46 96 Purchase of treasury stock ( 1,372 ) — Net cash (used in) provided by financing activities $ ( 1,326 ) $ 96 Effect of exchange rate changes on cash and cash equivalents 84 72 Net increase in cash and cash equivalents 22,232 3,102 Cash and cash equivalents at beginning of period 50,572 11,294 Cash and cash equivalents at end of period $ 72,804 $ 14,396 Supplemental disclosure of non-cash investing and financing activities: Amounts in accrued other and accounts payable related to property and equipment additions $ 27 $ 31 See accompanying Notes to Unaudited Consolidated Financial Statements. 7 KVH INDUSTRIES, INC. AND SUBSIDIARIES Notes to Consolidated Interim Financial Statements (Unaudited, all amounts in thousands except per share amounts) (1) Description of Business KVH Industries, Inc. (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. In March 2023, KVH began selling terminals for the Starlink Low Earth Orbit (LEO) service and in September 2023 became a Starlink authorized hardware and airtime reseller. In October 2024, we expanded our portfolio to include Starlink Local Priority data plans, which is primarily for stationary and in-motion commercial use on land. KVH further expanded its LEO service and hardware portfolio in January 2025 with the launch of OneWeb service for maritime applications. In addition, KVH provides, for monthly fixed and per-usage fees, satellite connectivity encompassing broadband Internet and Voice over Internet Protocol (VoIP) services, to its TracNet® H-series and TracPhone® V-HTS series customers via KVH’s global high-throughput satellite (HTS) network. Revenue from our cellular airtime service supplements KVH’s satellite-only airtime revenue following the July 2022 launch of the KVH ONE® hybrid network and TracNet H-series terminals and the subsequent introduction of the TracNet Coastal cellular/Wi-Fi terminal. KVH provides this combination of services and products in more than 130 countries. The May 2023 introduction of the KVH ONE OpenNet Program expanded access to KVH’s global HTS network and airtime services to non-KVH terminals. AgilePlans, KVH’s connectivity as a service offering, is a monthly subscription model that provides global connectivity to commercial maritime customers. The subscription can include KVH VSAT terminals and data service, Starlink and OneWeb terminals and data service, KVH’s CommBox™ Edge Communications Gateway and associated service licensing, VoIP, daily news, subsidized shipping and installation, and global support for a monthly fee with no minimum contract commitment. KVH offers AgilePlans subscribers a variety of airtime data plans with varying data speeds and fixed data usage levels with per megabyte overage charges. These airtime plans are similar to those that the Company offers to customers who elect to purchase or lease a TracNet H-series, TracPhone V-HTS series, Starlink, or OneWeb terminal. The Company recognizes the monthly AgilePlans subscription fee as service revenue over the service delivery period. The Company retains ownership of the hardware it provides to AgilePlans customers, who must return the hardware to KVH if they decide to terminate the service. Because KVH does not sell the hardware under AgilePlans, the Company does not recognize any product revenue when the hardware is deployed to an AgilePlans customer. KVH records the cost of the hardware used by AgilePlans customers as revenue-generating assets and depreciates the cost over an estimated useful life of two to five years . Since the Company retains ownership of the hardware, it does not accrue any warranty costs for AgilePlans hardware; however, any maintenance or refurbishment costs on the hardware are expensed in the period these costs are incurred. Service sales also include the distribution of commercially licensed entertainment, including movies, television programming, news, and music, to commercial customers in the maritime market through the KVH Media Group, along with supplemental value-added cybersecurity, email, and crew Internet services. In addition, KVH earns monthly usage fees from third-party satellite connectivity services, including VoIP, data and Internet services, provided to its Viasat/Inmarsat and Iridium customers who choose to activate their subscriptions with KVH. Service sales also include sales from product repairs and extended warranty sales. KVH’s satellite-only and hybrid products enable marine customers to receive data, VoIP, and value-added services via satellite, cellular, and shore-based Wi-Fi networks onboard commercial, leisure, and military/government vessels. In addition, the Company’s in-motion television terminals permit customers to receive live digital television via regional satellite services in marine vessels, recreational vehicles, buses and automobiles. KVH sells its products through an extensive international network of dealers and distributors. KVH also sells and leases products to service providers and end users. 8 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 2026. 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. Please see Note 17 for additional details surrounding the wind-down of the Company's manufacturing activities. (2) Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated interim financial statements of KVH Industries, Inc. and its wholly owned subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America. The Company has evaluated all subsequent events through the date of this filing. All significant intercompany accounts and transactions have been eliminated in consolidation. The consolidated interim financial statements have not been audited by the Company’s independent registered public accounting firm and include all adjustments (consisting of only normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial condition, results of operations, and cash flows for the periods presented. 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 and nine months ended September 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 The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of sales and expenses during the reporting periods. The estimates and assumptions used by management affect the Company’s revenue recognition, valuation of accounts receivable, valuation of inventory, valuation of prepaid assets, expected future cash flows (including growth rates, discount rates, terminal values and other assumptions and estimates used to evaluate the recoverability of long-lived assets), estimated fair values of long-lived assets (including amortization methods and amortization periods), certain accrued expenses and other related charges, stock-based compensation, contingent liabilities, forfeitures and key valuation assumptions for its share-based awards, estimated fulfillment costs for warranty obligations, tax reserves and recoverability of the Company’s net deferred tax assets and related valuation allowance, and the valuation of right-of-use assets and lease liabilities. Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Asset Held for Sale The Company classifies an asset as held for sale when management, having the authority to approve the action, commits to a plan to sell the asset, the sale is probable within one year and the asset is available for immediate sale in its present condition. The Company also considers whether an active program to locate a buyer has been initiated, whether the asset is marketed actively for sale at a price that is reasonable in relation to its current fair value and whether actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The Company initially measures an asset that is classified as held for sale at the lower of its carrying amount or fair value less costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized until the date of sale. The Company assesses the fair value of an asset less costs to sell for each reporting period that it remains classified as held for sale and reports any subsequent changes as an adjustment to the carrying amount of the asset, as long as the new carrying amount does not exceed the carrying amount of the asset at the time it was initially classified as held for sale. Assets are not depreciated or amortized while they are classified as held for sale. 9 Foreign Currency Translation The financial statements of the Company’s foreign subsidiaries located in Denmark, Singapore, Brazil and Cyprus are maintained using the United States dollar as the functional currency. Exchange rates in effect on the date of the transaction are used to record monetary assets and liabilities. Revenue and other expense elements are recorded at rates that approximate the rates in effect on the transaction dates. 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 $( 9 ) and $( 48 ) for the three months ended September 30, 2025 and 2024, respectively, and $( 141 ) and $( 317 ) for the nine months ended September 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. The Company translates the assets and liabilities of these foreign subsidiaries at the exchange rates in effect at the end of each reporting period. Net sales, costs and expenses are translated using average exchange rates in effect during the period. Gains and losses from foreign currency translation are credited or charged to accumulated other comprehensive loss included in stockholders' equity in the accompanying consolidated balance sheets. (3) Recently Issued Accounting Standards and Accounting Standards Not yet Adopted In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this ASU apply to all entities that are subject to Topic 740, Income Taxes. The amendments require public business entities to disclose specific categories in their tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. These amendments also require all entities to disclose income taxes paid, net of refunds received, disaggregated by federal, state, and foreign taxes and by individual jurisdictions in which income taxes paid, net of refunds received, are equal to or greater than five percent of total income taxes paid. For public business entities, the amendments in this ASU are effective for annual periods beginning after December 15, 2024. The amendments in this ASU should be applied on a prospective basis. The adoption of ASU No. 2023-09 is not expected to have a material impact on the Company’s financial statements, including disclosures. In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The standard requires public business entities to provide further disaggregated information of relevant expense captions within its consolidated statements of operations. The standard is effective for annual periods beginning after December 15, 2026 and interim periods within annual periods beginning after December 15, 2027. The standard may be applied prospectively or retrospectively. The adoption will result in disclosure changes only. There are no other recent accounting pronouncements that have been issued by the FASB that are not yet effective and that the Company expects would have a material impact on the Company’s financial statements, including disclosures. (4) Marketable Securities 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 $ 466 during the three months ended September 30, 2025 and 2024, respectively, and $ 0 and $ 1,892 during the nine months ended September 30, 2025 and 2024, respectively. We held no marketable securities as of September 30, 2025 and December 31, 2024. 10 (5) Stockholder's Equity (a) Stock Equity and Incentive Plan The Company recognizes stock-based compensation in accordance with the provisions of ASC Topic 718, Compensation-Stock Compensation . Stock-based compensation expense was $ 367 and $ 384 , excluding $( 1 ) and $ 1 of compensation expense related to our Amended and Restated 1996 Employee Stock Purchase Plan, or the ESPP, for the three months ended September 30, 2025 and 2024, respectively, and $ 1,134 and $ 1,622 , excluding $ 3 and $ 7 of compensation expense related to ESPP, for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, there was $ 1,708 of total unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted-average period of 2.87 years. As of September 30, 2025, there was $ 1,117 of total unrecognized compensation expense related to restricted stock awards, which is expected to be recognized over a weighted-average period of 1.52 years. Stock Options During the three months ended September 30, 2025, 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 September 30, 2025, no stock options were granted and 132 stock options expired, were canceled or were forfeited. During the three months ended September 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 September 30, 2024, no stock options were granted and 230 stock options expired, were canceled or were forfeited. During the nine months ended September 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 nine months ended September 30, 2025, 575 stock options were granted and 259 stock options expired, were canceled or were forfeited. During the nine months ended September 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 nine months ended September 30, 2024, 266 stock options were granted and 501 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 nine months ended September 30, 2025 and 2024 are as follows: Nine Months Ended September 30, 2025 2024 Risk-free interest rate 3.93 % 4.36 % Expected volatility 40.81 % 48.63 % Expected life (in years) 3.77 4.32 Dividend yield 0 % 0 % As of September 30, 2025, there were 1,264 options outstanding with a weighted average exercise price of $ 7.09 per share and 380 options exercisable with a weighted average exercise price of $ 9.22 per share. As of September 30, 2024, there were 995 options outstanding with a weighted average exercise price of $ 8.23 per share and 410 options exercisable with a weighted average exercise price of $ 9.32 per share. 11 Restricted Stock During the three months ended September 30, 2025, 70 shares of restricted stock were granted with a weighted average grant date fair value of $ 5.50 per share and 4 shares of restricted stock were forfeited. Additionally, during the three months ended September 30, 2025, 1 shares of restricted stock vested. During the three months ended September 30, 2024, 85 shares of restricted stock were granted with a weighted average grant date fair value of $ 4.51 per share and no share of restricted stock were forfeited. Additionally, during the three months ended September 30, 2024, 16 shares of restricted stock vested. During the nine months ended September 30, 2025, 70 shares of restricted stock were granted with a weighted average grant date fair value of $ 5.50 per share and 26 shares of restricted stock were forfeited. Additionally, during the nine months ended September 30, 2025, 147 shares of restricted stock vested. During the nine months ended September 30, 2024, 207 shares of restricted stock were granted with a weighted average grant date fair value of $ 4.82 per share and 43 shares of restricted stock were forfeited. Additionally, during the nine months ended September 30, 2024, 158 shares of restricted stock vested. As of September 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 September 30, 2025 and 2024, 4 and 0 shares were issued under the ESPP, respectively. During the nine months ended September 30, 2025 and 2024, 4 and 24 shares were issued under the ESPP, respectively. The Company recorded compensation charges related to the ESPP of $( 1 ) and $ 1 for the three months ended September 30, 2025 and 2024, respectively, and $ 3 and $ 7 for the nine months ended September 30, 2025 and 2024, respectively. (c) Stock-Based Compensation Expense The following table presents stock-based compensation expense, including expense for the ESPP, in the Company's consolidated statements of operations for the nine months ended September 30, 2025 and 2024, respectively: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Cost of service sales $ 6 $ 8 $ 19 $ 22 Cost of product sales 12 5 22 19 Research and development 15 63 7 326 Sales, marketing and support 61 74 215 219 General and administrative 272 235 874 1,043 $ 366 $ 385 $ 1,137 $ 1,629 (d) Accumulated Other Comprehensive Loss (AOCL) Comprehensive income (loss) includes net income (loss), unrealized gains and losses from foreign currency translation, and unrealized gains and losses on available for sale marketable securities. 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). 12 The balances for the three months ended September 30, 2025 and 2024 are as follows: Foreign Currency Translation Total Accumulated Other Comprehensive Loss Balance, June 30, 2025 $ ( 3,032 ) $ ( 3,032 ) Other comprehensive loss ( 676 ) ( 676 ) Net other comprehensive loss ( 676 ) ( 676 ) Balance, September 30, 2025 $ ( 3,708 ) $ ( 3,708 ) Foreign Currency Translation Total Accumulated Other Comprehensive Loss Balance, June 30, 2024 $ ( 3,991 ) $ ( 3,991 ) Other comprehensive income 134 134 Net other comprehensive income 134 134 Balance, September 30, 2024 $ ( 3,857 ) $ ( 3,857 ) The balances for the nine months ended September 30, 2025 and 2024 are as follows: Foreign Currency Translation Total Accumulated Other Comprehensive Loss Balance, December 31, 2024 $ ( 4,032 ) $ ( 4,032 ) Other comprehensive income 324 324 Net other comprehensive income 324 324 Balance, September 30, 2025 $ ( 3,708 ) $ ( 3,708 ) Foreign Currency Translation Total Accumulated Other Comprehensive Loss Balance, December 31, 2023 $ ( 4,185 ) $ ( 4,185 ) Other comprehensive income 328 328 Net other comprehensive income 328 328 Balance, September 30, 2024 $ ( 3,857 ) $ ( 3,857 ) (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. 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 and nine months ended September 30, 2025, since there was a net loss, the company excluded 1,350 and 1,187 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 nine months ended September 30, 2024, since there was a net loss, the company excluded 1,165 and 1,088 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. 13 A reconciliation of the basic and diluted weighted average common shares outstanding is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Weighted average common shares outstanding—basic 19,361 19,433 19,418 19,367 Dilutive common shares issuable in connection with stock plans — — — — Weighted average common shares outstanding—diluted 19,361 19,433 19,418 19,367 (7) Inventories Inventories are stated at the lower of cost or net realizable value using the first-in first-out costing method. Inventories as of September 30, 2025 and December 31, 2024 include the costs of material, labor, and factory overhead. Components of inventories consist of the following: September 30, 2025 December 31, 2024 Raw materials $ 6,850 $ 15,379 Work in process 2,220 2,469 Finished goods 4,324 5,105 $ 13,394 $ 22,953 During the three and nine months ended September 30, 2025, the Company recorded a $ 5,510 inventory write-down related primarily to further reduced demand for certain of the Company’s hardware products as well as a reduction in the prices the Company charges for certain TracNet H-series terminals. The Company implemented this price reduction at the end of the third quarter of 2025 and, as a result, reduced the value of its remaining inventory of those products to net realizable value based on lower customer pricing. Please see Note 17 for additional details surrounding the wind-down of the Company’s manufacturing activities. (8) Prepaid Expenses and Other Current Assets September 30, 2025 December 31, 2024 Prepaid Starlink pooled data $ 3,501 $ 14,137 Other prepaid expenses and other current assets 5,699 1,879 $ 9,200 $ 16,016 During the second quarter of 2024, KVH expanded its relationship with Starlink through a bulk data distribution agreement. Under the agreement, KVH prepaid for access to a large block of Starlink Global Priority data at favorable rates. The agreement provides KVH flexibility in the development and sales of custom, cost-effective airtime plans using Starlink’s Global Priority service. KVH began drawing from this prepaid pooled data in the third quarter of 2024. This block of data is expected to be fully consumed by the end of the fourth quarter of 2025. KVH anticipates that it will purchase another, substantially larger block of Starlink Global Priority data in the fourth quarter of 2025. 14 (9) Property and Equipment Property and equipment, net, as of September 30, 2025 and December 31, 2024 consist of the following: September 30, 2025 December 31, 2024 Leasehold improvements 340 336 Machinery and equipment 2,071 6,021 Revenue-generating assets 58,971 61,380 Office and computer equipment 7,334 10,561 Motor vehicles — 31 68,716 78,329 Less accumulated depreciation ( 46,421 ) ( 51,315 ) $ 22,295 $ 27,014 Depreciation expense was $ 2,525 and $ 3,163 for the three months ended September 30, 2025 and 2024, respectively, and $ 7,809 and $ 9,947 for the nine months ended September 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 September 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”). As of September 30, 2024, 75 Enterprise Center had a carrying value of approximately $ 7.8 million. The Company determined that all of the criteria to classify 75 Enterprise Center as held for sale had been met as of September 30, 2024. The estimated fair value was determined based upon the anticipated sales price of these assets based on current market conditions and assumptions made by management, less selling costs. The Company recorded an impairment charge of $ 1.1 million during the three and nine months ended September 30, 2024, as the carrying value of 75 Enterprise Center at the time the asset for sale criteria were met exceeded the fair value less costs to sell. The sale was completed in September 2025, resulting in a loss of $ 0.3 million, which is included in other income (expense), net in the Company's consolidated statement of operations for the three and nine months ended September 30, 2025. The Company also entered into an agreement with the buyer to lease this property until the end of March 2026 for approximately $ 0.1 million. Additionally, in the third quarter of 2024, the Company commenced its plan to sell the property, building, improvements, and land located at 50 Enterprise Center in Middletown, Rhode Island (“50 Enterprise Center”). As of September 30, 2024, 50 Enterprise Center had a carrying value of approximately $ 3.6 million. 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 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. 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 nine months ended September 30, 2025. 15 (10) Product Warranty The Company’s products carry standard limited warranties that range from one to two years and vary by product. The warranty period begins on the date of retail purchase or lease by the original purchaser. The Company also offers extended warranties on its products for up to five years , The Company accrues estimated product warranty costs at the time of sale and any additional amounts are recorded when such costs are probable and can be reasonably estimated. Factors that affect the Company’s warranty liability include the number of units sold or leased, historical and anticipated rates of warranty repairs and the cost per repair. Warranty and related costs are reflected within sales, marketing and support in the accompanying consolidated statements of operations. As of September 30, 2025 and December 31, 2024, the Company had accrued product warranty costs of $ 754 and $ 607 , respectively. The following table summarizes product warranty activity during 2025 and 2024: Nine Months Ended September 30, 2025 2024 Beginning balance $ 607 $ 828 Charges to expense 625 398 Costs incurred ( 478 ) ( 642 ) Ending balance $ 754 $ 584 (11) Legal Matters In the ordinary course of business, the Company is a party to inquiries, legal proceedings and claims including, from time to time, disagreements with vendors and customers. The Company is not a party to any lawsuit or proceeding that, in management's opinion, is likely to materially harm the Company's business, results of operations, financial condition, or cash flows. (12) Fair Value Measurements ASC Topic 820, Fair Value Measurements and Disclosures (ASC 820), provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Quoted prices for similar assets or liabilities in active markets; or observable prices that are based on observable market data, based on directly or indirectly market-corroborated inputs. Level 3: 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 September 30, 2025 or December 31, 2024. The carrying amount of certain financial instruments approximates fair value due to their short-term, highly liquid nature. These instruments include cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses. The carrying amount of the Company's operating and financing lease liabilities approximates fair value based on currently available quoted rates of similarly structured borrowings. 16 Assets Measured and Recorded at Fair Value on a Nonrecurring Basis 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 nine months ended September 30, 2025. There was a $ 1.1 million impairment of the Company's long-lived assets during the nine months ended September 30, 2024. See note 9 for further information. The Company does not have any liabilities that are recorded at fair value on a non-recurring basis. (13) Intangible Assets Intangible assets with finite lives and other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of intangible assets with finite lives and other long-lived assets is measured by a comparison of the carrying amount of an asset or asset group to future undiscounted cash flows expected to be generated by the asset or asset group. Asset groups are determined at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If these comparisons indicate that an asset is not recoverable, the Company will recognize an impairment loss for the amount by which the carrying value of the asset or asset group exceeds its related estimated fair value. The Company has determined that the assets within each of the Company's reporting units (Mobile Broadband (MBB) and KVH Media Group (Media)) are highly interrelated and interdependent on each other to generate revenues, and thus independent cash flows are not identifiable at a level lower than that of these reporting units. 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 nine months ended September 30, 2025 are as follows: Amounts Balance at December 31, 2024 $ 828 Amortization expense ( 317 ) Intangible assets acquired in asset acquisition 26 Foreign currency translation adjustment — Balance at September 30, 2025 $ 537 Intangible assets arose from the purchase of distribution rights from Kognitive Networks Inc. in October 2023 and the purchase of KVH Industries Norway AS in September 2010. The assets that are related to the distribution rights from Kognitive Networks are being amortized on a straight-line basis over the estimated useful life of 3 years. The assets related to the purchase of KVH Industries Norway AS for acquired intellectual property are fully amortized. In January 2017, the Company completed the acquisition of certain subscriber relationships from a third party. This acquisition did not meet the definition of a business under ASC 2017-01, Business Combinations (Topic 805)-Clarifying the Definition of a Business . The Company ascribed $ 100 of the initial purchase price to the acquired subscriber relationships definite-lived intangible assets with an initial estimated useful life of 10 years. Under the asset purchase agreement, the purchase price includes a component of contingent consideration under which the Company is required to pay a percentage of recurring revenues received from the acquired subscriber relationships through 2026 up to a maximum annual payment of $ 114 . The amounts payable under the contingent consideration arrangement, if any, will be included in the measurement of the cost of the acquired subscriber relationships. 17 Acquired intangible assets are subject to amortization. The following table summarizes acquired intangible assets at September 30, 2025 and December 31, 2024, respectively: Gross Carrying Amount Accumulated Amortization Net Carrying Value September 30, 2025 Subscriber relationships $ 77 $ 33 $ 44 Distribution rights 1,250 757 493 Intellectual property 2,284 2,284 — $ 3,611 $ 3,074 $ 537 December 31, 2024 Subscriber relationships $ 51 $ 13 $ 38 Distribution rights 1,250 460 790 Intellectual property 2,284 2,284 — $ 3,585 $ 2,757 $ 828 Amortization expense related to intangible assets was $ 107 and $ 102 for the three months ended September 30, 2025 and 2024, respectively, and $ 317 and $ 303 for the nine months ended September 30, 2025 and 2024, respectively. Amortization expense was categorized as general and administrative expense. As of September 30, 2025, the total weighted average remaining useful lives of the definite-lived intangible assets was 1.3 years. Estimated future amortization expense for intangible assets recorded by the Company at September 30, 2025 is as follows: Years ending December 31, Amortization Expense 2025 $ 108 2026 429 Total amortization expense $ 537 18 (14) Revenue from Contracts with Customers In accordance with ASC 606, revenue is recognized when a customer obtains control of promised products and services. The amount of revenue recognized reflects the consideration which the Company expects to be entitled to receive in exchange for these products and services. Disaggregation of Revenue The following table summarizes net sales from contracts with customers for the three and nine months ended September 30, 2025 and 2024: Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Service - over time $ 25,388 $ 24,410 $ 70,079 $ 74,122 Product - point in time 3,065 4,561 10,411 12,789 Total net sales $ 28,453 $ 28,971 $ 80,490 $ 86,911 For product sales, the delivery of the Company’s performance obligations is generally transferred to the customer, and associated revenue is recognized, at a point in time. 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. The Company's performance is impacted by the levels of activity in the marine and land mobile markets, among other factors. Performance in any particular period could be impacted by the timing of sales to certain large customers. 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 83 % and 79 % of the Company's consolidated net sales for the three months ended September 30, 2025 and 2024, respectively, and 80 % of the Company's consolidated net sales for both the nine months ended September 30, 2025 and 2024. 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 11 % and 16 % of the Company's consolidated net sales for the three months ended September 30, 2025 and 2024, respectively, and 13 % and 15 % of the Company's consolidated net sales for the nine months ended September 30, 2025 and 2024, respectively. No other single product class accounts for 10% or more of the Company's consolidated net sales. The Company operates in a number of major geographic areas, including internationally. 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 77 % and 71 % of consolidated net sales for the three months ended September 30, 2025 and 2024, respectively, and 78 % and 72 % of consolidated net sales for the nine months ended September 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 September 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 September 30, 2025 or 2024. Sales to Singapore customers represented 22 % and 21 % of the Company's consolidated net sales for the nine months ended September 30, 2025 and 2024, respectively. No other individual foreign country represented 10% or more of the Company's consolidated net sales for the nine months ended September 30, 2025 or 2024. 19 Business and Credit Concentrations The Company is potentially subject to financial instrument concentration of credit risk through its cash and cash equivalents. To mitigate these risks, the Company maintains cash and cash equivalents with reputable and nationally recognized financial institutions. As of September 30, 2025, substantially all of the cash and cash equivalents were held by Bank of America, N.A. Concentrations of risk with respect to trade accounts receivable are generally limited due to the large number of customers and their dispersion across several geographic areas. Although the Company does not foresee that credit risk associated with these receivables will deviate from historical experience, repayment is dependent upon the financial stability of those individual customers. 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 12 % and 11 % of consolidated net sales for the nine months ended September 30, 2025 and 2024, respectively. No other customers accounted for 10% or more of consolidated net sales for the nine months ended September 30, 2025 and 2024. One customer accounted for approximately 18 % and 19 % of accounts receivable at September 30, 2025 and December 31, 2024, respectively. One customer accounted for 28 % and 45 % of long-term accounts receivable included in other non-current assets on the consolidated balance sheets related to sales-type leases at September 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. The failure of a supplier, including a subcontractor, to deliver on schedule could delay or interrupt the Company’s delivery of products and thereby materially adversely affect the Company’s revenues and operating results. (15) Income Taxes The Company’s effective tax rate for the three and nine months ended September 30, 2025 was ( 0.2 )% and ( 1.9 )%, respectively, compared with ( 4.4 )% and ( 1.9 )%, 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 and nine months ended September 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 September 30, 2025 and December 31, 2024, the Company had reserves for uncertain tax positions of $ 788 and $ 724 , respectively. There were no material changes during the nine months ended September 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 September 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. In general, the statute of limitations with respect to the Company's United States federal income taxes has expired for years prior to 2020, and the relevant state and foreign statutes vary. However, preceding years remain open to examination by United States federal and state and foreign taxing authorities to the extent of future utilization of net operating losses and research and development tax credits generated in each preceding year. 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. The Company does not expect the OBBBA to have a material impact on its consolidated financial statements. 20 (16) Leases Lessee The Company has operating leases for office facilities, equipment, and satellite service capacity and related equipment. Lease expense was $ 232 and $ 376 for the three months ended September 30, 2025 and 2024, respectively, and $ 738 and $ 1,095 for the nine months ended September 30, 2025 and 2024, respectively. Short-term operating lease costs were $ 24 and $ 20 for the three months ended September 30, 2025 and 2024, respectively, and $ 70 and $ 59 for the nine months ended September 30, 2025 and 2024, respectively. Maturities of lease liabilities as of September 30, 2025 under operating leases having an initial or remaining non-cancelable term of one year or more are as follows: Remainder of 2025 $ 233 2026 741 2027 840 2028 and thereafter 3,695 Total minimum lease payments $ 5,509 Less amount representing interest $ ( 901 ) Present value of net minimum operating lease payments $ 4,608 Less current installments of obligation under current-operating lease liabilities $ 591 Obligations under long-term operating lease liabilities, excluding current installments $ 4,017 Weighted-average remaining lease term - operating leases (years) 6.14 Weighted-average discount rate - operating leases 5.50 % 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 costs of sales and operational expenditures 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. This lease agreement resulted in a right of use asset and operating lease liabilities of approximately $ 3,600 as of September 30, 2025. Lessor The Company enters into leases with certain customers primarily for the TracPhone and TracNet VSAT systems. These leases are classified as sales-type leases because title to the equipment transfers to the customer at the end of the lease term. The Company records the leases at a price typically equivalent to normal selling price and in excess of the cost or carrying amount. Upon delivery, the Company records the net present value of all payments under these leases as product revenue, and the related costs of the product are charged to cost of sales. Interest income is recognized throughout the lease term (typically three to five years ) using an implicit interest rate. The sales-type leases do not have unguaranteed residual assets. Upon adoption of ASC 842, the Company elected to apply the practical expedient provided to lessors to combine the lease and non-lease component of a contract where the revenue recognition pattern is the same and where the lease component, when accounted for separately, would be considered an operating lease. 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 $ 3,056 as of September 30, 2025 and the non-current portion of the net investment in these leases was $ 2,971 as of September 30, 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 $ 90 and $ 108 during the three months ended September 30, 2025 and 2024, respectively, and $ 293 and $ 354 during the nine months ended September 30, 2025 and 2024, respectively. 21 The future undiscounted cash flows from these leases as of September 30, 2025 are: Remainder of 2025 $ 1,363 2026 2,532 2027 1,754 2028 702 2029 126 2030 18 Total undiscounted cash flows $ 6,495 Present value of lease payments $ 6,027 Difference between undiscounted cash flows and discounted cash flows $ 468 (17) Restructuring On February 9, 2024, the Board of Directors of the Company voted to implement a staged wind-down of the Company’s manufacturing activities at its facility in Middletown, Rhode Island. The Board made this determination following a strategic review of the Company’s manufacturing operations, driven by reduced demand for the Company’s hardware products in the face of intensifying competition during the third and fourth quarters of 2023. 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 by the end of 2026. The Company expects to continue to facilitate customer transition to third-party hardware products compatible with the Company’s mobile satellite communications services. The Company also plans to continue to conduct maintenance, refurbishment service, warehousing, shipping and receiving activities at the Middletown, Rhode Island location until the Company's anticipated relocation in the spring of 2026. As part of this restructuring, the Company reduced its headcount by approximately 75 employees, or approximately 20 % of its total workforce as of the time the Company announced the restructuring. In 2024, the Company incurred aggregate severance charges of approximately $ 3.9 million, consisting of approximately $ 3.6 million of cash charges and approximately $ 0.3 million of non-cash charges arising from pre-existing contractual obligations to accelerate vesting of certain outstanding equity compensation awards. For the aggregate severance charges of approximately $ 3.9 million, the Company recorded in its consolidated statement of operations $ 0.9 million in cost of product sales, $ 1.4 million in research and development, $ 0.7 million in sales, marketing and support, and $ 0.8 million in general and administrative. The Company did no t incur restructuring charges in the three and nine months ended September 30, 2025 related to the staged wind-down of the Company's manufacturing activities. (18) Segment Information The Company manages its operations as a single operating segment for the purpose of assessing performance and making operating decisions, resulting in a single reportable segment. The Company has determined that its Chief Operating Decision Maker (CODM) is its Chief Executive Officer. The CODM reviews the Company’s financial information on a consolidated basis for the purpose of allocating resources and assessing financial performance. The key measure of segment profit or loss that the CODM uses to allocate resources and assess performance is the Company’s consolidated net income (loss). This is reviewed against budgeted expectations to assess segment performance and allocate resources. The Company’s segment net income for the nine months ended September 30, 2025 and 2024 consisted of the following: 22 Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Sales: Service $ 25,388 $ 24,410 $ 70,079 $ 74,122 Product 3,065 4,561 10,411 12,789 Net Sales 28,453 28,971 80,490 86,911 Cost of service sales VSAT airtime 10,471 13,144 31,214 39,767 LEO airtime 5,547 1,340 12,095 3,154 Other (1) 676 499 1,830 1,575 16,694 14,983 45,139 44,496 Cost of product sales VSAT 514 834 1,698 1,816 LEO 1,591 1,585 4,179 4,335 TracVision & land mobile 302 742 1,622 2,685 Other (2) 7,439 1,553 9,364 5,485 9,846 4,714 16,863 14,321 Research and development Personnel costs 796 1,074 2,568 5,666 Professional fees 26 44 77 168 Other (3) 147 289 427 937 969 1,407 3,072 6,771 Sales, marketing and support Personnel costs 3,582 3,460 10,191 10,750 Professional fees 356 231 957 612 Other (4) 946 1,241 3,706 4,288 4,884 4,932 14,854 15,650 General and administrative Personnel costs 2,268 1,734 6,193 7,747 Professional fees 505 899 1,508 1,926 Other (5) 918 1,156 3,105 3,541 3,691 3,789 10,806 13,214 Long-lived asset impairment charge — 1,137 — 1,137 Other segment items (6) ( 697 ) ( 792 ) ( 2,530 ) ( 1,940 ) Net loss $ ( 6,934 ) $ ( 1,199 ) $ ( 7,714 ) $ ( 6,738 ) (1) Includes costs related to Inmarsat, service activations, content service, CommBox Edge and other miscellaneous (2) Includes costs related to CommBox Edge, TracNet Coastal, obsolete inventory write-off and other miscellaneous (3) Includes facilities and other less significant expenses (4) Includes marketing expenses, external commissions, travel and entertainment, facilities expense, warranty expense and other less significant expenses (5) Includes the financing fees, facilities expense, computer expenses, depreciation and amortization and other less significant expenses 23 (6) Other segment items includes interest income; 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 $ 26,931 , $ 8,995 of these assets are located inside of the United States. Regarding the assets located outside of the United States, $ 6,346 are located in Singapore. The geographic location of the Company's AgilePlans revenue-generating assets has been determined based upon the customer shipping address. (19) Share Buyback Program On December 9, 2024, the Board of Directors of the Company authorized a share repurchase program pursuant to which the Company may purchase outstanding shares of the Company’s common stock for an aggregate purchase price of up to $ 10 million. Under the program, the Company, at management’s discretion, may repurchase shares from time to time through various means, including on the open market, in privately negotiated transactions or block transactions, or through an accelerated repurchase agreement. The Company may elect to make purchases under Rule 10b-18 under the Securities Exchange Act of 1934, as amended, which imposes certain volume limitations, and/or under Rule 10b5-1 under that act, which would permit repurchases to occur during periods when the Company might otherwise be precluded from making purchases under insider trading laws or Company policy. The volume and timing of any such repurchases will depend on a variety of factors, including the availability of shares, price, market conditions, alternative uses of capital, liquidity, general business conditions, satisfaction of debt covenants, and applicable regulatory requirements. 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 September 30, 2025, the Company repurchased 22 shares of common stock in open market transactions at a cost of approximately $ 116 . During the nine months ended September 30, 2025, the Company repurchased 264 shares of common stock in open market transactions at a cost of approximately $ 1,372 . Except as noted above, there were no other repurchase programs outstanding. (20) Subsequent Events On October 8, 2025, the Company acquired certain customer and vendor agreements and other assets from a satellite services provider operating in the Asia-Pacific region for a purchase price consisting of approximately $ 3.1 million in cash. The Company also paid approximately $ 0.6 million for certain satellite communications equipment related inventory. The Company expects to record one or more intangible assets with respect to these transactions. In connection with the acquisition, a subsidiary of the Company made offers of employment to eleven employees of the seller, all of which have been accepted. The Company also entered into transition arrangements with the seller to facilitate the orderly transfer of acquired assets. The transfer of certain agreements requires the consent of the counterparty. The Company expects that, if consent is not obtained, the Company and the seller will fulfill those agreements through subcontracting arrangements, where permitted. The agreements remain terminable in accordance with their terms, and the unanticipated termination of any of the agreements may prevent the Company from realizing some or all of the anticipated benefits of the acquisition. 24