KVH Industries (KVHI) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue rose 27% year-over-year to $33.7 million, driven by strong growth in LEO-based connectivity and recurring service revenue, with LEO services like Starlink and OneWeb now representing over 55% of airtime service sales.

• Service revenue reached $29.7 million, increasing 29% year-over-year, reflecting expansion of the subscriber base and recurring revenue strength.

• Net income for Q2 2026 was $0.2 million ($0.01 per share), down from $0.9 million ($0.05 per share) in Q2 2025.

• Adjusted EBITDA for the quarter was $3.0 million, up from $2.8 million in Q1 and $2.7 million in Q2 2025.

• The company is winding down manufacturing operations, focusing on integrated communications solutions and transitioning customers to third-party hardware.

Financial highlights

• Service gross profit was $10.6 million, with a service gross margin of 36% (up from 35% in Q1); overall gross margin for Q2 2026 was 31%.

• Operating expenses totaled $10.4 million, up from $9.7 million in Q1, mainly due to higher salaries, professional fees, and bad debt expense.

• Cash and cash equivalents stood at $57.7 million as of June 30, 2026, with working capital of $101.3 million.

• Operating cash flow was negative $6.4 million for the first half of 2026, mainly due to a $22 million prepayment for Starlink pooled data.

• Capital expenditures were $1.3 million, with $0.4 million for ERP project and HQ fit-out, and $0.2 million non-cash for VSAT antennas.

Outlook and guidance

• Management expects sufficient liquidity for at least the next twelve months, with ongoing investments in Starlink data and a continued shift toward service-based revenue.

• Expect to complete the $15 million stock repurchase authorization within the current month.

• Anticipate continued growth in recurring revenue and subscriber base in the second half of the year.

• Project ongoing terminal shipments in the 2,000–3,000 range per quarter, depending on market dynamics.

• Manufacturing wind-down is expected to be completed by end of 2026, with continued support for customer transitions.