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 service sales now representing over 55% of airtime service sales.

• Service revenue reached $29.7 million, up 29% year-over-year, reflecting subscriber base expansion and strong demand for Starlink and OneWeb services.

• 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 increased to $3.0 million.

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

• Opened first retail location, expanded global sales and support teams, and grew land-based Starlink initiative to 1,600 sites.

Financial highlights

• Service gross margin improved to 36% in Q2 2026, with service gross profit at $10.6 million.

• Adjusted EBITDA was $3.0 million, up from $2.8 million in Q1; capital expenditure was $1.3 million, down from $2.6 million in Q1.

• Cash and cash equivalents at June 30, 2026, were $57.7 million; working capital was $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.

• Net income margin for Q2 2026 was 0.6%; adjusted EBITDA margin was 9%.

Outlook and guidance

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

• 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.

• Terminal shipments expected to remain in the 2,000–3,000 range per quarter, subject to market dynamics.

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

• Strategic initiatives are expected to support recurring service revenue and subscriber base expansion.