KVH Industries Reports $11 Million Net Loss for Fiscal Year 2024, Announces Manufacturing Wind-Down

KVH Industries, Inc. reported a net loss of $11 million for the fiscal year ending December 31, 2024, compared to a loss of $15.3 million in 2023, reflecting a decrease in the loss margin from 11.6% to 9.7%. The company's total revenue fell by 14% to $113.8 million, driven primarily by a 16% decline in service sales, which accounted for 84.7% of total sales. This decrease was largely attributed to a $17.1 million drop in airtime service sales, influenced by a reduction in VSAT-only subscribers and a significant contract downgrade from the U.S. Coast Guard, which is expected to reduce revenue by approximately 95% over the next few years.

In terms of operational changes, KVH announced a strategic wind-down of its manufacturing operations in February 2024, a decision prompted by declining demand for its hardware products amid increasing competition. The company plans to cease most manufacturing activities by the end of 2025, transitioning to a model that relies on third-party hardware. This restructuring included a workforce reduction of approximately 75 employees, or 20% of its total staff, resulting in severance charges of $3.9 million. As of December 31, 2024, KVH employed 260 team members, down from previous years.

KVH's product sales also saw a slight decline of 2%, totaling $17.4 million, with notable decreases in VSAT Broadband and TracVision product sales. However, the company reported a $5 million increase in Starlink product sales, indicating a shift in customer preferences towards low-earth orbit (LEO) services. The company has begun integrating Starlink services into its offerings, which it expects will help mitigate the decline in traditional VSAT services. Additionally, KVH introduced new products, including the TracNet Coastal terminals, which provide 5G and Wi-Fi connectivity, further diversifying its service portfolio.

Looking ahead, KVH anticipates ongoing challenges due to intensified competition from LEO service providers, which may continue to impact its revenue from traditional satellite services. The company expects that the trend of declining VSAT service sales will persist, potentially accelerating in the coming years. Despite these challenges, KVH remains focused on expanding its multi-orbit, multi-channel integrated communications solutions and enhancing its service offerings to adapt to changing market conditions. The company maintains a strong liquidity position with $50.6 million in cash and cash equivalents as of year-end, which it believes will support its operational needs for the foreseeable future.