Financial Analysis

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.

CommitmentsAndContingenciesDisclosureTextBlock

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

DisaggregationOfRevenueTableTextBlock

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 …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Income Taxes The Companys 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 Companys 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 Companys tax jurisdictions include the United States, the U …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

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 p …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

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 Companys financial statements, including disclosures. In November 2024, the FASB issued ASU No. 2024-03, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The standard requires public business entities to provide further disaggregated information of relevant ex …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Restructuring On February 9, 2024, the Board of Directors of the Company voted to implement a staged wind-down of the Companys manufacturing activities at its facility in Middletown, Rhode Island. The Board made this determination following a strategic review of the Companys manufacturing operations, driven by reduced demand for the Companys 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 Companys 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 Companys 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. …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

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 Companys 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 Companys 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 comprehensiv …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

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 Companys 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 Companys consolidated net income (loss). This is reviewed against budgeted expectations to assess segment performance and allocate resources. The Companys segment net income for the nine months ended September 30, 2025 and 2024 consisted of the following: 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 96 …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

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 Companys 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 Companys consolidated financial statements and related notes included in the Companys 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 fi …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

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.

SubsequentEventsTextBlock