KVH Industries (Nasdaq: KVHI) reported Q2 2026 revenue of $33.7 million for the quarter ended June 30, up 27% from $26.6 million a year earlier, while GAAP EPS declined to $0.01 from $0.05. Higher Starlink and OneWeb subscriptions drove service growth, but net income fell even as adjusted EBITDA and the operating result improved.
Core earnings data
Revenue also increased 4% sequentially from Q1 2026, supported by a 6% increase in service revenue. The year-over-year comparison shows that growth was concentrated in recurring services, while product sales made a smaller contribution.
| Metric | Q2 2026 | Q2 2025 | Year-over-year change |
|---|---|---|---|
| Revenue | $33.7 million | $26.6 million | +27% |
| Service revenue | $29.7 million | $23.0 million | +29% |
| Product revenue | $4.0 million | $3.6 million | +12% |
| Operating loss | $(0.1) million | $(0.4) million | Loss narrowed by about $0.3 million |
| Net income | $0.2 million | $0.9 million | Down about 78% |
| GAAP EPS | $0.01 | $0.05 | Down 80% |
| Adjusted EBITDA | $3.0 million | $2.7 million | Up about 11% |
Adjusted EBITDA is a non-GAAP measure and excludes items including interest, taxes, depreciation, amortization, stock-based compensation and certain variable charges.
LEO services are reshaping KVH’s revenue mix
Airtime revenue reached $27.8 million, rising 31% year over year and 5% sequentially. KVH attributed the increase primarily to subscriber growth for Starlink and OneWeb, which more than offset a substantial decline in legacy VSAT service sales caused by fewer VSAT subscribers.
The mix shift was pronounced: LEO services represented more than 55% of Q2 airtime revenue, compared with less than 32% a year earlier. That means KVH’s growth increasingly depends on reselling and bundling third-party LEO connectivity rather than its legacy satellite services.
Product revenue increased 12% to $4.0 million. Starlink product sales rose by $0.7 million and OneWeb product sales increased by $0.3 million, partially offset by declines of $0.5 million in TracVision products and $0.2 million in VSAT Broadband products. KVH said low-cost alternatives to VSAT, including products with streaming capabilities, continued to weigh on TracVision demand.
Revenue growth outpaced profit conversion
KVH’s operating loss narrowed to $0.1 million despite operating expenses increasing by $0.9 million to $10.4 million. The largest expense increases included $0.4 million for salaries, benefits and taxes, $0.3 million for professional fees and $0.3 million for bad debt expense. Lower warranty and facilities expenses provided partial offsets.
The approximate operating margin improved to negative 0.3% from negative 1.5%. However, adjusted EBITDA rose about 11%, slower than the 27% increase in revenue, reducing the approximate adjusted EBITDA margin to 8.9% from 10.2%.
GAAP net income declined to $0.2 million from $0.9 million even though the operating loss narrowed. The release did not provide enough detail on below-operating-line items to attribute that divergence to a specific factor.
Management’s view
CEO Brent C. Bruun said LEO service growth, particularly from Starlink, was expanding recurring revenue and KVH’s subscriber base. Management is also advancing bundled, multi-network service offerings as it transitions customers toward newer connectivity platforms while maintaining a focus on long-term operating performance.
Recent insider transactions
The supplied insider data shows 30,000 shares purchased in one transaction and 47,987 shares sold through seven transactions during the past six months, resulting in net sales of 17,987 shares. The transactions below are the 10 most recently reported, but they do not by themselves establish insiders’ views on KVH’s outlook.
| Date | Insider and role | Action | Price per share | Transaction value |
|---|---|---|---|---|
| Jun. 10, 2026 | Brent C. Bruun, CEO | Sale | $7.60 | $16,944 |
| Jun. 10, 2026 | Felise B. Feingold, General Counsel | Sale | $7.60 | $14,147 |
| May 27, 2026 | Bradley Louis Radoff, beneficial owner over 10% | Sale | $10.78–$11.39 | $391,994 |
| Mar. 10, 2026 | Brent C. Bruun, CEO | Sale | $6.64 | $13,599 |
| Mar. 10, 2026 | Felise B. Feingold, General Counsel | Sale | $6.64 | $10,579 |
| Feb. 18, 2026 | Brent C. Bruun, CEO | Sale | $6.38 | $22,559 |
| Feb. 18, 2026 | Felise B. Feingold, General Counsel | Sale | $6.38 | $10,938 |
| Feb. 12, 2026 | Bradley Louis Radoff, beneficial owner over 10% | Purchase | $6.26 | $187,944 |
| Dec. 9, 2025 | Stephen H. Deckoff, director and beneficial owner over 10% | Purchase | $5.99–$6.05 | $424,674 |
| Dec. 2, 2025 | Stephen H. Deckoff, director and beneficial owner over 10% | Purchase | $5.99–$6.06 | $168,902 |
Risks investors should monitor
- LEO growth may carry weaker economics. KVH identifies generally lower product and service margins from reseller arrangements as a risk. Revenue growth may therefore continue to outpace EBITDA growth.
- Dependence on a small number of network providers is increasing. Starlink or other capacity suppliers could sell directly to customers, expand competing reseller networks, change commercial terms or stop providing capacity.
- Legacy products and services remain under pressure. Declining VSAT subscribers and competition from lower-cost alternatives are reducing VSAT service and TracVision product sales.
- Purchase obligations could affect profitability. KVH could incur expenses if it does not consume prepaid Starlink data within the contract period or if minimum vendor commitments exceed customer demand.
Summary
KVH’s second-quarter growth came primarily from the rapid expansion of Starlink and OneWeb services, pushing LEO connectivity above half of airtime revenue and offsetting continued weakness in legacy VSAT offerings. Operating performance improved and adjusted EBITDA increased, but profit growth lagged revenue growth and GAAP net income declined. The central issue for future quarters is whether KVH can convert its expanding LEO subscriber base and multi-network offerings into stronger margins while managing provider dependence and the contraction of its legacy business.
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