KVH Industries Q1 2016 Revenue Drops 2 Percent YoY

KVH Headquarters in Middletown, R.I. Photo: KVH Industries

[Via Satellite 05-05-2016] KVH Industries reported revenue of $40.4 million for the first quarter of 2016, down 2 percent compared to the first quarter of 2015. First quarter product revenues of $15.4 million were flat with the prior year quarter. Service revenues were $25 million, a decrease of 4 percent compared to the first quarter of 2015, primarily driven by the British pound currency weaknesses.

Airtime service revenues of $15.2 million, which include KVH’s mini-VSAT Broadband airtime revenues, decreased 3 percent Year-over-Year (YoY), primarily due to a 38 percent decrease in Inmarsat FleetBroadband revenues resulting from a higher subscriber termination rate. Content and services revenues of $9.8 million, which include the company’s entertainment, e-Learning, and safety content, declined 4 percent in the first quarter of 2016 compared to the first quarter of 2015.

KVH did gain a notable new VSAT fleet deal for up to 53 vessels during the quarter. The company’s VSAT margins reached 36 percent compared to 35 percent in the prior year period. Despite economic challenges, KVH reported its new mini-VSAT Broadbandsm 2.0 service is proving popular and generating higher average Revenues Per User (ARPUs) and improved margins.

“Overall, given the headwinds in the commercial maritime sector, we were pleased with our results in the first quarter,” said Martin Kits van Heyningen, CEO of KVH. “We had a solid quarter for both VSAT and marine TV hardware sales, and are confident that we continue to gain market share. We did see a small decline in the ARPU for our VSAT airtime subscribers, particularly those operating in the offshore oil and gas sector, which resulted in VSAT airtime being down 1 percent year-over-year.”