KVH Industries, Inc.

earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Anthony Pite, Chief Financial Officer. Please go ahead.

Thank you, Stephen. Good morning, everyone, and thank you for joining us today for KVH Industries' first quarter results, which are included in the earnings release we published earlier this morning. Joining me on the call is the company's Chief Executive Officer, Brent Bruin. Before I get into the numbers, a few standard statements. Firstly, if you would like a copy of the earnings release, or if you would like to listen to a recording of today's call, both will be available on our website And if you are listening via the web, please feel free to submit questions to ir.kvh.com. Further, this conference call will contain certain forward-looking statements that are subject to numerous assumptions and uncertainties that may cause our actual results to differ materially from those expressed in these statements. We undertake no obligation to update or revise any of these statements. We will also discuss adjusted EBITDA, which is a non-GAAP financial measure. You will find a definition of this measure in our press release, as well as a reconciliation to comparable GAAP numbers. We encourage you to review the cautionary statements made in our SEC filings, specifically those under the heading risk factors in our 2024 Form 10-K, which was filed on March 10th. The company's other SEC filings are available directly from the investor information section of our website. Now, to walk you through the highlights of our first quarter, I'll turn the call over to Brent.

Thank you, Anthony, and good morning, everyone. Our first quarter results reflect the positive impact of our strategic initiatives and our commitment to managing costs. Compared to the fourth quarter of last year, gross profit grew sequentially. We increased our subscriber base by 5 percent, and operating expenses and capital expenditures were both in check. Revenue declined year-over-year in the first quarter to $25.4 million, primarily due to lower revenue from our VSAT airtime service, which includes the loss of the U.S. Coast Guard revenue. However, airtime gross margin was up roughly 3 percent from the fourth quarter, thanks to solid margin contribution from Starlink. We saw Starlink revenue continue to increase as a percentage of our total revenue over the course of the quarter. We also increased quarterly shipments of connectivity terminals to more than 1,300 units, our fifth consecutive record quarter. These shipments include a significant increase in Starlink terminals, continuation of orders for our TrackNet and TrackPhone VSAT terminals, and for the first time, OneWeb terminals. Our subscriber growth also accelerated in the first quarter as we increased our subscribing vessels by 5 percent compared to the fourth quarter of 2024. I'm pleased to report that we have more than fully recovered from the decline in subscribing vessels that we experienced in 2023 in the first quarter of 2024. We now have more than 7,400 subscribing vessels. Starlink drove this growth as we experienced strong demand in the commercial and leisure markets in the first quarter. Roughly 30% of Starlink activations in Q1 were hybrid configurations, illustrating the value of our ability to deliver a multi-orbit managed solution for vessels. We also added the new Starlink mini terminal to our product portfolio for land and maritime applications. Our Combox Edge communications gateway also continued to thrive in the first quarter, due in part to its versatility in managing Starlink communications. Product shipments were up 33% from the fourth quarter of last year, and we increased our active Combox Edge subscribers by 35% from the last quarter. We are working diligently to expand the capabilities, features, and value offered by Combox Edge. Earlier today, we announced the launch of Combox Edge Secure Suite. This new feature set is designed to detect, prevent, and report on cybersecurity threats. Thanks to its advanced intrusion prevention system, Security Suite actively identifies and blocks harmful traffic in real time to reduce the risk to vessel communications, operations, and network security. To achieve this, Security Suite employs some of the most advanced cybersecurity and proactive monitoring technology available, including Cisco Talos, which focuses on identifying emerging and existing cyber threats, and Cisco Snort, which monitors, analyzes, and responds to malicious network traffic in real time. As discussed in our Q4 earnings call, we began shipments and activations of OneWeb terminals in late January. We are seeing significant interest in the service, especially outside the U.S. We are very pleased that OneWeb has been added to our product and service portfolio. Looking at our overall business operations, the sales of both our headquarters and factory facilities remain pending, subject to closing conditions. We expect to close the sale of our headquarters before the end of the quarter and anticipate that the factory sale will close in Q3 following zoning approvals. During Q1, we bought back shares under the terms of the stock repurchase program approved by our board of directors in December 2024. Through the end of Q1, we purchased more than 30,000 shares at a cost of roughly $163,000. And finally, we are keeping an eye on tariffs, but their status and potential impact are uncertain. Our exposure to potential tariffs on imports from China is reduced thanks to the purchase of components we carried out in 2024 as part of our manufacturing wind-down efforts. At this time, we don't expect tariffs to have a material impact on our costs. So in conclusion, we are very pleased with the results driven by our strategic initiatives. We achieved record-breaking subscriber growth, increased product shipments, and successfully added OneWeb to our portfolio. While there are still challenges ahead, I am confident in our path going forward. And now, I will turn the call back to Anthony to discuss the numbers. Anthony?