Q4 2025 KVH Industries Inc Earnings Call
Speaker #1: At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a A question and answer session . To ask a question during the session , you will need to press star one one on your telephone .
Speaker #1: With our growing subscriber base, our demonstrated ability to integrate and scale new satellite technologies, and our vessel-based managed IT solution launching in the coming weeks, we believe KVH is uniquely positioned to capture this expanding market and deliver differentiated, high-value services to our customers.
Speaker #1: You will then hear an automated message advising that your hand is raised to withdraw your question , please press star one one again .
Speaker #1: Please be advised that today's conference is being recorded . I would now like to hand the conference over to your first speaker , Anthony Pike .
Speaker #1: Please go ahead
Speaker #1: We enter 2026 with momentum, financial strength, and a clear strategy, and have never been more confident in KVH's direction. With that said, I'll turn the call back to Anthony to review the financial details.
Speaker #2: Thank you . Tanya Good morning , everyone , and thank you for joining us today for Kvh Industries . Fourth 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 Bruun .
Speaker #1: Anthony?
Speaker #2: Thank you, Brent. So with respect to our fourth quarter financial results, service gross profit was 9.8 million dollars, which is up 1.1 million dollars from the prior quarter.
Speaker #2: A copy of the earnings release and a recording of today's call will be available on our website at This conference call contains forward looking statements for the subject to uncertainties that may cause actual results to differ materially from those expressed in these statements Words such as expects may , intend , anticipate , will and similar expressions identify forward looking statements which include projections , plans , initiatives and other future events .
Speaker #2: Service gross margin was 34%, which remained flat compared to the prior quarter. And airtime depreciation expense, which is a non-cash charge, represented 8% and 9% of service revenue in the fourth and third quarters, respectively, which impacted these gross margins.
Speaker #2: It is also worth noting that our cost of service sales related to our legacy network will reduce in 2026, as our minimum bandwidth commitment reduces by 7 million dollars compared to 2025.
Speaker #2: We undertake no obligation to update these statements and you should review
Speaker #2: And as Brent mentioned, total subscribing vessels at the end of Q4 were just above 9,000, which is up 1% from the prior quarter and 28% from the beginning of the year.
Speaker #2: Vessel growth in the fourth quarter was lower than prior quarters this year, due to the termination of two Southeast Asian low ARPU fishing fleets.
Speaker #2: These two fleets contributed very little to our service gross profit, and excluding the loss of these fleets in Q4, total subscribing vessels were up 8% in the fourth quarter, and 37% from the beginning of the year.
Speaker #3: It was the year kV proved . It is positioned to lead it Let me explain what I mean For years , the Maritime satellite industry was built on geo technology Reliable , established but limited in speed and capacity .
Speaker #2: The Q4 operating expenses totaled 10.5 million dollars, compared to 9.5 million dollars in the prior quarter. expenses, including 0.9 million dollars of non-recurring costs, which related to transaction costs from the acquisition we completed, in Q4, as well as some restructuring costs.
Speaker #3: The arrival of Leo constellations changed everything Vessels that once relied on modest , modest bandwidth can now access high speed , always on connectivity at sea .
Speaker #3: New providers are entering the market . Customer expectations are rising , and the addressable opportunity is expanding rapidly . CVX saw this shift coming We made a deliberate strategic decision to reposition our business around Leo airtime .
Speaker #2: As Brent mentioned, our adjusted EBITDA for the quarter was 3.1 million dollars and capital expenditure for the quarter was 2.4 million dollars. Of which 1.4 million dollars related to our ongoing ERP project and the fit-out of our new US headquarters.
Speaker #3: Subscriber growth , and high value managed services 2025 was the year that strategy began to pay off Here's what we delivered in the fourth quarter .
Speaker #2: Both of these projects will conclude in 2026. So this compares to adjusted EBITDA of $1.4 million and capital expenditure of $1.6 million in the third quarter of 2025.
Speaker #3: Service revenue grew to $28.3 million , a 27% increase from Q4 2024 . We contracted for our second Starlink data pool , a 300% increase from our initial pool representing a $45 million , 18 month commitment .
Speaker #2: And so our ending cash balance of $69.9 million was down approximately $2.9 million from the beginning of the quarter, and this decrease was driven by the acquisition we completed in Q4.
Speaker #3: We made this commitment with confidence Demand for Leo airtime across our customer base is strong and growing , and we delivered our strongest adjusted EBITDA quarter of the year for the full year .
Speaker #2: So overall, we are very pleased with the fourth quarter performance, which shows a continuation in the execution of our strategy to business and the transition from our legacy to a LEO-driven, maritime SATCOMS market.
Speaker #3: Service revenue grew 2% to $98.4 million . That headline number . Understates the real momentum in our business . Stripping out the $7.7 million in US Coast Guard revenue that did not occur in 2025 .
Speaker #2: Our subscribed vessel count continues to grow, churn on our legacy network is being managed well, revenue has increased for the third quarter in a row with consistent margins, and our costs have remained under control.
Speaker #3: Underlying service revenue grew 11% . A meaningful reflection of what our core maritime connectivity business looks like We grew our subscriber base by approximately 2000 vessels , a 28% increase .
Speaker #2: All of which resulted in our strongest quarterly adjusted EBITDA performance of the year. And so with all that considered, our guidance for 2026 is revenue of 130 to 145 million dollars and adjusted EBITDA of 11 to 16 million dollars.
Speaker #3: Ending the year with more than 9000 vessels under contract . That is a significant and growing installed base that generates recurring revenue and creates the platform for everything we are building We surpassed 1000 common box Edge subscribers .
Speaker #2: This concludes our prepared remarks, and I will now turn the call over to the operator to open the line for the Q&A portion of this morning's call.
Speaker #3: Combox edge will be integral to our vessel based , managed . It solution , which we plan to introduce in the coming weeks .
Speaker #2: Operator?
Speaker #3: Certainly. As a reminder to ask your question, you will need to press star 11 on your telephone and wait for your name to be announced.
Speaker #3: To withdraw your question, please press star 11 again. Please stand by while we compile our Q&A roster. And our first question will be coming from the line of Chris Quilty of Quilty Space.
Speaker #3: This is the next chapter for CVX . Moving beyond connectivity into a broader , higher valued , managed service relationship with our customers , we also expanded our global footprint , successfully completing the integration of a maritime communications customer base in the Asia Pacific region , adding more than 800 vessels and more than 4400 land based subscribers .
Speaker #3: Your line is open, Chris.
Speaker #4: Thanks, gentlemen. Good results here. I had a question for you just first on the acquisition. I can't remember when you bought it in the quarter.
Speaker #3: And we delivered $8.1 million in adjusted EBITDA for the full year , including 3.1 million in the fourth quarter alone , reflecting the operating leverage we are beginning to generate as the business scales .
Speaker #4: Is that two and a half million, sort of a good run rate that we should assume for that business on a go-forward basis?
Speaker #5: Yes. The business is actually a bit larger, Chris, but yes, two and a half million is really the net impact. We did have a number of vessels that were we were providing our VSAT service through this particular customer.
Speaker #3: None of this happened by accident . We made deliberate choices investing in Leo capacity , growing our subscriber base , reducing operating costs by 17% and selling our Middletown facility to strengthen our balance sheet .
Speaker #5: And obviously, we'll pick up the incremental margin on that, but two and a half million per quarter is pretty accurate, close assumption, close estimate.
Speaker #3: The result is a company that is leaner , more focused , and better positioned than it ever has been . The that financial strength gives our board the confidence to act .
Speaker #4: And I'm assuming part of the acquisition is you'll would you actively convert those over to LEO, or let them sort of mature on their own?
Speaker #3: Given our recent top line growth in a rapidly growing market , improving profitability , positive free cash flow and no debt . Our board continues to view our common stock as undervalued .
Speaker #5: No, we'll actively look to understand our customer base, and we'll work with them, and we'll provide them with the best solution that's available for them.
Speaker #3: With that said , the board has authorized an increase in our share repurchase program from $10 million to $15 million , which we believe is a next is a prudent next step in returning value to our shareholders Looking ahead , the satellite communications industry is undergoing a significant transformation We are still in the early stages of that shift and the coming years .
Speaker #5: And our LEO-based services, to a large degree, is the best service that we could provide today. And as we've demonstrated, we're doing great in regards to providing LEO services.
Speaker #5: We're growing our install base. The usage is up. We've got our new data pool, so it goes without saying. That's our focus.
Speaker #4: And on the new data pool, Anthony should we assume similar margin trends that we've been seeing with the prior pool and the length of that of 18 months, I think, is shorter than your original plan, or was that also 18 months?
Speaker #3: New Leo based providers will come to market , expanding the opportunity further with our growing subscriber base . Our demonstrated ability to integrate and scale new satellite technologies and our vessel based managed IT solution launching in the coming weeks .
Speaker #5: Yeah. Well, let me jump in there first, Anthony. In regard to it's the same 18 it was a similar 18-month commitment. The fact of the matter is we depleted the pool prior to the prior to 18 months.
Speaker #3: We believe CVX is uniquely positioned to capture this expanding market and deliver differentiated , high value services to our customers . We enter 2026 with Momentum Financial strength , and a clear strategy and have never been more confident in CVS direction .
Speaker #5: So it might appear like it was less, but we still had some runway to go on that, which we didn't need, which we're hopeful will be the same case for their next pool.
Speaker #3: With that said , I'll turn the call back to Anthony to review the financial details Anthony .
Speaker #5: As far as the margins, we anticipate consistent margins because I'm sure you're aware Starlink has implemented a terminal access charge which, in essence, is a pass-through.
Speaker #2: Thank you Brent . So with respect to our fourth quarter financial results , service gross profit was $9.8 million , which is up $1.1 million from the prior quarter Service gross margin was 34% , which remained flat compared to the prior quarter , and airtime depreciation expense , which is a non-cash charge represented 8% and 9% of service revenue in the fourth and third quarters , respectively , which impacted these gross margins .
Brent Bruun: Value for our shareholders. Looking ahead, the satellite communications industry is undergoing a significant transformation. We are still in the early stages of that shift. In the coming years, new LEO-based providers will come to market, expanding the opportunity further. With our growing subscriber base, our demonstrated ability to integrate and scale new satellite technologies, and our vessel-based managed IT solution launching in the coming weeks, we believe KVH is uniquely positioned to capture this expanding market and deliver differentiated high-value services to our customers. We enter 2026 with momentum, financial strength, and a clear strategy, and I've never been more confident in KVH's direction. With that said, I'll turn the call back to Anthony to review the financial details. Anthony.
Brent Bruun: Value for our shareholders. Looking ahead, the satellite communications industry is undergoing a significant transformation. We are still in the early stages of that shift. In the coming years, new LEO-based providers will come to market, expanding the opportunity further. With our growing subscriber base, our demonstrated ability to integrate and scale new satellite technologies, and our vessel-based managed IT solution launching in the coming weeks, we believe KVH is uniquely positioned to capture this expanding market and deliver differentiated high-value services to our customers. We enter 2026 with momentum, financial strength, and a clear strategy, and I've never been more confident in KVH's direction. With that said, I'll turn the call back to Anthony to review the financial details. Anthony.
Speaker #5: So that might have a slight impact on the overall margins for the Starlink piece of our business, but I'll let Anthony answer the specific question.
Speaker #2: Yeah. Just as Brent said, really, we don't the only change we expect really on margin is probably driven a little bit by the terminal access charge.
Speaker #2: But from a dollar profit gross profit perspective, that should not be materially affected at all. And we don't the new deal we've got should help us maintain their margins.
Speaker #2: It is also worth noting that our cost of service sales related to our legacy network will reduce in 2026 as our minimum bandwidth commitment reduces by $7 million compared to 2025 .
Speaker #2: And as Brent mentioned , total subscribing vessels at the end of Q4 were just above 9000 , which is up 1% from the prior quarter and 28% from the beginning of the year Vessel growth in the fourth quarter was lower than prior quarters this year due to the termination of two Southeast Asian low rpu fishing fleets These two fleets contributed very little to our service gross profit .
Speaker #4: Very good. And when you look at the product margins here, obviously, actually, I just signed up for Starlink, and my antenna is free now.
Speaker #4: At least on the consumer side. And we've seen some pressure across enterprise. Is that a business where you think you can maintain a break-even, or does that become a lost leader over time?
Anthony Pike: Thank you, Brent. With respect to our Q4 financial results, service gross profit was $9.8 million, which is up $1.1 million from the prior quarter. Service gross margin was 34%, which remained flat compared to the prior quarter. An airtime depreciation expense, which is a non-cash charge, represented 8% and 9% of service revenue in the Q4 and Q3, respectively, which impacted these gross margins. It is also worth noting that our cost of service sales related to our legacy network will reduce in 2026, as our minimum bandwidth commitment reduces by $7 million compared to 2025. As Brent mentioned, total subscribing vessels at the end of Q4 were just above 9,000, which is up 1% from the prior quarter and 28% from the beginning of the year.
Anthony Pike: Thank you, Brent. With respect to our Q4 financial results, service gross profit was $9.8 million, which is up $1.1 million from the prior quarter. Service gross margin was 34%, which remained flat compared to the prior quarter. An airtime depreciation expense, which is a non-cash charge, represented 8% and 9% of service revenue in the Q4 and Q3, respectively, which impacted these gross margins. It is also worth noting that our cost of service sales related to our legacy network will reduce in 2026, as our minimum bandwidth commitment reduces by $7 million compared to 2025. As Brent mentioned, total subscribing vessels at the end of Q4 were just above 9,000, which is up 1% from the prior quarter and 28% from the beginning of the year.
Speaker #2: And excluding the loss of these fleets in Q4 , total subscribing vessels were up 8% in the fourth quarter and 37% from the beginning of the year .
Speaker #5: The plan is to maintain break-even, but it is an enabler to the airtime. Break-even or slightly better.
Speaker #2: The Q4 operating expenses totaled $10.5 million , compared to $9.5 million in the prior quarter However , Q4 operating expenses included $0.9 million of non-recurring costs , which related to transaction costs from the acquisition .
Speaker #4: Gotcha. Great. I will circle back into the queue.
Speaker #5: Thanks, Chris.
Speaker #3: It is a friendly reminder to ask a question. Please press star 11 on your telephone. And I'm showing no further questions. This will conclude today's program.
Speaker #2: We completed in Q4 , as well as some restructuring costs . As Brent mentioned , our adjusted EBITDA for the quarter was $3.1 million and capital expenditure for the quarter was $2.4 million , of which $1.4 million related to our ongoing ERP project and the fit out of our new US headquarters .
Speaker #3: Thank you for participating. You may now
Anthony Pike: Vessel growth in Q4 was lower than prior quarters this year due to the termination of two Southeast Asian low ARPU fishing fleets. These two fleets contributed very little to our service gross profit, and excluding the loss of these fleets in Q4, total subscribing vessels were up 8% in Q4 and 37% from the beginning of the year. Q4 operating expenses totaled $10.5 million compared to $9.5 million in the prior quarter. However, Q4 operating expenses included $0.9 million of non-recurring costs, which related to transaction costs from the acquisition we completed in Q4, as well as some restructuring costs.
Anthony Pike: Vessel growth in Q4 was lower than prior quarters this year due to the termination of two Southeast Asian low ARPU fishing fleets. These two fleets contributed very little to our service gross profit, and excluding the loss of these fleets in Q4, total subscribing vessels were up 8% in Q4 and 37% from the beginning of the year. Q4 operating expenses totaled $10.5 million compared to $9.5 million in the prior quarter. However, Q4 operating expenses included $0.9 million of non-recurring costs, which related to transaction costs from the acquisition we completed in Q4, as well as some restructuring costs.
Speaker #2: Both of these projects will conclude in 2026 . So this compares to adjusted EBITDA of $1.4 million in capital expenditure of $1.6 million in the third quarter of 2025 .
Speaker #2: And so our ending cash balance of $69.9 million was down approximately $2.9 million from the beginning of the quarter . And this decrease was driven by the acquisition we completed in Q4 So overall , we are very pleased with the fourth quarter performance , which shows a continuation in the execution of our strategy to focus on our recurring revenue business and the transition from our legacy to a Leo driven maritime satcom market .
Speaker #2: As subscribed vessel count continues to grow , churn and our legacy network is being managed well Revenue has increased , as increased for the third quarter in a row , with consistent margins , and our costs have remained under control , all of which resulted in our strongest quarterly adjusted EBITDA performance of the year And so with all that considered , our guidance for 2026 is revenue of 130 to $145 million and adjusted EBITDA of 11 to $16 million .
Anthony Pike: As Brent mentioned, our adjusted EBITDA for the quarter was $3.1 million, and capital expenditure for the quarter was $2.4 million, of which $1.4 million related to our ongoing ERP project and the fit out of our new US headquarters. Both of these projects will conclude in 2026. This compares to adjusted EBITDA of $1.4 million and capital expenditure of $1.6 million in Q3 of 2025. Our ending cash balance of $69.9 million was down approximately $2.9 million from the beginning of the quarter. This decrease was driven by the acquisition we completed in Q4.
Anthony Pike: As Brent mentioned, our adjusted EBITDA for the quarter was $3.1 million, and capital expenditure for the quarter was $2.4 million, of which $1.4 million related to our ongoing ERP project and the fit out of our new US headquarters. Both of these projects will conclude in 2026. This compares to adjusted EBITDA of $1.4 million and capital expenditure of $1.6 million in Q3 of 2025. Our ending cash balance of $69.9 million was down approximately $2.9 million from the beginning of the quarter. This decrease was driven by the acquisition we completed in Q4.
Speaker #2: This concludes our prepared remarks , and I will now turn the call over to the operator to open the line for the Q&A portion of this morning's call .
Speaker #2: Operator
Speaker #1: Certainly . As a reminder to ask a question , you will need to press star one one on your telephone and wait for your name to be announced .
Anthony Pike: Overall, we are very pleased with the Q4 performance, which shows a continuation in the execution of our strategy to focus on our recurring revenue business and the transition from our legacy to a LEO-driven maritime SatComs market. Our subscribed vessel count continues to grow. Churn in our legacy network is being managed well. Revenue has increased for the Q3 in a row with consistent margins, and our costs have remained under control, all of which resulted in our strongest quarterly adjusted EBITDA performance of the year. With all that considered, our guidance for 2026 is revenue of $130 to 145 million and adjusted EBITDA of $11 to 16 million.
Anthony Pike: Overall, we are very pleased with the Q4 performance, which shows a continuation in the execution of our strategy to focus on our recurring revenue business and the transition from our legacy to a LEO-driven maritime SatComs market. Our subscribed vessel count continues to grow. Churn in our legacy network is being managed well. Revenue has increased for the Q3 in a row with consistent margins, and our costs have remained under control, all of which resulted in our strongest quarterly adjusted EBITDA performance of the year. With all that considered, our guidance for 2026 is revenue of $130 to 145 million and adjusted EBITDA of $11 to 16 million.
Speaker #1: To withdraw your question , please press star one . One again . Please stand by while we compile our Q&A roster , and our first question will be coming from the line of Chris Quilty of Quilty space .
Speaker #1: Your line is open . Chris
Speaker #4: Thanks , gentlemen . Good results here . I had a question for you . Just first on the the acquisition . I can't remember when you bought it in the quarter .
Speaker #4: Is that 2.5 million sort of a good run rate that we should assume for that business on a go forward basis ?
Speaker #3: Yes . The business was actually a bit larger , Chris . But yes , 2.5 million is really the net impact . We did have a number of vessels that were we were providing our Vsat service through this particular customer , and obviously we'll pick up the incremental margin on that .
Anthony Pike: This concludes our prepared remarks, and I will now turn the call over to the operator to open the line to the Q&A portion of this morning's call. Operator?
Anthony Pike: This concludes our prepared remarks, and I will now turn the call over to the operator to open the line to the Q&A portion of this morning's call. Operator?
Speaker #3: But 2.5 million per quarter is pretty close assumption . Close estimate .
Operator: Certainly. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile our Q&A roster. Our first question will be coming from the line of Chris Quilty of Quilty Space. Your line is open, Chris.
Operator: Certainly. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile our Q&A roster. Our first question will be coming from the line of Chris Quilty of Quilty Space. Your line is open, Chris.
Speaker #4: And I'm assuming part of the acquisition is you'll would you actively convert those over to Leo or let them sort of mature on their own
Speaker #3: No . We will actively look understand our customer base and we'll work with them and we'll provide them with the best solution that's available for them , you know , and our Leo based services to a large degree , is the best service that we could provide today .
Chris Quilty: Thanks, gentlemen. Good results here. I had a question for you just first on the acquisition. I can't remember when you bought it in the quarter. Is that $2.5 million sort of a good run rate that we should assume for that business on a go-forward basis?
Chris Quilty: Thanks, gentlemen. Good results here. I had a question for you just first on the acquisition. I can't remember when you bought it in the quarter. Is that $2.5 million sort of a good run rate that we should assume for that business on a go-forward basis?
Speaker #3: And , you know , as we've demonstrated , we're we're doing great in regard to providing Leo services . We're growing our installed base .
Speaker #3: The usage is up . We've got our new data pool . So , you know , it goes without saying . That's our focus .
Anthony Pike: Yes. The business is actually a bit larger, Chris, but yes, $2.5 million is really the net impact. We did have a number of vessels that we were providing our VSAT service through this particular customer, and obviously, we'll pick up the incremental margin on that, but $2.5 million per quarter is pretty close assumption, close estimate.
Anthony Pike: Yes. The business is actually a bit larger, Chris, but yes, $2.5 million is really the net impact. We did have a number of vessels that we were providing our VSAT service through this particular customer, and obviously, we'll pick up the incremental margin on that, but $2.5 million per quarter is pretty close assumption, close estimate.
Speaker #4: And and on the new data pool , you know , Anthony , should we assume similar margin trends that we've been seeing with the prior pool and the the length of that of 18 months , I think is shorter than your original , your original plan , or was that also 18 months ?
Speaker #3: Yeah . Well , let me jump in there first . Anthony . In regard to it's the same 18 . It was a similar 18 month commitment .
Chris Quilty: I'm assuming part of the acquisition is would you actively convert those over to LEO or let them sort of mature on their own?
Chris Quilty: I'm assuming part of the acquisition is would you actively convert those over to LEO or let them sort of mature on their own?
Speaker #3: The fact of the matter is we depleted the pool prior to the prior to 18 months . So it might appear like it was less .
Anthony Pike: No, we'll actively look, understand our customer base, and we'll work with them, and we'll provide them with the best solution that's available for them. You know, our LEO-based services, to a large degree, is the best service that we could provide today. You know, as we've demonstrated, we're doing great in regards to providing LEO services. We're growing our installed base. The usage is up. We've got our new data pool. You know, it goes without saying that that's our focus.
Anthony Pike: No, we'll actively look, understand our customer base, and we'll work with them, and we'll provide them with the best solution that's available for them. You know, our LEO-based services, to a large degree, is the best service that we could provide today. You know, as we've demonstrated, we're doing great in regards to providing LEO services. We're growing our installed base. The usage is up. We've got our new data pool. You know, it goes without saying that that's our focus.
Speaker #3: But we still had some runway to go on that which we didn't need , which we're hopeful will be the same case with our next pool .
Speaker #3: As far as the margins , we anticipate consistent margins , but as I'm sure you're aware , Starlink has implemented a terminal access charge , which in essence is a pass through so that might have a slight impact on the overall margins for the Starlink piece .
Speaker #3: Of our business . But I'll let Anthony answer the specific question .
Chris Quilty: on the new data pool, you know, Anthony, should we assume, you know, similar margin trends that we've been seeing with the prior pool and the length of that of 18 months, I think is shorter than your original plan, or was that also 18 months?
Chris Quilty: on the new data pool, you know, Anthony, should we assume, you know, similar margin trends that we've been seeing with the prior pool and the length of that of 18 months, I think is shorter than your original plan, or was that also 18 months?
Speaker #2: Yeah , just as Brent said , really , we don't the only change we expect really on margin is probably driven a little bit by the the terminal access charge .
Speaker #2: But you know , from a dollar profit , gross profit perspective , you know , that should not be materially affected at all .
Brent Bruun: Yeah. Let me jump in there first, Anthony. It was a similar 18-month commitment. The fact of the matter is we depleted the pool prior to 18 months, so it might appear like it was less, but we still had some runway to go on that, which we didn't need, which we're hopeful will be the same case with our next pool. As far as the margins, we anticipate consistent margins, but as I'm sure you're aware, Starlink has implemented a terminal access charge, which in essence is a pass-through. That might have a slight impact on the overall margins for the Starlink piece of our business. I'll let Anthony answer the specific question.
Brent Bruun: Yeah. Let me jump in there first, Anthony. It was a similar 18-month commitment. The fact of the matter is we depleted the pool prior to 18 months, so it might appear like it was less, but we still had some runway to go on that, which we didn't need, which we're hopeful will be the same case with our next pool. As far as the margins, we anticipate consistent margins, but as I'm sure you're aware, Starlink has implemented a terminal access charge, which in essence is a pass-through. That might have a slight impact on the overall margins for the Starlink piece of our business. I'll let Anthony answer the specific question.
Speaker #2: And we don't , you know , the New Deal . We've got should help us maintain their margins .
Speaker #4: Very good . And when you look at the the product margins here , obviously actually I just signed up for Starlink and my antenna is free now , at least on the consumer side .
Speaker #4: And we've seen some pressure across enterprise . Is that a business where you think you can . Maintain a break even , or does that become a loss leader over time ?
Speaker #3: The plan would to is to maintain break even . But it is an enabler to the airtime break even or slightly better .
Speaker #4: Gotcha . Great . I will circle back into the Q .
Anthony Pike: Yeah, just as Brent said, really, we don't. The only change we expect really on margin is probably driven a little bit by the terminal access charge. You know, from a dollar profit, gross profit perspective, you know, that should not be materially affected at all. You know, the new deal we've got should help us maintain the margins.
Anthony Pike: Yeah, just as Brent said, really, we don't. The only change we expect really on margin is probably driven a little bit by the terminal access charge. You know, from a dollar profit, gross profit perspective, you know, that should not be materially affected at all. You know, the new deal we've got should help us maintain the margins.
Speaker #3: Thanks , Chris .
Speaker #1: As a friendly reminder to ask a question , please press star one one on your telephone As I'm showing no further questions , this will conclude today's program .
Chris Quilty: Very good. When you look at the product margins here, obviously, actually, I just signed up for Starlink, and my antenna is free now, at least on the consumer side, and we've seen some pressure across enterprise. Is that a business where you think you can, you know, maintain a break even, or does that become a loss leader over time?
Chris Quilty: Very good. When you look at the product margins here, obviously, actually, I just signed up for Starlink, and my antenna is free now, at least on the consumer side, and we've seen some pressure across enterprise. Is that a business where you think you can, you know, maintain a break even, or does that become a loss leader over time?
Brent Bruun: The plan with IoT is to maintain breakeven, but it is an enabler to the airtime. Breakeven or slightly better.
Brent Bruun: The plan with IoT is to maintain breakeven, but it is an enabler to the airtime. Breakeven or slightly better.
Chris Quilty: Gotcha. Great. I will circle back into the queue.
Chris Quilty: Gotcha. Great. I will circle back into the queue.
Brent Bruun: Thanks, Chris.
Brent Bruun: Thanks, Chris.
Operator: As a friendly reminder to ask a question, please press star one one on your telephone. As I'm showing no further questions, this will conclude today's program. Thank you for participating. You may now disconnect.
Operator: As a friendly reminder to ask a question, please press star one one on your telephone. As I'm showing no further questions, this will conclude today's program. Thank you for participating. You may now disconnect.