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Technology Stocks : KVH Industries, Inc.
KVHI 5.520-2.1%Nov 7 9:30 AM EST
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To: awecr2 who wrote (7042)11/12/2018 4:51:41 PM
From: awecr2  Read Replies (1) of 7249
 
I think it’s also worth noting that we can reference Inmarsat’s maritime numbers to interpolate why KVH minivsat service revenues are gradually increasing at this stage and haven’t taken off yet.

investors.inmarsat.com

When evaluating the bottom of page 3 in this above link, Inmarsat FBB Revenues are down 13.4%. This drop is likely higher for KVH, given their propensity to incentivize their own Vsat products and services over FBB. The impact is likely a negative 1 to 2% to minivsat service growth because this is where KVH allocated all Broadband services(incl FBB), beginning in 2014. At the time FBB service revenues accounted for approximately $1 to 1.5mm in service revenues, on a quarterly basis. It’s possible this also included tv and iridium related service revenues. That number is down to approximately $500k on a quarterly basis. With the inclusion of LTE and soon to be Certus, this component will flatten out and likely turn positive by the 2nd half of 2019, dependent on LTE global expansion and Certus intro timing. The good news for KVH Broadband services is that over 50% of hardware outstanding was upgradable, when CaaS was introduced. The part that wasn’t upgradable is now mostly protected from churn by the introduction of V3-HTS. As Inmarsat maritime revenues hover around flat growth, KVH revenues will grow significantly, in comparison, as FBB service revenues become increasingly insignificant.

Aw
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