Strong Vessel Growth Offset by ARPU Decline; New Capacity Plan Pending
 
Resetting the bar. Q2 revenues declined 7%, slightly more than we forecast, while AEBITDA was flat, besting our estimate by 12%.  KVH lowered its 2025 revenue and AEBITDA midpoint guidance by 8% and 17%, respectively.
Airtime return-to-growth.  Airtime revenues (ex-U.S. Coast Guard) grew y/y for the first time in nearly two years (up ~3%), and sequentially since 1Q23.  LEO led the way. 
Vessel count accelerating.  LEO additions are now far exceeding GEO losses.  KVH added ~600 vessels in Q2, exceeding the pre-covid high of ~570 vessels in 2019.  We are forecasting ~2,000 adds in ‘25, up from 400 in ’24.