KVH Industries Q4 Gets Boost From Airtime Revenue, India Expansion Serving As Additional Catalyst: Analyst

Needham analyst Ryan Koontz maintained a Buy rating on KVH Industries, Inc KVHI with a price target of $13.00.
KVHI reported 4Q22 revenue from continuing operations of $36 million, above the $34.3 million consensus.
Adjusted EBITDA of $4.3 million was solidly above the $3.5 million consensus.
Total revenue from continued operations increased +2% Y/Y, mainly driven by strengths in airtime revenue.
Adjusted EPS of $0.03 was ahead of Needham's $0.00 estimate and was up from ($0.17) in the year-ago period.
A gross margin of 35% (+350bps Y/Y, -120bps Q/Q) benefited from a solid service gross margin of 46% (+1090bps Y/Y, -10bps Q/Q).
VSAT airtime service revenue increased 12% Y/Y to $26.8 million with a gross margin of 43.5% (+900bps Y/Y).
The company reported 6,900 active subscribers on its new, more affordable, and higher-margin HTS network compared to 6,800 subscribers in the previous quarter.
KVHI is excited about its expansion into India. It currently ships its legacy TracPhone (L-band) systems and plans to shift to the new TracNet H-series after the necessary approvals.
The company reports strong traction with innovative new hybrid-connectivity TracNet systems, which began shipping in July and offer significant improvements in near-land customer experience.
Despite its competitive threat, the company has begun integrating Starlink into its hybrid offering, believing that Starlink is a best-effort service unable to offer SLA guarantees.
Management relayed comfort in sustaining its new, lower level of opex and profitability, supported by KVHI's first reported operating income in 6 years.
Price Action: KVHI shares traded lower by 1.71% at $9.79 on the last check Friday.

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