KVH Industries Inc (KVHI) 2024 Q2 法說會逐字稿

Good day and thank you for standing by. Welcome to the Q2 2024 KVH Industries, Inc., earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded.

美好的一天，感謝您的支持。歡迎參加 KVH Industries, Inc. 2024 年第二季財報電話會議。（操作員指示）請注意，今天的會議正在錄製中。

I would now like to turn the call over to our first speaker for today, CFO, Anthony Pike.

現在我想將電話轉給今天的第一位演講者、財務長安東尼派克 (Anthony Pike)。

Thank you, Crystal. Good morning, everyone, and thank you for joining us today for KVH Industries second-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.

謝謝你，水晶。大家早上好，感謝您今天加入我們，了解 KVH Industries 第二季度業績，該業績包含在我們今天早上發布的財報中。與我一起參加電話會議的是該公司執行長布倫特布魯恩 (Brent Bruun)。

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.

在討論這些數字之前，先做一些標準陳述。首先，如果您想要一份收益報告的副本，或者想要收聽今天電話會議的錄音，都可以在我們的網站上找到。如果您透過網路收聽，請隨時向 ir@kvh.com 提交問題。此外，本次電話會議將包含某些前瞻性陳述，這些陳述受到許多假設和不確定性的影響，可能導致我們的實際結果與這些陳述中表達的結果有重大差異。

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 the definition of this measure in our press release as well as a reconciliation to comparable GAAP numbers.

我們不承擔更新或修改任何這些聲明的義務。我們還將討論調整後的 EBITDA，這是一項非 GAAP 財務指標。您可以在我們的新聞稿中找到該衡量標準的定義以及與可比較 GAAP 數據的調整表。

We encourage you to review the cautionary statements made in our SEC filings, specifically those under the heading "Risk Factors" in our Q2 2024 Form 10-Q, which will be filed later today. The company's other SEC filings are available directly from the Investor information section of our website.

我們鼓勵您查看我們在 SEC 文件中所做的警示性聲明，特別是我們將於今天晚些時候提交的 2024 年第二季度表格 10-Q 中“風險因素”標題下的聲明。該公司向 SEC 提交的其他文件可直接從我們網站的投資者資訊部分取得。

Now, to walk you through the highlights of our second quarter, I'll turn the call over to Brent.

現在，為了向您介紹第二季度的亮點，我將把電話轉給布倫特。

Thank you, Anthony, and good morning, everyone. Let me begin with a high-level overview of our results.

謝謝你，安東尼，大家早安。讓我先對我們的結果進行高度概述。

Second-quarter airtime revenue was $23.0 million, down $3.9 million from the second quarter of 2023. As anticipated, airtime gross margins declined slightly due to a shift in our airtime subscriber base. Total revenue for the quarter was $28.7 million, roughly a 15% decrease from a year ago. This was due to the continued decline in VSAT product sales and corresponding VSAT service revenue. These results are in line with the expectations we provided last quarter.

第二季播放時間收入為 2,300 萬美元，比 2023 年第二季減少 390 萬美元。正如預期的那樣，由於我們的通話時間用戶群發生變化，通話時間毛利率略有下降。該季度總收入為 2,870 萬美元，比去年同期下降約 15%。這是由於VSAT產品銷售和相應的VSAT服務收入持續下降所致。這些結果符合我們上季提供的預期。

The maritime industry continues to undergo significant changes, driven by the emergence of NGSO networks. In response to the new market realities, we have taken aggressive steps this year to reposition the company for the future. We are already seeing encouraging results. We have now completed our reorganization efforts and believe that we are now appropriately sized with the right resources to meet our goals as we move forward. The reorganization is expected to result in annualized operating expense savings of approximately $5 million.

在 NGSO 網路的出現推動下，海運業持續發生重大變化。為了因應新的市場現實，我們今年採取了積極的措施，為公司的未來重新定位。我們已經看到了令人鼓舞的結果。我們現在已完成重組工作，並相信我們現在擁有適當的規模和適當的資源，可以在前進的過程中實現我們的目標。此次重組預計將每年節省約 500 萬美元的營運費用。

We achieved a slight increase in our subscriber vessel count in the second quarter, reversing the decline in subscribers we experienced in the first quarter. We shipped a record number of communication antennas for the second consecutive quarter, and we substantially increased shipments of our CommBox Edge Gateway. Many of the second-quarter product shipments are now being installed and awaiting activation. Historically, previous quarter shipments have been strong leading indicator for future airtime and service subscription growth.

我們的訂戶船舶數量在第二季度略有增加，扭轉了第一季訂戶數量下降的趨勢。我們連續第二季的通訊天線出貨量創歷史新高，並且大幅增加了 CommBox Edge Gateway 的出貨量。許多第二季度發貨的產品現已安裝並等待啟動。從歷史上看，上一季的出貨量一直是未來通話時間和服務訂閱成長的強勁領先指標。

Additionally, we signed a bulk data distribution agreement with Starlink. Under this agreement, we made a prepayment for a large block of data to be used over a period of more than one year at favorable rates. This new arrangement offers us increased flexibility in developing and selling custom data plans. As a matter of fact, this morning we introduced a number of customers Starlink data plans, which offer new options for fleet operators and boaters to select the plan most suitable for each vessel in budget.

此外，我們也與 Starlink 簽署了大量資料分發協議。根據該協議，我們預付了大量數據，以便以優惠的價格在一年多的時間內使用。這種新安排為我們開發和銷售客製化資料計劃提供了更大的靈活性。事實上，今天早上我們推出了一些客戶的星鏈數據計劃，為船隊運營商和船主提供了新的選擇，讓他們在預算內選擇最適合每艘船的計劃。

Additionally, we have expanded our value added services to include vessel-based telephone connections using our global voice over IP service offering. We can now provide any Starlink equipped vessel with two voice lines and as many as 10 virtual local members.

此外，我們還擴展了加值服務，包括使用我們的全球 IP 語音服務產品進行基於船舶的電話連接。我們現在可以為任何配備 Starlink 的船隻提供兩條語音線路和多達 10 名虛擬本地成員。

Starlink is an exciting part of our multi-orbit, multi-channel portfolio. It offers outstanding communications for commercial and leisure subscribers worldwide. We are pleased to be able to offer custom data plans and other valuable supporting services, such as global VSAT, LEO, hybrid, always-on connectivity, the CommBox Communications Gateway service, and 24/7 365 live airtime and technical support for our customers around the world.

星鍊是我們多軌道、多通道產品組合中令人興奮的一部分。它為全球商業和休閒用戶提供出色的通訊服務。我們很高興能夠為客戶提供客製化數據計劃和其他有價值的支援服務，例如全球 VSAT、LEO、混合、始終在線連接、CommBox 通訊網關服務以及 24/7 365 即時通話和技術支援世界各地。

Our customers appreciate the breadth and quality of our integrated solutions and support. The result is the fastest growing connectivity service in our history. We have activated more than 1,000 new Starlink terminals for new and existing customers since the start of the year.

我們的客戶讚賞我們整合解決方案和支援的廣度和品質。結果是我們歷史上成長最快的連接服務。自今年年初以來，我們已為新舊客戶啟動了 1,000 多個新的 Starlink 終端。

We are also moving forward with other new product and service enhancements. In addition to the anticipated rollout of OneWeb service later this quarter, we will be expanding the capabilities of CommBox Edge in the coming months with enhanced cybersecurity and crew Internet options. At the same time, we plan to offer new ways to bring crew entertainment and news content on board using the KVH Link service.

我們也正在推動其他新產品和服務的改進。除了預計在本季稍後推出 OneWeb 服務外，我們還將在未來幾個月內透過增強的網路安全和機組網路選項來擴展 CommBox Edge 的功能。同時，我們計劃提供新的方式，利用 KVH Link 服務將船員娛樂和新聞內容帶上飛機。

Our industry is changing rapidly. Stand-alone VSAT service subscriptions have declined faster than anticipated. But we have been nimble and have taken steps to adjust our business model. We are seeing continued growth in VSAT LEO hybrid solutions and reduced churn for those deployments, which indicates the commercial fleet managers and leisure boaters recognize the value of our hybrid approach.

我們的行業正在迅速變化。獨立 VSAT 服務訂閱量的下降速度快於預期。但我們一直很靈活，並已採取措施調整我們的業務模式。我們看到 VSAT LEO 混合解決方案持續成長，而這些部署的流失率減少，這表明商業船隊管理者和休閒船主認識到我們混合方法的價值。

We are anticipating subscriber growth in the third quarter and are hopeful that this trend continues. We are on our way to achieving our strategic, financial, and operational goals for 2024 and believe that we are on the right path and will emerge on our view orientation to world-class solutions provider built on global airtime and superior service and support.

我們預計第三季的用戶數量將會成長，並希望這種趨勢能持續下去。我們正在努力實現 2024 年的策略、財務和營運目標，並相信我們正走在正確的道路上，並將成為基於全球通話時間和卓越服務與支援的世界級解決方案提供者。

I'd now like to hand it back to our CFO, Anthony Pike, for a look at the numbers.

我現在想把它交還給我們的財務長安東尼·派克，讓他看看這些數字。

Thanks, Brent. As a reminder, I would like to note that similar to our call for Q1, I will not restate data that is in the earnings release or clearly described in our 10-Q. I'll focus my comments on information with either elaborates on or clarifies the published data.

謝謝，布倫特。提醒一下，我想指出，與我們對第一季的呼籲類似，我不會重述收益發布中或我們的 10-Q 中明確描述的數據。我將集中評論訊息，詳細說明或澄清已發布的數據。

So with respect to our second-quarter financial results, airtime gross margin, which is not reported in our earnings release, was 36.0%, down compared to the prior quarter gross margin of 41.8%. As noted during prior calls, we do expect airtime margins compressed slightly over time as LEO services become a larger percentage of our total airtime revenue. However, this decline in airtime gross margin from Q1 was primarily driven by churn in our traditional VSAT vessels, where a significant portion of our costs associated with this service are fixed.

因此，就我們第二季的財務表現而言，我們的財報中未報告的通話時間毛利率為 36.0%，低於上一季毛利率 41.8%。正如先前電話會議中所指出的，隨著 LEO 服務在我們總通話時間收入中所佔的比例越來越大，我們預計通話時間利潤率會隨著時間的推移而略有壓縮。然而，通話時間毛利率較第一季下降的主要原因是我們傳統 VSAT 船舶的流失，與該服務相關的成本的很大一部分是固定的。

Total subscribing vessels at the end of Q1 were just below 6,700, which is approximately 1% up from the prior quarter. Reported Q2 product gross profit of negative $0.3 million included $0.5 million of employee severance charges related to the reorganization and manufacturing wind down. Excluding these charges, product gross profit was a positive $0.2 million as compared to a negative $1.4 million in Q1 of last year.

第一季末的訂閱船舶總數略低於 6,700 艘，比上一季增加約 1%。報告的第二季產品毛利為負 30 萬美元，其中包括與重組和生產關閉相關的 50 萬美元員工遣散費。排除這些費用，產品毛利為正 20 萬美元，而去年第一季為負 140 萬美元。

The Q2 operating expenses of $11.8 million include $0.7 million of employee severance charges related to the transformation initiatives and manufacturing wind down announced on February 13. Q2 operating expenses, excluding rig charges, were down around $1 million or 7% from the prior quarter.

第二季營運費用為 1,180 萬美元，其中包括 70 萬美元的員工遣散費，這些費用與 2 月 13 日宣布的轉型計畫和生產縮減有關。第二季營運費用（不含鑽孔機費用）較上一季下降約 100 萬美元，即 7%。

As mentioned previously, the restructure we have performed will generate $9.1 million of annualized savings in employee costs. Around $3.7 million of this will benefit product gross profit and around $5.4 million will reduce operating expenses. Our adjusted EBITDA for the quarter was $2.6 million and our earnings release has a usual reconciliation of that.

如前所述，我們進行的重組將每年節省 910 萬美元的員工成本。其中約 370 萬美元將有利於產品毛利，約 540 萬美元將減少營運費用。我們本季調整後的 EBITDA 為 260 萬美元，我們的收益發布對此進行了通常的調節。

Capital expenditures for the quarter were $2.6 million. And so adjusted EBITDA less CapEx was zero. This compares to a negative $0.3 million in the prior quarter with adjusted EBITDA of $2 million less CapEx of $2.3 million. Our ending cash balance of $49.3 million was down approximately $17 million from the beginning of the quarter. And this was due to payments to Starlink related to our pool data agreements, which we announced on June 26.

該季度的資本支出為 260 萬美元。因此調整後的 EBITDA 減去資本支出為零。相較之下，上一季為負 30 萬美元，調整後 EBITDA 為 200 萬美元，資本支出為 230 萬美元。我們的期末現金餘額為 4,930 萬美元，比本季初減少了約 1,700 萬美元。這是由於我們於 6 月 26 日宣布的與我們的池資料協議相關的向 Starlink 的付款。

Our expectations for revenue and adjusted EBITDA in 2024 are unchanged from what we disclosed in our Q1 call, in that we expect our 2024 revenue to be in the range of approximately $117 million to $127 million, and our adjusted EBITDA for 2024 will be in the range of approximately $6 million to $12 million.

我們對2024 年收入和調整後EBITDA 的預期與我們在第一季電話會議中披露的內容沒有變化，因為我們預計2024 年收入將在約1.17 億美元至1.27 億美元之間，我們2024 年調整後EBITDA 將在範圍約為 600 萬至 1200 萬美元。

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. Operator?

我們準備好的演講到此結束，我現在將把電話轉給接線員，以開通今天早上電話問答部分的線路。操作員？

(Operator Instructions) Chris Quilty, Quilty Space.

（操作員說明）Chris Quilty，Quilty Space。

Thanks, guys. I just wanted to start with a clarification. I heard that Anthony affirmed the $9 million in cost savings. But Brent, somewhere in the script, you mentioned $5 million of annualized cost savings.

謝謝，夥計們。我只想先澄清一下。我聽說安東尼確認可以節省 900 萬美元的成本。但布倫特，在劇本中的某個地方，您提到了每年可節省 500 萬美元的成本。

Yeah. Sorry. Yeah, Chris. That was for operating expense.

是的。對不起。是的，克里斯。那是營運費用。

Okay.

好的。

So I was referring approximately $5 million of operating expense, which correlates to the $5.4 million that Anthony discussed.

所以我指的是大約 500 萬美元的營運費用，這與安東尼討論的 540 萬美元相關。

Got you. Okay. Second question, I think you in the past sort of mentioned what you're seeing in terms of customer bundling. Are you seeing existing customers with a TracVision product simply swapping for Starlink? Or they generally adding that on? And for, I would say, new Starlink subscribers where you're just add -- they're new to you and you're bringing them on with Starlink. Are those generally in one class of vessels? Does it tend to be on the leisure side, more commercial? Or any other trends you're seeing?

明白你了。好的。第二個問題，我認為您過去曾提到您在客戶捆綁方面所看到的情況。您是否發現擁有 TracVision 產品的現有客戶只是簡單地更換為 Starlink？或者他們通常會添加這個？我想說的是，對於您剛剛添加的新星鏈訂閱者來說，他們對您來說是新的，您將他們帶入星鏈。這些通常屬於一類船舶嗎？它是否傾向於休閒、更商業化？或您看到的任何其他趨勢？

Well, we're seeing a bit of everything, quite frankly. So as far as -- you asked a few questions embedded into one long question. As far as the Starlink terminal adds, as far as existing customers, some is swapped out and those tend to be the lower end of the leisure market. It would have previously used our 37 centimeter. In the midrange, larger yachts and commercial maritime, they're adding Starlink to their existing VSAT.

坦白說，我們已經看到了一切。就您而言，您在一個長問題中提出了幾個問題。就星鏈終端而言，就現有客戶而言，有些客戶被替換掉，而這些客戶往往是休閒市場的低端客戶。以前它會使用我們的 37 公分。在中型、大型遊艇和商業海事領域，他們將 Starlink 添加到現有的 VSAT 中。

As far as new product sales, we've sold a number of standalone Starlink, but we've also have sold quite a few into the merchant marine arena, providing both VSAT as well as Starlink along with our CommBox Edge and a variety of other value-added services.

就新產品銷售而言，我們已經銷售了許多獨立的 Starlink，但我們也向商船領域銷售了相當多的產品，提供 VSAT 和 Starlink 以及我們的 CommBox Edge 和各種其他產品增值服務。

Got you. And what are you seeing in terms of the ARPU trends as this mix shifts?

明白你了。隨著這種組合的變化，您對 ARPU 趨勢有何看法？

Yeah. Right now, it's a bit early. The ARPU on Starlink, on a standalone Starlink, tends to be a little bit lower than what we've experienced from a VSAT standalone as far as -- sorry, I lost my train of thought -- as far as the combination of the Starlink and a VSAT, it's very much in line and actually a bit more than what we've seen historically. But Anthony, there's more details that you can provide.

是的。現在看來，還有些早。Starlink 上的 ARPU，在獨立的 Starlink 上，往往比我們從 VSAT 獨立設備上體驗到的 ARPU 稍低一點——抱歉，我失去了思路——就 Starlink 的組合而言和VSAT，它非常符合，實際上比我們歷史上看到的要多一些。但是安東尼，你可以提供更多細節。

Yeah. I mean, ARPU was overall fairly flat, I guess. But that's still a Starlink. It's still a relatively small portion of our overall business.

是的。我的意思是，我猜，ARPU 總體上相當平穩。但這仍然是星鏈。這仍然只占我們整體業務的一小部分。

Got you. And what are you seeing just in terms of end market? I mean, there's quite a bit of dislocation in the world, especially at maritime. Is that having any impact on sales, either positive or negative?

明白你了。您對終端市場有何看法？我的意思是，世界上存在著相當多的混亂，尤其是在海事領域。這對銷售有正面或負面的影響嗎？

I'm sorry. What do you mean by end market?

對不起。終端市場是什麼意思？

Well, speaking about the overall shipping and logistics industry, at times we've had -- okay, I'll leave it at that.

好吧，談到整個航運和物流行業，有時我們會遇到——好吧，我就到此為止。

Yeah, we haven't seen much of an impact from other market dynamics, but we have seen an impact the vessels that were previously not signing up for communications or VSAT communications are moving forward with Starlink. So Starlink like is opening up a larger market, both in leisure and like commercial. And like commercial would include fishing as well. There's a variety of different sized fishing vessels out there. And the midsize to larger ones would always have communication connectivity. And most of those want -- a lot of those want VSAT. We're seeing the lower end of that market opening up. We also would anticipate the market opening up further as we introduce 5G service offerings around the world in particular with marine.

是的，我們還沒有看到其他市場動態帶來的太大影響，但我們已經看到了以前未簽約通訊或 VSAT 通訊的船舶正在使用星鏈的影響。因此，Starlink 正在開闢一個更大的市場，無論是在休閒領域還是商業領域。就像商業廣告一樣，也包括釣魚。那裡有各種不同大小的漁船。中型到大型企業始終具有通訊連接。其中大多數人都想要——很多人想要VSAT。我們看到該市場的低端市場正在開放。隨著我們在世界各地推出 5G 服務產品，特別是在海洋領域，我們也預期市場會進一步開放。

And OneWeb service, is that up and running yet?

OneWeb 服務已經啟動並運作了嗎？

No, we're testing it right now, but it has not been -- it has not been launched. We're anticipating later this quarter, but we do not have an exact date.

不，我們現在正在測試它，但它還沒有——它還沒有啟動。我們預計在本季晚些時候推出，但目前還沒有確切的日期。

Got you. And so far, customers find that a comparable service to Starlink, are they purchasing it for different reasons? They need high latitude.

明白你了。到目前為止，客戶發現與 Starlink 類似的服務，他們購買它的原因是否不同？他們需要高緯度。

We haven't launched it yet. So we're just testing on a couple of vessels and it seems to work well.

我們還沒有推出它。所以我們只是在幾艘船上進行了測試，看起來效果很好。

Got you. And in terms of the wind down of the manufacturing, it looks like the gross margins came out better than I had expected, and certainly better than recent trends. Is it fair to assume we should look at sort of teen's type negative margins as the product burns through?

明白你了。就製造業的逐步結束而言，毛利率似乎比我預期的要好，而且肯定比最近的趨勢要好。假設我們應該考慮隨著產品的消耗而出現青少年類型的負利潤，這是否公平？

Go ahead.

前進。

So yeah, we talk -- the restructures helping us significantly in the factory. We expect additional cost of sales savings and maybe $0.5 million in the third quarter on the labor side. So obviously, that will help things. But also as we continue to build out, we are absorbing our costs much more successfully. So yeah, we do hope and anticipate that the trend to positive margins on the product will continue.

所以，是的，我們談論了——重組對我們工廠的幫助很大。我們預計第三季勞動力方面將進一步節省銷售成本，可能節省 50 萬美元。顯然，這會有幫助。但隨著我們繼續擴建，我們也能更成功地吸收成本。所以，是的，我們確實希望並預期該產品的正利潤率趨勢將持續下去。

Okay. And on the service side, you're comfortable with managing your GEO bandwidth as that draws down?

好的。在服務方面，您是否願意在 GEO 頻寬下降時管理它？

Yeah, we have the network appropriately sized for our installed base right now, and we have some flexibility to reduce bandwidth as we move forward.

是的，我們現在擁有適合我們安裝基礎的網路規模，並且隨著我們的發展，我們可以靈活地減少頻寬。

Got you. And final question, anything you're seeing out there beyond Starlink competitively in the market?

明白你了。最後一個問題，除了 Starlink 之外，您還看到什麼在市場上具有競爭力嗎？

When you say beyond Starlink, you're talking about other NGSO or LEO solutions. I think the next big one to come would be Kuiper. We have to get -- OneWeb is just about here and then you would have Amazon Kuiper. And (inaudible) Lightspeed from Telesat seems to be a bit delayed, but I think that's the next big move that would take place and I believe that would be in 2026 timeframe.

當您說“星鏈”之外時，您指的是其他 NGSO 或 LEO 解決方案。我認為下一個大人物將是柯伊伯。我們必須得到－OneWeb 就在眼前，然後你就會擁有 Amazon Kuiper。（聽不清楚）Telesat 的 Lightspeed 似乎有點延遲，但我認為這將是下一個重大舉措，而且我相信這將在 2026 年的時間範圍內發生。

I am showing no further questions at this time. This does conclude today's conference. You may now disconnect.

我目前沒有提出任何進一步的問題。今天的會議到此結束。您現在可以斷開連線。

Okay. Thank you very much, and good day, everyone.

好的。非常感謝大家，祝大家有美好的一天。