KVH Industries Inc.

11/06/2025 | Press release | Distributed by Public on 11/06/2025 15:45

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Introduction
The statements included in this quarterly report on Form 10-Q, other than statements of historical fact, are forward-looking statements. Examples of forward-looking statements include statements regarding our future financial results, operating results, business strategies, projected costs, products and services, competitive positions and plans, customer preferences, consumer trends, anticipated product development, and objectives of management for future operations. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "should," "would," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. Any expectations based on these forward-looking statements are subject to risks and uncertainties and other important factors, including those discussed in the section entitled "Risk Factors" in Item 1A of Part II of this quarterly report on Form 10-Q. These and many other factors could affect our future financial and operating results and could cause actual results to differ materially from expectations based on forward-looking statements made in this document or elsewhere by us or on our behalf. For example, our expectations regarding certain items as a percentage of sales assume that we will achieve our anticipated sales goals. The following discussion and analysis should be read in conjunction with our consolidated interim financial statements and related notes appearing elsewhere in this report.
Overview
We are a leading global provider of innovative and technology-driven connectivity solutions to primarily maritime commercial, leisure, and military/government customers. We provide global high-speed Internet and Voice over Internet Protocol (VoIP) services via satellite to mobile users at sea and on land. We are also a leading provider of commercially licensed entertainment, including movies, television programming, news, and music, to commercial customers in the maritime market, along with supplemental value-added cybersecurity, email, and crew internet services.
We generate a substantial majority of our revenues from sales of satellite Internet airtime services. We provide, for monthly fixed fees and per-usage fees, satellite connectivity encompassing broadband Internet, data and VoIP services, to customers via our KVH ONE hybrid network, which integrates global satellite service (including Ku-band VSAT using the Intelsat (acquired by SES in July 2025) HTS network along with Starlink, OneWeb, Iridium, and other satellite services), KVH-provided cellular service in more than 130 countries, and shore-based Wi-Fi access. In March 2023, we began selling Starlink terminals and, in September 2023, we became a Starlink authorized hardware and airtime reseller offering Global Priority data plans for maritime use. In October 2024, we expanded our portfolio to include Starlink Local Priority data plans, which is primarily for stationary and in-motion commercial use on land. In the third quarter of 2025, Starlink products and services were our fastest growing products and services. We are also now earning usage fees from our offering of OneWeb maritime service, which we launched in January 2025. Revenue from our cellular airtime service supplements our satellite-only airtime revenue. In addition, we earn monthly usage fees from sales of third-party satellite connectivity for VoIP and supplemental services to our Inmarsat, Iridium, and Starlink customers. In December 2024, we introduced our TracNet Coastal and TracNet Coastal Pro terminals, expanding our extensive multi-channel portfolio of maritime products and services with a standalone 5G/cellular and Wi-Fi system. We also generate service revenue from product repairs and extended warranty sales.
Our service sales also include the distribution of entertainment, including movies, television programming, news and music, to commercial customers in the maritime market through KVH Media Group, along with supplemental value-added services.
Historically, our Ku-band VSAT communications service has been the primary driver of revenue growth. However, these services represent a declining percentage of our revenues in the face of increased demand for and competition from emerging LEO services. Our satellite-only and hybrid products enable marine customers to receive data, VoIP, and value-added services via satellite, cellular, and shore-based Wi-Fi networks onboard commercial, leisure, and military/government vessels. In addition, our in-motion television terminals permit customers to receive live digital television via regional satellite services in marine vessels, recreational vehicles, buses and automobiles. We sell our products through an extensive international network of dealers and distributors. We also sell and lease products to service providers and end users.
In February 2024, we announced a staged wind-down of our product manufacturing operations at our Middletown, Rhode Island location. The wind-down was driven by reduced demand for our hardware products in the face of intensifying competition in the third and fourth quarters of 2023. We concluded that we should discontinue our capital-intensive manufacturing activities and concentrate our efforts on growing sales of our multi-orbit, multi-channel, integrated communications solutions. We expect that we will continue our product manufacturing activities in order to generate a targeted amount of inventory of maritime satellite connectivity and satellite television terminals to meet anticipated demand into 2026 and that we will cease substantially all manufacturing activity by the end of 2026. This wind-down has been extended from the end of 2025 because the reduced workforce has been prioritizing fulfilling LEO product orders and refurbishing AgilePlans terminals over manufacturing new units. We expect to continue to facilitate customer transition to third-party hardware products compatible with our mobile satellite communications services. We also plan to continue to conduct maintenance, service, warehousing, shipping and receiving activities at the Middletown, Rhode Island location until our anticipated relocation in the spring of 2026.
As part of this restructuring, we reduced our headcount by approximately 75 employees, or approximately 20% of our total workforce as of the time we announced the restructuring. As of June 30, 2024, all employee terminations were completed. During 2024, we incurred $3.9 million of severance charges for this and other restructurings. The $3.9 million of severance charges incurred during the year consisted of approximately $3.6 million of cash charges and approximately $0.3 million of non-cash charges arising from pre-existing contractual obligations to accelerate vesting of certain outstanding equity compensation awards.
During the second quarter of 2024, we expanded our relationship with Starlink through a bulk data distribution agreement. Under the agreement, we prepaid $17.0 million for access to a large block of Starlink Global Priority data at favorable rates. The agreement provides us flexibility in the development and sale of custom airtime plans using Starlink's Global Priority service. This block of data is expected to be fully consumed by the fourth quarter of 2025. In recognition of the substantial growth of Starlink airtime services as a percentage of our revenue, we anticipate that we will purchase another, substantially larger block of Starlink Global Priority data in the fourth quarter of 2025.
During the third quarter of 2024, we commenced our plan to sell the warehouse building and surface parking lot located at 75 Enterprise Center in Middletown, Rhode Island ("75 Enterprise Center"). As of September 30, 2024, 75 Enterprise Center had a carrying value of approximately $7.8 million. We determined that all of the criteria to classify 75 Enterprise Center as held for sale had been met as of September 30, 2024. The estimated fair value was determined based upon the anticipated sales price of these assets based on current market conditions and assumptions made by management, less selling costs. We recorded an impairment charge of $1.1 million in 2024, as the carrying value of 75 Enterprise Center at the time the asset for sale criteria were met exceeded the fair value less costs to sell.
In December 2024, we entered into an agreement to sell 75 Enterprise Center for $8.5 million. The sale was completed in September 2025, resulting in a loss of $0.3 million, which is included in other income (expense), net in our consolidated statement of operations for the three and nine months ended September 30, 2025. The sale generated $7.8 million of net cash. In September 2025, we also entered into an agreement with the buyer to lease this property until the end of March 2026 for approximately $0.1 million.
Additionally, in the third quarter of 2024, we commenced our plan to sell the property, building, improvements, and land located at 50 Enterprise Center in Middletown, Rhode Island ("50 Enterprise Center"). As of September 30, 2024, 50 Enterprise Center had a carrying value of approximately $3.6 million. We determined that all of the criteria to classify 50 Enterprise Center as held for sale had been met as of September 30, 2024. The estimated fair value of 50 Enterprise Center at that date exceeded its carrying value. In December 2024, we entered into an agreement to sell 50 Enterprise Center, subject to the buyer's right to terminate the agreement during an inspection period. In January 2025, before the end of the inspection period, we received notice of termination from the buyer. In March 2025, we entered into an agreement with another buyer to sell 50 Enterprise Center for $5.3 million. The sale was completed in June 2025, resulting in a gain of $1.3 million, which is included in other income (expense), net in our consolidated statement of operations for the nine months ended September 30, 2025. The sale generated $4.9 million of net cash.
During the three and nine months ended September 30, 2025, we recorded a $5.5 million inventory write-down related primarily due to further reduced demand for certain of our hardware products as well as a reduction in the prices we charge for certain TracNet H-series terminals. We implemented this price reduction at the end of the third quarter of 2025 and, as a result, reduced the value of our remaining inventory of those products to net realizable value based on lower customer pricing. If demand continues to decline, we may need to record additional inventory write-downs.
Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations are based upon our consolidated interim financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these interim financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosure at the date of our interim financial statements. Our significant accounting policies are summarized in Note 1 to the consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2024.
Critical accounting estimates are those estimates made that involve a significant level of estimation uncertainty and have had or are reasonably likely to have an impact on our statement of operations. We believe that our accounting estimates for intangible assets and other long-lived assets are the only estimates critical to an understanding and evaluation of our financial results for the nine months ended September 30, 2025, as discussed below.
Results of Operations
The following table provides, for the periods indicated, certain financial data relating to our operations expressed as a percentage of net sales:
Three Months Ended Nine Months Ended
September 30, September 30,
2025 2024 2025 2024
Sales:
Service 89.2 % 84.3 % 87.1 % 85.3 %
Product 10.8 15.7 12.9 14.7
Net sales 100.0 100.0 100.0 100.0
Cost and expenses:
Costs of service sales 58.7 51.7 56.1 51.2
Costs of product sales 34.6 16.3 21.0 16.5
Research and development 3.4 4.9 3.8 7.8
Sales, marketing and support 17.2 17.0 18.5 18.0
General and administrative 13.0 13.1 13.4 15.2
Long-lived assets impairment charge - 3.9 - 1.3
Total costs and expenses 126.9 106.9 112.8 110.0
Loss from operations (26.9) (6.9) (12.8) (10.0)
Interest income 2.4 2.2 2.3 2.8
Interest expense - - - -
Other income (expense), net 0.1 0.7 1.1 (0.4)
Loss before income tax expense (24.4) (4.0) (9.4) (7.6)
Income tax expense 0.1 0.2 0.2 0.1
Net loss (24.5) % (4.2) % (9.6) % (7.7) %
Three months ended September 30, 2025 and 2024
Net Sales
Our net sales for the three months ended September 30, 2025 and 2024 were as follows:
Change
For the three months ended September 30, 2025 vs. 2024
2025 2024 $ %
(dollars in thousands)
Service $ 25,388 $ 24,410 $ 978 4 %
Product 3,065 4,561 (1,496) (33) %
Net sales $ 28,453 $ 28,971 $ (518) (2) %
Net sales decreased by $0.5 million, or 2%, for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. Service sales increased by $1.0 million, or 4%, to $25.4 million for the three months ended September 30, 2025 from $24.4 million for the three months ended September 30, 2024. The increase in service sales was primarily due to a $0.7 million increase in our airtime service sales, which reflected a substantial increase in LEO service sales driven by an increase in subscribers for both Starlink and OneWeb. This increase in LEO service sales was largely offset by a substantial decrease in VSAT service sales, which was driven primarily by a decrease in VSAT subscribers, as well as a $2.3 million reduction in sales related to the U.S. Coast Guard contract downgrade in the third quarter of 2024. For the three months ended September 30, 2025, LEO services sales represented over 40% of airtime services sales, as compared to less than 15% for the three months ended September 30, 2024. The increase in LEO service sales as a percentage of total airtime sales resulted from both the substantial increase in LEO service sales and the substantial decrease in VSAT service sales. LEO service providers have continued to expand their product and service offerings, further heightening competition in the global leisure segment and in commercial and government markets.
Product sales decreased by $1.5 million, or 33%, to $3.1 million for the three months ended September 30, 2025 from $4.6 million for the three months ended September 30, 2024. The decrease in product sales was primarily due to a $0.7 million decrease in Starlink product sales, a $0.6 million decrease in VSAT Broadband product sales and a $0.5 million decrease in TracVision product sales, partially offset by a $0.4 million increase in OneWeb product sales. The decrease in Starlink product sales was primarily due to discounted pricing. Competition from low-cost alternatives to VSAT, which include streaming capabilities, has had a significant impact on sales of our TracVision products.
Costs of Sales
Costs of sales consists of costs of service sales and costs of product sales. Costs of sales increased by $6.8 million, or 35%, in the three months ended September 30, 2025 to $26.5 million from $19.7 million in the three months ended September 30, 2024. The increase in costs of sales was driven by a $5.1 million increase in costs of product sales and a $1.7 million increase in costs of service sales. As a percentage of net sales, costs of sales were 93% and 68% for the three months ended September 30, 2025 and 2024, respectively.
Our costs of service sales consist primarily of satellite service capacity, depreciation, service network overhead expense associated with our VSAT Broadband network infrastructure, direct network service labor, product installation costs, media materials and distribution costs, and service repair materials. For the three months ended September 30, 2025, costs of service sales increased by $1.7 million, or 11%, to $16.7 million from $15.0 million in the three months ended September 30, 2024, primarily due to a $1.5 million increase in airtime costs of service sales. As a percentage of service sales, costs of service sales were 66% and 61% for the three months ended September 30, 2025 and 2024, respectively. The increase in cost of service sales as a percentage of service sales was primarily due to increased rates of Starlink airtime data usage by customers prior to expiration of that data and the purchase during the quarter of VSAT airtime in excess of anticipated usage in order to help meet our contractual minimum purchase obligations for VSAT airtime in 2025.
Our costs of product sales consist primarily of materials, manufacturing overhead, and direct labor used to produce our products. For the three months ended September 30, 2025, costs of product sales increased by $5.1 million, or 109%, to $9.8 million from $4.7 million in the three months ended September 30, 2024, primarily due to a $6.0 million increase in various manufacturing and other unabsorbed expenses and a $0.4 million increase in OneWeb cost of product sales. The manufacturing and other unabsorbed costs included a $5.5 million inventory writedown related primarily to further reduced demand for certain of our hardware products as well as a reduction in the prices we charge for certain TracNet H-series terminals. These increases were partially offset by a $0.4 million decrease in Starlink cost of product sales, a $0.4 million decrease in TracVision costs of product sales and a $0.3 million decrease in VSAT Broadband cost of product sales. As a percentage of product sales, costs of product sales were 321% and 103% for the three months ended September 30, 2025 and 2024, respectively. Cost of product sales increased as a percentage of product sales primarily due to the increase in various manufacturing and other unabsorbed expenses.
Operating Expenses
Research and development expense consists of direct labor, materials, external consultants, and related overhead costs that support our internally funded product development and product sustaining engineering activities. Research and development expense for the three months ended September 30, 2025 decreased by $0.4 million, or 31%, to $1.0 million from $1.4 million for the three months ended September 30, 2024. The decrease in research and development expense resulted primarily from a $0.3 million decrease in salaries, benefits and taxes. As a percentage of net sales, research and development expense was 3% and 5% for the three months ended September 30, 2025 and 2024, respectively.
Sales, marketing, and support expense consists primarily of salaries and related expenses for sales and marketing personnel, commissions for both in-house and third-party representatives, costs related to the co-development of certain content, other sales and marketing support costs such as advertising, literature and promotional materials, product service personnel and support costs, warranty-related costs and bad debt expense. Sales, marketing and support expense also includes the operating expenses of our sales office subsidiaries in Denmark, Singapore, Brazil, and Japan. Sales, marketing and support expense for the three months ended September 30, 2025 decreased by less than $0.1 million, or 1%, to $4.9 million for the three months ended September 30, 2024. The decrease in sales, marketing and support expense resulted primarily from a $0.3 million decrease in facilities expense, partially offset by a $0.2 million increase in expensed materials. As a percentage of net sales, sales, marketing and support expense was 17% for both the three months ended September 30, 2025 and 2024.
General and administrative expense consists of costs attributable to management, finance and accounting, information technology, human resources, certain outside professional services, and other administrative costs. General and administrative expense for the three months ended September 30, 2025 decreased by $0.1 million, or 3%, to $3.7 million from $3.8 million for the three months ended September 30, 2024. The decrease in general and administrative expense resulted primarily from a $0.4 decrease in professional fees and a $0.3 million decrease in dues and subscriptions expense. These decreases were partially offset by a $0.5 million increase in salaries, benefits and taxes. As a percentage of net sales, general and administrative expense was 13% for both the three months ended September 30, 2025 and 2024.
Interest and Other Income, Net
Interest income represents interest earned on our cash and cash equivalents, as well as from investments and our sale-type lease receivables. Interest income increased by $0.1 million to $0.7 million for the three months ended September 30, 2025 from $0.6 million for the three months ended September 30, 2024, primarily as a result of higher cash balances in 2025. Of the current period interest income of $0.7 million, $0.6 million is attributable to interest earned on cash and cash equivalents, while the remaining $0.1 million was attributable to interest from lease receivables. Other income, net decreased by $0.2 million to other income, net of less than $0.1 million for the three months ended September 30, 2025 from other income, net of $0.2 million for the three months ended September 30, 2024. This decrease was driven primarily by a $0.3 million loss on the sale of 75 Enterprise Center in September 2025.
Income Tax Expense
Income tax expense for the three months ended September 30, 2025 was less than $0.1 million and primarily related to withholding taxes imposed in foreign jurisdictions. Income tax expense for the three months ended September 30, 2024 was $0.1 million and related to taxes on income earned in foreign jurisdictions.
Nine months ended September 30, 2025and 2024
Net Sales
Our net sales for the nine months ended September 30, 2025 and 2024 were as follows:
Change
For the nine months ended September 30, 2025 vs. 2024
2025 2024 $ %
(dollars in thousands)
Service $ 70,079 $ 74,122 $ (4,043) (5) %
Product 10,411 12,789 (2,378) (19) %
Net sales $ 80,490 $ 86,911 $ (6,421) (7) %
Net sales decreased by $6.4 million, or 7%, for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. Service sales decreased by $4.0 million, or 5%, to $70.1 million for the nine months ended September 30, 2025 from $74.1 million for the nine months ended September 30, 2024. The decrease in service sales was primarily due to an overall $4.7 million decrease in our airtime service sales, which reflected a $7.2 million decrease in airtime service sales related to the U.S. Coast Guard contract downgrade. In addition, there was a substantial decrease in other VSAT subscribers, which was partially offset by a substantial increase in LEO service sales. For the nine months ended September 30, 2025, LEO services sales represented over 30% of airtime services sales, as compared to less than 10% for the nine months ended September 30, 2024. The increase in LEO service sales as a percentage of total airtime sales resulted from both a substantial increase in LEO service sales and a substantial decrease in VSAT service sales. LEO service providers have continued to expand their product and service offerings, further heightening competition in the global leisure segment and in commercial and government markets.
Product sales decreased by $2.4 million, or 19%, to $10.4 million for the nine months ended September 30, 2025 from $12.8 million for the nine months ended September 30, 2024. The decrease in product sales was primarily due to a $1.2 million decrease in TracVision product sales, a $1.1 million decrease in Starlink product sales, a $0.4 million decrease in VSAT Broadband product sales and a $0.4 million decrease in accessory and service parts product sales, partially offset by a $0.8 million increase in OneWeb product sales. The decline in Starlink product sales was primarily driven by discounted pricing, whereas declines in other product sales was primarily driven by product mix and discounted pricing on VSAT Broadband products. Competition from low-cost alternatives to VSAT, which include streaming capabilities, has had a significant impact on sales of our TracVision products.
Costs of Sales
Costs of sales increased by $3.2 million, or 5%, in the nine months ended September 30, 2025 to $62.0 million from $58.8 million in the nine months ended September 30, 2024. The increase in costs of sales was driven by a $2.5 million increase in costs of product sales and a $0.6 million increase in costs of service sales. As a percentage of net sales, costs of sales were 77% and 68% for the nine months ended September 30, 2025 and 2024, respectively.
For the nine months ended September 30, 2025, costs of service sales increased by $0.6 million, or 1%, to $45.1 million from $44.5 million for the nine months ended September 30, 2024, primarily due to a $0.5 million increase in content services cost of services sales and a $0.4 million increase in airtime cost of service sales. As a percentage of service sales, costs of service sales were 64% and 60% for the nine months ended September 30, 2025 and 2024, respectively.
For the nine months ended September 30, 2025, costs of product sales increased by $2.5 million, or 18%, to $16.9 million from $14.3 million in the nine months ended September 30, 2024, primarily due to a $4.0 million increase in various manufacturing and other unabsorbed expenses and a $0.7 million increase in OneWeb cost of product sales, partially offset by a $0.9 million decrease in Starlink cost of product sales and a $0.9 million decrease in TracVision cost of product sales. The manufacturing and other unabsorbed costs included a $5.5 million inventory writedown related primarily to further reduced demand for certain of our hardware products as well as a reduction in the prices we charge for certain TracNet H-series terminals. As a percentage of product sales, costs of product sales were 162% and 112% for the nine months ended September 30, 2025 and 2024, respectively. Cost of product sales increase as a percentage of product sales primarily due to the increase in various manufacturing and other unabsorbed expenses.
Operating Expenses
Research and development expense for the nine months ended September 30, 2025 decreased by $3.7 million, or 55%, to $3.1 million from $6.8 million for the nine months ended September 30, 2024. The decrease in research and development expense resulted primarily from a $3.1 million decrease in salaries, benefits and taxes, after giving effect to $0.9 million in costs incurred during the nine months ended September 30, 2024 related to the reduction in our workforce, and a $0.3 million decrease in facilities expense allocated to our research and development operations. As a percentage of net sales, research and development expense was 4% and 8% for the nine months ended September 30, 2025 and 2024, respectively.
Sales, marketing and support expense for the nine months ended September 30, 2025 decreased by $0.8 million, or 5%, to $14.9 million from $15.7 million for the nine months ended September 30, 2024. The decrease in sales, marketing and support expense resulted primarily from a $0.6 million decrease in salaries, benefits and taxes, after giving effect to $0.3 million in costs incurred during the nine months ended September 30, 2024 related to the reduction in our workforce. In addition, there was a $0.6 million decrease in facilities expense allocated to our sales, marketing and support operations, partially offset by a $0.3 million increase in warranty expense and a $0.3 million increase in professional fees. As a percentage of net sales, sales, marketing and support expense was 19% and 18% for the nine months ended September 30, 2025 and 2024, respectively.
General and administrative expense for the nine months ended September 30, 2025 decreased by $2.4 million, or 18%, to $10.8 million from $13.2 million for the nine months ended September 30, 2024. The decrease in general and administrative expense resulted primarily from a $1.6 million decrease in salaries, benefits and taxes, after giving effect to $0.7 million in costs incurred during the nine months ended September 30, 2024 related to the reduction in our workforce, a $0.6 million decrease in depreciation expense, a $0.4 million decrease in professional fees and a $0.3 million decrease in dues and subscriptions expense, partially offset by a $0.7 million increase in facilities expense allocated to our general and administrative operations. As a percentage of net sales, general and administrative expense was 13% and 15% for the nine months ended September 30, 2025 and 2024, respectively.
Interest and Other Income (Expense), Net
Interest income decreased by $0.6 million to $1.8 million for the nine months ended September 30, 2025 from $2.4 million for the nine months ended September 30, 2024, primarily as a result of lower cash balances in 2025 as a result of the $17.0 million prepayment in June 2024 for access to a large block of Starlink Mobile Priority data at favorable rates. Of the current period interest income of $1.8 million, $1.5 million is attributable to interest earned on cash and cash equivalents, and $0.3 million was attributable to interest from lease receivables. Other income (expense), net changed by $1.2 million to other income, net of $0.8 million for the nine months ended September 30, 2025 from other expense, net of $0.3 million for the nine months ended September 30, 2024. This change was driven primarily by a $1.3 million gain on the sale of 50 Enterprise Center in June 2025, partially offset by a $0.3 million loss on the sale of 75 Enterprise Center in September 2025.
Income Tax Expense
Income tax expense for the nine months ended September 30, 2025 was $0.1 million and primarily related to state taxes and withholding taxes imposed in foreign jurisdictions. Income tax expense for the nine months ended September 30, 2024 was $0.1 million and related to taxes on income earned in foreign jurisdictions.
Liquidity and Capital Resources
Our primary liquidity needs have been to fund general business requirements, including working capital requirements and capital expenditures. In recent years, we have funded our operations primarily from the sale of two businesses in 2022, the sale of 50 Enterprise Center, the sale of 75 Enterprise Center, cash flows from operations and proceeds received from exercises of stock options and the issuance of stock.
On August 9, 2022, we sold our inertial navigation business to EMCORE Corporation for net proceeds of $54.9 million, less specified deductions.
As of September 30, 2025, we had $72.8 million in cash and cash equivalents, of which $3.4 million was held in local currencies by our foreign subsidiaries. We held no marketable securities as of September 30, 2025 as all excess cash has been invested in an interest-bearing account with Bank of America, N.A. since the fourth quarter of 2024. As of September 30, 2025, we had $104.5 million in working capital.
Based upon our current working capital position, current operating plans and expected business conditions, we expect to have sufficient funds, through at least twelve months from the date that this report is filed with the SEC, to fund our short-term and long-term working capital requirements, including capital expenditures and contractual obligations. In recognition of the substantial growth of Starlink airtime services as a percentage of our revenue since the second quarter of 2024, we anticipate that, in the fourth quarter of 2025, we will purchase a substantial block of Starlink Global Priority data and will make an upfront payment of a material portion of the purchase price, with periodic payments continuing over the course of the contract period. Our funding plans for our working capital needs and other commitments may be adversely impacted if our underlying assumptions regarding our anticipated revenues and expenses are not realized. If our operating results fail to meet our expectations, we could be required to seek additional funding through public or private financings or other arrangements. In that event, adequate funds may not be available when needed or may be available only on terms which could have a negative impact on our business and results of operations. In addition, if we raise funds by issuing equity securities, our stockholders may experience dilution.
Net cash generated in operations was $13.7 million for the nine months ended September 30, 2025 compared to net cash used in operations of $13.6 million for the nine months ended September 30, 2024. The $27.3 million change in net cash provided by operations was primarily the result of a $23.0 million decrease in cash outflows related to prepaid expenses and current assets, which included the $17.0 million purchase of the Starlink data pool in 2024, a $15.7 million decrease in cash outflows relating to inventories, a $5.7 million decrease in cash outflows relating to accrued compensation, product warranty and other expenses, and a $0.5 million increase in cash inflows relating to deferred revenue, partially offset by a $7.0 million reduction in non-cash items, a $5.7 million increase in cash outflows related to accounts payable, a $3.6 million decrease in cash inflows relating to accounts receivable, a $1.0 million increase in net loss, and a $0.4 million decrease in cash inflows relating to other non-current assets.
Net cash provided by investing activities was $9.8 million for the nine months ended September 30, 2025 compared to net cash provided by investing activities of $16.5 million for the nine months ended September 30, 2024. The $6.7 million decrease in net cash provided by investing activities was primarily the result of a $23.1 million decrease in proceeds from net sales of marketable securities, which was driven by the liquidation of our marketable securities held by Wells Fargo in 2024, partially offset by proceeds of $7.8 million for the sale of 75 Enterprise Center, proceeds of $4.9 million for the sale of 50 Enterprise Center, a $2.0 million increase of proceeds from the sale of fixed assets and a $1.6 million decrease in capital expenditures.
Net cash used in financing activities was $1.3 million for the nine months ended September 30, 2025 compared to net cash provided by financing activities of $0.1 million for the nine months ended September 30, 2024. The $1.4 million increase in net cash used in financing activities is primarily attributable to a $1.4 million increase in cash outflows related to the purchase of treasury stock.
Other Matters
On December 9, 2024, our Board of Directors authorized a share repurchase program pursuant in which we may purchase outstanding shares of our common stock for an aggregate purchase price of up to $10 million.
Under the program, we, at management's discretion, may repurchase shares from time to time through various means, including on the open market, in privately negotiated transactions or block transactions, or through an accelerated repurchase agreement. We may elect to make purchases under Rule 10b-18 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which imposes certain volume limitations, and/or under Rule 10b5-1 under that act, which would permit repurchases to occur during periods when we might otherwise be precluded from making purchases under insider trading laws or our company policy. The volume and timing of any such repurchases will depend on a variety of factors, including the availability of shares, price, market conditions, alternative uses of capital, liquidity, general business conditions, satisfaction of debt covenants, and applicable regulatory requirements. The program does not obligate us to repurchase any minimum number or dollar amount of shares, and the program may be modified, suspended or terminated at any time without prior notice.
During the three months ended September 30, 2025, we repurchased 22 shares of common stock in open market transactions at a cost of approximately $0.1 million. During the nine months ended September 30, 2025, we repurchased 264 shares of common stock in open market transactions at a cost of approximately $1.4 million. Except as noted above, there were no other repurchase programs outstanding.
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