Strategic Performance and Market Dynamics

• Record connectivity unit shipments of approximately 3,100 units were driven by seasonal preparation in leisure and fishing sectors and increased affordability of Starlink hardware.

• The company is successfully navigating a structural shift to Low Earth Orbit (LEO) services, which now represent over 45% of airtime revenue compared to less than 30% a year ago.

• Management attributes the decline in stand-alone VSAT subscribers to an ongoing industry-wide shift toward LEO services, though they continue to view VSAT as a key component of their broader multi-orbit offering.

• Strategic expansion into managed IT and crew welfare content (Link platform) is designed to evolve the company from a connectivity provider to a comprehensive maritime solutions partner.

• Geographic growth efforts are focused on India and Latin America, where the company is positioning itself to capture demand for both legacy VSAT and emerging LEO services.

• Service revenue remained flat sequentially due to typical seasonal patterns, including suspended vessels during the first quarter.

Outlook and Strategic Initiatives

• Record Q1 shipments are expected to serve as a leading indicator for increased subscriber activations starting in the second quarter.

• The company is exploring an additional LEO service provider to further diversify its multi-orbit portfolio and enhance customer flexibility.

• The planned introduction of live-stream content to the Link platform is intended to increase its value to customers and crew while enhancing crew morale and the onboard experience.

• Infrastructure investments, including a new ERP system and U.S. headquarters, are on track for completion within 2026.

• Expansion in India and Latin America will involve incremental headcount and marketing costs, though management states these are already embedded in existing guidance.

Financial and Operational Risk Factors

• Cash balance decreased by $10.8 million primarily due to a $16 million bulk data purchase installment paid to Starlink.

• Operating expenses decreased sequentially following the absence of $0.8 million in nonrecurring acquisition and restructuring costs from the prior quarter.

• Airtime depreciation continues to impact service gross margins, representing 7% of service revenue in the current quarter.

• Management noted that while geopolitical conflicts in the Middle East have not yet impacted results, historical trends suggest idle vessels often increase bandwidth usage.

Q&A Session Highlights

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