U.S. Air Force looks to Xacta for critical automation and training solutionsASHBURN, Va., June 11, 2025 (GLOBE NEWSWIRE) -- Telos Corporation (NASDAQ: TLS), a leading provider of cyber, cloud and enterprise security solutions for the world’s most security-conscious organizations, today announced a contract extension with the U.S. Air Force to help meet complex compliance requirements with Telos’ flagship cyber governance, risk and compliance (GRC) platform, Xacta®. The Company secured a $3.7 million option ...

Core Points - Telos Corporation has been awarded a $14 million contract over five years by the Defense Information System Agency (DISA) to support the Organizational Messaging Service with its Automated Message Handling System (AMHS) [1] - DISA provides assured messaging and directory services to various military and government entities, facilitating secure information exchange and interoperability [2] - The Telos AMHS solution is utilized by multiple organizations, including the U.S. Army, Marine Corps, and various Defense and Intelligence Agencies, ensuring compliance with official messaging standards [3][4] Company Overview - Telos Corporation specializes in cybersecurity, cloud security, and enterprise security solutions, serving security-conscious organizations globally [4] - The company's offerings include IT risk management, information security, identity and access management, and secure mobility solutions [4]

Revenue Performance - Consolidated revenue for the first quarter of FY 2025 was $30.616 million, a year-over-year increase of 3.4% from $29.619 million in FY 2024[93] - Security Solutions segment revenue increased by 38.5% to $25.818 million, driven by the successful ramp-up of a significant program[98] - Secure Networks segment revenue decreased by 56.3% to $4.798 million, primarily due to the ramp-down of several programs[100] Profitability Metrics - Gross margin improved to 39.8% in Q1 FY 2025 from 37.0% in Q1 FY 2024, attributed to a more favorable program mix[93] - Net loss for Q1 FY 2025 was $8.604 million, compared to a net loss of $7.378 million in Q1 FY 2024, reflecting a year-over-year increase of 16.6%[93] - Adjusted EBITDA for Q1 FY 2025 was $362,000, a significant improvement from an adjusted loss of $2.335 million in Q1 FY 2024[106] - Adjusted net loss for the three months ended March 31, 2025, was $2.1 million, or $0.03 per share, compared to an adjusted net loss of $5.7 million, or $0.08 per share, for the same period in 2024[109] Expenses Overview - Operating expenses rose by $1.8 million, or 9.3%, in Q1 FY 2025 compared to the same period in FY 2024, with selling, general and administrative expenses increasing by 21.0%[95] - Research and development expenses declined by 50.4% in Q1 FY 2025, due to lower amortization costs and discontinued development of selected solutions[95] - The company reported stock-based compensation expense of $7.0 million for the three months ended March 31, 2025, compared to $3.0 million for the same period in 2024[109] Cash Flow and Liquidity - Free cash flow for the three months ended March 31, 2025, was $3.8 million, an increase from a negative free cash flow of $3.6 million for the same period in 2024[115] - Net cash provided by operating activities for the three months ended March 31, 2025, was $6.1 million, an increase of $6.5 million compared to the same period in 2024[120] - Cash and cash equivalents as of March 31, 2025, were $57.8 million, with working capital of $70.6 million[118] - Net cash used in investing activities for the three months ended March 31, 2025, decreased by $1.8 million compared to the same period in 2024, primarily due to reduced capital expenditures[121] - The company has a $30.0 million revolving credit facility with a maturity date of December 30, 2025, providing additional liquidity if needed[117] - The company emphasizes liquidity management to maintain a strong balance sheet and support future opportunities[119] Other Income - Other income decreased by 55.2% in Q1 FY 2025, primarily due to a decrease in dividend income from money market placements[96] Gross Profit - Gross profit for the three months ended March 31, 2025, was $12.2 million, representing a gross margin of 39.8%, compared to a gross profit of $11.0 million and a margin of 37.0% for the same period in 2024[112] - Adjusted gross profit for the three months ended March 31, 2025, was $12.4 million, with an adjusted gross margin of 40.4%, compared to $11.2 million and 37.9% for the same period in 2024[112] Government Contracts - The company generated approximately 89% of total revenues from contracts with U.S. government agencies in Q1 FY 2025[89]

Financial Performance - Telos Corporation reported a quarterly loss of $0.03 per share, better than the Zacks Consensus Estimate of a loss of $0.05, and an improvement from a loss of $0.08 per share a year ago, representing an earnings surprise of 40% [1] - The company posted revenues of $30.62 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 4.73% and showing an increase from $29.62 million in the same quarter last year [2] - Over the last four quarters, Telos has exceeded consensus EPS estimates four times and has also topped consensus revenue estimates four times [2] Stock Performance and Outlook - Telos shares have declined approximately 28.4% since the beginning of the year, compared to a decline of 3.7% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is -$0.05 on revenues of $32.52 million, and for the current fiscal year, it is -$0.16 on revenues of $145.4 million [7] - The estimate revisions trend for Telos is mixed, resulting in a Zacks Rank 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Industry Context - The Computers - IT Services industry, to which Telos belongs, is currently in the top 38% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Total company revenue grew 16% sequentially to $30.6 million, exceeding guidance [7] - GAAP gross margin was 39.8%, and cash gross margin was 45.3%, both exceeding guidance due to a favorable mix [8] - Adjusted EBITDA was a profit of $362,000 compared to guidance of a loss between $1.8 million to $800,000 [8] - Cash flow from operations was positive at $6.1 million, and free cash flow was positive at $3.8 million [9] Business Line Data and Key Metrics Changes - Security Solutions revenue grew 18% sequentially to $25.8 million, while Secure Networks revenue grew 8% sequentially to $4.8 million [8] - Security Solutions revenue increased from 63% of total company revenue in Q1 2024 to 84% in Q1 2025 [10] - Adjusted operating expenses declined by $1.3 million year over year due to a restructuring and cost reduction plan [11] Market Data and Key Metrics Changes - Revenue grew 3% year over year, driven by a 39% increase in Security Solutions, partially offset by contraction in Secure Networks [9] - Cash flow from operations increased by $6.5 million year over year, and free cash flow increased by $7.4 million [11] Company Strategy and Development Direction - The company is focusing on expanding its TSA PreCheck program, targeting 500 enrollment locations by the end of 2025 [12][13] - The DMDC program is expected to be a major source of revenue growth over the next several quarters [13] - The company anticipates year-over-year growth in revenue, adjusted EBITDA, and cash flow to accelerate in the second half of 2025 [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver mission-critical offerings to government customers and highlighted the robust pipeline of opportunities [19][29] - The company expects cash flow to significantly improve year over year, driven by TSA PreCheck performance [31] - Management acknowledged that the renewal market is expected to contract significantly this year [52] Other Important Information - The company has achieved new orders with several customers, including federal government agencies and a Fortune 100 technology company [14] - The business pipeline remains robust, with over $4 billion in opportunities [29] Q&A Session Summary Question: Any changes on the new business front and margin profile for DMDC? - Management indicated that DMDC will generate substantial revenue but will be dilutive to overall margins as lower margin revenue streams ramp up [25][26] Question: What is the expected cash gross margin by year-end? - Management suggested a potential step down of approximately 600 basis points in cash gross margin from the first half to the second half of the year [37] Question: Performance of existing TSA PreCheck footprint and rollout visibility? - Management expressed confidence in TSA PreCheck as a key driver of financial performance, with significant cash flow expected [31] Question: Expectations for free cash flow in Q2 and full year? - Management did not provide specific guidance for Q2 free cash flow but indicated a significant improvement year over year compared to the previous year [42][48] Question: Which business line was the bigger outperformer in Q1? - Management confirmed that Security Solutions was the bigger outperformer, driven by both TSA PreCheck and DMDC [49][50]

Telos (TLS) Q1 2025 Earnings Call May 09, 2025 09:30 AM ET Company Participants Allison Phillipp - Director of Corporate CommunicationsMark Bendza - Executive VP & CFOJohn Wood - Chairman & CEOMark Griffin - Executive Vice President of Security SolutionsNehal Chokshi - Managing Director Conference Call Participants Zach Cummins - Senior Research AnalystRudy Kessinger - Managing Director - Senior Equity Research Analyst Operator Good day, and thank you for standing by. Welcome to the Telos Corporation First ...

Financial Data and Key Metrics Changes - Total company revenue grew 16% sequentially to $30.6 million, exceeding guidance [6] - Security solutions revenue increased 18% sequentially to $25.8 million, while Secure Networks revenue grew 8% sequentially to $4.8 million [7] - GAAP gross margin was 39.8%, and cash gross margin was 45.3%, both exceeding guidance [7] - Adjusted EBITDA was a profit of $362,000, compared to guidance of a loss between $1.8 million and $800,000 [7] - Cash flow from operations was positive at $6.1 million, and free cash flow was positive at $3.8 million [8] Business Line Data and Key Metrics Changes - Security solutions revenue represented 84% of total company revenue in Q1 2025, up from 63% in Q1 2024 [10] - Revenue growth in security solutions was driven by the successful transition of the DMDC program and TSA PreCheck enrollment volume [9] - Secure Networks contracted due to the completion and ramp down of multiple programs [10] Market Data and Key Metrics Changes - The company expects TSA PreCheck to be a significant driver of financial performance, with 291 locations currently operational and a target of 500 by the end of 2025 [12][13] - The DMDC program is expected to be a major source of revenue growth over the next several quarters [13] Company Strategy and Development Direction - The company is focused on expanding its TSA PreCheck enrollment network and has added 73 new locations in the past nine weeks [12] - A restructuring and cost reduction plan was implemented to maximize operating leverage as the company returns to growth in 2025 [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving year-over-year growth in revenue, adjusted EBITDA, and cash flow, particularly in the second half of 2025 [19] - The company anticipates revenue growth of 14% to 21% year-over-year for Q2 2025, primarily driven by security solutions [15] Other Important Information - The company has a robust business pipeline exceeding $4 billion, with several hundred opportunities being pursued [30] - The renewal market is expected to contract significantly this year, impacting overall market dynamics [52] Q&A Session Summary Question: Changes on the new business front and DMDC margin profile - Management indicated that the DMDC program will be dilutive to overall margins, with lower margin revenue streams ramping up [25] Question: Incremental new business this year - The business pipeline remains robust, with several hundred opportunities, but any incremental growth will likely be single-digit [30] Question: Performance of existing TSA PreCheck footprint - Management expressed confidence in TSA PreCheck's contribution to cash generation and overall financial performance [32] Question: Cash gross margins and DMDC revenues - Management projected a potential step down in cash gross margins by approximately 600 basis points from the first half to the second half of the year [37] Question: Free cash flow expectations for Q2 2025 - Management did not provide specific guidance but indicated a significant improvement compared to the previous year [44] Question: Outperformance from security solutions and secure networks - Security solutions were identified as the bigger outperformer, driven by both DMDC and TSA PreCheck [50]

May 9, 2025 DISCLAIMERS The information contained in this presentation does not constitute or form part of, and should not be construed as, any offer, sale or subscription of, or any invitation to offer, buy or subscribe for, any securities, nor shall there be any offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful. Telos Corporation (the "Company") will only make such an offer or sale pursuant to an effective registration statement with the Securities ...

Core Viewpoint - Telos Corporation has released its first quarter financial results for 2025, highlighting its position as a leading provider of security solutions for organizations with high security needs [1][3]. Financial Results - The financial results for the first quarter of 2025 are available on Telos' investor relations website [1]. - A live webcast to discuss these results is scheduled for May 9, 2025, at 9:30 a.m. ET, with an archived version available shortly after [2]. Company Overview - Telos Corporation specializes in cybersecurity, cloud security, and enterprise security solutions, catering to commercial enterprises, regulated industries, and government customers globally [3]. - The company's offerings include IT risk management, information security, cloud-based asset protection, identity and access management, secure mobility, organizational messaging, and network management [3].

Financial Performance - Telos Corporation reported $30.6 million in revenue for Q1 2025, a 16.1% sequential growth from Q4 2024, with 84.3% of revenue from Security Solutions[1][4] - The GAAP gross margin increased to 39.8%, up 278 basis points year-over-year, while cash gross margin rose to 45.3%, an increase of 313 basis points[1][4] - Adjusted EBITDA for Q1 2025 was $0.4 million, a $2.7 million improvement year-over-year, attributed to revenue growth and lower adjusted operating expenses[1][4] - Cash flow from operations was $6.1 million, and free cash flow was $3.8 million, driven by revenue growth and favorable working capital dynamics[1][4] - For Q2 2025, the company forecasts revenue growth of 14% to 21% year-over-year, estimating revenues between $32.5 million and $34.5 million[2] Operational Highlights - The Defense Manpower Data Center (DMDC) program is ramping towards full operational capacity, contributing to revenue growth in Security Solutions[4] - The company expanded its TSA PreCheck enrollment locations to 291, further driving growth in its Security Solutions segment[4] Loss and Expenses - GAAP net loss for Q1 2025 was $8.6 million, compared to a net loss of $7.4 million in Q1 2024[1][5] - Adjusted net loss improved to $2.1 million from $5.7 million year-over-year, reflecting operational improvements[5] - Operating expenses for the three months ended March 31, 2025, were $21,204,000, an increase from $19,399,000 in the same period of 2024[27] - Stock-based compensation expense for the three months ended March 31, 2025, was $7,048,000, compared to $2,984,000 in the same period of 2024[22] Balance Sheet - Total assets as of March 31, 2025, were $158,061,000, a slight decrease from $158,235,000 as of December 31, 2024[19] - The total stockholders' equity decreased to $126,114,000 as of March 31, 2025, from $127,137,000 as of December 31, 2024[19] - Cash and cash equivalents at the end of the period were $57,930,000, up from $54,717,000 at the beginning of the period[21] Profitability Metrics - Adjusted EBITDA for the three months ended March 31, 2025, was $362,000, a significant improvement from an adjusted EBITDA loss of $2,335,000 in the same period of 2024[22] - Gross profit for the three months ended March 31, 2025, was $12,182,000, with a gross margin of 39.8%, compared to a gross profit of $10,961,000 and a margin of 37.0% in the prior year[25] - Free cash flow for the three months ended March 31, 2025, was $3,769,000, a turnaround from a negative free cash flow of $3,649,000 in the same period of 2024[26]