ASHBURN, Va., Dec. 19, 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 it was awarded a contract for the Missile Defense Agency Scalable Homeland Innovative Enterprise Layered Defense (SHIELD) indefinite-delivery/indefinite-quantity (IDIQ) contract with a ceiling of $151 billion. This contract encompasses a broad range of work areas that allows for the rapid d ...

Core Insights - The article discusses the author's extensive experience in financial analysis and investment opportunities, emphasizing a focus on market trends and strategic recommendations for optimizing financial portfolios [1]. Group 1: Company Analysis - The author has previously contributed to Fade The Market on Seeking Alpha, providing insights into various investment opportunities [1]. - There is a potential for initiating a long position in TLS within the next 72 hours, indicating a possible investment opportunity [2]. Group 2: Industry Context - The article highlights the importance of thorough analysis and research in the financial sector, particularly in evaluating market trends and investment strategies [1].

I'm a seasoned financial analyst with a passion for puzzling out the complexities of the financial world. As a former writer for Fade The Market on Seeking Alpha, I diligently worked to provide insightful analysis and well-researched articles on various investment opportunities. However, I am no longer involved in analyzing, submitting, or commenting on articles for Fade The Market. With a vast experience, I have honed my expertise in evaluating market trends, analyzing investment opportunities, and providi ...

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgency to invest now [1][13] - The energy demands of AI technologies are highlighted, with data centers consuming as much energy as small cities, leading to concerns about power grid strain and rising electricity prices [2][3] Investment Opportunity - A specific company is positioned as a critical player in the AI energy landscape, owning essential energy infrastructure assets that will benefit from the increasing energy demands of AI [3][7] - This company is not a chipmaker or cloud platform but is described as a "toll booth" operator in the AI energy boom, collecting fees from energy exports [5][6] Financial Position - The company is noted for being debt-free and holding a significant cash reserve, amounting to nearly one-third of its market capitalization, which positions it favorably compared to heavily indebted competitors [8][10] - It is trading at less than 7 times earnings, indicating a potentially undervalued investment opportunity in the context of its critical role in AI and energy [10][12] Market Trends - The company is poised to benefit from the onshoring trend driven by tariffs, as well as a surge in U.S. LNG exports under the "America First" energy policy [14][7] - The influx of talent into the AI sector is expected to drive continuous innovation and advancements, further solidifying the importance of investing in AI-related infrastructure [12][11] Future Outlook - The narrative suggests that investing in this company is not just about financial returns but also about participating in the future of technology and energy [15][19] - The potential for significant returns, estimated at over 100% within 12 to 24 months, is emphasized as a compelling reason to act now [15][19]

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Revenue Growth - Revenue increased by 116.3% year-over-year, driven by a 153.5% growth in Security Solutions due to the expansion of large programs in Telos ID [115]. - For the nine months ended September 30, 2025, total revenue reached $118.0 million, up from $81.9 million in the same period of 2024, marking a dollar change of $36.1 million [116]. - Security Solutions segment revenue for Q3 2025 was $46.5 million, an increase of $28.1 million, or 153.5%, compared to Q3 2024 [123]. - For the nine months ended September 30, 2025, Security Solutions segment revenue increased by $49.9 million, or 91.1%, primarily due to the expansion of large programs in Telos ID [125]. Profitability and Margins - Gross margin expanded by 2,672 basis points year-over-year, reaching 39.9% for Q3 2025, compared to 13.2% in Q3 2024 [115]. - Security Solutions segment gross profit for Q3 2025 increased by $17.0 million, or 734.9%, compared to Q3 2024, with gross margin rising from 12.6% to 41.5% [124]. - Year-to-date segment gross margin for Security Solutions increased from 33.2% in 2024 to 39.7% in 2025, attributed to a decrease in cost of sales related to prior impairment losses [126]. - Secure Networks segment gross profit for Q3 2025 increased by $0.4 million, or 51.3%, with gross margin rising from 15.3% to 25.4% [129]. Operating Performance - Net loss improved by $25.9 million year-over-year, resulting in a net loss of $2.1 million for Q3 2025 [115]. - Operating loss for Q3 2025 was $2.5 million, significantly improved from an operating loss of $28.9 million in Q3 2024 [116]. - Operating expenses decreased by $9.0 million, or 28.1%, in Q3 2025 compared to Q3 2024, primarily due to the absence of impairment losses recorded in the prior year [118]. - R&D expenses decreased by $0.5 million, or 21.2%, in Q3 2025 compared to Q3 2024, due to lower amortization costs [118]. Cash Flow and Liquidity - Cash flow from operations improved by $16.2 million year-over-year, totaling $9.1 million, or 17.8% of revenue [115]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $22.2 million, an increase of $37.6 million compared to the same period in 2024 [135]. - As of September 30, 2025, the company had cash and cash equivalents of $59.1 million and working capital of $65.6 million [133]. - The company emphasizes liquidity management, believing available cash and access to a $30.0 million revolving credit facility are sufficient for operational needs over the next 12 months [134]. Investment and Financing Activities - Net cash used in investing activities for the nine months ended September 30, 2025, decreased by $5.3 million compared to the prior year, primarily due to the absence of a significant investment transaction [136]. - Net cash used in financing activities for the nine months ended September 30, 2025, increased by $8.9 million, primarily due to stock repurchases totaling $7.6 million [137]. Segment Performance - Secure Networks segment revenue for the nine months ended September 30, 2025, decreased by $13.8 million, or 51.0%, due to the ramp down of several programs without new business wins [130]. - Other income decreased by $0.5 million, or 48.0%, for Q3 2025 compared to Q3 2024, primarily due to changes in dividend income from money market placements [120].

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分组1 - Telos Corporation reported quarterly earnings of $0.09 per share, exceeding the Zacks Consensus Estimate of $0.02 per share, compared to a loss of $0.1 per share a year ago, representing an earnings surprise of +350.00% [1] - The company achieved revenues of $51.44 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 13.06%, and showing a significant increase from year-ago revenues of $23.78 million [2] - Telos has consistently outperformed consensus EPS and revenue estimates over the last four quarters, indicating strong operational performance [2] 分组2 - The stock has gained approximately 86.6% since the beginning of the year, significantly outperforming the S&P 500's gain of 14.4% [3] - The current consensus EPS estimate for the upcoming quarter is $0.01 on revenues of $45.8 million, while for the current fiscal year, it is -$0.03 on revenues of $157.89 million [7] - The Computers - IT Services industry, to which Telos belongs, is currently ranked in the top 28% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this sector [8]

Financial Data and Key Metrics Changes - Revenue grew 116% in Q3 2025 to $51.4 million, exceeding guidance of $44-$47 million [7] - GAAP gross margin was 39.9%, and cash gross margin was 44.8%, both above guidance and previous quarter margins [7] - Adjusted EBITDA was $10.1 million, surpassing guidance of $4-$5.7 million, with an adjusted EBITDA margin of 19.6% [8][10] - Free cash flow was $6.6 million, representing a 12.8% free cash flow margin [8] Business Line Data and Key Metrics Changes - Telos ID was a significant driver of revenue growth, contributing to the overall performance [5][15] - Adjusted operating expenses were approximately $500,000 better than guidance due to cost discipline [7] Market Data and Key Metrics Changes - The company achieved a cumulative revenue growth of 44% in the first nine months of 2025 [9] - Cash gross margin expanded by 30 basis points to 43% year-over-year [9] Company Strategy and Development Direction - The company plans to continue evolving its Xacta platform with increased automation and new features [11] - The TSA PreCheck program has reached 504 enrollment locations, with plans for further evaluation and improvement [12][13] - The company forecasts existing programs will generate approximately $180 million in revenue for 2026, driven by growth in Telos ID [14] Management's Comments on Operating Environment and Future Outlook - Management noted that the government shutdown has caused delays in awards and administrative processes, but the impact on P&L has been modest [18][19] - The company maintains a robust pipeline of opportunities, with several tens of millions of revenue expected from new business in 2026 [21][41] - Management expressed confidence in continued year-over-year growth into the fourth quarter and 2026 [15][68] Other Important Information - The company has a multi-billion dollar pipeline of new business opportunities, with expectations for significant awards in the coming months [21][41] - The company has deployed $7.6 million to repurchase 2.1 million shares at a weighted average price of $3.69 per share [10] Q&A Session Summary Question: Impact of government shutdown on award decisions - Management indicated that awards are stalled and generally delayed due to the government shutdown, but the impact on P&L has been modest [18][19] Question: Initial feedback on Xacta AI product - Management reported strong initial traction with one major enterprise deployment and positive customer feedback [22][29] Question: Growth plans for TSA PreCheck program - Management stated that they will continue to evaluate and expand the network of enrollment locations to serve travelers better [36][38] Question: Revenue potential from the pipeline for 2026 - Management confirmed that the pipeline remains robust, with several tens of millions of revenue expected from new business opportunities [41][56] Question: Upsell potential for existing Xacta customers - Management noted significant excitement among existing customers for Xacta AI, with plans to target the installed base first [44][45]

Financial Performance - Q3 2025 - Revenue reached $51.4 million, exceeding guidance of $44.0 million to $47.0 million, representing a 116% year-over-year growth[9, 11] - GAAP Gross Margin was 39.9%, surpassing the assumed guidance of approximately 34.0% to 35.5%[9, 11] - Cash Gross Margin was 44.8%, exceeding the assumed guidance range due to strong performance across all business lines[9, 11] - Adjusted EBITDA reached $10.1 million with a 19.6% margin, exceeding the top end of the guidance range[9] - Cash Flow from Operations was $9.1 million, and Free Cash Flow was $6.6 million, marking a year-over-year growth of $16.5 million[9, 11] Financial Performance - 9 Months 2025 - Revenue increased by 44% to $118.0 million from $81.9 million in the same period of the previous year[15] - Adjusted EBITDA increased by $20.3 million to $10.8 million[15] - Free Cash Flow increased by $39.9 million[15] Business Segments - Security Solutions revenue increased by 154% year-over-year to $46.5 million for the nine months ended September 30, 2025, driven by expansion within the Telos ID portfolio[17] - Secure Networks revenue decreased by 9% year-over-year to $5.0 million for the nine months ended September 30, 2025, primarily due to the completion of certain programs[17] Future Outlook - Q4 2025 - The company forecasts revenue growth of 67% to 76% year-over-year, projecting revenue between $44.0 million and $46.3 million[20]