Telos(TLS) - 2025 Q1 - Quarterly Results

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]