Telos(TLS)2025-05-09 20:08Revenue 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]