Telos(US:TLS)2025-11-10 21:03Revenue 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].