Telos(US:TLS)2021-08-16 20:03Revenue and Financial Performance - Revenue increased by 8.1% to $52.6 million for Q2 2021, compared to $48.6 million in Q2 2020[140]. - Security Solutions revenue decreased by approximately 8.8% to $31.2 million, primarily due to a $4.6 million decrease in sales related to the U.S. Census Bureau contract[140]. - Secure Networks revenue increased by approximately 48.6% to $21.4 million, driven by contracts with the DoD[140]. - Gross profit increased by 17.0% to $20.6 million for Q2 2021, with a gross margin increase to 39.1% from 36.2% in Q2 2020[142]. - SG&A expenses increased by 212.7% to $39.1 million for Q2 2021, primarily due to stock-based compensation[143]. - Operating loss was $18.6 million for Q2 2021, compared to an operating income of $5.1 million in Q2 2020[144]. - Net loss attributable to Telos Corporation was $18.7 million for Q2 2021, compared to a net income of $0.3 million in Q2 2020[147]. - Total assets increased to $220.1 million as of June 30, 2021, from $183.8 million as of December 31, 2020[156]. - Total liabilities decreased to $55.4 million as of June 30, 2021, from $56.7 million as of December 31, 2020[157]. - Net loss attributable to Telos Corporation for the six months ended June 30, 2021, was $33.5 million, compared to $2.0 million for the same period in 2020[155]. - For the three months ended June 30, 2021, Telos Corporation reported a net loss of $18.7 million, compared to a net income of $0.3 million for the same period in 2020[162]. - Adjusted EBITDA for the six months ended June 30, 2021, was $5.7 million, a decrease from $8.2 million for the same period in 2020[162]. - Adjusted Net Income for the three months ended June 30, 2021, was $2.6 million, resulting in an Adjusted EPS of $0.04[164]. - The company does not anticipate paying any cash dividends on its common stock in the foreseeable future[167]. Backlog and Revenue Composition - Recurring revenue has exceeded 85% of the company's annual revenue for the past three years[125]. - Total backlog consists of contract revenues remaining to be earned, with funded backlog expected to be earned within one year[126]. Government and Cybersecurity Initiatives - President Biden's FY 2022 budget request includes $715 billion for the Department of Defense, a 1.6% increase from FY 2021[132]. - The company offers a premier platform for enterprise cyber risk management, Xacta, which is widely used across the U.S. federal government[122]. - The company has developed Telos Ghost, a virtual obfuscation network-as-a-service aimed at enhancing security and privacy[126]. - The company maintains government certifications that distinguish its identity services, including TSA PreCheck enrollment provider and FBI-approved Channeler[126]. - The company anticipates increased demand for its solutions due to intensified efforts to defend against ransomware and cyberattacks[136]. - Federal agencies are enhancing cybersecurity measures, which may lead to increased need for the company's services[138]. - The company is positioned to benefit from the government's shift towards secure cloud services and zero trust architecture[137]. - The company's solutions are critical for maintaining continuity of services during the ongoing shift to teleworking by federal employees[135]. Cash Flow and Capital Management - Cash used in operating activities was $5.8 million for the six months ended June 30, 2021, compared to cash provided of $0.8 million for the same period in 2020[169]. - Cash provided by financing activities was $35.5 million for the six months ended June 30, 2021, primarily due to proceeds from the follow-on offering[171]. - The company intends to use remaining net proceeds from the IPO and follow-on offering for general corporate purposes and potential acquisitions[167]. - As of June 30, 2021, working capital was $139.7 million, an increase from $105.2 million as of December 31, 2020[168]. - Cash used in investing activities was approximately $4.7 million for the six months ended June 30, 2021, primarily due to software development costs[170].