Telos Corp (TLSRP.

Financial Performance - Telos Corp exceeded Q2 2024 revenue and profit guidance, reporting $28.5 million in revenue, above the expected range [2] - The company's GAAP gross margin was 34.1$2.9 million was better than expected, but the company experienced an $8 million cash outflow from operations and an$11.3 million free cash flow outflow, reflecting a year-over-year decline [3] Business Segments - Secure networks revenue is expected to decline by high 60% to mid-60% year-over-year due to program completions [3] - The security solutions segment is expected to grow, offsetting declines in secure networks [6] - TSA PreCheck program expanded enrollment centers from 28 to 83, with plans to reach 500 locations by 2025 [2] Contracts and Opportunities - New orders and renewals for Xacta business were secured, including contracts with the New Zealand government and a Fortune 100 technology company [2] - Protested program awards represent significant opportunities, with the first accounting for 90% of the total $525 million and the second representing 10% [4] - The company anticipates minimal impact on 2025 revenue potential if protests are resolved favorably by the end of 2024 [2] Market Share and Growth - TSA PreCheck is on track to achieve a one-third market share once fully ramped, with new locations achieving significant volume almost immediately after opening [5][7] - The company faces ongoing challenges with program award protests, which could delay revenue realization and impact financial performance [3]