Slide 1: Second Quarter 2023 Earnings
Second Quarter 2023 Earnings August 9, 2023 1
Slide 2: Disclaimers
DISCLAIMERS The information contained in this presentation does not constitute or form part of, and should not be construed as, any offer, sale or subscription of, or any invitation to offer, buy or subscribe for, any securities, nor shall there be any offer, solicitation or sale in any jurisdiction
Slide 3: Financial Performance Summary: Delivered $32.9M of Revenue and 37.6% Gross Margin
FINANCIAL PERFORMANCE SUMMARY DELIVERED $32.9M OF REVENUE AND 37.6% GROSS MARGIN 2Q 2023 Summary 2Q 2023 2Q 2023 Actual Guidance • Delivered $32.9M of revenue vs. guidance of $28M to $32M • Security Solutions (“SS”) down 44% YoY (vs. guidance of down high-40% to mid-50%); Down 13% sequentially; Resu
Slide 4: Recent Business Highlights
RECENT BUSINESS HIGHLIGHTS NOTABLE EVENTS • Key Xacta® renewals include the Central Intelligence Agency, U.S. Department of the Treasury, U.S. Department of the Interior, Office of Naval Intelligence, National Archives, U.S. Environmental Protection Agency, Oracle and SAP as well as new orders from
Slide 5: 2Q and 1H 2023 Year-over-Year Comparison
FINANCIAL PERFORMANCE SUMMARY 2Q AND 1H 2023 YEAR-OVER-YEAR COMPARISON Revenue Gross Profit Adjusted EBITDA(1) Free Cash Flow(1) 2Q YoY Commentary • Revenue: Security Solutions down 44% to $17.2M 2Q YoY $55.8M $20.9M primarily due to lower revenues on two ongoing $32.9M $12.4M $4.5M $5.4M 37.5% marg
Slide 6: 2023 Outlook: 3Q 2023 Guidance and Assumptions
2023 OUTLOOK 3Q 2023 Guidance Assumptions 3Q 2023 3Q 2023 • Revenue range primarily driven by risks and opportunities on preexisting programs Low End High End • SS revenue assumptions: • Down mid-50% to mid-40% YoY (down high teens to flat sequentially) Revenue $30M $34M • Primarily driven by Telos
Slide 7: Updated Guidance vs. Prior Guidance
2023 OUTLOOK UPDATED GUIDANCE vs. PRIOR GUIDANCE Updated Guidance Updated Guidance Assumptions FY 2023 FY 2023 • SS revenue assumptions: Low End High End • Down mid-40% to high-30% YoY • Expected lower revenues on two ongoing programs (~$50M) and a program loss (~$10M), Revenue $122M $137M partially
Slide 8: Summary
SUMMARY Exceeded high end of guidance range on key financial metrics; new business wins and continued focus on expense management driving improved profit outlook Raising midpoint of full-year guidance ranges Continued investment in business development capability and pipeline to rebuild backlog and
Slide 9: Appendix
Appendix 9
Slide 10: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES In addition to its results determined in accordance with GAAP, the Company believes the non-GAAP financial measures of EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income (Loss), Adjusted EPS and Free Cash Flow are useful in evaluating its
Slide 11: 2023 Additional Modeling Inputs
2023 ADDITIONAL MODELING INPUTS 2022 2023E 2023E Full Year Full Year 3Q 2023E Full Year YoY Commentary • SS slightly down to slightly up YoY, SN slightly down to flat. Gross Margin 36.4% 34.9% - 36.4% 30.4% - 34.2% • Less favorable mix shift between SS and SN Stock Based • Final vesting/amortization
Slide 12: 2022 and 2023 GAAP and Adjusted First Half Results
2022 AND 2023 GAAP AND ADJUSTED FIRST HALF RESULTS (Amounts in thousands, unaudited) 2022 2023 Q1 Q2 1H Q1 Q2 1H GAAP SBC Other Inc Adjusted GAAP SBC Other Inc Adjusted GAAP SBC Other Inc Adjusted GAAP SBC Other Inc Restructure Adjusted GAAP SBC Other Inc Restructure Adjusted GAAP SBC Other Inc Rest
Slide 13: 2022 GAAP and Adjusted Full Year Results
2022 GAAP AND ADJUSTED FULL YEAR RESULTS (Amounts in thousands, unaudited) NOTE: As previously revised 2022 Q1 Q2 Q3 Q4 FY GAAP SBC Other Inc Adjusted GAAP SBC Other Inc Adjusted GAAP SBC Other Inc Adjusted GAAP SBC Other Inc Restructure Adjusted GAAP SBC Other Inc Restructure Adjusted Revenue Secur
Slide 14: Reconciliations: EBITDA and Adjusted EBITDA
RECONCILIATIONS EBITDA, Adjusted EBITDA, EBITDA Margin and Adjusted EBITDA Margin (Unaudited) For the Three Months Ended For the Six Months Ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Amount Margin Amount Margin Amount Margin Amount Margin (dollars in thousands) Net loss $ (8,024)
Slide 15: Reconciliations: Adjusted Net Income and Adjusted EPS
RECONCILIATIONS Adjusted Net Income/(Loss) and Adjusted EPS (Unaudited) For the Three Months Ended For the Six Months Ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Adjusted Adjusted Adjusted Adjusted Adjusted Adjusted Adjusted Adjusted Net (Loss)/ Earnings Per Net (Loss)/ Earnings Pe
Slide 16: Reconciliations: Free Cash Flow
RECONCILIATIONS Free Cash Flow (Unaudited) For the Three Months Ended For the Six Months Ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 (in thousands) Net cash (used in)/provided by operating activities $ (4,113) $ 7,883 $ (4,213) $ 8,132 Adjustments: Purchases of property and equipme
Slide 17: Solutions that empower and protect the enterprise.
Solutions that empower TM and protect the enterprise.