Slide 1: Second Quarter 2026 Earnings
Second Quarter 2026 Earnings August 10, 2026
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
FINANCIAL PERFORMANCE SUMMARY DELIVERED $47.7M OF REVENUE, 35.0% GAAP GROSS MARGIN, 40.6% CASH GM1, AND $8.8M OF CASH FLOW FROM OPERATIONS 2Q 2026 2Q 2026 Summary 2Q 2026 Guidance / Actual • Delivered $47.7M of Revenue vs. guidance of $44.0M to $46.0M; YoY Revenue Assumptions growth of 32.7% • Secur
Slide 4: Transformation into a Consistent Free Cash Flow Generator
FINANCIAL PERFORMANCE SUMMARY TRANSFORMATION INTO A CONSISTENT FREE CASH FLOW GENERATOR Telos Quarterly Free Cash Flow Margin 1 Since 2020 20% 18% 14% 13% 13% 13% 13% 14% 12% 13% 10% 10% 4% 3% 0% 1% 0% 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q2
Slide 5: 3Q Guidance
2026 OUTLOOK 3Q GUIDANCE Guidance Guidance Assumptions 3Q 2026 3Q 2026 3Q Assumptions Low End High End • Revenue forecasted to be up 3% to 6% sequentially (down 3% YoY at the midpoint; up 6% YoY excluding the impact of unusually high non-recurring revenue in 3Q25) $49.2M $50.6M • Cash Gross Margin1
Slide 6: Updated vs. Prior FY Guidance
2026 OUTLOOK UPDATED VS. PRIOR FY GUIDANCE Updated Guidance Guidance Assumptions FY 2026 FY 2026 Updates to Full-Year Guidance Assumptions Low End High End • Starting in the fourth quarter, we expect the resale of single-digit gross margin third-party software to begin phasing-out $187M $195M • Reve
Slide 7: Summary
SUMMARY Exceeded 2Q Revenue, Margin, and Adjusted EBITDA Forecasts Generated FCF Margin1 of 13.9% in 2Q and 13.6% in 1H, Accelerated Share Repurchases in 2Q Revenue Growth, Operating Expense Discipline and Working Capital Rigor Have Enabled Consistent Quarterly Cash Generation Robust Pipeline of Sub
Slide 8: Appendix
Appendix Telos
Slide 9: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES In addition to Telos' results determined in accordance with U.S. GAAP, Telos believes the non-GAAP financial measures of EBITDA, Adjusted EBITDA, EBITDA Margin, Adjusted EBITDA Margin, Incremental Adjusted EBITDA, Incremental Adjusted EBITDA Margin, Adjusted Net Income (L
Slide 10: 2Q and 1H Year-over-Year Comparison
FINANCIAL PERFORMANCE SUMMARY 2Q AND 1H YEAR-OVER-YEAR COMPARISON Revenue GAAP Gross Profit Adjusted EBITDA1 Free Cash Flow1 YoY Commentary • Revenue: Security Solutions up 44% to $46.7M due to expansion within the Telos UP 33% UP 40% UP $6.5M UP $2.0M ID portfolio. Secure Networks down 69% to $1.1M
Slide 11: 2026 3Q Additional Modeling Assumptions
2026 OUTLOOK 2026 3Q ADDITIONAL MODELING ASSUMPTIONS 2025 2026E 2026E 3Q Commentary 3Q 3Q GAAP Gross Margin 39.9% ~32.0% - 33.0% • See Cash GM1 commentary below • SS and SN down YoY Cash Gross Margin1 44.8% ~37.5% - 38.5% • More favorable revenue mix between SS and SN (SS 98% vs. 90% in 3Q25) Stock
Slide 12: 2026 FY Additional Modeling Assumptions
2026 OUTLOOK 2026 FY ADDITIONAL MODELING ASSUMPTIONS 2025 2026E 2026E FY Commentary Full Year Full Year GAAP Gross Margin 37.0% ~33.0% - 34.0% • See Cash GM1 commentary below • SS down YoY; SN slightly down to up YoY Cash Gross Margin1 42.7% ~39.0% - 40.0% • More favorable revenue mix between SS and
Slide 13: GAAP and Adjusted 1H Results
2026 RESULTS GAAP AND ADJUSTED 1H RESULTS (Amounts in thousands, unaudited) 2026 2025 Three Months Ended March 31, 2026 Three Months Ended June 30, 2026 Six Months Ended June 30, 2026 Three Months Ended March 31, 2025 Three Months Ended June 30, 2025 Six Months Ended June 30, 2025 GAAP SBC Other Inc
Slide 14: GAAP and Adjusted Full Year Results
2025 RESULTS GAAP AND ADJUSTED FULL YEAR RESULTS (Amounts in thousands, unaudited) 2025 Three Months Ended March 31, 2025 Three Months Ended June 30, 2025 Three Months Ended September 30, 2025 Three Months Ended December 31, 2025 Twelve Months Ended December 31, 2025 GAAP SBC Other Inc Adjusted GAAP
Slide 15: Cash Gross Profit & Cash Gross Margin 1H Results
2026 RESULTS CASH GROSS PROFIT & CASH GROSS MARGIN 1H RESULTS (Amounts in thousands, unaudited) 2026 2025 Three Months Ended Three Months Ended Six Months Ended Three Months Ended Three Months Ended Six Months Ended March 31, 2026 June 30, 2026 June 30, 2026 March 31, 2025 June 30, 2025 June 30, 202
Slide 16: Cash Gross Profit & Cash Gross Margin Full Year Results
2025 RESULTS CASH GROSS PROFIT & CASH GROSS MARGIN FULL YEAR RESULTS (Amounts in thousands, unaudited) 2025 Three Months Ended Twelve Months Ended March 31, 2025 June 30, 2025 September 30, 2025 December 31, 2025 December 31, 2025 Revenue Security Solutions $ 25,818 $ 32,474 $ 2025 46,478 $ 44,830 $
Slide 17: GAAP, Adjusted, and Cash Operating Expenses
2025 RESULTS GAAP, ADJUSTED, AND CASH OPERATING EXPENSES (Amounts in thousands, unaudited) 2025 Three Months Ended Twelve Months Ended March 31, 2025 June 30, 2025 September 30, 2025 December 31, 2025 December 31, 2025 Operating Expenses 21,204 21,815 23,014 34,865 100,898 Adjustments [-] Stock-Base
Slide 18: Free Cash Flow and Free Cash Flow Margin
2026 RESULTS FREE CASH FLOW AND FREE CASH FLOW MARGIN (Amounts in thousands, unaudited) 2026 Three Months Ended March 31, 2026 June 30, 2026 Net cash provided by operating activities $ 8,656 $ 8,833 Adjustments [-] Capitalized software development costs (2,132) (1,970) [-] Purchases of property and
Slide 19: Free Cash Flow and Free Cash Flow Margin
2025 RESULTS FREE CASH FLOW AND FREE CASH FLOW MARGIN (Amounts in thousands, unaudited) 2025 Three Months Ended March 31, 2025 June 30, 2025 September 30, 2025 December 31, 2025 Net cash provided by operating activities $ 6,106 $ 6,950 $ 9,146 $ 7,980 Adjustments [-] Capitalized software development
Slide 20: Free Cash Flow and Free Cash Flow Margin
2024 RESULTS FREE CASH FLOW AND FREE CASH FLOW MARGIN (Amounts in thousands, unaudited) 2024 Three Months Ended March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 Net cash used in operating activities $ (350) $ (7,990) $ (7,080) $ (10,518) Adjustments [-] Capitalized software developm
Slide 21: Free Cash Flow and Free Cash Flow Margin
2023 RESULTS FREE CASH FLOW AND FREE CASH FLOW MARGIN (Amounts in thousands, unaudited) 21
Slide 22: Free Cash Flow and Free Cash Flow Margin
2022 RESULTS FREE CASH FLOW AND FREE CASH FLOW MARGIN (Amounts in thousands, unaudited) 22
Slide 23: Free Cash Flow and Free Cash Flow Margin
2021 RESULTS FREE CASH FLOW AND FREE CASH FLOW MARGIN (Amounts in thousands, unaudited) Note: As previously revised 23
Slide 24: Free Cash Flow and Free Cash Flow Margin
2020 RESULTS FREE CASH FLOW AND FREE CASH FLOW MARGIN (Amounts in thousands, unaudited) 24
Slide 25: EBITDA, Adjusted EBITDA and Margin Reconciliations
RECONCILIATIONS EBITDA, ADJUSTED EBITDA, EBITDA MARGIN, ADJUSTED EBITDA MARGIN, INCREMENTAL ADJUSTED EBITDA, AND INCREMENTAL ADJUSTED EBITDA MARGIN (Amounts in thousands, unaudited) For the Three Months Ended For the Six Months Ended June 30, 2026 June 30, 2025 Year-over-Year Change June 30, 2026 Ju
Slide 26: Adjusted Net Income (Loss) and Adjusted EPS
RECONCILIATIONS ADJUSTED NET INCOME (LOSS) AND ADJUSTED EPS (Amounts in thousands except per share data, unaudited) For the Three Months Ended For the Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 (in thousands, except per share data) Net income (loss) $ 660 $ (9,517) $ 2,
Slide 27: Adjusted Gross Profit, Cash Gross Profit, and Margins
RECONCILIATIONS ADJUSTED GROSS PROFIT, CASH GROSS PROFIT, ADJUSTED GROSS MARGIN, AND CASH GROSS MARGIN (Amounts in thousands, unaudited) For the Three Months Ended For the Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Amount Margin Amount Margin Amount Margin Amount Margin
Slide 28: Free Cash Flow and Free Cash Flow Margin
RECONCILIATIONS FREE CASH FLOW AND FREE CASH FLOW MARGIN (Amounts in thousands, unaudited) For the Three Months Ended For the Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Net cash provided by operating activities $ 8,833 $ 6,950 $ 17,489 $ 13,056 Adjustments: Capitalized
Slide 29: Adjusted Operating Expenses and Cash Operating Expenses
RECONCILIATIONS ADJUSTED OPERATING EXPENSES AND CASH OPERATING EXPENSES (Amounts in thousands, unaudited) For the Three Months Ended For the Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Operating expenses $ 16,382 $ 21,815 $ 32,302 $ 43,019 Adjustments: Stock-based compen
Slide 30: Solutions that empower and protect the enterprise.
Solutions that empower TM and protect the enterprise. Telos Confidential 30