Slide 1: First Quarter 2023 Earnings
First Quarter 2023 Earnings May 10, 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: $35.2M Revenue and 38.3% Gross Margin
FINANCIAL PERFORMANCE SUMMARY DELIVERED $35.2M OF REVENUE AND 38.3% GROSS MARGIN 1Q 2023 Summary 1Q 2023 1Q 2023 Actual Guidance • Delivered $35.2M of revenue • Security Solutions (“SS”) down 27% YoY (vs. guidance of down mid-20% to mid- 30%); Down 35% sequentially; Results in line with guidance Rev
Slide 4: Recent Business Highlights
RECENT BUSINESS HIGHLIGHTS NOTABLE EVENTS • Key Xacta renewals include the U.S. Air Force, the Department of Homeland Security, the Department of State, the Department of the Interior, the Department of Energy, the Defense Intelligence Agency, Amazon Web Services and EY • AMHS achieved several major
Slide 5: 1Q Year-over-Year Comparison
FINANCIAL PERFORMANCE SUMMARY 1Q YEAR-OVER-YEAR COMPARISON Revenue Gross Profit Adjusted EBITDA(1) Adjusted EPS(1) Free Cash Flow(1) $50.2M $18.9M $35.2M 37.6% margin $13.5M $1.0M 38.3% margin 1Q22 1Q23 1Q22 1Q23 ($0.01) ($0.04) ($3.1M) ($4.1M) ($0.8M) 1Q22 1Q23 1Q22 1Q23 1Q22 1Q23 • Security Soluti
Slide 6: 2Q 2023 Assumptions
2023 OUTLOOK 2Q 2023 Guidance Assumptions 2Q 2023 2Q 2023 • SS revenue assumptions: Low End High End • Down high-40% to mid-50% YoY (down high teens to mid-30% sequentially) • Primarily driven by Telos ID Revenue $28M $32M • SN revenue assumptions: -50% YoY -43% YoY • Down mid-30% to low-40% YoY (ap
Slide 7: Full Year 2023 Outlook
2023 OUTLOOK FULL YEAR 2023 Guidance Assumptions • SS revenue assumptions: FY 2023 FY 2023 Low End High End • Down low-30% to high-40% YoY • Expected lower revenues on two ongoing programs (~$40M) and a program loss $115M $140M (~$10M), partially offset by initial ramp of TSA PreCheck Revenue -47% Y
Slide 8: Summary
SUMMARY Exceeded high end of guidance range on key financial metrics Expense management actions buffered adjusted EBITDA in the quarter Highly liquid balance sheet with $112M of cash, no debt, and an undrawn $30M revolving credit facility with a $30M expansion feature 2023 is a transition year focus
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, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income (Loss), Adjusted EPS and Free Cash Flow are useful in evaluating its operating perfo
Slide 11: 2023 Additional Modeling Inputs
2023 ADDITIONAL MODELING INPUTS 2022 2023E 2023E Full Year Full Year 2Q 2023E Full Year YoY Commentary • Both SS and SN down YoY due to revenue pressure on high margin Gross Margin 36.4% 31.5% to 36.5% 28.0% to 31.5% programs, partially offset by favorable mix shift between SS and SN Share Based • F
Slide 12: 2023 1Q GAAP and Adjusted Results
2023 1Q GAAP AND ADJUSTED RESULTS (Amounts in thousands, unaudited) 2023 2022 Q1 Q1 GAAP SBC Other Inc Restructure Adjusted GAAP SBC Other Inc Adjusted Revenue Security Solutions 19,773 - - - 19,773 26,919 - - 26,919 Secure Networks 15,449 - - - 15,449 23,241 - - 23,241 Total 35,222 - - - 35,222 50,
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 and Adjusted EBITDA (Unaudited) For the Three Months Ended March 31, 2023 March 31, 2022 Amount Margin Amount Margin (Dollars in thousands) Net loss $ (10,746) (30.5%) $ (16,616) (33.1%) Other income (2,496) (7.1%) (12) -% Interest expense 249 0.7% 190 0.4% Provision for incom
Slide 15: Reconciliations: Adjusted Net Income (Loss) and Adjusted EPS
RECONCILIATIONS Adjusted Net Income (Loss) and Adjusted EPS (Unaudited) For the Three Months Ended March 31, 2023 March 31, 2022 Adjusted Adjusted Earnings Adjusted Adjusted Earnings Net Loss Per Share Net Loss Per Share (in thousands, except per share data) Net loss – GAAP measure $ (10,746) $ (0.1
Slide 16: Reconciliations: Free Cash Flow
RECONCILIATIONS Free Cash Flow (Unaudited) For the Three Months Ended March 31, 2023 March 31, 2022 (in thousands) Net cash (used in)/provided by operating activities $ (100) $ 249 Adjustments: Purchases of property and equipment (223) (546) Capitalized software development costs (3,800) (2,795) Fre
Slide 17: Solutions that empower and protect the enterprise.
Solutions that empower TM and protect the enterprise.