Telos Corporation · NASDAQ:TLS
Telos — Q1 2024 Earnings Presentation
22 slides from Telos's earnings presentation, May 10, 2024
Slide 1: First Quarter 2024 Earnings
First Quarter 2024 Earnings May 10, 2024
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 $29.6M OF REVENUE, 37.0% GAAP GROSS MARGIN, AND 42.2% CASH GROSS MARGIN1 1Q 2024 Summary 1Q 2024 1Q 2024 Actual Guidance • Delivered $29.6M of revenue vs. guidance of $28M to $29M • Security Solutions (“SS”) down 6% YoY (vs. guidance of down low teens to HSD %
Slide 4: Recent Business Highlights
RECENT BUSINESS HIGHLIGHTS NEW BUSINESS DEVELOPMENT UPDATE • Last quarter, we announced that Telos’ prime partners received awards on new programs worth up to $525M to Telos’ Security Solutions business over five years, subject to customary protest periods and favorable resolution of protests. • Res
Slide 5: 2024 Outlook: 2Q 2024 Guidance Assumptions
2024 OUTLOOK 2Q 2024 Guidance Assumptions • SS revenue assumptions: 2Q 2024 2Q 2024 Low End High End • Down HSD % to up MSD % YoY (down mid teens % to LSD % sequentially) • Primarily driven by the sale of a non-recurring perpetual license in 2Q 2023 $25M $28M offset by growth in TSA PreCheck in 2024
Slide 6: Summary
SUMMARY Exceeded High End of Guidance Range on Key Financial Metrics in the First Quarter of 2024 Substantial Progress on New Business Capture in the First Quarter Resolution of Protests Expected in the Second Quarter Based on Typical Protest Timetable Revenues Expected to Return to Sequential Growt
Slide 7: Appendix
Appendix Telos
Slide 8: 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, Adjusted Net Income/(Loss), Adjusted Earnings Per Share ("EPS"), Cash Gross Profit, Cas
Slide 9: 1Q Year-Over-Year Comparison
FINANCIAL PERFORMANCE SUMMARY 1Q YEAR-OVER-YEAR COMPARISON Revenue GAAP Gross Profit Adjusted EBITDA1 Adjusted EPS1 Free Cash Flow1 $35.2M $13.5M $29.6M $11.0M ($0.1M) Cash ($0.4M) Cash Flow from Flow from 38.3% GAAP GM 37.0% GAAP GM Operations Operations 39.7% Cash GM1 42.2% Cash GM1 ($4.1M) ($3.6M
Slide 10: 2024 2Q Additional Modeling Assumptions
2024 OUTLOOK 2024 2Q ADDITIONAL MODELING ASSUMPTIONS 2023 2023 2024E Full Year 2Q 2Q 2024E 2Q Commentary • SS down YoY; SN down to flat YoY GAAP Gross Margin 36.4% 37.6% ~30.0% - 33.3% • More favorable revenue mix between SS and SN • Cash gross margin1 down to flat YoY Stock Based $24.4M $7.7M ~$6.0
Slide 11: Full Year 2024 Modeling Inputs
2024 OUTLOOK FULL YEAR 2024 MODELING INPUTS Assumptions REVENUE • Preexisting programs are expected to generate ~$100M of revenue. • Assumes preexisting network of 28 TSA PreCheck enrollment centers. Any expansion of enrollment centers will provide additional revenue upside. Ultimately, full rollout
Slide 12: GAAP and Adjusted 1Q Results
2024 RESULTS GAAP AND ADJUSTED 1Q RESULTS (Amounts in thousands, unaudited) 2024 2023 Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 GAAP SBC Other Inc Restructure Adjusted GAAP SBC Other Inc Restructure Adjusted Revenue Security Solutions $ 18,640 $ - $ - $ - $ 18,640 $ 19,773
Slide 13: GAAP and Adjusted Full Year Results 2023
2023 RESULTS GAAP AND ADJUSTED FULL YEAR RESULTS (Amounts in thousands, unaudited) 2023 Three Months Ended March 31, 2023 Three Months Ended June 30, 2023 Three Months Ended September 30, 2023 Three Months Ended December 31, 2023 Twelve Months Ended December 31, 2023 GAAP SBC Other Inc Restructure A
Slide 14: GAAP and Adjusted Full Year Results 2022
2022 RESULTS GAAP AND ADJUSTED FULL YEAR RESULTS (Amounts in thousands, unaudited) NOTE: As previously revised 2022 Three Months Ended March 31, 2022 Three Months Ended June 30, 2022 Three Months Ended September 30, 2022 Three Months Ended December 31, 2022 Twelve Months Ended December 31, 2022 GAAP
Slide 15: Cash Gross Profit & Cash Gross Margin 1Q Results
2024 RESULTS CASH GROSS PROFIT & CASH GROSS MARGIN 1Q RESULTS (Amounts in thousands, unaudited) 2024 2023 Three Months Ended Three Months Ended March 31, 2024 March 31, 2023 Revenue Security Solutions $ 18,640 $ 19,773 Secure Networks 10,979 15,449 Total $ 29,619 $ 35,222 GAAP Gross Profit Security
Slide 16: Cash Gross Profit & Cash Gross Margin Full Year 2023
2023 RESULTS CASH GROSS PROFIT & CASH GROSS MARGIN FULL YEAR RESULTS (Amounts in thousands, unaudited) 2023 Three Months Ended Twelve Months Ended March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 December 31, 2023 Revenue Security Solutions $ 19,773 $ 17,196 $ 19,795 $ 20,652 $ 77,4
Slide 17: Cash Gross Profit & Cash Gross Margin Full Year 2022
2022 RESULTS CASH GROSS PROFIT & CASH GROSS MARGIN FULL YEAR RESULTS (Amounts in thousands, unaudited) 2022 Three Months Ended Twelve Months Ended March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 December 31, 2022 Revenue Security Solutions $ 26,919 $ 30,819 $ 32,440 $ 30,276 $ 120,
Slide 18: EBITDA, Adjusted EBITDA, EBITDA Margin, and Adjusted EBITDA Margin
RECONCILIATIONS EBITDA, ADJUSTED EBITDA, EBITDA MARGIN, AND ADJUSTED EBITDA MARGIN (Amounts in thousands, unaudited) Notes: (1) The stock-based compensation adjustment to EBITDA as of March 31, 2024 and 2023 is made up of $1.6 million and $7.9 million, respectively, of stock-based compensation expen
Slide 19: Adjusted Net Loss and Adjusted EPS
RECONCILIATIONS ADJUSTED NET LOSS AND ADJUSTED EPS (Amounts in thousands, unaudited) Notes: (1) The stock-based compensation adjustment to net loss as of March 31, 2024 and 2023 is made up of $1.6 million and $7.9 million, respectively, of stock-based compensation expense for the awarded RSUs, PSUs
Slide 20: Cash Gross Profit and Cash Gross Margin
RECONCILIATIONS CASH GROSS PROFIT AND CASH GROSS MARGIN (Amounts in thousands, unaudited) 20
Slide 21: Free Cash Flow
RECONCILIATIONS FREE CASH FLOW (Amounts in thousands, unaudited) 21
Slide 22: Solutions that empower and protect the enterprise.
Solutions that empower TM and protect the enterprise. Telos Confidential 22