Slide 1: Second Quarter 2024 Earnings
Second Quarter 2024 Earnings August 9, 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 $28.5M OF REVENUE, 34.1% GAAP GROSS MARGIN, AND 42.0% CASH GROSS MARGIN1 2Q 2024 Summary 2Q 2024 2Q 2024 Actual Guidance • Delivered $28.5M of revenue vs. guidance of $25M to $28M • Security Solutions (“SS”) up 4% YoY (vs. guidance of down HSD % to up MSD %);
Slide 4: Recent Business Updates
RECENT BUSINESS UPDATES TSA PreCheck® EXPANSION PROGRAM AWARD PROTESTS OTHER UPDATES • Expanded network of enrollment centers from 28 • Two program awards worth up to $525M to Telos • Xacta® new orders include the New Zealand locations to 83 locations over the past three over five years are under pr
Slide 5: 2024 Outlook: 3Q 2024 Guidance Assumptions
2024 OUTLOOK 3Q 2024 Guidance Assumptions • SS revenue assumptions: 3Q 2024 3Q 2024 Low End High End • Down mid-teens % to HSD % YoY (down MSD % to up LSD % sequentially) • Primarily driven by a short-term customer program in 2H 2023 that is not $22M $24M recurring in 2024 and revenue fluctuations i
Slide 6: Summary
SUMMARY Exceeded high end of guidance range on key financial metrics in the second quarter of 2024. Expanded network of TSA PreCheck enrollment locations to 83. Expect to reach 500 locations in 2025. Two program awards worth up to $525M to Telos over five years are under protest. Minimal impact on 2
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: 2Q and 1H 2024 Year-over-Year Comparison
FINANCIAL PERFORMANCE SUMMARY 2Q AND 1H 2024 YEAR-OVER-YEAR COMPARISON Revenue GAAP Gross Profit Adjusted EBITDA(1) Free Cash Flow(1) YoY Commentary • Revenue: Security Solutions up 4% to $17.9M primarily due to the growth in TSA PreCheck partially offset by contraction elsewhere in the portfolio. S
Slide 10: 2024 3Q Additional Modeling Assumptions
2024 OUTLOOK 2024 3Q ADDITIONAL MODELING ASSUMPTIONS 2023 2023 2024E Full Year 3Q 3Q 2024E 3Q Commentary • SS and SN down YoY GAAP Gross Margin 36.4% 36.0% ~31.3% - 33.3% • More favorable revenue mix between SS and SN • Cash gross margin1 slightly down to slightly up YoY Stock Based $24.4M $5.2M ~$8
Slide 11: GAAP and Adjusted 1H Results
2024 RESULTS GAAP AND ADJUSTED 1H RESULTS (Amounts in thousands, unaudited) 2024 2023 Three Months Ended March 31, 2024 Three Months Ended June 30, 2024 Six Months Ended June 30, 2024 Three Months Ended March 31, 2023 Three Months Ended June 30, 2023 Six Months Ended June 30, 2023 GAAP SBC Other Inc
Slide 12: 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 13: 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 14: Cash Gross Profit & Cash Gross Margin 1H Results
2024 RESULTS CASH GROSS PROFIT & CASH GROSS MARGIN 1H RESULTS (Amounts in thousands, unaudited) 2024 2023 Three Months Ended Three Months Ended Six Months Ended Three Months Ended Three Months Ended Six Months Ended March 31, 2024 June 30, 2024 June 30, 2024 March 31, 2023 June 30, 2023 June 30, 202
Slide 15: 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 16: 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 17: EBITDA, Adjusted EBITDA, and Margins Reconciliation
RECONCILIATIONS EBITDA, ADJUSTED EBITDA, EBITDA MARGIN, AND ADJUSTED EBITDA MARGIN (Amounts in thousands, unaudited) For the Three Months Ended For the Six Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Amount Margin Amount Margin Amount Margin Amount Margin (dollars in thousan
Slide 18: Adjusted Net Loss and Adjusted EPS
RECONCILIATIONS ADJUSTED NET LOSS AND ADJUSTED EPS (Amounts in thousands, unaudited) For the Three Months Ended For the Six Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Adjusted Adjusted Adjusted Adjusted Adjusted Earnings Adjusted Earnings Adjusted Earnings Adjusted Earnings
Slide 19: Cash Gross Profit and Cash Gross Margin
RECONCILIATIONS CASH GROSS PROFIT AND CASH GROSS MARGIN (Amounts in thousands, unaudited) For the Three Months Ended For the Six Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Amount Margin Amount Margin Amount Margin Amount Margin (dollars in thousands) Gross profit $ 9,707 34
Slide 20: Free Cash Flow
RECONCILIATIONS FREE CASH FLOW (Amounts in thousands, unaudited) For the Three Months Ended For the Six Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 (in thousands) Net cash used in operating activities $ (7,990) $ (4,113) $ (8,340) $ (4,213) Adjustments: Purchases of property
Slide 21: Solutions that empower and protect the enterprise.
Solutions that empower TM and protect the enterprise. Telos Confidential 21