Slide 1: 3Q 2021 Earnings Release
3Q 2021 Earnings Solutions Release that empower and protect the enterprise. TM November 15, 2021
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: 3Q 2021 Performance Summary
3Q 2021 PERFORMANCE SUMMARY • Sales grew 48% to $70.1 million; 80% sales growth adjusted for contract with U.S. Census Bureau (1) • Gross profit increased 57% to a record $26.1 million; expanded gross margin 229 basis points to 37.2% • Adjusted EBITDA increased 45% to $8.4 million • Generated $12.5
Slide 4: Leadership Announcements
LEADERSHIP ANNOUNCEMENTS MARK GRIFFIN EVP, Security Solutions • Will oversee all operations and business development activities, including Xacta, Telos Ghost, AMHS ED WILLIAMS and IDTrust360 Retiring as Chief Operating Officer • Has been with Telos since 1984 • COO since 2003 • Named GM of Telos ID
Slide 5: Business Highlights
BUSINESS HIGHLIGHTS CORE BUSINESS PERFORMANCE NOTABLE WINS AND RENEWALS PARTNER ENHANCEMENTS • Solid quarter of Xacta renewals for added • DMDC exercised Telos option-year 3, • Telos CyberProtect Partner Program backlog with existing government through mid-September 2022 for continued to progress. C
Slide 6: 3Q 2021 Financial Performance
3Q 2021 FINANCIAL PERFORMANCE Revenue Gross Profit Adjusted EBITDA Adjusted EPS Free Cash Flow Up Up Up Up Up 80% 57% 45% $0.11 10% Adjusted (1) • Reported up 48%; up 80% • Delivered record gross profit • Higher sales, gross profit • Higher adjusted net adjusted for contract with • Gross margins exp
Slide 7: 2021 Guidance Walk and 2022 Preview
2021 GUIDANCE WALK AND 2022 PREVIEW 2021 Guidance 2022 Preview Security Solutions: • Expected to grow in-line with 2021 growth before impact of U.S. Census Bureau contract ◦ Primarily driven by ramp in PreCheck ◦ Potential for higher commercial software sales later in the year Secure Networks: • Sal
Slide 8: Summary
SUMMARY • Seasoned operational leadership team in place • Continued progress on strategic priorities • Excellent 3Q results across all financial metrics, including record gross profit • Updated 2021 revenue guidance reflects 37% to 48% growth for 4Q and 33% to 36% growth for the year • Expecting ano
Slide 9: Appendix
ea Be Appendix Telos
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 Adjusted Sales Growth, Enterprise EBITDA, Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted EPS and Free Cash Flow are useful in evaluating its opera
Slide 11: Reconciliations
RECONCILIATIONS Enterprise EBITDA and Adjusted EBITDA (Unaudited, amounts in thousands) Three Months Ended September Nine Months Ended 30, September 30, 2021 2020 2021 2020 Net loss attributable to Telos Corporation $ (5,387) $ (200) $ (38,894) $ (2,178) Adjustments: Net income attributable to non-c
Slide 12: Reconciliations
RECONCILIATIONS Adjusted Net Income (Loss) and Adjusted EPS (Unaudited) Three Months Ended September 30, 2021 2020 Adjusted Adjusted Adjusted Net Adjusted Net Earnings Per Earnings Per Income (Loss) Income (Loss) Share Share (in thousands) (in thousands) Reported GAAP measure $ (5,387) $ (0.08) $ (2
Slide 13: Reconciliations
RECONCILIATIONS Adjusted Net Income (Loss) and Adjusted EPS (Unaudited) Nine Months Ended September 30, 2021 2020 Adjusted Adjusted Adjusted Net Adjusted Net Earnings Per Earnings Per Income (Loss) Income (Loss) Share Share (in thousands) (in thousands) Reported GAAP measure $ (38,894) $ (0.59) $ (2
Slide 14: Reconciliations
RECONCILIATIONS Free Cash Flow (Unaudited) Nine Months Ended September 30, 2021 2020 (in thousands) (in thousands) Net cash flows provided by operating activities $ 6,668 $ 11,957 Adjustments: Capital expenditure (7,784) (6,083) Final distribution to Telos ID Class B member - included in cash from o