Slide 1: Fourth Quarter and Full Year 2023 Earnings
Fourth Quarter and Full Year 2023 Earnings March 15, 2024 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: Delivered $41.1M of Revenue and 34.3% GAAP Gross Margin
FINANCIAL PERFORMANCE SUMMARY DELIVERED $41.1M OF REVENUE AND 34.3% GAAP GROSS MARGIN 4Q 2023 Summary FY 2023 4Q 2023 4Q 2023 Actual Actual Guidance • Delivered $41.1M of revenue vs. guidance of $30M to $34M • Security Solutions (“SS”) down 32% YoY (vs. guidance of down high-30% to low-30%); Up 4% s
Slide 4: 2023 Review
FINANCIAL PEROFRMANCE SUMMARY 2023 REVIEW Original Reaffirmed Raised Raised FY 2023 Guidance Guidance Guidance Guidance FY Performance vs. Original Guidance (4Q22 Earnings Call) (1Q23 Earnings Call) (2Q23 Earnings Call) (3Q23 Earnings Call) Actuals • SS revenue • $3.6M above midpoint Revenue $115M -
Slide 5: Recent Business Highlights
RECENT BUSINESS HIGHLIGHTS 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. OTHER NOTABLE EVENTS • Awarded Xacta® renewals include the U.S. Departm
Slide 6: 1Q 2024 Assumptions
2024 OUTLOOK 1Q 2024 Guidance Assumptions 1Q 2024 1Q 2024 • Revenue range primarily driven by risks and opportunities on preexisting programs Low End High End • SS revenue assumptions: • Down low teens to HSD % YoY (down mid teens to low teens % sequentially) Revenue $28M $29M • Primarily driven by
Slide 7: Summary
SUMMARY Exceeded High End of Original Revenue and Adjusted EBITDA Range in 2023 Prime Partners Received New Program Awards Worth up to $525M to Telos’ Security Solutions Business Over Five Years, Subject to Customary Protest Periods and Favorable Resolution of Protests Substantial Progress on New Bu
Slide 8: Appendix
Appendix 8
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, Adjusted Net Income/(Loss), Adjusted Earnings Per Share ("EPS"), Cash Gross Profit, Cas
Slide 10: 4Q and FY 2023 Year-over-Year Comparison
FINANCIAL PERFORMANCE SUMMARY 4Q AND FY 2023 YEAR-OVER-YEAR COMPARISON Revenue GAAP Gross Profit Adjusted EBITDA1 Free Cash Flow1 4Q YoY Commentary • Revenue: SS down 32% to $20.7M primarily due to the previous loss of one program and lower revenues on an ongoing program, partially offset by the ram
Slide 11: 2024 1Q Additional Modeling Inputs
2024 OUTLOOK 2024 1Q ADDITIONAL MODELING INPUTS 2023 2023 2024E Full Year 1Q 1Q 2024E 1Q Commentary • SS down YoY, SN slightly down YoY GAAP Gross Margin 36.4% 38.3% ~34.3% • More favorable revenue mix between SS and SN • Cash gross margin1 approximately flat YoY Stock Based $24.4M $9.5M ~$4.5M • ~$
Slide 12: 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 26 TSA PreCheck enrollment centers. Any expansion of enrollment centers will provide additional revenue upside. Ultimately, full rollout
Slide 13: 2023 GAAP and Adjusted Full Year Results
2023 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 Adjusted
Slide 14: 2022 GAAP and Adjusted Full Year Results
2022 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 SBC Oth
Slide 15: 2023 Cash Gross Profit and Cash Gross Margin Full Year Results
2023 CASH GROSS PROFIT AND 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 $ 77,416 Sec
Slide 16: 2022 Cash Gross Profit and Cash Gross Margin Full Year Results
2022 CASH GROSS PROFIT AND 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 $ 120,454 Se
Slide 17: Reconciliations: EBITDA and Adjusted EBITDA
RECONCILIATIONS EBITDA, Adjusted EBITDA, EBITDA Margin and Adjusted EBITDA Margin (Unaudited) Notes: (1) The stock-based compensation adjustment to EBITDA is made up of stock-based compensation expense for the awarded restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”)
Slide 18: Reconciliations: Adjusted Net Income and Adjusted EPS
RECONCILIATIONS Adjusted Net Income/(Loss) and Adjusted EPS (Unaudited) Notes: (1) The stock-based compensation adjustment to EBITDA is made up of stock-based compensation expense for the awarded RSUs, PSUs, stock options, and other sources. Stock-based compensation expense for the awarded RSUs, PSU
Slide 19: Reconciliations: Cash Gross Profit and Cash Gross Margin
RECONCILIATIONS Cash Gross Profit and Cash Gross Margin (Unaudited) 19
Slide 20: Reconciliations: Free Cash Flow
RECONCILIATIONS Free Cash Flow (Unaudited) 20
Slide 21: Solutions that empower and protect the enterprise.
Solutions that empower TM and protect the enterprise.