Telos Corporation · NASDAQ:TLS
Telos — Q3 2024 Earnings Presentation
21 slides from Telos's earnings presentation, Nov 12, 2024
Slide 1: Third Quarter 2024 Earnings
Third Quarter 2024 Earnings November 12, 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 $23.8M OF REVENUE, 13.2% GAAP GROSS MARGIN, AND 44.0% CASH GROSS MARGIN1 3Q 2024 Summary 3Q 2024 3Q 2024 Actual Guidance • Delivered $23.8M of revenue vs. guidance of $22M to $24M • Security Solutions (“SS”) down 7% YoY (vs. guidance of down mid-teens % to HSD
Slide 4: Recent Business Updates
RECENT BUSINESS UPDATES TSA PreCheck® EXPANSION PROGRAM AWARD PROTESTS UPDATE OTHER UPDATES • Expanded network of enrollment centers from 83 • Program #1: • New Xacta® orders include the U.S. Air Force Office locations to 173 locations over the past three of Special Investigations, as well as renewa
Slide 5: 2024 Outlook: 4Q 2024 Guidance Assumptions
2024 OUTLOOK 4Q 2024 Guidance Assumptions • SS revenue assumptions: 4Q 2024 4Q 2024 Low End High End • Up low-teens % to low-20% sequentially (down LSD % to up MSD % YoY) • Primarily driven by launch of DMDC program and growth in TSA PreCheck® $24.5M $26.5M enrollments, partially offset by revenue f
Slide 6: Summary
SUMMARY 3Q Revenue at Top End of Guidance; Adjusted EBITDA Exceeded Guidance Assessed Cost Structure and Investment Priorities During 3Q and Implemented a Restructuring Plan to Eliminate Cost and Reallocate Resources to High-Growth Programs in Security Solutions DMDC Program Previously Under Protest
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"), Adjusted Gross Profit,
Slide 9: 3Q and 9M 2024 Year-Over-Year Comparison
FINANCIAL PERFORMANCE SUMMARY 3Q AND 9M 2024 YEAR-OVER-YEAR COMPARISON Revenue GAAP Gross Profit Adjusted EBITDA(1) Free Cash Flow(1) 3Q YoY Commentary • Revenue: Security Solutions down 7% to $18.3M due to the reduction in revenue from a long-term program and the completion of a short-term program
Slide 10: 2024 4Q Additional Modeling Assumptions
2024 OUTLOOK 2024 4Q ADDITIONAL MODELING ASSUMPTIONS 2023 2024 2024E 4Q Commentary Full Year 4Q Full Year (E) 4Q (E) • SS down, SN up YoY ~30.7% - ~36.0% - GAAP Gross Margin 36.4% 34.3% 31.2% 37.6% • More favorable revenue mix between SS and SN • Cash gross margin1 up YoY Stock Based $24.4M $1.9M ~$
Slide 11: GAAP and Adjusted First 9M Results 2024
2024 RESULTS GAAP AND ADJUSTED FIRST 9M RESULTS (Amounts in thousands, unaudited) 2024 2023 Three Months Ended March 31, 2024 Three Months Ended June 30, 2024 Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024 Three Months Ended September 30, 2023 Nine Months Ended September
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 2022 Three Months Ended September 30, 2022 Three Months Ended December 31, 2022 Twelve Months Ended December 31, 2022
Slide 14: Cash Gross Profit & Cash Gross Margin First 9M 2024
2024 RESULTS CASH GROSS PROFIT & CASH GROSS MARGIN FIRST 9M RESULTS (Amounts in thousands, unaudited) 2024 2023 Three Months Ended Three Months Ended Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended March 31, 2024 June 30, 2024 September 30, 2024 September 30, 2024 September
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, EBITDA Margin, and Adjusted EBITDA Margin
RECONCILIATIONS EBITDA, ADJUSTED EBITDA, EBITDA MARGIN, AND ADJUSTED EBITDA MARGIN (Amounts in thousands, unaudited) Reconciliation of Net Loss to EBITDA, Adjusted EBITDA, EBITDA Margin and Adjusted EBITDA Margin For the Three Months Ended For the Nine Months Ended September 30, 2024 September 30, 2
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 Nine Months Ended September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Adjusted Adjusted Adjusted Adjusted Adjusted Earnings Per Adjusted Earnings Per Adjust
Slide 19: Adjusted Gross Profit, Cash Gross Profit, and Margins
RECONCILIATIONS ADJUSTED GROSS PROFIT, CASH GROSS PROFIT, ADJUSTED GROSS MARGIN, AND CASH GROSS MARGIN (Amounts in thousands, unaudited) For the Three Months Ended For the Nine Months Ended September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Amount Margin Amount Margin Amount
Slide 20: Free Cash Flow
RECONCILIATIONS FREE CASH FLOW (Amounts in thousands, unaudited) For the Three Months Ended For the Nine Months Ended September 30, September 30, September 30, September 30, 2024 2023 2024 2023 Net cash (used in) provided by operating activities $ (7,080) $ 846 $ (15,420) $ (3,367) Adjustments: Purc
Slide 21: Solutions that empower and protect the enterprise.
Solutions that empower TM and protect the enterprise. Telos Confidential 21