Telos (TLS) investor relations material

Executive summary

• Achieved transformational growth in 2025 with strong revenue gains, significant margin expansion, and improved cash generation, driven by disciplined execution and ramping large programs.

• Security Solutions segment now represents over 90% of total revenue, with significant momentum in identity and cybersecurity offerings, especially Telos ID.

• Returned capital to shareholders through share repurchases while maintaining a highly liquid and flexible balance sheet.

• Delivered on large programs, secured new business, and scaled the operating model.

• GAAP net loss was $16.3 million in 2025, including a $1.5 million restructuring charge and $14.9 million non-cash goodwill impairment.

Financial highlights

• FY 2025 revenue reached $164.8 million, up 52% year-over-year; Q4 revenue was $46.8 million, up 77% year-over-year, both surpassing guidance.

• Security Solutions revenue grew 95% to $149.6 million for FY 2025 and 105% in Q4; Secure Networks declined 52% for the year.

• FY 2025 adjusted EBITDA was $18.1 million (11.0% margin); Q4 adjusted EBITDA was $7.3 million (15.6% margin).

• Free cash flow for FY 2025 was $21.3 million (12.9% margin), a $61 million improvement year-over-year; Q4 free cash flow was $6.3 million (13.4% margin).

• GAAP gross margin for FY 2025 was 37.0%; cash gross margin was 42.7%.

Outlook and guidance

• FY 2026 revenue guidance: $187–$200 million, representing 14%–21% year-over-year growth; adjusted EBITDA guidance: $20.6–$28.0 million (11.0%–14.0% margin).

• Q1 2026 revenue expected to grow 44%–47% year-over-year to $44–$45 million, with cash gross margin over 39%.

• Cash operating expenses projected to decline by $1.5–$4 million in 2026 due to restructuring and expense management.

• Cash gross margin for FY 2026 projected at 37.0%–39.5%.