The earnings call presented a strong positive outlook with significant revenue growth, improved EBITDA, and robust free cash flow. The expansion of the TSA PreCheck program and new authorizations further underscore the company's positive trajectory. While there were concerns about gross margin variability and contraction in the secure networks segment, these were minor compared to the overall positive performance and outlook.

Company Guidance

During the Telos Corporation second quarter 2025 earnings call, the company reported robust financial performance, exceeding both revenue and profit guidance. Revenue for the quarter grew by 26% year-over-year to $36 million, surpassing the guidance range of $32.5 million to $34.5 million. Security Solutions contributed approximately 90% of total revenue, driving this outperformance. The company achieved a GAAP gross margin of 33.2% and a cash gross margin of 38.4%, with adjusted EBITDA of $400,000, outperforming the forecasted loss range of $2.1 million to $600,000. Operating cash flow for the quarter was $7 million, with free cash flow reaching $4.6 million or a 12.9% margin. The company also resumed share repurchases, buying back 1.5 million shares for $4 million. Looking ahead, Telos forecasts third-quarter revenue growth of 85% to 98% year-over-year, with a revenue range of $44 million to $47 million and adjusted EBITDA of $4 million to $5.7 million. The company anticipates maintaining positive free cash flow for the full year amid strong performance from key programs like TSA PreCheck and the DMDC program.

Strong Revenue Growth

Telos Corporation reported a 26% increase in revenue for the second quarter, reaching $36 million, exceeding the guidance range of $32.5 million to $34.5 million. This growth was primarily driven by the Security Solutions segment.

Significant EBITDA Improvement

Adjusted EBITDA saw a $3.3 million improvement year-over-year, turning a profit of approximately $400,000 compared to a forecasted loss. This was due to a combination of revenue growth and cost discipline.

Robust Free Cash Flow

The company achieved a free cash flow of $4.6 million for the second quarter and $8.4 million for the first half of 2025, representing a 12.9% and 12.6% margin respectively.

Expansion of TSA PreCheck Program

Telos expanded its TSA PreCheck enrollment centers to 415 locations across 40 states, a 43% increase since the last earnings call, targeting 500 locations by the end of 2025.

FedRAMP High Authorization Achievement

Telos received FedRAMP High Authorization for its Xacta software solution, meeting stringent standards for protecting highly sensitive government data in cloud environments.

Positive Third Quarter Outlook

Telos forecasts a significant revenue increase of 85% to 98% year-over-year for the third quarter, with projected revenue between $44 million and $47 million and an adjusted EBITDA margin of 9.1% to 12.1%.

Telos (TLS) Earnings, Revenues Date & History

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TLS Earnings History

Report Date	Fiscal Quarter	Forecast / EPS	Last Year's EPS	EPS YoY Change	Slides	Play Transcript
Nov 18, 2025	2025 (Q3)	0.01 / -	-0.1	―	―	―
Aug 11, 2025	2025 (Q2)	-0.05 / -0.03	-0.09	66.67% (+0.06)
May 09, 2025	2025 (Q1)	-0.05 / -0.03	-0.08	62.50% (+0.05)
Mar 10, 2025	2024 (Q4)	-0.09 / -0.04	-0.09	55.56% (+0.05)
Nov 12, 2024	2024 (Q3)	-0.14 / -0.10	-0.07	-42.86% (-0.03)
Aug 09, 2024	2024 (Q2)	-0.14 / -0.09	-0.03	-200.00% (-0.06)
May 10, 2024	2024 (Q1)	-0.11 / -0.08	-0.04	-100.00% (-0.04)
Mar 15, 2024	2023 (Q4)	-0.11 / -0.09	0.05	-280.00% (-0.14)
Nov 09, 2023	2023 (Q3)	-0.14 / -0.07	0.1	-170.00% (-0.17)
Aug 09, 2023	2023 (Q2)	-0.13 / -0.03	0.04	-175.00% (-0.07)

The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.

Beat

Missed

TLS Earnings-Related Price Changes

Report Date	Price 1 Day Before	Price 1 Day After	Percentage Change
Aug 11, 2025	$2.38	$3.87	+62.61%
May 09, 2025	$2.45	$1.96	-20.00%
Mar 10, 2025	$2.87	$2.60	-9.41%
Nov 12, 2024	$4.24	$3.92	-7.55%

Earnings announcements can affect a stock’s price. This table shows the stock's price the day before and the day after recent earnings reports, including the percentage change.