Q3 2024 Telos Corp Earnings Call Transcript
Key Points
- Telos Corp (TLSRP.PFD) delivered revenue near the top end of the guidance range and adjusted EBITDA above the top end of the guidance range.
- The TSA PreCheck program is a significant growth driver, with the company expanding its enrollment centers from 83 to 173 locations, aiming for 500 by 2025.
- The Defense Manpower Data Center (DMDC) program, worth up to $485 million over five years, has resolved its protest in favor of Telos and is currently generating revenue.
- Security solutions revenue grew 3% sequentially, driven by double-digit growth in Telos ID.
- Telos Corp has a large pipeline of new business opportunities, particularly in secure networks, with a total pipeline value of approximately $4.1 billion.
- Secure networks revenue declined sequentially and year-over-year due to the ramp down of existing programs.
- The company took a $13.1 million charge in the quarter, impacting GAAP gross margin.
- Restructuring actions led to the discontinuation of certain solutions that were not generating acceptable returns.
- Adjusted EBITDA was a $4.1 million loss, although better than guidance, it still represents a financial loss.
- The Department of Homeland Security (DHS) program, worth up to $40 million, is still under protest, creating uncertainty in revenue realization.
Good day. And thank you for standing by. Welcome to the Telos Corporation third quarter, 2024 earnings call. (Operator Instructions)
Please be advised that today's session is being recorded. I would now like to hand the conference over to your first speaker today, Alison Phillips. Allison, you have the floor.
Good morning. Thank you for joining us to discuss Telos Corporation's third quarter, 2024 financial results. With me today is John Wood, Chairman and CEO of Telos; and Mark Bendza, Executive Vice President and CFO of Telos. Let me quickly review the format of today's presentation.
Mark will begin with remarks on our third quarter, 2024 results. Next John will discuss business highlights from the quarter. Then Mark will follow up with fourth quarter guidance before turning back to John to wrap up. We will then open the line for Q&A where Mark Griffin, Executive Vice President of Security Solutions will also join us.
The third quarter financial results were
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