Telos (NASDAQ:TLS) Announces Quarterly Earnings Results

Key Points

• Telos beat quarterly expectations, reporting EPS of $0.06 versus the $0.02 consensus and revenue of $47.74 million versus expectations of $44.63 million.
• The company said Q1 was a strong operational quarter, with revenue up 56% year over year, adjusted EBITDA of $7.9 million, and free cash flow of $6.4 million.
• There is some leadership uncertainty as CEO John Wood is on medical leave, with an interim team handling day-to-day operations while the company also highlighted a large proposal pipeline and early traction for Xacta.ai.

Telos (NASDAQ:TLS - Get Free Report) released its quarterly earnings data on Monday. The company reported $0.06 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.02 by $0.04, FiscalAI reports. Telos had a negative return on equity of 20.30% and a negative net margin of 22.17%.The business had revenue of $47.74 million for the quarter, compared to analysts' expectations of $44.63 million.

Here are the key takeaways from Telos' conference call:

• Telos reported a strong Q1 beat with revenue up 56% YoY to $47.7M, GAAP gross margin of 36.4% (cash gross margin 42.3%), and adjusted EBITDA of $7.9M (16.5% margin), all above guidance.
• Operating cash flow was $8.7M and Free Cash Flow was $6.4M (13.4% FCF margin, the fifth consecutive quarter >12%), and the company repurchased $2.2M of stock in Q1 with plans to accelerate buybacks in Q2.
• The CEO, John Wood, is on a medical leave of absence and an interim leadership team (including the CFO and two EVPs) is running day-to-day operations, which introduces executive transition risk despite management saying operations remain uninterrupted.
• Management cites a nearly $500M proposal pipeline (with two ~ $90M bids and many multi‑year/2‑year opportunities) expected to see award decisions in H2 2026, and highlighted early traction for Xacta.ai with 400+ licenses and pilots across government and banking.

Telos Stock Performance

TLS traded down $0.10 during trading on Monday, reaching $4.38. 669,957 shares of the company's stock were exchanged, compared to its average volume of 727,519. The stock has a market capitalization of $338.24 million, a P/E ratio of -8.74 and a beta of 0.95. The company's fifty day simple moving average is $4.27 and its 200-day simple moving average is $5.14. Telos has a 1 year low of $2.15 and a 1 year high of $8.36. The company has a debt-to-equity ratio of 0.06, a current ratio of 2.57 and a quick ratio of 2.57.

Insiders Place Their Bets

In related news, EVP Edward Hutchinson Jr. Robbins sold 64,527 shares of Telos stock in a transaction that occurred on Wednesday, March 18th. The stock was sold at an average price of $4.02, for a total transaction of $259,398.54. Following the transaction, the executive vice president owned 567,278 shares in the company, valued at approximately $2,280,457.56. This trade represents a 10.21% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which can be accessed through this link. Insiders have sold 105,723 shares of company stock worth $425,292 in the last ninety days. Corporate insiders own 14.90% of the company's stock.

Institutional Investors Weigh In On Telos

Several large investors have recently added to or reduced their stakes in TLS. Two Sigma Investments LP increased its stake in Telos by 322.9% in the 3rd quarter. Two Sigma Investments LP now owns 908,565 shares of the company's stock valued at $6,215,000 after purchasing an additional 693,716 shares in the last quarter. Jane Street Group LLC purchased a new stake in shares of Telos in the 2nd quarter worth about $1,801,000. Marshall Wace LLP grew its stake in Telos by 161.6% in the 3rd quarter. Marshall Wace LLP now owns 911,148 shares of the company's stock valued at $6,232,000 after acquiring an additional 562,878 shares during the last quarter. Lazard Asset Management LLC purchased a new position in Telos during the 4th quarter valued at about $2,494,000. Finally, Millennium Management LLC raised its position in Telos by 28.1% during the third quarter. Millennium Management LLC now owns 2,090,011 shares of the company's stock worth $14,296,000 after acquiring an additional 457,997 shares during the last quarter. 62.14% of the stock is owned by hedge funds and other institutional investors.

Analyst Upgrades and Downgrades

Several research firms have recently issued reports on TLS. Wedbush reduced their price objective on shares of Telos from $10.00 to $8.00 and set an "outperform" rating on the stock in a research report on Tuesday, March 17th. BMO Capital Markets lowered their price objective on shares of Telos from $8.00 to $5.00 and set a "market perform" rating for the company in a research report on Monday, March 16th. Finally, Weiss Ratings reaffirmed a "sell (d-)" rating on shares of Telos in a report on Monday, April 20th. Two investment analysts have rated the stock with a Buy rating, two have given a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat, the company has an average rating of "Hold" and an average price target of $7.38.

Telos Company Profile

Telos Corporation NASDAQ: TLS is a provider of cybersecurity, secure communications, and enterprise IT solutions designed to help organizations manage risk, accelerate mission delivery and maintain compliance. The company's core business activities encompass risk management and compliance automation, secure mobility, zero-trust architecture, cloud security, and identity and access management. Telos serves a diverse customer base that includes U.S. federal agencies, the Department of Defense, intelligence communities and select commercial enterprises.

Among its flagship offerings is the Xacta® platform, which automates assessment and authorization for IT systems and cloud environments, helping clients streamline compliance with NIST, FedRAMP and other frameworks.

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