The following is a summary of the Telos Corporation (TLS) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Q2 2024 revenue exceeded guidance at $28.5 million, exceeding the range of $25 million to $28 million.

• Security Solutions and Secure Networks segments drove revenue, contributing $17.9 million and $10.6 million respectively.

• GAAP gross margin hit 34.1%, surpassing the guidance range of 30% to 33.3%.

• Cash gross margin expanded 326 basis points year-over-year, reaching 42%.

• Adjusted EBITDA loss was better than expected at $2.9 million, compared to the guided range of a $6 to $8 million loss.

Business Progress:

• Expanded the TSA PreCheck program significantly to 83 locations from 28 since the last call, aiming for 500 by 2025.

• Received new and renewal contracts with federal and commercial clients, notably with the New Zealand government and a Fortune 100 technology company in the Xacta business segment.

• Further integrated and enhanced offerings within the Secure Networks and Security Solutions divisions.

Opportunities:

• The expansion of TSA PreCheck program represents a significant growth potential, targeting a third of the $200 million market upon full ramp-up.

• New and reawarded multi-year federal contracts valued up to $525 million, subject to ongoing protests, poised to significantly influence revenue pipelines upon resolution.

Risks:

• Ongoing protests over federal contract awards create uncertainty concerning project commencements and revenue recognition.

More details: Telos IR

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