Telos Corporation Reports Robust Q4 2025 Results, Signals Double-Digit Growth for 2026

Telos Corporation (NASDAQ: TLS) has released its financial results for the fourth quarter and full year ended December 31, 2025, providing investors with several notable updates on the company’s operational performance, cash flow, share repurchases, and forward outlook for 2026.

Key Financial Highlights

• Revenue Growth: Telos delivered a remarkable 77% year-over-year growth in revenue in Q4 2025. The company reported fourth quarter revenues of \$44.8 million, compared to \$21.9 million in the prior year quarter. Full year revenues reached \$187 million (upper end of guidance: \$187–200 million).
• Profitability and Margins:
  • Adjusted Gross Profit: \$17.0 million for Q4 2025, up from \$10.8 million in Q4 2024.
  • Adjusted Gross Margin: 40.9% for Q4 2025, compared to 40.3% a year earlier.
  • Cash Gross Profit: \$19.6 million in Q4 2025, up from \$12.4 million in Q4 2024.
  • Cash Gross Margin: 47.6% in Q4 2025, up from 56.1% in Q4 2024 (noted decline in margin but strong absolute profit growth).
  • GAAP Net Loss: \$(16.3) million for Q4 2025 and \$(9.3) million for Q4 2024. However, Adjusted Net Income was a positive \$4.5 million in Q4 2025, compared to a loss of \$(2.8) million in Q4 2024.
  • EBITDA: \$(15.1) million for Q4 2025, compared to \$(7.4) million a year earlier, but Adjusted EBITDA was positive at \$7.3 million in Q4 2025, swinging from a negative \$(0.8) million in the prior year quarter.
  • GAAP EPS: \$(0.22) for Q4 2025, compared to \$(0.13) a year earlier, but Adjusted EPS was \$0.06 for Q4 2025, compared to \$(0.04) in Q4 2024.
• Cash Flow and Liquidity:
  • Free Cash Flow: Q4 2025 free cash flow was \$6.3 million (13.4% of revenue), a year-over-year improvement of \$21.1 million.
  • Cash Flow from Operations: \$8.0 million in Q4 2025, compared to \$(10.5) million in Q4 2024.
  • Full Year Free Cash Flow: \$21.3 million (12.9% of revenue), up \$61.0 million year-over-year.

Share Repurchase Activity

• Telos continued returning capital to shareholders through buybacks:
  • Q4 2025: Repurchased over 1 million shares, deploying \$6.0 million at an average price of \$5.78 per share.
  • Full Year 2025: Repurchased 3.1 million shares for \$13.6 million at an average price of \$4.38 per share.
  • Share Repurchase Authorization Increased: The Board has raised the authorization to \$75.0 million.

2026 Financial Guidance and Outlook

• Q1 2026 Revenue Guidance: \$44.0 million to \$45.0 million (44%–47% YoY growth).
• Full Year 2026 Revenue Guidance: \$187 million to \$200 million (14%–21% YoY growth).
• Adjusted EBITDA Margin: Management expects further margin expansion and robust cash flow generation.
• Operating Expense Control: The company is targeting lower operating expenses for 2026, supporting margin expansion.

Balance Sheet Position

• Total Assets: \$139.9 million as of December 31, 2025 (compared to \$158.2 million as of December 31, 2024).
• Stockholders’ Equity: \$95.95 million as of December 31, 2025 (down from \$127.1 million as of December 31, 2024), reflecting buybacks and losses in the period.
• Cash and Cash Equivalents: \$54.7 million as of year-end 2025, compared to \$99.4 million at the end of 2024.

Other Noteworthy Items for Shareholders

• Non-GAAP Measures: Management continues to emphasize non-GAAP metrics (Adjusted EBITDA, Cash Gross Profit, etc.) for a clearer view of operating performance.
• Impairment and Restructuring: The company recorded an \$11.7 million impairment loss on intangible assets in 2025 and restructuring expenses of \$0.2 million. These are non-recurring and excluded from adjusted metrics.
• No Indication as an Emerging Growth Company: Telos does not qualify as an emerging growth company and has not elected extended transition for new accounting standards.
• Forward-Looking Risks: Management highlighted risks and uncertainties, including those in the “Risk Factors” section of its SEC filings. Forward-looking statements are not guarantees of future performance, and actual results may differ materially.

Potential Share Price Moving Factors

• Exceptional Q4 and Full Year Growth: The significant 77% revenue growth in Q4 and double-digit full-year growth, coupled with positive adjusted earnings, could drive positive investor sentiment.
• Return to Shareholders: Continued and increased share repurchases signal confidence in the company’s valuation and outlook, potentially supporting the share price.
• 2026 Guidance: Management’s forecast for another year of double-digit revenue growth, margin expansion, and robust cash flow could be a strong catalyst for shares, especially if the company delivers on these targets.
• Operational Improvements: The transition from GAAP net losses to positive adjusted net income and EBITDA demonstrates improving business fundamentals.
• Impairment and Restructuring: While these are one-time charges, their exclusion from adjusted results is important for understanding the company’s underlying profitability.

Conference Call and Additional Information

Management hosted a conference call on March 16, 2026, at 9:30 a.m. ET to discuss the results. The webcast and supplementary presentation are available on the Telos Investor Relations website. Shareholders are encouraged to review the full press release and exhibits for complete details.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Forward-looking statements are subject to risk and uncertainty and actual results may differ materially. Investors should review the company’s filings with the SEC and consult their financial advisor before making investment decisions.

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