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Dec 31, 2024
Telos Q4 2024 Earnings Report
Telos reported a revenue decline in Q4 2024 while improving gross margins and reducing adjusted EBITDA loss.
Key Takeaways
Telos' Q4 2024 revenue fell 35.8% year-over-year to $26.4 million, mainly due to a reduction in Secure Networks revenue. The company achieved a gross margin of 40.3%, a 6 percentage-point increase from Q4 2023. Despite a GAAP net loss of $9.3 million, adjusted EBITDA improved to a $0.2 million loss from a $3.2 million loss in Q4 2023, reflecting cost optimization efforts. Free cash flow was negative $14.8 million due to increased working capital needs.
Revenue decreased 35.8% year-over-year to $26.4 million.
GAAP net loss widened to $9.3 million from $7.0 million in Q4 2023.
Adjusted EBITDA improved to a loss of $0.2 million from a $3.2 million loss in Q4 2023.
Free cash flow was negative $14.8 million due to working capital investments.
Forward Guidance
Telos expects sequential revenue growth of 7-15% in Q1 2025, with improving profitability and positive cash flow.
Positive Outlook
- Q1 2025 revenue forecasted between $28.2 million and $30.2 million.
- Sequential revenue growth expected between 7-15%.
- Adjusted EBITDA loss expected to improve to a range of $1.8 million to $0.8 million.
- Positive cash flow anticipated in Q1 2025.
- Continued expansion of TSA PreCheck enrollment locations.
Challenges Ahead
- Revenue remains significantly lower than Q4 2023 levels.
- Free cash flow remains negative due to working capital investments.
- Secure Networks segment revenue declined sharply.
- Stock-based compensation remains a high expense item.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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