TLS

Investors might want to bet on Telos Corporation (TLS), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook. Analysts' growing optimism on the earnings prospects of this company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank. The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008. Consensus earnings estimates for the next quarter and full year have moved considerably higher for Telos Corporation, as there has been strong agreement among the covering analysts in raising estimates. The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate: For the current quarter, the company is expected to earn $0.04 per share, which is a change of -55.6% from the year-ago reported number. Over the last 30 days, one estimate has moved higher for Telos compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 73.75%. The company is expected to earn $0.15 per share for the full year, which represents a change of +66.7% from the prior-year number. There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, three estimates have moved up for Telos versus no negative revisions. This has pushed the consensus estimate 74.12% higher. Thanks to promising estimate revisions, Telos currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500. While strong estimate revisions for Telos have attracted decent investments and pushed the stock 11.2% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Telos Corporation (TLS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Monday, Aug. 10, 2026 at 9:30 a.m. ET Director of Corporate Communications - Allison Phillipp Chairman and Chief Executive Officer - John Wood Executive Vice President and Chief Financial Officer - Mark Bendza Executive Vice President of Security Solutions - Mark D. Griffin Operator: Good day, and thank you for standing by. Welcome to the Telos Corporation's second quarter 2026 Earnings Conference Call. At this time, After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press 1-1 on your telephone. You will then hear an automated message advising that your hand is raised. If you would like to remove yourself from the queue, please press 1-1 again. Please be advised that today's conference is being recorded. Would now like to turn the conference over to your speaker for today, Allison Phillipp, Director of Corporate Communications. Please go ahead. Allison Phillipp: Good morning. Thank you for joining us to discuss Telos Corporation's second quarter 26 financial results. With me today is John Wood, Chairman and CEO of Telos; Mark Bendza, executive vice president and CFO of Telos and Mark D. Griffin, executive vice president of security solutions. Let me quickly review the format of today's presentation. Mark Bendza will begin with remarks on our second quarter results and full year outlook. We will then open the line for Q&A John Wood and Mark D. Griffin will also join us. The second quarter financial results issued earlier today. And are posted on the Telos Investor Relations website where this call is being simultaneously webcast. Additionally, we have provided presentation slides on our Investor Relations website. Before we begin, we want to emphasize that some of our statements on this call, including all of those relating to 2026 company performance, plans and operations, are forward looking statements. And are made under the safe harbor provisions of the federal securities laws. These statements are based on current expectations and assumptions, that are subject to risks and uncertainties. Actual results could materially differ for various reasons including the factors described in today's financial results summary, in the comments made during this conference call and in our SEC filings. We do not undertake any duty to update any forward looking statement. In addition, during today's call, we will discuss non GAAP financial measures. Which we believe are useful as supplemental and clarifying measures. To help investors understand Telos' financial performance. These non GAAP financial measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. You can find additional disclosures regarding these non GAAP measures including reconciliations with comparable GAAP results. In our second quarter results summary and on the Investor Relations portion of our website. Please also note that financial comparisons are year over year unless otherwise specified. The webcast replay of this call will be available on our company site under the Investor Relations link. With that, I will turn the call over to Mark Bendza. Gary Mark Bendza: Thank you, Allison, and good morning, everyone. We are pleased to report another strong quarter. Highlighted by results that exceeded the high end of our guidance range, strong cash flow generation accelerated share repurchases, and a meaningful increase in our full year profitability outlook. These results reflect the strength of our business and our continued ability to solve complex mission critical challenges for our customers. Telos helps the world's most security conscious organizations solve those challenges by combining proven cybersecurity digital identity, and secure networking solutions. Combined with deep mission expertise and a flexible approach to addressing unique customer requirements. Our solutions strengthen security improve operational efficiency, accelerate compliance, and help customers adapt to an evolving threat landscape. Let's turn to slide 3. Total company revenue increased 33% year over year to $47.7 million. Exceeding our guidance range of $44 million to $46 million driven by stronger than forecasted performance in Telos ID. GAAP gross margin was 35%. And cash gross margin was 40.6%. Both above our expectations. Reflecting disciplined execution across large programs in Telos ID. As a reminder, given the diversity of our revenue streams, gross margins will fluctuate from quarter to quarter, based on revenue mix. Adjusted operating expenses declined by more than $800 thousand year over year but were approximately $500 thousand above guidance assumptions. Primarily reflecting higher TSA precheck marketing activity and incentive compensation accruals. Adjusted EBITDA exceeded the high end of our guidance range, reaching $6.9 million compared to guidance of $5 million to $6 million. Adjusted EBITDA margin expanded to 14.4%, up significantly from 1.1% in the prior year period. Let's turn to slide 4 to discuss cash flow. Over the past few years, we have transformed Telos into an increasingly cash generative business. Strong revenue growth, lower operating expenses, and disciplined working capital management have significantly improved our free cash flow margins while reducing quarter to quarter cash flow volatility. Operating cash flow for the second quarter was $8.8 million and free cash flow totaled $6.6 million. Representing a 13.9% free cash flow margin. This marks our sixth consecutive quarter with a free cash flow margin above 12%. During the quarter, we deployed $4.7 million to repurchase more than 1 million shares at an average price of $4.50 per share. Let's turn to slide 5 to discuss our third quarter guidance. For the third quarter, we forecast revenue in a range of $49.2 million to $50.6 million. down slightly year over year due to unusually high nonrecurring revenue associated with the start up of a new program in the comparable period last year. Excluding the year over year differential in nonrecurring revenue, third quarter revenue guidance implies 6% growth at the midpoint. We expect cash gross margin to be 37.5% to 38.5%. Reflecting the anticipated effects of contingency reserves on fixed price contracts and normal fluctuations in revenue mix. Adjusted operating expenses are expected to be approximately $400 thousand lower than the prior year. Adjusted EBITDA is expected to be between $6 million and $6.8 million representing a 12.2% to 13.4%. Let's turn to slide 6 to discuss our updated full year outlook. Based on our strong first half execution, we are raising our full year profitability outlook. We are increasing our adjusted EBITDA guidance to a range of $23.6 million to $28.6 million up from our previous guidance of $20.6 million to $28 million We are also raising our adjusted EBITDA margin outlook to 12.6% to 14.7% representing an improvement of approximately 70 to 160 basis points versus our prior forecast. In addition, we are raising our full year cash gross margin outlook to 39% to 40% up from our previous forecast of 38.2% to 39.5%. While lowering our adjusted operating expense forecast by approximately $1.7 million Our full year revenue outlook is now $187 million to $195 million. Starting in the fourth quarter, we expect the resale of low margin third party software to begin phasing out. While this revenue stream contributes meaningful revenue, it carries only a single digit gross margin. And is not consistent with the margin profile we are building across the company. As a result, our revenue outlook is approximately $2.5 million lower at the midpoint than our previous guidance. Beyond 2026, the full run rate impact will be $33 million of revenue per year with only a modest impact on profit. Because this revenue stream carries a single digit gross margin, eliminating it is expected to improve total company cash gross margin by over 600 basis points on a run rate basis all else being equal. In addition, we expect to realize 400 basis points of additional cash gross margin accretion in the second half of 27, after we complete the expense recognition of certain prior period investments in our TSA PreCheck program. Accordingly, we expect the combination of these 2 items to improve our cash gross margins by approximately 10 percentage points during the second half of next year, all else being equal. Before I conclude, I would like to spend a few minutes discussing growth, and new business opportunities. On our last earnings call, we mentioned that we had submitted proposals representing nearly $500 million in total contract value. And expected the government to make award decisions during the second half of 26. We continue to expect award decisions in the second half of the year. Consistent with prior quarters, the timing of contract awards is determined by our government customers and may vary based on their priorities and procurement schedules. These opportunities span both our security solutions and secure network segments. With a heavy concentration in security solutions. Beyond these submitted proposals, we continue to build a healthy pipeline while remaining disciplined in pursuing new opportunities that align with our strategic priorities. Let's turn to slide 7 to wrap up. The second quarter reflects the continued execution of our strategy. We are delivering profitable growth generating consistent free cash flow, and allocating capital in ways that we believe create long term shareholder value. Looking ahead, we are encouraged by the opportunities in our pipeline as award decisions are made over the coming quarters. Overall, we are pleased with our first half performance. Confident in our updated full year outlook, and remain focused on executing our strategy to drive profitable growth generate steady cash flow, and create long term value for our shareholders. With that, operator, please open the line for questions. Operator: Thank you. Please press 1-1 on your telephone. You will hear that automatic message advising that your hand is raised. You would like to remove yourself from the queue, press 1-1 again. We also ask that you wait for your name and company to be announced before proceeding with your question. 1 moment while we compile the Q&A roster. First question will be coming from the line of Erik Suppiger. Of B. Riley. Please go ahead. Erik Suppiger: Yes. Thanks for taking the question. First off, on the on the TSA PreCheck, any update on how your work with the post office is, is working? And then secondly, on the September quarter come the upcoming quarter, can you just discuss the kind of the nature of fiscal year end spending? What are your what are your expectations in terms of the health of the fiscal year end budgets here? Gary Mark Bendza: Yeah. Hey, Erik Good morning. Thanks for the question. So this is Mark Bendza. I will start. So first, on TSA PreCheck, program is going really well. We are very pleased with it. First off market share is up significantly from the same period last year. We are expecting normal seasonality in the second half. Generally speaking from what we have seen in the last couple of years. Second half market, tends to be lighter than the first half, so that is reflected in our guidance. But overall, very pleased with how that program is trending and how our market share is trending. I will turn it to Mark D. Griffin to comment on porkchips. Mark D. Griffin: Hello. Yes. You will see in the Baird near future an additional couple sites with the post office that we are rolling out as part of the pilot. We are pleased with the progress we are making, and we look forward to additional expansion there. Spending September end spending, government spending was the was the other question. Is that right, Erik? Erik Suppiger: Yep. that is right. Yep. Gary Mark Bendza: Yeah. So why do not I start, and then Christina can supplement. So as we as we mentioned, we have a solid portfolio of proposals outstanding. it is actually up a little bit from last earnings call. Last earnings call, we were little under $500 million total contract value. I would say now we are a little over $500 million total contract value. Indications are still that awards on those opportunities. Should be decided sometime here in the second half. Of course, that is fully in the fully under the control of the customer. But we are still expecting reward decisions sometime here in the second half. I do not know. Mark, Christina, if you want to add to that. Mark D. Griffin: Yes. The award decision is still looks solid for moving forward. So we still have quite a few on the pipeline that are expected to be awarded between now and the end of the government fiscal year, which is the end of September. With the progress, it looks like congress is making on extension of a budget, we hope to roll into the October time frame with no lapse in additional award for the fourth quarter as well. Gary Mark Bendza: Okay. Very good. Thank you. Thanks, sir. Operator: Thank you. 1 moment for the next question. Next question is coming from the line of Matthew Calitri. Of Needham and Company. Please go ahead. Matthew Calitri: Hey, guys. This is Matthew Calitri over at Needham. Thank you for taking our questions. I was hoping you guys could provide a little bit more color on that single digit gross margin third party software revenue. So understood on the margin profile, and great to see the profitability improvements you guys have been driving. But what exactly is that revenue? Like, is it on the security solutions or on the network side? And, like, how are you guys thinking about balancing growth and profitability here? Gary Mark Bendza: Yeah. Good morning, Matthew. Thanks for the question. Mark Bendza here. So that revenue stream is part of a much larger program. Within security solutions There are multiple revenue streams within that program that were part of, you know, the overall RFP when we bid for this program. Clearly, that is not a revenue stream that we would otherwise pursue as a stand alone revenue stream. It just it does not you know, align with the portfolio that we are developing and the margin profile, the type of business we pursue. But because it was part of an overall program, that aligns very well. The overall program aligns very well with our portfolio. You know, that revenue stream came along with it when we won it. So that revenue stream will start to phase out in the fourth quarter Like I said, single digit margin on that revenue stream. And you know, we will see a very meaningful cash gross margin accretion as a result of it. And then it will take--you know, because the revenue stream because the revenue stream carries such a low gross margin, it will take you know, relatively little additional revenue to fully offset the profit that we would that would go away with that. Does that answer your question, Matthew? Matthew Calitri: Yeah. Yeah. Definitely. That makes a lot of sense. Thank you for that. And then you had called out Telos ID as driving the strength in the quarter. Anything further you can you share there of, like, what exactly or was it broad based strength or whatever? And is there I know, obviously, by the by the nature of the name of it, there is not a ton you can share on the confidential IT security, but any there to, like, kinda help us get an idea of how momentum is there? Gary Mark Bendza: Yeah. In the quarter, you know, the beat above the top end of the revenue guide was primarily in our TSA PreCheck program and our program with the Defense Manpower Data Center. Those are those are 2 large programs in the portfolio. Both performed well relative to guidance. And then on gross margins, gross margins outperformed really as a as a result of just a terrific job our program managers are doing managing fixed price fixed price contracts. Every quarter when we guide, we include in our guide some contingency on fixed price programs. You have that in our sort of quarter guide as well. And then, you know, we have that in first quarter and second quarter, and then our program managers continue to do a great job managing the risk that we have added contingencies for into our guide. And so we have outperformed gross margins in part as a result of that. For the last 2 quarters. Excellent. Thanks so much. Operator: Thank you. 1 moment for the next question. The next question is coming from the line of Bradley Clark of B and Capital Markets. Please go ahead. Bradley Clark: Hi. Thanks for the question. I just want to ask about some of the awards that remain to be determined in the later part of the year. What are some considerations or general puts and takes in these awards and how they may impact the overall pipeline growth heading into next year? Either on the positive or the negative side? Gary Mark Bendza: Yes, Brad. Thanks for the question, Mark Bendza here. So you know, like we have talked about, it is a really solid portfolio of opportunities, both in magnitude as well as how we are positioned on those opportunities A lot of those opportunities are in the similar scope of work to the confidential IT security work that we have mentioned in the past. We are performing for the federal government. So we do have some solid past performance history on that on that type of work. So we feel we are well positioned there. And given the timing of these opportunities, you know, it is less of a P and l driver for this year. Much more of an opportunity to drive p and l for next year. Did I answer your question, Brad? Yes. Thank you. Okay. Great. Operator: 1 moment for the next question, please. The next question will be coming from the line of Rudy Kessinger of D. A. Davidson. Please go ahead. Rudy Kessinger: Thanks for taking my questions, guys. On this third party software revenue, this $33 million was this part of the DMDC contract, or was this separate? And when did this revenue start? I guess, You know, was it 33 million the last several years, or how long has it been in the numbers? Gary Mark Bendza: Yeah. Hey, Rudy. Mark Bendza here. So yes, it is 1 of the revenue streams in that program. And it really kicked in, I think it was I wanna say, like, second quarter of 25. Okay. Rudy Kessinger: So going forward, I guess, with that being out of DMDC, I am just trying to get a sense of revenue concentration with between PreCheck and that DMDC CC contracted. I guess, to your expectation for 2027 on DMDC, is it now more like around a $20 million to $30 million a year of revenue versus the prior I think, $50 million to $75 million range. I am just trying to get a sense of how large that contract will be with that. Party software revenue stripped out. Gary Mark Bendza: Yeah. I would rather not get into too much detail deconstructing individual programs. But what I can say is there is $33 million of that single digit margin software that will come out next year. Okay. Rudy Kessinger: Got it. And then lastly, me, just on PreCheck, I know you called out--you have said Telos ID, not specifically PreCheck, but just curious how the PreCheck program's been ramping, how, you know, precheck enrollments and renewal volumes that you guys are seeing in market share that you are getting is tracking versus expectations? Gary Mark Bendza: Yeah. Program's doing great. So market share, as I mentioned earlier, is up significantly in the first half of this year compared to the comparable period last year. Well, last year, we spent a lot of time and energy and management attention building out our network of enrollment locations. And this year, we are spending much more time focused on productivity of those locations. And so in part as a well, not in part, as a function of those 2 things, both the ramp of the locations and the focus on productivity of those locations, we are seeing some pretty significant step ups in market share year over year. Got it. Thanks for my questions, guys, and congrats on the results in the quarter. Great. Thanks. Operator: Thank you. 1 moment for the next question. The next question is coming from the line of Nehal Chokshi of Northland Capital Markets. Please go ahead. Nehal Chokshi: All right. Great. Congrats on a strong quarter. For the full year EBITDA raise, can you parse out the drivers of that? I can think of at least a couple here. The ongoing OpEx control, potentially the phasing out of that third party software and perhaps any other drivers I have missed. Gary Mark Bendza: Yeah. So let's see. there is--well, you have kind of hit on them, actually. So we have better visibility on OpEx. So we are lowering our OpEx assumption for the year. Cash gross margins are up due to outperformance in the first half. In particular, on a couple things. 1, mix, more favorable mix, and 2, outperformance on fixed price contracts relative to contingencies we have in our guidance. Combined with taking out some of the lower margin revenue in the fourth quarter, Combination of all those things allowed us to take up our cash gross profit cash gross margin rather, guidance, and then a very modest tweak at the midpoint of the revenue range primarily driven by the elimination of low margin software in the fourth quarter. Okay. Nehal Chokshi: Great. And just to be clear, the nonrecurring revenue from Q2 2025, that is been normalized out. And would then say that, uh, revenue would be up I am sorry. From Q3 2025. If we take it out, normalize that, say, okay. The guy revenue guidance would be up 6% year over year. Is that nonrecurring revenue the same as the third party software that is being phased out in the fourth quarter? Gary Mark Bendza: No. it is actually--it is different. That was some short term non revenue associated with the start up of a new program. it is a different it is a different revenue stream. Got it. Nehal Chokshi: Okay. Alright. And then you are guiding down EBITDA $500 thousand quarter-over-quarter for Q3. Versus a $2 million midpoint increase in revenue. Presumably, that is mix. But if there is anything else going on, please let us know. Gary Mark Bendza: The main driver there really is we are guiding cash gross margin down in the third quarter. And it is really a function of a couple of things. it is it is 1, the contingency that I mentioned in fixed price contracts you know, we put that in our guide every quarter. And our program managers continue to outperform. We guided in both the first quarter and the second quarter cash gross margins in the high 30s ended up coming in the low 40s. Third quarter, we are guiding again kind of high 30s. In part due to those contingencies. We will see how that goes in the third quarter here. But then also, we do have some seasonal mix impact, in particular, from TSA PreCheck that I mentioned earlier, We have been noticing in recent years that second quarter tends to be lighter than the first quarter. So we have embedded that in our guide. We will see if that seasonality holds this year. Maybe it maybe it will outperform this year. We will see what the market does. But we wanted to make sure that we at least reflected that in the guidance. Nehal Chokshi: Alright. Great. And then as you pointed out, your free cash flow margin has significantly improved over the past 6 quarters, consistently above 12% at or above 12%. And from what I understand, I think that premium free cash flow margin to your defense contract computers So a couple of questions behind this point. 1, what are the fundamental drivers of the premium free cash flow margin? It simply expense control, or is this a reflection of something else? Such as having migrated from being a cost plus to a fixed price contractor over the multiple decades that Telos has been in existence for. Gary Mark Bendza: Yeah, it is a good question. I would say there are a couple of drivers there. First, our cash gross margin profile is much better than a lot of those companies that you are referring to. And that is a function of, in part, you know, years of investment in IP for some of our businesses. that is 1. 2, we shifted from we shifted from much more of a cost plus model to much more of a fixed price model many years ago. And so we take more risk than some of those other companies. And we are appropriately compensated for taking that risk. And I would say also, you know, more recently, you know, we have done a lot of work on rightsizing our cost base. Over the last you know, 3, 4 years. And I think we have gotten that to a much better much better place now. I would also say we are much more of a capital light business model than other folks. So we carry a lot less PP and E and CapEx. And then lastly, we have done a ton of work the last call it, year and a half, 2 years around working capital. Getting our collections aligned within the quarter with our payments to suppliers and subcontractors. So there are a lot of things that went into driving those free cash flow margins to where they are today. And we are very pleased with the results. Nehal Chokshi: Great. So given this now proven premium free cash flow margin, appears 1 would think that Telos becomes an attractive target for some of these larger peers. So what is Telos's Telos-specific receptivity to this potential? Gary Mark Bendza: Yeah. So that is a good question. And we have been getting that question a lot lately. You know, especially from investment bankers and sponsors. Listen, we are laser focused on maximizing value for our shareholders. And I think you know, you have seen that. Over the past in particular, over the past couple of years. We have been able to create a lot of value organically. And, you know, I think that cash flow slide and the earning deck that you referred to tells the story quite well. Yeah. We have driven revenues higher, OpEx lower, excellent cash generation, consistent share repurchases. And we forecast those trends will continue. But if a change of control opportunity clearly represented a superior path, to create value for our shareholders, we would seriously consider. Great. Thank you very much. Okay. Thanks, Nehal. Operator: Thank you. And there are no more questions in the queue. We will now turn the call back over to management for closing remarks. Please go ahead. Gary Mark Bendza: Thank you, operator, and thanks to everyone for joining us today. We are pleased with our first half performance and believe our results reflect continued progress in building a more profitable, cash generative, and scalable business. We look forward to updating you next quarter, In addition, we hope to speak with many of you at the DA Davidson conference tomorrow. The Vivo Technology and Innovation Leaders Conference on November 12, and the Needham Virtual Tech Week on November 18 through 20th. Operator: Thank you. This concludes today's program. Thank you so much for joining. You may now disconnect. Before you buy stock in Telos, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Telos wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Telos (TLS) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Telos Corporation? Here are five stocks we like better. Telos exceeded Q2 expectations: Revenue rose 33% year over year to $47.7 million, while adjusted EBITDA reached $6.9 million, well above guidance. Stronger Telos ID performance, including TSA PreCheck, helped drive the results. Full-year profitability outlook improved: Telos raised its adjusted EBITDA forecast to $23.6 million–$28.6 million, lifted its cash gross-margin outlook to 39%–40%, and reduced projected operating expenses. The company also generated $6.6 million in free cash flow and repurchased more than 1 million shares. Telos is shifting toward higher-margin revenue: Beginning in Q4, it plans to phase out roughly $33 million of annual low-margin third-party software resale revenue, which is expected to increase cash gross margin by more than 600 basis points on a run-rate basis. The company also has more than $500 million in pending government proposals, with potential awards expected mainly to affect 2027 results. Telos (NASDAQ:TLS) reported second-quarter 2026 revenue and adjusted EBITDA above its guidance range, citing stronger-than-expected performance in its Telos ID business, including TSA PreCheck and work with the Defense Manpower Data Center. Revenue rose 33% year over year to $47.7 million, above the company’s forecast of $44 million to $46 million. GAAP gross margin was 35%, while cash gross margin reached 40.6%, both exceeding management’s expectations. Adjusted EBITDA totaled $6.9 million, above the company’s $5 million to $6 million guidance range and compared with an adjusted EBITDA margin of 1.1% in the prior-year quarter. The second-quarter adjusted EBITDA margin was 14.4%. → MarketBeat Week in Review – 08/03 - 08/07 Executive Vice President and CFO Mark Bendza said the results reflected stronger Telos ID performance as well as execution on large programs. He said adjusted operating expenses declined more than $800,000 from a year earlier, although they were about $500,000 higher than the company’s guidance assumptions due primarily to higher TSA PreCheck marketing activity and incentive compensation accruals. Telos reported operating cash flow of $8.8 million and free cash flow of $6.6 million during the quarter, representing a free-cash-flow margin of 13.9%. Bendza said this was the company’s sixth consecutive quarter with a free-cash-flow margin above 12%. → Quantum Earnings Week: Winners and Losers Are Finally Emerging The company repurchased more than 1 million shares for $4.7 million during the quarter, at an average price of $4.50 per share. In response to an analyst question, Bendza attributed Telos’ cash generation to its gross-margin profile, years of investment in intellectual property, a shift toward more fixed-price work, cost-base reductions, a capital-light model, and efforts to improve working-capital management. He said the company has worked to align customer collections within the quarter with payments to suppliers and subcontractors. → Take-Two’s Q1 Results Leave GTA 6 Bulls Stuck in the Fog of War For the third quarter, Telos forecast revenue of $49.2 million to $50.6 million. The range would be slightly below the prior-year period because the comparable quarter included unusually high, non-recurring revenue associated with the startup of a new program. Excluding that difference, the midpoint of the company’s third-quarter outlook implies 6% year-over-year growth, Bendza said. Telos expects third-quarter cash gross margin of approximately 37.5% to 38.5% and adjusted EBITDA of $6 million to $6.8 million, for an adjusted EBITDA margin of 12.2% to 13.4%. The gross-margin outlook reflects contingency reserves on fixed-price contracts and anticipated changes in revenue mix, according to the company. For the full year, Telos raised its adjusted EBITDA outlook to $23.6 million to $28.6 million from its prior range of $20.6 million to $28 million. It also raised its adjusted EBITDA margin forecast to 12.6% to 14.7%, an improvement of roughly 70 to 160 basis points from its previous outlook. The company lifted its full-year cash gross-margin outlook to 39% to 40%, from 38.2% to 39.5%, and lowered its projected adjusted operating expenses by approximately $1.7 million. Full-year revenue is now expected to range from $187 million to $195 million. Beginning in the fourth quarter, Telos expects to begin phasing out resale revenue from low-margin third-party software. Bendza said the revenue stream is part of a larger Security Solutions program and carries a single-digit gross margin. He said it was included in the broader program won by Telos but is not a type of stand-alone business the company would otherwise pursue. The reduced revenue contribution lowered the midpoint of the company’s full-year revenue outlook by approximately $2.5 million. Bendza said the full run-rate effect will be about $33 million of annual revenue with only a modest impact on profit. Management expects removing the software resale stream to improve total company cash gross margin by more than 600 basis points on a run-rate basis, all else equal. Telos also expects roughly 400 basis points of additional cash gross-margin accretion in the second half of 2027 after it completes expense recognition related to certain prior-period TSA PreCheck investments. Together, those items are expected to improve cash gross margin by about 10 percentage points in the second half of 2027, all else equal. Bendza said TSA PreCheck was performing well, with first-half market share “up significantly” from the same period a year ago. He said Telos spent much of last year building its enrollment-location network and has focused this year on improving the productivity of those locations. The company has factored normal second-half seasonality into its outlook, as it has observed that the second half has generally been lighter than the first half in recent years. Mark Griffin, Telos’ executive vice president of Security Solutions, said the company expects to add a couple of U.S. Postal Service sites in the near future as part of its TSA PreCheck pilot. Telos also said it has a growing portfolio of pending government proposals. Bendza said the company had submitted proposals representing slightly more than $500 million in total contract value, up from just under $500 million discussed during the previous earnings call. Management continues to expect award decisions in the second half of 2026, though the timing remains under the control of government customers. Griffin said the company expects several awards between now and the end of the federal fiscal year in September. He added that Telos hopes Congress’ progress toward a budget extension will allow agencies to move into October without a lapse and support additional fourth-quarter awards. Bendza said the opportunities are expected to be a greater driver of profit and loss in 2027 than in 2026. 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. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Telos Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Revenue: Total company revenue increased 33% year-over-year to $47.7 million, exceeding the guidance range of $44 million to $46 million. GAAP Gross Margin: GAAP gross margin was 35%. Cash Gross Margin: Cash gross margin was 40.6%, above expectations. Adjusted Operating Expenses: Declined by more than $800,000 year-over-year, but were approximately $500,000 above guidance assumptions. Adjusted EBITDA: Reached $6.9 million, exceeding the high end of the guidance range of $5 million to $6 million. Adjusted EBITDA Margin: Expanded to 14.4%, up from 1.1% in the prior year period. Operating Cash Flow: Totaled $8.8 million for the second quarter. Free Cash Flow: Totaled $6.6 million, representing a 13.9% free cash flow margin. Share Repurchases: Deployed $4.7 million to repurchase more than 1 million shares at an average price of $4.50 per share. Warning! GuruFocus has detected 4 Warning Signs with TLS. Is TLS fairly valued? Test your thesis with our free DCF calculator. Release Date: August 10, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Telos Corp (NASDAQ:TLS) reported Q2 2026 revenue of $47.7 million, a 33% year-over-year increase, exceeding the high end of its guidance range. Adjusted EBITDA reached $6.9 million, surpassing guidance, with the margin expanding to 14.4% from 1.1% in the prior year. The company generated strong free cash flow of $6.6 million, marking its sixth consecutive quarter with a free cash flow margin above 12%. Telos Corp (NASDAQ:TLS) raised its full-year adjusted EBITDA guidance to $23.6-$28.6 million and improved its cash gross margin outlook to 39%-40%. The TSA PreCheck program is performing well, with market share up significantly in the first half, and the company is expanding its postal service pilot to additional sites. Telos Corp (NASDAQ:TLS) expects Q3 2026 revenue to decline slightly year-over-year due to non-recurring revenue from a program startup in the prior year. The company is phasing out low-margin third-party software resale, which will reduce full-year revenue by approximately $2.5 million at the midpoint and $33 million annually thereafter. Q3 2026 adjusted EBITDA is guided lower sequentially, reflecting contingency reserves on fixed-price contracts and seasonal mix impacts from TSA PreCheck. The timing of contract awards for nearly $500 million in submitted proposals remains uncertain, as it is controlled by government customers. The company's gross margin is expected to fluctuate quarterly due to revenue mix, with Q3 cash gross margin guided at 37.5%-38.5%, down from Q2's 40.6%. Q: Can you provide more color on the single-digit gross margin third-party software revenue that will phase out, and how you're balancing growth and profitability?A: Mark Bendza (CFO) explained that this revenue stream is part of a much larger program within Security Solutions and was included when the company won the overall contract. It does not align with the company's strategic margin profile, but because it was part of a program that aligned well, it came along with the win. The revenue will begin phasing out in Q4 2026. Since it carries a single-digit gross margin, its elimination is expected to improve total company cash gross margin by over 600 basis points on a run-rate basis, and it will take relatively little additional revenue to fully offset the profit that goes away with it. Q: What are the fundamental drivers of your premium free cash flow margins compared to defense contracting peers, and what is the Board's receptivity to a potential acquisition?A: John Wood (CEO) attributed the premium free cash flow margins to a better cash gross margin profile from years of IP investment, a shift from cost-plus to fixed-price contracts, a right-sized cost base, a capital-light business model, and disciplined working capital management. Regarding M&A, he stated the company is laser-focused on maximizing shareholder value and has created significant value organically. However, if a change-of-control opportunity clearly represented a superior path to create value for shareholders, the Board would seriously consider it. Q: Can you parse out the drivers of the full-year guidance raise?A: Mark Bendza (CFO) cited better visibility on OpEx, leading to a lower operating expense assumption for the year. Cash gross margins are up due to outperformance in the first half, driven by a more favorable revenue mix and outperformance on fixed-price contracts relative to contingencies in guidance. This was combined with the removal of lower-margin revenue in Q4. The revenue range was only modestly tweaked at the midpoint, primarily due to the elimination of the low-margin software. Q: What is driving the expected Q3 EBITDA decline quarter-over-quarter, and how is the TSA PreCheck program performing?A: Mark Bendza (CFO) explained that Q3 cash gross margin guidance is lower due to contingency reserves on fixed-price contracts and seasonal mix impacts, particularly from TSA PreCheck, which tends to be lighter in the second half of the year. On PreCheck, the program is performing well, with market share up significantly in the first half of 2026 compared to the prior year, driven by the ramp of enrollment locations and a focus on productivity. Q: What are the considerations and puts and takes for the pending contract awards in the second half of the year?A: John Wood (CEO) noted the portfolio of proposals is now slightly over $500 million in total contract value, up from under $500 million last quarter. The opportunities are heavily concentrated in Security Solutions, with similar scope to the confidential IT security work performed for the federal government. The company feels well-positioned due to solid past performance history. These awards are less of a P&L driver for 2026 and more of an opportunity to drive P&L for 2027. Q: Can you provide an update on the TSA PreCheck program and the work with the post office, as well as expectations for fiscal year-end spending?A: Mark Bendza (CFO) stated the TSA PreCheck program is going well, with first-half market share up significantly year-over-year, though normal seasonality is expected in the second half. Mark Griffin (EVP of Security Solutions) added that a couple of additional post office pilot sites are rolling out soon. On fiscal year-end spending, John Wood (CEO) noted the portfolio of pending proposals is up slightly to over $500 million, with award decisions still expected in the second half, though timing is controlled by the customer. Q: Was the $33 million third-party software revenue part of the DMDC contract, and how long has it been in the numbers?A: Mark Bendza (CFO) confirmed it is one of the revenue streams in that program, which kicked in around Q2 2025. He declined to deconstruct individual programs further but reiterated that approximately $33 million of the single-digit margin software will come out next year. Q: What drove the revenue beat in the quarter, and can you share more on the strength in Telos ID?A: John Wood (CEO) attributed the beat above the top end of the revenue guide primarily to the TSA PreCheck program and the program with the Defense Manpower Data Center. Gross margins outperformed due to excellent program management on fixed-price contracts. The company includes contingency reserves in guidance for fixed-price programs, and program managers have consistently outperformed those contingencies, leading to gross margin beats for the last two quarters. Q: Is the non-recurring revenue from Q3 2025 the same as the third-party software being phased out in Q4?A: Mark Griffin (EVP of Security Solutions) clarified that it is different. The Q3 2025 non-recurring revenue was short-term revenue associated with the startup of a new program, whereas the third-party software being phased out is a separate, ongoing revenue stream. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Telos Corporation (TLS) came out with quarterly earnings of $0.04 per share, beating the Zacks Consensus Estimate of $0.02 per share. This compares to a loss of $0.03 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +100.00%. A quarter ago, it was expected that this company would post earnings of $0.02 per share when it actually produced earnings of $0.06, delivering a surprise of +200%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Telos, which belongs to the Zacks Computers - IT Services industry, posted revenues of $47.75 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 5.53%. This compares to year-ago revenues of $35.97 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Telos shares have lost about 6.3% since the beginning of the year versus the S&P 500's gain of 13.3%. While Telos has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Telos was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.03 on $51.59 million in revenues for the coming quarter and $0.13 on $194.2 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Computers - IT Services is currently in the top 42% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, AIB Data Centers Inc. (AIB), has yet to report results for the quarter ended June 2026. This company is expected to post quarterly loss of $0.01 per share in its upcoming report, which represents a year-over-year change of +99.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. AIB Data Centers Inc.'s revenues are expected to be $3.56 million, up 4985.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Telos Corporation (TLS) : Free Stock Analysis Report AIB Data Centers Inc. (AIB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Cognex Corporation (CGNX) came out with quarterly earnings of $0.45 per share, beating the Zacks Consensus Estimate of $0.42 per share. This compares to earnings of $0.25 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +7.14%. A quarter ago, it was expected that this company would post earnings of $0.25 per share when it actually produced earnings of $0.34, delivering a surprise of +36%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Cognex, which belongs to the Zacks Electronics - Testing Equipment industry, posted revenues of $291.26 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 0.67%. This compares to year-ago revenues of $249.09 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Cognex shares have added about 98.8% since the beginning of the year versus the S&P 500's gain of 13%. While Cognex has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Cognex was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.37 on $280.33 million in revenues for the coming quarter and $1.48 on $1.11 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Electronics - Testing Equipment is currently in the top 10% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the broader Zacks Computer and Technology sector, Telos Corporation (TLS), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 10. This company is expected to post quarterly earnings of $0.02 per share in its upcoming report, which represents a year-over-year change of +166.7%. The consensus EPS estimate for the quarter has been revised 4.8% higher over the last 30 days to the current level. Telos Corporation's revenues are expected to be $45.24 million, up 25.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cognex Corporation (CGNX) : Free Stock Analysis Report Telos Corporation (TLS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The market expects Telos Corporation (TLS) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 10. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. This company is expected to post quarterly earnings of $0.02 per share in its upcoming report, which represents a year-over-year change of +166.7%. Revenues are expected to be $45.24 million, up 25.8% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 4.76% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Telos, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +33.33%. On the other hand, the stock currently carries a Zacks Rank of #4. So, this combination makes it difficult to conclusively predict that Telos will beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Telos would post earnings of $0.02 per share when it actually produced earnings of $0.06, delivering a surprise of +200.00%. Over the last four quarters, the company has beaten consensus EPS estimates four times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Telos doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Another stock from the Zacks Computers - IT Services industry, Epam (EPAM), is soon expected to post earnings of $3.14 per share for the quarter ended June 2026. This estimate indicates a year-over-year change of +13.4%. Revenues for the quarter are expected to be $1.41 billion, up 4% from the year-ago quarter. Over the last 30 days, the consensus EPS estimate for Epam has been revised 0.4% down to the current level. Nevertheless, the company now has an Earnings ESP of +0.23%, reflecting a higher Most Accurate Estimate. When combined with a Zacks Rank of #4 (Sell), this Earnings ESP makes it difficult to conclusively predict that Epam will beat the consensus EPS estimate. The company beat consensus EPS estimates in each of the trailing four quarters. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Telos Corporation (TLS) : Free Stock Analysis Report EPAM Systems, Inc. (EPAM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Revenue growth of 56% was driven by broad-based strength in Security Solutions, specifically TSA PreCheck enrollment, the DMDC program, and federal confidential IT security work. The company is undergoing a structural transformation toward a more scalable and cash-generative model, achieving its fifth consecutive quarter of free cash flow margins above 12%. Adjusted EBITDA margin expansion to 16.5% resulted from a favorable mix of high-margin revenue streams combined with disciplined cost management from the Q4 restructuring plan. Management implemented an interim leadership structure following the CEO's medical leave, emphasizing that strategic priorities and customer engagement remain uninterrupted. The business is shifting focus toward high-value organic growth while maintaining a liquid balance sheet to support aggressive capital return to shareholders. Operational discipline in working capital management has become a core driver of the company's ability to fund share repurchases from free cash flow. Full-year revenue and EBITDA guidance remains unchanged despite the Q1 beat, reflecting a measured approach to lock in more performance data before revising estimates. The company maintains a multibillion-dollar pipeline with nearly $500 million in outstanding proposals currently awaiting government award decisions in 2026. TSA PreCheck enrollments are expected to follow historical seasonal trends, with lower volume typically occurring in the second half of the year. Management intends to accelerate share repurchases in the second quarter, utilizing free cash flow while maintaining a target cash balance of approximately $50 million. New business awards expected in the second half of 2026 could provide meaningful revenue upside due to front-end loaded contract structures. Chairman and CEO John B. Wood is on a medical leave of absence; an interim three-person executive team and a new Board Chairman have assumed his responsibilities. The company raised the low end of its full-year cash gross margin expectations to reflect the margin strength achieved during the first quarter. Government-driven award timelines remain a variable risk, as the timing of the $500 million proposal pipeline is ultimately controlled by customer requirements. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that the decision not to raise full-year guidance immediately is a disciplined philosophy of waiting for mid-year visibility rather than a reflection of leadership changes. The interim leadership transition was described as seamless due to the multi-year history of working together among the General Counsel and two executive vice presidents. Management stated that higher fuel prices and travel costs have not negatively impacted enrollment demand to date. Growth will be pursued by optimizing existing locations and testing new partnership models, including a current pilot with a modest number of new locations. The $500 million in pending proposals includes two large bids around $90 million each, with the majority of contracts carrying roughly two-year terms. These opportunities are separate from the DMDC prime partner and are concentrated in the Security Solutions segment. Telos has installed over 400 licenses of Exact AI and is running live production pilots within the intelligence community and banking sector. Management anticipates numerous orders later in the year following strong responses from market surveys and demonstrations.