Telos (TLS) Q4 2025 earnings summary

Executive summary

• Achieved transformational growth in 2025 with strong revenue gains, significant margin expansion, and improved cash generation, driven by disciplined execution and operating leverage.

• Security Solutions segment now represents over 90% of total revenue, with strong momentum in identity and cybersecurity programs, especially Telos ID.

• Returned capital to shareholders through share repurchases while maintaining a highly liquid and flexible balance sheet.

• Delivered on large programs, secured new business, and scaled the operating model.

• GAAP net loss was $16.3 million in Q4 2025, including a $1.5 million restructuring charge and $14.9 million non-cash goodwill impairment.

Financial highlights

• FY 2025 revenue reached $164.8 million, up 52% year-over-year; Q4 revenue was $46.8 million, up 77% year-over-year, both surpassing guidance.

• Security Solutions revenue grew 95% to $149.6 million for FY 2025 and 105% in Q4; Secure Networks declined 52% for the year.

• Adjusted EBITDA for FY 2025 was $18.1 million (11.0% margin), up $27.8 million year-over-year; Q4 adjusted EBITDA was $7.3 million (15.6% margin).

• Free cash flow for FY 2025 was $21.3 million (12.9% margin), a $61 million improvement year-over-year; Q4 free cash flow was $6.3 million (13.4% margin).

• Returned $13.6 million to shareholders via share repurchases, representing 4.3% of shares outstanding.

Outlook and guidance

• FY 2026 revenue guidance: $187–$200 million, representing 14%–21% year-over-year growth, mainly from existing programs.

• Adjusted EBITDA for 2026 projected at $20.6–$28.0 million (margin 11.0%–14.0%).

• Cash gross margin for FY 2026 forecasted at 37%–39.5%, lower than 2025 due to revenue mix and expense recognition timing.

• Q1 2026 revenue expected to grow 44%–47% year-over-year to $44–$45 million.

• Continued robust cash flow and additional share repurchases anticipated, with lower operating expenses.