Form 8-K

8-K — TELOS CORP

Accession: 0000320121-26-000021

Filed: 2026-05-11

Period: 2026-05-11

CIK: 0000320121

SIC: 7373 (SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN)

Item: Results of Operations and Financial Condition

Item: Financial Statements and Exhibits

Documents

8-K — tls-20260511.htm (Primary)

EX-99.1 (q12026earningspressrelease.htm)

EX-99.2 (q12026mar312026financialre.htm)

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GRAPHIC (image_telosa.jpg)

XML — IDEA: XBRL DOCUMENT (R1.htm)

8-K

8-K (Primary)

Filename: tls-20260511.htm · Sequence: 1

tls-20260511

0000320121false00003201212026-05-112026-05-11

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

May 11, 2026

Date of Report (Date of earliest event reported)

TELOS CORPORATION

(Exact name of registrant as specified in its charter)

Maryland 001-08443 52-0880974

(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)

19886 Ashburn Road,

Ashburn, Virginia

20147-2358

(Address of principal executive offices) (Zip Code)

(703) 724-3800

(Registrant’s telephone number, including area code)

NOT APPLICABLE

(Former name, former address, and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading symbol Name of each exchange on which registered

Common stock, $0.001 par value per share TLS The Nasdaq Stock Market LLC

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On Monday, May 11, 2026, Telos Corporation (the “Company”) issued a press release announcing a conference call to discuss its financial results for the first quarter ended March 31, 2026, and posted those financial results on its website. A copy of the press release and financial results for the first quarter ended March 31, 2026 are attached as Exhibit 99.1 and Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by reference.

The Company will conduct a conference call to discuss its financial results on Monday, May 11, 2026, at 9:30 a.m., Eastern Time. A live broadcast of the conference call along with a supplemental presentation will be available to the public through links on the Investor Relations section of the Company’s website (https://investors.telos.com).

The information in this Current Report on Form 8-K, including Exhibit 99.1 and Exhibit 99.2 attached hereto, is furnished pursuant to Item 2.02 of this Current Report on Form 8-K. Such information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

99.1

Press Release, issued May 11, 2026

99.2

First Quarter 2026 Financial Results

104 Inline XBRL for the cover page of this Current Report on Form 8-K.

S I G N A T U R E S

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

TELOS CORPORATION

By: /s/ Mark Bendza

Mark Bendza

Chief Financial Officer

Date: May 11, 2026

EX-99.1

Filename: q12026earningspressrelease.htm · Sequence: 2

Document

Exhibit 99.1

Telos Corporation Announces First Quarter 2026 Earnings

Ashburn, Va. – May 11, 2026 – Telos Corporation (NASDAQ: TLS), a leading provider of cyber, cloud and enterprise security solutions for the world’s most security-conscious organizations, has posted its 2026 first quarter financial results on its investor relations website at https://investors.telos.com.

Telos will host a live webcast to discuss its first quarter 2026 financial results today, May 11, 2026, at 9:30 a.m. ET. To access the webcast, visit https://edge.media-server.com/mmc/p/so4sxhaa.

Related presentation materials will be available in the Investors section of the Company’s website. In addition, an archived webcast will be posted on the website approximately two hours after the live event concludes.

About Telos Corporation

Telos Corporation (NASDAQ: TLS) empowers and protects the world’s most security-conscious organizations with efficient, adaptable, and secure solutions that safeguard people, systems, and information. We deliver advanced capabilities across cyber governance, risk, and compliance (GRC) with Xacta®; identity and biometric solutions; secure networks and communications; and TSA PreCheck® enrollment services. Serving the U.S. federal government, regulated industries, and global enterprises, Telos helps customers stay ahead of evolving threats, accelerate compliance, and achieve mission success. Driven by purpose and guided by our core values, we build trusted partnerships, deliver superior solutions, and help create a more secure, interconnected world. Learn more at www.telos.com.

Media: media@telos.com

Investors: InvestorRelations@telos.com

EX-99.2

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Document

Exhibit 99.2

First Quarter 2026 Financial Results

May 11, 2026

Telos Corporation Reports 56% Revenue Growth and Continued Strong Profitability and Cash Flow Margins; Reaffirms Full Year Outlook

•Substantial Growth: Revenue grew 56% year-over-year to $47.7 million, exceeding guidance, and driven by 78% growth in Security Solutions primarily due to the expansion of large programs in Telos ID.

•Healthy Gross Margins: GAAP Gross Margin and Cash Gross Margin1 both exceeded guidance assumptions primarily due to performance in Telos ID. GAAP Gross Margin was 36.4% and Cash Gross Margin1 was 42.3%.

•Rigorous Expense Discipline: GAAP Operating Expenses decreased 25% year-over-year primarily due to lower stock-based compensation expense. Adjusted Operating Expenses1 decreased 8% primarily due to restructuring and cost management initiatives.

•Expanding Operating Margins: GAAP Net Income was $2.0 million. Adjusted EBITDA1 was $7.9 million, exceeding guidance. Adjusted EBITDA Margin1 expanded from 1.2% to 16.5% year-over-year primarily due to revenue growth in Telos ID and lower operating expenses.

•Robust Cash Flow Margins: Cash Flow from Operations was $8.7 million, or 18.1% of revenue. Free Cash Flow1 increased 69% year-over-year to $6.4 million. Free Cash Flow Margin1 increased from 12.3% to 13.4%.

•Continued Share Repurchases. Deployed $2.2 million to repurchase 0.5 million shares at an average price of $4.25 per share in the first quarter of 2026. Repurchases expected to accelerate in the second quarter.

•Forecast: Year-over-year double-digit revenue growth, lower operating expenses, and Adjusted EBITDA Margin2 expansion as well as robust cash flow and accelerated share repurchases in the second quarter. Reaffirming full year outlook.

Financial Guidance for the Second Quarter and Full Year

Second Quarter Full Year

Revenue $44.0 million - $46.0 million $187 million - $200 million

Year-Over-Year Growth 22% - 28% 14% - 21%

Adjusted EBITDA2

$5.0 million - $6.0 million $20.6 million - $28.0 million

Adjusted EBITDA Margin2

11.4% - 13.0% 11.0% - 14.0%

1 Cash Gross Margin, Adjusted Operating Expenses, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Margin are non-GAAP financial measures. Refer to “Non- GAAP Financial Measures” below.

2 Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. The Company has not provided a reconciliation to the most directly comparable GAAP measure to these forward-looking non-GAAP financial measures because certain items are out of the Company’s control or cannot be reasonably predicted. Accordingly, reconciliations of forward-looking Adjusted EBITDA and Adjusted EBITDA Margin are not available without unreasonable effort.

First Quarter 2026 Financial Highlights

Three Months Ended

March 31, 2026 March 31, 2025

(amounts in millions, except per share data)

Revenue $ 47.7 $ 30.6

Gross Profit $ 17.4 $ 12.2

Gross Margin 36.4 % 39.8 %

Adjusted Gross Profit1

$ 17.6 $ 12.4

Adjusted Gross Margin1

36.9 % 40.4 %

Cash Gross Profit1

$ 20.2 $ 13.9

Cash Gross Margin1

42.3 % 45.3 %

GAAP Net Income (Loss) $ 2.0 $ (8.6)

Adjusted Net Income (Loss)1

$ 4.3 $ (2.1)

EBITDA1

$ 4.9 $ (6.7)

Adjusted EBITDA1

$ 7.9 $ 0.4

Adjusted EBITDA Margin1

16.5 % 1.2 %

GAAP EPS, basic $ 0.03 $ (0.12)

Weighted-average Shares of Common Stock Outstanding, basic (GAAP) 73.8 72.7

GAAP EPS, diluted2

$ 0.03 $ (0.12)

Weighted-average Shares of Common Stock Outstanding, diluted/basic2 (GAAP)

77.6 72.7

Adjusted EPS1

$ 0.06 $ (0.03)

Weighted-average Shares of Common Stock Outstanding, diluted/basic2 (non-GAAP)

77.6 72.7

Cash Flow from Operations $ 8.7 $ 6.1

Free Cash Flow1

$ 6.4 $ 3.8

Free Cash Flow Margin1

13.4% 12.3%

1 Adjusted Gross Profit, Adjusted Gross Margin, Cash Gross Profit, Cash Gross Margin, Adjusted Net Income (Loss), EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EPS, Free Cash Flow and Free Cash Flow Margin are non-GAAP financial measures. Refer to "Non-GAAP Financial Measures" below.

2 This line is labeled “diluted/basic” because for a period of net loss, potentially dilutive shares are not included in the calculation of diluted earnings (loss) per share, because to do so would be anti-dilutive. For the first quarter of 2025, the basic and diluted weighted-average share of common stock outstanding are the same due to a net loss position. For the first quarter of 2026, the basic and diluted weighted-average share of common stock outstanding are different due to a net income position.

Forward-Looking Statements

This summary contains forward-looking statements which are made under the safe harbor provisions of the federal securities laws. These statements are based on the Company’s management’s current beliefs, expectations and assumptions about future events, conditions, and results and on information currently available to them. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The Company believes that these risks and uncertainties include, but are not limited to, those described under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth from time to time in the Company’s filings and reports with the U.S. Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K for the year ended December 31, 2025, and its Quarterly Reports on Form 10-Q, as well as future filings and reports by the Company, copies of which are available at https://investors.telos.com and on the SEC’s website at www.sec.gov.

Although the Company bases these forward-looking statements on assumptions that its management believes are reasonable when made, the Company cautions the reader that forward-looking statements are not guarantees of future performance and that the Company’s actual results of operations, financial condition and liquidity, and industry developments may differ materially from statements made in or suggested by the forward-looking statements contained in this summary. Given these risks, uncertainties, and other factors, many of which are beyond its control, the Company cautions the reader not to place undue reliance on these forward-looking statements. Any forward-looking statement speaks only as of the date of such statement and, except as required by law, the Company undertakes no obligation to update any forward-looking statement publicly, or to revise any forward-looking statement to reflect events or developments occurring after the date of the statement, even if new information becomes available in the future. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.

Non-GAAP Financial Measures

In addition to our results determined in accordance with U.S. GAAP, we believe the non-GAAP financial measures of EBITDA, Adjusted EBITDA, EBITDA Margin, Adjusted EBITDA Margin, Incremental Adjusted EBITDA, Incremental Adjusted EBITDA Margin, Adjusted Net Income (Loss), Adjusted Earnings Per Share ("EPS"), Adjusted Gross Profit, Adjusted Gross Margin, Cash Gross Profit, Cash Gross Margin, Adjusted Operating Expenses, Cash Operating Expenses, Free Cash Flow and Free Cash Flow Margin are useful in evaluating our operating and cash flow performance. We believe that this non-GAAP financial information, when taken collectively with our GAAP results, may be helpful to readers of our financial statements because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies. A reconciliation is provided below for each of these non-GAAP financial measures to the most directly comparable financial measure stated in accordance with GAAP.

Telos believes that EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Incremental Adjusted EBITDA, Incremental Adjusted EBITDA Margin, Adjusted Net Income (Loss), Adjusted EPS, Cash Operating Expenses, and Adjusted Operating Expenses provide the Board of Directors, management and investors with a clear representation of the Company’s core operating performance and trends, provide greater visibility into the long-term financial performance of the Company, and eliminate the impact of items that do not relate to the ongoing operating performance of the business. Further, Adjusted EBITDA is used by the Board of Directors and management to prepare and approve the Company’s annual budget, and to evaluate the performance of certain management personnel when determining incentive compensation. Adjusted Gross Profit, Cash Gross Profit, Adjusted Gross Margin and Cash Gross Margin provide management and investors a clear representation of the core economics of gross profit and gross margin without the impact of non-cash expenses and sunk costs expended. Telos uses Free Cash Flow and Free Cash Flow Margin to understand the cash flows that directly correspond with our operations and the investments the Company must make in those operations, using a methodology that combines operating cash flows and capital expenditures. Further, Free Cash Flow may be useful to management and investors in evaluating the Company's operating and cash flow performance and liquidity, and the Board of Directors uses this measure to evaluate the performance of certain management personnel when determining incentive compensation. Telos believes these non-GAAP financial measures facilitate the comparison of the Company’s operating and cash performance on a consistent basis between periods by excluding certain items that may, or could, have a disproportionately positive or negative impact on the Company’s results of operations in any particular period. When viewed in combination with the Company’s results prepared in accordance with GAAP, these non-GAAP financial measures help provide a broader picture of factors and trends affecting the Company’s results of operations.

The Company defines EBITDA as net income (loss), adjusted for non-operating (income) expense, interest expense, provision for (benefit from) income taxes, and depreciation and amortization. The Company defines Adjusted EBITDA as EBITDA, adjusted for stock-based compensation expense, impairment loss on goodwill and intangible assets, and restructuring expenses (adjustments). The Company defines EBITDA Margin, as EBITDA as a percentage of total revenue. The Company defines Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of total revenue. The Company defines Incremental Adjusted EBITDA as the net change between current and prior year Adjusted EBITDA. The Company defines Incremental Adjusted EBITDA Margin as Incremental Adjusted EBITDA as a percentage of the net change between current and prior year total revenue. The Company defines Adjusted Net Income (Loss) as net (loss) income, adjusted for non-operating (income) expense, stock-based compensation expense, impairment loss on goodwill and intangible assets, and restructuring expenses (adjustments). The Company defines Adjusted EPS as Adjusted Net Income (Loss) divided by the weighted-average number of common shares outstanding for the period. The Company defines Adjusted Gross Profit as gross profit, plus stock-based compensation expense, impairment loss on intangible assets, and restructuring expenses charged under cost of sales. The Company defines Adjusted Gross Margin as Adjusted Gross Profit as a percentage of total revenue. The Company defines Cash Gross Profit as Adjusted Gross Profit, plus depreciation and amortization. The Company defines Cash Gross Margin as Cash Gross Profit as a percentage of total revenue. The Company defines Adjusted Operating Expenses as operating expenses, adjusted for stock-based compensation expenses, impairment loss on goodwill and intangible assets, and restructuring expenses (adjustments). The Company defines Cash Operating Expenses as Adjusted Operating Expenses, adjusted for depreciation and amortization, and capitalized software development costs. Free Cash Flow is defined as net cash (used in) provided by operating activities, less net purchases of property and equipment, and capitalized software development costs. The Company defines Free Cash Flow Margin as Free Cash Flow as a percentage of total revenue.

EBITDA, Adjusted EBITDA, EBITDA Margin, Adjusted EBITDA Margin, Incremental Adjusted EBITDA, Incremental Adjusted EBITDA Margin, Adjusted Net Income (Loss), Adjusted EPS, Adjusted Gross Profit, Adjusted Gross Margin, Cash Gross Profit, Cash Gross Margin, Adjusted Operating Expenses, Cash Operating Expenses, Free Cash Flow, and Free Cash Flow Margin each has limitations as an analytical tool, and you should not consider any of them in isolation, or as a substitute for analysis of results as reported under GAAP. Among other limitations, each of EBITDA, Adjusted EBITDA, EBITDA Margin, Adjusted EBITDA Margin, Incremental Adjusted EBITDA, Incremental Adjusted EBITDA Margin, Adjusted Net Income (Loss), Adjusted EPS, Adjusted Gross Profit, Adjusted Gross Margin, Cash Gross Profit, Cash Gross Margin, Adjusted Operating Expenses, Cash Operating Expenses, Free Cash Flow and Free Cash Flow Margin does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments, does not reflect the impact of certain cash and non-cash charges resulting from matters considered not to be indicative of ongoing operations, and does not reflect income tax expense or benefit. Other companies in the Company’s industry may calculate Adjusted EBITDA, Adjusted EBITDA Margin, Incremental Adjusted EBITDA, Incremental Adjusted EBITDA Margin, Adjusted Net Income (Loss), Adjusted EPS, Adjusted Gross Profit, Adjusted Gross Margin, Cash Gross Profit, Cash Gross Margin, Adjusted Operating Expenses, Cash Operating Expenses, Free Cash Flow and Free Cash Flow Margin differently than Telos does, which limits its usefulness as a comparative measure. Because of these limitations, neither EBITDA, Adjusted EBITDA, EBITDA Margin, Adjusted EBITDA Margin, Incremental Adjusted EBITDA, Incremental Adjusted EBITDA Margin, Adjusted Net Income (Loss), Adjusted EPS, Adjusted Gross Profit, Adjusted Gross Margin, Cash Gross Profit, Cash Gross Margin, Adjusted Operating Expenses, Cash Operating Expenses, Free Cash Flow, nor Free Cash Flow Margin should be considered as a replacement for gross profit, gross margin, net (loss) income, earnings per share, operating expenses, net cash flows (used in) provided by operating activities, or operating cash flow margin as determined by GAAP, or as a measure of profitability. Telos compensates for these limitations by relying primarily on the Company’s GAAP results and using non-GAAP measures only for supplemental purposes.

About Telos Corporation

Media:

media@telos.com

Investors:

InvestorRelations@telos.com

TELOS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

For the Three Months Ended

March 31, 2026 March 31, 2025

(in thousands, except per share amounts)

Revenue – Security Solutions $ 45,970 $ 25,818

Revenue – Secure Networks 1,772 4,798

Total revenue 47,742 30,616

Cost of sales – Security Solutions (excluding depreciation and amortization) 26,514 13,257

Cost of sales – Secure Networks (excluding depreciation and amortization) 1,257 3,674

Depreciation and amortization 2,596 1,503

Total cost of sales 30,367 18,434

Gross profit 17,375 12,182

Operating expenses

Research and development expenses 1,357 1,571

Selling, general and administrative expenses 14,563 19,633

Total operating expenses 15,920 21,204

Operating income (loss) 1,455 (9,022)

Other income 697 561

Interest expense (111) (147)

Income (loss) before income taxes 2,041 (8,608)

(Provision for) benefit from income taxes (18) 4

Net income (loss) $ 2,023 $ (8,604)

Net income (loss) per share:

Basic $ 0.03 $ (0.12)

Diluted $ 0.03 $ (0.12)

Weighted-average number of shares outstanding:

Basic 73,822 72,715

Diluted 77,615 72,715

TELOS CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

March 31, 2026 December 31, 2025

(in thousands, except per share amount and share data)

Assets:

Cash and cash equivalents $ 50,230 $ 53,180

Accounts receivable, net 16,425 17,000

Prepaid expenses 10,963 10,565

Deferred program expenses 14,326 10,006

Other current assets 3,681 3,662

Total current assets 95,625 94,413

Property and equipment, net 2,694 3,071

Finance lease right-of-use assets, net 3,865 4,170

Operating lease right-of-use assets, net 354 410

Goodwill 3,006 3,006

Intangible assets, net 29,808 30,281

Other assets 4,543 4,513

Total assets $ 139,895 $ 139,864

Liabilities and Stockholders' Equity:

Liabilities:

Accounts payable $ 2,583 $ 4,087

Accrued liabilities 6,614 6,900

Accrued compensation and benefits 7,363 12,309

Contract liabilities – current portion 18,096 11,223

Finance lease obligations – current portion 2,072 2,033

Operating lease obligations – current portion 254 232

Total current liabilities 36,982 36,784

Contract liabilities – non-current portion 951 1,124

Finance lease obligations – non-current portion 5,078 5,608

Operating lease obligations – non-current portion 125 186

Deferred income taxes 55 53

Other liabilities 173 159

Total liabilities 43,364 43,914

Commitments and contingencies

Stockholders’ equity:

Common stock 113 111

Additional paid-in capital 458,392 459,828

Accumulated other comprehensive loss (104) (96)

Accumulated deficit (361,870) (363,893)

Total stockholders’ equity 96,531 95,950

Total liabilities and stockholders’ equity $ 139,895 $ 139,864

TELOS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

For the Three Months Ended

March 31, 2026 March 31, 2025

(in thousands)

Cash flows from operating activities:

Net income (loss) $ 2,023 $ (8,604)

Adjustments to reconcile net income (loss) to cash flows from operations:

Stock-based compensation 2,971 7,048

Depreciation and amortization 3,429 2,336

Loss on disposal of fixed assets 51 —

Amortization of debt issuance costs 8 17

Provision for (benefit from) deferred income tax 2 (4)

Provision for (recovery from) doubtful accounts 1 (5)

Changes in other operating assets and liabilities:

Accounts receivable 575 427

Prepaid expenses, deferred program expenses, other current assets and other assets (3,749) 3,016

Accounts payable (1,564) (88)

Accrued compensation and benefits (533) 375

Contract liabilities 6,699 (93)

Accrued liabilities and other liabilities (1,257) 1,681

Net cash provided by operating activities 8,656 6,106

Cash flows from investing activities:

Capitalized software development costs (2,132) (2,214)

Purchases of property and equipment (145) (123)

Net cash used in investing activities (2,277) (2,337)

Cash flows from financing activities:

Payments under finance lease obligations (491) (452)

Payment of tax withholding related to net share settlement of equity awards (6,619) (104)

Repurchases of common stock (2,198) —

Payments for debt issuance costs (21) —

Net cash used in financing activities (9,329) (556)

Net change in cash, cash equivalents, and restricted cash (2,950) 3,213

Cash, cash equivalents, and restricted cash, beginning of period 53,320 54,717

Cash, cash equivalents, and restricted cash, end of period $ 50,370 $ 57,930

NON-GAAP FINANCIAL MEASURES

(Unaudited)

Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA; Net Income (Loss) Margin to EBITDA Margin and Adjusted EBITDA Margin; Incremental Net Income (Loss) and Net Income (Loss) Margin to Incremental Adjusted EBITDA and Incremental Adjusted EBITDA Margin

For the Three Months Ended

March 31, 2026 March 31, 2025 Year-over-Year Change

Amount Margin Amount Margin Amount Margin

(dollars in thousands)

Net income (loss) $ 2,023 4.2 % $ (8,604) (28.1) % $ 10,627 62.1 %

Other income (697) (1.5) % (561) (1.8) % (136) (0.8) %

Interest expense 111 0.2 % 147 0.5 % (36) (0.2) %

Provision for (benefit from) income taxes 18 0.1 % (4) — % 22 0.1 %

Depreciation and amortization 3,429 7.2 % 2,336 7.6 % 1,093 6.4 %

EBITDA (Non-GAAP) 4,884 10.2 % (6,686) (21.8) % 11,570 67.6 %

Stock-based compensation expense(1)

2,971 6.3 % 7,048 23.0 % (4,077) (23.8) %

Adjusted EBITDA (Non-GAAP) $ 7,855 16.5 % $ 362 1.2 % $ 7,493 43.8 %

(1) The stock-based compensation expense to EBITDA as of March 31, 2026, and 2025 is made up of $1.7 million and $5.5 million, respectively, of stock-based compensation expense for the awarded RSUs, PSUs, and stock options, and $1.2 million and $1.5 million, respectively, of other sources of stock-based compensation expense. The other sources of stock-based compensation consist of accrued compensation, which the Company intends to settle in shares of the Company's common stock. However, the Company has the discretion to determine whether this compensation will ultimately be paid in stock or cash up until the date at which they are paid. Any change to the expected payment form would result in out-of-quarter adjustments to this add back to Adjusted EBITDA.

Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss), and EPS to Adjusted EPS

For the Three Months Ended

March 31, 2026 March 31, 2025

(in thousands, except per share data)

Net income (loss) $ 2,023 $ (8,604)

Adjustments:

Other income (697) (561)

Stock-based compensation expense(1)

2,971 7,048

Adjusted net income (loss) (Non-GAAP measure) $ 4,297 $ (2,117)

Earnings (loss) per share, diluted $ 0.03 $ (0.12)

Adjustments:

Other income (0.01) (0.01)

Stock-based compensation expense(1)

0.04 0.10

Adjustment to diluted earnings per share(2)

— —

Adjusted earnings (loss) per share, diluted (non-GAAP) $ 0.06 $ (0.03)

Weighted-average shares to compute GAAP earnings (loss) per share, diluted 77,615 72,715

Weighted-average shares to compute non-GAAP earnings (loss) per share, diluted(2)

77,615 72,715

(2) For a period of net loss, potentially dilutive shares are not included in the calculation of diluted earnings (loss) per share, because to do so would be anti-dilutive. This is an adjustment used to reconcile GAAP earnings (loss) per share (excluding potentially dilutive shares) with non-GAAP earnings per share (including potentially dilutive shares).

Reconciliation of Gross Profit to Adjusted Gross Profit and Cash Gross Profit; Gross Margin to Adjusted Gross Margin and Cash Gross Margin

For the Three Months Ended

March 31, 2026 March 31, 2025

Amount Margin Amount Margin

(dollars in thousands)

Gross profit $ 17,375 36.4% $ 12,182 39.8%

Adjustments:

Stock-based compensation expense — cost of sales 216 0.5% 190 0.6%

Adjusted gross profit (Non-GAAP) 17,591 36.9% 12,372 40.4%

Depreciation and amortization — cost of sales 2,596 5.4% 1,503 4.9%

Cash gross profit (Non-GAAP) $ 20,187 42.3% $ 13,875 45.3%

Reconciliation of Cash Flows from Operations to Free Cash Flow and Free Cash Flow Margin

For the Three Months Ended

March 31, 2026 March 31, 2025

(in thousands)

Net cash provided by operating activities $ 8,656 $ 6,106

Adjustments:

Capitalized software development costs (2,132) (2,214)

Purchases of property and equipment (145) (123)

Free cash flow (Non-GAAP) $ 6,379 $ 3,769

Revenue $ 47,742 $ 30,616

Operating cash flow margin 18.1 % 19.9 %

Free cash flow margin (Non-GAAP) 13.4 % 12.3 %

Reconciliation of Operating Expenses to Adjusted Operating Expenses and Cash Operating Expenses

For the Three Months Ended

March 31, 2026 March 31, 2025

(in thousands)

Operating expenses $ 15,920 $ 21,204

Adjustments:

Stock-based compensation expense (2,755) (6,858)

Adjusted operating expenses (Non-GAAP) 13,165 14,346

Depreciation and amortization (833) (833)

Software R&D capitalized costs 2,042 2,270

Cash operating expenses (Non-GAAP) $ 14,374 $ 15,783

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v3.26.1

Cover

May 11, 2026

Cover [Abstract]

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Document Period End Date

May 11, 2026

Entity Registrant Name

TELOS CORPORATION

Entity Incorporation, State or Country Code

Entity File Number

001-08443

Entity Tax Identification Number

52-0880974

Entity Address, Address Line One

19886 Ashburn Road

Entity Address, City or Town

Ashburn

Entity Address, State or Province

Entity Address, Postal Zip Code

20147-2358

City Area Code

703

Local Phone Number

724-3800

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Common stock, $0.001 par value per share

Trading Symbol

TLS

Security Exchange Name

NASDAQ

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