IT & Cybersecurity Firm Telos Tops Q3 Expectations Despite Weak Results, Boosts FY23 Guidance

Telos Corp TLS reported a Q3 FY23 revenue of $36.2 million, beating the consensus of $31.9 million. 

Services revenue decreased to $34.4 million from $55.3 million a year ago, and Products revenue fell to $1.8 million from $8.3 million the prior year.

Adjusted gross margin expanded by 684 bps Y/Y to 41.5%, with adjusted gross profit declining to $15.0 million from $22.1 million the prior year.

Adjusted EPS loss was $(0.07), beating the consensus loss of $(0.13).

Adjusted EBITDA loss was $(1.3) million, compared to Adjusted EBITDA of $8.6 million a year ago.

Telos net cash used in operating activities for the nine months ended September 30, 2023, totaled $(3.37) million, compared to operating cash flow of $20.1 million a year ago.

Q4 Outlook: Telos sees revenue of $30 million - $34 million and Adjusted EBITDA of $(6.5) million - $(4.5) million. 

FY23 Outlook: Telos revised its outlook for revenue to $134 million - $138 million from $122 million - $137 million and adjusted EBITDA to $(9) million- $(7) million from $(19) million - $(14) million.

Price Action: TLS shares traded higher by 0.25% at $3.0675 on the last check Thursday.