Q1 2024 Telos Corp Earnings Call

May 10, 2024

Okay.

Speaker Change: Good day and thank you for standing by welcome to the Telus Corporation first quarter 2024 earnings call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question during the session I'll need to press star one on your telephone you will then hear an automated message device in your hand is raised to withdraw your question. Please press star one again please.

Operator: Good day, and thank you for standing by. Welcome to the Telos Corporation First Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message device, and your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Allison Phillipp. Please go ahead.

Speaker Change: Be advised todays conference is being recorded I would now like to hand, the conference over to your speaker today Alison Phillip. Please go ahead.

Allison Phillipp: Good morning.

Allison Phillipp: Good morning. Thank you for joining us to discuss Telos Corporation's first quarter 2024 financial results. With me today is John Wood, Chairman and CEO of Telos, and Mark Benza, Executive Vice President and CFO of Telos. Let me quickly review the format of today's presentation. Mark will begin with remarks on our first quarter 2024 results. Next, John will discuss business highlights from the first quarter. Mark will follow this up with second quarter guidance and insights on the financial outlook for the company before turning back to John to wrap up.

Allison Phillipp: Thank you for joining us to discuss <unk> Corporation's first quarter 2024 financial results.

Allison Phillipp: With me today is John Wren, Chairman and CEO of pellets and Marvell.

John B. Wood: Executive Vice President and CFO of Tullow.

Allison Phillipp: Let me quickly review the format of today's presentation.

Allison Phillipp: Mark will begin with remarks on our first quarter 2024 results.

John B. Wood: Next John will discuss business highlights from the first quarter.

John B. Wood: Mark will follow this up in the second quarter guidance and insights on our financial outlook for the company before turning back to John to wrap up.

Allison Phillipp: We will then open the line for Q&A, and Mark Griffin, Executive Vice President of Security Solutions, will also join us. The earnings press release was issued earlier today and is posted on the Telos Investor Relations website, where this call is being simultaneously webcast.

John B. Wood: We will then open the line for Q&A, where Mark Griffin Executive Vice President Security solution will also join us.

John B. Wood: The earnings press release was issued earlier today and is posted on the tell US Investor Relations Web site, where this call is being simultaneously webcast.

John B. Wood: Additionally, we have provided presentation slides on our Investor Relations website.

Allison Phillipp: 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 are forward-looking statements and are made under the Safe Harbor provisions of the Federal Securities Law. These statements are based on current expectations and assumptions. They are subject to risks and uncertainty. Actual results could materially differ for various reasons, including the factors described in today's earnings press release, in the comments made during this conference call, and in our SEC filing.

John B. Wood: Before we begin I want to emphasize that some of our statements on this call are forward looking statements.

John B. Wood: Made under the Safe Harbor provisions of the Federal Securities laws.

John B. Wood: These statements are based on current expectations and assumptions that are subject to risks and uncertainties.

John B. Wood: Actual results could materially differ for various reasons, including the factors described in today's earnings press release and the comments made during this conference call and in our SEC filings.

Allison Phillipp: 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's 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.

John B. Wood: We do not undertake any duty to update any forward looking statements.

John B. Wood: In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful supplemental and clarifying measures to help investors understand <unk> financial performance.

John B. Wood: non-GAAP financial measures. So have you considered in addition to and not as a substitute for or in isolation from GAAP results you.

John B. Wood: You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP results.

John B. Wood: In our earnings press release and on the Investor Relations portion of our website.

Please also note that the financial comparisons are year over year, unless otherwise specified.

Allison Phillipp: You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP results, in our earnings press release 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 for the next year on our company website under Investor Relations. With that, I'll turn the call over to Mark. Thank you, Allison, and good morning, everyone.

John B. Wood: The webcast replay of this call will be available for the next year on our company website under the Investor Relations link.

John B. Wood: With that I'll turn the call over to Mark.

Mark D. Griffin: Thank you Allison and good morning, everyone let's.

Mark D. Griffin: Let's begin today on slide three. I am pleased to report that Telos again over-delivered on key financial metrics in the first quarter, exceeding both revenue and profit guidance. Overall, it was a straightforward quarter with better than guided performance across key financial metrics, leading to a meaningful beat on profit and cash. Now, let's get into some of the details.

Mark D. Griffin: Let's begin today on slide three.

Mark D. Griffin: I am pleased to report that tell us that again over delivered on key financial metrics in the first quarter exceeding both our revenue and profit guidance.

Mark D. Griffin: Overall, it was a straightforward quarter was better than guided performance across key financial metrics, leading to a meaningful beat on profit and cash flow.

Speaker Change: Let's get into some of the details.

Speaker Change: We delivered $29 $6 million of revenue in the first quarter or approximately $600000 above our guidance range of $28 million to $29 million.

Mark D. Griffin: We delivered $29.6 million of revenue in the first quarter, or approximately $600,000 above our guidance range of $28 million to $29 million. Security Solutions delivered $18.6 million of revenue, which was above the top end of our guidance range due to modest outperformance across all lines of business. Secure Networks delivered approximately $11 million of revenue in line with the top end of our guidance.

Speaker Change: Security solutions delivered $18 $6 million of revenue, which was above the top end of our guidance range due to modest outperformance across all lines of business.

Secure networks delivered approximately $11 million of revenue in line with the top end of our guidance range.

Mark D. Griffin: Gap gross margin was 37 percent, above our guidance due to cost management on fixed price contracts and security solutions, better-than-expected utilization of direct labor and secure networks, and a slightly better overall weighting of revenues to our higher-margin security solutions business. Security Solutions generated approximately 63% of total company revenues in the first quarter of 2024 versus 56% in the first quarter of 2023, a favorable variance that is expected to widen as the year progresses.

Speaker Change: GAAP gross margin was 37% above our guidance due to cost management on fixed price contracts and security solutions.

Speaker Change: Other than expected utilization of direct labor and secure networks and a slightly better overall weighting of revenues to our higher margin security solutions business.

Speaker Change: Security solutions generated approximately 63% of total company revenues in the first quarter of 2024 versus 56% in the first quarter of 2023, a favorable variance that is expected to widen as the year progresses.

Speaker Change: Cash gross margin was a notable 42, 2% expanding 249 basis points year over year, and representing our second highest quarter since our IPO in 2020.

Mark D. Griffin: Cash gross margin was a notable 42.2%, expanding 249 basis points year over year and representing our second highest quarter since our IPO in 2020. Revenues and gross margins both above forecast resulted in gross profit above what was incorporated into our adjusted EBITDA guidance. In addition, R&D and FG&A expenses were better than forecasted due to timing of spending and higher than forecasted capitalization of software development. As a result, Adjusti Bida'a also exceeded the top end of our guidance. Majesity Vida was a $2.3 million loss compared to our guidance range of $5.5 million to $5 million.

Speaker Change: Revenues and gross margins both above forecast resulted in gross profit above what was incorporated into our adjusted EBITDA guidance range.

Speaker Change: In addition, R&D and SG&A expenses were better than forecasted due to timing of spending and higher than forecasted capitalization of software development costs.

Speaker Change: As a result, adjusted EBITDA also exceeded the top end of our guidance range.

Speaker Change: Adjusted EBITDA was a $2 $3 million loss compared to our guidance range of $5 $5 million loss to a $5 million loss.

Speaker Change: Lastly, cash flow from operations was a $350000 outflow and free cash flow was $3 $6 million outflow.

Mark D. Griffin: Lastly, cash flow from operations was a $350,000 outflow, and free cash flow was a $3.6 million outflow. Free cash flow improves from a $4.1 million outflow in the first quarter of 2023. So, overall, it was a clean quarter with solid execution throughout the portfolio. I will now turn it over to John for an overview of business highlights.

Speaker Change: Free cash flow improves from a $4 $1 million outflow in the first quarter of 2023.

Speaker Change: So overall it was a clean quarter with solid execution throughout the portfolio.

Speaker Change: I will now turn it over to John for an overview of business highlights.

Speaker Change: Hi.

John B. Wood: Thanks, Mark and good morning, everyone, let's turn to slide four.

John B. Wood: Thanks, Mark, and good morning, everyone. Let's turn to the slide that was communicated on our last earnings call in March. Telos has teaming agreements in place with Prime Partners, who in the first quarter received awards from the federal government worth up to $525 million for Telos' security solutions business over five years. It's not uncommon for award decisions of this magnitude to be protested by incumbents or other bidders as part of a customary post-award protest period provided by the government, and that's the case here. These awards have been protested, and finalization of the awards is subject to resolution of the protest. Given the typical protest timetable...

John B. Wood: As communicated on our last earnings call in March.

<unk> television agreements in place with Prime partners, who in the first quarter received awards from the federal government, where it's up to $525 million to tell us the security solutions business over five years.

John B. Wood: It's not uncommon for award decisions of this magnitude to be protested by incumbents or other bidders as part of our customary post award protest period provided by the government and that's the case here.

John B. Wood: These awards protested and Finalization of the awards are subject to resolution of the protest.

John B. Wood: Given the typical protest timetable resolution is expected in the second quarter and assuming a favorable outcome revenues are expected to ramp throughout the balance of the year.

John B. Wood: Resolution is expected in the second quarter, and assuming a favorable outcome, revenues are expected to ramp throughout the balance of the year. We look forward to the conclusion of these protests as these awards represent pre-existing programs requiring a timely and smooth transition to ensure uninterrupted service to the federal government. Beyond these awards, it's important to highlight that since 2023, we have won positions on five new federal contract vehicles, including, most recently, a vehicle through which the United States Marine Corps will procure modernized capabilities for telecommunications and network infrastructure at all required Marine Corps bases, posts, camps, and stations globally.

John B. Wood: We look forward to the conclusion of these protests as these awards represent pre existing programs, requiring a timely and smooth transition to ensure uninterrupted service to the federal government.

John B. Wood: Beyond These awards it is important to highlight since 2023, we've won positions on five new federal contract vehicles, including most recently a vehicle through which the United States Marine Corps will procure modernized capabilities for telecommunications and network infrastructure at all required <unk>.

John B. Wood: <unk> core basis post camps and stations globally.

John B. Wood: In the aggregate these five new contract vehicles provide tell us with market access to compete for new business opportunities that represent a $12 billion addressable market.

John B. Wood: We will continue to pursue additional contract vehicles that will further increase our access to new federal markets over time.

John B. Wood: In addition, I'm pleased to report on several other key outcomes since our last earnings call. Our Executive Business has received new orders from the U.S. Air Force Services Center, as well as a major technology company and a federal government customer. Additionally, the executive business has achieved renewals with several key customers, including the U.S. 16th Air Force, the U.S. National Geospatial Intelligence Agency, the U.S. Defense Intelligence Agency, the U.S. Department of Energy, a professional services company, and a leading cloud computing company.

John B. Wood: In addition, I am pleased to report on several other key outcomes since our last earnings call.

John B. Wood: Or is that the business has received new orders with the U S Air Force Services Center as well as a major technology company and our federal government customer. Additionally.

John B. Wood: Additionally, the exact business has achieved renewals with several key customers, including the U S. 16th Air Force. The U S National Geospatial Intelligence agency. The U S Defense Intelligence agency the U S Department of energy.

John B. Wood: <unk> services company, and a leading cloud computing company.

John B. Wood: The company has received service renewals with the U.S. Department of Homeland Security, the U.S. Office of Naval Intelligence, and a federal executive department. Additionally, our automated message handling system business achieved a major contract renewal with a branch of the U.S. Armed Forces. And finally, within our Telos ID business, transaction volumes in our TSA PreCheck program have sequentially ramped every quarter for the last four quarters, including the first quarter of 2024. We continue to work closely with TSA to ensure our pre-existing enrollment locations are operating at the absolute highest possible standards necessary for a national security program of this magnitude before accelerating our rollout of additional onsite enrollment centers around the country. We opened two additional enrollment locations in April, with more expected in the coming quarter. I will now turn the call over to Mark, who will discuss second quarter guidance. Mark?

John B. Wood: The company has received services renewals with the U S Department of Homeland Security. The U S office of Naval Intelligence and a federal Executive Department.

John B. Wood: Our automated message handling system business achieved a major contract renewal with a branch of the U S. Armed forces and finally within our <unk> business transaction volumes at our TSA pre check program have sequentially ramp every quarter for the last four quarters, including the first quarter of 2024.

John B. Wood: We continue to work closely with TSA to ensure our preexisting enrollment locations are operating at the absolute highest possible standards necessary for our National Security program of this magnitude before accelerating our rollout of additional onsite enrollment centers around the country.

We opened two additional enrollment locations in April with more expected in the coming quarters I will now turn the call over to Mark who will discuss second quarter guidance Mark.

Mark D. Griffin: Thanks, John Let's turn to slide five.

Mark D. Griffin: Thanks, John. Now, let's turn to slide five. For the second quarter, we expect revenue in a range of $25 million to $28 million and an adjusted EBITDA loss of $8 million to $6 million. We forecast security solutions revenue to be down high single digits to up mid single digits percent year over year, primarily driven by a non-recurring perpetual license sale in the second quarter of 2023, offset by growth in TSA pre-check in 2024. We forecast secure networks revenue to decline low 40% to mid 30% year over year due to the ongoing reductions in backlog that we expect to persist sequentially throughout the year.

Mark D. Griffin: For the second quarter, we expect revenue in a range of $25 million to $28 million.

Mark D. Griffin: And an adjusted EBITDA loss of $8 million to $6 million.

Mark D. Griffin: We forecast security solutions revenue to be down high single digits to up mid single digits percent year over year, primarily driven by a nonrecurring perpetual license sale in the second quarter of 2023 offset by growth in TSA pre check in 2024.

Mark D. Griffin: We forecast secure networks revenue to decline low 40% to mid 30% year over year due to the ongoing reductions in backlog that we expect to persist sequentially throughout the year.

Mark D. Griffin: Our second quarter guidance combined with our first quarter reported revenue.

Mark D. Griffin: Our second-quarter guidance, combined with our first-quarter reported revenue, implies first half revenue of $54.6 million to $57.6 million and compares favorably with the approximately $55 million of first half revenue that we outlined in the 2024 modeling inputs provided in the appendix of our fourth quarter earnings presentation. Overall, we expect total company revenue to return to sequential growth in the third or fourth quarter, subject to a favorable resolution approach. Gap gross margin is expected to be down approximately 750 basis points to 425 basis points year-over-year, primarily due to higher amortization of capitalized software development costs and security solutions and a non-recurring perpetual license sale in the comparable period last year, partially offset by a more favorable revenue contribution from our higher-margin security solutions business in 2020.

Mark D. Griffin: Implies first half revenue of $54 6 million to $57 $6 million.

Mark D. Griffin: Compares favorably with the approximately $55 million of first half revenue that we outlined in the 2020 for modeling inputs provided in the appendix of our fourth quarter earnings presentation.

Mark D. Griffin: Overall, we expect total company revenue to return to sequential growth in the third or fourth quarter subject to favorable resolution of protests.

Mark D. Griffin: GAAP gross margin is expected to be down approximately 750 basis points to 425 basis points year over year, primarily due to higher amortization of capitalized software development costs and security solutions.

Mark D. Griffin: And a nonrecurring perpetual license sale in the comparable period last year.

Mark D. Griffin: Partially offset by a more favorable revenue contribution from our higher margin security solutions business in 2024.

Mark D. Griffin: Cash gross margin is expected to be down 250 basis points to flat year over year.

Mark D. Griffin: Cash gross margin is expected to be down 250 basis points to flat year over year. Cash below-the-line expenses, which adjust for capitalized software development costs, stock-based compensation, restructuring costs, and DNA, are forecast to be approximately $1.9 to $2.1 million higher year-over-year, primarily due to investment and growth initiatives. Lastly, our full-year outlook is substantially unchanged. We've made only minor adjustments to the full-year modeling inputs provided in the appendix.

Mark D. Griffin: Cash below the line expenses, which adjusts for capitalized software development costs stock based compensation restructuring costs and DNA are forecast to be approximately <unk> <unk>.

Mark D. Griffin: One nine to $2 $1 million higher year over year, primarily due to investment in growth initiatives.

Mark D. Griffin: Lastly, our full year outlook is substantially unchanged, we've made only minor adjustments to the full year modeling inputs provided in the appendix.

Mark D. Griffin: And with that I'll turn it back to Jonathan.

John B. Wood: And with that, I'll turn it back to John. Thanks, Mark. Now, let's turn to slide six.

Jonathan: Thanks, Mark, let's turn to slide six in summary, we once again exceeded expectations and delivered results above the high end of the guidance range on key financial metrics in the first quarter we.

John B. Wood: In summary, we once again exceeded expectations and delivered results above the high end of the guidance range on key financial metrics in the first quarter. We've made substantial progress on new business capture during the first quarter, and we expect security solutions and total company revenues to return to sequential growth in the third or fourth quarter, subject to favorable resolution approaches. And with that, we're happy to take questions. Operator, please open the line for Q&A, and we ask the call participants to please be mindful of others in the queue by asking only one question.

Jonathan: We've made substantial progress on new business capture during the first quarter and we expect security solutions and total company revenues to return to sequential growth in the third or fourth quarter subject to favorable resolution of protests.

Speaker Change: With that we're happy to take questions.

Speaker Change: Operator, please open the line for Q&A and we asked the call participants to please be mindful of others in the queue by asking only one question. Thank you.

Speaker Change: Thank you ladies and gentlemen, if you have a question or a comment at this time. Please press star one on your telephone. If your question has been answered or you wish to move yourself from the queue. Please press star one again, we will pause for a moment, while we compile our Q&A roster.

John B. Wood: Ladies and gentlemen, if you have a question or a comment at this time, please press star 1 1 on your telephone. If your question has been answered, or you wish to move yourself from the queue, please press star 1 1 again.

Speaker Change: Our first question comes from Zach Cummins with B Riley Securities. Your line is open.

Operator: We'll pause for a moment while we compile our Q&A roster. Our first question comes from Zach Cummins with B Raleigh Securities. Your line is open.

Zachary Cummins: Hi, Good morning, John and Mark Thanks for taking my questions and congrats on the solid performance here in Q1.

Zachary Cummins: Hi, good morning, John and Mark. Thanks for taking my questions and congratulations on your solid performance here in Q1. I guess I'll try to make a multi-part question. One, for John, can you speak to just the protesting process? I appreciate the timeline and... I'm just curious if they give you any sort of indications or updates along the way, anything you can share incrementally about the protesting process.

I guess I'll try to make a multi part question one for John can you speak to just the protesting process I appreciate the timeline.

Zachary Cummins: Just curious if they give you any sort of indications or updates along the way.

Zachary Cummins: Anything you can share incrementally on the protest process and then part two is just.

John B. Wood: And then part two is just on a CFA pre-check program. It's nice to hear that you've ramped volumes every quarter since its launch, but I'd just curious if we could get more insight into how you're thinking about the rollout timeline for new locations and, and now that all three vendors are live on the program, if there's been any notable changes in transaction volume. Sure. Thank you for the question, Zach. You know, the protest process is typically 100 days. We would expect the outcome, an outcome this quarter on both of the new awards that we announced last quarter. And we're not; we don't really have a day-to-day insight into the protest process.

Zachary Cummins: CFA pretty JAK program.

Zachary Cummins: Nice to hear that you've ramped volumes every quarter since its launch but.

Zachary Cummins: Just curious if we could get more insight into how youre thinking about.

Zachary Cummins: Rollout timeline for new locations and now that all three vendors are live on the program. If there's been any notable changes in transaction volumes.

Sure. Thanks, Thank you for the question Zack.

John B. Wood: That's really not our fault; we're not a part of that process. But as we've reported earlier, a very small percentage of these programs are resolved against the winners. So we're confident that we're going to be able to move forward with these programs. Now, as far as TSA PreCheck goes, I'm very pleased to say that we will be accelerating the rollout of TSA PreCheck at our Office Depot locations. And we expect to accelerate that rollout into Q2, getting to 500 stores within 2025.

Zachary Cummins: Yeah.

Speaker Change: The protest process is typically 100 days, we would expect the outcome and outcome this quarter.

Speaker Change: Both of the New awards that we announced last quarter and were not we don't really have.

Speaker Change: Day to day insight into the protest process, that's really not our we're not a part of that process, but as we've reported earlier.

Speaker Change: A small percentage of these programs are.

Speaker Change: All against the against the winter if you will so.

Speaker Change: We're confident that we're going to be able to move forward with these programs.

Speaker Change: Now as far as TSA pre check goes.

Speaker Change: Kris I am very pleased to say that we will be accelerating the ramp of our office depot locations and we expect to accelerate that rollout into Q2 getting to 500 stores within 2025.

John B. Wood: Yeah, Zach, I think what I'd add to that, with respect to transaction volumes, as we've said, they've ramped nicely over the last few quarters. In terms of having all the participants come into the market, in terms of the three participants, that was already factored into the prior guidance and modeling inputs that we've provided. Does that answer your question, Zach? Yes, it does.

Kris: Yes, Doug I think what I would add to that with respect to transaction volumes averaged as we've said.

Speaker Change: They've ramped nicely over the last few quarters.

In terms of having all of the participants.

Speaker Change: Come into the market in terms of the three participants.

Speaker Change: Hi, there.

Speaker Change: That was already factored into the prior guidance and modeling inputs that we've provided.

Speaker Change: Does that answer your questions.

Speaker Change: Yes, it does.

Zachary Cummins: I appreciate you answering my questions, and best of luck with the rest of the quarter. Thank you. Okay. Thanks, Zach.

Speaker Change: I appreciate you answering my questions and best of luck with the rest of the quarter. Thank you.

Operator: One moment for our next question. Our next question comes from Rudy Kissinger with D. A. Davidson. Your line is open.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from Rudy <unk> with D. A Davidson your line is open.

Rudy: Hey, Thanks for taking my question I guess I'm kind of curious.

Rudy Grayson Kessinger: Hey, thanks for taking my question. I guess I'm kind of curious, you know, how much revenue from existing contracts this year is going to fall in 25. So if it's $100 million this year, how much is that going to decline to in 25? Thank you.

Rudy: This $100 million of revenue from existing contracts this year.

Rudy: How much from those existing contracts.

Rudy: <unk>.

Rudy: Is it going to fall in 25 years. So if it's a $100 million this year, how much of that decline 225. Thank you.

Rudy: Okay.

Mark D. Griffin: Yeah, so Rudy, what we've said in the past, and I think it applies here as well, in a typical year, we expect a few tens of millions of Hedwin from prior year revenues. So if you think about the 100 million that's recurring in 24, I'd say in 25, that 100 becomes approximately 70, and then you add on from there the additional revenue from these programs that would come on board subject to resolution of the protest.

Rudy: Yes.

Rudy: So really what we saw.

Rudy: In the past and I think it applies here as well.

Rudy: In a typical year, we expect a few tens of millions.

Rudy: Of headwind.

Rudy: From prior year revenues. So if you think about the 100 million recurring and 24.

Rudy: <unk> 25, that's approximately 100 becomes approximately 70.

Rudy: And then youre, adding on from there.

Rudy: The additional revenue from these programs that would come on board subject to resolution of the protest.

Mark D. Griffin: We've given you an indication of what that could be in a typical year. And then we'd have additional revenue from TSA PreCheck as we continue to make progress and roll out our office depot location. And then, of course, any other additional new business wins that we realize late this year, early next year. That's the typical seasonality pattern of new business winds. Does that answer your question, Rudy? Yes, it does. Thank you.

Rudy: We've given you an indication of what that could be in a typical year.

Rudy: And then we'd have additional revenue from TSA pre check as we make continue to make progress on rolling out our office locations.

Rudy: And then of course any other additional new business wins.

Rudy: That's we've realized late this year early next year, that's the typical seasonality pattern of new business wins.

Speaker Change: That answer your question Rick.

Rick: It does thank you okay.

Speaker Change: One moment for our next question.

Speaker Change: The next question comes from Bradley Clark with BMO capital markets. Your line is open.

Operator: OK. One moment for our next question. Our next question comes from Bradley Clark with BMO Capital Markets. Your line is open.

Bradley Reiss Clark: Hi, Thank you for taking my question.

Bradley Reiss Clark: Thank you for taking my question. On the TSA side, you know, one of the strategies is obviously opening the number of locations. Is there anything else that Telos is doing to sort of differentiate its TSA offering now that, you know, sort of the competitive landscape is set? Is there anything from pricing or marketing that could actually fall into the expense line that we should be considering aside from new locations? Bradley, this is Mark Griffin.

Bradley Reiss Clark: The TSA side.

Bradley Reiss Clark: One of the strategy, obviously opening a number of location.

Bradley Reiss Clark: Anything else.

Bradley Reiss Clark: Can you sort of differentiate.

Bradley Reiss Clark: <unk> Tsi offering now back.

Bradley Reiss Clark: Sort of the competitive landscape.

Bradley Reiss Clark: Is there any pent up on price in a market in that.

Bradley Reiss Clark: And that could actually fall into the expense line.

Bradley Reiss Clark: Could be considering aside from new locations.

Speaker Change: Right right.

Mark D. Griffin: I'll answer first. First, I wanted to say how pleased we are with our strategic relationship with Office Depot for the TSA PreCheck program. This direct-to-consumer opportunity is of great value to TSA and the program. So as we roll out, obviously, from a marketing and an expansion point of view, that's a key partner that will be very critical for us as we do that. From an expense line, I'm going to turn it over to Mark, but right now, I'm not anticipating major expenses in that area other than our commitment to our strategic partner, Office Depot, and the expansion in those areas. I have nothing to add to what Kristin's already said.

Speaker Change: Margaret.

Speaker Change: Since our first first of all I wanted to say how pleased we are with our strategic relationship with office depot for the TSA pre check program.

Speaker Change: Direct to consumer opportunities a great value to TSA in the program.

Speaker Change: So as we rollout obviously from a from a marketing and an expansion point of view that as a key partner that will be very critical for us as we do that.

Speaker Change: On slide I'm going to.

Speaker Change: Turn it over to Mark right now.

Mark D. Griffin: I am not anticipating major expenses in that area other than our commitment to our strategic partner office depot and the expansion in those areas.

Mark D. Griffin: I agree with that I have nothing to add to what Chris has already said.

Mark D. Griffin: Thank you.

Speaker Change: One moment for our next question.

Speaker Change: Okay.

Speaker Change: Our next question comes from Alex Henderson with Needham Your line is open.

Mark D. Griffin: Thanks. Thank you. One moment for our next question. Our next question comes from Alex Henderson with Needham. Your line is open.

Speaker Change: Thanks.

Alexander Henderson: Thanks. I'm struck by how many renewals you.., announced here. In that context, you also..., maintained the full-year numbers so as to say these renewals were as expected and not changing the overall trajectory. Is that a fair statement?

Speaker Change: <unk>.

Alexander Henderson: Struck by how many.

Alexander Henderson: Renewals you have announced here.

Alexander Henderson: In that context.

Alexander Henderson: You've also maintained the full year numbers, so I assume that these renewals were as expected.

Alexander Henderson: And not changing the overall trajectory is that is that a fair statement.

Speaker Change: Yes, I think Thats a fair statement.

John B. Wood: Yeah, I think that's a fair statement, Alex. Our track record on renewals is excellent. Our customers tend to be very sticky, and so we had another excellent quarter on renewals. And that's what we expected coming into the year.

Speaker Change: Track record on renewals.

Speaker Change: Our.

Speaker Change: <unk> tend to be very sticky and so.

Speaker Change: We had another excellent quarter on renewals and that's what we expected coming into the year.

John B. Wood: As you look forward into the back half of the year and into the first half of next year, over the next 12 months, what does the renewal pipeline look like? Alex, on the contract renewal, Mark Griffin, the Security Solutions contract renewals renew quite heavily on a renewal percentage basis. Where we see less renewal volume is on the secure network side, so I expect that the majority of the business in Security Solutions will renew and grow based on the other contract vehicles John mentioned in his script.

Speaker Change: As you look forward into the back half of the year and into the first half of next year over the next 12 months, what does the renewal pipeline look like.

Speaker Change: Okay.

Speaker Change: Awesome.

Speaker Change: Alex on the.

Alexander Henderson: The contract renewal markets.

Alexander Henderson: The.

Alexander Henderson: Security solutions contract renewals.

Alexander Henderson: <unk>.

Alexander Henderson: Italy on a renewal percentage basis.

Alexander Henderson: Where we see less.

Alexander Henderson: Less renewal.

Alexander Henderson: Volume is on a secured network side.

Alexander Henderson: I expect that the majority of the business in security solutions will renew and grow based on the other contract vehicles John mentioned in his script.

John B. Wood: Those five contract vehicles will also come into the portfolio, both for secure networks and secure solutions. So I think you'll see a growth area there, not only for contract renewals but also new contract vehicles coming into play, which will add to the portfolio. Yeah, so I'll say it a little more simply.

Alexander Henderson: Of those five contract vehicles will also come into the portfolio both for secure networks and secure solutions. So I think youll see.

Alexander Henderson: Our growth area there.

Alexander Henderson: Not only on contract renewals, but also new contract vehicles coming into play which will add to the portfolio.

Alexander Henderson: Jonathan I'll say, it a little more simplistically.

Alexander Henderson: So security solutions business by and large is a recurring revenue stream.

Alexander Henderson: That's where you can sort of you see the renewals coming in.

Alexander Henderson: In a very consistent way generally speaking on the secured network side. Those those programs tend to have a beginning a middle and it and so thats, where you see that few tens of millions that Marc always talks about on these calls so think about security solutions as being recurring revenue thinking about secured networks as being more epic.

Mark D. Griffin: So Security Solutions, by and large, is a recurring revenue stream. That's where you sort of see the renewals coming in, you know, in a very consistent way, generally speaking. On the secure network side, those programs tend to have a beginning, a middle, and an end.

John B. Wood: So that's where you see that few tens of millions that Mark always talks about on these calls. So think about Security Solutions as being recurring revenue. Think about secure networks as being more episodic revenue. I guess what I'm trying to ask, and maybe I'll just try it again. Different way, but it's the same question.

Alexander Henderson: <unk> revenue.

Speaker Change: I guess, what I'm trying to ask and maybe I'll just try it a different different wave is the same question.

Alexander Henderson: Is there more or less than normal renewals in the headlines? Just the same level. We're trying to ascertain the... Yeah, so it's about the same, Alex. And, you know, we would anticipate it to continue. There are four big points for us in the in the company. One is to continue our extreme focus on our current customers. The second is to very much accelerate the opening of Office Depot locations because that's going to accelerate the ramp-up of revenue for TSA PreCheck.

Speaker Change: Is there more or less the normal renewals in the headlights.

Speaker Change: Or is it just the same level of typical renewals, we're trying to ascertain.

Speaker Change: This potential change in the rate of your renewals as opposed to.

Speaker Change: What the the closure rates look like yes, so it's about the same out and.

Speaker Change: We would anticipate it to continue.

Speaker Change: Continue further four big points for us in the company. One is to continue our extreme focus on our current customers. The second is to very much accelerate the ramp of office depot locations to that could accelerate the ramp of revenue per TSA pre check and the third is to execute against new business wins that we previously.

Operator: The third is to execute against new business wins that we have previously announced. And the fourth is to focus on continuing to deliver new business awards, so our pipeline continues to grow, and it continues to be an opportunity for us to see top lines. Thanks.

Speaker Change: Announced in the fourth is to focus on continuing to deliver new business Awards. So our pipeline continues to grow and it continues to be an opportunity for us to see topline okay.

Speaker Change: Okay. Thanks.

Nehal Sushil Chokshi: Thanks, Alex. One moment for our next question. Our next question comes from Nehal Chokshi with Northland Capital Markets. Your line is open.

Speaker Change: Thanks, Alex.

Speaker Change: Number four our next question.

Speaker Change: Okay.

Speaker Change: Our next question comes from Nihon <unk> with Northland Capital markets. Your line is open.

Speaker Change: Okay.

John B. Wood: Thank you. The five new federal contract vehicles that you've won positions in that represent a 12 billion dollar adjustable market, can you talk about, you know, A, what is the number? Is that an annualized number, or is that over X amount of years? And if it's over X amount of years, how many years is that?

Nihon: Thank you.

Nihon: The.

Five new federal contract vehicles.

Nihon: That you've won positions in that.

Nihon: Representing a $12 billion addressable market.

Speaker Change: Can you talk about.

Speaker Change: A what is the.

Speaker Change: Is that an annualized number or is that over X amount of years and if it's over it's not yours. How many years is that and then b.

Speaker Change: What would you expect the margin profile of the $12 billion addressable market that you've won the right to compete for now yeah. So two of the of the awards are in the secure networks bucket. If you will two of the awards are in what I'll call, our enterprise bucket, which is the entire company.

Speaker Change: And then one is in security solutions.

Speaker Change: As far as the margin profile goes on there.

John B. Wood: As far as the margin profile goes, the period of performance on these can range anywhere from five to ten years. And I'm going to turn to Mark on the margins, if you don't mind. Yes, the margin profiles would follow what we have projected and modeled as far as security solutions and secure networks are concerned.

Speaker Change: The period of performance on these can range anywhere from five to 10 years and im going to turn to Mark on the margins if you don't mind.

Mark D. Griffin: Yes, the margin profiles would follow what we have is projected and modeled as far as security solutions and secured networks. So those margin profiles with basically follow that based on what John indicated at the breakout of that total overall market better and keep in mind for the analysts on the call.

Mark D. Griffin: So those margin profiles would basically follow that based on what John indicated as the breakout of that total overall market benefit. And keep in mind, for the analysts on the call here, for each of these awards, there are several other awardees in each case. So what ends up happening, and the reason we call it an addressable market is because on each of these awards, we have to compete at the task order level.

Mark D. Griffin: Here each of these awards.

There are several other award ease in each case, so what ends up happening is and the reason we call. It an addressable market is because on each of these awards we have to compete at the task order level. So we're competing against limited competition.

Mark D. Griffin: So we're competing against limited competition on the task order level for each of these awards versus the previous two awards we talked about where, you know, it's a team award or it's a single award to one player, if you will, the team being one player.

Mark D. Griffin: The task order level on these on each of these awards versus the previous two awards, we chatted about.

Mark D. Griffin: It's a we're part of a team where it's a single award to one player.

Mark D. Griffin: You will the team being one player.

John B. Wood: So that's why those other awards are much more predictable in terms of the revenue breakout, whereas for these other awards, these are contract vehicles which have ceilings, large ceilings, and in each case, we have to compete at the task order level. And task orders can be anywhere from like $2 million to $100 million, just to be, give it a little more, if you will, nuance to it. Yeah, that's definitely helpful. And then, in recent quarters, you've been talking about your bidding pipeline, the size of the bidding pipeline, and how that's been growing. Did you give an update? If not, can you do so?

Mark D. Griffin: So thats why those other awards are much more predictable in terms of the way the revenue breakout is whereas on these other world Awards. These are contract vehicles, which had ceilings large ceilings and in each case, we have to compete at the task order level and task orders can be anywhere from like $2 million to 100.

Mark D. Griffin: Million just to give a little more fuel nuance to it.

Speaker Change: Yeah, that's definitely helpful and then.

Speaker Change: Past quarters, you've been talking about your bidding pipeline the size of the bidding pipeline, how that's been growing.

Speaker Change: Did you give an update if not can you do so.

John B. Wood: Sure, so outside of these awards, these vehicles that have been won, there's an additional roughly $3.2 billion worth of pipeline, and that's unfactored without renewal. Scott, great, and that's up from what last quarter? You know, truth be told, I don't want our analysts to fall into the trap of trying to measure it quarter to quarter because it's going to change. Some bids will come in, some bids will go out, we'll no bid certain things, we'll accelerate bids on other things, but in general, though, we like to see a pipeline like this because we want to see it be at least 10x what our potential is. I got it.

Speaker Change: Sure. So outside of these awards that these vehicles that have been won there is an additional roughly three $2 billion worth of Av.

Speaker Change: <unk> pipeline.

Speaker Change: And thats on factor without renewals.

Speaker Change: Yeah.

Speaker Change: Got it great and Thats up from.

What last quarter.

Speaker Change: Truth be told Ed I don't want our analysts have fallen into the trap of trying to measure it quarter to quarter, because it's going to change it's going to see some bids will come in some bids will go out.

Speaker Change: We'll know better certain things will accelerate bids on other things, but in general, though we like to see a pipeline like this because we want to see it be at least 10 at what our potential is.

Ed: Got it great. Thank you.

Ed: Ladies and gentlemen, this does conclude the Q&A portion of today's conference I'd like to turn the call back over to John Wood.

Nehal Sushil Chokshi: Great. Thank you. Ladies and gentlemen, this does conclude the Q&A portion of today's conference. I'd like to turn the call back over to John.

John B. Wood: Well first of all I just want to thank our shareholders for your ongoing support and.

John B. Wood: Well, first of all, I just want to thank our shareholders for, you know, your ongoing support. And, you know, as we said here on the call, I'm very pleased with. You know, the progress we've made on our new business capture in the first quarter, you know, I'm looking forward to finally getting to sequential revenue growth in the third or fourth quarter, and obviously, that's subject to the resolution of the protest that we've talked about previously.

John B. Wood: As we as we said here on the call I'm very pleased with.

John B. Wood: The progress we've made on our new business capture in the first quarter.

John B. Wood: I'm looking forward to finally getting to sequential revenue growth in the third or the fourth quarter.

John B. Wood: And obviously subject to the resolution of the protest that we've talked about previously.

John B. Wood: <unk>.

John B. Wood: You know, these contracts will have the potential to significantly and very positively impact our performance, along with us opening up Office Depot locations for TSA PreCheck. You know, I think the other thing I want to remain focused on is our pipeline expansion. I mentioned several quarters ago that we're going to go back to the markets that we know best.

John B. Wood: These contracts will have the potential to significantly and very positively impact our performance along with US opening up office depot locations for.

John B. Wood: TSA pre check.

I think the other thing I want to remain focused on is our pipeline expansion I mentioned several quarters ago that we're going to go back to the markets that we know best and I think we're seeing the kind of results that we expect to add for a company that knows the U S federal government and adjacent markets around it so I remain very.

Operator: And I think we're, we're seeing the kind of results that we expect to have for a company that knows the US federal government and adjacent markets around it. So I remain very excited about the outlook for the company. And, you know, with robust and recession-resistant end markets, with well-funded customers, and a decades-long track record of serving the world's most security conscious organizations, Telos really does have a very strong foundation for the future.

Operator: So I just want to say again, on behalf of all of us here at Telos, thank you. Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day. ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Good day and thank you for standing by.

John B. Wood: Excited about the outlook for the company.

John B. Wood: With robust and recession resistant end markets with well funded customers and a decades long track record of serving the world's most security conscious organizations tell us really does have a very strong foundation for the future. So I just wanted to say again on behalf of all of US here at Telos. Thank you.

Speaker Change: Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.

Operator: Welcome to the Telos Corporation First Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message device when your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Allison Phillipp. Please go ahead.

Speaker Change: [music].

Speaker Change: Good day, and thank you for standing by.

Speaker Change: Can you tell US Corporation first quarter 2024 earnings call.

Speaker Change: At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question during the session I'll need to press star one on your telephone you will then hear an automated message device in your hand is raised to withdraw your question. Please press star. One again. Please be advised today's conference is being recorded I would now like to hand, the conference over to your speaker today Alison Phillip. Please go ahead.

Allison Phillipp: Good morning.

Allison Phillipp: Thank you for joining us to discuss <unk> Corporation's first quarter 2024 financial results.

Allison Phillipp: With me today is John Lewis, Chairman, and CEO of pellets, and Mark <unk> Executive Vice President and CFO of Tullow.

Let me quickly review the format of today's presentation.

Allison Phillipp: Mark will begin with remarks on our first quarter 2024 results.

John B. Wood: Next John will discuss business highlights from the first quarter.

Mark will follow this up in the second quarter guidance and insights and our financial outlook for the company before turning back to John to wrap up.

John B. Wood: We will then open the line for Q&A, where Mark Griffin Executive Vice President Security solution will also join us.

John B. Wood: The earnings press release was issued earlier today and is posted on the tell us Investor Relations website.

John B. Wood: This call is being simultaneously webcast.

Additionally, we have provided presentation slides on our Investor Relations website.

John B. Wood: Before we begin we want to emphasize that some of our statements on this call are forward looking statements and are made under the safe Harbor provisions of the federal Securities laws.

John B. Wood: These statements are based on current expectations and assumptions that are subject to risks and uncertainties.

John B. Wood: We do not undertake any duty to update any forward looking statements.

John B. Wood: In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful supplemental and clarify measures to help investors understand <unk> financial performance.

John B. Wood: non-GAAP financial measures. So have you considered in addition to and not as a substitute for or in isolation from GAAP results you.

John B. Wood: You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP results in our earnings press release and on the Investor Relations portion of our website.

John B. Wood: Please also note the financial comparisons are year over year, unless otherwise specified.

The webcast replay of this call will be available for the next year on our company website under the Investor Relations link.

John B. Wood: With that I'll turn the call over to Mark.

Mark D. Griffin: Thank you Allison and good morning, everyone.

Mark D. Griffin: Let's begin today on slide three. I am pleased to report that Telos again over-delivered on key financial metrics in the first quarter, exceeding both revenue and profit guidance. Overall, it was a straightforward quarter with better than guided performance across key financial metrics leading to a meaningful beat on profit and cash. Let's get into some of the details. We delivered $29.6 million of revenue in the first quarter, or approximately $600,000 above our guidance range of $28 million to $29 million.

Mark D. Griffin: Let's begin today on slide three.

Mark D. Griffin: I am pleased to report that tell US is again over delivered on key financial metrics in the first quarter exceeding both revenue and profit guidance.

Mark D. Griffin: Overall, it was a straightforward quarter with better than guided performance across key financial metrics, leading to a meaningful beat on profit and cash flow.

Speaker Change: Let's get into some of the details.

Speaker Change: We delivered $29 $6 million of revenue in the first quarter or approximately $600000 above our guidance range of $28 million to $29 million.

Mark D. Griffin: Security Solutions delivered $18.6 million of revenue, which was above the top end of our guidance range due to modest outperformance across all lines of business. Secure Networks delivered approximately $11 million of revenue, in line with the top end of our guidance. Gap gross margin was 37 percent, above our guidance due to cost management on fixed price contracts and security solutions, better-than-expected utilization of direct labor and secure networks, and a slightly better overall weighting of revenues to our higher-margin security solutions business.

Speaker Change: Security solutions delivered $18 $6 million of revenue, which was above the top end of our guidance range due to modest outperformance across all lines of business.

Speaker Change: Secure networks delivered approximately $11 million of revenue in line with the top end of our guidance range.

Speaker Change: GAAP gross margin was 37% above our guidance due to cost management on fixed price contracts and security solutions.

Speaker Change: Better than expected utilization of direct labor and secured networks.

Speaker Change: On a slightly better overall weighting of revenues to our higher margin security solutions business.

Mark D. Griffin: Security Solutions generated approximately 63% of total company revenues in the first quarter of 2024 versus 56% in the first quarter of 2023, a favorable variance that is expected to widen as the year progresses. Cash gross margin was a notable 42.2%, expanding 249 basis points year over year and representing our second highest quarter since our IPO in 2020. Revenues and gross margins were both above forecast, resulting in gross profit above what was incorporated into our adjusted EBITDA guidance.

Speaker Change: Security solutions generated approximately 63% of total company revenues in the first quarter of 2024 versus 56% in the first quarter of 2023.

Speaker Change: Favorable variance that is expected to widen as the year progresses.

Speaker Change: Cash gross margin was a notable 42, 2% expanding 249 basis points year over year, and representing our second highest quarter since our IPO in 2020.

Speaker Change: Revenues and gross margins both above forecast resulted in gross profit above what was incorporated into our adjusted EBITDA guidance range.

Mark D. Griffin: In addition, R&D and SG&A expenses were better than forecasted due to timing of spending and higher than forecasted capitalization of software development. As a result, Adjusti Bida'a also exceeded the top end of our guidance. Sajasati Vida was a $2.3 million loss compared to our guidance range of a $5.5 million loss to a $5 million loss.

Speaker Change: In addition, R&D and SG&A expenses were better than forecasted due to timing of spending and higher than forecasted capitalization of software development costs.

Speaker Change: As a result, adjusted EBITDA also exceeded the top end of our guidance range adjust.

Speaker Change: Adjusted EBITDA was a $2 $3 million loss compared to our guidance range of $5 $5 million loss to a $5 million loss.

Mark D. Griffin: Lastly, cash flow from operations was a $350,000 outflow, and free cash flow was a $3.6 million outflow. Free cash flow improved from a $4.1 million outflow in the first quarter of 2023. So overall, it was a clean quarter with solid execution throughout the portfolio. I will now turn it over to John for an overview of his highlights.

Speaker Change: Lastly, cash flow from operations was a $350000 outflow and free cash flow was $3 $6 million outflow.

Speaker Change: Free cash flow improves from a $4 1 million outflow in the first quarter of 2023.

Speaker Change: So overall it was a clean quarter with solid execution throughout the portfolio.

Speaker Change: I will now turn it over to John for an overview of the business highlights.

Speaker Change: John.

John B. Wood: Thanks, Mark. And good morning, everyone. Let's turn the slide. As communicated on our last earnings call in March, Telos has teaming agreements in place with Prime Partners, who in the first quarter received awards from the federal government worth up to $525 million to Telos' security solutions business over five years. It's not uncommon for award decisions of this magnitude to be protested by incumbents or other bidders as part of a customary post-award protest period provided by the government, and that's the case here. These awards have been protested, and finalization of the awards is subject to resolution of the protest.

John: Thanks, Mark and good morning, everyone, let's turn to slide four.

John: As communicated on our last earnings call in March <unk> television agreements in place with Prime partners, who in the first quarter received awards from the federal government worth up to $525 million to tell us the security solutions business over five years.

John: It's not uncommon for award decisions of this magnitude to be protested by incumbents or other bidders as part of our customary post award protest period provided by the government and that's the case here.

John: These awards protested and Finalization of the awards are subject to resolution of the protest.

John B. Wood: Given the typical protest timetable... Resolution is expected in the second quarter, and assuming a favorable outcome, revenues are expected to ramp throughout the balance of the year. We look forward to the conclusion of these protests as these awards represent pre-existing programs requiring a timely and smooth transition to ensure uninterrupted service to the federal government. Beyond these awards, it's important to highlight that since 2023, we have won positions on five new federal contract vehicles, including, most recently, a vehicle through which the United States Marine Corps will procure modernized capabilities for telecommunications and network infrastructure at all required Marine Corps bases, posts, camps, and stations globally.

John: Given the typical protest timetable.

John: Resolution is expected in the second quarter and assuming a favorable outcome revenues are expected to ramp throughout the balance of the year.

John: We look forward to the conclusion of these protests as these awards represent pre existing programs, requiring a timely and smooth transition to ensure uninterrupted service to the federal government.

John: Beyond These awards it is important to highlight since 2023, we've won positions on five new federal contract vehicles, including most recently a vehicle through which the United States Marine Corps will procure modernized capabilities for telecommunications and network infrastructure and all required marine.

John: Four basis.

John: Camps and stations globally.

John B. Wood: In the aggregate, these five new contract vehicles provide Telos with market access to compete for new business opportunities that represent a $12 billion addressable market. We will continue to pursue additional contract vehicles that will further increase our access to new federal markets over time. In addition, I'm pleased to report on several other key outcomes since our last earnings call. Our Executive Business has received new orders from the U.S. Air Force Services Center, as well as a major technology company and a federal government customer.

John: In the aggregate these five new contract vehicles provide tell us with market access to compete for new business opportunities that represented 12 billion dollar addressable market.

John: We will continue to pursue additional contract vehicles that will further increase our access to new federal markets over time.

John B. Wood: Additionally, the executive business has achieved renewals with several key customers, including the U.S. 16th Air Force, the U.S. National Geospatial Intelligence Agency, the U.S. Defense Intelligence Agency, the U.S. Department of Energy, a professional services company, and a leading cloud computing company. The company has also received service renewals with the U.S. Department of Homeland Security, the U.S. Office of Our automated message handling system business achieved a major contract renewal with a branch of the U.S. Armed Forces.

John: In addition, I am pleased to report on several other key outcomes since our last earnings call.

John: Or is that the business has received new orders with the U S Air Force Services Center as well as a major technology company and our federal government customer. Additionally.

John: Additionally, the exact the business has achieved renewals with several key customers, including the U S. 16th Air Force. The U S National Geospatial Intelligence agency. The U S Defense Intelligence agency the U S Department of energy.

John: <unk> services company, and a leading cloud computing company.

John: The company has received services renewals with the U S Department of Homeland Security. The U S office of Naval Intelligence and a federal Executive Department.

John: Our automated message handling system business achieved a major contract renewal with a branch of the U S. Armed forces and finally within our Telus IV business transaction volumes at our TSA pre check program have sequentially ramp every quarter for the last four quarters, including the first quarter of 2024.

John B. Wood: And finally, within our Telos ID business, transaction volumes in our TSA PreCheck program have sequentially ramped every quarter for the last four quarters, including the first quarter of 2024. We continue to work closely with TSA to ensure our pre-existing enrollment locations are operating at the absolute highest possible standards necessary for a national security program of this magnitude before accelerating our rollout of additional onsite enrollment centers around the country. We opened two additional enrollment locations in April, with more expected in the coming quarter. I will now turn the call over to Mark, who will discuss second quarter guidance. Mark?

John: We continue to work closely with TSA to ensure our preexisting enrollment locations are operating at the absolute highest possible standards necessary for our National Security program of this magnitude before accelerating our rollout of additional onsite enrollment centers around the country.

John: We opened two additional enrollment locations in April with more expected in the coming quarters I'll now turn the call over to Mark who will discuss second quarter guidance Mark.

Mark D. Griffin: Thanks, John Let's turn to slide five.

Mark D. Griffin: For the second quarter, we expect revenue in a range of $25 million to $28 million.

Mark D. Griffin: And an adjusted EBITDA loss of $8 million 6 million.

Mark D. Griffin: Our second quarter guidance combined with our first quarter reported revenue.

Mark D. Griffin: Implies first half revenue of $54 6 million to $57 $6 million and compares favorably with the approximately $55 million of first half revenue that we outlined in the 2020 for modeling inputs provided in the appendix of our fourth quarter earnings presentation.

Mark D. Griffin: <unk>.

Mark D. Griffin: Overall, we expect total company revenue to return to sequential growth in the third or fourth quarter subject to favorable resolution of protests.

Mark D. Griffin: And a nonrecurring perpetual license sale in the comparable period last year par.

Mark D. Griffin: Partially offset by a more favorable revenue contribution from our higher margin security solutions business in 2024.

Mark D. Griffin: Cash gross margin is expected to be down 250 basis points to flat year over year.

Mark D. Griffin: Lastly, our full year outlook is substantially unchanged, we've made only minor adjustments to the full year modeling inputs provided in the appendix.

Mark D. Griffin: With that I'll turn it back to John.

John B. Wood: And with that, I'll turn it back to John. Thanks, Mark. Now, let's turn to slide six.

John: Thanks, Mark, let's turn to slide six.

John: In summary, we once again exceeded expectations and deliver results above the high end of the guidance range on key financial metrics in the first quarter we.

We've made substantial progress on new business capture during the first quarter and we expect security solutions and total company revenues to return to sequential growth in the third or fourth quarter subject to favorable resolution of protests and with that we're happy to take questions.

Speaker Change: Operator, please open the line for Q&A and we asked the call participants to please be mindful of others in the queue by asking only one question. Thank you.

John B. Wood: Ladies and gentlemen, if you have a question or a comment at this time, please press star one one on your telephone. If your question has been answered, or you wish to move yourself from the queue, please press star one one again.

Speaker Change: Thank you ladies and gentlemen, if you have a question or comment at this time. Please press star one on your telephone. If your question has been answered or you wish to move yourself from the queue. Please press star one again, we will pause for a moment, while we compile our Q&A roster.

Operator: We'll pause for a moment while we compile our Q&A roster. Our first question comes from Zach Cummins with B Raleigh Securities. Your line is open. Hi, good morning, John and Mark.

Speaker Change: Our first question comes from Zach Cummins with B Riley Securities. Your line is open.

Zachary Cummins: Thanks for taking my questions and congratulations on your solid performance here in Q1. I guess I'll try to make it a multi-part question. One, for John, can you speak to just the protesting process? I appreciate the timeline and...

Zachary Cummins: Hi, Good morning, John and Mark Thanks for taking my questions and congrats on solid performance here in Q1.

Zachary Cummins: Yes, I'll try to make a multipart question one for John could you speak to just the protesting process I appreciate the timeline.

John B. Wood: I'm just curious if they give you any sort of indications or updates along the way, anything you can share incrementally on the protesting process. And then part two is just on the CFA pre-check program. It's nice to hear that you've ramped volumes every quarter since its launch, but I'd just curious if we could get more insight into how you're thinking about the rollout timeline for new locations. And now that all three vendors are live on the program, have there been any notable changes in transaction volume?

Zachary Cummins: Just curious if they give you any sort of indications or updates along the way.

Zachary Cummins: Anything you can share incrementally on the protest process.

Zachary Cummins: And then part two is just.

Zachary Cummins: The CFA pre check program now.

Zachary Cummins: Nice to hear that you ramp volumes every quarter since its launch but.

Zachary Cummins: Just curious if we could get more insight into how youre thinking about the rollout timeline for new locations and now that all three vendors are live on the program. If there's been any notable changes in transaction volumes.

John B. Wood: Sure, thank you for the question, Zach. You know, the protest process is typically 100 days. We would expect the outcome, an outcome this quarter on both of the new awards that we announced last quarter. And we're not, we don't really have a day-to-day insight into the protest process.

Speaker Change: Sure. Thanks, Thank you for the question Zack.

Speaker Change: Yeah.

Speaker Change: The protest process is typically 100 days, we would expect the outcome and outcome this quarter.

Speaker Change: Both of the New awards that we announced last quarter and we're not we don't really have.

Day to day inside into the protest process Thats really not our we're not a part of that process, but as we reported earlier.

Speaker Change: A small percentage of these programs are.

Speaker Change: All against the against the winter if you will so.

Speaker Change: We're confident that we're going to be able to move forward with these programs.

Speaker Change: Now as far as TSA pre check goes.

Speaker Change: Kris Im very pleased to say that we will be accelerating the ramp of our office depot locations and we expect to accelerate that rollout into Q2 getting to 500 stores within 2025.

Kris: Yes, Doug I think what I would add to that with respect to transaction volumes at least as we've said.

Speaker Change: They've ramped nicely over the last few quarters.

Speaker Change: In terms of having all of the participants.

Speaker Change: Come into the market in terms of the three participants.

Speaker Change: Hi.

Speaker Change: That was already factored into the prior guidance and modeling inputs that we've provided.

Speaker Change: Does that answer your questions.

Zachary Cummins: I appreciate you answering my questions and best of luck with the rest of the quarter. One moment for our next question. Our next question comes from Rudy Kissinger with D.A. Davidson.

Speaker Change: Yes, it does.

Speaker Change: I appreciate you answering my questions and best of luck with the rest of the quarter.

Speaker Change: Okay. Thanks, Matt.

Speaker Change: One moment for our next question.

Rudy Grayson Kessinger: Your line is open. Hey, thanks for taking my question. I guess I'm kind of curious, you know, this hundred million of revenue from existing contracts this year, how much from those existing contracts is going to fall in 25.

Speaker Change: Our next question comes from Rudy <unk> with D. A Davidson your line is open.

Hey, Thanks for taking my question I guess I'm kind of curious this $100 million of revenue from existing contracts this year.

Rudy: How much from those existing contracts.

Rudy: Is it going to fall in 25, so if it's a $100 million. This year, how much is that going to decline 225. Thank you.

Mark D. Griffin: So if it's $100 million this year, how much is that going to decline to in 25? Thank you. Yeah, so Rudy, what we've said in the past, and I think it applies here as well, in a typical year, we expect a few tens of millions of Hedwin from prior to your revenues. So if you think about the hundred million that's recurring in 24, I'd say in 25, that's approximately, that hundred becomes approximately 70, and then you add on from there the additional revenue from these programs that would come on board subject to resolution of the protest.

Speaker Change: Yes, so so really rough.

Speaker Change: Said in the past and I think it applies here as well.

Speaker Change: In a typical year, we expect a few tens of millions.

Speaker Change:

Speaker Change: Headwind.

Speaker Change: From prior year revenues.

Speaker Change: If you think about the $100 million.

Speaker Change: <unk> and.

Speaker Change: In 2004.

Speaker Change: They had 25 Thats approximately 100 becomes approximately 70.

Speaker Change: And then youre, adding on from there.

Speaker Change: The additional revenue from these programs that would come on board subject to resolution of the protest.

Speaker Change: We've given you an indication of what that could be in a typical year.

Speaker Change: And then we'd have additional revenue from TSA pre check as we make continue to make progress on rolling out our office co locations.

Speaker Change: And then of course any other additional new business wins.

Speaker Change: <unk>, we realize late this year early next year, that's the typical seasonality pattern of new business wins.

Speaker Change: That's your question Rudy.

Speaker Change: It does thank you okay.

Bradley Reiss Clark: OK. One moment for our next question. Our next question comes from Bradley Clark with BMO Capital Markets. Your line is open.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from Bradley Clark with BMO capital markets. Your line is open.

Mark D. Griffin: Thank you for taking my question. On the TSA side, you know, one of the strategies is obviously opening the number of locations. Is there anything else that Telos is doing to sort of differentiate its TSA offering now that, you know, sort of the competitive landscape is set? Is there anything from pricing or marketing that could actually fall into the expense category that we should be considering aside from new locations? Brad, this is Mark Griffin.

Bradley Reiss Clark: Hi, Thank you for taking my question.

Bradley Reiss Clark: The TSA side.

Bradley Reiss Clark: One of the strategy is obviously opening a number of location.

Bradley Reiss Clark: Anything else that power is.

Bradley Reiss Clark: Can you sort of differentiate.

Speaker Change: HTS Guy operating now back.

Speaker Change: Sort of.

Speaker Change: Relative landscape.

Speaker Change: Is there anything from pricing on marketing.

Speaker Change: That could actually fallen to the expense line.

Speaker Change: It could be considering aside from new locations.

Speaker Change: Okay.

Mark D. Griffin: I'll answer first. First, I wanted to say how pleased we are with our strategic relationship with Office Depot for the TSA PreCheck Program. This direct-to-consumer opportunity is of great value to TSA and the program. So, as we roll out, obviously, from a marketing and an expansion point of view, that's a key partner that will be very critical for us as we do that. From an expense line, I'm going to turn it over to Mark, but right now, I'm not anticipating major expenses in that area other than our commitment to our strategic partner, Office Depot, and the expansion in those areas. I have nothing to add to what Chris has already said.

Brad.

Brad: Margaret I'll answer first first of all I wanted to say how pleased we are with our strategic relationship with office depot for the TSA project program.

Brad: This direct to consumer opportunities a great value to TSA in the program.

Speaker Change: So as we rollout obviously from a from a marketing and an expansion point of view that as a key partner that will be very critical for us as we do that.

Speaker Change: On slide <unk>.

Speaker Change: Turn it over to Mark right now.

Mark D. Griffin: Im not anticipating major expenses in that area other than our commitment to our strategic partner office depot and the expansion in those areas.

Mark D. Griffin: I agree with that I have nothing to add to what Chris has already said.

Mark D. Griffin: Thank you.

Speaker Change: One moment for our next question.

Speaker Change: Okay.

Speaker Change: Yes.

Alexander Henderson: Thank you. One moment for our next question. Our next question comes from Alex Henderson with Needham. Your line is open.

Speaker Change: Our next question comes from Alex Henderson with Needham Your line is open.

Speaker Change: Yes.

John B. Wood: Thanks. I was struck by how many renewals you announced here. In that context, these renewals were as expected and not changing the overall trajectory. Is that a fair statement? Yeah, I think that's a fair statement, Alex.

Speaker Change: Thanks.

Speaker Change: <unk>.

Alexander Henderson: Struck by how many.

Alexander Henderson: Renewals you have announced here.

Alexander Henderson: In that context.

Alexander Henderson: You've also maintained the full year numbers, so I assume that these renewals were as expected.

Alexander Henderson: And not changing the overall trajectory is that is that a fair statement.

Speaker Change: Yes, I think Thats a fair statement.

Mark D. Griffin: Our track record on renewals is excellent. Our customers tend to be very sticky, and so we had another excellent quarter on renewals, and that's what we expected coming into the year. As you look forward into the back half of the year and into the first half of next year, over the next 12 months, what does the renewal pipeline look like? Alex, on the contract renewal, Mark Griffin, the Security Solutions contract renewals renew quite heavily on a renewal percentage basis.

Speaker Change: Our track record on renewals.

Speaker Change: Excellent.

Speaker Change: Customers tend to be very sticky and so.

Speaker Change: We had another excellent quarter on renewals and Thats, what we expected coming into the year.

Speaker Change: As you look forward into the back half of the year and into the first half of next year over the next 12 months, what does the renewal pipeline look like.

Speaker Change: Okay.

Alexander.

Alexander Henderson: The contract renewal markets.

Alexander Henderson: The.

Alexander Henderson: Security solutions contract renewals.

Alexander Henderson: Renewed quite heavily on a renewal percentage basis.

John B. Wood: Where we see less renewal volume is on the secure network side, so I expect that the majority of the business in Security Solutions will renew and grow based on the other contract vehicles John mentioned in his script. Those five contract vehicles will also come into the portfolio, both for secure networks and secure solutions, so I think you'll see a growth area there, not only for contract renewals but also new contract vehicles coming into play, which will add to the portfolio.

Alexander Henderson: Where we see less renewal.

Alexander Henderson: Volume is on the secure network side.

Alexander Henderson: The majority of the business in security solutions will renew and grow based on the other contract vehicles John mentioned in his script.

Alexander Henderson: Those five contract vehicles will also come into the portfolio both for secured networks in secure solutions. So I think youll see.

Alexander Henderson: Our growth area there.

Alexander Henderson: Not only on contract renewals, but also new contract vehicles coming into play which will add to the portfolio.

John B. Wood: Yeah, so I'll say it a little more simply, so Security Solutions is, by and large, a recurring revenue stream. That's where you can sort of see the renewals coming in in a very consistent way, generally speaking. On the secure network side, those programs tend to have a beginning, a middle, and an end.

Speaker Change: Yes, Jonathan I'll say, it a little more simplistically.

Speaker Change: So security solutions business by and large is a recurring revenue stream.

Speaker Change: That's why you see the renewals coming in.

Speaker Change: In a very consistent way generally speaking on a secured network side. Those those programs tend to have a beginning a middle and it and so thats, where you see that few tens of millions that Marc always talks about on these calls so think about security solutions as being recurring revenue think about secured networks as being more epic.

Alexander Henderson: So that's where you see that few tens of millions that Mark always talks about on these calls. So think about Security Solutions as being recurring revenue; think about secure networks as being more episodic revenue. I guess what I'm trying to ask, and maybe I'll just try to... in a different way, but it's the same question.

Speaker Change: <unk> revenue.

Speaker Change: Yes, I guess, what I'm trying to ask and maybe I'll just try it a different different way or it's the same question is there more or less than normal renewals in the headlights.

John B. Wood: Is there more or less than normal renewals in the headlines? Just the same level. We're trying to ascertain whether there will be any potential change in the rate of the renewals as opposed to... Yeah, so it's about the same, Alex. And, you know, we would anticipate it to continue. There are four big points for us in the in the company. One is to continue our extreme focus on our current customers. The second is to very much accelerate the opening of Office Depot locations because that's going to accelerate the ramp-up of revenue for TSA PreCheck.

Speaker Change: Or is it just the same level of typical renewals.

Speaker Change: Trying to ascertain.

Speaker Change: <unk>.

Speaker Change: This potential change in the rate of your renewals as opposed to.

Speaker Change: What the closure rates look like yes. So it's about the same Alex and we would anticipate it to.

Speaker Change: Continue further four big points for us in the company one is to continue our extreme focus on our current customers.

Speaker Change: Very much accelerate the ramp of office depot locations to that could accelerate the ramp of revenue per TSA pre check and the third is to execute against new business wins that we previously announced in the fourth is to focus on continuing to deliver new business Awards. So our pipeline continues to grow and it continues to be an opportunity for us.

Nehal Sushil Chokshi: The third is to execute against new business wins that we have previously announced. And the fourth is to focus on continuing to deliver new business awards, so our pipeline continues to grow, and it continues to be an opportunity for us to see top line growth. Thanks. Thanks, Alex. One moment for our next... Our next question comes from Nehal Chokshi with Northland Capital Markets. Your line is open.

Speaker Change: See topline.

Speaker Change: Okay. Thanks.

Speaker Change: One moment for our next question.

Speaker Change: Okay.

Speaker Change: Our next question comes from Nihon <unk> with Northland Capital markets. Your line is open.

Speaker Change: Okay.

John B. Wood: Thank you. The five new federal contract vehicles that you've won positions in that represent a 12 billion dollar trustable market, can you talk about, you know, A, what is the number? Is that an annualized number, or is that over X amount of years? And if it's over X amount of years, how many years is that?

Nihon: Thank you.

Nihon: The <unk>.

Nihon: <unk>, new federal contract vehicles.

Nihon: That you've won positions and that represented a $12 billion addressable market.

Nihon: Can you talk about.

Nihon: What is the.

Nihon: Is that an annualized number or is that over X amount of years and if it's over X amount of years, how many years does that and then b.

Mark D. Griffin: And then B, what would you expect the margin profile of this $12 billion addressable market that you've won the right to compete in for now? Yeah, so two of the awards are in the secure networks bucket, if you will. Two of the awards are in what I'll call our enterprise bucket, which is the entire company. And then one is in security solutions. As far as the margin profile goes, the period of performance on these can range anywhere from five to ten years. And I'm going to turn to Mark on the margins, if you don't mind. Yes, the margin profiles would follow what we have projected and modeled as far as security solutions and secure networks are concerned.

Nihon: What would you expect the margin profile of the $12 billion addressable market that you've won the right to compete for now yes, so too.

John B. Wood: So those margin profiles would basically follow that based on what John indicated as the breakout of that total overall market value. And keep in mind, for the analysts on the call here, for each of these awards, there are several other awardees in each case. So what ends up happening is, and the reason we call it an addressable market is because on each of these awards, we have to compete at the task order level.

Nihon: The awards are in the secure networks bucket. If you will to the awards are in what I'll call. Our enterprise bucket, which is the entire company and then one is in security solutions.

John B. Wood: So we're competing against limited competition on the task order level for each of these awards versus the previous two awards we talked about where we're part of a team where it's a single award for one player, if you will, the team being one player. So that's why those other awards are much more predictable in terms of the way the revenue breakout is, whereas for these other awards, these are contract vehicles which have ceilings, large ceilings, and in each case, we have to compete at the task order level.

John B. Wood: And task orders can be anywhere from like $2 million to $100 million, just to give it a little more, if you will, nuance to it. Yeah, that's definitely helpful. And then, in past quarters, you've been talking about your bidding pipeline, the size of the bidding pipeline, how that's been growing. Did you give an update? If not, can you do so?

Nihon: As far as the margin profile goes on there.

Nihon: The period of performance on these can range anywhere from five to 10 years.

Nihon: I'm going to turn to Mark on the margins if you don't mind.

Nihon: Yes.

Mark D. Griffin: Return profiles would follow what we have is projected and modeled as far as security solution that secured networks. So those margin profiles with basically follow that based on what John indicated at the break out of that total overall market better and keep in mind for the analysts on the call here.

Each of these awards.

Mark D. Griffin: There are several other awardees and each case, so what ends up happening is and the reason we call. It an addressable market is because on each of these awards we have to compete at the task order level. So we're competing against limited competition.

Mark D. Griffin: On the task order level on these on each of these awards versus the previous two awards, we chatted about.

Mark D. Griffin: It's a we're part of a team where it's a single award to one player.

If you will the team being one player. So that's why those other awards are much more predictable in terms of the way the revenue breakout is whereas on these other world Awards. These are contract vehicles, which had ceilings large ceilings and in each case, we have to compete at the task order level and task orders can be anywhere from.

Mark D. Griffin: Like $2 million to $100 million just to.

Mark D. Griffin: Give a little more fuel nuance to it.

Speaker Change: Yes, that's definitely helpful and then.

Speaker Change: Past quarters, you've been talking about your bidding pipeline. Besides the bidding pipeline how does from growing did you give an update can you do so.

Nehal Sushil Chokshi: Sure, so outside of these awards, these vehicles that have been won, there's an additional roughly $3.2 billion worth of pipeline, and that's unfactored without renewal. Got it. Great. And that's up from, what, last quarter?

Speaker Change: Sure. So outside of these award that these vehicles that have been won there is an additional roughly three $2 billion worth of.

Of the pipeline.

Speaker Change: And thats on factored without renewals.

Speaker Change: Hi.

Speaker Change: Got it great and Thats up from.

Speaker Change: What last quarter.

John B. Wood: Truth be told, I don't want our analysts to fall into the trap of trying to measure it quarter to quarter because it's going to change. Some bids will come in, some bids will go out. We'll know bids for certain things. We'll accelerate bids on other things. But in general, though, we like to see a pipeline like this because we want to see it be at least 10x what our potential is. Okay.

Speaker Change: Truth be told I don't want our analysts to fall into the trap of trying to measure it quarter to quarter, because it's going to change it's going to see some bids will come in some bids will go out.

Speaker Change: We'll know bid certain things will accelerate bids on other things, but in general, though we like to see a pipeline like this because we want to be at least 10 at what our potential is.

Speaker Change: Got it great. Thank you.

Nehal Sushil Chokshi: Great. Thank you. Ladies and gentlemen, this does conclude the Q&A portion of today's conference. I'd like to turn the call back over to John Wood.

Speaker Change: Ladies and gentlemen, this does conclude the Q&A portion of today's conference I'd like to turn the call back over to John <unk>.

John: Well first of all I just want to thank our shareholders for your ongoing support and.

John: As we as we said here on the call I'm very pleased with the.

John: The progress we've made on our new business capture in the first quarter.

John: Im looking forward to finally getting to sequential revenue growth in the third or the fourth quarter and obviously subject to the resolution of the protest that we've talked about previously.

John B. Wood: You know, these contracts will have the potential to significantly and very positively impact our performance, along with us opening up Office Depot locations for TSA PreCheck. You know, I think the other thing I want to remain focused on is our pipeline expansion. I mentioned several quarters ago that we were going to go back to the markets that we know best, and I think we're, we're, seeing the kind of results that we expect to have for a company that knows the US federal government and adjacent markets around it.

John: <unk>.

These these contracts will have the potential to significantly and very positively impact our performance along with US opening up office depot locations for TSA.

John: <unk> pre check.

John: I think the other thing I want to remain focused on is our pipeline expansion I mentioned several quarters ago that we're going to go back to the markets that we know best and I think we're seeing the kind of results that we expect to add for a company that knows the U S federal government and adjacent markets around it so I remain very.

John B. Wood: So I remain very excited about the outlook for the company. And, you know, with robust and recession-resistant end markets, with well-funded customers, and a decades-long track record of serving the world's most security conscious organizations, Telos really does have a very strong foundation for the future. So I just want to say again, on behalf of all of us here at Telos, thank you. Ladies and gentlemen, that does conclude today's presentation. You may now disconnect and have a wonderful day.

John: Cited about the outlook for the company.

John: And with robust and recession resistant end markets with well funded customers and a decades long track record of serving the world's most security conscious organizations tell us really does have a very strong foundation for the future. So I just wanted to say again on behalf of all of US here at Telos. Thank you.

Speaker Change: Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.

Q1 2024 Telos Corp Earnings Call

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