Telos Corp (TLS) 2024 Q1 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Telos Corporation first-quarter-2024 earnings call. (Operator Instructions) Please be advised, this conference is being recorded.

美好的一天，感謝您的支持。歡迎參加 Telos Corporation 2024 年第一季財報電話會議。（操作員指示）請注意，本次會議正在錄製中。

I would now like to hand the conference over to your speaker today, Allison Phillipp. Please go ahead.

現在我想將會議交給今天的發言人艾莉森·菲利普。請繼續。

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 Bendza, Executive Vice President and CFO of Telos.

早安.感謝您與我們一起討論 Telos Corporation 2024 年第一季的財務表現。今天和我在一起的是 Telos 董事長兼執行長 John Wood；以及 Telos 執行副總裁兼財務長 Mark Bendza。

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 the second-quarter guidance and insights on the financial outlook for the company before turning back to John to wrap up. We will then open the line for Q&A who are Mark Griffin, Executive Vice President of Security Solutions, will also join us.

讓我快速回顧一下今天演講的形式。馬克將首先評論我們 2024 年第一季的業績。接下來，約翰將討論第一季的業務亮點。馬克將跟進第二季度的指導和對公司財務前景的見解，然後返回約翰進行總結。然後我們將開通問答熱線，安全解決方案執行副總裁 Mark Griffin 也將加入我們。

The earnings press release was issued earlier today and is posted on the Telos Investor Relations website, where this call is being simultaneously webcast. Additionally, we have provided presentation slides on our Investor Relations website.

收益新聞稿於今天稍早發布，並發佈在 Telos 投資者關係網站上，該電話會議同時進行網路直播。此外，我們還在投資者關係網站上提供了簡報幻燈片。

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. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ for various reasons, including the factors described in today's earnings press release, in the comments made during this conference call and in our SEC filings. We do not undertake any duty to update any forward-looking statements.

在開始之前，我們想強調，我們在本次電話會議中的一些聲明屬於前瞻性聲明，並且是根據聯邦證券法的安全港條款做出的。這些陳述基於當前的預期和假設，存在風險和不確定性。實際結果可能因各種原因而存在重大差異，包括今天的收益新聞稿中描述的因素、本次電話會議期間的評論以及我們向 SEC 提交的文件中的評論。我們不承擔更新任何前瞻性陳述的責任。

In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful to supplemental and clarifying measures to help investors understand Telos' financial performance. These non-GAAP financial measures should be considered in addition to and not as a substitute for or in isolation from GAAP results.

此外，在今天的電話會議中，我們將討論非公認會計準則財務指標，我們認為這些指標有助於補充和澄清指標，幫助投資者了解 Telos 的財務表現。這些非公認會計原則財務指標應作為公認會計原則結果的補充，而不是替代或孤立於公認會計原則結果。

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 the Investor Relations link.

您可以在我們的收益新聞稿和我們網站的投資者關係部分找到有關這些非公認會計原則衡量標準的其他披露信息，包括與可比較公認會計原則結果的調節表。另請注意，除非另有說明，否則財務比較是逐年進行的。本次電話會議的網路直播重播將於明年在我們公司網站的投資者關係連結下提供。

With that, I'll turn the call over to Mark.

這樣，我會將電話轉給馬克。

Thank you, Allison, and good morning, everyone. Let's begin today on slide 3. I am pleased to report that Telos has again overdelivered 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 flow.

謝謝你，艾莉森，大家早安。讓我們從今天的幻燈片 3 開始。我很高興地報告，Telos 在第一季的關鍵財務指標上再次超額交付，超過了收入和利潤指引。總體而言，這是一個簡單的季度，關鍵財務指標的表現優於指導，導致利潤和現金流大幅成長。

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. 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.

讓我們來了解一些細節。我們第一季實現了 2,960 萬美元的收入，比我們 2,800 萬美元至 2,900 萬美元的指導範圍高出約 60 萬美元。安全解決方案實現了 1860 萬美元的收入，高於我們指導範圍的上限，因為所有業務線都表現適度出色。

Secure Networks delivered approximately $11 million of revenue, in line with the top end of our guidance range. GAAP gross margin was 37%, 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.

Secure Networks 交付了約 1100 萬美元的收入，符合我們指導範圍的上限。GAAP 毛利率為37%，高於我們的指導，原因是固定價格合約和安全解決方案的成本管理、直接勞動力和安全網路的利用率好於預期，以及我們利潤率較高的安全解決方案業務的收入整體權重略好。

Security Solutions generated approximately 63% of total company revenues in the first quarter of 2024 and 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 both above forecast resulted in gross profit above what was incorporated into our adjusted EBITDA guidance range.

2024 年第一季度，安全解決方案約占公司總收入的 63%，而 2023 年第一季這一比例為 56%，這一有利差異預計會隨著時間的推移而擴大。現金毛利率高達 42.2%，年增 249 個基點，是自 2020 年 IPO 以來第二高的季度。收入和毛利率都高於預測，導致毛利高於我們調整後的 EBITDA 指引範圍。

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. As a result, adjusted EBITDA also exceeded the top end of our guidance range. Adjusted EBITDA was a $2.3 million loss compared to our guidance range of a $5.5 million loss to a $5 million loss.

此外，由於支出時間安排以及軟體開發成本資本化高於預期，研發和銷售、一般行政管理費用也比預期好。因此，調整後的 EBITDA 也超出了我們指導範圍的上限。調整後 EBITDA 為 230 萬美元損失，而我們的指導範圍為 550 萬美元損失至 500 萬美元損失。

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.

最後，營運現金流為 35 萬美元流出，自由現金流為 360 萬美元流出。自由現金流較 2023 年第一季的 410 萬美元流出有所改善。總體而言，這是一個乾淨的季度，整個投資組合執行力紮實。

I will now turn it over to John for an overview of business highlights. John?

我現在將把它交給約翰，以概述業務亮點。約翰？

Thanks, Mark, and good morning, everyone. Let's turn to slide 4. 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.

謝謝，馬克，大家早安。讓我們轉到投影片 4。正如我們在3 月的最後一次財報電話會議上所傳達的那樣，Telos 與主要合作夥伴簽訂了合作協議，這些合作夥伴在第一季度獲得了聯邦政府在五年內向Telos 安全解決方案業務提供的價值高達5.25 億美元的獎勵。

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 award is subject to resolution of the protest.

作為政府提供的慣常的授予後抗議期的一部分，這種規模的授予決定遭到現任者或其他投標人的抗議並不罕見，這裡就是這種情況。這些獎項已遭到抗議，裁決的最終確定取決於抗議的解決。

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.

鑑於典型的抗議時間表，預計將在第二季度得到解決。假設結果良好，預計今年剩餘時間收入將持續成長。我們期待這些抗議活動的結束，因為這些獎項代表了現有的計劃，需要及時、平穩的過渡，以確保為聯邦政府提供不間斷的服務。

Beyond these awards, it's important to highlight since 2023, we have won positions on five new several contract vehicles, including most recently, a vehicle through which the United States Marine Corps will procure modernized capabilities for telecommunication and network infrastructure at all required Marine Corps bases, post, camps and stations globally.

除了這些獎項之外，值得強調的是，自2023 年以來，我們已經贏得了五種新的合約車輛的職位，其中包括最近美國海軍陸戰隊將在所有所需的海軍陸戰隊基地採購現代化電信和網路基礎設施能力的車輛全球各地的郵局、營地和車站。

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.

總的來說，這五種新的合約工具為 Telos 提供了市場准入，以競爭代表價值 120 億美元的潛在市場的新商機。我們將繼續尋求更多的合約工具，隨著時間的推移，這將進一步增加我們進入新聯邦市場的機會。

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

此外，我很高興地報告自上次財報電話會議以來的其他幾個關鍵成果。我們的 Xacta 業務已收到美國空軍服務中心以及一家大型科技公司和聯邦政府客戶的新訂單。此外，Xacta業務還與多個關鍵客戶實現了續約，包括美國第16空軍、美國國家地理空間情報局、美國國防情報局、美國能源部、一家專業服務公司和一家領先的雲端運算公司。

The company has received services renewals with the US Department of Homeland Security, the US Office of Naval Intelligence and a federal executive department. Our Automated Message Handling System business achieved a major contract renewal with a branch of the US Armed Forces.

該公司已獲得美國國土安全部、美國海軍情報辦公室和聯邦行政部門的服務續約。我們的自動訊息處理系統業務與美國武裝部隊的一個分支機構續簽了重大合約。

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 preexisting 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 on-site enrollment centers around the country. We opened two additional enrollment locations in April with more expected in the coming quarters.

最後，在我們的 Telos ID 業務中，我們的 TSA PreCheck 計畫的交易量在過去四個季度中每季都在連續成長，包括 2024 年第一季。我們將繼續與 TSA 密切合作，確保我們現有的招生地點按照如此規模的國家安全計劃所需的絕對最高標準運行，然後再加速在全國各地推出更多現場招生中心。我們在四月開設了兩個額外的註冊地點，預計未來幾季還會有更多的註冊地點。

I will now turn the call over to Mark who will discuss second-quarter guidance. Mark?

我現在將把電話轉給馬克，他將討論第二季度的指導。標記？

Thanks, John. Let's turn to slide 5. 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 Precheck 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.

謝謝，約翰。讓我們轉到投影片 5。我們預計第二季營收在 2,500 萬美元至 2,800 萬美元之間，調整後 EBITDA 虧損為 800 萬美元至 600 萬美元。我們預測安全解決方案收入將同比下降高個位數百分比至中個位數百分比增長，這主要是由於2023 年第二季度的非經常性永久許可證銷售所推動，但被2024 年TSA Precheck 的增長所抵消。我們預計安全網路收入將年減 40% 至 30%，因為我們預計全年積壓訂單將持續減少。

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 favorable resolution of protests.

我們的第二季指引與第一季報告的收入相結合，意味著上半年收入為5460 萬美元至5760 萬美元，與我們在附錄中提供的2024 年建模輸入中概述的上半年收入約5500萬美元相比，情況更為有利我們的第四季財報。總體而言，我們預計，如果抗議活動得到有利解決，公司總收入將在第三或第四季恢復環比成長。

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 in 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 2024.

GAAP 毛利率預計將同比下降約 750 個基點至 425 個基點，主要是由於安全解決方案的資本化軟體開發成本攤銷增加以及去年同期的非經常性永久許可證銷售，部分抵消2024 年，我們利潤率較高的安全解決方案業務將帶來更有利的收入貢獻。

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 D&A are forecast to be approximately $1.9 million to $2.1 million higher year over year, primarily due to investment in growth initiatives. Lastly, our full-year outlook is substantially unchanged. And we've made only minor adjustments to the full-year modeling inputs provided in the appendix.

現金毛利率預計將年減 250 個基點至持平。根據資本化軟體開發成本、股票薪酬、重組成本和 D&A 進行調整後的線下現金支出預計將同比增加約 190 萬至 210 萬美元，這主要是由於對增長計劃的投資。最後，我們的全年前景基本上沒有改變。我們僅對附錄中提供的全年模型輸入進行了微小調整。

And with that, I'll turn it back to John.

說到這裡，我會把它轉回給約翰。

Thanks, Mark. Let's turn to slide 6. 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 of protests.

謝謝，馬克。讓我們轉到投影片 6。總而言之，我們再次超越了預期，第一季的關鍵財務指標的表現超出了指導範圍的上限。第一季我們在新業務取得方面取得了實質進展。我們預計，如果抗議得到有利解決，安全解決方案和公司總收入將在第三或第四季恢復連續成長。

And with that, we're happy to take questions.

因此，我們很樂意回答問題。

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. Thank you.

接線員，請打開問答線路，我們請通話參與者註意隊列中的其他人，只問一個問題。謝謝。

(Operator Instructions) Zach Cummins, B. Riley Securities.

（操作員指令）Zach Cummins，B. Riley Securities。

Hi. Good morning, John and Mark. Thanks for taking my questions, and congrats on 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 just curious if they give you any indications or updates along the way? Anything you can share incrementally on the protesting process?

你好。早上好，約翰和馬克。感謝您回答我的問題，並祝賀第一季的出色表現。我想我會嘗試提出一個由多個部分組成的問題。約翰，你能談談抗議過程嗎？我很欣賞時間表。只是好奇他們是否會向您提供任何指示或更新？關於抗議過程，您有什麼可以逐步分享的嗎？

And then, part two is just on a TSA PreCheck program. Nice to hear that you've ramped volumes every quarter since its launch. But just curious if we could get more insight into how you're thinking about the rollout time line for new locations? And now that all three vendors are live on the program, if there's been any notable changes in transaction volumes?

然後，第二部分只是關於 TSA PreCheck 計劃。很高興聽到自推出以來每個季度銷量都在增加。但只是好奇我們是否可以更深入地了解您如何考慮新地點的推出時間表？現在所有三個供應商都已參與該計劃，交易量是否有任何顯著變化？

Sure. Thank you for the question, Zach. 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 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, a very small percentage of these programs are resolved against the winner, if you will. So we're confident that we're going to be able to move forward with these programs.

當然。謝謝你的提問，扎克。抗議過程通常為 100 天。我們預計結果是本季度我們上季度宣布的兩個新獎項的結果。我們並沒有真正了解抗議過程的日常情況。這確實不是我們的——我們不是這個過程的一部分。但正如我們之前報導的那樣，如果您願意的話，這些計劃中的一小部分是針對獲勝者解決的。因此，我們有信心能夠推進這些計劃。

Now, as far as TSA PreCheck goes, I'm just pleased -- I'm 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.

現在，就 TSA PreCheck 的進展而言，我很高興 — 我很高興地說，我們將加快 Office Depot 辦公地點的擴建速度。我們預計在第二季加快推出速度，到 2025 年將門市數量增加到 500 家。

Yeah. And 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?

是的。扎克，我認為我要補充的是，正如我們所說，交易量在過去幾季中成長良好。就讓所有參與者以三個參與者的形式進入市場而言，這已經考慮到我們提供的先前指導和建模輸入。這能回答你的問題嗎，札克？

Yes, it does. I appreciate answering my questions, and best of luck for the rest of the quarter. Thank you.

是的，它確實。我很高興回答我的問題，祝本季剩下的時間一切順利。謝謝。

Thank you.

謝謝。

Okay. Thanks, Zach.

好的。謝謝，扎克。

Rudy Kessinger, D.A. Davidson.

魯迪·凱辛格，D.A.戴維森。

Hey. Thanks for taking my question. I guess I'm curious, this $100 million of revenue from existing contracts this year. How much from those existing contracts is going to fall in '25? So if it's $100 million this year, how much is revenue decline in '25? Thank you.

嘿。感謝您提出我的問題。我想我很好奇，今年現有合約帶來的 1 億美元收入。25 年現有合約將減少多少？那麼，如果今年是 1 億美元，那麼 25 年的營收會下降多少？謝謝。

Yeah. So really, 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 headwind from prior year revenues. So if you think about the $100 million that's recurring in '24, I'd say in '25, that's approximately -- that $100 million becomes approximately $70 million. And then, you're adding on from there the additional revenue from these programs that would come on board subject to resolution of the protest.

是的。事實上，我們過去所說的，我認為它也適用於這裡。在典型的一年中，我們預計上一年的收入將受到數千萬美元的不利影響。因此，如果你考慮一下 24 年重複出現的 1 億美元，我會說 25 年，這大約是 1 億美元變成了大約 7000 萬美元。然後，您可以從這些項目中增加額外收入，這些收入將根據抗議的解決而增加。

We've given you an indication of what that could be in a typical year. And then, we have additional TSA PreCheck as we make -- continue to make progress in rolling out our Office Depot locations. And then, of course, any other additional new business wins that we realized late this year, early next year, that's the typical seasonality pattern of new business wins. Does that answer your question, Rudy?

我們已經向您提供了典型年份的情況。然後，我們會進行額外的 TSA 預檢查，繼續在推出 Office Depot 地點方面取得進展。當然，我們在今年年底、明年初實現的任何其他新業務的勝利，都是新業務勝利的典型季節性模式。這能回答你的問題嗎，魯迪？

It does. Thank you.

確實如此。謝謝。

Okay.

好的。

Bradley Clark, BMO Capital Markets.

Bradley Clark，BMO 資本市場。

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

你好。謝謝你回答我的問題。在 TSA 方面，其中一項策略顯然是開放地點數量。既然競爭格局是這樣的，Telos 是否還採取其他措施來使其 TSA 產品脫穎而出——除了新地點之外，定價或行銷方面是否有任何內容實際上可能屬於我們應該考慮的費用範圍？

Brad, it's Mark Griffin. I'll answer it 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 in 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.

布拉德，我是馬克‧格里芬。我先來回答一下。首先，我想說的是，我們對與 Office Depot 在 TSA PreCheck 計畫方面的策略關係感到非常高興。這種直接面向消費者的機會對於該計劃中的 TSA 來說非常有價值。因此，當我們推出時，顯然，從行銷和擴張的角度來看，這是一個關鍵合作夥伴，在我們這樣做時對我們來說非常關鍵。

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.

我將把費用行交給馬克。但目前，除了我們對策略夥伴 Office Depot 的承諾以及在這些領域的擴張之外，我預計不會在該領域產生重大支出。

I agree with that. I have nothing to add to what Griffin has already said.

我同意這一點。對於格里芬已經說過的話，我沒有什麼要補充的。

Thank you.

謝謝。

Alex Henderson, Needham.

亞歷克斯·亨德森，李約瑟。

Thanks. I was struck by how many renewals you have announced here. And in that context, you've also maintained the full-year numbers. So I assume that these renewals were as expected and not changing the overall trajectory. Is that a fair statement?

謝謝。我對你們在這裡宣布的續約數量感到震驚。在這種情況下，您還保留了全年資料。因此，我認為這些更新符合預期，並且不會改變整體軌跡。這是一個公平的說法嗎？

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.

是的。我認為這是一個公平的說法，亞歷克斯。我們的續訂記錄非常出色。我們的客戶往往非常黏性。因此，我們在續約方面又度過了一個出色的季度，這正是我們對今年的預期。

And 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?

當您展望今年下半年和明年上半年時，在接下來的 12 個月內，續約管道會是什麼樣子？

Alex, on the contract renewal, Mark here, 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. Those five contract vehicles will also come into the portfolio, both for Secured Networks and Secure Solutions. So I think you'll see a growth area there, not only on contract renewals but also new contract vehicles coming into play, which will add to the portfolio.

亞歷克斯，關於合約續簽，請馬克，安全解決方案合約續約的金額以續約百分比為基礎。我們發現安全網路方面的續訂量較少。因此，我預計安全解決方案中的大部分業務將基於約翰在腳本中提到的其他合約工具進行更新和成長。這五種合約工具也將納入安全網路和安全解決方案的產品組合中。因此，我認為您會在那裡看到一個成長領域，不僅在合約續約方面，而且在新的合約工具上發揮作用，這將增加投資組合。

Yeah. So I'll say it a little more simplistically. So Security Solutions business, by and large, is a recurring revenue stream. That's where you can 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. 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.

是的。所以我會說得更簡單一點。因此，總的來說，安全解決方案業務是一個經常性收入來源。在那裡您可以看到續訂以非常一致的方式進行。一般來說，在安全網路方面，這些程序往往有開始、中間和結束。所以這就是馬克在這些電話中總是談論的幾千萬的地方。因此，將安全解決方案視為經常性收入，將安全網路視為更間歇性的收入。

Yeah. I guess what I'm trying to ask, and maybe I'll just try it a different way, it's the same question. Is there more or less than normal renewals in the headlights or is it just the same level of typical renewals? We're trying to ascertain the potential change in the rate of renewals as opposed to what the closure rates look like.

是的。我想我想問什麼，也許我會嘗試不同的方式，這是同一個問題。車頭燈的更新量是否比正常更新多或少，或者只是與典型更新水平相同？我們正在嘗試確定續訂率的潛在變化，而不是關閉率的變化。

Yes. So it's about the same, Alex. And we would anticipate it to continue. There are 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, so that's going to accelerate the ramp of revenue for TSA PreCheck. And the third is to execute against new business wins that we 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.

是的。所以情況大致相同，亞歷克斯。我們預計這種情況會持續下去。我們公司有四大亮點。一是繼續高度關注現有客戶。第二個是大幅加快 Office Depot 辦公地點的擴張，從而加快 TSA PreCheck 收入的成長。第三是執行我們之前宣布的新業務勝利。第四是專注於繼續頒發新的業務獎項。因此，我們的管道繼續增長，這仍然是我們看到營收的機會。

Okay. Thanks.

好的。謝謝。

Thanks, Alex.

謝謝，亞歷克斯。

Nehal Chokshi, Northland Capital Markets.

Nehal Chokshi，北國資本市場。

Thank you. The five new federal contract vehicles that you won positions in that represent a $12 billion addressable market. Can you talk about, A, what is the -- 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? And then B, what would you expect the margin profile of this $12 billion addressable market that you wanted the right to compete for now?

謝謝。您贏得的五種新的聯邦合約工具代表著 120 億美元的潛在市場。你能談談，A，什麼是──是年化數字還是超過 x 年的數字？如果超過 x 年，那是幾年？然後 B，您希望現在有權參與競爭的這個價值 120 億美元的潛在市場的利潤狀況是多少？

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 5 to 10 years. And I'm going to turn to Mark on the margins, if you don't mind.

是的。如果你願意的話，其中兩個獎項屬於安全網路類別。其中兩個獎項屬於我所謂的企業類別，即整個公司，另一個獎項屬於安全解決方案。就利潤率而言，這些產品的履約期限可能為 5 至 10 年。如果你不介意的話，我將在邊緣向馬克求助。

Yes. The margin profiles would follow what we have as projected and modeled as far as Security Solutions and Secure Networks. So those margin profiles would basically follow that based on what John indicated is the breakout of that total overall market balance.

是的。利潤概況將遵循我們對安全解決方案和安全網路的預測和建模。因此，這些保證金概況基本上將遵循約翰所指出的整體市場平衡的突破。

And keep in mind, for the analysts on the call here, 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. So we're competing against limited competition on the task order level on these -- on each of these awards versus the previous two awards we chatted about where 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.

請記住，對於參加會議的分析師來說，每個獎項中都有幾個其他獲獎者。所以最終發生的事情是，我們稱之為可尋址市場的原因是因為在每個獎項上，我們都必須在任務訂單層級上競爭。因此，我們正在與任務順序級別上的有限競爭進行競爭 - 每個獎項與我們討論過的前兩個獎項相比 - 我們是團隊的一部分，其中對一名玩家提供單一獎項，如果你願意的話，球隊是一名球員。

So that's why those other awards are much more predictable in terms of the way the revenue breakout is, whereas on these other awards, these are contract vehicles, which have ceilings, large ceilings. 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 a little more, if you will, nuance to it.

因此，這就是為什麼其他獎項在收入突破方面更容易預測，而在其他獎項中，這些都是合約工具，有上限，很大的上限。在每種情況下，我們都必須在任務訂單層級上競爭，任務訂單的金額可以從 200 萬美元到 1 億美元不等，只是為了，如果你願意的話，可以提供更多的細微差別。

Yeah. That's definitely helpful. And then in past quarters, you've been talking about your bidding pipeline, size of the bidding pipeline, how that's been growing? Did you give an update? If not, can you do so?

是的。這絕對有幫助。然後在過去的幾個季度中，您一直在談論您的投標管道，投標管道的規模，其增長情況如何？你有更新嗎？如果沒有，你可以這樣做嗎？

Sure. So outside of these awards, that these vehicles that have been won, there's an additional roughly $3.2 billion worth of pipeline, and that's unfactored without renewals.

當然。因此，除了這些已獲獎的車輛之外，還有價值約 32 億美元的待售產品，而且這是未考慮更新的因素。

Got it. Great. And that's up from what last quarter?

知道了。偉大的。這比上個季度有上升嗎？

To be -- 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 -- 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 being at least 10x what our potential is.

說實話，我不希望我們的分析師陷入試圖按季度衡量的陷阱，因為它會改變。將會有一些出價進入，一些出價將會退出。我們不會對某些東西進行投標。我們將加快其他項目的投標。但總的來說，我們希望看到這樣的管道，因為我們希望看到它至少是我們潛力的 10 倍。

Got it. Great. Thank you.

知道了。偉大的。謝謝。

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.

女士們、先生們，今天會議的問答部分到此結束。我想把電話轉回給約翰·伍德。

Well, first of all, I just want to thank our shareholders for your ongoing support. And as we said here on the call, I'm very pleased with the progress we've made on our new business capture in the first quarter. I'm 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. 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.

首先，我要感謝我們的股東一直以來的支持。正如我們在電話會議上所說，我對第一季新業務的進展感到非常滿意。我期待最終在第三或第四季實現收入連續成長。顯然，這取決於我們之前討論過的抗議的解決。這些合約將有可能對我們的業績產生重大且非常積極的影響，同時我們也將為 TSA PreCheck 開設 Office Depot 地點。

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 seeing the 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 with robust and recession-resistant end markets, with well-funded customers 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.

我認為我想要繼續關注的另一件事是我們的管道擴張。幾個季度前我曾提到，我們將回到我們最了解的市場。我認為，對於一家了解美國聯邦政府及其周邊市場的公司來說，我們正在看到我們所期望的結果。因此，我對公司的前景仍然感到非常興奮，憑藉強勁且抗衰退的終端市場，資金充足的客戶以及數十年來為世界上最具安全意識的組織提供服務的記錄，Telos 確實擁有為未來奠定了非常堅實的基礎。所以我只想代表 Telos 所有人再次說謝謝。

Well, ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.

好了，女士們先生們，今天的演講到此結束。您現在可以斷開連接，並度過美好的一天。