Telos Corp (TLS) 2024 Q3 法說會逐字稿

Good day. And thank you for standing by. Welcome to the Telos Corporation third quarter, 2024 earnings call. (Operator Instructions)

再會。感謝您的支持。歡迎參加 Telos Corporation 2024 年第三季財報電話會議。（操作員指令）

Please be advised that today's session is being recorded. I would now like to hand the conference over to your first speaker today, Alison Phillips. Allison, you have the floor.

請注意，今天的會議正在錄音。現在我想將會議交給今天的第一位發言者艾莉森·菲利普斯。請艾莉森發言。

Good morning. Thank you for joining us to discuss Telos Corporation's third 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. Let me quickly review the format of today's presentation.

早安.感謝您加入我們討論 Telos Corporation 2024 年第三季的財務表現。今天和我一起的是 Telos 董事長兼執行長 John Wood；以及 Telos 執行副總裁兼財務長 Mark Bendza。讓我快速回顧一下今天演講的形式。

Mark will begin with remarks on our third quarter, 2024 results. Next John will discuss business highlights from the quarter. Then Mark will follow up with fourth quarter guidance before turning back to John to wrap up. We will then open the line for Q&A where Mark Griffin, Executive Vice President of Security Solutions will also join us.

馬克將首先介紹我們 2024 年第三季的業績。接下來，約翰將討論本季的業務亮點。然後，馬克將跟進第四季度的指導，然後再交給約翰進行總結。然後我們將開啟問答環節，安全解決方案執行副總裁馬克‧格里芬 (Mark Griffin) 也將加入我們。

The third quarter financial results were issued earlier today and are 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.

第三季財務結果已於今天稍早發布，並發佈在 Telos 投資者關係網站上，本次電話會議也同時在該網站上進行網路直播。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.

在開始之前，我們想強調一下，我們在本次電話會議中的某些陳述是前瞻性陳述，是根據聯邦證券法的安全港條款做出的。這些聲明是基於當前的預期和假設，但存在風險和不確定性。

Actual results could materially differ for various reasons including the factors described in today's financial results summary and the comments made during this conference call and in our SEC filings. We do not undertake any duty to update any forward-looking statements.

實際結果可能因各種原因而存在重大差異，包括今天的財務結果摘要中描述的因素以及本次電話會議和我們提交給美國證券交易委員會的文件中發表的評論。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 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.

此外，在今天的電話會議中，我們將討論非 GAAP 財務指標，我們認為這些指標作為補充和澄清指標很有用，可以幫助投資者了解 Telos 的財務表現。這些非 GAAP 財務指標應作為 GAAP 結果的補充而不是替代或與 GAAP 結果隔離。

You can find additional disclosures regarding these non-GAAP measures including reconciliations with comparable GAAP results, in our third quarter financial results summary 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.

您可以在我們網站投資者關係部分的第三季度財務結果摘要中找到有關這些非 GAAP 指標的更多披露信息，包括與可比 GAAP 結果的對帳。另請注意，除非另有說明，財務比較都是與去年同期相比進行的。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.

說完這些，我會把電話轉給馬克。

Thank you Allison and good morning, everyone. Let's begin today on slide 3.

謝謝你艾莉森，大家早安。今天我們從第 3 張投影片開始。

I'm pleased to report that Telos has delivered revenue near the top end of the guidance range and the adjusted EBITDA above the top end of the guidance range. We delivered $23.8 million of revenue in the quarter compared to guidance of $22 million to $24 million. Security solutions delivered $18.3 million or 77% of total revenue which was in line with the top end of our guidance range, due to strong performance across the portfolio relative to forecast.

我很高興地報告，Telos 的收入接近指導範圍的最高端，調整後的 EBITDA 高於指導範圍的最高端。本季我們的營收為 2,380 萬美元，而預期為 2,200 萬至 2,400 萬美元。安全解決方案實現了 1,830 萬美元的收入，佔總收入的 77%，與我們的指導範圍最高值一致，這得益於整個產品組合的表現強勁於預期。

Security solutions revenue grew 3% sequentially due to double digit sequential growth in Telos ID, primarily as a result of the ongoing ramp of our TSA PreCheck program. We expect sequential growth in our security solutions business to accelerate in the fourth quarter as our large program with the Defense Manpower Data Center or DMDC begins to ramp.

安全解決方案收入環比增長 3%，這主要得益於 Telos ID 的兩位數環比增長，這主要得益於我們 TSA PreCheck 計劃的持續推進。隨著我們與國防人力資料中心 (DMDC) 的大型專案開始加速，我們預計第四季度我們的安全解決方案業務將實現連續成長。

DMDC is the large program award that was under protest earlier this year and has since been resolved and is currently generating revenue. Secure networks delivered $5.5 million or 23% of total revenue in line with guidance. Secure networks revenue declined sequentially and year over year as expected due to the ramp down of existing programs.

DMDC 是今年稍早受到抗議的大型專案獎，目前已解決並且正在產生收入。安全網路實現了 550 萬美元的收入，佔總收入的 23%，符合預期。由於現有項目的減少，安全網路收入如預期一樣環比和同比下降。

As previously reported, secure networks have gained access to new contract vehicles in recent quarters and has cultivated a large pipeline of new business opportunities that we are currently pursuing to replenish the backlog.

正如之前所報導的，安全網路在最近幾季已經獲得了新的合約載體，並培育了大量新的業務機會，我們目前正在尋求補充積壓訂單。

Turning to margins. As we mentioned on our last earnings call, we continue to assess opportunities to reduce our cost base in order to maximize our operating leverage, incremental margins and cash flow as we return to growth in 2025. As we also stated on our last earnings call, our guidance does not include any charges that could result from such actions. During the quarter, we assess our cost structure and investment priorities to reduce costs and reallocate resources to support large programs that are currently ramping in security solutions.

轉向利潤。正如我們在上次財報電話會議上提到的那樣，我們將繼續評估降低成本基礎的機會，以便在 2025 年恢復成長時最大限度地提高我們的營運槓桿、增量利潤率和現金流。正如我們在上次收益電話會議上所述，我們的指引並不包括任何可能由此類行動產生的費用。在本季度，我們評估了我們的成本結構和投資重點，以降低成本並重新分配資源，以支援目前正在加大安全解決方案的大型專案。

As a result, we discontinued the development and sale of selected solutions or parts of solutions that were not generating acceptable returns. The restructuring as well as an assessment of our intangible assets resulted in an $11.7 million non-cash impairment of capitalized software assets including $5.3 million in cost of sales and the $1.4 million restructuring charge including $400,000 in cost of sales.

因此，我們停止了那些未能產生可接受回報的特定解決方案或部分解決方案的開發和銷售。重組以及對我們無形資產的評估導致資本化軟體資產的非現金減值 1,170 萬美元，其中包括 530 萬美元的銷售成本和 140 萬美元的重組費用，其中包括 40 萬美元的銷售成本。

In total, we took a $13.1 million charge in the quarter $5.7 million of which was recorded in cost of sales and impacted GAAP gross margin. GAAP gross margin was 13.2% excluding the $5.7 million impairment and restructuring charge and cost of sales, gross margin expanded 130 basis points year-over-year to 37.3% and was above the top end of our guidance range.

總體而言，我們在本季支出了 1,310 萬美元，其中 570 萬美元計入銷售成本並影響了 GAAP 毛利率。不計 570 萬美元的減損重組費用及銷售成本，GAAP 毛利率為 13.2%，毛利率年增 130 個基點至 37.3%，高於我們預期範圍的最高值。

In addition, cash gross margin expanded 250 basis points year-over-year to 44%. Cash gross margin was above our guidance range and was also the company's highest cash gross margin since the IPO in 2020. Strong revenue cash gross margin over performance and cost reductions resulted in adjusted EBITDA above the top end of the guidance range. Adjusted EBITDA was a $4.1 million loss compared to guidance of an $8 million loss to a $6.5 million loss.

此外，現金毛利率較去年同期擴大250個基點至44%。現金毛利率高於我們的指導範圍，也是該公司自2020年IPO以來的最高現金毛利率。強勁的收入現金毛利率和成本降低導致調整後的 EBITDA 高於指導範圍的最高端。調整後的 EBITDA 虧損 410 萬美元，而預期虧損 800 萬美元至 650 萬美元。

Lastly, cash flow from operations and free cash flow both improved sequentially. Cash flow from operations with a $7.1 million outflow and free cash flow with a $9.9 million outflow.

最後，經營現金流和自由現金流均連續改善。經營活動現金流出 710 萬美元，自由現金流出 990 萬美元。

I will now turn the call over to John for an overview of recent business highlights. John?

現在我將把電話轉給約翰，讓他概述最近的業務亮點。約翰？

Thanks Mark and good morning everyone. Let's turn to slide 4. We continue to make steady progress on the TSA PreCheck program, as Mark previously indicated this program is the main driver for the sequential growth in the third quarter in our Telos ID business and it remains well on track to becoming our single largest program in 2024. We have continued to successfully accelerate the expansion of our network of enrollment centers by more than doubling our footprint from 83 to 173 locations over the past three months.

謝謝馬克，大家早安。讓我們翻到第 4 張投影片。我們繼續在 TSA PreCheck 計劃上取得穩步進展，正如馬克之前所指出的，該計劃是我們 Telos ID 業務第三季度環比增長的主要驅動力，並且有望在 2024 年成為我們最大的單一計劃。在過去三個月中，我們繼續成功加速擴張招生中心網絡，將招生中心數量增加了一倍多，從 83 個增加到 173 個。

Additionally, it's important to point out that we continue to prioritize our expansion in key markets, geographically distributed across 29 states around the country. These states comprise approximately 79% of the population of the United States.

此外，值得指出的是，我們繼續優先考慮在主要市場的擴張，這些市場的地理分佈遍布全國 29 個州。這些州約占美國人口的 79%。

We plan to build on this progress and continue the growth of our footprint in the coming quarters with the expectation of reaching 500 locations in 2025. Most importantly, we are thrilled to be working with TSA to effectively grow this important national security program and provide this critical service to the community of US travelers.

我們計劃在此基礎上再接再厲，在未來幾季繼續擴大我們的業務範圍，預計到 2025 年將達到 500 家門市。最重要的是，我們很高興能與 TSA 合作，有效地發展這項重要的國家安全計劃，並為美國旅行者群體提供這項重要服務。

Next, I'd like to provide an update on the status of the program award protests discussed on our prior earnings calls. The first program is with the Defense Manpower Data Center or DMDC. Within the United States Department of Defense and it is worth up to $485 million to Telos over five years.

接下來，我想就我們之前的收益電話會議上討論的計劃獎勵抗議的最新情況提供一些更新信息。第一個計畫是與國防人力資料中心（DMDC）合作的。在美國國防部內，五年內它將為 Telos 帶來高達 4.85 億美元的價值。

As expected, the protest on this program was resolved in favor of Telos and our prime partner by the end of September and we are currently generating revenues as the program operations ramp. We look forward to working with our partner to provide exceptional support to our customer on this program for years to come.

正如預期的那樣，對該計劃的抗議在 9 月底得到了解決，有利於 Telos 和我們的主要合作夥伴，隨著計劃運營的推進，我們目前正在創造收入。我們期待與我們的合作夥伴共同努力，在未來幾年為該計劃的客戶提供卓越的支援。

The second program is with the Department of Homeland Security or DHS. This program with DHS is worth up to $40 million to Telos over five years and as previously communicated, we expect this protest to be resolved in the fourth quarter.

第二個項目是與國土安全部（DHS）合作的。這項與國土安全部合作的項目在五年內為 Telos 帶來了高達 4000 萬美元的價值，正如之前所通報的，我們預計這項抗議將在第四季度得到解決。

In addition, I'd like to report on several other business outcomes since our last earnings call. Our Xact business has received new orders with several new customers including the United States Air Force Office of Special Investigations, as well as renewals from the Social Security Administration, the Federal Bureau of Investigation, the Defense Intelligence Agency, Infor, Siemens and other key customers.

此外，我想報告我們上次財報電話會議以來的其他幾項業務成果。我們的 Xact 業務已收到包括美國空軍特別調查辦公室在內的多個新客戶的新訂單，以及來自社會安全局、聯邦調查局、國防情報局、Infor、西門子和其他主要客戶的續約。

We received renewals for cyber services from the General Services Administration, the Defense Health Agency and other government customers. The automated message handling system business continues to achieve high renewal rates with its customer base. In particular this quarter, the business realized renewals from the Department of Homeland Security, the Department of the Treasury and several other government customers. Finally, we received a new contract with the United States Army in our secure networks business.

我們收到了總務管理局、國防衛生局和其他政府客戶的網路服務續約。自動訊息處理系統業務持續在客戶群中實現較高的續約率。特別是本季度，該業務實現了與國土安全部、財政部和其他幾個政府客戶的續約。最後，我們在安全網路業務方面與美國陸軍簽訂了一份新的合約。

I'll now turn the call over to Mark who will discuss fourth quarter guidance. Mark?

現在我將電話轉給馬克，他將討論第四季的指導。標記？

Thanks John. Let's turn to slide 5. For the fourth quarter, we expect revenue to grow 3% to 11% sequentially to a range of $24.5 million to $26.5 million. And we expect an adjusted EBITDA loss of $4.5 million to $3.5 million. Sequential revenue growth, will be driven by security solutions. We forecast security solutions to grow low 10% to low 20% sequentially driven by the accelerating ramp of TSA PreCheck enrollment and our new program with the Defense Manpower Data Center or DMDC that I mentioned earlier.

謝謝約翰。讓我們翻到第 5 張投影片。對於第四季度，我們預計營收將環比成長 3% 至 11%，達到 2,450 萬美元至 2,650 萬美元之間。我們預計調整後的 EBITDA 損失為 450 萬美元至 350 萬美元。連續的收入成長將受到安全解決方案的推動。我們預測，受 TSA PreCheck 註冊人數加速成長以及我們與國防人力資料中心或我之前提到的 DMDC 合作的新專案的推動，安全解決方案將持續成長 10% 到 20% 左右。

We expect secure networks revenues to decline sequentially in the fourth quarter due to the steady decline in backlog in advance of new business wins, that would typically be awarded in the fourth quarter of 2024 and the first quarter of 2025.

我們預計安全網路收入將在第四季度環比下降，原因是新業務簽約前的積壓訂單穩步下降，新業務簽約通常會在 2024 年第四季和 2025 年第一季完成。

As previously mentioned, secure networks has gained access to new contract vehicles in recent quarters and has cultivated a large pipeline of new business opportunities that we are pursuing to replenish the backlog for 2025 and beyond. As a result of forecasted strong sequential growth in security solutions in the fourth quarter combined with a sequential decline in secure networks, we expect security solutions to contribute over 80% of total company revenues in the fourth quarter.

如前所述，安全網路在最近幾季獲得了新的合約載體，並培養了大量新的業務機會，我們正在尋求這些機會來補充 2025 年及以後的積壓訂單。由於預測第四季安全解決方案將出現強勁的環比成長，而安全網路將出現環比下滑，我們預計安全解決方案將為第四季公司總收入貢獻80%以上。

GAAP gross margin is expected to expand by 170 basis points to 330 basis points year-over-year, primarily due to the favorable mix shift from our lower margin, secure networks business to our higher margin security solutions business. Cash gross margin is expected to expand by 465 basis points to 580 basis points year-over-year for the same reason.

預計 GAAP 毛利率將比去年同期擴大 170 個基點至 330 個基點，這主要歸因於從利潤率較低的安全網路業務向利潤率較高的安全解決方案業務的有利組合轉變。基於同樣的原因，現金毛利率預計將年增 465 個基點至 580 個基點。

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 $4 million lower year-over-year due to lower incentive compensation expense and the benefits of cost actions taken in the third quarter.

調整資本化軟體開發成本、股票薪酬重組成本和 D&A 後的現金支出預計將同比減少約 400 萬美元，這歸因於激勵薪酬支出減少以及第三季度採取的成本行動帶來的收益。

Lastly, we will provide further detail about our 2025 outlook on our fourth quarter earnings call in March. But in the meantime, the 2025 revenue drivers that we outlined on prior earnings calls have not changed. We forecast a return to year-over-year revenue growth in 2025. Revenues in 2025 will be comprised of several key components. First, we expect our existing business excluding TSA PreCheck and the DMDC and DHS programs that we won in the first quarter of 2024 to generate approximately $60 million to $65 million of revenue in 2025.

最後，我們將在 3 月的第四季財報電話會議上提供有關 2025 年展望的更多詳細資訊。但同時，我們在先前的收益電話會議上概述的 2025 年收入驅動因素並沒有改變。我們預測 2025 年營收將恢復年增。2025 年的收入將由幾個關鍵部分組成。首先，我們預計，我們現有的業務（不包括 TSA PreCheck 以及我們在 2024 年第一季贏得的 DMDC 和 DHS 計畫）將在 2025 年產生約 6,000 萬至 6,500 萬美元的收入。

Assuming the DHS protest is resolved in our favor, the DMDC and DHS programs could generate over $100 million of revenue in some years. But for modeling purposes, we're assuming a more modest $60 million to $85 million in a typical year at full run rate. We believe we have potential to achieve the typical year run rate in 2025.

假設國土安全部的抗議得到對我們有利的解決，DMDC 和國土安全部計畫可以在某些年份產生超過 1 億美元的收入。但為了建立模型，我們假設在滿載運轉的情況下，典型年份的收入為 6,000 萬至 8,500 萬美元。我們相信我們有潛力在 2025 年實現典型的年運行率。

Third, we are targeting a pro rata market share of the TSA PreCheck market after we complete the rollout of our 500 enrollment locations and those locations mature into productive sites for a full calendar year. We expect to complete the rollout of our 500 enrollment locations by the end of 2025 and we believe the TSA PreCheck market is approximately a $200 million market based on our current pricing structure.

第三，在我們完成 500 個登記地點的推廣，並且這些地點在全年內發展成為生產基地後，我們的目標是按比例獲得 TSA PreCheck 市場的市場份額。我們預計到 2025 年底將完成 500 個登記地點的推廣，並且我們認為，根據我們目前的定價結構，TSA PreCheck 市場規模約為 2 億美元。

Although we do not expect to achieve our per out of market share in 2025 we expect TSA PreCheck revenues to ramp as we continue to roll out our enrollment locations over the course of next year. And lastly, we have a large pipeline of new business opportunities, especially in secure networks and we'll be submitting proposals during the fourth quarter government buying season. Any new business wins during the fourth quarter of 2024 or the first quarter of 2025 will have the potential to contribute revenue next year.

儘管我們預計無法在 2025 年實現市場份額，但我們預計，隨著我們明年繼續推出登記地點，TSA PreCheck 的收入將會增加。最後，我們擁有大量新的商機，特別是在安全網路領域，我們將在第四季政府採購季提交提案。2024 年第四季或 2025 年第一季贏得的任何新業務都有可能為明年的收入做出貢獻。

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

說完這些，我就把話題轉回給約翰。

Thanks Mark. Let's turn to slide 6. In summary, we delivered revenues near the top end of the guidance range and exceeded guidance on adjusted EBITDA.

謝謝馬克。我們翻到第 6 張投影片。總而言之，我們的收入接近預期範圍的最高端，並且調整後的 EBITDA 超過了預期。

Additionally, we are thrilled to protest from the DMDC program was resolved in our favor, we are now generating revenues on this program as we ramp operations. I look forward to working with our partner to provide exceptional support to our customer for years to come.

此外，我們很高興 DMDC 計劃的抗議得到了對我們有利的解決，現在我們正在透過該計劃創造收入，同時擴大營運。我期待與我們的合作夥伴共同努力，在未來幾年為我們的客戶提供卓越的支援。

We continued rapid expansion of our network of TSA PreCheck enrollment locations to 173 more than doubling our footprint since the last earnings call. We continue to expect we'll reach 500 locations in 2025. Finally, with this recent positive news, we expect to achieve sequential revenue growth in the fourth quarter.

我們繼續快速擴張 TSA PreCheck 登記地點網絡，目前已增至 173 個，自上次財報電話會議以來，我們的網絡覆蓋範圍增長了一倍多。我們仍預計到 2025 年將達到 500 家門市。最後，有了最近的利好消息，我們預計第四季將實現連續的營收成長。

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

我們非常樂意回答您的提問。

Operator, please open the line for Q&A. Thank you.

接線員，請開通問答專線。謝謝。

(Operator instructions)

（操作員指令）

Bradley Clark, BMO.

布拉德利克拉克，BMO。

Yeah. Hi. Thanks for taking my question and congrats on the protest resolution. Can you just review the DMDC contract with up to $485 million? What are some of the puts and takes around, what ultimately determines how much that contract can be given that the $485 million feeling like what are the factors that determine where you land below that feeling?

是的。你好。感謝您回答我的問題，並祝賀抗議活動得到解決。您能只審查價值高達 4.85 億美元的 DMDC 合約嗎？周圍有哪些利弊，最終是什麼決定了這份合約的金額，考慮到 4.85 億美元的感覺，哪些因素決定了你的落腳點？

Yeah, so Brad, it's Mark back in here. So on that program, there is -- there are a couple of different revenue streams there. There's a base services revenue stream, which is recurring revenue stream that we have a high level of visibility into that's approximately $25 million. The remainder of the revenues are a combination of third party hardware, software, technology that we integrate into the overall solution for our customer. That revenue stream can fluctuate quarter to quarter and year to year.

是的，布拉德，我是馬克。因此，在該計劃中，有幾個不同的收入來源。我們有一個基本服務收入流，即經常性收入流，我們對其有很高的可預見性，大約為 2500 萬美元。剩餘的收入來自於我們為客戶整合到整體解決方案中的第三方硬體、軟體和技術的組合。該收入流可能每個季度甚至每年都會波動。

So overall for modeling purposes, we're calling it $60 million to $85 million a year. But in any given year, you can be over $100 million in total. But our best estimate at this point on a low year would be about $60 million. Now, in those numbers, I tend to lump together the DMDC, and DHS is a small piece of that, of the $60 million to $85 million that I quote. We're only including about [$2 million to $8 million] in that range for DHS which is the smaller program of the two.

因此總體來說，出於建模目的，我們將其稱為每年 6,000 萬至 8,500 萬美元。但在任何一年，總額可能超過 1 億美元。但目前，我們對低迷年份的最佳估計是約 6,000 萬美元。現在，在這些數字中，我傾向於將 DMDC 和 DHS 合併在一起，而 DHS 只是其中的一小部分，我引用的金額為 6000 萬到 8500 萬美元。我們只為 DHS 納入了大約 [200 萬到 800 萬美元] 的資金，它是兩個項目中較小的一個。

Okay. Thank you. And then can you remind us of the margin profile of this work compared to the remainder of your security solution business?

好的。謝謝。然後，您能否提醒我們這項工作與您其他的安全解決方案業務相比的利潤狀況？

Yeah, so the margin profile varies quite a bit depending on which revenue stream. I don't want to get into the details of the margin profile for each revenue stream, but overall on a blended basis, I think those two programs combined -- I describe it as being dilutive to cash gross margins.

是的，利潤率狀況會根據收入來源的不同而有很大差異。我不想詳細討論每個收入來源的利潤率狀況，但總體而言，我認為這兩個項目結合起來——我將其描述為稀釋現金毛利率。

Now, in my prepared remarks, I talked about buckets of revenue for 2025, some of those are accretive to margins. Some of those are diluted to margins. Overall in 2025, I'd say we're probably going to be a couple 100 basis points lower on cash grows margins so slightly lower on cash flow margin, but of course, on a significantly higher revenue base.

現在，在我準備好的發言中，我談到了 2025 年的收入來源，其中一些可以增加利潤。其中一些已經對利潤產生了稀釋。總體而言，到 2025 年，我認為我們的現金成長利潤率可能會下降幾百個基點，因此現金流利潤率會略有下降，但當然，收入基數會大幅提高。

Okay. Thank you.

好的。謝謝。

Sure.

當然。

Zach Cummins, B. Riley.

康明斯、B.萊利。

Thanks. Good morning, Mark and John, thanks for taking my question.

謝謝。早安，馬克和約翰，謝謝你們回答我的問題。

I really wanted to focus on the restructuring actions that you decided to take here, late Q3, early Q4. Can you give us a little more detail on maybe some of the business lines that are going away and potentially how this could result in and maybe more of a margin uplift when we look at the revenue ramp next year?

我非常想關注您決定在此採取的重組行動，即第三季末和第四季初。您能否向我們詳細介紹一些即將消失的業務線，以及這些變化可能如何導致利潤率進一步提升，從而促進明年的收入成長？

Sure. Hey Zack, it's John. So the two solutions that we ended up deciding not to continue selling are advanced cyber analytics and our Ghost solution.

當然。嘿，札克，我是約翰。因此，我們最終決定不再繼續銷售的兩種解決方案是高級網路分析和我們的 Ghost 解決方案。

Basically, we just weren't seeing the uptick in sales that we wanted to and as a result, we just decided, let's fail quickly and move on.

基本上，我們沒有看到我們想要的銷售成長，因此，我們決定，趕緊失敗，然後繼續前進。

Yeah and Zach, what I'll add to that is, current revenues in those two solutions are effectively, I'd say the minimis at this point. So there will be no a revenue headwind as a result of that decision. And really, as we looked at the portfolio and we have these very substantial programs in hand that we are ramping quickly. We wanted to maximize the benefit of operating leverage, incremental margins and cash flows heading into 2025 as a result of those ramp -- as the ramp of those programs that we have in hand.

是的，扎克，我想補充的是，我認為目前這兩種解決方案的收入實際上處於最低水平。因此該決定不會帶來收入方面的阻力。事實上，當我們審視投資組合時，我們手頭上有這些非常重要的項目，我們正在迅速推進它們。我們希望透過這些成長——以及我們手頭上這些項目的成長——最大限度地提高 2025 年的營運槓桿、增量利潤和現金流的效益。

So we took a hard look at the overall portfolio to identify where we could be shifting resources from higher risk, lower return opportunities to the lower risk, higher return opportunities that we have in hand.

因此，我們仔細研究了整體投資組合，以確定我們可以將資源從高風險、低迴報機會轉移到我們手中的低風險、高回報機會。

Understood. And if my one follow up question is just, around the pipeline going into the key buying season, especially for secure networks. Can you give us a sense of maybe the size of some of these opportunities that you're bidding on and confidence in securing some of this business as you go through the award process here in the next couple of quarters.

明白了。如果我的一個後續問題是圍繞進入關鍵購買季節的管道，特別是對於安全網路。您能否向我們介紹您正在競標的一些機會的規模，以及在接下來的幾個季度中，當您完成授予流程時，對獲得這些業務的信心？

Yeah. So maybe I'll start and then Mark Griffin and John can supplement. So, we have a pretty meaningful portfolio of opportunities that were that are either already submitted or that we're currently working on.

是的。所以也許我先開始，然後馬克·格里芬和約翰可以補充。因此，我們擁有非常有意義的機會組合，這些機會要么已經提交，要么我們正在努力。

You could think of it as somewhere around 20 opportunities or so, about a third of those are already submitted, the balance are in process. In total, you're looking at, nine figures of total contract value to Telos.

您可以將其視為大約 20 個機會左右，其中約三分之一已經提交，其餘正在處理中。總的來說，你所看到的是 Telos 的合約總價值為九位數。

And next year, of course, depending on win rates and when these programs start -- there's potential for a couple of tens of millions or more of revenue in 2025. But again, there's a lot of contingencies around that. It's what proportion do we win? Are they protested? When do they start so on and so forth? So a little early to try to give direction on what that number is for next year or to guide it, we'll do that in March. But it's a pretty solid portfolio of opportunities that are actively in process.

當然，明年取決於勝率以及這些項目何時啟動——到 2025 年，有可能實現數千萬甚至更多的收入。但同樣，這其中還有很多意外情況。我們獲勝的比例是多少？他們抗議了嗎？他們什麼時候開始等等？因此，現在還為時過早，我們將在三月嘗試對明年的數字做出指導或提供指導。但這是一個相當可靠的機會組合，目前正在積極進行中。

Let me see if Mark Griffin or John have anything to add.

讓我看看馬克·格里芬或約翰是否還有什麼補充。

It's Mark Griffin, I don't have anything to add other than the total portfolio right now. The pipeline is around $4.1 billion and a reference that's about 245 opportunities of which what Mark indicated was a subset of that.

我是馬克·格里芬，除了目前的總投資組合外，我沒有什麼可補充的。該管道價值約為 41 億美元，參考數字約為 245 個機會，其中馬克指出的只是其中的一部分。

That's good. I agree, that.

那挺好的。我同意，那。

Understood. Well, thanks for taking my questions and best of luck with the rest of the quarter.

明白了。好吧，感謝您回答我的問題，並祝您本季剩餘時間一切順利。

Thank you, Zach.

謝謝你，扎克。

Rudy Kessinger, D A Davidson.

魯迪凱辛格、D A 戴維森。

Hey, thanks for taking my questions guys. Mark, so if I go back a year ago your Q3 call last year. At that point in time you guys said you believe you had a total 2024 potential revenue opportunity that exceeded 200 $million and obviously, you guys fell well short of that this year, you're kind of painting a picture. I know you're not giving a number, but with the pieces you gave, you're kind of painting a picture of, ball park $150 million of revenue for next year.

嘿，感謝你們回答我的問題。馬克，如果我回顧一年前您去年的第三季電話會議。當時你們說，你們相信到 2024 年，你們的總潛在收入機會將超過 2 億美元，但顯然，今年你們還遠遠沒有達到這個目標，你們正在描繪一幅圖景。我知道您沒有給出一個具體數字，但是根據您提供的信息，您可以大致估算出明年的收入約為 1.5 億美元。

I guess, I'm just curious what risk lies within that kind of number and in particular, on the two large programs, the $60 million to $85 million. How are you getting to that $60 million to 85 million? And what's the risk that, you know, a year from now, those contracts are only doing $30 million to $40 million next year.

我想，我只是好奇這個數字中存在什麼風險，特別是對於兩個大型專案而言，6000 萬美元到 8500 萬美元。您怎麼才能獲得這 6,000 萬到 8,500 萬美元？你知道，一年後，這些合約的價值明年可能只有 3,000 萬至 4,000 萬美元，這有什麼風險呢？

Yeah. Really good question. The big difference between last year and this year. Last year, our comments and we were clear about this on the call, but last year, our comments were based on the $625 million of proposals that we had submitted and we won a good chunk of those proposals in March and then they were protested and they slid to the right for the lion's share of this year. And now in the fourth quarter, we're just starting to generate revenues on this program.

是的。真是個好問題。去年和今年的差異很大。去年，我們在電話會議上對此表示了明確的意見，但去年，我們的意見是基於我們提交的6.25 億美元的提案，我們在3 月份贏得了其中很大一部分提案，然後這些提案遭到了抗議，他們今年的大部分份額都向右滑動。現在到了第四季度，我們才剛開始透過這個專案創造收入。

So that was a big driver of that delta, but a really good outcome on the new business wins relative to what we had submitted at the time of that call. And then of course the risk for revenue recognition in 2024 ended up being around the protest. Now, fast forward to today, the revenue growth that we're talking about for next year, these are programs that are one in hand that we're currently generating revenues on and ramping.

因此，這是導致這種差異的一個重要原因，但相對於我們在電話會議時提交的內容而言，新業務的成功確實是一個好結果。當然，2024 年收入確認的風險最終取決於抗議活動。現在，快進到今天，我們正在談論明年的收入成長，這些都是我們目前正在創造收入並不斷增加的項目。

As we talk about the $60 million to $85 million I would describe it in this way, of the $60 million to $85 million there's $2 million to $8 million in the DHS program which is still under protest. I think we said on the last call and on this one as well that we're expecting that to be resolved in the fourth quarter based on feedback that we've received.

當我們談論 6000 萬到 8500 萬美元時，我會這樣描述，在 6000 萬到 8500 萬美元中，有 200 萬到 800 萬美元屬於國土安全部計劃，而該計劃目前仍處於抗議之中。我想我們在上次和這次電話會議上也說過，根據我們收到的回饋，我們預計這個問題將在第四季得到解決。

So that's $2 million to $8 million, the protest needs to be resolved. And then of course, there's a range there depending on how much share of that program we get from quarter to quarter, year to year. But we think that can range from $2 million to $8 million. For the balance of the revenue of $60 million to $85 million, we have high degree of visibility into $25 million of it.

因此，這筆金額是 200 萬到 800 萬美元，抗議需要解決。當然，這取決於我們每個季度、每年從該計劃中獲得的份額。但我們認為這個數字可能在200萬美元到800萬美元之間。對於 6,000 萬美元至 8,500 萬美元的餘額，我們對其中 2,500 萬美元具有較高的可預測性。

And then the balance is the third party hardware and software that I referred to earlier, that we integrate into the overall solution for the customer, that portion is variable and can fluctuate quarter to quarter, year to year. We think we have a pretty good understanding of what that revenue stream would look like in a typical year, given that 2025 would be the first, full year of execution on that program.

然後平衡是我之前提到的第三方硬體和軟體，我們將其整合到客戶的整體解決方案中，這部分是可變的，並且可能每個季度、每年都在波動。我們認為，考慮到 2025 年將是該計劃實施的第一年，我們對典型年份的收入流情況有相當好的了解。

We don't have multiple years of history on this overall scope of work. Of course, we have decades of history on this program on a smaller scope of work. This is a significantly bigger scope of work on this program. So we don't have the history of years and decades of revenue streams to use that as a basis for the $60 million to $85 million. But a relative to the $100 million that it could be in any given year, we think $60 million to $85 million is a pretty prudent haircut on the total potential. Thanks for the question.

我們對這個整體工作範圍沒有多年的歷史記錄。當然，我們在這個專案上已經有幾十年的歷史了，只是工作範圍比較小。該計劃的工作範圍大大擴大。因此，我們沒有多年甚至幾十年的收入來源歷史，無法以此作為 6,000 萬至 8,500 萬美元的依據。但相對於任何一年的 1 億美元，我們認為 6,000 萬至 8,500 萬美元是對總潛力的相當審慎的削減。謝謝你的提問。

It does. That's very helpful color, breaking out there. I appreciate that. I also wanted to ask on pre check. The ramp has certainly picked up in locations. I know you're saying, get to the 500 locations that you're not going to have full one third market share for the full year. But I guess I'm curious with the locations you have now we assumed you were getting one third market share with your currently live locations that would indicate about $22 million, $23 million of annualized PreCheck revenue today.

是的。那是非常有用的顏色，在那裡爆發。我很感激。我也想問一下預檢狀況。在某些地方，坡道確實已經回升。我知道您的意思是，即使開設 500 家門市，您也不可能在全年佔據三分之一的市場份額。但我想我對您現在的門市情況感到好奇，我們假設您目前的門市佔有三分之一的市場份額，這意味著今天的 PreCheck 年度收入約為 2,200 萬美元、2,300 萬美元。

I'm curious, are you getting one third market share at those existing 170 locations? And if not, like how quickly are you seeing yourselves get to one third market share with some of the locations you rolled out earlier this year?

我很好奇，你們在現有的 170 個地點是否獲得了三分之一的市佔率？如果沒有，那麼你們預計多快能透過今年稍早推出的一些門市獲得三分之一的市場份額？

Yeah, we don't have data on the catchment area around each of those locations, but I can answer it a different way. Based on the average locations that we have open currently, and when you extrapolate that out to 500 locations, we are currently capturing the portion of overall market share that we would expect based on the locations we have open today. At the same level of productivity and the locations we have open today holds as we roll out to 500, we should be on track to capture a pro rata market share of enrollments.

是的，我們沒有每個地點周圍集水區的數據，但我可以用不同的方式回答這個問題。根據我們目前開設的平均門市數量，如果將其推算到 500 個門市，那麼我們目前正在佔據根據目前開設的門市所預期的總體市場份額的份額。當我們將門市數量增加到 500 家時，如果生產力和目前開設的門市數量保持相同水平，我們應該能夠按比例獲得市場份額。

Okay. That's helpful. Thank you, Mark.

好的。這很有幫助。謝謝你，馬克。

Yeah.

是的。

Nehal Chokshi, Northland Capital Markets.

北國資本市場 (Northland Capital Markets) 的 Nehal Chokshi。

Thank you. And congrats on the solid bottom line results and guidance here. It's good to see that. Of this DMDC $485 million total contract value. Is there any portion of that $485 million that may not be realized over the course of that five years or is that $60 million low point, simply a reflection of the timing of subcontracted revenue.

謝謝。並祝賀您取得了穩固的獲利成果和指引。很高興看到這一點。其中DMDC的合約總價值為4.85億美元。這 4.85 億美元中是否有部分可能無法在這五年內實現，或者 6,000 萬美元的最低點只是分包收入時間的反映。

So of the $485 million, $125 million is the base services revenue that I described as having a high level of visibility. The difference between the $125 million and the $485 million is the third party hardware and software that we integrate into the overall solution.

因此，在 4.85 億美元中，1.25 億美元是基礎服務收入，我將其描述為具有高度可見性。1.25 億美元和 4.85 億美元之間的差額在於我們整合到整體解決方案中的第三方硬體和軟體。

The amount of that over the five years, we'll have to see. But our best estimate is that the two combined shouldn't be less than $60 million in a typical year and could be over -- it could be approximately $100 million in some peak years.

我們將拭目以待五年內這數字將會是多少。但我們最好的估計是，這兩項收入合計在典型年份不應低於 6,000 萬美元，在某些高峰年份甚至可能超過 1 億美元。

Got it.

知道了。

It's really going to be driven by the needs and the demands of the program.

這實際上將由計劃的需求和要求所驅動。

Okay. (multiple speaker)

好的。（多位發言者）

So what I would say is that, unlike other contract vehicles that we have, this is a single award contract for what is essentially the one of the largest biometric applications in the government. It's really the program that drives the common access card among other things, which gets you access to all the military bases and all the military networks around the world. So this particular contract is very important to the customer. It's very important to the mission. So in general, if they have the requirement to spend the money they're going to.

所以我想說的是，與我們現有的其他合同載體不同，這是一個單一授予合同，實際上是政府最大的生物識別應用之一。它實際上是驅動通用存取卡等的程序，可讓您訪問世界各地的所有軍事基地和所有軍事網路。所以這個特殊的合約對客戶來說非常重要。這對於任務來說非常重要。所以一般來說，如果他們有花錢的要求，他們就會去花。

And we've had a relationship with this customer since 1995. This one that we know very, very well. I think it's actually our longest serving customer that we have as a company.

我們從 1995 年就與這位客戶建立了合作關係。我們對這個非常了解。我認為他們實際上是我們公司服務時間最長的客戶。

So this customer understands (inaudible) and just by way of color and we have something like 14, 18 wheelers of equipment coming our way. So there's all kinds of different things that we're doing for this customer.

所以這位客戶明白（聽不清楚），光是透過顏色，我們就有大約 14 輪或 18 輪的設備運過來。我們為這個客戶做了各種不同的事。

Got it. Thanks for that color John. And then you also announced being named one of 20 vendors of, I think like a $13 billion base infrastructure management ID, IQ contract for Air Force. Is that revenue from that award expected in calendar '25? Is that part of your calendar '25 buildup that you talked about, Mark.

知道了。感謝約翰的那個顏色。然後，你們也宣布被列為 20 家供應商之一，我想這是一份價值 130 億美元的空軍基礎設施管理 ID、IQ 合約。該獎項的收入預計會在 25 年產生嗎？馬克，這是你談到的 25 年曆的一部分嗎？

So now that -- any future task orders and revenues that would come from that vehicle that would be included in the bucket of new business wins that I referred to that I did not quantify, but it's not included in any of the quantified buckets that I listed.

因此，現在——任何未來的任務訂單和收入都將來自該工具，這些都將包含在我提到的新業務勝利桶中，我沒有量化，但它不包括在我提到的任何量化桶中。

And the reason for that in the hall is that each of -- in this particular case, this contract based in infrastructure modernization was an Air Force contract. This contract is competed at the task order level by those 23 or four bidders of which we are one. So we compete on a task order level. On this contract, we would expect to get our fair share of this work over time. Given that we've done a tremendous amount of work with the Air Force previously on another contract we had called [Netsense] where we were able to deliver something like $1.6 billion worth of value to the Air Force doing essentially the same kind of stuff.

而大廳裡出現這種情況的原因是——在這個特定案例中，基於基礎設施現代化的合約是一份空軍合約。該合約由23家或4家投標者按任務訂單級別競爭，我們是其中之一。因此我們在任務訂單層面上進行競爭。根據這份合同，我們希望隨著時間的推移，獲得我們應得的份額。鑑於我們之前已經與空軍在另一份名為 [Netsense] 的合約中完成了大量工作，我們在該合約中為空軍提供了價值約 16 億美元的產品，基本上做著同樣的事情。

Yeah. And just to be clear, has there been any material task orders from this new contract vehicle issued yet?

是的。需要明確的是，這個新的合約載體已經發出任何重大任務訂單了嗎？

Mark Griffin will answer.

馬克·格里芬會回答。

Hello, it's Mark Griffin. The task orders are just coming out now, the government's released, I believe three and we're bidding on one of them right now. Task order two. We'll also bid on others as they come out. So it's just started once the protest was resolved and the playing field was announced. So we're in the process now of bidding on those and we expect some resolution shortly on program awards.

你好，我是馬克·格里芬。任務訂單剛剛發布，政府已經發布，我相信是三個，我們現在正在競標其中一個。任務訂單二。一旦其他產品問世，我們也會對其進行投標。因此，抗議解決、比賽場地宣布後，比賽就開始了。因此，我們現在正在對這些項目進行競標，並希望很快就專案授予結果做出一些決定。

Okay. And then for calendar '25 what you're basically talking about is, you have a bunch of contracts in hand, but you're not expecting them to be matured in within calendar '25. At some point in time, calendar '26, calendar '27 they would be matured though. Once these contracts reach their mature state. What's your confidence level that you will be a material positive, free cash flow? And what kind of free cash flow do you think that could be?

好的。然後對於 25 年日曆，您基本上談論的是，您手頭上有一堆合同，但您不期望它們在 25 年日曆內到期。在某個時間點，例如日曆 26 年、日曆 27 年，它們就會成熟。一旦這些合約達到成熟狀態。您對獲得實質的正自由現金流有多大信心？您認為這會是什麼樣的自由現金流？

So, I'm not going to comment directly on free cash flow. But what I will say is this about, like me and my management team are compensated on two things. One is on revenue growth and the other is on being free cash flow positive.

所以，我不會直接評論自由現金流。但我要說的是，我和我的管理團隊在兩件事上得到了報酬。一是營收成長，二是自由現金流為正。

Yeah, and the Nehal, I guess what I'll add to that is in the past we've talked about as a rule of thumb, approximately $200 million of revenue being free cash flow break even and $155 million of revenue being adjusted EBITDA per even.

是的，我想補充的是，過去我們討論過一個經驗法則，大約 2 億美元的收入是自由現金流盈虧平衡，1.55 億美元的收入是調整後的 EBITDA甚至。

Some of these revenue streams that we have ramping in particular, a PreCheck is a very favorable working capital profile. So the free capital break even point is probably lower than 200 now. And we think we are on a good path to get there.

我們正在增加的一些收入來源，特別是 PreCheck 的營運資金狀況非常有利。因此，自由資本損益平衡點現在可能低於 200。我們認為，我們正朝著這個目標前進。

What would you expect the incremental operating profit for incremental revenue above that $200 million or breakeven rate which might be too high to be?

您預期超過 2 億美元增量收入的增量營業利潤或損益平衡率（這可能太高了）是多少？

Yeah. No, I don't want to get on a slippery slope to guiding '25 on this call. But we feel -- my earlier comments around the restructuring and the movement of resources that I talked about.

是的。不，我不想在這通電話中走上指導‘25’的下坡路。但我們感覺——我之前關於重組和資源流動的評論已經談到了。

I thought my point about growth and free cash flow.

我認為我的觀點是關於成長和自由現金流。

All are very good. Those actions that we took were all towards moving resources towards these programs in a way that would allow us to maximize the benefit of that V shaped recovery on revenue in 2025. So we'll say more on the March call in terms of P&L details, you know why I said here.

一切都非常好。我們所採取的這些行動都是為了將資源轉移到這些項目上，以便我們在 2025 年最大限度地發揮 V 型復甦對收入的益處。因此，我們將在三月的電話會議上更詳細地討論損益表的細節，你知道我為什麼在這裡這麼說。

Got it. Thank you for taking all my questions.

知道了。感謝您回答我的所有問題。

You're welcome.

不客氣。

This concludes the question and answer session. I would now like to turn it back to John Wood for closing remarks.

問答環節到此結束。現在我想請約翰·伍德作最後發言。

I want to thank our shareholders for your ongoing support. And I'm very pleased with the recent positive news on our program award with the Defense Manpower Data Center and the continued progress with the TSA PreCheck program. Both these programs are key components of our future growth plans.

我要感謝我們的股東一直以來的支持。我對我們與國防人力資料中心專案合作獲得的積極消息以及 TSA PreCheck 專案的持續進展感到非常高興。這兩個項目都是我們未來成長計畫的關鍵組成部分。

Furthermore, we are focused on replenishing secure networks backlog through the recently won new contract vehicles and a large cultivated pipeline of new business opportunities. Finally, the team continues to prioritize the expansion of our pipeline and driving new business capture to enable additional growth for the company.

此外，我們也專注於透過最近贏得的新合約載體和大量培育的新業務機會來補充安全網路積壓。最後，團隊繼續優先擴大我們的產品線並推動新業務的獲取，以實現公司的額外成長。

Based on all of this, I look forward to 2025 and I remain excited about the long term outlook for the company with robust and recession resistant end markets, well funded customers and decades long track record of serving the world's most security conscious organizations. Telos is a strong foundation for the future.

基於所有這些，我展望2025年，並且我仍然對公司的長期前景感到興奮，該公司擁有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注重安全的組織提供服務的記錄。Telos 為未來奠定了堅實的基礎。

Thank you everybody.

謝謝大家。

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

感謝您參加今天的會議。該計劃確實結束了。您現在可以斷開連線。