Telos Corp (TLS) 2024 Q4 法說會逐字稿

Good day and thank you for standing by. Welcome to the Telos Corporation fourth quarter 2024 financial results conference call.

您好，感謝您的支持。歡迎參加 Telos Corporation 2024 年第四季財務業績電話會議。

(Operator Instructions)

（操作員指示）

Please be advised that today's conference is being recorded. I would now like to hand the conference over to Allison Phillipp, Director of Corporate Communications. Please go ahead.

請注意，今天的會議正在錄音。現在我想將會議交給企業傳播總監 Allison Phillipp。請繼續。

Good morning. Thank you for joining us to discuss Telos Corporation's fourth quarter and full year 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.感謝您加入我們討論 Telos Corporation 2024 年第四季和全年財務表現。今天和我一起的是 Telos 董事長兼執行長約翰伍德 (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 2024 year-end results. Next, John will discuss business highlights from the quarter. Then Mark will follow up with first 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.

讓我快速回顧一下今天演講的形式。馬克將首先評論我們的 2024 年年終業績。接下來，約翰將討論本季的業務亮點。然後，馬克將跟進第一季的指導，然後再由約翰進行總結。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 fourth quarter and year-end 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.

第四季和年終財務業績已於今天稍早發布，並發佈在 Telos 投資者關係網站上，本次電話會議也在該網站上同步進行網路直播。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, including all of those relating to 2025 company performance, plans, and operations, are forward-looking statements and are made under the Safe Harbor provisions of the Federal Securities laws.

在開始之前，我們想強調的是，我們在本次電話會議上的某些聲明，包括所有與 2025 年公司業績、計劃和運營有關的聲明，都是前瞻性聲明，並且是根據聯邦證券法的安全港條款做出的。

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 financial results summary, 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.

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。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、本次電話會議期間的評論以及我們向美國證券交易委員會提交的文件中描述的因素。我們不承擔更新任何前瞻性陳述的義務。

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' financial performance.

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。

These non-GAAP financial measures should be considered in addition to and not as a substitute for or an isolation from GAAP results. You can find additional disclosures regarding these non-GAAP measures, including reconciliation with comparable GAAP results in our fourth quarter and year-end financial results summary and on the investor relations portion of our website.

這些非 GAAP 財務指標應被視為 GAAP 結果的補充，而不是替代或與 GAAP 結果隔離。您可以在我們的第四季和年終財務結果摘要以及我們網站的投資者關係部分中找到有關這些非 GAAP 指標的更多揭露，包括與可比較 GAAP 結果的對帳。

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

另請注意，除非另有說明，財務比較都是逐年進行的。明年，我們公司網站的「投資者關係」連結將提供本次電話會議的網路直播重播。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. I'm pleased to report that Telos has delivered fourth quarter revenue near the top end of the guidance range and adjusted EBITDA above the top end of the guidance range.

謝謝你，艾莉森，大家早安。今天我們從投影片 3 開始。我很高興地報告，Telos 第四季的營收接近指引範圍的最高端，調整後的 EBITDA 高於指引範圍的最高端。

Total company revenue grew 11% sequentially to $26.4 million in the quarter compared to guidance of $24.5 million to $26.5 million. Security Solutions revenue grew 20% sequentially to $21.9 million or 83% of total company revenue, which was near the top end of our guidance range.

本季公司總營收季增 11%，達到 2,640 萬美元，而預期為 2,450 萬美元至 2,650 萬美元。安全解決方案營收季增 20%，達到 2,190 萬美元，占公司總收入的 83%，接近我們指導範圍的最高端。

During the fourth quarter, our large program with the Defense Manpower Data Center or DMDC successfully transitioned from the incumbent contractor and began to generate significant revenue for security solutions. In addition, revenue from TSA PreCheck enrollments grew over 30% sequentially.

在第四季度，我們與國防人力資料中心或 DMDC 合作的大型專案成功從現任承包商轉型，並開始為安全解決方案創造可觀的收入。此外，TSA PreCheck 登記收入較上季成長超過 30%。

Secure Networks delivered $4.5 million of revenue, or 17% of total company revenue, representing the top end of the guidance range. Secure Networks revenue declined sequentially as expected due to the ramp down of existing programs.

安全網路公司實現了 450 萬美元的收入，占公司總收入的 17%，達到指導範圍的最高值。由於現有項目的減少，安全網路收入如預期一樣較上季下降。

Turning to margins, GAAP gross margin expanded nearly 600 basis points year over year to 40.3%, and cash gross margin expanded nearly 900 basis points year over year to 47%.

談到利潤率，GAAP 毛利率年增近 600 個基點至 40.3%，現金毛利率較去年同期成長近 900 個基點至 47%。

Fourth quarter cash gross margin of 47% was the company's highest quarter since the IPO in 2020. And full year 2024 cash gross margin of 43.7% was the company's highest since 2000. Gross margin expansion was primarily driven by the favorable mix shifts from our lower margin secure networks business to our higher margin Security Solutions business.

第四季現金毛利率為47%，是該公司2020年IPO以來的最高季度。2024 年全年現金毛利率為 43.7%，為本公司自 2000 年以來的最高水準。毛利率的成長主要得益於從利潤率較低的安全網路業務轉變為利潤率較高的安全解決方案業務的有利組合。

Security Solutions revenue grew from 50% of total company revenue in the fourth quarter of 2023 to 83% in 2024, and from 53% for the full year 2023 to 71% in 2024. As discussed on our last earnings call, during the third quarter of 2024, we discontinued the development and sale of selected solutions or parts of solutions that were not generating acceptable returns.

安全解決方案收入占公司總收入的比例從 2023 年第四季的 50% 成長到 2024 年的 83%，並從 2023 年全年的 53% 成長到 2024 年的 71%。正如我們在上次收益電話會議上所討論的那樣，在 2024 年第三季度，我們停止了未能產生可接受回報的選定解決方案或部分解決方案的開發和銷售。

These actions reduced our cost base and created new capacity for investment in our highest growth programs in order to maximize our operating leverage, incremental margins, and cash flow as we return to growth in 2025.

這些措施降低了我們的成本基礎，並為我們最高成長項目的投資創造了新的能力，以便在 2025 年恢復成長時最大限度地提高我們的經營槓桿、增量利潤和現金流。

Largely as a result of our third quarter cost actions, adjusted operating expenses, which include R&D and SG&A expense, excluding stock-based compensation, restructuring, and impairment expenses declined sequentially by $2.4 million.

主要是由於我們第三季的成本行動，調整後的營運費用（包括研發和銷售、一般及行政費用，不包括股票薪酬、重組和減值費用）環比下降了 240 萬美元。

When combined with higher cash gross profit, the reduction in operating expenses drove a sequential improvement in adjusted EBITDA from a $4.2 million loss in the third quarter to a $200,000 loss in the fourth quarter.

加上更高的現金毛利，營運費用的減少推動調整後 EBITDA 連續改善，從第三季的 420 萬美元虧損改善至第四季的 20 萬美元虧損。

Lastly, cash flow from operations was a $10.5 million outflow, and free cash flow was a $14.8 million outflow, reflecting a short-term buildup of working capital associated with high growth programs and one-time CapEx investments in IT infrastructure expansion.

最後，經營活動現金流出 1,050 萬美元，自由現金流出 1,480 萬美元，反映了與高成長計畫相關的短期營運資本累積以及 IT 基礎設施擴展的一次性資本支出投資。

We expect these dynamics to reverse and drive positive cash flow from operations and positive free cash flow in the first quarter of 2025. I will now turn it over to John for an overview of recent business highlights. John?

我們預計這些動態將逆轉並推動 2025 年第一季的經營現金流和自由現金流為正。現在我將把主題交給約翰，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. First I'll provide an update on our TSA PreCheck program. We made significant progress expanding our nationwide network of enrollment centers, providing a convenient solution to travelers and gaining market share in this important national security program throughout 2024.

謝謝，馬克，大家早安。讓我們翻到第 4 張投影片。首先，我將提供有關我們的 TSA PreCheck 計劃的最新資訊。我們在擴大全國招生中心網路方面取得了重大進展，為旅客提供了便利的解決方案，並在 2024 年全年在這項重要的國家安全計畫中獲得市場份額。

We increased our enrollment centers from 26 locations at the beginning of 2024 to 218 locations in key markets across the United States today.

我們的招生中心從 2024 年初的 26 個地點增加到目前遍布美國主要市場的 218 個地點。

As we said in the past, we do not expect a linear monthly pace of opening new enrollment centers. We will have phases when we open, a larger number of locations, followed by quarters when we open fewer locations, and during which we, together with the TSA will assess the operations of our enrollment centers before resuming a higher pace of rollouts.

正如我們過去所說的那樣，我們並不期望每月開設新的招生中心的速度呈線性增長。我們將分階段開放更多地點，然後分季度開放較少地點，在此期間，我們將與 TSA 一起評估我們登記中心的營運情況，然後再恢復更高的推廣速度。

We opened a total of 177 new locations in the second, third, and fourth quarters of 2024 before moderating the pace of openings with 15 new locations so far in 2025. We expect to resume a higher pace of rollouts in the coming weeks and months and continue to target 500 locations sometime around the end of the year.

我們在 2024 年第二、第三和第四季共開設了 177 家新店，並在 2025 年放緩了開設速度，迄今已開設了 15 家新店。我們預計在未來幾週和幾個月內恢復更快的推廣速度，並繼續瞄準在年底左右覆蓋 500 個地點。

TSA PreCheck grew quickly into our single largest program by revenue during 2024, and we expect the program to deliver significant growth again this year.

2024 年，TSA PreCheck 迅速發展成為我們收入最高的單一項目，我們預計今年將再次顯著成長。

Next, I'll provide an update on the two key program wins that we have previously discussed over our last several earnings calls. We have successfully transitioned the Defense Manpower Data Center or DMDC program and are now generating revenue. This program along with TSA PreCheck enrollments, was a key source of our sequential growth in the fourth quarter.

接下來，我將介紹我們在過去幾次財報電話會議上討論過的兩個關鍵項目勝利的最新情況。我們已經成功轉型國防人力資料中心或 DMDC 計劃，並且目前正在產生收入。該計劃以及 TSA PreCheck 註冊是我們第四季度連續成長的主要來源。

We look forward to a full year of successful operations on this program in 2025 as we expect it to be a major driver of revenue growth for the company. Additionally, we were pleased to report that the stop work order on the program with the Department of Homeland Security or DHS was lifted in January. We expect to begin generating revenue in this program later in 2025.

我們期待該計劃在 2025 年全年成功運營，因為我們預計它將成為公司收入成長的主要推動力。此外，我們很高興地報告，美國國土安全部（DHS）針對該項目的停工令已於一月份解除。我們預計該計劃將於 2025 年下半年開始產生收入。

We're thrilled with the positive outcomes in both these program awards and look forward to providing high quality services to these critical customers over the next several years. Finally, I'll provide the latest news on other business outcomes since our last earnings call.

我們對這兩個項目獎項的積極成果感到非常高興，並期待在未來幾年為這些重要客戶提供高品質的服務。最後，我將提供自上次財報電話會議以來其他業務成果的最新消息。

Our executive business has achieved new orders with several customers including the Office of Naval Intelligence, the US Department of Energy, a US Federal government agency, as well as a key renewal with the US Federal government customer in the intelligence community. We also received a new order for cyber services from a Fortune 100 company in the technology sector.

我們的執行業務已與多家客戶達成新訂單，其中包括海軍情報局、美國能源部、美國聯邦政府機構，以及與美國聯邦政府情報界客戶達成的重要續約。我們也從一家科技業的財富 100 強公司獲得了新的網路服務訂單。

The automated message handling system or AMHS business achieved key renewals from a UK government department and a US federal government customer in the intelligence community. Regarding our new business pipeline on our previous call, we indicated we had submitted several bids and we're working on additional opportunities that totaled nine figures of total contract value to Telos.

自動訊息處理系統或 AMHS 業務獲​​得了英國政府部門和美國聯邦政府情報界客戶的關鍵續約。關於我們在上次電話會議上的新業務管道，我們表示我們已經提交了幾份投標，並且我們正在努力尋找其他機會，這些機會與 Telos 的合約總價值總計達九位數。

As a result of the recent change in administration and uncertainty around near-term priorities and objectives, we're experiencing some delays in the timing of awards from the government on single awards. However, we are not seeing similar delays on task orders available via the various active contract vehicles we have won over the last couple of years.

由於最近政府的變動以及近期優先事項和目標的不確定性，我們在政府授予單項獎項的時間上遇到了一些延遲。然而，我們並沒有看到透過過去幾年贏得的各種有效合約工具獲得的任務訂單出現類似的延遲。

Accordingly, we are reprioritizing task orders on our contract vehicles over single awards and are currently vetting and responding to task orders at a rapid pace. We remain optimistic of our positioning and competitiveness on our outstanding and upcoming bids. I'll now turn the call over to Mark, who will discuss first quarter guidance. Mark?

因此，我們正在重新調整合約車輛上的任務訂單的優先級，使其不再局限於單一獎項，目前正在快速審查和回應任務訂單。我們對於我們在未完成的和即將進行的投標中的定位和競爭力仍然持樂觀態度。現在我將電話轉給馬克，他將討論第一季的指導。標記？

Thanks, John. Let's turn to slide 5. For the first quarter, we expect revenue to grow 7% to 15% sequentially to a range of $28.2 million to $30.2 million. And we forecast an adjusted EBITDA loss of $1.8 million to $800,000. Sequential revenue growth will be driven by Security Solutions.

謝謝，約翰。讓我們翻到幻燈片 5。對於第一季度，我們預計營收將環比成長 7% 至 15%，達到 2,820 萬美元至 3,020 萬美元之間。我們預測調整後的 EBITDA 損失為 180 萬美元至 80 萬美元。安全解決方案將推動連續收入成長。

We forecast Security Solutions to grow high single digit percent to mid-teens percent sequentially driven by our new program with the Defense Manpower Data Center and the ongoing ramp of TSA PreCheck enrollments.

我們預測，受我們與國防人力資料中心合作的新專案以及 TSA PreCheck 註冊人數持續增加的推動，安全解決方案的成長率將達到高個位數百分比至中十幾個百分點。

Security Solutions is forecasted to contribute approximately 84% of total company revenue. We anticipate secure networks revenue to be comparable to the fourth quarter.

預計安全解決方案將貢獻公司總收入的約 84%。我們預計安全網路收入將與第四季相當。

GAAP gross margin is expected to expand by 150 basis points to 215 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 forecasted to expand by 260 basis points to 285 basis points year over year for the same reason.

預計 GAAP 毛利率將比去年同期擴大 150 個基點至 215 個基點，這主要歸因於我們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，預計現金毛利率將年增 260 個基點至 285 個基點。

Cash operating expenses, which include R&D and SG&A adjusted for stock-based compensation, restructuring expenses, depreciation and amortization, impairment and capitalized software development costs are forecasted to be approximately $1 million lower year over year due to lower spending as a result of the restructuring plan that we implemented during the third quarter of 2024, partially offset by investments in our highest growth programs. We're pleased to report that we expect to generate positive cash flow during the first quarter.

現金營運費用（包括根據股票薪酬調整後的研發和銷售、一般及行政費用、重組費用、折舊和攤銷、減值和資本化軟體開發成本）預計同比減少約 100 萬美元，原因是我們在 2024 年第三季度實施的重組計劃導致支出減少，但部分被我們對最高增長項目的投資所抵消。我們很高興地報告，我們預計第一季將產生正現金流。

Turning to the full year 2025. The structure of the revenue framework that we outlined on prior earnings calls has not changed. We forecast a return to year-over-year revenue growth. Revenue for the full year will be comprised of several key components.

展望2025年全年。我們在先前的收益電話會議上概述的收入框架結構沒有改變。我們預測收入將恢復年增。全年收入將由幾個關鍵部分組成。

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 $70 million in 2025, representing an increase from the previously estimated $60 million to $65 million. This increase in estimates reflects higher expected revenues on various contracts across the portfolio due to a combination of scope expansion and contract extensions.

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 項目）將在 2025 年產生約 7000 萬美元的收入，比之前估計的 6000 萬美元增加到 6500 萬美元。預計收入的增加反映了由於範圍擴大和合約延長，整個投資組合中各項合約的預期收入將增加。

Second, we estimate the DMDC and DHS programs could recognize approximately $50 million to $75 million of revenue, representing a decrease from the previously estimated $60 million to $85 million. The change in estimates reflects the time phasing of revenue recognition during the first year of the program.

其次，我們估計 DMDC 和 DHS 專案的收入約為 5,000 萬至 7,500 萬美元，低於先前估計的 6,000 萬至 8,500 萬美元。估計的變化反映了該計劃第一年收入確認的時間階段。

Time phasing in the first year will be driven by the ultimate mix of third party solutions that are recognized as revenue when orders are filled versus solutions that are recognized as revenue over a period of performance. The mix of gross revenue recognition and net revenue recognition will impact the range as well.

第一年的時間分階段將取決於在訂單完成時確認為收入的第三方解決方案與在一段時間內確認為收入的解決方案的最終組合。總收入確認和淨收入確認的組合也會影響範圍。

Third, we are targeting a pro rata share of the TSA PreCheck enrollment market after we complete the rollout of our 500 locations at full capacity for a full calendar year. We believe the entire TSA PreCheck market is approximately a $200 million market on a net revenue basis in a typical year based on our current pricing structure.

第三，我們計劃在全年全面部署 500 個地點後，按比例在 TSA PreCheck 註冊市場中佔有一席之地。我們認為，根據我們目前的定價結構，整個 TSA PreCheck 市場在典型年份的淨收入約為 2 億美元。

Although we do not expect to achieve our pro rata market share in 2025, we expect TSA PreCheck revenues to ramp along with our enrollment centers during the year. Enrollment revenue represented approximately 70% of the total $200 million TSA PreCheck market in 2024. Renewal revenue comprised the other 30%.

儘管我們預計 2025 年無法實現按比例分配的市場份額，但我們預計 TSA PreCheck 收入將隨著我們的登記中心的增加而增長。到 2024 年，註冊收入將佔 TSA 預檢市場總額 2 億美元的約 70%。續約收入佔剩餘的 30%。

And lastly, John discussed our new business pipeline and business development activities. Any new business wins during 2025 will have the potential to contribute additional revenue during the year. And with that, I'll turn it back to John.

最後，約翰討論了我們的新業務管道和業務發展活動。2025 年期間贏得的任何新業務都有可能在當年帶來額外收入。說完這些，我就把話題轉回給約翰。

Thanks Mark. Let's turn to slide 6. In summary, revenue grew 11% sequentially to $26.4 million and adjusted EBITDA improved sequentially by $4 million to a $200,000 loss. Additionally, we achieved our highest full year cash gross margin since 2000. We successfully assumed full operational control of our scope on the DMDC program and look forward to a full year of operations and the accompanying revenue growth in 2025.

謝謝馬克。讓我們翻到第 6 張投影片。整體而言，營收季增 11% 至 2,640 萬美元，調整後 EBITDA 環比成長 400 萬美元至虧損 20 萬美元。此外，我們實現了自 2000 年以來最高的全年現金毛利率。我們成功地全面控制了 DMDC 計劃的營運範圍，並期待 2025 年全年營運和隨之而來的收入成長。

We continue to ramp our network of TSA PreCheck enrollment locations and are targeting 500 locations sometime around the end of the year. We expect 7% to 15% sequential revenue growth and positive cash flow in the first quarter of 2025, and we are forecasting significant improvements in revenue, profit, and cash flow for the full year. And with that, we're happy to take questions.

我們將繼續擴大 TSA PreCheck 登記地點網絡，目標是在今年年底前達到 500 個地點。我們預計 2025 年第一季營收將環比成長 7% 至 15%，現金流將為正，我們預測全年營收、利潤和現金流將顯著改善。我們非常樂意回答您的問題。

Operator, please open the line for Q&A.

接線員，請開通問答專線。

Thank you.

謝謝。

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

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

Hi, good morning. Mark and John, congrats on the solid results in Q4. John, I just wanted to ask with the change in administration, it sounds like you've had some impact on single award type of programs, just curious of maybe what you've heard from some of your partners, and just how you're framing the year just given all the moving parts here in early 2025.

嗨，早安。馬克和約翰，恭喜你們在第四季取得的優異成績。約翰，我只是想問一下，隨著政府的變動，聽起來你對單一獎勵類型的項目產生了一些影響，我只是好奇你從一些合作夥伴那裡聽到了什麼，以及考慮到 2025 年初的所有活動，你如何規劃這一年。

So in general Zach and thank you for your question, in general, the company really is focused on delivering, solutions that help optimize performance for our customers, in terms of automation and so forth and so I would say the new administration in general is positive for Telos.

所以總的來說，扎克，謝謝你的提問，總的來說，公司確實專注於提供有助於優化客戶性能的解決方案，在自動化等方面，所以我想說新政府總體上對 Telos 來說是積極的。

Having said that at the customer level, we are seeing single awards being held back while the administration sort of reviews those opportunities that's why we're focused on the task orders that we have from existing contract vehicles.

話雖如此，在客戶層面，我們看到單一獎項被擱置，而管理層正在審查這些機會，這就是為什麼我們專注於現有合約工具的任務訂單。

Understood. And my follow-up question, geared towards Mark, helpful to get a little bit more detail in terms of the 2025 framework just in terms of the new awards that that you outlined with DMDC and DHS. Is it largely just accounting issues as we think about that ramping up in the first year, or can you just go a little bit more into the nuances of that for revenue recognition in in the first years of those awards?

明白了。我的後續問題是針對馬克的，有助於就 2025 框架以及您與 DMDC 和 DHS 共同提出的新獎項獲得更多細節。當我們考慮在第一年增加收入時，這是否主要只是會計問題，或者您能否更詳細地介紹一下在這些獎項頒發的第一年收入確認的細節？

Yeah, it's a good question, Zach. So yes, there is no change in our expectations around the total value of third party content that we would integrate into that program. The difference is the mix of that third party content as we're getting deeper into the program, what we're seeing is that the mix is more weighted to software than it is to hardware.

是的，這是個好問題，札克。所以是的，我們對整合到該計劃中的第三方內容的總價值的預期沒有改變。不同之處在於，隨著我們對該計劃的深入了解，我們發現第三方內容的混合更側重於軟體而不是硬體。

Now hardware content is pretty straightforward in terms of revenue recognition. You recognize essentially the full value of the order at the time the order is filled, so you recognizes revenue, the full value of the order at the time the order is filled. With software, it's a mix.

現在，硬體內容在收入確認方面非常簡單。您基本上在訂單完成時確認了訂單的全部價值，因此您在訂單完成時確認了收入，即訂單的全部價值。對於軟體來說，這是一種混合。

Some software will be recognized full value at the time the order is filled. Other types of software would be recognized over a period of performance, say over a one year period of performance or a one year license or maintenance contract. So in the first year on some of these orders, we'll see a partial year of revenue recognition rather than a full year and then in '26 you'll see the full year of revenue recognition.

一些軟體將在訂單完成時確認全部價值。其他類型的軟體將在一段時間內得到認可，例如一年的執行期或一年的許可或維護合約。因此，對於其中一些訂單，在第一年，我們將看到部分年度的收入確認，而不是全年的收入確認，然後在 26 年，您將看到全年的收入確認。

The other important point is that, it looks like from a cash perspective, for the most part we'll see the full benefit on a -- the full cash flow benefit at the time the order is filled. So that's one of the reasons why, we're bullish on cash in the quarter and the year. Cash flow should outperform the P&L, so to speak, in 2025.

另一個重要點是，從現金角度來看，大多數情況下，我們會在訂單完成時看到全部現金流收益。這就是我們看好本季和今年現金的原因之一。可以這麼說，到 2025 年，現金流的表現應該會超過損益表。

(Operator Instructions) Rudy Kessinger, D.A. Davidson.

（操作員指示）Rudy Kessinger，D.A.戴維森。

Hey guys, thanks for taking my questions. Mark, if I think about TSA PreCheck, [$200 million] market opportunities, 70% coming from enrollments, you have 218 locations, or I guess you got about 45% of the roll out if we just do the numbers there, that would imply if you're getting that one-third share at this 118 locations you should be running about $21 million in annual revenue from enrollment plus some from renewals understanding it's going to take longer to get the one-third share on the renewal side. Is that the right way to think, ballpark about where TSA revenue is running currently?

嘿夥計們，謝謝你們回答我的問題。馬克，如果我考慮一下 TSA PreCheck，[2 億美元] 的市場機會，其中 70% 來自註冊，你們有 218 個地點，或者如果我們只計算一下數字，我猜你們獲得了大約 45% 的推廣份額，這意味著，如果你在這 118 個地點獲得那三分之一的份額，那麼你應該每年從註冊中獲得大約 200 萬美元的價值時間。這樣想對嗎？大致估算一下 TSA 的收入目前在哪裡？

So the framework you've laid out, yes, is the right way, to think about it. Of course, over the course of 2024 on an average basis we have far fewer locations open than we do now, and then over the course of this year, those locations will ring.

所以，您列出的框架是正確的思考方式。當然，到 2024 年，我們平均開設的門市數量將比現在少得多，而到今年，這些門市就會開始營業。

Okay and then I'm curious on cash flow. I know it says in slides here you guys mentioned it should be positive in Q1. Just, how much of that is maybe just driven by, strong Q1 collections and then for the full year you just made a comment there, cash should outpace I guess P&L. Like how should we think about free cash flow potential for the full year.

好的，我對現金流很好奇。我知道幻燈片裡說你們提到第一季應該是正面的。只是，其中有多少可能只是由強勁的第一季收款所推動，然後對於全年而言，您剛才在那裡發表評論，我猜現金應該超過損益表。例如我們應該如何考慮全年的自由現金流潛力。

Yeah, so in the first quarter, there is a benefit in terms of the fourth quarter working capital buildup that will be liquidating in the first quarter. In terms of the overall year, here's the way I would think about it, adjusted EBITDA even break even for the year is probably somewhere around $155 million, $160 million of revenues, somewhere around there depending on mix.

是的，因此在第一季度，第四季度營運資本的累積會帶來好處，而這些資本將在第一季清算。就全年而言，我是這樣認為的，調整後的 EBITDA 甚至全年盈虧平衡點大概在 1.55 億美元左右，收入在 1.6 億美元左右，具體數字取決於產品組合。

Even adjusted EBITDA -- at a break even, adjusted EBITDA this year, I would expect us to be positive free cash flow at a break even adjusted EBITDA level. So what that means is you're going to have, let's say you have break even adjusted EBITDA, you're going to subtract from that about $10 million of capitalized software, then you're going to add about $2 million of interest income, that would imply roughly $8 million of negative free cash flow before changes in working capital.

即使調整後的 EBITDA - 達到盈虧平衡，今年調整後的 EBITDA，我預計我們將在盈虧平衡的調整後 EBITDA 水平上實現正自由現金流。所以這意味著，假設你有損益平衡調整後的 EBITDA，你要從中減去大約 1000 萬美元的資本化軟體，然後再增加大約 200 萬美元的利息收入，這意味著在營運資本變化之前大約有 800 萬美元的負自由現金流。

I would say the change in working capital should be enough in 2025 to get us to a positive free cash flow. So the change in working capital should be better than $8 million at that hypothetical break even adjusted EBITDA level. Does that make sense?

我想說，2025 年營運資本的變動應該足以讓我們實現正的自由現金流。因此，在假設的損益平衡調整後 EBITDA 水準下，營運資本的變動應該高於 800 萬美元。這樣有道理嗎？

It does and that's a very, very helpful breakdown. I appreciate that. Thank you.

確實如此，這是一個非常非常有用的細分。我很感激。謝謝。

And by the way, that's just another way of saying our breakeven level of revenues for -- or the level of revenues required for breakeven free cash flow should be lower than the level of revenues required to break even on [an adjusted EBITDA basis].

順便說一句，這只是另一種說法，即我們的盈虧平衡收入水平——或者盈虧平衡自由現金流所需的收入水平應該低於盈虧平衡所需的收入水平。[調整後的 EBITDA 基礎]。

This will conclude today's question and answer session. I'll now turn the call back to John Wood for closing remarks.

今天的問答環節到此結束。現在我將把電話轉回給約翰·伍德，請他作最後發言。

Well, our shareholders for your ongoing support with the encouraging news on our DMDC and our TSA PreCheck programs, we look forward to significant improvements in revenue growth, profit, and cash flow in 2025. I look forward to 2025 and I remain excited about the long term outlook for the company.

好吧，感謝股東們對我們的 DMDC 和 TSA PreCheck 計劃的持續支持，我們期待 2025 年收入成長、利潤和現金流取得顯著改善。我期待著 2025 年，並​​且對公司的長期前景感到興奮。

With robust and recession resistant markets, well-funded customers, and a decade-long track record of serving the world's most security conscious organizations, Telos is a strong foundation for the future.

Telos 擁有強勁且抗衰退的市場、資金充足的客戶以及十年來為世界上最注重安全的組織提供服務的記錄，為未來奠定了堅實的基礎。

Thank you.

謝謝。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。