Telos Corp (TLS) 2025 Q1 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Telos Corporation first quarter 2025 earnings call. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question-and-answer session. (Operator Instructions) I would now like to hand the conference over to your speaker today, Allison Phillipp, Director of Corporate Communications.

您好，感謝您的支持。歡迎參加 Telos Corporation 2025 年第一季財報電話會議。請注意，今天的會議正在錄音。演講者演講結束後，將有問答環節。（操作員指示）現在，我想將會議交給今天的發言人，企業傳播總監 Allison Phillipp。

Good morning. Thank you for joining us to discuss Telos Corporation's first quarter 2025 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. Mark will begin with remarks on our first quarter 2025 results.

早安.感謝您加入我們討論 Telos Corporation 2025 年第一季的財務表現。今天與我一起的有 Telos 董事長兼執行長 John Wood 和 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。馬克將首先評論我們 2025 年第一季的業績。

Next, John will discuss business highlights from the quarter. Then Mark will follow up with second 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.

接下來，約翰將討論本季的業務亮點。然後，馬克將跟進第二季度的指導，然後由約翰進行總結。然後我們將開通問答熱線，安全解決方案執行副總裁馬克·格里芬 (Mark Griffin) 也將加入我們。

The first 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.

第一季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一些聲明，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.

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和我們向美國證券交易委員會提交的文件中描述的因素。

We do not undertake any duty to update any forward-looking statements. 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.

我們不承擔更新任何前瞻性陳述的義務。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 in isolation from GAAP results. You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP results, in our first quarter results summary and on the Investor Relations portion of our website. Please also note that financial comparisons are year over year unless otherwise specified.

這些非 GAAP 財務指標應被視為 GAAP 結果的補充，而不應替代或與 GAAP 結果分開。您可以在我們的第一季業績摘要和我們網站的投資者關係部分找到有關這些非 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，財務比較都是逐年進行的。

The webcast replay of this call will be available on our company website under the Investor Relations link. With that, I'll turn the call over to Mark.

本次電話會議的網路直播重播將在我們公司網站的「投資者關係」連結下提供。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 again overdelivered on key financial metrics in the first quarter, exceeding both revenue and profit guidance, overall, in a straightforward quarter with better-than-guided performance across revenue, gross margin, operating expenses, and adjusted EBITDA. Total company revenue grew 16% sequentially to $30.6 million and included growth from both Security Solutions and Secure Networks.

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 在第一季再次超額完成了關鍵財務指標，總體而言，收入和利潤都超過了預期，收入、毛利率、營運費用和調整後 EBITDA 的表現均優於預期。公司總收入較上季成長 16%，達到 3,060 萬美元，其中包括安全解決方案和安全網路的成長。

Security Solutions grew 18% sequentially to $25.8 million and Secure Networks grew 8% sequentially to $4.8 million. Security Solutions revenue exceeded guidance partially due to outperformance on high-growth programs.

安全解決方案季增 18%，達到 2,580 萬美元，安全網路較上季成長 8%，達到 480 萬美元。安全解決方案收入超出預期，部分原因是高成長項目的出色表現。

GAAP gross margin was 39.8%, and cash gross margin was 45.3%, both exceeding guidance due to more favorable mix. Adjusted operating expenses, excluding depreciation and amortization, were approximately $800,000 better than guidance, primarily due to lower-than-forecasted non-labor costs across multiple cost centers.

GAAP 毛利率為 39.8%，現金毛利率為 45.3%，由於組合較有利，均超出預期。調整後的營運費用（不包括折舊和攤提）比預期高出約 80 萬美元，這主要歸因於多個成本中心的非勞動力成本低於預期。

As a result, adjusted EBITDA also exceeded the top end of our guidance range. Adjusted EBITDA was a $362,000 profit compared to our guidance range of a $1.8 million loss to an $800,000 loss. Lastly, cash flow from operations was a positive $6.1 million, and free cash flow was a positive $3.8 million. On our last earnings call, we said we were forecasting significant year-over-year improvements in revenue, profit, and cash flow for the full year 2025.

因此，調整後的 EBITDA 也超出了我們預期範圍的最高值。調整後的 EBITDA 利潤為 362,000 美元，而我們的預期範圍是虧損 180 萬美元至 80 萬美元。最後，經營現金流為正 610 萬美元，自由現金流為正 380 萬美元。在我們上次的收益電話會議上，我們表示，我們預測 2025 年全年的營收、利潤和現金流將比去年同期大幅成長。

So let's turn to slide 4 for a brief review of our year-over-year performance in the first quarter of the year. Revenue grew 3% year over year due to 39% growth in Security Solutions partially offset by contraction in Secure Networks.

讓我們翻到第 4 張投影片來簡單回顧一下我們今年第一季的年比表現。由於安全解決方案成長 39%，但安全網路的萎縮部分抵消了這一增長，因此收入同比增長 3%。

Growth in Security Solutions was primarily driven by the successful transition of the Defense Manpower Data Center or DMDC program in the fourth quarter of 2024 and the ramp of TSA PreCheck enrollment volume. Secure Networks contracted due to the completion and ramp down of multiple programs over the past several quarters.

安全解決方案的成長主要得益於 2024 年第四季國防人力資料中心或 DMDC 計畫的成功過渡以及 TSA PreCheck 註冊量的增加。由於過去幾個季度多個項目的完成和減少，安全網路公司簽訂了合約。

GAAP gross margin expanded 278 basis points and cash gross margin expanded 313 basis points, both primarily due to the favorable mix shift from Secure Networks to Security Solutions. Security Solutions revenue increased from 63% of total company revenue in the first quarter of 2024 to 84% of revenue in the first quarter of 2025.

GAAP 毛利率擴大了 278 個基點，現金毛利率擴大了 313 個基點，這主要歸因於從安全網路到安全解決方案的有利組合轉變。安全解決方案營收從 2024 年第一季占公司總營收的 63% 成長至 2025 年第一季佔營收的 84%。

As a result of revenue growth and gross margin expansion, GAAP gross profit increased by $1.2 million and cash gross profit increased by $1.4 million.

由於收入成長和毛利率擴大，GAAP毛利增加了120萬美元，現金毛利增加了140萬美元。

Turning to operating expenses. During the third quarter of 2024, we implemented a restructuring and cost reduction plan in order to maximize our operating leverage as we return to growth in 2025. In part as a result of that plan, adjusted operating expenses, excluding depreciation and amortization, declined by $1.3 million year over year. Higher cash gross profit combined with lower adjusted operating expenses drove adjusted EBITDA higher by $2.7 million.

談到營運費用。2024 年第三季度，我們實施了重組和成本削減計劃，以便在 2025 年恢復成長時最大限度地提高我們的經營槓桿。部分由於該計劃，調整後的營運費用（不包括折舊和攤提）比去年同期下降了 130 萬美元。更高的現金毛利加上更低的調整後營運費用推動調整後 EBITDA 上漲 270 萬美元。

And lastly, Cash flow from operations increased by $6.5 million, and free cash flow increased by $7.4 million due to higher adjusted EBITDA, lower capitalized software development costs, and favorable working capital dynamics. Overall, we expect the trend of year-over-year growth in revenue, adjusted EBITDA, and cash flow to accelerate in the second half of 2025. I will now turn it over to John for an overview of recent business highlights. John?

最後，由於調整後的 EBITDA 增加、資本化軟體開發成本降低以及營運資本動態有利，經營現金流增加了 650 萬美元，自由現金流增加了 740 萬美元。整體而言，我們預計 2025 年下半年營收、調整後 EBITDA 和現金流年成長趨勢將加速。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 5. First, I'll provide an update on our TSA PreCheck program. We continue to make progress expanding our national network of enrollment centers, providing a convenient solution for travelers and gaining enrollment market share on this important national security program. The rollout has increased since our last earnings call in March, and 73 new locations have been added over the past nine weeks.

謝謝，馬克，大家早安。讓我們翻到幻燈片 5。首先，我將提供有關我們的 TSA PreCheck 計劃的最新資訊。我們繼續在擴大全國招生中心網路方面取得進展，為旅客提供便利的解決方案，並在這項重要的國家安全計畫中獲得招生市場份額。自從我們三月舉行的上次收益電話會議以來，新門市數量有所增加，過去九週內已增加了 73 家新門市。

We currently have 291 locations in key markets across the United States. As we said in the past, we do not expect a linear monthly pacing of opening new enrollment centers. We will have phases when we open a larger number of locations followed by quarters when we opened fewer locations and during which we, together with the TSA, we'll assess the operations of our enrollment centers before resuming a higher pace of rollouts. However, we continue to target achieving 500 enrollment locations sometime around the end of 2025.

我們目前在美國主要市場擁有 291 個分店。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 一起評估登記中心的營運情況，然後再恢復更高的推廣速度。然而，我們仍將目標定為在 2025 年底左右實現 500 個招生地點。

Next, I will provide a quick update on the program with DMDC. The program is ramping on schedule, and we continue to expect it to be a major source of revenue growth for the company over the next several quarters. Finally, I will summarize the latest news on other business outcomes since our last earnings call.

接下來，我將與 DMDC 一起快速更新該計劃。該計劃正在按計劃進行，我們預計它將成為未來幾季公司收入成長的主要來源。最後，我將總結自上次財報電話會議以來其他業務成果的最新消息。

Our Xacta business has achieved new orders with several customers including Infor and a US federal government customer as well as renewals from the US 16th Air Force, the Office of Naval Intelligence, a New Zealand government agency, a leading cloud provider, and several other federal government customers.

我們的 Xacta 業務已獲得包括 Infor 和美國聯邦政府客戶在內的多家客戶的新訂單，以及來自美國第 16 航空隊、海軍情報局、紐西蘭政府機構、領先的雲端提供者和其他幾家聯邦政府客戶的續約訂單。

We also received a new order for cyber services from a Fortune 100 company in the technology sector. The automated message handling system, or AMHS, business has achieved key renewals from the United States Marine Corps, the Defense Information Systems Agency, and the US Special Operations Command. I'll now turn the call back to Mark, who will discuss second quarter guidance. Mark?

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。自動訊息處理系統（AMHS）業務已獲得美國海軍陸戰隊、國防資訊系統局和美國特種作戰司令部的關鍵更新。現在我將電話轉回給馬克，他將討論第二季的指導。標記？

Thanks, John. Let's turn to slide 6. For the second quarter, we expect revenue to grow 14% to 21% year over year to a range of $32.5 million to $34.5 million. We forecast Security Solutions revenue to grow low 60% to low 70% year over year, primarily due to growth in DMDC and TSA PreCheck enrollments. We forecast Secure Networks revenue to contract to low 70% to mid-50% year over year due to the completion of programs over the past several quarters.

謝謝，約翰。讓我們翻到第 6 張投影片。對於第二季度，我們預計營收將年增 14% 至 21%，達到 3,250 萬美元至 3,450 萬美元。我們預測安全解決方案收入將年增 60% 至 70% 左右，這主要歸因於 DMDC 和 TSA PreCheck 註冊人數的成長。由於過去幾季專案的完成，我們預測安全網路的營收將年減至 70% 以下至 50% 左右。

GAAP gross margin is expected to be approximately 32% to 33.5% and cash gross margin is expected to be approximately 38% to 39.5%, down from last year due to rapid growth of lower-margin programs in Security Solutions and the completion of higher-margin programs in Secure Networks.

預計 GAAP 毛利率約為 32% 至 33.5%，現金毛利率約為 38% 至 39.5%，較去年同期有所下降，原因是安全解決方案中利潤率較低的項目快速增長，以及安全網絡中利潤率較高的項目的完成。

Cash operating expenses which adjusts for capitalized software development costs, stock-based compensation, restructuring costs and D&A are forecast to be approximately $1 million to $1.3 million lower year over year primarily due to cost reduction initiatives in 2024. We forecast an adjusted EBITDA loss of $2.1 million to $600,000.

經資本化軟體開發成本、股票薪酬、重組成本和 D&A 調整後的現金營運費用預計將年減約 100 萬至 130 萬美元，這主要歸因於 2024 年的成本削減措施。我們預測調整後的 EBITDA 損失為 210 萬美元至 60 萬美元。

Lastly, our full year outlook is unchanged. Revenue for the full year 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 $70 million of revenue in 2025.

最後，我們的全年展望保持不變。全年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 計劃）將在 2025 年產生約 7000 萬美元的收入。

We Second, we estimate that DMDC and DHS programs could recognize approximately $50 million to $75 million of revenue. Third, we expect TSA PreCheck enrollment revenue to ramp along with our enrollment centers during the year. And lastly, 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.

其次，我們估計 DMDC 和 DHS 專案可實現約 5,000 萬至 7,500 萬美元的收入。第三，我們預計 TSA PreCheck 登記收入將隨著我們登記中心的增加而增加。最後，2025 年期間贏得的任何新業務都有可能在當年帶來額外的收入。說完這些，我就把話題轉回給約翰。

Thanks, Mark. Let's turn to slide 6. In summary, we're pleased to have over delivered on key financial metrics in the first quarter, with 16% sequential revenue growth positive adjusted EBITDA, and positive cash flow. Additionally, we're thrilled with the progress on the DMDC program. The program continues to ramp successfully and remains a key source of revenue growth in 2025.

謝謝，馬克。讓我們翻到第 6 張投影片。總而言之，我們很高興第一季的關鍵財務指標超額完成，營收季增 16%，調整後 EBITDA 為正，現金流為正。此外，我們對 DMDC 計劃的進展感到非常興奮。該項目繼續成功推進，並將繼續成為 2025 年收入成長的主要來源。

We are excited to be able to deliver mission-critical offerings to this important US government customer. We continue to make progress on the expansion of our TSA PreCheck enrollment network and have added a significant number of new locations since our last earnings call.

我們很高興能夠為這位重要的美國政府客戶提供關鍵任務產品。我們在擴大 TSA PreCheck 註冊網路方面繼續取得進展，自上次財報電話會議以來已增加了大量新地點。

For the second quarter, we're forecasting 14% to 21% year-over-year revenue growth primarily driven by substantial growth in Security Solutions, partially offset by contraction in Secure Networks. Finally, we expect year-over-year growth in revenue adjusted EBITDA and cash flow to accelerate in the second half of 2025. With that, we're happy to take questions.

對於第二季度，我們預測營收將年增 14% 至 21%，這主要得益於安全解決方案的大幅成長，但安全網路的萎縮部分抵銷這一成長。最後，我們預計 2025 年下半年營收調整後的 EBITDA 和現金流年增將加速。我們很樂意回答您的問題。

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

接線員，請開通問答專線。謝謝。

(Operator Instructions)

（操作員指示）

Zach Cummins, B. Riley Securities.

康明斯 (Zach Cummins)，B. Riley 證券。

Mark and John, I appreciate giving me the opportunity to ask questions, and congrats on the solid start to the year. Mark, I appreciate the reaffirmed outlook essentially. I'm just curious if there's been any changes on the new business front, first part of the question there. And second part is can you give us a better sense of what the margin profile for DMDC looks like as that continues to go through the early stages of the ramp right now?

馬克和約翰，我很感謝你們給我機會提問，並祝賀你們今年取得了良好的開端。馬克，我基本上很欣賞這種重申的觀點。我只是好奇新業務方面是否有任何變化，這是問題的第一部分。第二部分是，您能否讓我們更了解 DMDC 的利潤狀況，因為目前 DMDC 仍在經歷成長的早期階段？

So it's Mark Bendza here. I will start on DMDC margin profile, and then I'll turn it over to Mark Griffin regarding new business. So DMDC is a large program that's going to generate substantial revenue and revenue growth for us this year and then into '26 in Q2 it's also a complex program, and there's multiple revenue streams within that program.

我是馬克‧本札 (Mark Bendza)。我將從 DMDC 利潤率概況開始，然後我將把它交給 Mark Griffin 來討論新業務。因此，DMDC 是一個大型項目，它將在今年為我們帶來可觀的收入和收入成長，然後在 26 年第二季度，它也是一個複雜的項目，並且該項目中有多個收入來源。

And they have very different margin profiles. But on balance, on a blended basis, that program will be dilutive to overall margins. I'm not going to get into program-specific margin details. But it will be dilutive to overall margins.

而且它們的利潤率狀況也有很大差異。但總體而言，從綜合來看，該計劃將會稀釋整體利潤率。我不會深入討論特定程序的保證金細節。但這會稀釋整體利潤率。

And as that program ramps sequentially over the course of this year, it's going to primarily be the lower-margin revenue streams that will ramp. And so you will see margin contraction sequentially over the course of the year.

隨著該計劃在今年內逐步推進，主要利潤率較低的收入流將會增加。因此，您會看到利潤率在一年內連續收縮。

So revenues will ramp significantly from the first quarter to the second quarter. Margins will contract and then operating expenses will be relatively flattish, maybe a little higher in the second half. And then year over year, you're going to see overall revenue, adjusted EBITDA and cash flow that year-over-year variance to improve from the first half to the second half. So let me pause there and see if that answers that part of the question.

因此，營收將從第一季到第二季大幅成長。利潤率將會收縮，而營運費用將相對持平，下半年可能會略高一些。然後，與去年同期相比，你會看到總收入、調整後的 EBITDA 和現金流的同比差異從上半年到下半年有所改善。所以讓我暫停一下，看看這是否回答了問題的這一部分。

Yeah, very helpful on that front. And just curious about any kind of incremental new business this year that maybe is flowing into the model?

是的，在這方面非常有幫助。我只是好奇今年是否有任何增量新業務可能流入該模型？

Sure. I'll turn it over to Mark.

當然。我將把它交給馬克。

Zach, the business pipeline still remains over $4 billion with several hundred opportunities that we're working on. The award dates for those opportunities still are scattered between this quarter and next quarter and end of the year.

扎克，業務管道仍然有超過 40 億美元的價值，我們正在努力開發數百個機會。這些機會的授予日期仍然分散在本季、下個季度和年底之間。

So any incremental growth that we see from awards this year will be single-digit kind of opportunities, but the pipeline is still very robust and we're still very pleased with how it's filling out. So it's equivalent to what it was last earnings call. just a different mix on some of the opportunities that we see both on the IA front, the IV front, and Secure Networks.

因此，我們今年從獎項中看到的任何增量增長都將是位數的機會，但渠道仍然非常強勁，我們對它的填補情況仍然感到非常滿意。因此，它相當於上次收益電話會議的內容。只是我們在 IA 前端、IV 前端和安全網路上看到的一些機會的不同組合。

Got it. And just in terms of -- my last question is around TSA PreCheck. Obviously, the pace of the rollout has been a little bit slower to start this year. So just curious on the performance of your existing footprint and the visibility that you have in terms of rolling out to that 500 target with the TSA here towards the end of the year?

知道了。就這一點而言——我的最後一個問題是關於 TSA 預檢的。顯然，今年年初推出的速度有點慢。所以我只是好奇您現有的足跡的表現以及您在年底與 TSA 一起推出 500 個目標方面的知名度？

Yeah. So PreCheck's going to be a really important driver of our financials this year. We feel good about it, especially in terms of cash generation. I think you saw in the first quarter, a very significant turnaround in cash flow. Overall, for the full year, I think you'll see cash flow step up significantly year over year. And in part, that's due to performance on TSA PreCheck. So we're feeling good about its contribution to the economics for the year.

是的。因此，PreCheck 將成為我們今年財務狀況的一個非常重要的推動力。我們對此感到滿意，特別是在現金產生方面。我認為您在第一季就看到了現金流的顯著改善。總體而言，就全年而言，我認為您會看到現金流逐年大幅增加。部分原因是由於 TSA PreCheck 的表現。因此，我們對它對今年經濟的貢獻感到滿意。

Thanks for taking my questions, really appreciate it, and best of luck with the rest of the quarter.

感謝您回答我的問題，非常感謝，並祝您本季剩餘時間一切順利。

Rudy Kessinger, D.A. Davidson.

魯迪凱辛格、地方檢察官戴維森。

And really following on Zach's question, Mark, I know you don't want to get into maybe specifics on the margin profile, but put it a little bit more bluntly to back. If I look at your Q2 midpoint of your guidance versus Q1 results, it's negative 31% incremental cash gross margins, negative 59% incremental EBITDA margins.

馬克，關於札克的問題，我知道你可能不想談論利潤率的具體細節，但請更直白地講一下。如果我看一下您第二季的預期中點與第一季的業績對比，您會發現現金毛利率增量為負 31%，EBITDA 利潤率增量為負 59%。

So I guess could you tell us sequential the clients throughout the year in cash gross margins? Like where could they be by year-end? Could they be low-30s, mid-30s, like where should we kind of plug those? And specifically on the DMDC revenues of $50 million to $75 million, what would that revenue be if it was being recognized on a net basis instead of on a gross basis?

那麼我想您能否告訴我們客戶全年的現金毛利率連續狀況？例如到年底他們會在哪裡？它們會不會是 30 多歲，30 多歲，我們該把它們插在哪裡？具體來說，對於 DMDC 5000 萬至 7500 萬美元的收入，如果按淨額而不是總額確認，那麼該收入是多少？

Yeah, sure, Rudy. So first half to second half, if we talk cash gross margins, I'd say you're going to see a proximately -- now this is going to depend on mix. There are various things that can move this answer depending on mix. But I would say, from first half to second half, you'll probably see cash gross margin step down call it, roughly 600 basis points. We have some other higher-margin revenue streams elsewhere in the portfolio.

是的，當然，魯迪。因此，從上半年到下半年，如果我們談論現金毛利率，我會說你會看到一個大致的情況——現在這將取決於組合。根據混合情況，有多種因素可以影響這個答案。但我想說，從上半年到下半年，你可能會看到現金毛利率下降，大約 600 個基點。我們的投資組合中還有其他一些利潤率較高的收入來源。

that could come into the second half that will offset some of that solution. But as a base case, think of it as around 600 basis points of sequential cash gross margin dilution from the first half to the second half. And that will be driven by two things. It's the lower-margin revenue streams in BC. And then an accounting nuance that we've talked about in the past, which is how we're recognizing some of our costs on TSA PreCheck.

這可能會在下半年抵消部分解決方案的影響。但作為基準情況，可以認為從上半年到下半年，現金毛利率連續下降了約 600 個基點。這將由兩件事推動。這是 BC 省利潤較低的收入來源。然後是我們過去討論過的會計細節，即我們如何確認 TSA PreCheck 的部分成本。

So we have some costs that from a GAAP basis, is ramping through cost of sales and TSA PreCheck, but there's not a corresponding increase in cash expense, actually cash outflow expense. So that's one of the reasons why you'll see cash flow meaningfully outperform what you would expect relative to adjusted EBITDA.

因此，從 GAAP 基礎來看，我們的一些成本正在透過銷售成本和 TSA PreCheck 增加，但現金支出（實際上是現金流出支出）並沒有相應增加。這就是為什麼您會看到現金流量相對於調整後的 EBITDA 明顯超出預期的原因之一。

That's helpful. Thank you.

這很有幫助。謝謝。

(Operator Instructions)

（操作員指示）

Nehal Chokshi, Northland Capital Markets.

Nehal Chokshi，北國資本市場。

Yeah. Nice results and I think a positive guidance from my perspective here. So you had positive free cash flow this quarter. That's great. It sounds like that's largely being driven by TSA PreCheck. And then trying to bridge to your commentary that you expect year-over-year growth in cash flow in the second half of 2025. Does that mean that 2025 free cash flow will be negative?

是的。結果不錯，而且從我的角度來看，這是一個積極的指導。因此本季您的自由現金流為正。那太棒了。聽起來這很大程度上是由 TSA PreCheck 推動的。然後嘗試與您的評論相銜接，您預計 2025 年下半年現金流將同比增長。這是否意味著 2025 年的自由現金流將為負值？

Yeah, Nehal. No. So I'm not guiding 2Q free cash flow because it's very much going to be driven by working capital at the end of 2Q. So I can tell you that the first two months of the quarter, I expect to be positive, slightly positive. The third month of the quarter, it's really going to come down to the mundane details of working capital, collections versus payments in the last kind of one to two weeks of June versus the one to two weeks of July.

是的，尼哈爾。不。因此，我不會預測第二季的自由現金流，因為它很大程度上將由第二季末的營運資金驅動。因此我可以告訴你，我預計本季的前兩個月將是積極的，略微積極的。本季的第三個月，實際上將歸結為營運資金的日常細節，即 6 月最後一周至兩週與 7 月最後兩週的收款與付款情況。

And that delta could really push working capital positive or negative. And then it will just reverse in July. So -- but that being said, second quarter of last year, we burned $11 million of free cash flow, right? I think relative to last year, we're going to be in a very different place here just like this quarter. And so that's true throughout the year.

而這個增量實際上可能會使營運資本產生正向或負向的影響。然後到了七月它就會逆轉。那麼——但話雖如此，去年第二季度，我們消耗了 1100 萬美元的自由現金流，對嗎？我認為與去年相比，本季我們的處境將有很大不同。全年都是如此。

Yeah. Okay, meaning the first two months versus the third month of the quarter in terms of free cash flow generating characteristics. Is that what you're saying that's true.

是的。好的，這意味著就自由現金流產生特徵而言，前兩個月與本季第三個月相比。您說的是真的嗎？

No. What we're saying is that we expect to be -- from a year-over-year point of view, we expect to be way better than last year. Yeah. I mean our free cash flow.

不。我們所說的是，我們預計——從同比來看，我們預計會比去年好得多。是的。我指的是我們的自由現金流。

Understood, and let's say, free cash flow for calendar '24 was negative $40 million. Given where you were for 1Q '25 and where things seem to be trajecting what is your expectations for the full year? Will it actually be positive?

明白了，假設 24 年的自由現金流為負 4000 萬美元。考慮到您在 2025 年第一季的情況以及事態的發展，您對全年的期望是什麼？它實際上會產生積極作用嗎？

Yeah. So I'm not guiding full year cash flow. But one of the things that I walked through on the last call is that we expect free cash flow to outperform adjusted EBITDA in part due to some favorable working capital dynamics as well as the pretty significant chunk of expense recognition running through cost of sales on PreCheck that will not have a corresponding cash outflow.

是的。所以我沒有指導全年現金流。但我在上次電話會議上談到的一件事是，我們預計自由現金流將超過調整後的 EBITDA，部分原因是一些有利的營運資本動態，以及 PreCheck 銷售成本中相當大一部分費用確認不會產生相應的現金流出。

Okay. All right. Great. And then just on the quarter here. You note that outperformance comes from both Security Solutions and security networks, Secure Networks from a dollar basis, which one was the bigger outperformer?

好的。好的。偉大的。然後就本季而言。您注意到，安全解決方案和安全網路都表現出色，從美元基礎來看，安全網路的表現哪一個更出色？

Solutions - Security Solutions.

解決方案 - 安全解決方案。

And would that primarily have been driven by TSA PreCheck then?

那麼這主要是否是由 TSA PreCheck 推動的呢？

I'd say both of the growth programs so at the end of the PreCheck.

我想說這兩個成長計畫都在 PreCheck 結束時。

Okay. And are you seeing any rollover in renewal activity, given that we're coming to the -- that we are past the five-year would anniversary here?

好的。鑑於我們即將迎來五年紀念日，您是否看到續約活動有任何進展？

Yeah, the renewal market will contract, overall market will contract pretty meaningfully this year and we did see that in the first quarter as expected.

是的，續約市場將會萎縮，今年整體市場將會大幅萎縮，我們在第一季確實看到了這一現象，正如預期的那樣。

Okay. Great. Fantastic results given that dynamic. Thank you.

好的。偉大的。鑑於這種動態，結果非常棒。謝謝。

This will conclude today's question-and-answer session. I will now turn the call back to John Wood for any 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，請他做最後發言。

Well, first of all, I just want to thank our shareholders for your ongoing support. And we continue to make progress in the first quarter. We executed our plan, demonstrated year-over-year growth in key financial metrics and we look forward to continuing the trend of year-over-year growth throughout 2025.

嗯，首先，我只想感謝我們的股東一直以來的支持。我們在第一季繼續取得進展。我們執行了計劃，關鍵財務指標實現了同比增長，我們期待在 2025 年繼續保持同比增長的趨勢。

We have very robust and recession-resistant markets and well-funded customers and a decades-long track record of serving the world's most security-conscious organizations. So from our perspective, Telos has a very strong foundation for the future. So thank you very much for participating.

我們擁有非常強勁且抗衰退的市場和資金充足的客戶，並且擁有數十年來為世界上最注重安全的組織提供服務的記錄。因此從我們的角度來看，Telos 的未來有著非常堅實的基礎。非常感謝您的參與。

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

謝謝。會議到此結束。感謝您的參與。您現在可以斷開連線。