Telos Corporation Reports 26.2% Revenue Growth in Q2 2025, Despite Increased Net Loss

Telos Corporation reported its financial results for the second quarter and first half of fiscal year 2025, revealing a total revenue of $35.97 million for the three months ended June 30, 2025, a 26.2% increase from $28.50 million in the same period of 2024. For the six months, revenue rose to $66.58 million, up 11.6% from $58.12 million year-over-year. The company experienced a gross profit of $11.93 million for the quarter, compared to $9.71 million in the prior year, while the gross margin slightly decreased to 33.2% from 34.1%. Despite the revenue growth, Telos reported a net loss of $9.52 million for the quarter, widening from a loss of $7.76 million in the same period last year.

The increase in revenue was primarily driven by a successful ramp-up of a significant program within the Security Solutions segment, which saw revenues rise by 81.8% to $32.47 million. This segment's gross profit also increased significantly, reflecting higher revenues despite a decrease in gross margin due to revenue mix. Conversely, the Secure Networks segment experienced a substantial decline in revenue, dropping 67.1% to $3.49 million, attributed to the ramp-down of several programs. The overall operating expenses for the quarter increased by 18.9% to $21.82 million, largely due to higher stock-based compensation costs.

In terms of operational metrics, Telos reported a cash and cash equivalents balance of $57.00 million as of June 30, 2025, an increase from $54.58 million at the end of 2024. The company also repurchased approximately 1.5 million shares of its common stock for $4.00 million during the quarter. The total employee headcount remained stable, with no significant changes reported. The company continues to focus on its primary customer base, which includes U.S. government agencies, accounting for approximately 90% of total revenues.

Looking ahead, Telos anticipates that the recent enactment of the One Big Beautiful Bill Act, which includes significant funding allocations for the defense sector, may present new business opportunities. However, the company also acknowledges potential risks associated with changes in U.S. government spending and procurement processes, which could impact future revenues. Management remains optimistic about leveraging its existing contracts and expanding its market presence, particularly in cybersecurity and secure networking solutions.