TELOS CORP

Several key highlights of our financial performance in fiscal year 2025 are described below. More details are presented in our "Results of Operations" section below.

•Revenue increased 52.2% year-over-year due to 94.9% growth in Security Solutions, primarily due to the expansion of large programs in Telos ID.

•Gross margin expanded 523 basis points year-over-year.

•Operating expenses increased by $10.6 million, or 11.7%, year-over-year due to an $8.9 million increase in stock-based compensation, an $8.5 million increase in impairment loss and a $0.1 million increase in restructuring expenses. These increases were partially offset by a decrease of $6.9 million, or 11.1%, of the remaining operating expenses due to the restructuring efforts undertaken in the third quarter of 2024 and ongoing disciplined cost management.

•Cash flow from operations improved by $56.1 million year-over-year from a $25.9 million outflow to a $30.2 million inflow, or 18.3% of revenue due to improved revenue and profitability, as well as improved working capital management.

•We deployed $13.6 million to repurchase approximately 3.1 million shares of our common stock at an average share price of $4.38 per share.