TELOS CORP
For the period ended Dec 31, 2025. Filed Mar 16, 2026.
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FY2025 · Filed Mar 16, 2026
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. Segment Information
- SEGMENT INFORMATION
Operating segments are defined as components of the Company for which separate discrete financial information is available and evaluated regularly by the chief operating decision maker ("CODM") in deciding how to allocate resources and assess performance. We identified our CEO as the CODM.
We operate our business intwo reportable and operating segments: Security Solutions and Secure Networks.
Our Security Solutions segment is primarily focused on cybersecurity, cloud and identity solutions, and secure messaging through Xacta, Telos AMHS and Telos ID offerings.
Our Secure Networks segment provides secure networking architectures and solutions to our customers through secure mobility solutions, and network management and defense services.
We measure each segment's profitability based on gross profit. Our CEO evaluates the segment's performance based on metrics, such as segment revenue and gross profit, that align with our strategies and objectives, and provide a framework for the timely and rational allocation of resources between the segments.
| Table 16: Results of Operations by Business Segment | ||||||||
|---|---|---|---|---|---|---|---|---|
| For the Year Ended December 31, | ||||||||
| 2025 · 2024 | ||||||||
| Security Solutions · Secure Networks · Total · Security Solutions · Secure Networks · Total | ||||||||
| (in thousands) | ||||||||
| Revenues | $149,600 | $15,205 | $164,805 | $76,760 | $31,512 | $108,272 | ||
| Cost of sales | ||||||||
| Depreciation and amortization (1) | 8,173 | 7 | 8,180 | 6,396 | 8 | 6,404 | ||
| Stock-based compensation expense (1) | 594 | 58 | 652 | 667 | 161 | 828 | ||
| Impairment loss on intangible assets (1) | — | — | — | 5,333 | — | 5,333 | ||
| Other segment items (2) | 83,274 | 11,682 | 94,956 | 36,685 | 24,593 | 61,278 | ||
| Total cost of sales | 92,041 | 11,747 | 103,788 | 49,081 | 24,762 | 73,843 | ||
| Gross profit | $57,559 | $3,458 | 61,017 | $27,679 | $6,750 | 34,429 | ||
| Operating expenses | ||||||||
| Research and development expenses | 7,057 | 8,442 | ||||||
| Selling, general and administrative expenses | 78,925 | 75,487 | ||||||
| Goodwill impairment | 14,916 | — | ||||||
| Impairment loss on intangible assets | — | 6,373 | ||||||
| Total operating expenses | 100,898 | 90,302 | ||||||
| Operating loss | (39,881) | (55,873) | ||||||
| Other income | 3,225 | 4,023 | ||||||
| Interest expense | (553) | (644) | ||||||
| Loss before income taxes | (37,209) | (52,494) | ||||||
| Benefit from (provision for) income taxes | 663 | (26) | ||||||
| Net loss | $(36,546) | $(52,520) | ||||||
(1) The significant segment expense categories and amounts align with the segment-level information regularly provided to the CODM.
(2) Other segment items for each reportable segment include direct labor, direct subcontractor costs, direct materials and inventory, other direct non-labor costs, fringes, overhead, and facility costs.
We account for inter-segment sales and transfers as if the sales or transfers were to third parties, that is, at current market prices, if any. There were no inter-segment sales and transfers during fiscal years 2025, and 2024. Interest income, interest expense, other income and expense items, and income taxes, as reported in the consolidated financial statements, are not part of the segment profitability measure and are primarily recorded at the corporate level.
Management does not utilize total assets by segment to evaluate segment performance or allocate resources. As a result, assets are not tracked by segment, and therefore, total assets by segment are not disclosed.
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