TELOS CORP

13. EARNINGS (LOSS) PER SHARE

Basic EPS is computed by dividing net income (loss) by the basic weighted-average number of common shares outstanding for the period. Diluted EPS is calculated to give effect to all potentially dilutive common stock equivalents that were outstanding during the reporting period. The dilutive effects of outstanding common stock equivalents are determined using the treasury-stock and if-converted method, only in periods in which such effect would have been dilutive for the period.

For the period of net loss, potentially dilutive securities are not included in the calculation of diluted net earnings (loss) per share, because doing so would be anti-dilutive. For the three and nine months ended September 30, 2025, the diluted earnings per share calculation excluded 2,972,000 and 2,073,000, respectively, of potentially dilutive securities that were anti-dilutive.

For the three and nine months ended September 30, 2026, and 2025, the outstanding PSUs aggregating to 7,584,241 and 8,565,699 shares, respectively, have been excluded from the calculation of potentially dilutive securities above because the issuance of shares is contingent upon certain conditions that were not satisfied by the end of the period. Further, an additional 2,206,163 of outstanding PSUs were excluded in the computation of potentially dilutive securities above because they were antidilutive for the nine months ended September 30, 2025.