TELOS CORP
For the period ended Sep 30, 2026. Filed Nov 9, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 9, 2026
Extracted filing text, with the paragraph anchors used by the comparison.
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. Segment Information
- SEGMENT INFORMATION
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 Automated Message Handling System ("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 Chief Executive Officer, whom we identified as the chief operating decision maker ("CODM"), 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.
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 the three and nine months ended September 30, 2026, and 2025. 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.
| Table 14.1: Results of Operations by Business Segment (Quarter) | ||||||||
|---|---|---|---|---|---|---|---|---|
| For the Three Months Ended | ||||||||
| September 30, 2026 · September 30, 2025 | ||||||||
| Security Solutions · Secure Networks · Total · Security Solutions · Secure Networks · Total | ||||||||
| (in thousands) | ||||||||
| Revenues | $54,184 | $1,014 | $55,198 | $46,478 | $4,966 | $51,444 | ||
| Cost of Sales | ||||||||
| Depreciation and amortization (1) | 2,636 | 1 | 2,637 | 2,354 | 2 | 2,356 | ||
| Stock-based compensation expense (1) | 171 | 16 | 187 | 142 | 12 | 154 | ||
| Other segment items (2) | 30,616 | 818 | 31,434 | 24,696 | 3,692 | 28,388 | ||
| Total cost of sales | 33,423 | 835 | 34,258 | 27,192 | 3,706 | 30,898 | ||
| Gross profit | $20,761 | $179 | 20,940 | $19,286 | $1,260 | 20,546 | ||
| Operating expenses | ||||||||
| Research and development expenses | 1,452 | 1,899 | ||||||
| Selling, general and administrative expenses | 15,398 | 21,115 | ||||||
| Total operating expenses | 16,850 | 23,014 | ||||||
| Operating income (loss) | 4,090 | (2,468) | ||||||
| Other income | 464 | 511 | ||||||
| Interest expense | (100) | (136) | ||||||
| Income (loss) before income taxes | 4,454 | (2,093) | ||||||
| Provision for income taxes | (18) | (21) | ||||||
| Net income (loss) | $4,436 | $(2,114) | ||||||
(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.
| Table 14.2: Results of Operations by Business Segment (Year-to-Date) | ||||||||
|---|---|---|---|---|---|---|---|---|
| For the Nine Months Ended | ||||||||
| September 30, 2026 · September 30, 2025 | ||||||||
| Security Solutions · Secure Networks · Total · Security Solutions · Secure Networks · Total | ||||||||
| (in thousands) | ||||||||
| Revenues | $146,816 | $3,869 | $150,685 | $104,770 | $13,258 | $118,028 | ||
| Cost of Sales | ||||||||
| Depreciation and amortization (1) | 7,740 | 7 | 7,747 | 5,569 | 5 | 5,574 | ||
| Stock-based compensation expense (1) | 549 | 56 | 605 | 450 | 43 | 493 | ||
| Other segment items (2) | 84,403 | 2,923 | 87,326 | 57,107 | 10,194 | 67,301 | ||
| Total cost of sales | 92,692 | 2,986 | 95,678 | 63,126 | 10,242 | 73,368 | ||
| Gross profit | $54,124 | $883 | 55,007 | $41,644 | $3,016 | 44,660 | ||
| Operating expenses | ||||||||
| Research and development expenses | 4,154 | 4,982 | ||||||
| Selling, general and administrative expenses | 44,998 | 61,051 | ||||||
| Total operating expenses | 49,152 | 66,033 | ||||||
| Operating income (loss) | 5,855 | (21,373) | ||||||
| Other income | 1,662 | 1,625 | ||||||
| Interest expense | (318) | (424) | ||||||
| Income (loss) before income taxes | 7,199 | (20,172) | ||||||
| Provision for income taxes | (80) | (63) | ||||||
| Net income (loss) | $7,119 | $(20,235) | ||||||
(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.
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