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Investing.com -- Telos Corporation (NASDAQ:TLS) saw its shares tumble 15.9% after reporting fourth-quarter earnings that beat analyst expectations but showed a significant YoY revenue decline. The cybersecurity firm’s revenue fell 36% compared to the same quarter last year, despite coming in at the top end of guidance.
Telos reported Q4 revenue of $26.4 million, slightly above the analyst consensus of $25.62 million and at the high end of the company’s guidance range of $24.5 million to $26.5 million. Adjusted earnings per share came in at -$0.04, beating the analyst estimate of -$0.11.
Despite the earnings beat, investors appeared focused on the sharp revenue decline. The company’s Security Solutions segment grew 6% YoY, but this was more than offset by a 78% YoY drop in the Secure Networks segment.
"While we faced challenges in 2024, we made significant progress in expanding our TSA PreCheck® program and transitioning key government contracts," said John B. Wood, CEO of Telos. "We’re positioning ourselves for growth in 2025 with our expanded enrollment network and new contract wins."
Telos reported a cash gross margin of 47.0% for the quarter, above the top end of guidance, driven by lower than forecasted costs across its portfolio. The company’s adjusted EBITDA also exceeded the top end of guidance due to higher cash gross profit and lower adjusted operating expenses.
Looking ahead, Telos provided Q1 2025 revenue guidance of $28.2 million to $30.2 million, representing sequential growth of 7% to 15%. The company expects its Security Solutions segment to drive this growth, projecting a high single-digit to mid-teens percentage increase sequentially.
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