{
  "@context": "https://frontierpicks.com/schemas/dossier.v1.json",
  "ticker": "TLS",
  "name": "Telos Corporation",
  "url": "https://frontierpicks.com/dossiers/TLS/",
  "json_url": "https://frontierpicks.com/dossiers/TLS.json",
  "status": "DORMANT",
  "current_conviction": "MEDIUM",
  "archetype": {
    "code": "a4",
    "n": 4
  },
  "current_thesis": "Telos Corporation's third-quarter beat and raised 2026 outlook, led by Telos ID and TSA PreCheck volumes, make the shares modestly more likely than not to beat the S&P 500. The first 2027 outlook, expected in early 2027, shows whether growth survives the $32 million resale phase-out.",
  "invalidation_trigger": "A daily close below $6.89, 10% under the 2026-11-11 close and below the $7.17 first close after the third-quarter report, which would show the post-report gain fading; or full-year 2026 revenue guidance cut below $198.2 million.",
  "catalyst_date": null,
  "portfolio": null,
  "pick": null,
  "themes": [
    "ai-enterprise-software"
  ],
  "tags": [],
  "sources": [],
  "caveats": [],
  "source_links": [
    {
      "title": "Telos Raises 2026 Outlook as Telos ID Programs Lift Security Solutions Revenue 17 Percent",
      "url": "https://idtechwire.com/telos-raises-2026-outlook-as-telos-id-programs-lift-security-solutions-revenue-17-percent/",
      "date": "2026-11-09"
    },
    {
      "title": "What Telos (TLS) Said on Its Q3 Earnings Call",
      "url": "https://www.marketbeat.com/instant-alerts/transcript-what-telos-tls-said-on-its-q3-earnings-call-2026-11-09/",
      "date": "2026-11-09"
    },
    {
      "title": "Telos Q3 Revenue Rises 7% to $55 Million as Profitability Reaches IPO High",
      "url": "https://www.panabee.com/news/telos-earnings-q3-2026",
      "date": "2026-11-09"
    }
  ],
  "evidence": [
    {
      "claim": "Third-quarter 2026 revenue was $55.20M versus $51.44M a year earlier, above the company's $49.2–50.6M guide.",
      "source": "Telos 10-Q for the quarter ended 2026-09-30",
      "as_of": "2026-11-09"
    },
    {
      "claim": "Q3 2026 adjusted EBITDA was $10.6M (19.2% margin); GAAP net income was $4.4M versus a $2.1M loss a year earlier; GAAP gross margin was 37.9% versus 39.9%.",
      "source": "Telos Q3 2026 results, reported by IDTechWire",
      "as_of": "2026-11-09"
    },
    {
      "claim": "FY2026 revenue guidance was raised to $198.2–200.7M from $187–195M, and adjusted EBITDA guidance to $32.3–34.1M from $23.6–28.6M.",
      "source": "Telos Q3 2026 results, reported by IDTechWire and Benzinga",
      "as_of": "2026-11-09"
    },
    {
      "claim": "Q4 2026 revenue was guided to $47.5–50.0M versus a $45.571M consensus, with adjusted EBITDA of $7.0–8.8M.",
      "source": "Benzinga; IDTechWire",
      "as_of": "2026-11-09"
    },
    {
      "claim": "The CFO forecast a $32M year-over-year 2027 revenue reduction from ending software resale; $58M of net new Xacta orders are expected to add about $20M of 2027 revenue.",
      "source": "Q3 2026 earnings call, MarketBeat summary; IDTechWire",
      "as_of": "2026-11-09"
    },
    {
      "claim": "B. Riley raised its target to $11 from $9 (buy); Needham kept a buy rating with a $9 target; Wedbush kept a neutral rating and raised its target to $7.",
      "source": "Benzinga analyst headlines",
      "as_of": "2026-11-10"
    },
    {
      "claim": "Controller and chief accounting officer Donald Terreri sold 9,400 shares in the open market at $7.42.",
      "source": "SEC Form 4 filed 2026-11-10",
      "as_of": "2026-11-10"
    },
    {
      "claim": "Telos repurchased more than 1.2 million shares for $5.7M at an average of $4.59 in Q3 2026.",
      "source": "Q3 2026 earnings call, MarketBeat summary",
      "as_of": "2026-11-09"
    }
  ],
  "view_changes": [
    {
      "date": "2026-11-12",
      "at": "2026-11-12T03:56:00Z",
      "from": "LOW",
      "to": "MEDIUM",
      "kind": "results",
      "fact_date": "2026-11-09",
      "fact": "Telos reported third-quarter 2026 revenue of $55.2 million, above its $49.2–50.6 million guide, and raised full-year revenue guidance to $198.2–200.7 million and adjusted EBITDA guidance to $32.3–34.1 million."
    }
  ],
  "frame": null,
  "filed_numbers": {
    "as_of": "2026-11-13",
    "sector": "Technology",
    "financials": {
      "status": "ok",
      "reason": null,
      "close_date": "2026-11-13",
      "latest_quarter": "2026-09-30",
      "figures": {
        "revenue": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-11-09",
              "restated": null,
              "value_musd": 55.2,
              "yoy_pct": 7.3
            },
            {
              "end": "2026-06-30",
              "filed": "2026-08-10",
              "restated": null,
              "value_musd": 47.7,
              "yoy_pct": 32.7
            },
            {
              "end": "2026-03-31",
              "filed": "2026-05-11",
              "restated": null,
              "value_musd": 47.7,
              "yoy_pct": 55.9
            },
            {
              "end": "2025-12-31",
              "filed": "2026-03-16",
              "restated": null,
              "value_musd": 46.8,
              "yoy_pct": 77.4
            },
            {
              "end": "2025-09-30",
              "filed": "2025-11-10",
              "restated": null,
              "value_musd": 51.4,
              "yoy_pct": 116.3
            },
            {
              "end": "2025-06-30",
              "filed": "2025-08-11",
              "restated": null,
              "value_musd": 36,
              "yoy_pct": 26.2
            }
          ]
        },
        "gross_margin": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-11-09",
              "restated": null,
              "pct": 37.9
            },
            {
              "end": "2026-06-30",
              "filed": "2026-08-10",
              "restated": null,
              "pct": 35
            },
            {
              "end": "2026-03-31",
              "filed": "2026-05-11",
              "restated": null,
              "pct": 36.4
            },
            {
              "end": "2025-12-31",
              "filed": "2026-03-16",
              "restated": null,
              "pct": 35
            },
            {
              "end": "2025-09-30",
              "filed": "2025-11-10",
              "restated": null,
              "pct": 39.9
            },
            {
              "end": "2025-06-30",
              "filed": "2025-08-11",
              "restated": null,
              "pct": 33.2
            }
          ]
        },
        "operating_margin": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-11-09",
              "restated": null,
              "pct": 7.4
            },
            {
              "end": "2026-06-30",
              "filed": "2026-08-10",
              "restated": null,
              "pct": 0.6
            },
            {
              "end": "2026-03-31",
              "filed": "2026-05-11",
              "restated": null,
              "pct": 3
            },
            {
              "end": "2025-12-31",
              "filed": "2026-03-16",
              "restated": null,
              "pct": -39.6
            },
            {
              "end": "2025-09-30",
              "filed": "2025-11-10",
              "restated": null,
              "pct": -4.8
            },
            {
              "end": "2025-06-30",
              "filed": "2025-08-11",
              "restated": null,
              "pct": -27.5
            }
          ]
        },
        "pretax_income": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-09",
          "value_musd": 4.5
        },
        "net_income": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-09",
          "four_quarters_end": "2026-09-30",
          "value_musd": 4.4,
          "four_quarters_musd": -9.2
        },
        "operating_cash_flow": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-09",
          "first_end": "2025-12-31",
          "value_musd": 34.9
        },
        "capital_spending": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-09",
          "first_end": "2025-12-31",
          "value_musd": 0.5
        },
        "free_cash_flow": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-09",
          "first_end": "2025-12-31",
          "value_musd": 34.4
        },
        "diluted_share_change": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-09",
          "base_end": "2025-09-30",
          "pct": 5.4
        },
        "cash": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-09",
          "value_musd": 51.8
        },
        "debt": {
          "status": "not available"
        },
        "net_cash": {
          "status": "not available"
        },
        "deferred_revenue": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-09",
          "value_musd": 17.1,
          "yoy_pct": 19.1
        },
        "backlog": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-09",
          "value_musd": 84,
          "yoy_pct": 28.2
        },
        "receivables": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-09",
          "value_musd": 23.7
        },
        "inventory": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-09",
          "value_musd": 3
        },
        "equity": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-09",
          "value_musd": 94.4
        },
        "market_value": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-11-02",
          "basis_filed": "2026-11-09",
          "value_musd": 540.5
        },
        "enterprise_value": {
          "status": "not available"
        },
        "ev_sales": {
          "status": "not available"
        },
        "ev_ebit": {
          "status": "not available"
        },
        "pe": {
          "status": "not meaningful"
        },
        "pb": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-11-02",
          "basis_filed": "2026-11-09",
          "multiple": 5.7
        },
        "fcf_yield": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-11-02",
          "basis_filed": "2026-11-09",
          "pct": 6.4
        }
      }
    },
    "short_interest": {
      "status": "ok",
      "settlement": "2026-10-15",
      "published": "2026-10-26",
      "short_pct_of_outstanding": 3.53,
      "days_to_cover": 4,
      "change_pct": -2.5
    },
    "insiders": {
      "status": "ok",
      "as_of": "2026-11-15",
      "windows": [
        {
          "days": 90,
          "status": "ok",
          "from": "2026-08-18",
          "bought_usd": 0,
          "sold_usd": 2534591.17,
          "bought_unpriced": 0,
          "sold_unpriced": 0
        },
        {
          "days": 365,
          "status": "ok",
          "from": "2025-11-16",
          "bought_usd": 0,
          "sold_usd": 9585329.23,
          "bought_unpriced": 0,
          "sold_unpriced": 0
        }
      ]
    }
  },
  "body_markdown": "## Current Thesis\n\nTelos Corporation beat its own third-quarter forecast and raised its 2026 outlook on 2026-11-09, which makes the shares modestly more likely than not to beat the S&P 500 over the next three months. The open question is 2027. Fourth-quarter results and the first 2027 outlook, expected in early 2027, show whether growth holds once the company stops reselling low-margin third-party software.\n\nThird-quarter revenue was $55.20 million, against $51.44 million a year earlier (10-Q, 2026-11-09). The company had guided to $49.2–50.6 million, a 2% to 4% decline. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reached $10.6 million, a 19.2% margin, against a $6.0–6.8 million guide. Full-year revenue guidance rose to $198.2–200.7 million from $187–195 million. Adjusted EBITDA guidance rose to $32.3–34.1 million from $23.6–28.6 million.\n\nThe shares have already moved. They went from a $4.82 close on 2026-11-06 to $7.65 on 2026-11-11. At that close they sit above Wedbush's raised $7 target and below Needham's $9 and B. Riley's $11 (Benzinga, 2026-11-10). In that range, the price reflects the raised 2026 outlook but not yet a growth year in 2027.\n\nThis was the first report under chief executive officer (CEO) Mark Griffin, who took over on 2026-11-02. On the 2026-11-09 call he said he expects no immediate change of strategy, and executive chairman John Wood keeps the product roadmap and long-term sales strategy (MarketBeat transcript summary).\n\n## Bull Case\n\n- **Third quarter beat on every line.** Adjusted earnings per share were $0.09 against a $0.04 consensus, and revenue was $55.198 million against a $50.004 million consensus (Benzinga, 2026-11-09). Generally accepted accounting principles (GAAP) net income was $4.4 million, against a $2.1 million loss a year earlier (IDTechWire, 2026-11-09).\n- **Telos ID carries the growth.** Security Solutions revenue rose to $54.2 million from $46.5 million (IDTechWire, 2026-11-09). Chief financial officer Mark Bendza cited stronger-than-expected Transportation Security Administration (TSA) PreCheck transaction volumes on the 2026-11-09 call.\n- **Fourth-quarter guide sits above consensus.** The company guided fourth-quarter revenue to $47.5–50.0 million, against a $45.571 million consensus, with adjusted EBITDA of $7.0–8.8 million (Benzinga, 2026-11-09).\n- **New Xacta orders support 2027.** Information Assurance booked $58 million in net new Xacta and professional-services orders, which the company expects to produce about $20 million of 2027 revenue (IDTechWire, 2026-11-09).\n- **Analysts raised targets after the report.** B. Riley raised its target to $11 from $9 and kept a buy rating. Needham kept a buy rating with a $9 target, and Wedbush kept a neutral rating with a target raised to $7 (Benzinga, 2026-11-10).\n- **The company bought back stock below today's price.** Telos spent $5.7 million on more than 1.2 million shares at an average of $4.59 in the third quarter (MarketBeat call summary, 2026-11-09).\n\n## Bear Case\n\n- **Revenue steps down in the fourth quarter.** The $47.5–50.0 million guide is below the $55.2 million third quarter (company guidance, 2026-11-09). The MarketBeat call summary gives no reason for the drop.\n- **2027 starts with a $32 million hole.** Bendza forecast a $32 million year-over-year revenue reduction from ending low-margin software resale. Asked about 2027 growth, he said the company has \"a really good shot\" at it, and the company gave no formal 2027 guidance (2026-11-09 call).\n- **Gross margin slipped.** GAAP gross margin was 37.9% in the third quarter, down from 39.9% a year earlier (IDTechWire, 2026-11-09). Panabee's review of the quarter attributes much of the profit gain to stock-based compensation falling to $3.0 million from $9.4 million.\n- **Insiders sold before and after the report.** SEC Form 4 filings show controller Donald Terreri selling 9,400 shares at $7.42 on 2026-11-10. In September, Bendza sold 200,000 shares at $4.55, 25,461 at $4.33 and 174,539 at $4.05, and Wood sold 96,151 at $4.05.\n- **A similar rally faded last year.** The shares hit an intraday 52-week high of $8.30 on 2025-11-11 and fell to a $3.88 close on 2026-02-23 in adjusted daily closes. One year's price path does not show what will happen this time.\n\n## Setup & Price Structure\n\nThe last close was $7.65 on 2026-11-11, 7.8% below the intraday 52-week high of $8.30 set on 2025-11-11. The shares are up 66.3% over three months from a $4.60 close on 2026-08-13. On 2026-11-11, the 50-day moving average was $4.71 and the 200-day moving average $4.54, both in adjusted daily closes.\n\nThe repricing happened in one session. The shares closed at $4.82 on 2026-11-06 and $7.17 on 2026-11-09, the day of the report. They then added to the gain with a $7.67 close on 2026-11-10 and held at $7.65 on 2026-11-11.\n\nThe $7.17 close of 2026-11-09 is the first close after the report. The case turns on whether the shares hold above it. The $8.30 intraday high from 2025-11-11 is the prior peak. The 52-week closing low is $3.88, from 2026-02-23.\n\n## Catalyst Calendar\n\n- **~2027-03-10 (est.):** Fourth-quarter and full-year 2026 results, with the first 2027 outlook. Shows whether fourth-quarter revenue lands inside the $47.5–50.0M guide and whether 2027 guidance implies growth after the $32M resale reduction, the question the current price leaves open.\n\n## What Would Change Our Mind\n\nA daily close below $6.89, 10% under the 2026-11-11 close and below the $7.17 first close after the third-quarter report, which would show the post-report gain fading; or full-year 2026 revenue guidance cut below $198.2 million.\n\nThe risks this note tracks, each with what would confirm it:\n\n- 2027 revenue declines once software resale ends, because Telos ID and Xacta growth fall short of the $32M resale reduction. Confirmed by: A 2027 revenue outlook at the fourth-quarter report that falls below 2026 revenue after the resale is removed.\n- TSA PreCheck transaction volumes slow, taking away the main driver of the 2026 raise. Confirmed by: Management citing weaker PreCheck volumes, or fourth-quarter revenue below the $47.5M low end of the guide.\n- Gross margin keeps slipping on program mix, so profit gains depend on lower stock compensation rather than operating leverage. Confirmed by: Fourth-quarter GAAP gross margin below the third quarter's 37.9% with no lift from the resale exit.\n- Federal budget disruption delays awards and task orders on a business that depends on federal agencies. Confirmed by: Management citing funding delays or award slippage, or pending proposals decided later than the 'coming months' timing given on 2026-11-09.\n- Senior insiders keep selling at post-report prices. Confirmed by: Form 4 filings showing open-market sales by Griffin, Wood or Bendza after 2026-11-09.\n\n## Correlation Notes\n\nTelos trades mostly on its own contract awards and guidance, because nearly all of its revenue comes from US federal agencies. US stocks rallied broadly on 2026-11-09, according to Benzinga. Telos's move from $4.82 to $7.17 that day followed its own report and raised outlook.\n\nIts identity business also ties results to air-travel demand through TSA PreCheck enrollment volumes, which the chief financial officer cited as a driver on 2026-11-09. Analyst coverage groups Telos with Cybersecurity names: Wedbush covers it alongside Check Point, Fortinet and Varonis. Telos's weekly moves have followed its own news more than that group's.",
  "first_seen": "2026-11-10",
  "last_analyzed": "2026-11-12T03:56:07+00:00",
  "last_synthesized": "2026-11-12",
  "date_modified": "2026-11-12",
  "license": "Content © FrontierPicks. Cite the canonical URL."
}