Telos Corporation Surpasses Expectations in Second Quarter 2026 with Strong Revenue Growth, Accelerated Cash Flow Generation, and Expanded Full-Year Profitability Outlook
Telos Corporation, a leading provider of mission-critical solutions for security-conscious organizations, has reported another strong quarter in its second quarter 2026 financial results. The company's performance exceeded expectations, driven by the growth of its Telos ID business and disciplined execution across large programs.
According to Mark Bendza, Executive Vice President and CFO of Telos, total company revenue increased 33% year-over-year to $47.7 million, surpassing the company's guidance range of $44 million to $46 million. This growth was primarily driven by stronger than forecasted performance in Telos ID, which saw a significant increase in revenue.
The company's gross margin also exceeded expectations, reaching 35% GAAP and 40.6% cash gross margin, both above the company's guidance assumptions. Adjusted operating expenses declined by more than $800,000 year-over-year but were approximately $500,000 above guidance assumptions, primarily reflecting higher TSA PreCheck marketing activity and incentive compensation accruals.
Adjusted EBITDA exceeded the high end of the company's guidance range, reaching $6.9 million compared to guidance of $5 million to $6 million. This represents a significant expansion in adjusted EBITDA margin to 14.4%, up from 1.1% in the prior year period.
John Wood, Chairman and CEO of Telos, emphasized that these results reflect the strength of the company's business and its continued ability to solve complex mission-critical challenges for customers. The company's solutions combine proven cybersecurity, digital identity, and secure networking capabilities with deep mission expertise and a flexible approach to addressing unique customer requirements.
Telos also reported strong cash flow generation, with free cash flow margins significantly improved while reducing quarter-to-quarter cash flow volatility. This transformation has been achieved through disciplined working capital management, strong revenue growth, and lower operating expenses.
As a result of this performance, the company's full-year profitability outlook has increased meaningfully. Mark Bendza stated that Telos is pleased with these results and looks forward to continued success in the future.
