tls-20260630


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q


x			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended: June 30, 2026


¨			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number: 001-08443

TELOS CORPORATION

(Exact name of registrant as specified in its charter)


Maryland						52-0880974
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

19886 Ashburn Road, Ashburn, Virginia						20147-2358
(Address of principal executive offices)						(Zip Code)

(703) 724-3800

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol	Name of each exchange on which registered
Common stock, $0.001 par value per share	TLS	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ¨ No x

As of August 3, 2026, the registrant had outstanding 74,736,789 shares of common stock.

Table of Contents to Second Quarter 2026 Form 10-Q


		Page
PART I - FINANCIAL INFORMATION		3
Item 1.	Financial Statements (Unaudited)	3
	Consolidated Statements of Operations	3
	Consolidated Statements of Comprehensive Income (Loss)	4
	Consolidated Balance Sheets	5
	Consolidated Statements of Cash Flows	6
	Consolidated Statements of Changes in Stockholders’ Equity	7
	Notes to the Unaudited Consolidated Financial Statements	8
	1. Organization	8
	2. Significant Accounting Policies	8
	3. Revenue Recognition	10
	4. Accounts Receivable, Net	11
	5. Inve ntories , Net	12
	6. Property and Equipment, Net	12
	7 . Goodwill	12
	8 . Intangible Assets, Net	13
	9 . Other Balance Sheet Components	13
	10 . Revolving Credit Facility	14
	1 1 . Stock-Based Compensation	14
	1 2 . Share Repurchases	16
	1 3 . Accumulated Other Comprehensive Loss	16
	1 4 . Earni n gs (Loss) per Share	16
	1 5 . Segment Information	17
	1 6 . Supplemental Cash Flow Information	18
	1 7 . Commitments and Contingencies	19
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
	Forward-Looking Statements	20
	Ov erview and Business Environment	20
	Financial Overview	21
	Results of Operations	21
	Liquidity and Capital Resources	23
	Critical Accounting Policies and Estimates	24
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	24
Item 4.	Controls and Procedures	24
PART II - OTHER INFORMATION		25
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults upon Senior Securities	25
Item 4.	Mine Safety Disclosures	25
Item 5.	Other Information	25
Item 6.	Exhibits	26
	SIGNATURES	27

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

TELOS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	For the Three Months Ended				For the Six Months Ended
	June 30, 2026		June 30, 2025		June 30, 2026		June 30, 2025

	(in thousands, except per share amounts)
Revenue – services	$	40,594	$	29,301	$	82,655	$	58,146
Revenue – products	7,151		6,667		12,832		8,438
Total revenue	47,745		35,968		95,487		66,584
Cost of sales – services (excluding depreciation and amortization)	22,537		16,605		45,776		32,096
Cost of sales – products (excluding depreciation and amortization)	6,002		5,716		10,534		7,156
Depreciation and amortization	2,514		1,715		5,110		3,218
Total cost of sales	31,053		24,036		61,420		42,470
Gross profit	16,692		11,932		34,067		24,114
Operating expenses:
Research and development expenses	1,345		1,512		2,702		3,083
Selling, general and administrative expenses	15,037		20,303		29,600		39,936
Total operating expenses	16,382		21,815		32,302		43,019
Operating income (loss)	310		(9,883)		1,765		(18,905)
Other income	501		553		1,198		1,114
Interest expense	(107)		(141)		(218)		(288)
Income (loss) before income taxes	704		(9,471)		2,745		(18,079)
Provision for income taxes	(44)		(46)		(62)		(42)
Net income (loss)	$	660	$	(9,517)	$	2,683	$	(18,121)

Net income (loss) per share:
Basic	$	0.01	$	(0.13)	$	0.04	$	(0.25)
Diluted	$	0.01	$	(0.13)	$	0.03	$	(0.25)

Weighted-average shares outstanding:
Basic	74,895		73,163		74,361		72,940
Diluted	77,547		73,163		77,576		72,940

See accompanying notes to the unaudited consolidated financial statements.

Table of Contents

TELOS CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)


	For the Three Months Ended				For the Six Months Ended
	June 30, 2026		June 30, 2025		June 30, 2026		June 30, 2025

	(in thousands)
Net income (loss)	$	660	$	(9,517)	$	2,683	$	(18,121)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	3		(5)		(5)		75
Actuarial gain on pension liability adjustment	—		—		—		8
Other comprehensive income (loss)	3		(5)		(5)		83
Comprehensive income (loss)	$	663	$	(9,522)	$	2,678	$	(18,038)

See accompanying notes to the unaudited consolidated financial statements.

Table of Contents

TELOS CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	June 30, 2026		December 31, 2025

	(in thousands, except per share amount and share data)
Assets:
Cash and cash equivalents	$	50,647	$	53,180
Accounts receivable, net	18,000		17,000
Inventories, net	4,917		996
Prepaid expenses	7,562		10,565
Deferred program expenses	13,920		10,006
Other current assets	1,779		2,666
Total current assets	96,825		94,413
Property and equipment, net	2,490		3,071
Finance lease right-of-use assets, net	3,560		4,170
Operating lease right-of-use assets, net	298		410
Goodwill	3,006		3,006
Intangible assets, net	29,213		30,281
Other assets	4,357		4,513
Total assets	$	139,749	$	139,864
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable	$	6,390	$	4,087
Accrued liabilities	5,673		6,900
Accrued compensation and benefits	8,985		12,309
Contract liabilities – current portion	17,220		11,223
Finance lease obligations – current portion	2,113		2,033
Operating lease obligations – current portion	255		232
Total current liabilities	40,636		36,784
Contract liabilities – non-current portion	874		1,124
Finance lease obligations – non-current portion	4,536		5,608
Operating lease obligations – non-current portion	62		186
Deferred income taxes	57		53
Other liabilities	171		159
Total liabilities	46,336		43,914
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value, 250,000,000 shares authorized, 74,736,789 shares and 72,773,272 shares issued and outstanding as of June 30, 2026, and December 31, 2025, respectively	113		111
Additional paid-in capital	454,611		459,828
Accumulated other comprehensive loss	(101)		(96)
Accumulated deficit	(361,210)		(363,893)
Total stockholders’ equity	93,413		95,950
Total liabilities and stockholders’ equity	$	139,749	$	139,864

See accompanying notes to the unaudited consolidated financial statements.

Table of Contents

TELOS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


			For the Six Months Ended
			June 30, 2026