The sale involved extensive negotiations over several years, highlighting a major strategic pivot for the company.
The transaction included spectrum assets, which are expected to be monetized further through upcoming sales to AT&T and Verizon, projected to generate $2 billion in proceeds.
The completion of this sale is seen as a key milestone in the company's transformation and focus on infrastructure assets.
Active Strategic Alternatives Process and Ecosystem Ecosystem Development
The company confirmed that its strategic alternatives process is active but currently passive, given the high upside potential.
Management highlighted that ecosystem partners and device manufacturers are responding with innovations, adding value beyond spectrum.
Discussions with potential partners and investors focus on unlocking the full ecosystem value, which could be 4-5 times the company's current valuation.
The foundation laid by spectrum and network deployment is attracting ecosystem players, creating a robust future growth environment.
Management sees significant strategic value in ecosystem development, which enhances long-term asset worth and market positioning.
Adjusted EBITDA was a $400,000 profit, outperforming guidance which forecasted a loss between $2.1 million and $600,000.
GAAP gross margin was 33.2%, and cash gross margin was 38.4%, both within guidance ranges but lower year-over-year due to revenue mix.
Operating cash flow was $7 million, and free cash flow was $4.6 million, representing a 12.9% free cash flow margin for the quarter.
Security Solutions accounted for approximately 90% of total revenue and was the primary driver of growth.
Telos reported second quarter 2025 revenue of $36 million, a 26% year-over-year increase, exceeding guidance of $32.5 million to $34.5 million.
Year-to-date free cash flow was $8.4 million or 12.6% margin, with significant improvements driven by revenue growth, cost discipline, and working capital management.
Telos expanded its TSA PreCheck enrollment centers to 415 locations across 40 states, including Puerto Rico, representing a 43% increase since May 2025.
The company aims to reach 500 enrollment locations in 2025, indicating aggressive growth in the program.
Despite COVID-related decline in renewal volume, new enrollments are increasing due to the expanded network, supporting the company's growth trajectory.
Dafinchi