Telos (NASDAQ:TLS) reported a stronger-than-expected first quarter for fiscal 2026, with revenue and adjusted EBITDA exceeding the company’s guidance as growth in TSA PreCheck enrollment activity and execution across large programs helped lift results.
Executive Vice President and Chief Financial Officer Mark Bendza said the quarter reflected “continued transformation of Telos into a more scalable, profitable, and cash-generative business.” He also addressed the company’s April 29 announcement that Chairman and CEO John Wood is on a medical leave of absence
Bendza said Independent Director Fred Schaufeld has assumed the role of chairman, while Bendza, General Counsel Hutch Robbins and Executive Vice President of Security Solutions Mark Griffin have jointly taken on Wood’s responsibilities on an interim basis. “This interim leadership structure is functioning as intended, and our teams remain fully aligned and focused on execution,” Bendza said, adding that customer and partner engagement remains strong and program execution is uninterrupted. Revenue Rises 56% as Margins Improve Telos reported first-quarter revenue of $47.7 million, up 56% from the prior-year period and above its guidance range of $44 million to $45 million. Bendza said the outperformance was supported by strong TSA PreCheck enrollment activity, continued execution across core programs and benefits from efficiency initiatives.
GAAP gross margin was 36.4%, while cash gross margin was 42.3%, both above company expectations. Bendza attributed the margin performance to a favorable mix of higher-margin revenue and continued operational discipline, while noting that gross margins can fluctuate from quarter to quarter based on revenue mix. Adjusted operating expenses were approximately $400,000 better than guidance and declined $1.2 million year over year, helped by cost discipline and a restructuring plan approved in the fourth quarter.