SEGMENT INFORMATION
Operating segments are defined as components of the Company for which separate discrete financial information is available and evaluated regularly by the chief operating decision maker ("CODM") in deciding how to allocate resources and assess performance. We identified our CEO as the CODM.
We operate our business in two reportable and operating segments: Security Solutions and Secure Networks.
Our Security Solutions segment is primarily focused on cybersecurity, cloud and identity solutions, and secure messaging through Xacta, Telos AMHS and Telos ID offerings.
Our Secure Networks segment provides secure networking architectures and solutions to our customers through secure mobility solutions, and network management and defense services.
We measure each segment's profitability based on gross profit. Our CEO evaluates the segment's performance based on metrics, such as segment revenue and gross profit, that align with our strategies and objectives, and provide a framework for the timely and rational allocation of resources between the segments.
Table 16: Results of Operations by Business Segment
For the Year Ended December 31,
20252024
Security SolutionsSecure NetworksTotalSecurity SolutionsSecure NetworksTotal
(in thousands)
Revenues$149,600 $15,205 $164,805 $76,760 $31,512 $108,272 
Cost of sales
Depreciation and amortization (1)
8,173 8,180 6,396 6,404 
Stock-based compensation expense (1)
594 58 652 667 161 828 
Impairment loss on intangible assets (1)
— — — 5,333 — 5,333 
Other segment items (2)
83,274 11,682 94,956 36,685 24,593 61,278 
Total cost of sales92,041 11,747 103,788 49,081 24,762 73,843 
Gross profit$57,559 $3,458 61,017 $27,679 $6,750 34,429 
Operating expenses
Research and development expenses7,057 8,442 
Selling, general and administrative expenses78,925 75,487 
Goodwill impairment14,916 — 
Impairment loss on intangible assets— 6,373 
Total operating expenses100,898 90,302 
Operating loss(39,881)(55,873)
Other income3,225 4,023 
Interest expense(553)(644)
Loss before income taxes(37,209)(52,494)
Benefit from (provision for) income taxes663 (26)
Net loss$(36,546)$(52,520)
(1) The significant segment expense categories and amounts align with the segment-level information regularly provided to the CODM.
(2) Other segment items for each reportable segment include direct labor, direct subcontractor costs, direct materials and inventory, other direct non-labor costs, fringes, overhead, and facility costs.
We account for inter-segment sales and transfers as if the sales or transfers were to third parties, that is, at current market prices, if any. There were no inter-segment sales and transfers during fiscal years 2025, and 2024. Interest income, interest expense, other income and expense items, and income taxes, as reported in the consolidated financial statements, are not part of the segment profitability measure and are primarily recorded at the corporate level.
Management does not utilize total assets by segment to evaluate segment performance or allocate resources. As a result, assets are not tracked by segment, and therefore, total assets by segment are not disclosed.
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Historical Timeline

Fiscal YearFiled
2025Mar 16, 2026Showing above
2024Mar 10, 2025
2023Mar 15, 2024
2022Mar 16, 2023
2021Mar 28, 2022

About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.