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.
Adjusted EBITDA was $61 million with a 12.7% margin, a 50 basis point expansion year-over-year.
Cash balances were $301 million at quarter end, down from $377 million at year-end, reflecting pension contributions and refinancing activities.
Cloud, Applications & Infrastructure Solutions revenue was $185 million, down 4.9% year-over-year but up 2% sequentially.
Digital Workplace Solutions revenue was $138 million, up 4.6% year-over-year, with 13% sequential growth in Q2.
Enterprise Computing Solutions revenue was $140 million, up 8.2% year-over-year, with L&S revenue at $88 million, exceeding expectations.
Excluding License and Support (L&S), revenue was essentially flat year-over-year at $396 million, with 8.5% sequential growth in constant currency.
Gross profit was $130 million with a 26.9% margin, slightly down from 27.2% last year; Ex-L&S gross margin was 17.6%, down 110 basis points due to restructuring charges.
Net income was negative $20 million, or a loss of $0.28 per share; adjusted net income was $14 million or $0.19 per share.
Net leverage ratio including pension obligations was 3.4x, stable year-over-year.
Non-GAAP operating profit margin improved to 7.6% from 6.1%, driven by higher L&S revenue and operational efficiencies.
Pre-pension free cash flow was negative $58 million due to working capital fluctuations; free cash flow was negative $337 million reflecting a $250 million discretionary pension contribution.
Second quarter reported revenue increased 12% sequentially and 1% year-over-year as reported and in constant currency, exceeding prior expectations.
Dafinchi