Telos (TLS) risk factors, FY2024 10-K

Business and Operational Risks

1. 01Our business could be negatively affected by cyber or other information security breaches, threats or other disruptions
2. 02If our customers do not renew their subscriptions or contracts for our solutions and services and expand our relationships with them, our revenue could decline and our results of operations would be adversely impacted
3. 03The U.S. government may terminate, cancel, delay, modify or curtail our contracts at any time prior to completion and, if we do not replace them, this may adversely affect our future revenues and could adversely impact our earnings
4. 04Federal government spending reductions, workforce changes, and policy shifts may impact our existing operations and future opportunities for new contracts
5. 05We are dependent on a few key customer contracts for a significant portion of our future revenue, and a significant reduction in goods and services or delay in implementation to one or more of these contracts would reduce or delay our future revenue and could materially affect our anticipated operating results
6. 06A failure to attract, train, retain and motivate key and skilled employees, including key members of our management team, would adversely affect our ability to execute our strategy and may disrupt our operations
7. 07Due to the competitive bidding process to obtain U.S. government contracts, both upon initial issuance and re-competition, and the likelihood of bid protest, we may be unable to achieve or sustain revenue growth and profitability
8. 08Our competitive position and future profitability depend, in part, on our ability to develop new technologies
9. 09Our financial results may fluctuate due to increasing variability in our security solutions' sales and implementation cycles
10. 10Failure to effectively develop and execute our sales and business development capabilities will harm our ability to grow our business
11. 11We depend on third parties for certain operational services and components of our products in order to fully perform under our contracts, and the failure or disruption of a third party to perform these services could have an adverse impact on our business
12. 12Failure to adequately protect our intellectual property, technologies and proprietary rights could harm our business, competitive position, financial condition, and results of operations
13. 13Our earnings and profitability may vary based on the mix of our contracts and may be adversely affected by our failure to estimate and manage costs, time, and resources accurately
14. 14We will face risks associated with the growth of our business in new commercial markets and with new customer verticals, and we may not be able to achieve organic growth nor have the necessary resources to dedicate to the overall growth of our business
15. 15Failure to deliver high-quality technical support services may adversely affect our relationships with our customers and our financial results
16. 16Our growth depends, in part, on the success of our strategic relationship with our partner organizations
17. 17If we are unable to license third-party technology that is used in our products and services to perform key functions, the loss could have an adverse effect on our revenues
18. 18The inability to set optimal pricing structures for our solutions and services could adversely impact our business, financial condition and results of operations
19. 19Sales to customers outside the United States expose us to risks inherent in international operations
20. 20We may be subject to legal proceedings, regulatory disputes and governmental inquiries that could materially harm our business, operating results, and financial condition
21. 21We have in the past acquired, and may in the future seek to acquire or invest in complementary businesses, products or technologies to enhance our technical capabilities or otherwise capture growth opportunities
22. 22Public confidence in, and acceptance of, identity platforms and biometrics generally, and our solutions specifically, will be a key factor in our business’s continued growth
23. 23Any decline or disruption in the travel industry could materially adversely affect our business, results of operations and financial condition
24. 24Actions that we are taking to restructure our business to improve profitability may not be as effective as anticipated
25. 25We are subject to payment processing risk
26. 26Goodwill and intangible assets represent significant assets on our balance sheet and any impairment on these assets could negatively impact our results of operations, and shareholders' equity
27. 27Artificial Intelligence is an emerging technology and may involve significant risks and uncertainties

Industry, Legal and Regulatory Risks

1. 28The business environment in which we operate is highly competitive, and we may not be able to compete successfully against existing or future competitors
2. 29We are subject to the seasonality of U.S. government spending
3. 30We are subject to substantial oversight from federal agencies that have the authority to suspend our ability to bid on contracts
4. 31We are subject to governmental export and import controls that could impair our ability to compete in international markets and subject us to liability if we are not in full compliance with applicable laws

Risks Related to Our Financial Reporting and Common Stock

1. 32We may fail to meet our publicly announced guidance and other expectations about our business and operating results, which may cause our stock price to decline
2. 33Our quarterly operating results fluctuate and may fall short of prior periods, our projections or the expectations of securities analysts or investors, which could adversely affect the trading price of our stock
3. 34We cannot guarantee that our share repurchase program will be fully implemented or that it will enhance long-term stockholder value
4. 35If we fail to maintain an effective system of internal control, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired
5. 36If our judgments or estimates relating to our critical accounting policies are based on assumptions that change or prove to be incorrect, our results of operations could be adversely affected
6. 37Weakened global economic conditions may adversely affect our industry, business, operating results and financial condition
7. 38Our systems and the third-party systems upon which we and our customers rely are also vulnerable to damage or interruption from catastrophic occurrences or events outside our control
8. 39Increased scrutiny of our environmental, social and governance responsibilities may result in additional costs and risks, and may adversely impact our reputation, employee retention, and willingness of customers and suppliers to do business with us
9. 40Changes in accounting principles or their application to us could result in unfavorable accounting charges or effects, which could adversely affect our results of operations and growth prospects
10. 41Global climate-related risks could negatively affect our business