What happened
Shares of Telos (TLS 2.08%) plummeted this morning after the company released its third-quarter 2021 results. The cybersecurity company reported earnings that missed analysts' estimates, and management also cut full-year guidance.
The tech stock was down by 24% as of 11:40 a.m. EST on Monday.
So what
Telos said that its reported sales increased 48% in the third quarter on a year-over-year basis. The company also said that its adjusted earnings per share were $0.10 in the quarter, which was just below analysts' consensus estimate of $0.11.
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CEO John Wood said in a press release that he was pleased with the performance in the quarter. "Additionally, we expanded gross margin 229 basis points to 37%, generated $12.5 million of positive cash flow from operations and continued to win and retain meaningful contracts," Wood said.
But despite those results, the company cut its full-year revenue guidance from the prior range between $283 million to $295 million to the current range of between $240 million to $245 million.
Management also lowered its full-year guidance for earnings before interest, taxes, depreciation, and amortization (EBITDA) to a range of $18 million to $19 million, from the previous guidance of $33 million to $36 million.
Now what
Investors never like to see a company lower its revenue and earnings estimates, which is why Telos' stock fell so hard this morning. Additionally, the company's earnings miss for the third quarter added to investors' disappointment.
Telos investors have been on a wild ride over the past 12 months, with the stock making massive gains, only to see them disappear quickly. Today's drop leaves Telos' shares down 11% over the past year.
