Telos Corporation's Strategic Expansion in TSA PreCheck Enrollment and Its Implications for Revenue Growth

Telos Corporation has emerged as a pivotal player in the U.S. travel security landscape through its aggressive expansion of TSA PreCheck enrollment centers. By July 28, 2025, the company had deployed 396 enrollment locations across 38 states, a 43% increase from its May 2025 network of 291 centers [2]. This rapid growth, driven by partnerships with retail chains like Office Depot and OfficeMax, reflects Telos’s ability to scale its infrastructure while addressing traveler demand for streamlined airport security [3]. The company’s strategic focus on accessibility—such as extended operating hours and rural site additions—positions it to capture a larger share of the TSA PreCheck market, which now serves over 99% of U.S. travelers with wait times under 10 minutes [1].

The financial implications of this expansion are equally compelling. In Q2 2025, Telos reported $36 million in revenue, a 26% year-over-year increase, with its Security Solutions segment contributing 90% of total revenue [4]. This segment’s 82% year-over-year growth was fueled by TSA PreCheck’s enrollment momentum and federal contract wins, including the Defense Manpower Data Center (DMDC) program [5]. Notably, the company achieved a positive adjusted EBITDA of $400,000 in Q2 2025, reversing a $3.3 million deficit in the same period in 2024 [6]. Free cash flow of $4.6 million enabled share repurchases, with Telos spending $4 million to buy back 1.5 million shares during the quarter [6]. These metrics underscore the program’s role as a recurring revenue engine and a catalyst for shareholder value.

Telos’s forward-looking strategy further strengthens its long-term prospects. With 452 enrollment centers operational by September 2025 [7], the company is on track to surpass its 500-center target by year-end. Management has emphasized that TSA PreCheck’s recurring revenue model—where members pay a $85 fee every five years—creates a stable cash flow stream, insulated from short-term economic volatility [5]. Additionally, the program’s alignment with federal security priorities ensures regulatory tailwinds, as the Department of Homeland Security (DHS) continues to prioritize expedited screening for frequent travelers [2].

For investors, Telos’s execution in 2025 demonstrates a clear link between infrastructure expansion and financial performance. The stock’s 43.55% pre-market surge following Q2 earnings highlights market confidence in the company’s ability to monetize its TSA PreCheck footprint [6]. While challenges such as pandemic-related renewal lags persist, the surge in new enrollments—driven by the expanded network—suggests a path to sustained growth. Analysts have noted that Telos’s strategic shift toward high-margin security solutions, including TSA PreCheck, positions it to outperform peers in the federal contracting sector [5].

In conclusion, Telos Corporation’s TSA PreCheck expansion exemplifies a disciplined approach to scaling a scalable, recurring revenue business. By combining geographic reach, operational efficiency, and strategic partnerships, the company is not only enhancing traveler convenience but also building a durable competitive advantage. As the U.S. air travel market rebounds and security demands evolve, Telos’s TSA PreCheck network stands as a cornerstone of its value proposition for shareholders.

Source:
[1] Telos Corporation Reaches 350 TSA PreCheck Enrollment and Renewal Locations Nationwide [https://www.telos.com/press-release/telos-corporation-reaches-350-tsa-precheck-enrollment-and-renewal-locations-nationwide/]
[2] Telos Corp (TLSRP.PFD) Q2 2025 Earnings Call Highlights [https://finance.yahoo.com/news/telos-corp-tlsrp-pfd-q2-070404934.html]
[3] Telos Corporation Expands TSA PreCheck Enrollment Network with 82 New Locations [https://www.nasdaq.com/articles/telos-corporation-expands-tsa-precheck-enrollment-network-82-new-locations-nationwide]
[4] Telos Reports 26 Percent Revenue Growth [https://www.aol.com/finance/telos-reports-26-percent-revenue-140605373.html]
[5] TLS Earnings Transcript [https://dafinchi.ai/earnings-transcript/TLS/2025/Q2]
[6] Earnings call transcript: Telos Corp Q2 2025 Surpasses Revenue Expectations [https://www.investing.com/news/transcripts/earnings-call-transcript-telos-corp-q2-2025-surpasses-revenue-expectations-93CH-4183270]
[7] Telos Expands TSA PreCheck Enrollment to 452 Centers [https://www.stocktitan.net/news/TLS/telos-corporation-an-official-tsa-pre-check-enrollment-provider-5jlua7j1d33k.html]