Good day, ladies and gentlemen, and welcome to Telos Corporation’s Third Quarter 2021 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions]. As a reminder, this call is being recorded. [Operator Instructions]. I would now like to hand the conference over to Christina Mouzavires. Please go ahead.

Thank you for joining us to discuss Telos Corporation's third quarter 2021 financial results. With me today is John Wood, Chairman and CEO of Telos; and Mark Bendza, CFO of Telos. Let me quickly review the format of today's presentation. John will begin with brief remarks on the third quarter results and Telos' strategic priorities, and Mark will cover the financials and guidance. Then we'll open the line for Q&A where Ed Williams, Executive Vice President and COO of Telos; and Mark Griffin, Executive Vice President of Security Solutions will also join us. The earnings press release was issued earlier today and is posted on the Telos Investor Relations website where this call is being simultaneously webcast. Additionally, we have provided presentation slides on our investor website. Before we begin, we want to emphasize that some of our statements on this call are forward-looking statements and are made under the Safe Harbor provisions of the Federal Securities laws. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ from various reasons, including the factors described in today's earnings press release and the comments made during this conference call and in our SEC filings. We do not undertake any duty to update any forward-looking statements. In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental and clarifying measures to help investors understand Telos' financial performance. These non-GAAP financial measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. You can find additional disclosures regarding these non-GAAP measures, including reconciliations and comparable GAAP results in our earnings press release and on the Investor Relations page of the Telos website. The webcast replay of this call will be available for the next year on our company website under the Investor Relations link. With that, I'll turn the call over to John.

Well, thank you, Christina. Welcome to our third quarter 2021 financial results conference call. Let's begin today on Slide 3. I'm pleased with our performance this quarter. We delivered 48% reported sales growth, 80% adjusted sales growth. We increased our gross profit 57% to a record $26.1 million. We expanded our gross margin by 229 basis points to 37%. We generated $12.5 million of positive cash flow from operations. And we continue to win meaningful contracts. Let's turn to Slide 4. We are nearing the end of our first year operating as a publicly-traded company. It's been a busy year with an exciting new energy and pace. While we welcome many new people to the team this year, we have others who are nearing the end of their careers. One such retirement is that of Ed Williams, who has served as our Chief Operating Officer since 2003. Ed joined Telos in 1993 and throughout his tenure has provided nearly 3 decades of leadership and dedicated service to the company. Effective today, November 15th, Ed's responsibilities will transition to 2 of my senior staff members, Mark Griffin and Brendan Malloy, who will report directly to me. Mark Griffin will step in as the Executive Vice President of Security Solutions, where he will oversee all the operations and business development efforts surrounding our security solutions business, which includes Xacta, Telos Ghost, the automated message handling system and IDTrust360. Mark has been with Telos since 1984, and in 2007, he became the General Manager of our Identity business, and he was instrumental in navigating and ultimately winning the TSA PreCheck expansion contract. Brendan Malloy will become the Executive Vice President of Secure Networks, overseeing all operations and business developments surrounding the Secure Networks business. Brendan has been with Telos since 1996, and throughout…

Thank you, John, and thank you, everyone, for joining us today. Let's turn to Slide 6. I'm pleased with our results this quarter, highlighted by 48% reported sales growth, 80% adjusted sales growth, 229 basis points of gross margin expansion, including gross margin expansion across every line of business, record gross profit of $26.1 million, $12.5 million of cash flow from operations and $9.4 million of free cash flow, bringing year-to-date free cash flow to positive $1.3 million. Now let's get into the details, starting with revenues. Reported third quarter revenues grew 48% from $47.4 million in 2020 to $70.1 million in 2021. Excluding our contract with the U.S. Census Bureau, which is ramped down as planned since the same period last year, total third quarter revenues grew 80%. In future quarters, comparisons with prior year periods will not be meaningfully impacted by our contract with the U.S. Census Bureau. Total third quarter revenues for Security Solutions grew 14% from $31.2 million in 2020 to $35.7 million in 2021, notwithstanding $7.8 million of lower sales in Telos ID on the contract with the U.S. Census Bureau, as previously mentioned. Continued strength in Security Solutions was driven by Telos ID, Xacta Solutions and our confidential healthcare program with the Federal government. Excluding the contract with the U.S. Census Bureau, third quarter revenues in Security Solutions grew 56%. Total third quarter revenues for our Secure Networks business grew 112% from $16.2 million in 2020 to $34.4 million in 2021. This significant increase was mostly driven by the same 2 large programs mentioned on our last earnings call. The rollout continued for a contract to provide security modules and kits to support the upgrade of Theater Deployable Communications for the U.S. Air Force. And site work continued on a 5-year U.S. Army contract…

Thanks, Mark. So we're confident the seasoned leadership team we have in place will usher the company into this next phase of growth. We're moving forward on our strategic priorities to increase commercial adoption of our solutions, build a robust and productive sales team, nurture a strong partner ecosystem and drive continued adoption of our solutions through existing customer expansion. We're very pleased with our performance this quarter, which was underscored by substantial revenue growth, record gross profit and excellent cash generation. And we look forward to another year of strong growth in 2022. With that, Mark Bendza, Ed Williams, Mark Griffin and I are available to take your questions. Operator, please open the line for Q&A.

[Operator Instructions]. Our first question comes from the line of Zach Cummins with B. Riley Securities.

Good morning, John and Mark, yes, thanks for all the incremental color, especially kind of around the outlook here going forward. But Mark, just really dialing down into that. When I'm looking at the full year guidance here for FY '21, I mean, can you give me a little more sense of, I guess, the other areas of the business outside of TSA and CMS that really didn't outperform your expectations that you were thinking they would when you gave that guidance in Q2?

Yes. So listen, in terms of the outperformance, really the change in the outperformance is really driven by 2 things. First, it's the perpetual license that we were expecting in the third quarter on AMHS within our Secure Comms business. That program will still launch this year as we had expected, but the perpetual license portion of it has pushed out of 2021. And then the other piece is the supply chain disruptions that we're experiencing on one program within secure networks. It's a sizable program, so that is having a meaningful impact on that outperformance line. Now what I'll say is even at the low end of our guidance for the fourth quarter, there is still meaningful supply chain risk at the low end. We have about $3 million of assumed shipments in December even at the bottom end of the guidance range. So please keep that in mind. And there's also another $6.5 million of shipments that we thought would have gone out by now this quarter, which have not yet gone out, but we feel like we have more comfort around that $6.5 million. And then listen, elsewhere within the portfolio, the business is performing as expected, and we feel really good about the other programs within Secure Networks as well as broad-based performance across Security Solutions and all other aspects of Security Solutions outside of the AMHS reference that I made earlier. But strong broad-based outperformance -- strong broad-based performance, I should say, in line with our expectations within Security Solutions and then elsewhere within Secure Networks outside of that one large program.

Understood. That's helpful. And looking at your 2022 review, I really appreciate just some high-level insight into this. But maybe I didn't fully understand. In terms of Security Solutions, are you expecting that growth rate to be in line with what you're going to post this year? Could you just clarify the expectations for Security Solutions growth rate this year? And I'm assuming that's excluding the contribution from the Census contract?

Yes. So when you back out the headwind from the U.S. Census contract, Security Solutions, I think, embedded in our guide is going to grow kind of in the high 30% range, so high 30s. So short of -- probably short of 40%, but in the high 30s.

Got it. And that's, including the headwind from the Census contract? I'm just trying to make sure I'm fully clear on that.

Yes. That is excluding the impact, excluding the headwind from Census. So if you calculate it on a reported basis, it would be lower than that.

Understood. That's helpful. And then just finally, on the CMS contract, it seems like you're already assuming there's not going to be any contribution from that in 2022. I mean can you give us some more insight into what's going on with that program and potentially what could be pushing that further to the right?

Yes. So first, let me just give you kind of a perspective on how I'm thinking about guidance in general. So I've always taken over the forecasting and guidance process in recent weeks here as I've transitioned to the role. So what you're starting to see in part with the changes we're making today to our guidance and our outlook is a little bit around kind of my philosophy on guidance. And so we're currently working through our '22 planning process. So of course, we're not going to provide '22 guidance today. We'll do that on the 4Q earnings call. But we're assessing a range of scenarios for '22 as we work through our planning process. And as we've discussed today and throughout the course of '21, a couple of our more meaningful short-term growth drivers than we originally expected in '21, they pushed into '22 or maybe even beyond in the case of CMS. In addition to that, as I mentioned, Secured Networks will have a sizable year-over-year headwind to backfill due to the expected completion of a large program early in '22. And so the way I think about guidance is I like to guide based on what I have a high degree of visibility into at a point in time. And then we can pull additional opportunities into our guidance as the year progresses and opportunities become more visible and certain, especially with respect to timing. I'll look to Mark Griffin here to comment briefly on CMS and how we're feeling about that. But I think based on what we're seeing right now at this stage, we're not putting CMS into our '22 outlook. But I'll pass it to Mark for more color there.

Hello, Zach. The way we see CMS is that government agencies have not been reverting back to full in-person fingerprinting. And the population that this program was anticipated was the lower risk health providers that needed to undergo background checks based on that population. And so the anticipated fingerprint volume, until that population comes back into the mix due to both COVID and the vaccine, that has come up. That expansion and increased opportunity this contract was afforded has been delayed. And so that's the guidance that Mark and John are both talking about is that specific lower-risk health providers have not come into the population yet.

Understood. And just final question for me. In terms of the Q4 guidance, I mean, can you give us a rough assumption of the mix between Security Solutions and Secure Networks in Q4?

Yes. We're at about -- give me one second here. It's about -- at the lower -- it's going to be a little better than the 50-50 that we saw this quarter.

Our next question comes from the line of Dan Ives with Wedbush.

So my question, I think a lot of people are asking is, how could management be so off in terms of miscalculating the timing of deals as well as just the complexity? And that's my first question, just given what we're seeing in terms of just the massive guidance cut.

Yes. So let me take a first shot. Let me take a first shot at that, Dan. So listen, I think one of the strengths of our equity story here is that we have some very large needle-moving growth opportunities in our portfolio that we're very excited about and we think our shareholders are excited about. Now the double-edged sword there is that when some of those meaningful growth opportunities shift even a little bit in some cases in terms of timing, that can have a meaningful impact on what we're forecasting versus actual results. And we saw that in the third quarter of this year with the movement of that one software license out of the quarter. And we saw it to the upside in the first quarter of this year when we had a large customer order pull-forward into the first quarter, and we ended up better than we expected. So that's the way I think about it. As I said earlier, going forward, and I think what you're starting to see in the guide this quarter is that my philosophy on guidance is that I will guide based on I have a high degree of visibility into at that point in time. And so you're going to see that in how we guide going forward, and you're seeing that for the fourth quarter here as well as our preliminary look on '22. But I'll pause there and see if John or anyone else wants to comment on.

Dan, it's John. The other thing I'd say just, in general, is that when we guided on TSA, our perspective was based on the program office that we could deliver. But the security office was not able to get to the point where they could get to an ATO. And as a result, as of today, at least, we don't have that ATO. So we -- like Mark said, these are large programs, they're multiyear programs. And unfortunately, it just didn't happen in this particular quarter on the TSA.

Yes. But isn't there a $40 million cost cut and only $25 million of it is TSA?

There's $25 million from TSA. There's some large...

Yes. So let's take each of those...

No, I just want to know -- I wanted just clear numbers. So what -- how much is the guidance cut?

So top line, $43 million to $50 million.

Okay. How much is TSA?

Well, no, there's 3 components there. Of the $43 million to $50 million, $25 million is TSA and then the balance is primarily between 2 other factors. First, supply chain disruptions that we're getting -- that are impacting a large program within Secure Networks. So there are several large shipments on a Secure Networks program that our forecasted to go out at the end of this quarter. Those supply chain disruptions are impacting one of our subcontractors, and that's going to push those shipments out of the end of the fourth quarter into the first quarter. And the other piece is within our Secure Communications business, a large multimillion dollar license software license, perpetual license that the customer is pushing out of this year. So none of these shifts, and I think it's an important point, none of these changes in any way represent a loss of business. All of this is timing. And actually, in all cases, this is timing outside of our control, unfortunately.

Okay. And I guess just a follow-up. What would give investors any confidence that were not back here 3, 6 months from now, and it just keeps getting pushed like in terms of your ability to forecast this?

Well, so Dan, again, this is -- I've only recently taken over the forecasting guidance process here. What -- how I'm thinking about guidance going forward, again, is that we will guide based on we have a high degree of visibility into at a point in time. And then as things become more imminent, as things materialize, we'll pull them into the guidance over the course of the year. So there's going to be a shift in terms of the philosophy of guidance here, at least from my perspective.

Our next question comes from the line of Keith Bachman with Bank of Montreal.

Yes, I have a couple similar to the last line of questioning. I want to go back to CMS for a second. And I think previously, we had thought that it might be kind of a $60 million tailwind associated with '22. Now it's zero. Pretty big variance there. What are the conditions that might allow for some of that to flow into '22? And/or is there a risk that, that's a perpetual zero, right? I mean you're saying it's zero in '22. Is that a zero in perpetuity and that maybe hybrid workforce stays or things along those lines? But put some context around CMS because I think most people were expecting the TSA to get pushed into next year. But this is a pretty big change on CMS as well.

Keith, before I ask Mark to answer that question, you might recall in the last discussion we had people were asking me about CMS. And I said that until we had more data, I wasn't about to talk about it for 2022. And we still are down the path of going down the vaccination program process where HHS has basically said that's our -- that's where we're pushing a majority of our dollars. And when the vaccination process is over, we'll get back to sort of business as usual where we move from doing manual intervention to using automation like ours at Telos. But Mark Griffin, I'd like you to add any additional points here because for those of you on the call here, Mark, running our Identity business also helped win us the CMS as well as the TSA business. So -- and today, Mark takes over Security Solutions. So Mark?

Look, Keith, the CMS program is a multifaceted program. So the targeted revenue that we had previously given you was on roughly 1.5 million fingerprints annually on that program. And as I explained earlier, that was primarily an expansion of the lower-risk health providers coming into that ecosystem. Because it's a multifaceted program, there are other opportunities that Telos will be looking at both from a security point of view and enhancement of that. So we'll also be targeting the acquisition that we had earlier in the year, which is the Diamond Fortress acquisition, the touchless fingerprinting application to basically bring in other capabilities and modalities to collect that population. So we're confident that the program will expand. Right now, we moved the guidance out from 2022 on specifically just that 1.5 million fingerprints. So there are other security elements that come into that program that we as a corporate security corporation will be bidding on. And we hope to bring those into the mix. I'm just not able to expand on those at this time. But as the program expands, there are other opportunities within that 10-year, $2 billion program that we'll be bidding on.

Okay. My second question is on the commercial impact being late in '22. While I appreciate given the very inconsistent performance of the collective firm, you've been hiring for a while now commercial sales reps and throughout the course of, certainly, '21. And to say the impact doesn't come to late '22 means -- it's concerning. And most enterprise sales reps are kind of 6 to 12 months. And so if you've been hiring through the course of '21, even if you took a weighted average, you should see some impact in March or June quarter. So it leaves -- kind of begs the question, why not a greater impact?

Yes. Why don't I start with that, Keith? So listen, it's not that there won't be impact earlier. It's -- what I was more signaling in my script is degree of impact. Maybe we'll see something more meaningful earlier than what I'm indicating in the script. But as I said earlier, I think about guidance and forecasting more based on the level of visibility that I have at a point in time. So we'll see over the course of next year what the ramp curve looks like.

And the other thing I'd point out, Keith, is that we'll give actual '22 guidance on the heels of Q4 earnings. There are still more things for us to be doing here between now and then. And so what Mark is trying to do is give a, if you will, a heads-up block ahead of time and trying to make sure that everybody understand sort of what we're having to deal with these large programs.

Okay. Well, my last one is just philosophically, is there any -- I'm not expecting specific numbers, but any directional barometers that you want to provide based on at least kind of the top line cadence on how we should be at least philosophically thinking about margins in '22, flat, down, up, any kind of just directional barometer so folks can at least try to set their models to be in the neighborhood, perhaps?

Yes. So I think there are a couple of puts and takes there. So first, as PreCheck phases into the P&L, I would describe PreCheck in the early days of being dilutive to gross margins. Over time, as that program scales and in particular, scales against the fixed costs running through cost of sales on that program, you're going to see gross margins expand. And then also, over time, as ancillary revenues get pulled into that program, those are going to be at a higher margin so you're going to mix higher. But in the short term, initially in that program, I would consider that program to be dilutive to gross margins. I think on the secure network side, I think there's opportunity for Secure Networks to mix slightly higher next year. And then in terms of the mix between solutions and networks, I would expect solutions to outgrow networks next year. And so you're going to see -- you should see a tailwind there. So headwinds in the form of PreCheck, tailwinds in the form of potentially higher margins within Secure Networks and then tailwinds in terms of better mix between solutions and networks.

Okay. Last one and then I'll cede the floor. It's now November 15. Is there any -- what's the status in your mind on the ramp of TSA? I'm reluctant to even ask since this has been kind of perpetually pushed off. But is there any chance of res in the March quarter? Or should we be thinking -- let's just start with June.

Mark? So I'm going to have Mark Griffin answer that question, Keith, directly, okay?

Keith, I want to first just touch on a point that the TSA Modernization Act of 2018 is a law that mandated that TSA expand PreCheck providers. So I just wanted to remind everyone on the phone that there isn't a question of if or when this program is mandated by law that it has to expand. And so our goal all along was to improve the passenger experience at checkpoint. And where we're at right now is, as we indicated earlier, both by Mark and John, the TSA is still indicating and is working with us daily, and we're here at our facility last week working through, we fully expect still to get our authority to operate this year and revenue to start ramping as early as January. Now it probably won't be significant in the first quarter, but we do start seeing revenue in the first quarter, not June.

Our next question comes from the line of Alex Henderson with Needham.

Since we were just talking about the TSA, can you give us a concise and clear explanation of why TSA has slipped as much as it has? Is it just simply because of the hacks that happened in the first half? What are -- what is the mechanics that's causing the slippage?

Alex, I'll ask Mark Griffin to answer that again directly for you guys.

Alex, yes, I believe the increased security heightened policy and procedure has added to some of that delay. As you know, as government contractor, we have to follow the process and procedures that the government mandates us for the authority to operate. And so part of the PreCheck expansion process is -- security is a heavy component of that. And TSA is very protective of their brand, and so they want to make sure that all expansion providers come out of the gate strong with a secure solution that has gone through all the vetting components within their whole organization.

Including their own.

Right. Including their own organization. And so we are seeing progress. I'm very confident we are moving forward in the right direction. Unfortunately, we are a government contractor, and we have to follow their process for the authority to operate.

Well, so going back to the calibration of the timing, is there anything different in the challenges of estimating the timing of when they're going to launch this now? I mean there was, say, 3 months ago when we got the third quarter guidance for the fourth quarter. Is there anything -- I mean I guess what I really don't understand is with only 1.5 months left, what gives you confidence this is actually going to close this year other than the press release, which cannot be relied upon since we've already seen press releases suggesting timing that hasn't been materialized?

Sure. I can appreciate that. We're seeing steps in the process as a security provider within the government. There are steps in the approval process that the government takes. They review your security documentation. So there's various steps that they take in that process. And although we were confident that those processes were going to begin on the last earnings call, they were delayed. And so now we have seen progress in the right move forward steps. And so those security processes, and those steps in the process are being taken now by TSA. And obviously, we're following suit in the process under their guidance.

Relative to the TSA, is there any change in the competitive dynamics that's associated with the timing of these ATOs that would either help you or hurt you as we ramp in '22?

So as you're aware, eligibility in the TSA PreCheck is expanding market due to population growth. So the population continues to grow. TSA awarded expansion contracts to 3 providers. So as such, the implied competition will always exist on this contract and hasn't changed based on the delay in the launch in...

Well, the question really goes to the question of how fast can those other companies comparatively get the approvals? Do they have the same time line? Or will you be able to because of the inclusion of Xacta and some of the other software advantages you have be able to get to market sooner than them? Or are you at risk of them getting compliance the ATO before you?

So government does not give us insight into the status of the other providers. However, we feel as though we're leading the approval process and making headway as a first out of gate solution provider. So I don't currently feel as though we'll not be first out of the gate from an expansion provider.

All right. So let me go to a second subject here. The commentary around the software growth being primarily in the second half of CY '22, really, it makes little or no sense to me in the context of the fact that you've already said that the salespeople that you've hired and the distribution expansions that you've hired have already resulted in significant benefits to your numbers and to your growth. And that, in fact, you felt that there was -- they were running ahead of budget. I don't understand why there would be a sudden lull for 6 months in the first half of '22 against the already improved performance of those participants.

Alex, this is John. What I've seen -- what we've seen is an expansion in the pipeline. And that's why I said earlier, as it relates to 2022 actual guidance, we will give that on Q4 earnings and then we'll go from there. I think Mark Bendza is trying to set expectations in a very conservative way. And my hope is that we'll be able to do better than what we're talking about as it relates to on Q4 earnings for 2022. And Mark, did I -- do you think I've said that correctly from your point of view?

Yes, I think that's fair. You answered it in a fair way.

But while that might be fair with the stock down at $18.50, down from $24.5, mechanics of why the revenue contribution from sales and distribution are going to be less than the first half than they were in the back half of this year is hard to understand. You've said in the past that you're already getting contribution from them.

I don't think that's going to happen, Alex. I think we're going to see good contribution from our sales and distribution channel partnerships. We're just -- again, without providing full guidance for 2022, we're just giving you sort of a heads up as we are -- where we are today.

All right. So let's shift gears again, go over to the Secure Networks side. I get it that it was up 85% this year. Obviously, that is a much lower gross margin product. And clearly, as that mix shifts away from that, that's going to be flat to down sequentially for '22, then I would assume that, that mix quite significantly improves the gross margin outlook for next year. Is there any reason why that would not be the case?

Yes. So there's a few puts and takes there. So within solutions itself, you're going to see a gross margin headwind as PreCheck phases into the P&L. In the early days of PreCheck, I would expect PreCheck to be dilutive to gross margins. And over time, as that program grows, you're going to see positive operating leverage against some fixed cost that's running through cost of sales in that program. And then you'll also see benefit over time from favorable mix shift as some additional ancillary higher-margin revenues get attached to that program. And then you're going to have a favorable mix shift between solutions and networks next year as solutions should outgrow networks. And then within networks, we think there's potential for slightly higher margins there as well. So those are kind of the puts and takes, the headwind from PreCheck and then tailwinds from mix shift between solutions and networks as well as possibly some slightly higher margins within networks.

Okay. So the TSA delay of $25 million, is that a reasonable baseline for quarterly revenues for '22 given you had expected to do that in the fourth quarter? I think you had expected to at least ramp that from the fourth quarter forward. But ignoring that point, assuming it kicked in by the end of the year, is it reasonable to think that the $100 million worth of revenue at least from the TSA to [pre-peak]?

So I would love to be more specific on that as we actually get a couple of months of experience in that program under our belts. But you could see a scenario where perhaps in the second half you could potentially see a run rate around those levels.

Our next question comes from the line of Nehal Chokshi with Northland Capital Markets.

Mark, when you say you're changing the way guide to include OEMs that have high visibility into, when you used the word, changing, does that mean that there's still more low-visibility items that you want to still scrub out here that may have a guidance here initial calendar '22 look through?

No, probably not in terms of '22. But in the interest of full transparency, the one thing I would like to highlight for the fourth quarter is around the supply chain constraints. Again, even at the bottom end of that guidance range, there's about $3 million of December shipments assumed in that guidance range. We believe those will go out. But again, these are -- this is -- these supply chain constraints are 2 levels down here. So these are suppliers to our subcontractor, in particular around electronics and electronic components and plastics. And so there's a solid $3 million of additional risk there at the bottom end of the guidance range. And there's also another $6.5 million of shipments that we thought would have gone out by now, which are delayed within the quarter. We feel a little better on those that those will go out this quarter. But there's still -- I didn't scrub everything out. I left $3 million in there at the bottom end of the range. And now with respect to '22, yes, I think at this stage, based on what we know, I think the high-level year-over-year direction for solutions and networks that I provided at this stage reflects kind of our current thinking on '22. But again, bear with us, we'll give guidance on the 4Q call. We're working through our '22 planning process and looking at different scenarios right now.

Okay. And then with respect to effectively a high 30% preliminary look, and high 30% year-over-year growth or preliminary look into calendar '22 Security Solutions, is that going to be even across the 3 subsegments? Or it sounds like it probably would be more weighted towards IDTrust360. Is that a correct interpretation?

Yes. I think that's the right way of thinking about it. I would say within solutions, the single largest growth driver would be the ramp in PreCheck.

Okay. Okay. Got it. And then within the 3Q '21 performance, you did say you had 56% year-over-year growth in Security Solutions adjusting for the Census Bureau from the year ago period. Is that 56% year-over-year growth relatively even across the 3 subsegments? Or how does that parse out there?

Yes. So the single -- I would say the largest grower there is within Telos ID, followed by information assurance, which is primarily our Xacta Solutions capability.

Right. Okay. All right. And then finally, John, in your part of script, you mentioned a lot of FedRAMP related Xacta wins with industry bellwethers, such as VMware and Salesforce. What percent of FedRAMP associated opportunity do you think Telos has now captured? And for the other percent, what's the typical legacy solution being utilized?

Yes. I would say it's a very small percentage right now, Nehal. And the way that people do it, generally speaking, is manually. So I think there's a great opportunity in front of us to expand that significantly because we are using automation to reduce the time it takes to actually get to FedRAMP compliance.

Thank you. This will conclude today's question-and-answer session. I will now turn the call back over to John Wood for closing remarks.

Guys, I just want to thank our shareholders for their ongoing support. We delivered strong results in the third quarter of '21, and we're well positioned to capitalize on the increased emphasis on cybersecurity across commercial and government organizations. We've got really, really solid outstanding people. We've got leading Security Solutions and tremendous potential. And while we have had a couple of issues with regard to our larger programs, I've actually never been more excited about Telos' future than I am today. So I just want to say thank you all for listening. And remember, this is a long-term investment, one that I'm -- I plan to be a part of for a long time as long as you guys will have me. Thanks a lot. Bye-bye now.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.