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Financial report summary
?Competition
Telos • Leidos • Nic • Digimarc • Leidos • Science Applications International • nDivisionRisks
- A significant portion of our revenue is derived from our installed base. Future results may be adversely impacted if we are unable to maintain our installed base and sell new solutions and related services to existing and new clients.
- Future results may be materially adversely impacted if we are unable to grow revenue, expand profit margin and generate sufficient cash flows in our businesses.
- Our results of operations have been, and may in the future be, adversely affected by volatile, negative or uncertain economic and political conditions as well as acts of war, terrorism, natural disasters or the widespread outbreak of infectious diseases.
- Our inability to effectively anticipate and respond to rapid technological innovation, such as artificial intelligence among others, in our industry could affect our results of operations and cash flows.
- Our work with government and public sector clients exposes us to additional risks inherent in the government contracting and public sector environment.
- If we are unable to align employees and their skills with global client demand around the world and retain and develop employees and management with strong leadership skills, our business may be adversely impacted.
- We have been, and expect in the future to be, required to contribute additional cash to meet our significant underfunded defined benefit pension plan obligations, and these contributions could have a material impact on our operations, financial condition and liquidity.
- We face aggressive competition, which could lead to reduced demand for our solutions and related services and could have an adverse effect on our business.
- Future results depend in part on the pricing, performance and capabilities of third parties with whom we have commercial relationships.
- Our commercial contracts have not been, and in the future may not be, as profitable as expected or provide the expected level of revenue.
- If we are unable to protect or enforce our intellectual property rights, our services or solutions infringe upon the intellectual property rights of others or we lose our ability to utilize the intellectual property of others, our business could be adversely affected.
- We could face business and financial risk through the completion of acquisitions or dispositions.
- Our global operations expose us to numerous and sometimes conflicting legal and regulatory requirements, and violations of these legal and regulatory requirements could harm our business and cause reputational risk.
- If we fail again to maintain an effective system of internal control over financial reporting and disclosure controls and procedures, our ability to report timely and accurate financial results or comply with applicable regulations could be impaired, and our business and operating results may be adversely affected.
- Legal proceedings and environmental matters have and may continue to impact our results of operations and cash flows.
- Failure to meet ESG expectations and standards, achieve our ESG goals, or comply with ESG regulations or laws could adversely affect our business, results of operations, financial condition, stock price or reputation.
- Our ability to use our net operating loss (NOL) carryforwards and certain other tax attributes may be limited.
- Impairment of goodwill or intangible assets may negatively impact our results of operations.
Management Discussion
- Revenue for 2023 was $2.02 billion compared with $1.98 billion for 2022, an increase of 1.8%. Foreign currency fluctuations had a negligible impact on revenue in 2023 compared with 2022.
- Revenue from international operations for both 2023 and 2022 was $1.13 billion. Foreign currency had a negligible impact on international revenue in 2023 compared with 2022. Revenue from U.S. operations was $889.0 million for 2023 compared with $854.9 million for 2022, an increase of 4.0%.
- During 2023, the company recognized cost-reduction charges and other costs of $9.3 million. The net charges related to workforce reductions were $8.3 million, principally related to severance costs, and were comprised of: (a) a charge of $15.2 million and (b) a credit of $6.9 million for changes in estimates. In addition, the company recorded net charges of $1.0 million comprised of charges of $4.7 million primarily related to professional fees and other expenses related to cost-reduction efforts and a credit of $3.7 million for net foreign currency gains related to exiting foreign countries. See Note 4, “Cost-reduction actions,” of the Notes to Consolidated Financial Statements for details of the cost reduction activities.