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SEGMENT INFORMATION
 12 Months Ended
Dec. 31, 2023
Segment Reporting [Abstract]  
SEGMENT INFORMATION SEGMENT INFORMATION
As noted in Note 2 – Significant Accounting Policies, we conduct our operations through two operating segments: Security Solutions and Secure Networks.
•Our Security Solutions segment is primarily focused on cybersecurity, cloud and identity solutions, and secure messaging through Xacta, Telos Ghost, Telos Advanced Cyber Analytics ("Telos ACA"), Telos Automated Message Handling System ("AMHS") and Telos ID offerings. We recognize revenue on contracts from providing various system platforms in the cloud, on-premises, and in hybrid cloud environments, as well as software sales or software-as-a-service. Revenue associated with the segment's custom solutions is recognized as work progresses or upon delivery of services and products. Fluctuation in revenue from period to period is the result of the volume of software sales, and the progress or completion of cloud and/or cybersecurity solutions during the period. The majority of the operating costs relate to labor, material, and overhead costs. Software sales have immaterial operation costs associated with them, thus yielding higher margins. Gross profit and margin are a function of operational efficiency on security solutions and changes in the volume of software sales.
•Our Secure Networks segment provides secure networking architectures and solutions to our customers through secure mobility solutions, and network management and defense services. Revenue is recognized over time as the work progresses on contracts related to managing network services and information delivery. Contract costs include labor, material, and overhead costs. Variances in costs recognized from period to period primarily reflect increases and decreases in activity levels on individual contracts.
Table 18.1: Results of Operations by Business Segment
For the Year Ended December 31,
20232022
(in thousands)
Revenues
Security Solutions$77,416 $120,454 
Secure Networks67,962 96,433 
Total revenue145,378 216,887 
Gross profit
Security Solutions39,614 61,948 
Secure Networks13,328 17,095 
Total gross profit52,942 79,043 
Selling, general and administrative expenses93,257 132,893 
Operating loss(40,315)(53,850)
Other income6,715 1,350 
Interest expense(786)(874)
Loss before income taxes(34,386)(53,374)
Provision for income taxes(36)(54)
Net loss$(34,422)$(53,428)
We measure each segment's profitability based on gross profit. We account for inter-segment sales and transfers as if the sales or transfers were to third parties, that is, at current market prices. Interest income, interest expense, other income and expense items, and income taxes, as reported in the consolidated financial statements, are not part of the segment profitability measure and are primarily recorded at the corporate level.
Management does not utilize total assets by segment to evaluate segment performance or allocate resources. As a result, assets are not tracked by segment, and therefore, total assets by segment are not disclosed.