DLH Holdings (DLHC) Company Report

DLH Holdings reported Q1 2026 revenue of $68.9 million and Adjusted EBITDA of $6.5 million. The revenue decline was primarily due to an $18 million decrease from small business set-aside conversions, mainly CMOP and Head Start. Adjusted EBITDA margin sequentially improved to 9.5%.
The company's debt increased to $136.6 million in Q1 2026, but they expect to convert 50%-55% of fiscal 2026 EBITDA to reduce debt by year-end. Free cash flow usage of $4.8 million in the quarter was a significant improvement compared to the prior year.
Q1 2026 operations were impacted by the longest government shutdown and a short-term funding gap, but the recently enacted budget provides improved funding visibility for clients. The CMOP work is expected to fully wrap up by Q3 fiscal 2026.
The cancellation of the CIO-SP4 contract affected bid opportunities, but the company views the resulting clarity as positive for pivoting its strategy. DLH is also observing a shift towards more commercial best practice vehicles and rapid deployment models in government contracting.

Feb 10, 2026, 3:00 PM

Transcript

DLH Holdings Announces Q1 FY26 Earnings Results

DLHC

Earnings

Guidance Update

DLH Holdings reported Q1 FY26 revenue of $68.9 million, a decrease from $90.8 million in Q1 FY25, with Adjusted EBITDA of $6.5 million (9.5% of revenue) compared to $9.9 million (11.0% of revenue) in the prior year period.
Free Cash Flow improved to $(4.8) million in Q1 FY26 from $(12.1) million in Q1 FY25.
Total Debt increased to $136.6 million in Q1 FY26 from $131.6 million in Q4 FY25, primarily due to short-term working capital demands.
The company expects to convert 50-55% of EBITDA earned during the fiscal year to debt reduction by the end of Q4 FY26 and noted an improved federal funding environment and strengthening demand signals in core markets.

Feb 10, 2026, 3:00 PM

Presentation

DLH Holdings Reports Q1 2026 Results with Revenue Decline and Improved Free Cash Flow

DLHC

Earnings

Guidance Update

Demand Weakening

DLH Holdings reported revenue of $68.9 million for the first quarter of fiscal 2026, a decrease from $90.8 million in the prior year period, primarily due to an approximate $18 million decrease from small business set-aside conversions, mainly CMOP and Head Start.
Adjusted EBITDA for Q1 2026 was $6.5 million, down from $9.9 million in the prior year, though the Adjusted EBITDA margin improved sequentially to 9.5%.
The company used approximately $4.8 million in free cash flow during the quarter, a significant improvement compared to the $12.1 million used in the prior year period.
Debt increased to $136.6 million in Q1 2026, but DLH Holdings expects to convert approximately 50%-55% of fiscal 2026 EBITDA to reduce debt by year-end.
The recently enacted budget provides increased funding capacity and improved visibility for clients, which is expected to positively impact the company's organic growth initiatives, despite the cancellation of CIO-SP4.

Feb 10, 2026, 3:00 PM

Transcript

DLH Holdings Reports Q1 2026 Results with Revenue Decline and Sequential EBITDA Margin Improvement

DLHC

Earnings

Guidance Update

New Projects/Investments

DLH Holdings reported Q1 2026 revenue of $68.9 million, a decrease from $90.8 million in the prior year, primarily due to an approximate $18 million impact from small business set-aside conversions for CMOP and Head Start programs.
Adjusted EBITDA for the quarter was $6.5 million, down from $9.9 million year-over-year, but the Adjusted EBITDA margin improved sequentially to 9.5%.
The company used approximately $4.8 million in free cash flow, an improvement from $12.1 million used in the prior year, with debt increasing to $136.6 million due to typical Q1 working capital needs and the government shutdown.
Management expects the complete wrap-up of CMOP work by Q3 of fiscal year 2026 and anticipates converting 50%-55% of fiscal 2026 EBITDA to reduce debt.
Despite challenges like the cancellation of CIO-SP4, the recently enacted budget provides improved clarity and stability, supporting organic growth initiatives and a shift towards more commercial best practice vehicles in government contracting.

Feb 10, 2026, 3:00 PM

Transcript

DLH Holdings Corp. Announces Fiscal First Quarter 2026 Results

DLHC

Earnings

Demand Weakening

Guidance Update

DLH Holdings Corp. reported revenue of $68.9 million for its fiscal first quarter ended December 31, 2025, representing a 24.1% decrease from the prior year, primarily due to the transition of certain programs to small-business set-aside contractors.
The company recorded a net loss of $(1.3) million and diluted earnings per share of $(0.09) for Q1 FY2026, a decline from a net income of $1.1 million and diluted EPS of $0.08 in the same period last year.
Adjusted EBITDA decreased to $6.5 million, or 9.5% of revenue, in Q1 FY2026 from $9.9 million (11.0% of revenue) in Q1 FY2025, benefiting from cost reduction initiatives.
Operating cash usage was $4.8 million, an improvement of almost $7 million year-over-year, while debt modestly increased to $136.6 million as of December 31, 2025, with management expecting further delevering in fiscal 2026.

Feb 9, 2026, 9:39 PM

8-K

DLH Holdings Reports Q1 2026 Loss Amid Revenue Decline

DLHC

Earnings

Guidance Update

Demand Weakening

DLH Holdings reported fiscal Q1 2026 revenue of $68.9 million, a year-over-year decline from $90.8 million, and a non-GAAP loss of $0.09 per share, both missing analyst estimates.
The revenue shortfall was largely attributed to program conversions to small-business set-asides, particularly CMOP and Head Start contract transitions, which contributed approximately $18 million to the decline.
The company's quarter-end debt rose to $136.6 million, with management planning to convert roughly 50%-55% of full-year fiscal 2026 EBITDA into debt reduction.
While near-term pressure is expected to continue until contract transitions are complete, management anticipates clearer demand for modernization work from stronger federal health agency budgets in fiscal 2026.

Feb 9, 2026, 9:24 PM

Morningstar

DLH Holdings Reports Fiscal First Quarter 2026 Results

DLHC

Earnings

Profit Warning

DLH Holdings Corp. reported revenue of $68.9 million for the fiscal first quarter ended December 31, 2025, marking a 24.1% decrease from the prior year, primarily due to the transition of certain programs to small-business set-aside contractors.
The company posted a net loss of $(1.3) million and diluted EPS of $(0.09) for Q1 2025, compared to net income of $1.1 million and diluted EPS of $0.08 in Q1 2024.
Adjusted EBITDA decreased by 34.3% to $6.5 million (9.5% of revenue) in Q1 2025, benefiting from cost reduction initiatives.
Operating cash usage improved by almost $7 million year-over-year, with net cash used in operating activities of $(4.8) million for Q1 2025.
Debt rose modestly to $136.6 million at December 31, 2025, due to short-term working capital needs, but the company anticipates further delevering during fiscal 2026.

Feb 9, 2026, 9:15 PM

Press Release

DLHC Announces Q4 and Fiscal Year 2025 Results

DLHC

Earnings

Debt Issuance

New Projects/Investments

DLHC reported Q4 2025 revenue of $81.2 million, EBITDA of $6.6 million, and Free Cash Flow of $10.7 million.
For the full fiscal year 2025, the company achieved revenue of $344.5 million, EBITDA of $34.0 million, and Free Cash Flow of $23.0 million.
The company significantly reduced its total debt by $10.7 million in Q4 2025, bringing the total to $131.6 million, and paid mandatory term debt through September 30, 2026, a year ahead of schedule.
DLHC secured new contract awards, including an NIH Office of Information Technology contract and a sole-source Indefinite Quantity/Indefinite Delivery contract for pharmacy and logistic services at multiple CMOP locations, and achieved CMMC Level 2 certification.

Dec 11, 2025, 3:00 PM

Presentation

DLH Holdings Corp. Reports Q4 and Full-Year 2025 Results, Highlights Strategic Transformation

DLHC

Earnings

Guidance Update

New Projects/Investments

DLH Holdings Corp. reported Q4 2025 revenue of $81.2 million and EBITDA of $6.6 million, with full-year 2025 revenue reaching $344.5 million and EBITDA of $34 million. The Q4 revenue decline was largely attributed to $11 million from small business set-aside conversions and contract unbundling.
The company demonstrated strong financial management by reducing debt by $10.7 million in Q4, bringing the fiscal year-end balance to $131.6 million, and has made all mandatory term debt payments through September 30, 2026, a year ahead of schedule.
Strategically, DLH is focusing on technology-powered solutions, achieving Cybersecurity Maturity Model Level Two (CMMC) certification and developing AI/ML tools like DLH Cyclone.
Management is optimistic about future performance, expecting a return to low double-digit organic growth and historical EBITDA margins, supported by a pipeline of qualified opportunities exceeding $3 billion.

Dec 11, 2025, 3:00 PM

Transcript

DLH Holdings Corp. Reports Q4 and Full-Year 2025 Results, Highlights Debt Reduction and Strategic Transformation

DLHC

Earnings

Guidance Update

New Projects/Investments

DLH Holdings Corp. (DLHC) reported Q4 2025 revenue of $81.2 million and full-year 2025 revenue of $344.5 million, with the quarterly decline primarily due to $11 million from small business set-aside conversions and contract unbundling.
EBITDA for Q4 2025 was $6.6 million (8.1% of revenue) and $34 million for the full year (approximately 10% of revenue). The company expects to return to historical gross and EBITDA margins with growth and scaling activities.
DLHC significantly reduced its debt, ending fiscal year 2025 with $131.6 million outstanding, a $23 million reduction over 12 months, and has made all mandatory term debt payments through September 30, 2026, a year ahead of schedule.
Strategically, DLHC achieved Cybersecurity Maturity Model Level Two (CMMC) certification and is focusing on digital transformation, cybersecurity, and AI/ML-powered solutions like DLH Cyclone. The company is optimistic about returning to low double-digit organic growth and has a qualified opportunities pipeline north of $3 billion.