DLH Holdings (NASDAQ: DLHC) posts Q2 loss on 33% revenue drop
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
DLH Holdings reported a weak fiscal 2026 second quarter as its legacy contracts transitioned to small-business set‑aside competitors. Revenue fell to $59.3 million from $89.2 million, a 33.5% decline year over year, driven by the loss of these legacy programs.
The company swung to a net loss of $2.5 million, or $(0.17) per diluted share, compared with net income of $0.9 million, or $0.06 per share, a year earlier. Adjusted EBITDA dropped to $5.3 million from $9.4 million, though the margin of 9.0% shows cost-cutting helped preserve profitability on a smaller revenue base.
Free cash flow was $3.8 million versus $14.5 million in the prior-year quarter. Total debt stood at $132.7 million, modestly down from $136.6 million at the end of the first quarter, while backlog declined to $442.4 million from $514.3 million as of September 30, 2025. DLH also secured a two‑year sole source extension for its NIH clinical research support contract.
Positive
- None.
Negative
- None.
Insights
DLH’s Q2 shows sharp revenue decline, a swing to loss, and softer cash flow during a contract transition year.
DLH’s revenue fell to $59.3M, down 33.5% year over year, as legacy programs moved to small‑business set‑aside contractors. This pushed operating results from a $5.1M profit to a small operating loss and net income from $0.9M to a $(2.5)M loss.
Profitability metrics deteriorated: EBITDA dropped from $9.4M to $4.2M, and Adjusted EBITDA declined to $5.3M, though the margin of 9.0% indicates cost scaling actions partially offset the revenue shock. Free cash flow also fell sharply, to $3.8M from $14.5M in the prior‑year quarter.
Leverage remains notable, with debt of $132.7M and backlog down 14.0% to $442.4M as of March 31, 2026. Management frames fiscal 2026 as a transition year, highlighting cost realignment and a two‑year sole source NIH extension, but future performance will depend on replacing transitioned work with newer technology‑focused contracts.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Revenue: $59.3M
Net income (loss): $(2.5M)
Diluted EPS: $(0.17)
+5 more
8 metrics
Revenue
$59.3M
Three months ended March 31, 2026; down 33.5% year over year
Net income (loss)
$(2.5M)
Three months ended March 31, 2026; versus $0.9M prior year
Diluted EPS
$(0.17)
Q2 2026 diluted earnings (loss) per share vs $0.06 in Q2 2025
Adjusted EBITDA
$5.3M
Q2 2026, compared with $9.4M in Q2 2025; 9.0% margin
Free cash flow
$3.8M
Q2 2026 free cash flow vs $14.5M prior-year quarter
Debt
$132.7M
Total debt at March 31, 2026; slightly above $131.6M at Sept 30, 2025
Backlog
$442.4M
Backlog at March 31, 2026 vs $514.3M at Sept 30, 2025 (−14.0%)
EBITDA
$4.2M
Q2 2026 EBITDA vs $9.4M in Q2 2025; 7.2% margin
Key Terms
Adjusted EBITDA, Free Cash Flow, backlog, cost scaling initiatives, +1 more
5 terms
Adjusted EBITDA financial
"Adjusted EBITDA of $5.3 million, or 9.0% of revenue, with the Company's cost scaling initiatives sustaining adjusted EBITDA margin"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Free Cash Flow financial
"Free cash flow of $3.8 million, with cash generation expected to accelerate in the second half of fiscal 2026"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
backlog financial
"Backlog | $442.4 | $514.3 | (14.0)%"
A backlog is the amount of work or orders that a company has received but hasn't completed yet. It’s like a restaurant with many dishes to serve; the backlog shows how many orders are still waiting to be finished. It matters because a large backlog can indicate strong demand or potential delays in delivering products or services.
cost scaling initiatives financial
"cost scaling initiatives consist of expenses incurred by the Company in scaling its business to align with its current contract volume"
small-business set-aside contractors regulatory
"transition of legacy programs to small-business set-aside contractors"
Earnings Snapshot
Revenue: $59.3M
Quarter ended March 31, 2026
Revenue
$59.3M
-33.5% YoY
Net income (loss)
$(2.5M)
-377.8% YoY
Diluted EPS
$(0.17)
-383.3% YoY
Adjusted EBITDA
$5.3M
-43.6% YoY
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): May 06, 2026
(Exact name of Registrant as Specified in its Charter)
| (State or Other Jurisdiction of Incorporation | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of Principal Executive Offices, and Zip Code)
(770 ) 554-3545
Registrant's telephone number, Including Area Code
(Former Name or Former Address, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |||||||||
| Capital Market | |||||||||||
CHECK THE APPROPRIATE BOX BELOW IF THE FORM 8-K FILING IS INTENDED TO SIMULTANEOUSLY SATISFY THE FILING OBLIGATION OF THE REGISTRANT UNDER ANY OF THE FOLLOWING PROVISIONS: | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition | ||||||||||
On May 6, 2026, DLH Holdings Corp. announced by press release its financial results for its fiscal quarter ended March 31, 2026. A copy of the press release is attached hereto as Exhibit 99.1. | |||||||||||
The information furnished pursuant to Item 2.02 of this Current Report, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. | |||||||||||
| Item 9.01 | Financial Statements and Exhibits | ||||||||||
| (d) Exhibits | |||||||||||
| The following exhibit is attached to this Current Report on Form 8-K: | |||||||||||
Exhibit Number | Exhibit Title or Description | ||||||||||
99.1 | Press Release dated May 6, 2026 | ||||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| DLH Holdings Corp. | ||||||||
| By: /s/ Kathryn M. JohnBull | ||||||||
| Name: Kathryn M. JohnBull | ||||||||
| Title: Chief Financial Officer | ||||||||
Date: May 6, 2026 | ||||||||
DLH Reports Fiscal 2026 Second Quarter Results
ATLANTA, May. 6, 2026 – DLH Holdings Corp. (NASDAQ: DLHC) (“DLH” or the “Company”), a leading provider of digital transformation and cybersecurity, systems engineering and integration, and science research and development, today announced financial results for its fiscal second quarter ended March 31, 2026.
Q2 Highlights:
•Revenue change both year-over-year and sequentially, from the first quarter of fiscal 2026, primarily reflects the transition of legacy programs to small-business set-aside contractors
•Adjusted EBITDA of $5.3 million, or 9.0% of revenue, with the Company's cost scaling initiatives sustaining adjusted EBITDA margin on the current revenue volume
•Free cash flow of $3.8 million, with cash generation expected to accelerate in the second half of fiscal 2026
•Debt was reduced to $132.7 million, from $136.6 million at the end of the first quarter, with greater reductions expected before the end of fiscal 2026
•Awarded a two-year sole source extension of our contract to provide clinical research support services to NIH.
Management Discussion:
“Fiscal 2026 is a transition year for DLH, with the previously disclosed conversion of legacy contracts to small businesses continuing and expected to complete in our 3rd quarter. We have proactively right-sized our cost structure to align with the Technology Powered Solutions business base, successfully protecting our margins.” said Zach Parker, DLH President and Chief Executive Officer. “With a leaner operating model and improving demand from our government customers, we are positioned to capture the digital modernization, cybersecurity and AI opportunities aligned with our core capabilities. We remain focused on profitable growth and free cash flow generation to reduce debt and expand our current portfolio of solutions and services.”
Operating Financial Summary
Three Months Ended | |||||||||||
March 31, | |||||||||||
$ million | 2026 | 2025 | % Change | ||||||||
Revenue | $59.3 | $89.2 | (33.5)% | ||||||||
Income (loss) from operations | $(0.1) | $5.1 | (102.0)% | ||||||||
Adjusted Income from operations | $1.0 | $5.1 | (80.4)% | ||||||||
Net income (loss) | $(2.5) | $0.9 | (377.8)% | ||||||||
Diluted Earnings (Loss) Per Share | $(0.17) | $0.06 | (383.3)% | ||||||||
EBITDA | $4.2 | $9.4 | (55.3)% | ||||||||
Adjusted EBITDA | $5.3 | $9.4 | (43.6)% | ||||||||
EBITDA margin on Revenue | 7.2% | 10.5% | (31.4)% | ||||||||
Adjusted EBITDA margin on Revenue | 9.0% | 10.5% | (14.3)% | ||||||||
Cash provided by Operating Activities⁽¹⁾ | $3.8 | $14.5 | (73.8)% | ||||||||
Free Cash Flow⁽¹⁾ | $3.8 | $14.5 | (73.8)% | ||||||||
(1) Operating cash flow and free cash flow for the quarter are derived by subtracting from this quarter's year-to-date amount the year-to-date amount reported in the Company’s prior Quarterly Report on Form 10-Q.
Additional Financial Metrics
March 31, 2026 | September 30, 2025 | % Change | |||||||||
Debt | $132.7 | $131.6 | 0.8% | ||||||||
Backlog | $442.4 | $514.3 | (14.0)% | ||||||||
Earnings Call & Webcast:
DLH management will discuss second quarter results and provide a general business update, including current competitive conditions and strategies, during a conference call beginning at 10:00 AM Eastern Time tomorrow, May 7, 2026. Interested parties may listen to the conference call by dialing 888-347-5290 or 412-317-5256. Presentation materials will also be posted on the Investor Relations section of the DLH website prior to the commencement of the conference call.
A digital recording of the conference call will be available for replay two hours after the completion of the call and can be accessed on the DLH Investor Relations website or by dialing 855-669-9685 and entering the conference ID #6965160.
About DLH:
DLH (NASDAQ: DLHC) enhances technology, public health, and cyber security readiness missions through science, technology, cyber, and engineering solutions and services. Our experts solve some of the most complex and critical missions faced by federal customers, leveraging digital transformation, artificial intelligence, advanced analytics, cloud-based applications, telehealth systems, and more. With a world-class workforce dedicated to the idea that “Your Mission is Our Passion,” DLH brings a unique combination of government sector experience, proven methodology, and unwavering commitment to innovative solutions to improve the lives of millions. For more information, visit www.DLHcorp.com.
Contact Information:
Investor Relations
Chris Witty
(646) 438-9385
cwitty@darrowir.com
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events or DLH`s future financial performance. Any statements that refer to expectations, projections or other characterizations of future events or circumstances or that are not statements of historical fact (including without limitation statements to the effect that the Company or its management “believes”, “expects”, “anticipates”, “plans”, “intends” and similar expressions) should be considered forward-looking statements that involve risks and uncertainties which could cause actual events or DLH’s actual results to differ materially from those indicated by the forward-looking statements. Forward-looking statements in this release include, among others, statements regarding benefits of acquisitions, estimates of future revenues, operating income, earnings, earnings per share, backlog, and cash flows. These statements reflect our belief and assumptions as to future events that may not prove to be accurate. Our actual results may differ materially from such forward-looking statements made in this release due to a variety of factors, including: the failure to achieve the anticipated benefits of any future acquisition (including anticipated future financial operating performance and results); the inability to retain employees and customers; contract awards in connection with re-competes for present business and/or competition for new business; our ability to manage our debt obligations; compliance with bank financial and other covenants; changes in client budgetary priorities; government contract procurement (such as bid and award protests, small business set asides, loss of work due to organizational conflicts of interest, etc.) and termination risks; significant delays or reductions in appropriations for our programs and broader changes in U.S. government funding and spending patterns; legislation that amends or changes discretionary spending levels or budget priorities; legal, regulatory, and political changes from the federal government that could result in economic uncertainty; the impact of inflation and higher interest rates; and other risks described in our SEC filings. For a discussion of such risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in the Company’s periodic reports filed with the SEC, including our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, as well as interim quarterly filings thereafter. The forward-looking statements contained herein are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry and business.
Such forward-looking statements are made as of the date hereof and may become outdated over time. The Company does not assume any responsibility for updating forward-looking statements.
DLH HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
March 31, | March 31, | |||||||||||||||||||||||||
2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
Revenue | $ | 59,265 | $ | 89,212 | $ | 128,158 | $ | 179,994 | ||||||||||||||||||
Cost of operations: | ||||||||||||||||||||||||||
Contract costs | 47,490 | 71,594 | 102,885 | 144,365 | ||||||||||||||||||||||
General and administrative costs | 7,530 | 8,238 | 15,291 | 16,305 | ||||||||||||||||||||||
Depreciation and amortization | 4,300 | 4,265 | 8,600 | 8,572 | ||||||||||||||||||||||
Total operating costs | 59,320 | 84,097 | 126,776 | 169,242 | ||||||||||||||||||||||
Income (loss) from operations | (55) | 5,115 | 1,382 | 10,752 | ||||||||||||||||||||||
Interest expense, net | 3,139 | 3,877 | 6,535 | 8,010 | ||||||||||||||||||||||
Income (loss) before provision for income taxes | (3,194) | 1,238 | (5,153) | 2,742 | ||||||||||||||||||||||
Provision for income taxes (benefit) | (659) | 360 | (1,294) | 750 | ||||||||||||||||||||||
Net income (loss) | $ | (2,535) | $ | 878 | $ | (3,859) | $ | 1,992 | ||||||||||||||||||
Net income (loss) per share | ||||||||||||||||||||||||||
Basic | $ | (0.17) | $ | 0.06 | $ | (0.27) | $ | 0.14 | ||||||||||||||||||
Diluted | $ | (0.17) | $ | 0.06 | $ | (0.27) | $ | 0.14 | ||||||||||||||||||
Weighted average common stock outstanding | ||||||||||||||||||||||||||
Basic | 14,493 | 14,386 | 14,493 | 14,386 | ||||||||||||||||||||||
Diluted | 14,493 | 14,454 | 14,493 | 14,454 | ||||||||||||||||||||||
DLH HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value of shares)
March 31, 2026 | September 30, 2025 | |||||||||||||
(unaudited) | ||||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash | $ | 131 | $ | 125 | ||||||||||
Accounts receivable | 33,642 | 38,394 | ||||||||||||
Other current assets | 3,013 | 4,018 | ||||||||||||
Total current assets | 36,786 | 42,537 | ||||||||||||
Goodwill | 138,161 | 138,161 | ||||||||||||
Intangible assets, net | 83,638 | 91,865 | ||||||||||||
Operating lease right-of-use assets | 7,760 | 8,764 | ||||||||||||
Deferred income taxes, net | 9,310 | 7,947 | ||||||||||||
Equipment and improvements, net | 942 | 1,274 | ||||||||||||
Other long-term assets | 115 | 115 | ||||||||||||
Total assets | $ | 276,712 | $ | 290,663 | ||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable and accrued liabilities | $ | 12,445 | $ | 19,246 | ||||||||||
Accrued payroll | 7,181 | 12,153 | ||||||||||||
Debt obligations - current, net of deferred financing costs | 19,450 | 8,067 | ||||||||||||
Operating lease liabilities - current | 3,022 | 2,918 | ||||||||||||
Other current liabilities | 193 | 287 | ||||||||||||
Total current liabilities | 42,291 | 42,671 | ||||||||||||
Long-term liabilities: | ||||||||||||||
Debt obligations - long-term, net of deferred financing costs | 110,511 | 119,966 | ||||||||||||
Operating lease liabilities - long-term | 12,595 | 14,022 | ||||||||||||
Other long-term liabilities | 1,045 | 1,046 | ||||||||||||
Total long-term liabilities | 124,151 | 135,034 | ||||||||||||
Total liabilities | 166,442 | 177,705 | ||||||||||||
Shareholders' equity: | ||||||||||||||
Common stock, $0.001 par value; 40,000 shares authorized; 14,493 and 14,493 shares issued and outstanding at March 31, 2026 and September 30, 2025, respectively | 14 | 14 | ||||||||||||
Additional paid-in capital | 102,905 | 101,734 | ||||||||||||
Retained earnings | 7,351 | 11,210 | ||||||||||||
Total shareholders’ equity | 110,270 | 112,958 | ||||||||||||
Total liabilities and shareholders' equity | $ | 276,712 | $ | 290,663 | ||||||||||
DLH HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(Amounts in thousands)
Six Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2026 | 2025 | |||||||||||||
Operating activities | ||||||||||||||
Net income (loss) | $ | (3,859) | $ | 1,992 | ||||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||
Depreciation and amortization | 8,600 | 8,572 | ||||||||||||
Amortization of deferred financing costs charged to interest expense | 857 | 880 | ||||||||||||
Stock-based compensation expense | 1,264 | 725 | ||||||||||||
Deferred income taxes, net | (1,363) | 1,530 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Accounts receivable | 4,752 | (1,864) | ||||||||||||
Other assets | 1,958 | (638) | ||||||||||||
Accounts payable and accrued liabilities | (6,801) | (7,927) | ||||||||||||
Accrued payroll | (4,972) | (402) | ||||||||||||
Other liabilities | (1,420) | 97 | ||||||||||||
Net cash provided by (used in) operating activities | (984) | 2,965 | ||||||||||||
Investing activities | ||||||||||||||
Purchase of equipment and improvements | (39) | (1) | ||||||||||||
Net cash used in investing activities | (39) | (1) | ||||||||||||
Financing activities | ||||||||||||||
Proceeds from revolving line of credit | 112,030 | 117,850 | ||||||||||||
Repayments of revolving line of credit | (109,408) | (116,008) | ||||||||||||
Repayments of debt obligations | (1,500) | (4,750) | ||||||||||||
Payments of deferred financing costs | — | (202) | ||||||||||||
Payments for taxes related to net share settlement of restricted stock units | (93) | — | ||||||||||||
Net cash provided by (used in) financing activities | 1,029 | (3,110) | ||||||||||||
Net change in cash | 6 | (146) | ||||||||||||
Cash - beginning of period | 125 | 342 | ||||||||||||
Cash - end of period | $ | 131 | $ | 196 | ||||||||||
Supplemental disclosure of cash flow information | ||||||||||||||
Cash paid during the period for interest | $ | 5,276 | $ | 7,165 | ||||||||||
Cash paid during the period for income taxes | $ | 724 | $ | 508 | ||||||||||
Supplemental disclosure of non-cash activity | ||||||||||||||
Common stock surrendered for the settlement of restricted stock units | $ | 93 | $ | — | ||||||||||
Lease liability recognized to acquire a right-of-use asset | $ | — | $ | 1,377 | ||||||||||
Non-GAAP Financial Measures
The Company uses Adjusted Income from Operations, EBITDA, Adjusted EBITDA, EBITDA as a percent of revenue, and Adjusted EBITDA as a percent of revenue as supplemental non-GAAP measures of performance. The Company uses Free Cash Flow as a supplemental non-GAAP liquidity measure. We define the measures as follows:
Adjusted Income from Operations represents income from operations before the costs associated with scaling general and administrative costs to revenue volume, referred to below as cost scaling initiatives.
EBITDA represents net income before income taxes, interest, depreciation and amortization; Adjusted EBITDA represents net income before income taxes, interest, depreciation and amortization and the costs associated with scaling general and administrative costs to revenue volume.
EBITDA and Adjusted EBITDA as a percent of revenue are calculated by dividing EBITDA or Adjusted EBITDA, respectively, for the measurement period by revenue for the same period.
Free cash flow is net cash provided by operating activities less the impact of purchases of equipment and improvements.
Adjusted Income from Operations, EBITDA, Adjusted EBITDA, EBITDA as a percent of revenue, and Adjusted EBITDA as a percent of revenue are non-GAAP measures of performance and are used by management to conduct and evaluate its business during its review of operating results for the periods presented. Free Cash Flow, a non-GAAP liquidity measure, is used by management to assess our ability to generate cash from our business operations and plan for future operating and capital actions.
Management and the Company's Board utilize these non-GAAP measures to make decisions about the use of the Company's resources, analyze performance between periods, develop internal projections and measure management performance. We believe that these non-GAAP measures are useful to investors in evaluating the Company's ongoing operating and financial results and understanding how such results compare with the Company's historical performance.
Adjusted Income from Operations, EBITDA, Adjusted EBITDA, EBITDA as a percent of revenue, Adjusted EBITDA as a percent of revenue, and free cash flow are not recognized measurements under accounting principles generally accepted in the United States, or GAAP, and when analyzing our performance and liquidity investors should (i) evaluate adjustments in our reconciliation to the nearest GAAP financial measures and (ii) use non-GAAP measures in addition to, and not as an alternative to, measures of our operating results, as defined under GAAP.
Reconciliation of GAAP Measures to Adjusted Income from Operations, EBITDA and Adjusted EBITDA (in thousands):
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
March 31, | March 31, | |||||||||||||||||||||||||||||||||||||
2026 | 2025 | Change | 2026 | 2025 | Change | |||||||||||||||||||||||||||||||||
Adjusted Income from Operations | ||||||||||||||||||||||||||||||||||||||
Income (loss) from Operations | $ | (55) | $ | 5,115 | $ | (5,170) | $ | 1,382 | $ | 10,752 | $ | (9,370) | ||||||||||||||||||||||||||
Cost scaling initiatives⁽¹⁾ | 1,082 | — | 1,082 | 1,890 | — | 1,890 | ||||||||||||||||||||||||||||||||
Adjusted Income from Operations | $ | 1,027 | $ | 5,115 | $ | (4,088) | $ | 3,272 | $ | 10,752 | $ | (7,480) | ||||||||||||||||||||||||||
EBITDA and Adjusted EBITDA | ||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | (2,535) | $ | 878 | $ | (3,413) | $ | (3,859) | $ | 1,992 | $ | (5,851) | ||||||||||||||||||||||||||
Depreciation and amortization | 4,300 | 4,265 | 35 | 8,600 | 8,572 | 28 | ||||||||||||||||||||||||||||||||
Interest expense, net | 3,139 | 3,877 | (738) | 6,535 | 8,010 | (1,474) | ||||||||||||||||||||||||||||||||
Provision for income taxes (benefit) | (659) | 360 | (1,019) | (1,294) | 750 | (2,044) | ||||||||||||||||||||||||||||||||
EBITDA | $ | 4,245 | $ | 9,380 | $ | (5,135) | $ | 9,982 | $ | 19,324 | $ | (9,342) | ||||||||||||||||||||||||||
Cost scaling initiatives⁽¹⁾ | 1,082 | — | 1,082 | 1,890 | — | 1,890 | ||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 5,327 | $ | 9,380 | $ | (4,053) | $ | 11,872 | $ | 19,324 | $ | (7,452) | ||||||||||||||||||||||||||
Net income (loss) as a % of revenue | (4.3) | % | 1.0 | % | (3.0) | % | 1.1 | % | ||||||||||||||||||||||||||||||
EBITDA as a % of revenue | 7.2 | % | 10.5 | % | 7.8 | % | 10.7 | % | ||||||||||||||||||||||||||||||
Adjusted EBITDA as a % of revenue | 9.0 | % | 10.5 | % | 9.3 | % | 10.7 | % | ||||||||||||||||||||||||||||||
Revenue | $ | 59,265 | $ | 89,212 | $ | 128,158 | $ | 179,994 | ||||||||||||||||||||||||||||||
Reconciliation of Free Cash Flow (in thousands):
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
March 31, | March 31, | |||||||||||||||||||||||||||||||||||||
2026 | 2025 | Change | 2026 | 2025 | Change | |||||||||||||||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | 3,786 | $ | 14,502 | $ | (10,716) | $ | (984) | $ | 2,965 | $ | (3,949) | ||||||||||||||||||||||||||
Less: Purchases of equipment and improvements | — | — | — | (39) | (1) | (38) | ||||||||||||||||||||||||||||||||
Free Cash Flow⁽¹⁾ | $ | 3,786 | $ | 14,502 | $ | (10,716) | $ | (1,023) | $ | 2,964 | $ | (3,987) | ||||||||||||||||||||||||||
(1) Operating cash flow and free cash flow for the quarter are derived by subtracting from this quarter's year-to-date amount the year-to-date amount reported in the Company’s prior Quarterly Report on Form 10-Q.
FAQ
How did DLH Holdings Corp. (DLHC) perform in fiscal Q2 2026?
DLH reported significantly weaker results in fiscal Q2 2026. Revenue fell to $59.3 million, down 33.5% year over year, and the company posted a $2.5 million net loss versus $0.9 million profit last year, reflecting contract transitions to small‑business set‑aside competitors.
What were DLH Holdings’ key profitability metrics for Q2 2026?
DLH generated Adjusted EBITDA of $5.3 million in Q2 2026, down from $9.4 million a year earlier, with a 9.0% Adjusted EBITDA margin. EBITDA was $4.2 million, versus $9.4 million previously, indicating lower profitability despite cost scaling initiatives to protect margins on reduced revenue.
Did DLH Holdings generate positive cash flow in Q2 2026?
Yes. DLH delivered Q2 2026 free cash flow of $3.8 million, though this was sharply lower than $14.5 million in the prior-year quarter. Management calculates free cash flow as net cash from operating activities minus purchases of equipment and improvements for the period.
What is DLH Holdings’ debt position as of March 31, 2026?
As of March 31, 2026, DLH reported total debt of $132.7 million, slightly up from $131.6 million at September 30, 2025 but down from $136.6 million at the end of the first quarter. Management highlighted ongoing debt reduction as a strategic priority for fiscal 2026.
How did DLH Holdings’ backlog change by March 31, 2026?
DLH’s backlog declined to $442.4 million at March 31, 2026, compared with $514.3 million at September 30, 2025, a 14.0% decrease. The reduction reflects the transition of legacy contracts to small‑business set‑aside providers during this fiscal 2026 transition year.
What major contract development did DLH Holdings announce with Q2 2026 results?
DLH announced a two-year sole source extension of its contract to provide clinical research support services to the NIH. This award supports the company’s science and research capabilities and offers revenue continuity in that program while other legacy contracts continue transitioning away.