Revenue falls 24% as DLH (NASDAQ: DLHC) swings to Q1 2026 loss

Rhea-AI Filing Summary

DLH Holdings Corp. reported fiscal 2026 first quarter revenue of $68.9 million, down 24% from $90.8 million a year earlier, as certain legacy programs transitioned to small‑business set-aside contractors. The company posted a net loss of $1.3 million, versus net income of $1.1 million.

Adjusted EBITDA was $6.5 million, or 9.5% of revenue, compared with $9.9 million and an 11.0% margin, reflecting cost-scaling initiatives to align expenses with lower volumes. Operating cash outflow improved to $4.8 million from $11.5 million, while debt increased to $136.6 million and backlog rose slightly to $517.4 million.

Positive

• None.

Negative

• Revenue and profitability deteriorated sharply: Q1 revenue fell 24% to $68.9 million, driven by program transitions, and results swung from $1.1 million net income to a $1.3 million net loss, with EBITDA and Adjusted EBITDA both declining meaningfully year over year.

Insights

Equity research analyst

DLH saw a sharp revenue drop, margin compression, and a swing to loss despite some cash flow improvement.

DLH reported Q1 revenue of $68.9 million, down from $90.8 million, mainly due to the anticipated transition of certain programs to small-business set-aside contractors. This drove income from operations down to $1.4 million and net results to a $1.3 million loss.

Adjusted EBITDA declined to $6.5 million with a 9.5% margin, versus $9.9 million and 11.0% last year, even after cost-scaling actions. However, operating cash usage improved to $4.8 million from $11.5 million, and backlog inched up to $517.4 million, offering some revenue visibility.

Debt increased to $136.6 million from $131.6 million, reflecting working capital needs, while management reiterated a focus on delevering during fiscal 2026. Subsequent quarterly filings will show whether cost reductions stabilize margins and whether revenue recovers as the company executes its strategy.

0000785557false00007855572026-02-092026-02-09

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):  February 9, 2026

DLH Holdings Corp.

(Exact name of Registrant as Specified in its Charter)

New Jersey

0-18492

22-1899798

(State or Other Jurisdiction of Incorporation

(Commission File Number)

(I.R.S. Employer Identification No.)

3565 Piedmont Road, NE, Building 3, Suite 700

Atlanta, GA 30305

(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
Common Stock			DLHC			Nasdaq			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:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 February 9, 2026, DLH Holdings Corp. announced by press release its financial results for its fiscal quarter ended December 31, 2025. 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 February 9, 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: February 9, 2026

DLH Reports Fiscal 2026 First Quarter Results

ATLANTA, Feb. 9, 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 first quarter ended December 31, 2025.

Q1 Highlights:

•Revenue variance from prior year period reflects the transition of certain programs to small-business set-aside contractors

•Adjusted EBITDA of $6.5 million, or 9.5% of revenue, benefitting from the Company's initiatives to reduce costs and streamline operations

•Operating cash usage of $4.8 million, reflecting normal first quarter patterns and working capital use; an improvement of almost $7 million year-over-year

•Debt rose modestly due to short-term working capital needs; Company remains on track for further delevering during fiscal 2026

Management Discussion:

“The first quarter of fiscal 2026 demonstrated our resilience and disciplined commitment to managing profitability and cash flow through a period of transition," said Zach Parker, DLH President and Chief Executive Officer. "As previously communicated, our revenue results reflect the anticipated transition of legacy programs to small business contractors. In recognition of our revenue volumes, we have rightsized our cost structure during the first and second quarters. The impact of the first quarter cost scaling initiatives is reflected in Adjusted EBITDA. At the completion of these actions, we believe we will have aligned expense with revenue volumes, restored margins to a competitive level and protected strategic investments that fuel organic growth. Additionally, we remain focused on delevering our balance sheet. While debt grew this quarter in line with first quarter trends, going forward we expect to deploy operating cash flow toward reducing debt levels to enhance our long-term financial flexibility and shareholder value."

Operating Financial Summary
			Three Months Ended
			December 31,
$ million			2025			2024			% Change
Revenue			$68.9			$90.8			(24.1)%
Income from operations			$1.4			$5.6			(75.0)%
Net (loss) income			$(1.3)			$1.1			(218.2)%
Diluted Earnings Per Share			$(0.09)			$0.08			(212.5)%
EBITDA			$5.7			$9.9			(42.4)%
Adjusted EBITDA			$6.5			$9.9			(34.3)%
EBITDA margin on Revenue			8.3%			11.0%			(24.5)%
Adjusted EBITDA margin on Revenue			9.5%			11.0%			(13.6)%
Cash provided by Operating Activities			$(4.8)			$(11.5)			(58.3)%
Free Cash Flow			$(4.8)			$(12.1)			(60.3)%
Additional Financial Metrics
			December 31, 2025			September 30, 2025			% Change
Debt			$136.6			$131.6			3.8%
Backlog			$517.4			$514.3			0.6%

Earnings Call & Webcast:

DLH management will discuss first 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, February 10, 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 #1284372.

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 over 1,700 employees 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 estimates of future revenues, operating income, earnings and cash flow. 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 risk that we will not realize the anticipated benefits of acquisitions (including anticipated future financial performance and results); the diversion of management’s attention from normal daily operations of the business and the challenges of managing larger and more widespread operations; 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; 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 subsequent reports filed 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, except as may be required by law.

DLH HOLDINGS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share amounts)

						Three Months Ended
						December 31,
						2025						2024
Revenue						$	68,892					$	90,782
Cost of operations:
Contract costs						55,395						72,771
General and administrative costs						7,761						8,067
Depreciation and amortization						4,300						4,307
Total operating costs						67,456						85,145
Income from operations						1,436						5,637
Interest expenses						3,396						4,133
(Loss) income before provision for income taxes						(1,960)						1,504
Provision for income taxes (benefit) expense						(636)						389
Net (loss) income						$	(1,324)					$	1,115
Net (loss) income per share
Basic						$	(0.09)					$	0.08
Diluted						$	(0.09)					$	0.08
Weighted average common stock outstanding
Basic						14,493						14,386
Diluted						14,563						14,563

DLH HOLDINGS CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except par value of shares)

						December 31, 2025						September 30, 2025
						(unaudited)
ASSETS
Current assets:
Cash						$	257					$	125
Accounts receivable						35,842						38,394
Other current assets						3,543						4,018
Total current assets						39,642						42,537
Goodwill						138,161						138,161
Intangible assets, net						87,752						91,865
Operating lease right-of-use assets						8,264						8,764
Deferred income taxes, net						8,447						7,947
Equipment and improvements, net						1,127						1,274
Other long-term assets						115						115
Total assets						$	283,508					$	290,663
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities						$	14,250					$	19,246
Accrued payroll						5,996						12,153
Debt obligations - current, net of deferred financing costs						17,425						8,067
Operating lease liabilities - current						3,129						2,918
Other current liabilities						226						287
Total current liabilities						41,026						42,671
Long-term liabilities:
Debt obligations - long-term, net of deferred financing costs						116,050						119,966
Operating lease liabilities - long-term						13,199						14,022
Other long-term liabilities						1,045						1,046
Total long-term liabilities						130,294						135,034
Total liabilities						171,320						177,705
Shareholders' equity:
Common stock, $0.001 par value; 40,000 shares authorized; 14,493 and 14,493 shares issued and outstanding at December 31, 2025 and September 30, 2025, respectively						14						14
Additional paid-in capital						102,288						101,734
Retained earnings						9,886						11,210
Total shareholders’ equity						112,188						112,958
Total liabilities and shareholders' equity						$	283,508					$	290,663

DLH HOLDINGS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOW

(Amounts in thousands)

						Three Months Ended
						December 31,
						2025						2024
Operating activities
Net (loss) income						$	(1,324)					$	1,115
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization						4,300						4,307
Amortization of deferred financing costs charged to interest expense						433						457
Stock-based compensation expense						647						193
Deferred income taxes, net						(501)						780
Changes in operating assets and liabilities:
Accounts receivable						2,552						(14,421)
Other assets						974						(661)
Accounts payable and accrued liabilities						(4,996)						(6,567)
Accrued payroll						(6,157)						2,275
Other liabilities						(698)						984
Net cash used in operating activities						(4,770)						(11,538)
Investing activities
Purchase of equipment and improvements						(39)						(552)
Net cash used in investing activities						(39)						(552)
Financing activities
Proceeds from revolving line of credit						67,396						59,910
Repayment of revolving line of credit						(62,362)						(47,509)
Payments of deferred financing costs						—						(202)
Payment of tax obligations resulting from net exercise of stock options						(93)						—
Net cash provided by financing activities						4,941						12,199
Net change in cash						132						109
Cash - beginning of period						125						342
Cash - end of period						$	257					$	451
Supplemental disclosure of cash flow information
Cash paid during the period for interest						$	3,003					$	3,594
Cash paid during the period for income taxes						$	—					$	32
Supplemental disclosure of non-cash activity
Common stock surrendered for the exercise of stock options						(93)						$	—
Lease liability recognized to acquire a right-of-use asset						$	—					1,377

Non-GAAP Financial Measures

The Company uses 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 following:

EBITDA and Adjusted EBITDA represent net (loss) income excluding depreciation and amortization, interest expense, and provision for income taxes; Adjusted EBITDA further excludes costs associated with scaling general and administrative expenses 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.

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.

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 net income to EBITDA and Adjusted EBITDA (in thousands):

						Three Months Ended
						December 31,
						2025						2024						Change
EBITDA and Adjusted EBITDA
Net (loss) income						$	(1,324)					$	1,115					$	(2,439)
Depreciation and amortization						4,300						4,307						(7)
Interest expense, net						3,396						4,133						(737)
Provision for income taxes (benefit) expense						(636)						389						(1,025)
EBITDA						$	5,736					$	9,944					$	(4,208)
Cost scaling initiatives						808						—						808
Adjusted EBITDA						$	6,544					$	9,944					$	(3,400)
Net (loss) income as a % of revenue						(1.9)		%				1.2		%
EBITDA as a % of revenue						8.3		%				11.0		%
Adjusted EBITDA as a % of revenue						9.5		%				11.0		%
Revenue						$	68,892					$	90,782

Reconciliation of Free Cash Flow (in thousands):

						Three Months Ended
						December 31,
						2025						2024						Change
Net cash (used in) provided by operating activities						$	(4,770)					$	(11,539)					$	6,769
Less: Purchases of equipment and improvements						(39)						(552)						513
Free Cash Flow						$	(4,809)					$	(12,091)					$	7,282

FAQ

How did DLH Holdings Corp. (DLHC) perform in fiscal Q1 2026?

DLH reported fiscal Q1 2026 revenue of $68.9 million, down from $90.8 million a year earlier, and a net loss of $1.3 million versus prior net income of $1.1 million, reflecting contract transitions and lower operating profitability.

Why did DLH’s revenue decline year over year in the quarter ended December 31, 2025?

Management stated that revenue variance from the prior-year period primarily reflects the transition of certain programs to small-business set-aside contractors. These anticipated contract changes reduced volumes and contributed to the 24% revenue decline and lower operating income in fiscal Q1 2026.

What were DLH’s EBITDA and Adjusted EBITDA margins for fiscal Q1 2026?

For fiscal Q1 2026, DLH reported EBITDA of $5.7 million and Adjusted EBITDA of $6.5 million. EBITDA margin was 8.3% of revenue, and Adjusted EBITDA margin was 9.5%, both below the prior year’s 11.0% as revenue declined despite cost scaling initiatives.

How did DLH’s cash flow and debt levels change in fiscal Q1 2026?

DLH used $4.8 million of cash in operating activities, an improvement from $11.5 million used a year earlier. Total debt rose to $136.6 million from $131.6 million, driven by short-term working capital needs, with management emphasizing plans to delever during fiscal 2026.

What is DLH Holdings Corp.’s backlog as of December 31, 2025?

DLH reported a backlog of $517.4 million as of December 31, 2025, slightly above $514.3 million at September 30, 2025. This modest increase suggests continued contracted work despite revenue headwinds from program transitions to small-business set-aside contractors.

When will DLH discuss its fiscal Q1 2026 results with investors?

DLH scheduled a conference call at 10:00 a.m. Eastern Time on February 10, 2026 to discuss fiscal Q1 2026 results and provide a business update. Investors can access the call via the provided dial-in numbers and DLH’s Investor Relations website.

Filing Exhibits & Attachments

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• EX-99.1 EX-99.1 167.7 KB

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• EX-101 XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT 1.7 KB
• EX-101 XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT 22.9 KB
• EX-101 XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT 13.3 KB