Revenue: As of FY2026 Q1, the actual value is USD 68.89 M, missing the estimate of USD 70.15 M.EPS: As of FY2026 Q1, the actual value is USD -0.09, missing the estimate of USD -0.07.EBIT: As of FY2026 Q1, the actual value is USD 4.803 M.<h4>Segment Revenue</h4>Revenue by Customer (Three Months Ended December 31) Department of Health and Human Services: $34,630 thousand in 2025 (50.3% of total revenue), a decrease from $41,948 thousand in 2024 (46.2% of total revenue). Department of Veterans Affairs: $26,911 thousand in 2025 (39.1% of total revenue), a decrease from $34,099 thousand in 2024 (37.6% of total revenue). Specifically, CMOP pharmacy and logistic services generated approximately $26.9 million in 2025, down from $34.1 million in 2024. Department of Defense: $7,226 thousand in 2025 (10.5% of total revenue), a decrease from $13,355 thousand in 2024 (14.7% of total revenue). Other Customers: $125 thousand in 2025 (0.1% of total revenue), a decrease from $1,380 thousand in 2024 (1.5% of total revenue). Total Revenue: $68,892 thousand in 2025, a decrease from $90,782 thousand in 2024.Revenue by Contract Type (Three Months Ended December 31) Time and Materials: $30,605 thousand in 2025, a decrease from $49,400 thousand in 2024. Firm Fixed Price: $24,288 thousand in 2025, an increase from $23,239 thousand in 2024. Cost Reimbursable: $13,999 thousand in 2025, a decrease from $18,143 thousand in 2024.Revenue by Contractor Role (Three Months Ended December 31) Prime Contractor: $64,454 thousand in 2025, a decrease from $84,439 thousand in 2024. Subcontractor: $4,438 thousand in 2025, a decrease from $6,343 thousand in 2024.<h4>Operational Metrics (Three Months Ended December 31)</h4><ul><li>Net (Loss) Income: -$1,324 thousand in 2025, compared to $1,115 thousand in 2024.</li><li>Income from Operations: $1,436 thousand in 2025, a significant decrease from $5,637 thousand in 2024.</li><li>Operating Margin: 2.1% in 2025, down from 6.2% in 2024.</li><li>Contract Costs: $55,395 thousand in 2025, decreased by $17,376 thousand from $72,771 thousand in 2024.</li><li>General and Administrative Costs: $7,761 thousand in 2025, decreased by $306 thousand from $8,067 thousand in 2024. As a percentage of revenue, these costs increased to 11.3% in 2025 from 8.9% in 2024.</li><li>Total Operating Costs: $67,456 thousand in 2025, decreased by $17,689 thousand from $85,145 thousand in 2024.</li><li>Interest Expenses: $3,396 thousand in 2025, decreased by $737 thousand from $4,133 thousand in 2024, primarily due to debt prepayment and a decrease in the floating interest rate.</li><li>Depreciation and Amortization: $4,300 thousand in 2025, relatively flat compared to $4,307 thousand in 2024.</li></ul><h4>Cash Flow (Three Months Ended December 31)</h4><ul><li>Net Cash Used in Operating Activities: -$4,770 thousand in 2025, an improvement from -$11,539 thousand in 2024, primarily due to increased collections.</li><li>Net Cash Used in Investing Activities: -$39 thousand in 2025, an improvement from -$552 thousand in 2024.</li><li>Net Cash Provided by Financing Activities: $4,941 thousand in 2025, a decrease from $12,199 thousand in 2024, mainly to satisfy short-term working capital needs.</li><li>Cash at End of Period: $257 thousand in 2025, compared to $451 thousand in 2024.</li></ul><h4>Unique Metrics</h4><ul><li>Backlog: $517.4 million as of December 31, 2025, compared to $514.3 million as of September 30, 2025.</li><li>Funded Backlog: $124.0 million as of December 31, 2025, compared to $114.1 million as of September 30, 2025.</li><li>EBITDA (Non-GAAP): $5.7 million in 2025, a decrease from $9.9 million in 2024.</li><li>Adjusted EBITDA (Non-GAAP): $6.5 million in 2025, a decrease from $9.9 million in 2024, with the decrease primarily attributed to reduced revenue volume from contract conversions.</li><li>Available Borrowing Capacity (Revolving Credit Facility): $10.7 million as of December 31, 2025, net of outstanding letters of credit, compared to $23.6 million as of September 30, 2025.</li></ul><h4>Future Outlook and Strategy</h4>DLH Holdings Corp. plans to achieve organic growth and generate robust cash flow by aligning capabilities with budget priorities and expanding within key national programs in health and national security. Despite anticipated uncertainties in the U.S. budget and regulatory landscape, DLH Holdings Corp. believes it is well-positioned to secure new business. The company expects to maintain significant business volume as a subcontractor for CMOP pharmacy and logistics services during the VA’s procurement transition process.

DLH | 10-Q: FY2026 Q1 Revenue Misses Estimate at USD 68.89 M