DLH Holdings Corp. reported a significant decline in financial performance for the fiscal year ending September 30, 2025, with total revenue of $344.5 million, down 13% from $395.9 million in the previous year. The decrease in revenue was primarily attributed to the conversion of certain contracts within the Department of Health and Human Services (HHS), Department of Veterans Affairs (VA), and Department of Defense (DoD) to small business contractors. Despite this decline, the company noted that new contract awards partially offset the revenue loss. Net income also fell sharply to $1.4 million, or $0.09 per share, compared to $7.4 million, or $0.52 per share, in the prior year.
In terms of operational changes, DLH's revenue distribution showed a shift, with the HHS contributing 49.8% of total revenue, down from 46.6% the previous year, while the VA's contribution decreased to 33.8% from 35.3%. The company maintained a diverse mix of contract types, with 51.4% of revenue from time and materials contracts, 27.2% from firm fixed-price contracts, and 21.4% from cost-reimbursable contracts. DLH's backlog as of September 30, 2025, was approximately $514.3 million, a decrease from $690.3 million the previous year, indicating a reduction in future revenue visibility.
Strategically, DLH has been active in pursuing new contracts and maintaining its competitive position in the federal contracting space. The company was awarded a new sole-source Indefinite Quantity/Indefinite Delivery (IDIQ) contract with a ceiling value of $90 million, effective October 28, 2025, which is expected to support its ongoing operations. However, the company faced challenges with the VA's procurement process, which has transitioned some contracts to service-disabled veteran-owned small businesses, impacting DLH's revenue from these contracts.
The company employed approximately 2,300 employees as of September 30, 2025, reflecting its commitment to maintaining a skilled workforce to support its operations. DLH's management emphasized the importance of aligning its capabilities with federal budget priorities, particularly in areas such as cybersecurity, digital transformation, and healthcare services. Looking ahead, the company remains focused on adapting to the evolving federal budget landscape and leveraging its technological capabilities to secure new business opportunities, despite the uncertainties surrounding federal spending and potential contract reductions.
About DLH Holdings Corp.
DLH Holdings Corp. provides health, defense, and research solutions to U.S. federal government agencies. Its core activities include digital transformation, cybersecurity, scientific research, and systems engineering. Serving agencies like HHS, VA, and DoD, DLH delivers services through prime contracts, emphasizing innovation, compliance, and strong government relationships. Its competitive edge lies in specialized expertise, proprietary tools, and a highly credentialed workforce.
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