ATLANTA, Feb. 02, 2026 (GLOBE NEWSWIRE) -- DLH Holdings Corp. (NASDAQ: DLHC) (“DLH” or the “Company”), a leading provider of science research and development, systems engineering and integration, and digital transformation and cyber security solutions to federal agencies, will release financial results for the fiscal first quarter ended December 31, 2025 on February 9, 2026 after the market closes. DLH will then host a conference call for the investment community at 10:00 a.m. Eastern Time the following day ...

Core Insights - The article provides an extensive analysis of Automatic Data Processing (ADP) in comparison to its competitors in the Professional Services industry, focusing on financial metrics, market position, and growth prospects [1] Company Overview - Automatic Data Processing is a global technology company specializing in cloud-based human capital management solutions, serving over 1.1 million clients and paying more than 42 million workers across 140 countries as of fiscal 2025 [2] Financial Metrics Comparison - ADP has a Price to Earnings (P/E) ratio of 24.96, which is below the industry average by 0.86x, indicating potential undervaluation [5] - The Price to Book (P/B) ratio of 16.05 is 2.42x the industry average, suggesting that ADP may be overvalued in terms of book value [5] - The Price to Sales (P/S) ratio of 4.94 is 1.92x the industry average, indicating potential overvaluation relative to sales performance [5] - ADP's Return on Equity (ROE) stands at 16.13%, which is 11.12% above the industry average, reflecting efficient equity utilization [5] - The company exhibits an EBITDA of $1.59 billion, which is 10.6x above the industry average, indicating strong profitability [5] - ADP's gross profit of $2.34 billion is 5.32x above the industry average, showcasing robust earnings from core operations [5] - Revenue growth for ADP is 7.09%, exceeding the industry average of 4.04%, indicating strong sales performance [5] Debt to Equity Ratio - ADP has a debt-to-equity (D/E) ratio of 1.49, placing it in the middle of its top 4 peers, suggesting a balanced financial structure with a moderate level of debt relative to equity [8] Key Takeaways - ADP's low P/E ratio compared to peers indicates potential undervaluation, while high P/B and P/S ratios suggest overvaluation relative to industry standards [9] - The company demonstrates strong performance in ROE, EBITDA, gross profit, and revenue growth compared to industry peers, reflecting favorable financial health and growth prospects [9]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Financial Data and Key Metrics Changes - The company reported revenue of $81.2 million for Q4 FY2025, down from $96.4 million in the prior year, primarily due to contract transitions and government efficiency initiatives [14][15] - EBITDA for Q4 was $6.6 million, a decrease from $10.7 million year-over-year, with EBITDA as a percentage of revenue at 8.1% compared to 11.1% in FY2024 [15][16] - For the full year, revenue totaled $344.5 million, with EBITDA of $34 million, approximately 10% of revenue, and free cash flow of $23 million [16][17] - The company reduced debt by $10.7 million during the quarter, ending FY2025 with a total debt of $131.6 million, a reduction of $23 million over the year [17][18] Business Line Data and Key Metrics Changes - The revenue decline was attributed to approximately $11 million from small business set-aside conversions, with $7.5 million related to transitioned CMOP locations and $2.9 million from contract unbundling [14][15] - The company has been awarded a sole-source IDIQ contract to continue providing pharmacy and logistics services, indicating ongoing operational capabilities despite revenue challenges [15][16] Market Data and Key Metrics Changes - The company is optimistic about growth opportunities in its addressable market, particularly in defense and non-defense sectors, driven by digital transformation and cybersecurity initiatives [6][31] - The pipeline of qualified opportunities is reported to be over $3 billion, indicating strong future growth prospects [33] Company Strategy and Development Direction - The company is focused on transforming into a leading technology, engineering, and scientific research solutions provider, emphasizing digital transformation, cybersecurity, and systems engineering [9][10] - Investment in proprietary tools and innovation, such as the DLH Cyclone AI/ML-powered data science engine, is aimed at enhancing competitive differentiation and organic growth [10][11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from contract transitions and government efficiency initiatives but expressed optimism about returning to historical growth and EBITDA margins [16][31] - The company is actively positioning for new business opportunities within the VA and expects to see awards in Q1 2026, which could positively impact margins [30][31] Other Important Information - The company achieved cybersecurity maturity model level two certification, enhancing its competitive position in the market [7] - Strong cash flow management has been highlighted as a key factor in the company's ability to reduce debt and strengthen its balance sheet [16][18] Q&A Session Summary Question: Status of the Head Start program and potential protest - The company did not participate in the protest regarding the Head Start program transition to small business set-asides, acknowledging the shift in government strategy [22] Question: Timeline for remaining CMOP awards - The company is not bidding on remaining CMOP contracts but is supporting a small business partner, with decisions expected in the coming quarter or two [24][25] Question: Expected return to historical growth and EBITDA margins - Management anticipates that new contract awards will begin to emerge in Q1 2026, which should positively impact margins [30][31] Question: Current size of the pipeline - The pipeline is reported to be over $3 billion, indicating strong growth prospects for the company [33]

Financial Data and Key Metrics Changes - The company reported revenue of $81.2 million in Q4 2025, down from $96.4 million in the prior year, primarily due to contract transitions and government efficiency initiatives [14][15] - EBITDA for Q4 was $6.6 million, compared to $10.7 million in the previous year, reflecting lower revenue and pressure on gross margins [15][16] - For the full year, revenue totaled $344.5 million, with EBITDA at $34 million, approximately 10% of revenue, and free cash flow of $23 million [16][17] - The company reduced debt by $10.7 million during the quarter, ending the fiscal year with $131.6 million in debt, a total reduction of $23 million over the year [17][18] Business Line Data and Key Metrics Changes - The revenue decline was attributed to approximately $11 million from small business set-aside conversions, with $7.5 million related to transitioned CMOP locations and $2.9 million from contract unbundling [14][15] - The company has been awarded a sole-source IDIQ contract to continue providing pharmacy and logistics services, with task orders already received [15] Market Data and Key Metrics Changes - The company achieved cybersecurity maturity model level two certification, enhancing its competitive position in the market [7] - The company is optimistic about growth opportunities in its addressable market as it transitions into a leading technology and engineering solutions provider [6][9] Company Strategy and Development Direction - The company is focused on digital transformation, cybersecurity, systems engineering, and scientific research as core capability pillars [9][10] - Investment in proprietary tools like DLH Cyclone, an AI/ML-powered data science engine, is expected to drive organic growth and enhance competitive differentiation [10][12] - The company aims to return to low double-digit organic growth in the future, leveraging its strategic differentiators and top talent [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities despite challenges faced during the fiscal year, emphasizing the importance of diversification and innovation [17][30] - The company anticipates returning to historical growth and EBITDA margins, with new contract awards expected in early 2026 [28][30] Other Important Information - The company has made all mandatory term debt payments through September 30, 2026, a year ahead of schedule [18] - The pipeline of qualified opportunities is strong, exceeding $3 billion, indicating healthy financial growth prospects [31] Q&A Session Summary Question: Status of the Head Start program and potential protest - The company did not participate in the protest regarding the Head Start program transition to small business set-asides, acknowledging the shift in strategy by the government [22] Question: Timeline for remaining CMOP awards - The company is not bidding on remaining CMOP contracts but is supporting a small business partner, with decisions expected in the coming quarter or two [24][25] Question: Expected return to historical growth and EBITDA margins - Management anticipates new business opportunities within the VA and other sectors to positively impact margins, with awards expected in early 2026 [28][30] Question: Current size of the pipeline - The company reported a pipeline exceeding $3 billion, indicating strong growth potential over the next 24 months [31]

Financial Data and Key Metrics Changes - The company reported revenue of $81.2 million in Q4 FY2025, down from $96.4 million in the prior year, primarily due to contract transitions and government efficiency initiatives [14][15] - EBITDA for Q4 was $6.6 million, compared to $10.7 million in the previous year, reflecting lower revenue and pressure on gross margins [15][16] - For the full year, revenue totaled $344.5 million, with EBITDA of $34 million, approximately 10% of revenue, and free cash flow of $23 million [16][17] - The company reduced debt by $10.7 million during the quarter, ending FY2025 with $131.6 million in debt, a total reduction of $23 million over the year [17][18] Business Line Data and Key Metrics Changes - The revenue contraction was largely attributed to the transition of certain programs to small business set-aside contracts, accounting for approximately $11 million of the decrease [14][15] - The company experienced a decline in revenue from transitioned CMOP locations and contract unbundling, with $7.5 million and $2.9 million respectively contributing to the overall decline [15] Market Data and Key Metrics Changes - The company has a strong pipeline of qualified opportunities exceeding $3 billion, indicating healthy financial growth prospects [33] Company Strategy and Development Direction - The company is focused on transforming into a leading technology, engineering, and scientific research solutions provider, emphasizing digital transformation, cybersecurity, and systems engineering [9][10] - Investment in proprietary tools and technologies, such as the DLH Cyclone AI/ML-powered data science engine, is aimed at enhancing competitive differentiation and organic growth [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities in the addressable market and the potential for returning to low double-digit organic growth in the future [12][13] - The company is positioning for new business within the VA and anticipates contract awards that could positively impact margins in the upcoming quarters [30][31] Other Important Information - The company achieved cybersecurity maturity model level two certification, enhancing its ability to compete for higher value business opportunities [7] - The company has made all mandatory term debt payments through September 30, 2026, a year ahead of schedule, and plans to continue debt reduction aligned with historical performance [18] Q&A Session Summary Question: Status of the Head Start program and potential protests - The company did not participate in the protest regarding the Head Start program transition to small business set-asides, acknowledging the shift in strategy by the administration [22] Question: Timeline for remaining CMOP awards - The company expects decisions on the remaining CMOP awards to occur within the next quarter or two, while continuing to operate at the remaining locations [24][25] Question: Return to historical growth and EBITDA margins - Management indicated that new contract awards are anticipated in Q1 2026, which could help return to historical growth and EBITDA margins [28][29] Question: Current size of the pipeline - The company reported a strong pipeline exceeding $3 billion, indicating a healthy outlook for financial growth [33]

Financial Performance - Q4 FY2025 - Revenue for Q4 FY25 was $81.2 million, compared to $96.4 million in Q4 FY24[15] - EBITDA for Q4 FY25 was $6.6 million, compared to $10.7 million in Q4 FY24[15] - Free Cash Flow for Q4 FY25 was $10.7 million, compared to $12.2 million in Q4 FY24[15] Financial Performance - Full Year FY2025 - Revenue for FY25 was $344.5 million, compared to $395.9 million in FY24[18] - EBITDA for FY25 was $23.0 million, compared to $42.0 million in FY24[18] - Free Cash Flow for FY25 was $34.0 million, compared to $26.5 million in FY24[18] Debt and Capital Allocation - Total debt was reduced by $10.7 million in Q4 to $131.6 million[9, 20] - Mandatory term debt is paid through September 30, 2026, a year ahead of schedule[9, 22] Strategic Updates - DLH received CMMC Level 2 certification, positioning the company for high-value business in defense markets[9] - DLH was awarded an NIH Office of Information Technology contract[9]

Financial Position and Indebtedness - The company has a substantial amount of goodwill on its balance sheet, which may lead to future write-offs that could decrease earnings or increase losses[96] - Following the acquisition of DLH, LLC in December 2022, the company amended its credit agreement, incurring additional indebtedness and modifying financial covenants[97] Dividends and Stock Ownership - The company has not paid dividends on its common stock since inception and does not anticipate paying any in the foreseeable future[100] - As of September 30, 2025, executive officers, directors, and significant stockholders own approximately 41% of the outstanding common stock, which may influence corporate decisions[105] Revenue and Operating Results - The company may experience fluctuations in revenues and operating results due to various factors, including government budgetary delays and contract timing[107] - Increased costs in supply and labor markets due to inflation could adversely affect the company's ability to compete and reduce profits[110] Legal and Insurance Risks - The company is exposed to legal proceedings and disputes, which could result in substantial monetary damages if unfavorable rulings occur[111] - The company does not maintain "key personnel" life insurance on its executive officers, which could materially affect operations if key personnel are lost[112] - The company may not be fully covered by insurance, and inability to renew insurance plans could adversely impact its business[113] Employee Costs and Tax Liabilities - Increases in employee healthcare claims and insurance premiums could significantly affect the company's direct costs and profit margins[114] - Changes to U.S. tax laws may require adjustments in accounting, potentially affecting profitability due to increased tax liabilities and audits[116] Compliance and Operational Risks - Compliance with the Sarbanes-Oxley Act has led to significant management resource allocation, resulting in increased accounting and legal expenses[117] - Future operations may be adversely impacted by global health events, creating volatility and economic disruption, affecting customer demand and service delivery[118] Market Risks and Interest Rates - The company has limited exposure to market risks, with no material engagement in trading practices that would expose it to interest rate or foreign currency risks[187] - A floating-to-fixed interest rate swap with a notional amount of $74.0 million is set to mature on September 30, 2025[187] - A 1.0% increase in SOFR would increase interest expense by approximately $0.6 million annually, with the current floating interest rate debt at 8.38%[188]

Core Insights - DLH Holdings Corp. reported a decline in revenue and net income for the fiscal fourth quarter ended September 30, 2025, primarily due to market headwinds impacting performance [1][4][8] - The company generated $10.7 million in free cash flow and reduced total indebtedness by $23 million over the year, indicating a focus on strengthening its balance sheet [4][8] - DLH's strategy revolves around three technology-driven pillars aimed at enhancing its position in federal health and national security sectors, with expectations of growing demand for advanced AI and cybersecurity solutions [3][4] Financial Performance - Revenue for Q4 2025 was $81.2 million, down 15.8% from $96.4 million in Q4 2024 [4][8] - Operating income decreased by 64.1% to $2.3 million from $6.4 million year-over-year [4][8] - Net loss for the quarter was $(0.9) million compared to a net income of $2.3 million in the same quarter last year, marking a 139.1% decline [4][8] - Diluted earnings per share fell to $(0.06) from $0.16, a decrease of 137.5% [4][8] - EBITDA for the quarter was $6.6 million, down 38.3% from $10.7 million in Q4 2024, with an EBITDA margin of 8.1% compared to 11.1% [4][8] Debt and Cash Flow - Total debt as of September 30, 2025, was $131.6 million, a reduction of 14.9% from $154.6 million a year earlier [6][8] - The backlog decreased by 25.5% to $514.3 million from $690.3 million year-over-year [6][8] - Cash provided by operating activities was $10.7 million, down 13.7% from $12.4 million in Q4 2024 [4][8] Strategic Outlook - The company anticipates expanding demand from key agencies for technology-powered solutions, particularly in advanced AI and mission-critical cybersecurity [4][8] - DLH is positioned to identify and capitalize on new opportunities, reinforcing its role as a trusted partner in advancing customer missions [4][8]

Core Viewpoint - DLH Holdings Corp. will release its financial results for the fiscal fourth quarter ended September 30, 2025, on December 10, 2025, and will host a conference call for investors on December 11, 2025, to discuss these results and operating trends [1]. Financial Results Announcement - The financial results will be released after market close on December 10, 2025 [1]. - A conference call will take place at 10:00 a.m. Eastern Time on December 11, 2025, featuring a presentation by senior management [1]. Conference Call Details - Interested parties can listen to the conference call by dialing 888-347-5290 or 412-317-5256 [2]. - Presentation materials will be available on the Investor Relations section of the DLH website prior to the call [2]. - A digital recording of the call will be accessible for replay two hours after its completion [2]. Company Overview - DLH Holdings Corp. specializes in science research and development, systems engineering, digital transformation, and cyber security solutions for federal agencies [3]. - The company employs over 2,400 individuals and focuses on enhancing technology, public health, and cyber security readiness missions [3]. - DLH leverages advanced technologies such as artificial intelligence, advanced analytics, and cloud-based applications to address complex missions [3].