DLH(US:DLHC)2026-02-09 21:39Revenue Performance - Revenue for Q1 FY2026 was $68.9 million, a decrease of 24.1% compared to $90.8 million in Q1 FY2025[5] - Revenue for the three months ended December 31, 2025, was $68,892,000, while in 2024 it was $90,782,000, indicating a significant decrease[23] Profitability Metrics - Adjusted EBITDA was $6.5 million, representing 9.5% of revenue, benefiting from cost reduction initiatives[4] - EBITDA for the three months ended December 31, 2025, was $5,736,000, down from $9,944,000 in 2024, a decrease of $4,208,000[23] - Adjusted EBITDA for the same period was $6,544,000, compared to $9,944,000 in 2024, reflecting a decline of $3,400,000[23] - EBITDA as a percentage of revenue for the same period was 8.3%, down from 11.0% in 2024[23] - Adjusted EBITDA as a percentage of revenue was 9.5% for the three months ended December 31, 2025, compared to 11.0% in 2024[23] Cash Flow and Operating Activities - Operating cash usage was $4.8 million, an improvement of nearly $7 million year-over-year[4] - Free Cash Flow for the three months ended December 31, 2025, was $(4,809,000), an improvement from $(12,091,000) in 2024, showing a positive change of $7,282,000[24] - Net cash used in operating activities for the three months ended December 31, 2025, was $(4,770,000), compared to $(11,539,000) in 2024, an increase of $6,769,000[24] Net Loss and Financial Position - Net loss for the quarter was $(1.3) million, compared to a net income of $1.1 million in the prior year, reflecting a 218.2% decline[5] - For the three months ended December 31, 2025, the company reported a net loss of $1,324,000 compared to a net income of $1,115,000 for the same period in 2024, representing a change of $2,439,000[23] - Net loss as a percentage of revenue for the three months ended December 31, 2025, was (1.9)%, compared to 1.2% in 2024[23] Debt and Backlog - Debt increased to $136.6 million, up 3.8% from $131.6 million in the previous quarter[6] - Backlog stood at $517.4 million, a slight increase of 0.6% from $514.3 million[6] Strategic Focus and Initiatives - The company is focused on aligning expenses with revenue volumes and restoring competitive margins[3] - Management plans to use operating cash flow to reduce debt levels and enhance long-term financial flexibility[3] - The company is undergoing a transition of legacy programs to small business contractors, impacting revenue[4] - Future strategies include further deleveraging and protecting strategic investments for organic growth[3] - The company implemented cost scaling initiatives that contributed $808,000 to Adjusted EBITDA in the current period[23]