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]