Core Insights - DLH Holdings Corp. reported a significant decline in revenue and net income for the fiscal first quarter ended December 31, 2025, reflecting a transition of legacy programs to small business contractors [3][4][6]. Financial Performance - Revenue decreased to $68.9 million from $90.8 million, a decline of 24.1% year-over-year [4]. - Income from operations fell to $1.4 million, down 75.0% from $5.6 million [4]. - The company reported a net loss of $1.3 million compared to a net income of $1.1 million in the prior year, marking a 218.2% change [4]. - Diluted earnings per share were $(0.09), a decrease of 212.5% from $0.08 [4]. - Adjusted EBITDA was $6.5 million, or 9.5% of revenue, down 34.3% from the previous year [4][6]. Cash Flow and Debt Management - Operating cash flow showed a usage of $(4.8) million, an improvement of 58.3% year-over-year [4][6]. - Free cash flow was $(4.8) million, a 60.3% improvement from $(12.1) million in the prior year [4][6]. - Debt increased to $136.6 million from $131.6 million, a rise of 3.8% [5]. Strategic Focus - The management emphasized a commitment to managing profitability and cash flow during the transition period, with initiatives to align costs with revenue volumes [3]. - The company aims to reduce debt levels using operating cash flow to enhance long-term financial flexibility and shareholder value [3]. Backlog and Future Outlook - The backlog increased slightly to $517.4 million from $514.3 million, reflecting a 0.6% growth [5]. - Management plans to discuss competitive conditions and strategies in an upcoming conference call [7].