DLH Holdings Q2 revenue falls 33.5% on contract transitions

DLH Holdings

06/05/2026 21:36

Overview

US digital transformation and cybersecurity provider's fiscal Q2 revenue fell 33.5% yr/yr

Adjusted EBITDA margin held at 9.0% as cost scaling initiatives protected margins

Company reported net loss and negative EPS for fiscal Q2

Outlook

Company expects legacy contract conversions to small businesses to finish in Q3 fiscal 2026

DLH expects cash generation to accelerate in second half of fiscal 2026

Company anticipates further debt reductions before end of fiscal 2026

Result Drivers

CONTRACT TRANSITION - Co said revenue decline was mainly due to legacy programs transitioning to small-business set-aside contractors

COST SCALING INITIATIVES - Co said cost scaling initiatives helped sustain adjusted EBITDA margin on lower revenue

NIH CONTRACT EXTENSION - Co awarded two-year sole source extension for clinical research support services to NIH

Company press release: ID:nGNX7yXFp2

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q2 Revenue
Beat
$59.30 mln
$58 mln (1 Analyst)
Q2 EPS
-$0.17
Q2 Net Income
-$2.50 mln
Q2 Income From Operations
-$100,000


Analyst Coverage

The one available analyst rating on the shares is "buy"

The average consensus recommendation for the it services & consulting peer group is "buy"

Wall Street's median 12-month price target for DLH Holdings Corp is $10.00, about 77% above its May 5 closing price of $5.65

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)