DLH (DLHC) 10-Q 31 Jan 24 2024 Q1 Quarterly report Financial data

Cover

Cover - $ / shares	3 Months Ended
	Dec. 31, 2023	Jan. 30, 2024	Sep. 30, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2023
Document Transition Report	false
Entity File Number	0-18492
Entity Registrant Name	DLH HOLDINGS CORP.
Entity Incorporation, State or Country Code	NJ
Entity Tax Identification Number	22-1899798
Entity Address, Address Line One	3565 Piedmont Road,
Entity Address, Address Line Two	Building 3,
Entity Address, Address Line Three	Suite 700
Entity Address, City or Town	Atlanta,
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30305
City Area Code	770
Local Phone Number	554-3545
Title of 12(b) Security	Common Stock
Trading Symbol	DLHC
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		14,230,708
Common stock, par value (in dollars per share)	$ 0.001		$ 0.001
Entity Central Index Key	0000785557
Amendment Flag	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--09-30

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Statement [Abstract]
Revenue	$ 97,850	$ 72,738
Contract costs	79,081	57,256
General and administrative costs	7,697	7,424
Corporate development costs	0	1,735
Depreciation and amortization	4,253	2,402
Total operating costs	91,031	68,817
Income from operations	6,819	3,921
Interest expense	4,658	1,830
Income before provision for income tax	2,161	2,091
Provision for income tax expense	10	544
Net income	$ 2,151	$ 1,547
Net income per share - basic (in dollars per share)	$ 0.15	$ 0.12
Net income per share - diluted (in dollars per share)	$ 0.15	$ 0.11
Weighted average common stock outstanding
Basic (in shares)	14,032	13,306
Diluted (in shares)	14,796	14,276

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2023	Jun. 30, 2023
Current assets:
Cash	$ 131	$ 215
Accounts receivable	55,577	59,119
Other current assets	2,916	3,067
Total current assets	58,624	62,401
Goodwill	138,161	138,161
Intangible assets, net	120,663	124,777
Operating lease right-of-use assets	8,996	9,656
Deferred Income Tax Assets, Net	3,076	3,070
Equipment and improvements, net	1,625	1,590
Other long-term assets	185	186
Total assets	331,330	339,841
Current liabilities:
Accounts payable and accrued liabilities	22,307	29,704
Debt obligations - current, net of deferred financing costs	16,130	17,188
Accrued payroll	15,703	13,794
Operating lease liabilities - current	3,353	3,463
Other Liabilities, Current	564	638
Total current liabilities	58,057	64,787
Debt obligations - long-term, net of deferred financing costs	151,870	155,147
Operating lease liabilities - long-term	15,042	15,908
Other long-term liabilities	1,559	1,560
Total long-term liabilities	168,471	172,615
Total liabilities	226,528	237,402
SHAREHOLDERS’ EQUITY
Common stock, $0.001 par value; 40,000 shares authorized; 14,105 and 13,950 shares issued and outstanding at December 31, 2023 and September 30, 2023, respectively	14	14
Additional paid-in capital	100,186	99,974
Retained earnings	4,602	2,451
Total shareholders’ equity	104,802	102,439
Total liabilities and shareholders' equity	$ 331,330	$ 339,841

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Dec. 31, 2023	Sep. 30, 2023
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	40,000	40,000
Common stock, issued (in shares)	14,105	13,950
Common stock, outstanding (in shares)	14,105	13,950

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Operating activities
Net income	$ 2,151	$ 1,547
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	4,253	2,402
Amortization of deferred financing costs charged to interest expense	642	276
Stock-based compensation expense	620	552
Deferred taxes, net	(6)	(13)
Changes in operating assets and liabilities
Accounts receivable	3,542	780
Other assets	510	994
Accounts payable and accrued liabilities	(7,397)	1,075
Accrued payroll	1,909	347
Other liabilities	(1,153)	13
Net cash provided by operating activities	5,071	7,973
Investing activities
Business acquisition, net of cash acquired	0	(179,958)
Purchase of equipment and improvements	(174)	(384)
Net cash used in investing activities	(174)	(180,342)
Financing activities
Proceeds from revolving line of credit	69,831	0
Repayment of revolving line of credit	(64,026)	0
Proceeds from debt obligations	0	200,703
Repayments of debt obligations	(10,378)	(19,327)
Payments of deferred financing costs	0	(7,221)
Proceeds from issuance of common stock upon exercise of options and warrants	261	0
Payment of tax obligations resulting from net exercise of stock options	(669)	(650)
Net cash provided by (used in) financing activities	(4,981)	173,505
Net change in cash	(84)	1,136
Cash - beginning of period	215	228
Cash - end of period	131	1,364
Supplemental disclosure of cash flow information
Cash paid during the period for interest	3,972	339
Cash paid during the period for income taxes	0	5
Common stock surrendered for the exercise of stock options	$ 244	$ 238

CONSOLIDATED STATEMENTS OF SHAR

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings
Beginning Balance (in shares) at Sep. 30, 2022		13,047
Beginning balance at Sep. 30, 2022	$ 92,060	$ 13	$ 91,057	$ 990
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance and fair value adjustment of common stock in business combination (in shares)		527
Issuance and fair value adjustment of common stock in business combination	7,000	$ 1	6,999
Expense related to director restricted stock units	180		180
Expense related to employee stock-based compensation	372		372
Exercise of stock options (in shares)		250
Exercise of stock options	0		0
Common stock surrendered for the exercise of stock options (in shares)		(67)
Common stock surrendered for the exercise of stock options	(650)		(650)
Net income	1,547			1,547
Ending Balance (in shares) at Dec. 31, 2022		13,757
Ending balance at Dec. 31, 2022	$ 100,509	$ 14	97,958	2,537
Beginning Balance (in shares) at Sep. 30, 2023	13,950	13,950
Beginning balance at Sep. 30, 2023	$ 102,439	$ 14	99,974	2,451
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Expense related to director restricted stock units	80		80
Expense related to employee stock options	$ 540		540
Exercise of stock options (in shares)	220	220
Exercise of stock options	$ 261		261
Common stock surrendered for the exercise of stock options (in shares)		(65)
Common stock surrendered for the exercise of stock options	(669)		(669)
Net income	$ 2,151			2,151
Ending Balance (in shares) at Dec. 31, 2023	14,105	14,105
Ending balance at Dec. 31, 2023	$ 104,802	$ 14	$ 100,186	$ 4,602

Basis of Presentation_and Princ

Basis of Presentation and Principles of Consolidation	3 Months Ended
	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation and Principles of Consolidation	Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of DLH Holdings Corp. and its wholly-owned subsidiaries (together with its subsidiaries, "DLH" or the "Company" and also referred to as "we," "us" and "our"). All significant intercompany balances and transactions have been eliminated in consolidation. The accompanying financial statements have been prepared in accordance with United States generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these statements do not include all of the information and footnotes required by GAAP for complete financial statements. Operating results for the three months ended December 31, 2023 are not necessarily indicative of the results that may be expected for the year ending September 30, 2024 or any future period. Amounts as of December 31, 2023 and for the three months ended December 31, 2023 and 2022 are unaudited. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2023 filed with the Securities and Exchange Commission on December 6, 2023.

Significant Accounting Policies

Significant Accounting Policies	3 Months Ended
	Dec. 31, 2023
Accounting Policies [Abstract]
Significant Accounting Policies	Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The most significant of these estimates and assumptions relate to estimating costs including overhead and its allocation, valuing and determining the amortization periods for long-lived intangible assets, interest rate swaps, stock-based compensation, and right-of-use assets and leases liabilities. We evaluate these estimates and judgments on an ongoing basis and base our estimates on historical experience, current and expected future outcomes, third-party evaluations, and various other assumptions that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. We revise material accounting estimates if changes occur, such as more experience is acquired, additional information is obtained, or there is new information on which an estimate was or can be based. Actual results could differ from those estimates. Revenue The Company's revenues from contracts with customers are derived from offerings that include technology-enabled business process outsourcing, program management solutions, and public health research and analytics, substantially within the U.S. government and its agencies. The Company has various types of contracts including time-and-materials contracts, cost-reimbursable contracts, and firm-fixed-price contracts. We consider a contract with a customer to exist when there is a commitment by both parties (customer and Company), payment terms are determinable, there is commercial substance, and collectability is probably in accordance with Accounting Standards Codification ("ASC") No. 606, Revenue from Contracts with Customers ("Topic 606"). We recognize revenue over time when there is a continuous transfer of control to our customer as performance obligations are satisfied. For our U.S. government contracts, this continuous transfer of control to the customer is transferred over time and revenue is recognized based on the extent of progress toward completion of the performance obligation. We consider control to transfer when we have a right to payment. In some instances, the Company commences providing services prior to formal approval to begin work from the customer. The Company considers these factors, the risks associated with commencing work, and legal enforceability in determining whether a contract exists under Topic 606. Contract modification can occur throughout the life of the contract and can affect the transaction price, extend the period of performance, adjust funding, or create new performance obligations. We review each modification to assess the impact of these contract changes to determine if it should be treated as part of the original performance obligation or as a separate contract. Contract modifications impact performance obligations when the modification either creates new or changes the existing enforceable rights and obligations. The effect of a contract modification on the transaction price and our measure of progress for the performance obligation to which it relates is recognized as an adjustment to revenue and profit cumulatively. Furthermore, a significant change in one or more estimates could affect the profitability of our contracts. We recognize adjustments in estimated profit on contracts in the period identified. For service contracts, we satisfy our performance obligations as services are rendered. We use cost-based input and time-based output methods to measure progress based on the contract type. • Time and material - We bill the customer per labor hour and per material, and revenue is recognized in the amount invoiced as the amount corresponds directly to the value of our performance to date. Revenue is recognized to the extent of billable rates times hours delivered plus materials and other reimbursable costs incurred. • Cost reimbursable - We record reimbursable costs as incurred, including an estimated share of the contractual fee earned. • Firm fixed price - We recognize revenue over time using a straight-line measure of progress. Contract costs generally include direct costs such as labor, materials, subcontract costs, and indirect costs identifiable with or allocable to a specific contract. Costs are expensed as incurred and include an estimate of the contractual fees earned. Contract costs incurred for U.S. government contracts, including indirect costs, are subject to audit and adjustment by various government audit agencies. Historically, our adjustments have not been material. Contract assets - Amounts are invoiced as work progresses in accordance with agreed-upon contractual terms. In part, revenue recognition occurs before we have the right to bill, resulting in contract assets. These contract assets are reported within accounts receivable on our consolidated balance sheets and are invoiced in accordance with payment terms defined in each contract. Period end balances will vary from period to period due to agreed-upon contractual terms. Fair Value of Financial Instruments The carrying amounts of the Company's cash and cash equivalents, accounts receivable, contract assets, accrued expenses, and accounts payable approximate fair value due to the short-term nature of these instruments. The fair values of the Company's debt instruments approximate fair value because the underlying interest rates approximate market rates that the Company could obtain for similar instruments at the balance sheet dates. Long-Lived Assets Our long-lived assets include equipment and improvements, intangible assets, right-of-use assets, and goodwill. The Company continues to review long-lived assets for possible impairment or loss of value at least annually, or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit's carrying amount is greater than its fair value. Equipment and improvements are recorded at cost, less accumulated depreciation and amortization. Depreciation and amortization are provided using the straight-line method over the estimated useful asset lives (3 to 7 years) and the shorter of the initial lease term or estimated useful life for leasehold improvements. Maintenance and repair costs are expensed as incurred. Intangible assets (other than goodwill) are originally recorded at fair value and are amortized on a straight-line basis over their estimated useful lives of 10 years. Right-of-use assets are measured at the present value of future minimum lease payments, including all probable renewals, plus lease payments made to the lessor before or at lease commencement and indirect costs paid, less incentives received. Our right-of-use assets include long-term leases for facilities and equipment and are amortized over their respective lease terms. Lease Liabilities The Company has leases for facilities and office equipment. Our lease liabilities are recognized as the present value of the future minimum lease payments over the lease term. Our lease payments consist of fixed and in-substance fixed amounts attributable to the use of the underlying asset over the lease term. Variable lease payments that do not depend on an index rate or are not in-substance fixed payments are excluded in the measurement of right-of-use assets and lease liabilities and are expensed in the period incurred. The incremental borrowing rate on our secured term loan is used in determining the present value of future minimum lease payments. Some of our lease agreements include options to extend the lease term or terminate the lease. These options are accounted for in our right-of-use assets and lease liabilities when it is reasonably certain that the Company will extend the lease term or terminate the lease. The Company does not have any finance leases. Goodwill The Company reviews goodwill for impairment on an annual basis and on a quarterly basis the Company assesses the impact of any macroeconomic changes that may impact the business conditions to determine if these changes have any adverse impact to goodwill. Notwithstanding this evaluation, factors including non-renewal of a major contract or other substantial changes in business conditions could have a material adverse effect on the valuation of goodwill in future periods and the resulting charge could be material to future periods’ results of operations. The Company determined that no change in business conditions occurred which would have a material adverse effect on the valuation of goodwill. Income Tax The Company accounts for income taxes in accordance with the asset and liability method, whereby deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reflected on the consolidated balance sheets when it is determined that it is more likely than not that the asset will be realized. This guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax asset will not be realized. We account for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon the technical merits, it is more likely than not that the position will be sustained upon examination. We had no uncertain tax positions at either December 31, 2023 or September 30, 2023. We report interest and penalties as a component of provision for income taxes. During the three months ended December 31, 2023 and 2022, we recognized no interest and no penalties related to income taxes. Stock-Based Compensation The Company uses the fair value-based method for stock-based compensation. Options issued are designated as either an incentive stock option or a non-statutory stock option. No option may be granted with a term of more than 10 years from the date of grant. Option awards may depend on achievement of certain performance measures determined by the Compensation Committee of our Board. Shares issued upon option exercise are newly issued common shares. All awards t o employees and non- employee s are reco rded at fair value on the date of the grant and expensed over the period of vesting. The Company uses a Monte Carlo method to estimate the fair value of each stock option at the date of grant. Any consideration paid by the option holders to purchase shares is credited to common stock. Stock-based compensation expense for the portion of equity awards for which the requisite service has not been rendered is recognized as the requisite service is rendered. The stock-based compensation expense for that portion of awards has been based on the grant-date fair value of those awards as calculated for recognition purposes under applicable guidance. For options that vest based on the Company’s common stock achieving and maintaining defined market prices, the Company values the awards with a Monte Carlo method that utilizes various probability factors and other criterion in establishing fair value of the grant. The related compensation expense is recognized over the service period. Cash The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. We maintain cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation up to $250,000. Deposits held with financial institutions may exceed the $250,000 limit. Accounts Receivable Receivables include amounts billed and currently due from customers where the right to consideration is unconditional and amounts unbilled. Both billed and unbilled amounts are non-interest bearing, unsecured, and recognized at an estimated realizable value that includes costs and fees, and are generally expected to be billed and received within a single year. We evaluate our receivables for expected credit losses on a quarterly basis and determine whether an allowance for expected credit losses is appropriate based on specific collection issues. No allowance for doubtful accounts was deemed necessary at either December 31, 2023 or September 30, 2023. Earnings Per Share Basic earnings per share is calculated by dividing income available to common shareholders by the weighted average number of common stock outstanding and restricted stock grants that vested or are likely to vest during the period. Diluted earnings per share is calculated by dividing income available to common shareholders by the weighted average number of basic common shares outstanding, adjusted to reflect potentially dilutive securities. Diluted earnings per share is calculated using the treasury stock method. Treasury Stock The Company periodically purchases its own common stock that is traded on public markets as part of announced stock repurchase programs. The repurchased common stock is classified as treasury stock on the consolidated balance sheets and held at cost. As of December 31, 2023 and September 30, 2023, the Company did not hold any treasury stock. Preferred Stock Our certificate of incorporation authorizes the issuance of "blank check" preferred stock with designations, rights and preferences as may be determined from time to time by our board of directors up to an aggregate of 5,000,000 shares of preferred stock. As of December 31, 2023 and September 30, 2023, the Company has not issued any preferred stock. Interest Rate Swap The Company uses derivative financial instruments to manage interest rate risk associated with its variable debt. The Company's objective in using these interest rate derivatives is to manage its exposure to interest rate movements and reduce volatility of interest expense. The gains and losses due to changes in the fair value of the interest rate swap agreements completely offset changes in the fair value of the hedged portion of the underlying debt. Offsetting changes in fair value of both the interest rate swaps and the hedged portion of the underlying debt are recognized in interest expense in the consolidated statements of operations. The Company does not hold or issue any derivative instruments for trading or speculative purposes. Risks & Uncertainties Management evaluates the impact of global markets and economic factors on our industry and the potential for adverse effects on the Company's consolidated financial position and its operations. As of December 31, 2023, there was no indication of any global or economic impacts to our industry.

New Accounting Pronouncements

New Accounting Pronouncements	3 Months Ended
	Dec. 31, 2023
Accounting Changes and Error Corrections [Abstract]
New Accounting Pronouncements	New Accounting Pronouncements In November 2023, Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07 "Segment reporting (Topic 280): Improvements to Reportable Segment Disclosures" which provides guidance intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, and each reported measure of segment profit or loss. The ASU requires that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this ASU and all existing segment disclosures in Topic 280. The amendments in this update are effective for all entities for its annual filings occurring after December 31, 2023, and interim periods after December 15, 2024. We are currently evaluating the impacts of the single reportable segment disclosures. In December 2023, FASB issued ASU 2023-09 "Income taxes (Topic 740): Improvements to Income Tax Disclosures" which provides guidance on the requirements such as the requirement that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. DLH is a public company that reports income tax disclosures and therefore this ASU applies to the Company. The amendments in this update are effective for all entities for its annual filings occurring after December 31, 2023. We are currently evaluating the impacts of the improvements to income tax disclosure.

Revenue Recognition

Revenue Recognition	3 Months Ended
	Dec. 31, 2023
Revenue from Contract with Customer [Abstract]
Revenue Recognition	Revenue Recognition The following table summarizes the contract balances recognized on the Company's consolidated balance sheets as follows (in thousands): December 31, September 30, 2023 2023 Contract assets $ 19,234 $ 20,542 Contract assets are included as part of the accounts receivable on the consolidated balances sheets. Contract liabilities had no balance as of December 31, 2023 and September 30, 2023. Disaggregation of Revenue from Contracts with Customers We disaggregate our revenue from contracts with customers by customer, contract type, as well as whether the Company acts as prime contractor or subcontractor. We believe these categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. The following series of tables present our revenue disaggregated by these categories: Revenue by customer for the three months ended December 31, 2023 and 2022 was as follows (in thousands): 2023 2022 Department of Health and Human Services $ 44,297 $ 27,305 Department of Veterans Affairs 34,680 33,708 Department of Defense 16,871 10,263 Other 2,002 1,462 Total $ 97,850 $ 72,738 Revenue by contract type for the three months ended December 31, 2023 and 2022 was as follows (in thousands): 2023 2022 Time and Materials $ 54,789 $ 48,991 Cost Reimbursable 19,751 12,580 Firm Fixed Price 23,310 11,167 Total $ 97,850 $ 72,738 Revenue by whether the Company acts as a prime contractor or a subcontractor for the three months ended December 31, 2023 and 2022 was as follows (in thousands): 2023 2022 Prime Contractor $ 87,633 $ 67,981 Subcontractor 10,217 4,757 Total $ 97,850 $ 72,738

Leases

Leases	3 Months Ended
	Dec. 31, 2023
Leases [Abstract]
Leases	Leases The following table summarizes lease balances presented on our consolidated balance sheets was as follows (in thousands): December 31, September 30, 2023 2023 Operating lease right-of-use assets $ 8,996 $ 9,656 Operating lease liabilities, current $ 3,353 $ 3,463 Operating lease liabilities - long-term 15,042 15,908 Total operating lease liabilities $ 18,395 $ 19,371 As of December 31, 2023, operating leases for facilities and equipment have remaining lease terms of less than 1 to 8 years. For the three months ended December 31, 2023 and 2022, total lease costs for our leases was as follows (in thousands): 2023 2022 Operating $ 873 $ 947 Short-term 50 43 Variable 37 31 Sublease income (a) (67) (71) Total lease costs $ 893 $ 950 (a) The Company subleases a portion of one of its leased facilities. The sublease is classified as an operating lease with respect to the underlying asset. The sublease term is 5 years and includes two additional 1 year term extension options. The Company's future minimum lease payments as of December 31, 2023 was as follows (in thousands): Fiscal year ending: 2024 (remaining) $ 3,833 2025 3,928 2026 3,700 2027 2,627 2028 2,377 Thereafter 6,295 Total future lease payments 22,760 Less: imputed interest (4,365) Present value of future minimum lease payments 18,395 Less: current portion of operating lease liabilities (3,353) Long-term operating lease liabilities $ 15,042 At December 31, 2023, the weighted-average remaining lease term and weighted-average discount rate are 6.2 years and 6.3%, respectively. The calculation of the weighted-average discount rate was determined based on borrowing terms from our secured term loan. Other information related to our leases for the three months ended December 31, 2023 and 2022 was as follows (in thousands): 2023 2022 Cash paid for amounts included in the measurement of lease liabilities $ 1,237 $ 1,022 Lease liabilities arising from obtaining right-of-use assets — 3,541 Other lease information $ 1,237 $ 4,563

Supporting Financial Informatio

Supporting Financial Information	3 Months Ended
	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Supporting Financial Information	Supporting Financial Information Accounts receivable The following table summarizes accounts receivable presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2023 2023 Billed receivables $ 36,343 $ 38,577 Contract assets 19,234 20,542 Allowance for doubtful accounts — — Accounts receivable $ 55,577 $ 59,119 Other current assets The following table summarizes other current assets presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2023 2023 Prepaid insurance and benefits $ 1,460 $ 1,330 Prepaid licenses and other expenses 477 743 Other receivables 979 994 Other current assets $ 2,916 $ 3,067 Goodwill The change in the carrying amount of goodwill as follows presented on our consolidated balance sheets as follows (in thousands): Balance at September 30, 2023 $ 138,161 Activity during the fiscal periods: No activity — Balance at December 31, 2023 $ 138,161 Intangible assets The following table summarizes intangible assets, net presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2023 2023 Intangible assets Customer contracts and related customer relationships $ 113,622 $ 113,622 Covenants not to compete 637 637 Trade name 13,034 13,034 Backlog 37,249 37,249 Total intangible assets 164,542 164,542 Less: accumulated amortization Customer contracts and related customer relationships (32,771) (29,929) Covenants not to compete (394) (378) Trade name (2,510) (2,185) Backlog (8,204) (7,273) Total accumulated amortization (43,879) (39,765) Intangible assets, net $ 120,663 $ 124,777 Amortization expense was $4.1 million and $2.2 million for the three months ended December 31, 2023 and 2022, respectively. As of December 31, 2023, the estimated amortization expense per fiscal year as follows (in thousands): Fiscal year ending: 2024 (remaining) $ 12,341 2025 16,455 2026 15,722 2027 14,694 2028 14,694 Thereafter 46,757 Total amortization expense $ 120,663 At December 31, 2023, the weighted-average remaining amortization period in total was 8.1 years. At September 30, 2023, the weighted-average amortization period for customer contracts and related customer relationships, backlog, trade names and covenants not to compete was 8.0 years, 8.3 years, 8.4 years, 5.8 years, respectively. Equipment and improvements, net The following table summarizes equipment and improvements, net presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2023 2023 Furniture and equipment $ 2,025 $ 1,790 Computer equipment and software 6,418 6,479 Leasehold improvements 1,614 1,614 Total equipment and improvements 10,057 9,883 Less: accumulated depreciation and amortization (8,432) (8,293) Equipment and improvements, net $ 1,625 $ 1,590 Depreciation and amortization expense was $0.1 million and $0.2 million for the three months ended December 31, 2023 and 2022, respectively. Accounts payable and accrued liabilities The following table summarizes accounts payable and accrued liabilities presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2023 2023 Accounts payable $ 9,213 $ 12,603 Accrued benefits 5,510 6,414 Accrued workers' compensation insurance 2,300 2,369 Accrued bonus and incentive compensation 1,075 4,719 Accrued interest 1,353 1,309 Other accrued expenses 2,856 2,290 Accounts payable and accrued liabilities $ 22,307 $ 29,704 Accrued payroll The following table summarizes accrued payroll presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2023 2023 Accrued leave $ 9,046 $ 9,621 Accrued payroll 5,183 2,487 Accrued payroll taxes 1,115 1,173 Accrued severance 359 513 Accrued payroll $ 15,703 $ 13,794 Debt obligations The following table summarizes debt obligations presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2023 2023 Secured term loan $ 159,031 $ 169,813 Secured revolving line of credit 15,350 9,546 Less: unamortized deferred financing costs (6,381) (7,024) Net bank debt obligations 168,000 172,335 Less: current portion of debt obligations, net of deferred financing costs (a) (16,130) (17,188) Long-term portion of debt obligations, net of deferred financing costs $ 151,870 $ 155,147 As of December 31, 2023, we have satisfied mandatory principal payments on our secured term loan. (a) As of December 31, 2023, the current portion comprises term loan amortization of $2.3 million and the $15.4 million outstanding balance on the secured revolving line of credit, net of $1.5 million of unamortized deferred financing costs. Interest expense The following table summarizes interest expense presented on our consolidated statements of operations for the three months ended December 31, 2023 and 2022 as follows (in thousands): 2023 2022 Interest expense (a) $ 4,016 $ 1,554 Amortization of deferred financing costs (b) 642 276 Interest expense $ 4,658 $ 1,830 (a) Interest expense on borrowing. (b) Amortization of expenses related to secured term loan and secured revolving line of credit.

Credit Facilities

Credit Facilities	3 Months Ended
	Dec. 31, 2023
Debt Disclosure [Abstract]
Credit Facilities	Credit Facilities A summary of our credit facilities as presented on our consolidated balance sheets as follows (in millions): December 31, 2023 September 30, 2023 Arrangement Loan Balance Interest Arrangement Loan Balance Interest Secured term loan (a) due December 8, 2027 $ 159,031 SOFR 1 + 4.1% Secured term loan (a) due December 8, 2027 $ 169,813 SOFR 1 + 4.1% Secured revolving line of credit (b) due December 8, 2027 $ 15,350 SOFR 1 + 4.1% Secured revolving line of credit (b) due December 8, 2027 $ 9,546 SOFR 1 + 4.1% 1 Secured Overnight Financing Rate ("SOFR") as of December 31, 2023 and September 30, 2023 were 5.4% and 5.3% respectively. (a) Represents the principal amounts payable on our term loan, which is secured by liens on substantially all of the assets of the Company. The principal of the term loan is payable in quarterly installments with the remaining balance due on December 8, 2027. On September 19, 2019, we executed a floating-to-fixed interest rate swap with First National Bank ("FNB") as counter party. The swap has a notional of $9.0 million at December 31, 2023, a fixed interest rate of 1.61% and a maturity date of June 7, 2024. On January 31, 2023, we executed an additional floating-to-fixed interest rate swap with FNB which has a notional amount of $96.0 million at December 31, 2023 , a fixed interest rate of 4.10% and a maturity date of January 31, 2026. As a result of entering these agreements, for the three months ended December 31, 2023, interest expense has been decreased by approximately $0.4 million. The Credit Agreement requires compliance with a number of financial covenants and contains restrictions on our ability to engage in certain transactions. Among other matters, we must comply with limitations on: granting liens; incurring other indebtedness; maintenance of assets; investments in other entities and extensions of credit; mergers and consolidations; and changes in nature of business. The loan agreement also requires us to comply with certain quarterly financial covenants including: (i) a minimum fixed charge coverage ratio of at least 1.25 to 1.00, and (ii) a total leverage ratio not exceeding the ratio of 4.50:1.00 to 2.00:1.00 through maturity. The total leverage ratio is calculated by dividing the Company's total interest-bearing debt by net income adjusted to exclude (i) interest and other expenses, (ii) provision for income taxes (benefit) expense, if any, (iii) depreciation and amortization, and (iv) non-cash charges, losses or expenses, including stock-based compensation, and (v) non-recurring charges, losses or expenses to include transaction and non-cash equity expense. We are in compliance with all loan covenants and restrictions as of December 31, 2023. We are required to pay quarterly amortization payments, which commenced in December 2022. The annual amortization amounts are $14.3 million each for fiscal years 2023 and 2024, $19.0 million each for fiscal years 2025 and 2026, and $23.75 million for fiscal year 2027, with the remaining unpaid loan balance due at maturity in December 2027. The quarterly payments are equal installments. The Company made voluntary prepayments of $10.8 million during the quarter ended December 31, 2023 bringing the outstanding principal balance on the secured term loan to $159.0 million. We have satisfied the mandatory principal payments through the end of fiscal 2024. In addition to quarterly payments of the outstanding indebtedness, the loan agreement also requires annual payments of a percentage of excess cash flow, as defined in the loan agreement. The loan agreement states that an excess cash flow recapture payment must be made equal to (a) 75% of the excess cash flow for the immediately preceding fiscal year in which indebtedness to consolidated EBITDA ratio is greater than or equal to 2.5:1; (b) 50% of the excess cash flow for the immediately preceding fiscal year in which the funded indebtedness to consolidated EBITDA Ratio is less than 2.5:1 but greater than or equal to 1.5:1; or (c) 0% of the excess cash flow for the immediately preceding fiscal year in which the funded indebtedness to consolidated EBITDA Ratio is less than 1.5:1. In addition, the Company must make additional mandatory prepayment of amounts outstanding based on proceeds received from asset sales and sales of certain equity securities or other indebtedness. Due to the voluntary prepayment of term debt, there was no excess cash flow payment required. For additional information regarding the schedule of future payment obligations, please refer to Note 10. Commitments and Contingencies . (b) The secured revolving line of credit has a ceiling of up to $70.0 million; as of December 31, 2023, we had unused borrowing capacity of $22.8 million, which is net of outstanding letters of credit. Borrowing on the secured revolving line of credit is secured by liens on substantially all of the assets of the Company. The Company accessed funds from the secured revolving line of credit during the year, which had a $15.4 million outstanding balance at December 31, 2023. As part of the secured revolving line of credit, the lenders agreed to a sublimit of $10.0 million for letters of credit for the account of the Company, subject to applicable procedures.

Stock-Based Compensation and Eq

Stock-Based Compensation and Equity Grants	3 Months Ended
	Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]
Stock-Based Compensation and Equity Grants	Stock-Based Compensation and Equity Grants Stock-based compensation expense Options issued under equity incentive plans were designated as either an incentive stock or a non-statutory stock option. No option was granted with a term of more than 10 years from the date of grant. Exercisability of option awards may depend on achievement of certain performance measures determined by the Compensation Committee of our Board. Shares issued upon option exercise are newly issued shares. As of December 31, 2023, there were 0.8 million shares available for grant. Stock-based compensation expense shown in the table below, is recorded in general and administrative expenses in our consolidated statements of operations for the three months ended December 31, 2023 and 2022 as follows (in thousands): 2023 2022 DLH employees (a) $ 540 $ 372 Non-employee directors (b) 80 180 Total stock option expense $ 620 $ 552 (a) Included in this amount are equity grants of restricted stock units ("RSU") to Executive Officers, which were issued in accordance with the DLH long-term incentive compensation policy in this fiscal year, including both RSU and stock option grants to employees during prior fiscal years. The RSUs issued and outstanding totaled 367,795 and 140,404 at December 31, 2023 and 2022, respectively. During the three months ended December 31, 2023, 169,544 RSUs were granted to Executive Officers. Of the RSUs granted, 84,773 have performance-based vesting criteria and the remaining 84,771 have service-based vesting criteria. The RSUs granted during the three months ended December 31, 2023, were valued as follows using the Monte Carlo Method, and will be amortized over the 3-year measurement period. (b) Equity grants of RSUs were made in accordance with DLH compensation policy for non-employee directors and a total of 61,525 and 53,510 restricted stock units were issued and outstanding at December 31, 2023 and 2022, respectively. These grants have service-based vesting criteria and vest at the end of this fiscal year. Volatility 50% Grant Date Performance Vesting Base Performance Vesting Criteria (Years) Fair Value December 15, 2023 Revenue Revenue increase at the end of the performance period as compared to the year ended September 30, 2023 3 $ 3.82 December 15, 2023 Stock price Stock price is at least $25.65 per share average for the 30 days prior to the end of the performance period 3 $ 5.36 Notes: Results based on 100,000 simulations Unrecognized stock-based compensation expense Unrecognized stock-based compensation expense is presented in the table below for the three months ended December 31, 2023 and 2022 as follows (in thousands): 2023 2022 Unrecognized expense for DLH employees (a) $ 7,983 $ 4,750 Unrecognized expense for non-employee directors 539 538 Total unrecognized expense $ 8,522 $ 5,288 (a) On a weighted average basis, the unrecognized expense for the three months ended December 31, 2023 is expected to be recognized within the next 3.42 years. Stock option activity for the three months ended December 31, 2023 The aggregate intrinsic value in the table below represents the total pretax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, times the number of shares) that would have been received by the option holders had all option holders exercised their in the money options on those dates. This amount will change based on the fair market value of the Company’s stock. A summary of the Company's stock option awards is as follows: (in years) Weighted Weighted Average (in thousands) (in thousands) Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Term Value Options outstanding, September 30, 2023 2,278 $ 8.40 5.80 $ 8,693 Granted — — — — Exercised (220) 2.29 — — Cancelled (25) 11.66 — — Options outstanding, December 31, 2023 2,033 $ 9.02 6.00 $ 13,803 Vested and exercisable, December 31, 2023 1,423 $ 7.18 4.80 $ 12,208 Stock option shares outstanding, vested and unvested balance as follows (in thousands): December 31, September 30, 2023 2023 Vested and exercisable 1,423 1,608 Unvested (a) 610 670 Options outstanding 2,033 2,278 (a) Certain awards vest upon satisfaction of certain performance criteria.

Earnings Per Share

Earnings Per Share	3 Months Ended
	Dec. 31, 2023
Earnings Per Share [Abstract]
Earnings Per Share	Earnings Per Share Basic earnings per share is calculated by dividing income available to common shareholders by the weighted average number of common shares outstanding and restricted stock grants that vested or are likely to vest during the period. Diluted earnings per share is calculated by dividing income available to common shareholders by the weighted average number of basic common shares outstanding, adjusted to reflect potentially dilutive securities. Diluted earnings per share is calculated using the treasury stock method. Earnings per share information is presented in the table below for the three months ended December 31, 2023 and 2022 as follows (in thousands except for per share amounts): 2023 2022 Numerator: Net income $ 2,151 $ 1,547 Denominator: Denominator for basic net income per share - weighted-average outstanding shares 14,032 13,306 Effect of dilutive securities: Stock options and restricted stock 764 970 Denominator for diluted net income per share - weighted-average outstanding shares 14,796 14,276 Net income per share - basic $ 0.15 $ 0.12 Net income per share - diluted $ 0.15 $ 0.11

Commitment and Contingencies

Commitment and Contingencies	3 Months Ended
	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Contractual obligations as of December 31, 2023 are as follows (in thousands): Payments Due Per Fiscal Year (Remaining) Total 2024 2025 2026 2027 2028 Thereafter Debt obligations $ 174,381 $ 15,350 $ 16,531 $ 19,000 $ 23,750 $ 99,750 $ — Facility operating leases 22,751 3,824 3,928 3,700 2,627 2,377 6,295 Equipment operating leases 9 9 — — — — — Total contractual obligations $ 197,141 $ 19,183 $ 20,459 $ 22,700 $ 26,377 $ 102,127 $ 6,295 Legal proceedings As a commercial enterprise and employer, the Company is subject to various claims and legal actions in the ordinary course of business. These matters can include professional liability, employment-relations issues, workers’ compensation, tax, payroll and employee-related matters, other commercial disputes arising in the course of its business, and inquiries and investigations by governmental agencies regarding our employment practices or other matters. The Company is not aware of any pending or threatened litigation that it believes is reasonably likely to have a material adverse effect on its results of operations, financial position or cash flows.

Related Party Transactions

Related Party Transactions	3 Months Ended
	Dec. 31, 2023
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions The Company has determined that for the three months ended December 31, 2023 and 2022 there were no significant related party transactions that have occurred which require disclosure through the date that these consolidated financial statements were issued.

Subsequent Events

Subsequent Events	3 Months Ended
	Dec. 31, 2023
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events Management has evaluated subsequent events through the date that the Company's unaudited consolidated financial statements were issued. Based on this evaluation, the Company has determined that no subsequent events have occurred which require disclosure through the date that these consolidated financial statements were issued.

Insider Trading Arrangements

Insider Trading Arrangements	3 Months Ended
	Dec. 31, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Significant Accounting Polici_2

Significant Accounting Policies (Policies)	3 Months Ended
	Dec. 31, 2023
Accounting Policies [Abstract]
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The most significant of these estimates and assumptions relate to estimating costs including overhead and its allocation, valuing and determining the amortization periods for long-lived intangible assets, interest rate swaps, stock-based compensation, and right-of-use assets and leases liabilities. We evaluate these estimates and judgments on an ongoing basis and base our estimates on historical experience, current and expected future outcomes, third-party evaluations, and various other assumptions that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. We revise material accounting estimates if changes occur, such as more experience is acquired, additional information is obtained, or there is new information on which an estimate was or can be based. Actual results could differ from those estimates.
Revenue	Revenue The Company's revenues from contracts with customers are derived from offerings that include technology-enabled business process outsourcing, program management solutions, and public health research and analytics, substantially within the U.S. government and its agencies. The Company has various types of contracts including time-and-materials contracts, cost-reimbursable contracts, and firm-fixed-price contracts. We consider a contract with a customer to exist when there is a commitment by both parties (customer and Company), payment terms are determinable, there is commercial substance, and collectability is probably in accordance with Accounting Standards Codification ("ASC") No. 606, Revenue from Contracts with Customers ("Topic 606"). We recognize revenue over time when there is a continuous transfer of control to our customer as performance obligations are satisfied. For our U.S. government contracts, this continuous transfer of control to the customer is transferred over time and revenue is recognized based on the extent of progress toward completion of the performance obligation. We consider control to transfer when we have a right to payment. In some instances, the Company commences providing services prior to formal approval to begin work from the customer. The Company considers these factors, the risks associated with commencing work, and legal enforceability in determining whether a contract exists under Topic 606. Contract modification can occur throughout the life of the contract and can affect the transaction price, extend the period of performance, adjust funding, or create new performance obligations. We review each modification to assess the impact of these contract changes to determine if it should be treated as part of the original performance obligation or as a separate contract. Contract modifications impact performance obligations when the modification either creates new or changes the existing enforceable rights and obligations. The effect of a contract modification on the transaction price and our measure of progress for the performance obligation to which it relates is recognized as an adjustment to revenue and profit cumulatively. Furthermore, a significant change in one or more estimates could affect the profitability of our contracts. We recognize adjustments in estimated profit on contracts in the period identified. For service contracts, we satisfy our performance obligations as services are rendered. We use cost-based input and time-based output methods to measure progress based on the contract type. • Time and material - We bill the customer per labor hour and per material, and revenue is recognized in the amount invoiced as the amount corresponds directly to the value of our performance to date. Revenue is recognized to the extent of billable rates times hours delivered plus materials and other reimbursable costs incurred. • Cost reimbursable - We record reimbursable costs as incurred, including an estimated share of the contractual fee earned. • Firm fixed price - We recognize revenue over time using a straight-line measure of progress. Contract costs generally include direct costs such as labor, materials, subcontract costs, and indirect costs identifiable with or allocable to a specific contract. Costs are expensed as incurred and include an estimate of the contractual fees earned. Contract costs incurred for U.S. government contracts, including indirect costs, are subject to audit and adjustment by various government audit agencies. Historically, our adjustments have not been material. Contract assets - Amounts are invoiced as work progresses in accordance with agreed-upon contractual terms. In part, revenue recognition occurs before we have the right to bill, resulting in contract assets. These contract assets are reported within accounts receivable on our consolidated balance sheets and are invoiced in accordance with payment terms defined in each contract. Period end balances will vary from period to period due to agreed-upon contractual terms. Disaggregation of Revenue from Contracts with Customers
Fair Value of Financial Instruments	Fair Value of Financial Instruments The carrying amounts of the Company's cash and cash equivalents, accounts receivable, contract assets, accrued expenses, and accounts payable approximate fair value due to the short-term nature of these instruments. The fair values of the Company's debt instruments approximate fair value because the underlying interest rates approximate market rates that the Company could obtain for similar instruments at the balance sheet dates.
Long-Lived Assets	Long-Lived Assets Our long-lived assets include equipment and improvements, intangible assets, right-of-use assets, and goodwill. The Company continues to review long-lived assets for possible impairment or loss of value at least annually, or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit's carrying amount is greater than its fair value. Equipment and improvements are recorded at cost, less accumulated depreciation and amortization. Depreciation and amortization are provided using the straight-line method over the estimated useful asset lives (3 to 7 years) and the shorter of the initial lease term or estimated useful life for leasehold improvements. Maintenance and repair costs are expensed as incurred. Intangible assets (other than goodwill) are originally recorded at fair value and are amortized on a straight-line basis over their estimated useful lives of 10 years.
Lease Liabilities	Right-of-use assets are measured at the present value of future minimum lease payments, including all probable renewals, plus lease payments made to the lessor before or at lease commencement and indirect costs paid, less incentives received. Our right-of-use assets include long-term leases for facilities and equipment and are amortized over their respective lease terms. Lease Liabilities The Company has leases for facilities and office equipment. Our lease liabilities are recognized as the present value of the future minimum lease payments over the lease term. Our lease payments consist of fixed and in-substance fixed amounts attributable to the use of the underlying asset over the lease term. Variable lease payments that do not depend on an index rate or are not in-substance fixed payments are excluded in the measurement of right-of-use assets and lease liabilities and are expensed in the period incurred. The incremental borrowing rate on our secured term loan is used in determining the present value of future minimum lease payments. Some of our lease agreements include options to extend the lease term or terminate the lease. These options are accounted for in our right-of-use assets and lease liabilities when it is reasonably certain that the Company will extend the lease term or terminate the lease. The Company does not have any finance leases.
Goodwill	Goodwill The Company reviews goodwill for impairment on an annual basis and on a quarterly basis the Company assesses the impact of any macroeconomic changes that may impact the business conditions to determine if these changes have any adverse impact to goodwill. Notwithstanding this evaluation, factors including non-renewal of a major contract or other substantial changes in business conditions could have a material adverse effect on the valuation of goodwill in future periods and the resulting charge could be material to future periods’ results of operations. The Company determined that no change in business conditions occurred which would have a material adverse effect on the valuation of goodwill.
Income Tax	Income Tax
Stock-based Compensation	Stock-Based Compensation The Company uses the fair value-based method for stock-based compensation. Options issued are designated as either an incentive stock option or a non-statutory stock option. No option may be granted with a term of more than 10 years from the date of grant. Option awards may depend on achievement of certain performance measures determined by the Compensation Committee of our Board. Shares issued upon option exercise are newly issued common shares. All awards t o employees and non- employee s are reco rded at fair value on the date of the grant and expensed over the period of vesting. The Company uses a Monte Carlo method to estimate the fair value of each stock option at the date of grant. Any consideration paid by the option holders to purchase shares is credited to common stock. Stock-based compensation expense for the portion of equity awards for which the requisite service has not been rendered is recognized as the requisite service is rendered. The stock-based compensation expense for that portion of awards has been based on the grant-date fair value of those awards as calculated for recognition purposes under applicable guidance. For options that vest based on the Company’s common stock achieving and maintaining defined market prices, the Company values the awards with a Monte Carlo method that utilizes various probability factors and other criterion in establishing fair value of the grant. The related compensation expense is recognized over the service period.
Cash	Cash
Accounts Receivable	Accounts Receivable Receivables include amounts billed and currently due from customers where the right to consideration is unconditional and amounts unbilled. Both billed and unbilled amounts are non-interest bearing, unsecured, and recognized at an estimated realizable value that includes costs and fees, and are generally expected to be billed and received within a single year. We evaluate our receivables for expected credit losses on a quarterly basis and determine whether an allowance for expected credit losses is appropriate based on specific collection issues. No allowance for doubtful accounts was deemed necessary at either December 31, 2023 or September 30, 2023.
Earnings Per Share	Earnings Per Share
Treasury Stock and Preferred Stock	Treasury Stock The Company periodically purchases its own common stock that is traded on public markets as part of announced stock repurchase programs. The repurchased common stock is classified as treasury stock on the consolidated balance sheets and held at cost. As of December 31, 2023 and September 30, 2023, the Company did not hold any treasury stock. Preferred Stock
Interest Rate Swap	Interest Rate Swap The Company uses derivative financial instruments to manage interest rate risk associated with its variable debt. The Company's objective in using these interest rate derivatives is to manage its exposure to interest rate movements and reduce volatility of interest expense. The gains and losses due to changes in the fair value of the interest rate swap agreements completely offset changes in the fair value of the hedged portion of the underlying debt. Offsetting changes in fair value of both the interest rate swaps and the hedged portion of the underlying debt are recognized in interest expense in the consolidated statements of operations. The Company does not hold or issue any derivative instruments for trading or speculative purposes.
Risks And Uncertainties	Risks & Uncertainties Management evaluates the impact of global markets and economic factors on our industry and the potential for adverse effects on the Company's consolidated financial position and its operations. As of December 31, 2023, there was no indication of any global or economic impacts to our industry.
New Accounting Pronouncements	New Accounting Pronouncements In November 2023, Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07 "Segment reporting (Topic 280): Improvements to Reportable Segment Disclosures" which provides guidance intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, and each reported measure of segment profit or loss. The ASU requires that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this ASU and all existing segment disclosures in Topic 280. The amendments in this update are effective for all entities for its annual filings occurring after December 31, 2023, and interim periods after December 15, 2024. We are currently evaluating the impacts of the single reportable segment disclosures. In December 2023, FASB issued ASU 2023-09 "Income taxes (Topic 740): Improvements to Income Tax Disclosures" which provides guidance on the requirements such as the requirement that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. DLH is a public company that reports income tax disclosures and therefore this ASU applies to the Company. The amendments in this update are effective for all entities for its annual filings occurring after December 31, 2023. We are currently evaluating the impacts of the improvements to income tax disclosure.

Revenue Recognition (Tables)

Revenue Recognition (Tables)	3 Months Ended
	Dec. 31, 2023
Revenue from Contract with Customer [Abstract]
Schedule of Contract Balances Recognized on the Company's Consolidated Balance Sheets	The following table summarizes the contract balances recognized on the Company's consolidated balance sheets as follows (in thousands): December 31, September 30, 2023 2023 Contract assets $ 19,234 $ 20,542
Schedule of Disaggregation of Revenue From Contracts with Customers	The following series of tables present our revenue disaggregated by these categories: Revenue by customer for the three months ended December 31, 2023 and 2022 was as follows (in thousands): 2023 2022 Department of Health and Human Services $ 44,297 $ 27,305 Department of Veterans Affairs 34,680 33,708 Department of Defense 16,871 10,263 Other 2,002 1,462 Total $ 97,850 $ 72,738 Revenue by contract type for the three months ended December 31, 2023 and 2022 was as follows (in thousands): 2023 2022 Time and Materials $ 54,789 $ 48,991 Cost Reimbursable 19,751 12,580 Firm Fixed Price 23,310 11,167 Total $ 97,850 $ 72,738 Revenue by whether the Company acts as a prime contractor or a subcontractor for the three months ended December 31, 2023 and 2022 was as follows (in thousands): 2023 2022 Prime Contractor $ 87,633 $ 67,981 Subcontractor 10,217 4,757 Total $ 97,850 $ 72,738

Leases (Tables)

Leases (Tables)	3 Months Ended
	Dec. 31, 2023
Leases [Abstract]
Schedule of Summarized Lease Balances in Consolidated Balance Sheet	The following table summarizes lease balances presented on our consolidated balance sheets was as follows (in thousands): December 31, September 30, 2023 2023 Operating lease right-of-use assets $ 8,996 $ 9,656 Operating lease liabilities, current $ 3,353 $ 3,463 Operating lease liabilities - long-term 15,042 15,908 Total operating lease liabilities $ 18,395 $ 19,371
Schedule of Lease Costs and Other Information Related to Leases	For the three months ended December 31, 2023 and 2022, total lease costs for our leases was as follows (in thousands): 2023 2022 Operating $ 873 $ 947 Short-term 50 43 Variable 37 31 Sublease income (a) (67) (71) Total lease costs $ 893 $ 950 Other information related to our leases for the three months ended December 31, 2023 and 2022 was as follows (in thousands): 2023 2022 Cash paid for amounts included in the measurement of lease liabilities $ 1,237 $ 1,022 Lease liabilities arising from obtaining right-of-use assets — 3,541 Other lease information $ 1,237 $ 4,563
Schedule of Company's Future Lease Payments	The Company's future minimum lease payments as of December 31, 2023 was as follows (in thousands): Fiscal year ending: 2024 (remaining) $ 3,833 2025 3,928 2026 3,700 2027 2,627 2028 2,377 Thereafter 6,295 Total future lease payments 22,760 Less: imputed interest (4,365) Present value of future minimum lease payments 18,395 Less: current portion of operating lease liabilities (3,353) Long-term operating lease liabilities $ 15,042

Supporting Financial Informat_2

Supporting Financial Information (Tables)	3 Months Ended
	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Schedule of Accounts Receivable	The following table summarizes accounts receivable presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2023 2023 Billed receivables $ 36,343 $ 38,577 Contract assets 19,234 20,542 Allowance for doubtful accounts — — Accounts receivable $ 55,577 $ 59,119
Schedule of Other Current Assets	The following table summarizes other current assets presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2023 2023 Prepaid insurance and benefits $ 1,460 $ 1,330 Prepaid licenses and other expenses 477 743 Other receivables 979 994 Other current assets $ 2,916 $ 3,067
Schedule of Changes in Carrying Amount of Goodwill	The change in the carrying amount of goodwill as follows presented on our consolidated balance sheets as follows (in thousands): Balance at September 30, 2023 $ 138,161 Activity during the fiscal periods: No activity — Balance at December 31, 2023 $ 138,161
Schedule of Intangible Assets	The following table summarizes intangible assets, net presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2023 2023 Intangible assets Customer contracts and related customer relationships $ 113,622 $ 113,622 Covenants not to compete 637 637 Trade name 13,034 13,034 Backlog 37,249 37,249 Total intangible assets 164,542 164,542 Less: accumulated amortization Customer contracts and related customer relationships (32,771) (29,929) Covenants not to compete (394) (378) Trade name (2,510) (2,185) Backlog (8,204) (7,273) Total accumulated amortization (43,879) (39,765) Intangible assets, net $ 120,663 $ 124,777
Schedule of Estimated Amortization of Intangible Assets	As of December 31, 2023, the estimated amortization expense per fiscal year as follows (in thousands): Fiscal year ending: 2024 (remaining) $ 12,341 2025 16,455 2026 15,722 2027 14,694 2028 14,694 Thereafter 46,757 Total amortization expense $ 120,663
Schedule of Equipment and Improvements, Net	The following table summarizes equipment and improvements, net presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2023 2023 Furniture and equipment $ 2,025 $ 1,790 Computer equipment and software 6,418 6,479 Leasehold improvements 1,614 1,614 Total equipment and improvements 10,057 9,883 Less: accumulated depreciation and amortization (8,432) (8,293) Equipment and improvements, net $ 1,625 $ 1,590
Schedule of Accounts Payable, Accrued Expenses, and Other Current Liabilities	The following table summarizes accounts payable and accrued liabilities presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2023 2023 Accounts payable $ 9,213 $ 12,603 Accrued benefits 5,510 6,414 Accrued workers' compensation insurance 2,300 2,369 Accrued bonus and incentive compensation 1,075 4,719 Accrued interest 1,353 1,309 Other accrued expenses 2,856 2,290 Accounts payable and accrued liabilities $ 22,307 $ 29,704
Schedule of Accrued Payroll	The following table summarizes accrued payroll presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2023 2023 Accrued leave $ 9,046 $ 9,621 Accrued payroll 5,183 2,487 Accrued payroll taxes 1,115 1,173 Accrued severance 359 513 Accrued payroll $ 15,703 $ 13,794
Schedule of Debt Obligations	The following table summarizes debt obligations presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2023 2023 Secured term loan $ 159,031 $ 169,813 Secured revolving line of credit 15,350 9,546 Less: unamortized deferred financing costs (6,381) (7,024) Net bank debt obligations 168,000 172,335 Less: current portion of debt obligations, net of deferred financing costs (a) (16,130) (17,188) Long-term portion of debt obligations, net of deferred financing costs $ 151,870 $ 155,147 As of December 31, 2023, we have satisfied mandatory principal payments on our secured term loan. (a) As of December 31, 2023, the current portion comprises term loan amortization of $2.3 million and the $15.4 million outstanding balance on the secured revolving line of credit, net of $1.5 million of unamortized deferred financing costs.
Schedule of Interest Expense	The following table summarizes interest expense presented on our consolidated statements of operations for the three months ended December 31, 2023 and 2022 as follows (in thousands): 2023 2022 Interest expense (a) $ 4,016 $ 1,554 Amortization of deferred financing costs (b) 642 276 Interest expense $ 4,658 $ 1,830 (a) Interest expense on borrowing. (b) Amortization of expenses related to secured term loan and secured revolving line of credit.

Credit Facilities (Tables)

Credit Facilities (Tables)	3 Months Ended
	Dec. 31, 2023
Debt Disclosure [Abstract]
Schedule of Loan Facility	A summary of our credit facilities as presented on our consolidated balance sheets as follows (in millions): December 31, 2023 September 30, 2023 Arrangement Loan Balance Interest Arrangement Loan Balance Interest Secured term loan (a) due December 8, 2027 $ 159,031 SOFR 1 + 4.1% Secured term loan (a) due December 8, 2027 $ 169,813 SOFR 1 + 4.1% Secured revolving line of credit (b) due December 8, 2027 $ 15,350 SOFR 1 + 4.1% Secured revolving line of credit (b) due December 8, 2027 $ 9,546 SOFR 1 + 4.1% 1 Secured Overnight Financing Rate ("SOFR") as of December 31, 2023 and September 30, 2023 were

Stock-Based Compensation and _2

Stock-Based Compensation and Equity Grants (Tables)	3 Months Ended
	Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]
Schedule of Stock-based Compensation Expense	Stock-based compensation expense shown in the table below, is recorded in general and administrative expenses in our consolidated statements of operations for the three months ended December 31, 2023 and 2022 as follows (in thousands): 2023 2022 DLH employees (a) $ 540 $ 372 Non-employee directors (b) 80 180 Total stock option expense $ 620 $ 552 (a) Included in this amount are equity grants of restricted stock units ("RSU") to Executive Officers, which were issued in accordance with the DLH long-term incentive compensation policy in this fiscal year, including both RSU and stock option grants to employees during prior fiscal years. The RSUs issued and outstanding totaled 367,795 and 140,404 at December 31, 2023 and 2022, respectively. During the three months ended December 31, 2023, 169,544 RSUs were granted to Executive Officers. Of the RSUs granted, 84,773 have performance-based vesting criteria and the remaining 84,771 have service-based vesting criteria. The RSUs granted during the three months ended December 31, 2023, were valued as follows using the Monte Carlo Method, and will be amortized over the 3-year measurement period. (b) Equity grants of RSUs were made in accordance with DLH compensation policy for non-employee directors and a total of 61,525 and 53,510 restricted stock units were issued and outstanding at December 31, 2023 and 2022, respectively. These grants have service-based vesting criteria and vest at the end of this fiscal year. Unrecognized stock-based compensation expense is presented in the table below for the three months ended December 31, 2023 and 2022 as follows (in thousands): 2023 2022 Unrecognized expense for DLH employees (a) $ 7,983 $ 4,750 Unrecognized expense for non-employee directors 539 538 Total unrecognized expense $ 8,522 $ 5,288 (a) On a weighted average basis, the unrecognized expense for the three months ended December 31, 2023 is expected to be recognized within the next 3.42 years.
Summary of Performance Vesting Critera	Volatility 50% Grant Date Performance Vesting Base Performance Vesting Criteria (Years) Fair Value December 15, 2023 Revenue Revenue increase at the end of the performance period as compared to the year ended September 30, 2023 3 $ 3.82 December 15, 2023 Stock price Stock price is at least $25.65 per share average for the 30 days prior to the end of the performance period 3 $ 5.36 Notes: Results based on 100,000 simulations
Schedule of Stock Option Activity	A summary of the Company's stock option awards is as follows: (in years) Weighted Weighted Average (in thousands) (in thousands) Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Term Value Options outstanding, September 30, 2023 2,278 $ 8.40 5.80 $ 8,693 Granted — — — — Exercised (220) 2.29 — — Cancelled (25) 11.66 — — Options outstanding, December 31, 2023 2,033 $ 9.02 6.00 $ 13,803 Vested and exercisable, December 31, 2023 1,423 $ 7.18 4.80 $ 12,208
Schedule of Option Shares Outstanding, Vested and Expected to Vest	Stock option shares outstanding, vested and unvested balance as follows (in thousands): December 31, September 30, 2023 2023 Vested and exercisable 1,423 1,608 Unvested (a) 610 670 Options outstanding 2,033 2,278 (a) Certain awards vest upon satisfaction of certain performance criteria.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	Dec. 31, 2023
Earnings Per Share [Abstract]
Schedule of Diluted Earnings per Share	Earnings per share information is presented in the table below for the three months ended December 31, 2023 and 2022 as follows (in thousands except for per share amounts): 2023 2022 Numerator: Net income $ 2,151 $ 1,547 Denominator: Denominator for basic net income per share - weighted-average outstanding shares 14,032 13,306 Effect of dilutive securities: Stock options and restricted stock 764 970 Denominator for diluted net income per share - weighted-average outstanding shares 14,796 14,276 Net income per share - basic $ 0.15 $ 0.12 Net income per share - diluted $ 0.15 $ 0.11

Commitment and Contingencies (T

Commitment and Contingencies (Tables)	3 Months Ended
	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Schedule of Contractual Obligations	Contractual obligations as of December 31, 2023 are as follows (in thousands): Payments Due Per Fiscal Year (Remaining) Total 2024 2025 2026 2027 2028 Thereafter Debt obligations $ 174,381 $ 15,350 $ 16,531 $ 19,000 $ 23,750 $ 99,750 $ — Facility operating leases 22,751 3,824 3,928 3,700 2,627 2,377 6,295 Equipment operating leases 9 9 — — — — — Total contractual obligations $ 197,141 $ 19,183 $ 20,459 $ 22,700 $ 26,377 $ 102,127 $ 6,295

Significant Accounting Polici_3

Significant Accounting Policies (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Acquired Indefinite-lived Intangible Assets [Line Items]
Estimated useful live of intangible assets	10 years
Uncertain tax positions	$ 0		$ 0
Income tax interest expense	0	$ 0
Income tax penalties expense	0	$ 0
Allowance for doubtful accounts	$ 0		$ 0
Treasury stock held (in shares)	0		0
Preferred shares authorized (in shares)	5,000,000
Preferred stock issued (in shares)	0		0
Employee Stock Option
Acquired Indefinite-lived Intangible Assets [Line Items]
Expiration term of share-based compensation plan	10 years
Minimum
Acquired Indefinite-lived Intangible Assets [Line Items]
Estimated useful of long-lived assets	3 years
Maximum
Acquired Indefinite-lived Intangible Assets [Line Items]
Estimated useful of long-lived assets	7 years

Revenue Recognition - Contract

Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Revenue from Contract with Customer [Abstract]
Contract assets	$ 19,234	$ 20,542

Revenue Recognition - Narrative

Revenue Recognition - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2023	Sep. 30, 2023
Revenue from Contract with Customer [Abstract]
Contract liabilities	$ 0	$ 0

Revenue Recognition - Disaggreg

Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Disaggregation of Revenue [Line Items]
Total	$ 97,850	$ 72,738
Prime Contractor
Disaggregation of Revenue [Line Items]
Total	87,633	67,981
Subcontractor
Disaggregation of Revenue [Line Items]
Total	10,217	4,757
Time and Materials
Disaggregation of Revenue [Line Items]
Total	54,789	48,991
Cost Reimbursable
Disaggregation of Revenue [Line Items]
Total	19,751	12,580
Firm Fixed Price
Disaggregation of Revenue [Line Items]
Total	23,310	11,167
Department of Health and Human Services | Revenue from Contract with Customer | Customer concentration
Disaggregation of Revenue [Line Items]
Total	44,297	27,305
Department of Veterans Affairs | Revenue from Contract with Customer | Customer concentration
Disaggregation of Revenue [Line Items]
Total	34,680	33,708
Department of Defense | Revenue from Contract with Customer | Customer concentration
Disaggregation of Revenue [Line Items]
Total	16,871	10,263
Other | Revenue from Contract with Customer | Customer concentration
Disaggregation of Revenue [Line Items]
Total	$ 2,002	$ 1,462

Leases - Summary of Lease Balan

Leases - Summary of Lease Balances in Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023	Jun. 30, 2023
Leases [Abstract]
Operating lease right-of-use assets	$ 8,996	$ 9,656	$ 9,656
Operating lease liabilities - current	3,353	3,463	3,463
Operating lease liabilities - long-term	15,042	15,908	$ 15,908
Total operating lease liabilities	$ 18,395	$ 19,371

Leases - Narrative (Details)

Leases - Narrative (Details)	3 Months Ended
	Dec. 31, 2023 sublease sublease_option
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of facilities subleased | sublease	1
Sublease term	5 years
Sublease number of additional extension options | sublease_option	2
Sublease extension option period	1 year
Weighted-average remaining lease term	6 years 2 months 12 days
Weighted-average discount rate	6.30%
Minimum | Facilities and Equipment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease term (in years)	1 year
Maximum | Facilities and Equipment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease term (in years)	8 years

Leases - Lease Costs (Details)

Leases - Lease Costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Leases [Abstract]
Operating	$ 873	$ 947
Short-term	50	43
Variable	37	31
Sublease income	(67)	(71)
Total lease costs	$ 893	$ 950

Leases - Company's Future Minim

Leases - Company's Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023	Jun. 30, 2023
Leases [Abstract]
2024 (remaining)	$ 3,833
2025	3,928
2026	3,700
2027	2,627
2028	2,377
Thereafter	6,295
Total future lease payments	22,760
Less: imputed interest	(4,365)
Total operating lease liabilities	18,395	$ 19,371
Less: current portion of operating lease liabilities	(3,353)	(3,463)	$ (3,463)
Long-term operating lease liabilities	$ 15,042	$ 15,908	$ 15,908

Leases - Other Information Rela

Leases - Other Information Related to Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Leases [Abstract]
Cash paid for amounts included in the measurement of lease liabilities	$ 1,237	$ 1,022
Lease liabilities arising from obtaining right-of-use assets	0	3,541
Other lease information	$ 1,237	$ 4,563

Supporting Financial Informat_3

Supporting Financial Information - Accounts Receivable (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Billed receivables	$ 36,343	$ 38,577
Contract assets	19,234	20,542
Less: Allowance for doubtful accounts	0	0
Accounts Receivable, before Allowance for Credit Loss, Current	$ 55,577	$ 59,119

Supporting Financial Informat_4

Supporting Financial Information - Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Prepaid insurance and benefits	$ 1,460	$ 1,330
Prepaid licenses and other expenses	477	743
Other receivables	979	994
Other current assets	$ 2,916	$ 3,067	$ 3,067

Supporting Financial Informat_5

Supporting Financial Information - Goodwill (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2023 USD ($)
Goodwill [Roll Forward]
Beginning Balance	$ 138,161
No activity	0
Ending Balance	$ 138,161

Supporting Financial Informat_6

Supporting Financial Information - Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 164,542	$ 164,542
Total accumulated amortization	(43,879)	(39,765)
Total amortization expense	120,663	124,777
Customer contracts and related customer relationships
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	113,622	113,622
Total accumulated amortization	(32,771)	(29,929)
Covenants not to compete
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	637	637
Total accumulated amortization	(394)	(378)
Trade name
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	13,034	13,034
Total accumulated amortization	(2,510)	(2,185)
Backlog
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	37,249	37,249
Total accumulated amortization	$ (8,204)	$ (7,273)

Supporting Financial Informat_7

Supporting Financial Information - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Finite-Lived Intangible Assets [Line Items]
Amortization expense of intangible assets	$ 4.1	$ 2.2
Intangible assets, remaining amortization period	8 years 1 month 6 days
Depreciation	$ 0.1	$ 0.2
Customer contracts and related customer relationships
Finite-Lived Intangible Assets [Line Items]
Intangible assets, remaining amortization period			8 years
Backlog
Finite-Lived Intangible Assets [Line Items]
Intangible assets, remaining amortization period			8 years 3 months 18 days
Trade name
Finite-Lived Intangible Assets [Line Items]
Intangible assets, remaining amortization period			8 years 4 months 24 days
Covenants not to compete
Finite-Lived Intangible Assets [Line Items]
Intangible assets, remaining amortization period			5 years 9 months 18 days

Supporting Financial Informat_8

Supporting Financial Information - Estimated Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
2024 (remaining)	$ 12,341
2025	16,455
2026	15,722
2027	14,694
2028	14,694
Thereafter	46,757
Total amortization expense	$ 120,663	$ 124,777

Supporting Financial Informat_9

Supporting Financial Information - Equipment and Improvements, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Furniture and equipment	$ 2,025	$ 1,790
Computer equipment and software	6,418	6,479
Leasehold improvements	1,614	1,614
Total equipment and improvements	10,057	9,883
Less: accumulated depreciation and amortization	(8,432)	(8,293)
Equipment and improvements, net	$ 1,625	$ 1,590	$ 1,590

Supporting Financial Informa_10

Supporting Financial Information - Accounts Payable, Accrued Expense and Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accounts payable	$ 9,213	$ 12,603
Accrued benefits	5,510	6,414
Accrued workers' compensation insurance	2,300	2,369
Accrued bonus and incentive compensation	1,075	4,719
Accrued interest	1,353	1,309
Other accrued expenses	2,856	2,290
Accounts payable and accrued liabilities	$ 22,307	$ 29,704	$ 29,704

Supporting Financial Informa_11

Supporting Financial Information - Accrued Payroll (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accrued Leave	$ 9,046	$ 9,621
Accrued payroll	5,183	2,487
Accrued payroll taxes	1,115	1,173
Accrued severance	359	513
Accrued payroll	$ 15,703	$ 13,794	$ 13,794

Supporting Financial Informa_12

Supporting Financial Information - Debt Obligations (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023	Jun. 30, 2023
Debt Instrument [Line Items]
Long-term debt	$ 174,381
Net bank debt obligations	168,000	$ 172,335
Less: current portion of debt obligations, net of deferred financing costs	(16,130)	(17,188)	$ (17,188)
Long-term portion of debt obligations, net of deferred financing costs	151,870	155,147	$ 155,147
Term loan amortization	16,531
Secured Debt
Debt Instrument [Line Items]
Long-term debt	159,031	169,813
Less: unamortized deferred financing costs	(6,381)	(7,024)
Term loan amortization	2,300
Current unamortized deferred financing costs	1,500
Revolving Line of Credit
Debt Instrument [Line Items]
Long-term debt	15,350	9,546
Revolving Line of Credit | Secured Debt
Debt Instrument [Line Items]
Long-term debt	$ 15,350	$ 9,546

Supporting Financial Informa_13

Supporting Financial Information - Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Interest expense	$ 4,016	$ 1,554
Amortization of deferred financing costs	642	276
Interest expense	$ 4,658	$ 1,830

Credit Facilities - Summary of

Credit Facilities - Summary of Loan Facility (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2023	Sep. 30, 2023
Line of Credit Facility [Line Items]
Long-term debt	$ 174,381
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Line of Credit Facility [Line Items]
Interest rate spread	5.40%	5.30%
Revolving Line of Credit
Line of Credit Facility [Line Items]
Long-term debt	$ 15,350	$ 9,546
Secured Debt
Line of Credit Facility [Line Items]
Long-term debt	159,031	169,813
Secured Debt | Term Loans
Line of Credit Facility [Line Items]
Long-term debt	$ 159,031	$ 169,813
Secured Debt | Term Loans | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Line of Credit Facility [Line Items]
Interest	4.10%	4.10%
Secured Debt | Revolving Line of Credit
Line of Credit Facility [Line Items]
Long-term debt	$ 15,350	$ 9,546
Secured Debt | Revolving Line of Credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Line of Credit Facility [Line Items]
Interest	4.10%	4.10%

Credit Facilities - Narrative (

Credit Facilities - Narrative (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2023 USD ($)	Sep. 30, 2023 USD ($)
Line of Credit Facility [Line Items]
2025	$ 16,531
Debt amortization fiscal year 2024	19,000
Debt amortization fiscal year 2025	23,750
Debt amortization fiscal year 2026	99,750
Long-term debt	174,381
Maturity One
Line of Credit Facility [Line Items]
Derivative notional amount	9,000
Maturity Two
Line of Credit Facility [Line Items]
Derivative notional amount	96,000
Interest Rate Swap
Line of Credit Facility [Line Items]
Decrease in interest expense	$ 400
Interest Rate Swap | Maturity One
Line of Credit Facility [Line Items]
Derivative fixed interest rate	1.61%
Interest Rate Swap | Maturity Two
Line of Credit Facility [Line Items]
Derivative fixed interest rate	4.10%
Revolving Line of Credit
Line of Credit Facility [Line Items]
Long-term debt	$ 15,350	$ 9,546
Secured Debt
Line of Credit Facility [Line Items]
2025	2,300
Long-term debt	$ 159,031	169,813
Secured Debt | Term Loans
Line of Credit Facility [Line Items]
Fixed charge coverage ratio	1.25
2025	$ 14,300
Debt amortization fiscal year 2024	14,300
Debt amortization fiscal year 2025	19,000
Debt amortization fiscal year 2026	19,000
Debt amortization fiscal year 2027	23,750
Voluntary principal amortization of term debt	10,800
Long-term debt	$ 159,031	169,813
Secured Debt | Term Loans | Excess Cash Flows Greater Than Or Equal to 2.50
Line of Credit Facility [Line Items]
Percentage of excess cash flow for each year of funded indebtedness to EBDTA	75%
Ratio of funded indebtedness to adjusted EBIDTA	2.5
Secured Debt | Term Loans | Excess Cash Flows Less Than 2.50
Line of Credit Facility [Line Items]
Ratio of funded indebtedness to adjusted EBIDTA	2.5
Secured Debt | Term Loans | Excess Cash Flows Equal to 1.50
Line of Credit Facility [Line Items]
Ratio of funded indebtedness to adjusted EBIDTA	1.5
Secured Debt | Term Loans | Excess Cash Flows Less Than 1.50
Line of Credit Facility [Line Items]
Percentage of excess cash flow for each year of funded indebtedness to EBDTA	0%
Ratio of funded indebtedness to adjusted EBIDTA	1.5
Secured Debt | Term Loans | Excess Cash Flows Less Than 2.50 But Greater Than 1.50
Line of Credit Facility [Line Items]
Percentage of excess cash flow for each year of funded indebtedness to EBDTA	50%
Secured Debt | Term Loans | Maximum
Line of Credit Facility [Line Items]
Ratio of funded indebtedness to EBITDA through maturity	4.50
Secured Debt | Term Loans | Minimum
Line of Credit Facility [Line Items]
Ratio of funded indebtedness to EBITDA through maturity	2
Secured Debt | Revolving Line of Credit
Line of Credit Facility [Line Items]
Long-term debt	$ 15,350	$ 9,546
Line of credit, maximum borrowing capacity	70,000
Line of credit, unused borrowing capacity	22,800
Secured Debt | Letter of Credit
Line of Credit Facility [Line Items]
Line of credit, current borrowing capacity	$ 10,000

Stock-Based Compensation and _3

Stock-Based Compensation and Equity Grants - Narrative (Details) - Employee Stock Option shares in Millions	3 Months Ended
	Dec. 31, 2023 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration term of share-based compensation plan	10 years
Number of shares available for grant (in shares)	0.8
Omnibus Equity Incentive Plan 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration term of share-based compensation plan	10 years

Stock-Based Compensation and _4

Stock-Based Compensation and Equity Grants - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock option expense	$ 620	$ 552
Total unrecognized expense	$ 8,522	$ 5,288
Restricted Stock Units
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units granted (in shares)	367,795	140,404
Expected term (years)	3 years
DLH employees
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total unrecognized expense	$ 7,983	$ 4,750
Weighted average share based compensation expense recognition period	3 years 5 months 1 day
Non-employee directors
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total unrecognized expense	$ 539	$ 538
Non-employee directors | Restricted Stock Units
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units granted (in shares)	61,525	53,510
NEO | Restricted Stock Units
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units granted (in shares)	169,544
NEO | Performance Shares
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units granted (in shares)	84,773
NEO | Service Based Restricted Stock Units
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units granted (in shares)	84,771
Selling, General and Administrative Expenses | DLH employees
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock option expense	$ 540	$ 372
Selling, General and Administrative Expenses | Non-employee directors
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock option expense	$ 80	$ 180

Stock-Based Compensation and _5

Stock-Based Compensation and Equity Grants - Performance Based Awards (Details)	3 Months Ended
	Dec. 31, 2023 $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility	50%
Minimum average price (in dollars per share)	$ 25.65
Revenue
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (years)	3 years
Calculated fair value (in dollars per share)	$ 3.82
Stock price
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (years)	3 years
Calculated fair value (in dollars per share)	$ 5.36

Stock-Based Compensation and _6

Stock-Based Compensation and Equity Grants - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2023	Sep. 30, 2023
Number of Shares
Options outstanding, beginning (in shares)	2,278
Granted (in shares)	0
Exercised (in shares)	(220)
Cancelled (in shares)	(25)
Options outstanding, ending (in shares)	2,033	2,278
Weighted Average Exercise Price
Options outstanding, beginning (in dollars per share)	$ 8.40
Granted (in dollars per share)	0
Exercised (in dollars per share)	2.29
Cancelled (in dollars per share)	11.66
Options outstanding, ending (in dollars per share)	$ 9.02	$ 8.40
Weighted Average Remaining Contractual Term
Weighted Average Remaining Contractual Term	6 years	5 years 9 months 18 days
Aggregate Intrinsic Value
Aggregate Intrinsic Value	$ 13,803	$ 8,693
Vested and exercisable (in shares)	1,423
Vested and exercisable, weighted average exercise price (in dollars per share)	$ 7.18
Vested and exercisable, weighted average remaining contractual term (in years)	4 years 9 months 18 days
Vested and exercisable, intrinsic value	$ 12,208

Stock-Based Compensation and _7

Stock-Based Compensation and Equity Grants - Stock Options Outstanding, Vested and Unvested (Details) - shares shares in Thousands	Dec. 31, 2023	Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]
Vested and exercisable (in shares)	1,423	1,608
Unvested (in shares)	610	670
Option outstanding (in shares)	2,033	2,278

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Numerator:
Net income	$ 2,151	$ 1,547
Denominator:
Denominator for basic net income (loss) per share - weighted-average outstanding shares (in shares)	14,032	13,306
Effect of dilutive securities:
Stock options and restricted stock (in shares)	764	970
Denominator for diluted net income (loss) per share - weighted-average outstanding shares (in shares)	14,796	14,276
Net income per share - basic (in dollars per share)	$ 0.15	$ 0.12
Net income per share - diluted (in dollars per share)	$ 0.15	$ 0.11

Commitments and Contingencies -

Commitments and Contingencies - Contractual Obligations (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Debt obligations
Debt obligations	$ 174,381
2024	15,350
2025	16,531
2026	19,000
2027	23,750
2028	99,750
Thereafter	0
Operating Leases
Total future lease payments	22,760
2024 (remaining)	3,833
2025	3,928
2026	3,700
2027	2,627
2028	2,377
Thereafter	6,295
Total Contractual Obligations
Total Obligations	197,141
2024	19,183
2025	20,459
2026	22,700
2027	26,377
2028	102,127
Thereafter	6,295
Facility operating leases
Operating Leases
Total future lease payments	22,751
2024 (remaining)	3,824
2025	3,928
2026	3,700
2027	2,627
2028	2,377
Thereafter	6,295
Equipment operating leases
Operating Leases
Total future lease payments	9
2024 (remaining)	9
2025	0
2026	0
2027	0
2028	0
Thereafter	$ 0