DLH (DLHC) 10-Q 5 Feb 25 2025 Q1 Quarterly report Financial data

Cover

Cover - shares	3 Months Ended
	Dec. 31, 2024	Feb. 03, 2025
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2024
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		14,386,468
Entity Central Index Key	0000785557
Amendment Flag	false
Document Fiscal Year Focus	2025
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, 2024	Dec. 31, 2023
Income Statement [Abstract]
Revenue	$ 90,782	$ 97,850
Contract costs	72,382	79,081
General and administrative costs	8,456	7,697
Depreciation and amortization	4,307	4,253
Total operating costs	85,145	91,031
Income from operations	5,637	6,819
Interest expenses	4,133	4,658
Income before provision for income tax	1,504	2,161
Provision for income tax expense	389	10
Net income	$ 1,115	$ 2,151
Net income per share - basic (in dollars per share)	$ 0.08	$ 0.15
Net income per share - diluted (in dollars per share)	$ 0.08	$ 0.15
Weighted average common stock outstanding
Basic (in shares)	14,386	14,032
Diluted (in shares)	14,563	14,796

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2024	Sep. 30, 2024
Current assets:
Cash	$ 451	$ 342
Accounts receivable	64,270	49,849
Other current assets	2,853	2,766
Total current assets	67,574	52,957
Goodwill	138,161	138,161
Intangible assets, net	104,207	108,321
Operating lease right-of-use assets	7,255	6,681
Deferred taxes, net	5,465	6,245
Equipment and improvements, net	2,189	1,830
Other long-term assets	158	186
Total assets	325,009	314,381
Current liabilities:
Accounts payable and accrued liabilities	18,723	25,290
Debt obligations - current, net of deferred financing costs	27,595	12,058
Accrued payroll	15,123	12,848
Operating lease liabilities - current	2,753	2,652
Other current liabilities	494	394
Total current liabilities	64,688	53,242
Long-term liabilities:
Debt obligations - long-term, net of deferred financing costs	134,623	137,316
Operating lease liabilities - long-term	13,354	12,789
Other long-term liabilities	904	902
Total long-term liabilities	148,881	151,007
Total liabilities	213,569	204,249
Shareholders' equity:
Common stock, $0.001 par value; 40,000 shares authorized; 14,386 and 14,386 shares issued and outstanding at December 31, 2024 and September 30, 2024, respectively	14	14
Additional paid-in capital	100,463	100,270
Retained earnings	10,963	9,848
Total shareholders’ equity	111,440	110,132
Total liabilities and shareholders' equity	$ 325,009	$ 314,381

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Dec. 31, 2024	Sep. 30, 2024
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)	14,386	14,386
Common stock, outstanding (in shares)	14,386	14,386

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2024	Dec. 31, 2023
Operating activities
Net income	$ 1,115	$ 2,151
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	4,307	4,253
Amortization of deferred financing costs charged to interest expense	457	642
Stock-based compensation expense	193	620
Deferred taxes, net	780	(6)
Changes in operating assets and liabilities:
Accounts receivable	(14,421)	3,542
Other assets	(661)	510
Accounts payable and accrued liabilities	(6,567)	(7,397)
Accrued payroll	2,275	1,909
Other liabilities	984	(1,153)
Net cash (used in) provided by operating activities	(11,538)	5,071
Investing activities
Purchase of equipment and improvements	(552)	(174)
Net cash used in investing activities	(552)	(174)
Financing activities
Proceeds from revolving line of credit	59,910	69,831
Repayment of revolving line of credit	(47,509)	(64,026)
Repayments of debt obligations	0	(10,378)
Payments of deferred financing costs	(202)	0
Proceeds from issuance of common stock upon exercise of options and warrants	0	261
Payment of tax obligations resulting from net exercise of stock options	0	(669)
Net cash provided by (used in) financing activities	12,199	(4,981)
Net change in cash	109	(84)
Cash - beginning of period	342	215
Cash - end of period	451	131
Supplemental disclosure of cash flow information
Cash paid during the period for interest	3,594	3,972
Cash paid during the period for income taxes	32	0
Common stock surrendered for the exercise of stock options	0	244
Lease liability recognized to acquire a right of use asset	$ 1,377	$ 0

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, 2023		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-based compensation	540		540
Exercise of stock options (in shares)		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
Ending balance at Dec. 31, 2023	$ 104,802	$ 14	100,186	4,602
Beginning Balance (in shares) at Sep. 30, 2024	14,386	14,386
Beginning balance at Sep. 30, 2024	$ 110,132	$ 14	100,270	9,848
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Expense related to director restricted stock units	180		180
Expense related to employee stock-based compensation	$ 13		13
Exercise of stock options (in shares)	0
Net income	$ 1,115			1,115
Ending Balance (in shares) at Dec. 31, 2024	14,386	14,386
Ending balance at Dec. 31, 2024	$ 111,440	$ 14	$ 100,463	$ 10,963

Basis of Presentation_and Princ

Basis of Presentation and Principles of Consolidation	3 Months Ended
	Dec. 31, 2024
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, 2024 are not necessarily indicative of the results that may be expected for the year ending September 30, 2025 or any future period. Amounts as of December 31, 2024 and for the three months ended December 31, 2024 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, 2024 filed with the Securities and Exchange Commission on December 4, 2024.

Significant Accounting Policies

Significant Accounting Policies	3 Months Ended
	Dec. 31, 2024
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 lease 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. Contract liabilities - Amounts are a result of billings in excess of costs incurred or prepayment for services to be rendered. Fair Value of Financial Instruments The carrying amounts of the Company's cash, 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. As of December 31, 2024, operating leases for facilities and equipment have remaining lease terms of less than 1 year to 6.5 years Goodwill The Company performs impairment evaluation at least annually and between annual tests whenever there is an indication of impairment. We performed a qualitative assessment of factors to determine whether it was necessary to perform the goodwill impairment test. Based on the results of the work performed, the Company has concluded that no impairment loss was warranted at December 31, 2024, as no change in business conditions occurred which would have a material adverse effect on the valuation of 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. Similarly, there were no impairments during the prior year ended September 30, 2024. 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, 2024 or September 30, 2024. We report interest and penalties as a component of provision for income taxes. During the three months ended December 31, 2024 and 2023, 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, 2024 or September 30, 2024. 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, 2024 and September 30, 2024, 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, 2024 and September 30, 2024, 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 and 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, 2024 and September 30, 2024, there was no indication of any global or economic impacts to our industry.

New Accounting Pronouncements

New Accounting Pronouncements	3 Months Ended
	Dec. 31, 2024
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 fiscal years beginning after December 15, 2023 and interim periods beginning 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. ASU 2023-09 is effective for public business entities for fiscal years beginning after December 15, 2024. We are currently evaluating the impacts of the improvements to income tax disclosure. In March 2024, the Securities and Exchange Commission ("SEC") has released a final rule that requires registrants to provide comprehensive climate-related disclosures in their annual reports and registration statements, including those for IPOs, beginning with annual reports for the year ending December 31, 2027, for smaller reporting companies ("SRC"). Registrants must disclose climate-related financial metrics and impacts on their financial estimates and assumptions in a footnote to the audited financial statements. The disclosures will also need to be addressed as part of management’s internal control over financial reporting ("ICFR") and will be subject to the financial statement and ICFR audit (if applicable) of an independent registered public accounting firm. We are currently evaluating the impacts of the improvements to our disclosure. On November 4, 2024, the FASB issued ASU 2024-03 to enhance transparency in financial reporting by requiring public business entities to disclose disaggregated information about expenses in their financial statements. The guidance mandates disclosure of specific cost components, such as inventory purchases, employee compensation, depreciation, and amortization, within relevant income statement expense captions, along with qualitative descriptions of any remaining undissected amounts. Entities must also disclose total selling expenses and define these annually. Effective for annual reporting periods beginning after December 15, 2026, and interim periods in 2027, the ASU allows prospective or retrospective application and permits early adoption. We are currently evaluating the impacts of the improvements to our disclosure.

Revenue Recognition

Revenue Recognition	3 Months Ended
	Dec. 31, 2024
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, 2024 2024 Contract assets $ 31,486 $ 23,945 Contract assets are included as part of the accounts receivable on the consolidated balances sheets. The change from prior period is primarily due to invoice timing. Contract liabilities had no balance as of December 31, 2024 and September 30, 2024. 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 was as follows (in thousands): Three Months Ended December 31, 2024 2023 Department of Health and Human Services $ 41,948 $ 44,297 Department of Veterans Affairs 34,099 34,680 Department of Defense 13,355 16,871 Other 1,380 2,002 Total $ 90,782 $ 97,850 Revenue by contract type was as follows (in thousands): Three Months Ended December 31, 2024 2023 Time and Materials $ 49,400 $ 54,789 Cost Reimbursable 18,143 19,751 Firm Fixed Price 23,239 23,310 Total $ 90,782 $ 97,850 Revenue by whether the Company acts as a prime contractor or a subcontractor was as follows (in thousands): Three Months Ended December 31, 2024 2023 Prime Contractor $ 84,439 $ 87,633 Subcontractor 6,343 10,217 Total $ 90,782 $ 97,850

Leases

Leases	3 Months Ended
	Dec. 31, 2024
Leases [Abstract]
Leases	Leases The following table summarizes lease balances presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2024 2024 Operating lease right-of-use assets $ 7,255 $ 6,681 Operating lease liabilities - current $ 2,753 $ 2,652 Operating lease liabilities - long-term 13,354 12,789 Total operating lease liabilities $ 16,107 $ 15,441 As of December 31, 2024, operating leases for facilities and equipment have remaining lease terms of less than 1 year to 6.3 years. The non-cash increase in both lease liabilities and right-of-use assets during the current period is primarily attributable to an extension of an existing operating lease. The non-cash increase to lease liabilities from the lease extension was $1.4 million. Total lease costs for our leases were as follows (in thousands): Three Months Ended December 31, 2024 2023 Operating $ 846 $ 873 Short-term 159 50 Variable 33 37 Sublease income (a) (49) (67) Total lease costs $ 989 $ 893 (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, 2024 were as follows (in thousands): Fiscal year ending: 2025 (remaining) $ 2,814 2026 3,641 2027 3,052 2028 2,914 2029 3,013 Thereafter 3,880 Total future lease payments 19,314 Less: imputed interest (3,207) Present value of future minimum lease payments 16,107 Less: current portion of operating lease liabilities (2,753) Long-term operating lease liabilities $ 13,354 At December 31, 2024, the weighted-average remaining lease term and weighted-average discount rate were 5.6 years and 6.6%, 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 were as follows (in thousands): Three Months Ended December 31, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities $ 968 $ 1,237 Lease liabilities arising from obtaining right-of-use assets 1,377 — Other lease information $ 2,345 $ 1,237

Supporting Financial Informatio

Supporting Financial Information	3 Months Ended
	Dec. 31, 2024
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, 2024 2024 Billed receivables $ 32,784 $ 25,904 Contract assets 31,486 23,945 Accounts receivable $ 64,270 $ 49,849 Other current assets The following table summarizes other current assets presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2024 2024 Prepaid licenses and other expenses $ 1,580 $ 1,315 Prepaid insurance and benefits 336 545 Other receivables 937 906 Other current assets $ 2,853 $ 2,766 Goodwill There were no activities in goodwill for the three months ended December 31, 2024. The balance of goodwill was approximately $138.2 million as of December 31, 2024 and September 30, 2024. Intangible assets The following table summarizes intangible assets, net presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2024 2024 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 (44,139) (41,297) Covenants-not-to-compete (458) (442) Trade name (3,814) (3,488) Backlog (11,924) (10,994) Total accumulated amortization (60,335) (56,221) Intangible assets, net $ 104,207 $ 108,321 Amortization expense was $4.1 million and $4.1 million for the three months ended December 31, 2024 and 2023, respectively. As of December 31, 2024, the estimated amortization expense per fiscal year was as follows (in thousands): Fiscal year ending: 2025 (remaining) $ 12,340 2026 15,722 2027 14,694 2028 14,694 2029 13,734 Thereafter 33,023 Total amortization expense $ 104,207 At December 31, 2024, the weighted-average remaining amortization period in total was 7.1 years. The weighted-average amortization period for customer contracts and related customer relationships, backlog, trade names and Covenants-not-to-compete was 7.1 years, 7.1 years, 7.5 years, and 5.3 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, 2024 2024 Furniture and equipment $ 1,846 $ 1,832 Computer equipment and software 7,573 7,273 Leasehold improvements 1,852 1,614 Total equipment and improvements 11,271 10,719 Less: accumulated depreciation (9,082) (8,889) Equipment and improvements, net $ 2,189 $ 1,830 Depreciation expense was $0.2 million and $0.1 million for the three months ended December 31, 2024 and 2023, 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, 2024 2024 Accounts payable $ 13,291 $ 13,421 Accrued benefits 1,679 4,519 Accrued workers' compensation insurance 2,015 1,528 Accrued bonus and incentive compensation 286 3,641 Accrued interest 711 619 Other accrued expenses 741 1,562 Accounts payable and accrued liabilities $ 18,723 $ 25,290 Accrued payroll The following table summarizes accrued payroll presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2024 2024 Accrued leave $ 7,912 $ 8,569 Accrued payroll 5,968 3,070 Accrued payroll taxes 1,195 981 Accrued severance 48 228 Total accrued payroll $ 15,123 $ 12,848 Debt obligations The following table summarizes debt obligations presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2024 2024 Secured term loan $ 142,500 $ 142,500 Secured revolving line of credit 24,459 12,058 Less: unamortized deferred financing costs (4,741) (5,184) Net bank debt obligations 162,218 149,374 Less: current portion of debt obligations, net of deferred financing costs (a) (27,595) (12,058) Long-term portion of debt obligations, net of deferred financing costs $ 134,623 $ 137,316 As of December 31, 2024, we have satisfied quarterly minimum principal payments on our secured term loan through September 30, 2025. (a) As of December 31, 2024, the current portion comprises term loan amortization of $4.8 million and the $24.5 million outstanding balance on the secured revolving line of credit, net of $1.6 million of unamortized deferred financing costs. Interest expense The following table summarizes interest expense presented on our consolidated statements of operations as follows (in thousands): Three Months Ended December 31, 2024 2023 Interest expense (a) $ 3,685 $ 4,016 Interest income (b) (9) — Amortization of deferred financing costs (c) 457 642 Interest expense $ 4,133 $ 4,658 (a) Interest expense on borrowing. (b) Interest earned from customer payments received after the due date. (c) Amortization of expenses related to secured term loan and secured revolving line of credit.

Credit Facilities

Credit Facilities	3 Months Ended
	Dec. 31, 2024
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, 2024 September 30, 2024 Arrangement Loan Balance Interest Arrangement Loan Balance Interest Secured term loan (a) due December 8, 2027 $ 142,500 SOFR 1 + 4.1% Secured term loan (a) due December 8, 2027 $ 142,500 SOFR 1 + 4.1% Secured revolving line of credit (b) due December 8, 2027 $ 24,459 SOFR 1 + 4.1% Secured revolving line of credit (b) due December 8, 2027 $ 12,058 SOFR 1 + 4.1% 1 Secured Overnight Financing Rate ("SOFR") as of December 31, 2024 and September 30, 2024 were 4.6% and 5.2% 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 January 31, 2023, we executed a floating-to-fixed interest rate swap with First National Bank ("FNB") which has a notional amount of $80.0 million at December 31, 2024 , a fixed interest rate of 4.10% and a maturity date of January 31, 2026. As a result of entering interest rate swap agreements, for the three months ended December 31, 2024, interest expense has been decreased by approximately $0.1 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. On November 6, 2024, the Company completed an amendment to its credit facility. The amendment modified certain financial covenants thresholds for future measurement periods and reduced the amount available under the revolving line of credit, as discussed in further detail below. The amendment was approved by the Company's Board of Directors and Executive Management and the credit facility lenders. The loan agreement also requires us to comply with certain quarterly financial covenants including: (i) a minimum fixed charge coverage ratio ranging from 1.25:1.00 to 1.05:1.00 and (ii) a total leverage ratio not exceeding the ratio of 4.75:1.00 to 4.25:1.00 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, 2024. We are required to pay quarterly amortization payments, which commenced in December 2022. The annual amortization amounts are $19.0 million 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 outstanding principal balance on the secured term loan was $142.5 million as of December 31, 2024. We have satisfied the mandatory principal payments through September 2025. 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) As amended, the secured revolving line of credit has a ceiling of up to $50.0 million; as of December 31, 2024, we had unused borrowing capacity of $11.8 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 $24.5 million outstanding balance at December 31, 2024. 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, 2024
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, 2024, 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 as follows (in thousands): Three Months Ended December 31, 2024 2023 DLH employees (a) $ 13 $ 540 Non-employee directors (b) 180 80 Total stock option expense $ 193 $ 620 (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, and stock option grants to employees during prior fiscal years. The RSUs issued and outstanding totaled 708,325 and 367,795 shares at December 31, 2024 and 2023, respectively. During the three months ended December 31, 2024 and 2023, the Company granted 312,906 and 169,544 shares of restricted stock units, respectively. During the three months ended December 31, 2024, 156,453 shares of the RSUs granted have performance-based vesting criteria and the remaining 156,453 shares have service-based vesting criteria. During the three months ended December 31, 2023, 84,773 shares of the RSUs granted have performance-based vesting criteria and the remaining 84,771 shares have service-based vesting criteria. The RSUs granted during the three months ended December 31, 2024 and 2023, were valued as follows using the Monte Carlo Method, and will be amortized over the 3-year measurement period. Volatility 50% Grant Date Performance Vesting Base Performance Vesting Criteria (Years) Fair Value December 20, 2024 Revenue Revenue increase at the end of the performance period as compared to the year ended September 30, 2027 3 $ 0.65 December 20, 2024 Stock price Stock price is at least $23.04 per share average for the 30 days prior to the end of the performance period 3 $ 1.67 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 (b) Equity grants of RSUs were made in accordance with DLH compensation policy for non-employee directors and a total of 78,556 and 61,525 restricted stock units were issued and outstanding at December 31, 2024 and 2023, respectively. These grants have service-based vesting criteria and vest at the end of this fiscal year. Unrecognized stock-based compensation expense Unrecognized stock-based compensation expense is presented in the table below (in thousands): December 31, 2024 2023 Unrecognized expense for DLH employees (a) $ 5,302 $ 7,983 Unrecognized expense for non-employee directors 539 539 Total unrecognized expense $ 5,841 $ 8,522 (a) On a weighted average basis, the unrecognized expense as of December 31, 2024 is expected to be recognized within the next 2.57 years. Stock option activity for the three months ended December 31, 2024 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, 2024 1,237 $ 9.28 6.1 $ 1,313 Granted — — — — Exercised — — — — Cancelled (50) 16.01 — — Options outstanding, December 31, 2024 1,187 $ 9.31 5.80 $ 652 Vested and exercisable, December 31, 2024 1,127 $ 9.07 5.70 $ 652 Stock option shares outstanding, vested and unvested balance as follows (in thousands): December 31, September 30, 2024 2024 Vested and exercisable 1,127 1,177 Unvested (a) 60 60 Options outstanding 1,187 1,237 (a) Certain awards vest upon satisfaction of certain performance criteria.

Earnings Per Share

Earnings Per Share	3 Months Ended
	Dec. 31, 2024
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 (in thousands except for per share amounts): Three Months Ended December 31, 2024 2023 Numerator: Net income $ 1,115 $ 2,151 Denominator: Denominator for basic net income per share - weighted-average outstanding shares 14,386 14,032 Effect of dilutive securities: Stock options and restricted stock 177 764 Denominator for diluted net income per share - weighted-average outstanding shares 14,563 14,796 Net income per share - basic $ 0.08 $ 0.15 Net income per share - diluted $ 0.08 $ 0.15

Commitment and Contingencies

Commitment and Contingencies	3 Months Ended
	Dec. 31, 2024
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Contractual obligations as of December 31, 2024 are as follows (in thousands): Payments Due Per Fiscal Year (Remaining) Total 2025 2026 2027 2028 2029 Thereafter Debt obligations $ 166,959 $ 24,459 $ 19,000 $ 23,750 $ 99,750 $ — $ — Facility operating leases 19,314 2,814 3,641 3,052 2,914 3,013 3,880 Total contractual obligations $ 186,273 $ 27,273 $ 22,641 $ 26,802 $ 102,664 $ 3,013 $ 3,880 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 ordinary course of 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, 2024
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions The Company has determined that for the three months ended December 31, 2024 and 2023, 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, 2024
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, 2024
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, 2024
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 lease 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. Contract liabilities - Amounts are a result of billings in excess of costs incurred or prepayment for services to be rendered. 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, 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.
Right-of-Use Assets and 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. As of December 31, 2024, operating leases for facilities and equipment have remaining lease terms of less than 1 year to 6.5 years
Goodwill	Goodwill The Company performs impairment evaluation at least annually and between annual tests whenever there is an indication of impairment. We performed a qualitative assessment of factors to determine whether it was necessary to perform the goodwill impairment test. Based on the results of the work performed, the Company has concluded that no impairment loss was warranted at December 31, 2024, as no change in business conditions occurred which would have a material adverse effect on the valuation of 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. Similarly, there were no impairments during the prior year ended September 30, 2024.
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, 2024 or September 30, 2024.
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, 2024 and September 30, 2024, 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 and 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, 2024 and September 30, 2024, 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 fiscal years beginning after December 15, 2023 and interim periods beginning 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. ASU 2023-09 is effective for public business entities for fiscal years beginning after December 15, 2024. We are currently evaluating the impacts of the improvements to income tax disclosure. In March 2024, the Securities and Exchange Commission ("SEC") has released a final rule that requires registrants to provide comprehensive climate-related disclosures in their annual reports and registration statements, including those for IPOs, beginning with annual reports for the year ending December 31, 2027, for smaller reporting companies ("SRC"). Registrants must disclose climate-related financial metrics and impacts on their financial estimates and assumptions in a footnote to the audited financial statements. The disclosures will also need to be addressed as part of management’s internal control over financial reporting ("ICFR") and will be subject to the financial statement and ICFR audit (if applicable) of an independent registered public accounting firm. We are currently evaluating the impacts of the improvements to our disclosure. On November 4, 2024, the FASB issued ASU 2024-03 to enhance transparency in financial reporting by requiring public business entities to disclose disaggregated information about expenses in their financial statements. The guidance mandates disclosure of specific cost components, such as inventory purchases, employee compensation, depreciation, and amortization, within relevant income statement expense captions, along with qualitative descriptions of any remaining undissected amounts. Entities must also disclose total selling expenses and define these annually. Effective for annual reporting periods beginning after December 15, 2026, and interim periods in 2027, the ASU allows prospective or retrospective application and permits early adoption. We are currently evaluating the impacts of the improvements to our disclosure.

Revenue Recognition (Tables)

Revenue Recognition (Tables)	3 Months Ended
	Dec. 31, 2024
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, 2024 2024 Contract assets $ 31,486 $ 23,945
Schedule of Disaggregation of Revenue From Contracts with Customers	The following series of tables present our revenue disaggregated by these categories: Revenue by customer was as follows (in thousands): Three Months Ended December 31, 2024 2023 Department of Health and Human Services $ 41,948 $ 44,297 Department of Veterans Affairs 34,099 34,680 Department of Defense 13,355 16,871 Other 1,380 2,002 Total $ 90,782 $ 97,850 Revenue by contract type was as follows (in thousands): Three Months Ended December 31, 2024 2023 Time and Materials $ 49,400 $ 54,789 Cost Reimbursable 18,143 19,751 Firm Fixed Price 23,239 23,310 Total $ 90,782 $ 97,850 Revenue by whether the Company acts as a prime contractor or a subcontractor was as follows (in thousands): Three Months Ended December 31, 2024 2023 Prime Contractor $ 84,439 $ 87,633 Subcontractor 6,343 10,217 Total $ 90,782 $ 97,850

Leases (Tables)

Leases (Tables)	3 Months Ended
	Dec. 31, 2024
Leases [Abstract]
Schedule of Summarized Lease Balances in Consolidated Balance Sheet	The following table summarizes lease balances presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2024 2024 Operating lease right-of-use assets $ 7,255 $ 6,681 Operating lease liabilities - current $ 2,753 $ 2,652 Operating lease liabilities - long-term 13,354 12,789 Total operating lease liabilities $ 16,107 $ 15,441
Schedule of Lease Costs and Other Information Related to Leases	Total lease costs for our leases were as follows (in thousands): Three Months Ended December 31, 2024 2023 Operating $ 846 $ 873 Short-term 159 50 Variable 33 37 Sublease income (a) (49) (67) Total lease costs $ 989 $ 893 Other information related to our leases were as follows (in thousands): Three Months Ended December 31, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities $ 968 $ 1,237 Lease liabilities arising from obtaining right-of-use assets 1,377 — Other lease information $ 2,345 $ 1,237
Schedule of Company's Future Lease Payments	The Company's future minimum lease payments as of December 31, 2024 were as follows (in thousands): Fiscal year ending: 2025 (remaining) $ 2,814 2026 3,641 2027 3,052 2028 2,914 2029 3,013 Thereafter 3,880 Total future lease payments 19,314 Less: imputed interest (3,207) Present value of future minimum lease payments 16,107 Less: current portion of operating lease liabilities (2,753) Long-term operating lease liabilities $ 13,354

Supporting Financial Informat_2

Supporting Financial Information (Tables)	3 Months Ended
	Dec. 31, 2024
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, 2024 2024 Billed receivables $ 32,784 $ 25,904 Contract assets 31,486 23,945 Accounts receivable $ 64,270 $ 49,849
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, 2024 2024 Prepaid licenses and other expenses $ 1,580 $ 1,315 Prepaid insurance and benefits 336 545 Other receivables 937 906 Other current assets $ 2,853 $ 2,766
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, 2024 2024 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 (44,139) (41,297) Covenants-not-to-compete (458) (442) Trade name (3,814) (3,488) Backlog (11,924) (10,994) Total accumulated amortization (60,335) (56,221) Intangible assets, net $ 104,207 $ 108,321
Schedule of Estimated Amortization of Intangible Assets	As of December 31, 2024, the estimated amortization expense per fiscal year was as follows (in thousands): Fiscal year ending: 2025 (remaining) $ 12,340 2026 15,722 2027 14,694 2028 14,694 2029 13,734 Thereafter 33,023 Total amortization expense $ 104,207
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, 2024 2024 Furniture and equipment $ 1,846 $ 1,832 Computer equipment and software 7,573 7,273 Leasehold improvements 1,852 1,614 Total equipment and improvements 11,271 10,719 Less: accumulated depreciation (9,082) (8,889) Equipment and improvements, net $ 2,189 $ 1,830
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, 2024 2024 Accounts payable $ 13,291 $ 13,421 Accrued benefits 1,679 4,519 Accrued workers' compensation insurance 2,015 1,528 Accrued bonus and incentive compensation 286 3,641 Accrued interest 711 619 Other accrued expenses 741 1,562 Accounts payable and accrued liabilities $ 18,723 $ 25,290
Schedule of Accrued Payroll	The following table summarizes accrued payroll presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2024 2024 Accrued leave $ 7,912 $ 8,569 Accrued payroll 5,968 3,070 Accrued payroll taxes 1,195 981 Accrued severance 48 228 Total accrued payroll $ 15,123 $ 12,848
Schedule of Debt Obligations	The following table summarizes debt obligations presented on our consolidated balance sheets as follows (in thousands): December 31, September 30, 2024 2024 Secured term loan $ 142,500 $ 142,500 Secured revolving line of credit 24,459 12,058 Less: unamortized deferred financing costs (4,741) (5,184) Net bank debt obligations 162,218 149,374 Less: current portion of debt obligations, net of deferred financing costs (a) (27,595) (12,058) Long-term portion of debt obligations, net of deferred financing costs $ 134,623 $ 137,316 As of December 31, 2024, we have satisfied quarterly minimum principal payments on our secured term loan through September 30, 2025. (a) As of December 31, 2024, the current portion comprises term loan amortization of $4.8 million and the $24.5 million outstanding balance on the secured revolving line of credit, net of $1.6 million of unamortized deferred financing costs.
Schedule of Interest Expense	The following table summarizes interest expense presented on our consolidated statements of operations as follows (in thousands): Three Months Ended December 31, 2024 2023 Interest expense (a) $ 3,685 $ 4,016 Interest income (b) (9) — Amortization of deferred financing costs (c) 457 642 Interest expense $ 4,133 $ 4,658 (a) Interest expense on borrowing. (b) Interest earned from customer payments received after the due date. (c) 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, 2024
Debt Disclosure [Abstract]
Summary of Credit Facilities	A summary of our credit facilities as presented on our consolidated balance sheets as follows (in millions): December 31, 2024 September 30, 2024 Arrangement Loan Balance Interest Arrangement Loan Balance Interest Secured term loan (a) due December 8, 2027 $ 142,500 SOFR 1 + 4.1% Secured term loan (a) due December 8, 2027 $ 142,500 SOFR 1 + 4.1% Secured revolving line of credit (b) due December 8, 2027 $ 24,459 SOFR 1 + 4.1% Secured revolving line of credit (b) due December 8, 2027 $ 12,058 SOFR 1 + 4.1% 1 Secured Overnight Financing Rate ("SOFR") as of December 31, 2024 and September 30, 2024 were 4.6% and 5.2% 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 January 31, 2023, we executed a floating-to-fixed interest rate swap with First National Bank ("FNB") which has a notional amount of $80.0 million at December 31, 2024 , a fixed interest rate of 4.10% and a maturity date of January 31, 2026. As a result of entering interest rate swap agreements, for the three months ended December 31, 2024, interest expense has been decreased by approximately $0.1 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. On November 6, 2024, the Company completed an amendment to its credit facility. The amendment modified certain financial covenants thresholds for future measurement periods and reduced the amount available under the revolving line of credit, as discussed in further detail below. The amendment was approved by the Company's Board of Directors and Executive Management and the credit facility lenders. The loan agreement also requires us to comply with certain quarterly financial covenants including: (i) a minimum fixed charge coverage ratio ranging from 1.25:1.00 to 1.05:1.00 and (ii) a total leverage ratio not exceeding the ratio of 4.75:1.00 to 4.25:1.00 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, 2024. We are required to pay quarterly amortization payments, which commenced in December 2022. The annual amortization amounts are $19.0 million 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 outstanding principal balance on the secured term loan was $142.5 million as of December 31, 2024. We have satisfied the mandatory principal payments through September 2025. 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) As amended, the secured revolving line of credit has a ceiling of up to $50.0 million; as of December 31, 2024, we had unused borrowing capacity of $11.8 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 $24.5 million outstanding balance at December 31, 2024. 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 _2

Stock-Based Compensation and Equity Grants (Tables)	3 Months Ended
	Dec. 31, 2024
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 as follows (in thousands): Three Months Ended December 31, 2024 2023 DLH employees (a) $ 13 $ 540 Non-employee directors (b) 180 80 Total stock option expense $ 193 $ 620 (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, and stock option grants to employees during prior fiscal years. The RSUs issued and outstanding totaled 708,325 and 367,795 shares at December 31, 2024 and 2023, respectively. During the three months ended December 31, 2024 and 2023, the Company granted 312,906 and 169,544 shares of restricted stock units, respectively. During the three months ended December 31, 2024, 156,453 shares of the RSUs granted have performance-based vesting criteria and the remaining 156,453 shares have service-based vesting criteria. During the three months ended December 31, 2023, 84,773 shares of the RSUs granted have performance-based vesting criteria and the remaining 84,771 shares have service-based vesting criteria. Unrecognized stock-based compensation expense is presented in the table below (in thousands): December 31, 2024 2023 Unrecognized expense for DLH employees (a) $ 5,302 $ 7,983 Unrecognized expense for non-employee directors 539 539 Total unrecognized expense $ 5,841 $ 8,522 (a) On a weighted average basis, the unrecognized expense as of December 31, 2024 is expected to be recognized within the next 2.57 years.
Summary of Performance Vesting Critera	Volatility 50% Grant Date Performance Vesting Base Performance Vesting Criteria (Years) Fair Value December 20, 2024 Revenue Revenue increase at the end of the performance period as compared to the year ended September 30, 2027 3 $ 0.65 December 20, 2024 Stock price Stock price is at least $23.04 per share average for the 30 days prior to the end of the performance period 3 $ 1.67 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, 2024 1,237 $ 9.28 6.1 $ 1,313 Granted — — — — Exercised — — — — Cancelled (50) 16.01 — — Options outstanding, December 31, 2024 1,187 $ 9.31 5.80 $ 652 Vested and exercisable, December 31, 2024 1,127 $ 9.07 5.70 $ 652
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, 2024 2024 Vested and exercisable 1,127 1,177 Unvested (a) 60 60 Options outstanding 1,187 1,237 (a) Certain awards vest upon satisfaction of certain performance criteria.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	Dec. 31, 2024
Earnings Per Share [Abstract]
Schedule of Diluted Earnings per Share	Earnings per share information is presented in the table below (in thousands except for per share amounts): Three Months Ended December 31, 2024 2023 Numerator: Net income $ 1,115 $ 2,151 Denominator: Denominator for basic net income per share - weighted-average outstanding shares 14,386 14,032 Effect of dilutive securities: Stock options and restricted stock 177 764 Denominator for diluted net income per share - weighted-average outstanding shares 14,563 14,796 Net income per share - basic $ 0.08 $ 0.15 Net income per share - diluted $ 0.08 $ 0.15

Commitment and Contingencies (T

Commitment and Contingencies (Tables)	3 Months Ended
	Dec. 31, 2024
Commitments and Contingencies Disclosure [Abstract]
Schedule of Contractual Obligations	Contractual obligations as of December 31, 2024 are as follows (in thousands): Payments Due Per Fiscal Year (Remaining) Total 2025 2026 2027 2028 2029 Thereafter Debt obligations $ 166,959 $ 24,459 $ 19,000 $ 23,750 $ 99,750 $ — $ — Facility operating leases 19,314 2,814 3,641 3,052 2,914 3,013 3,880 Total contractual obligations $ 186,273 $ 27,273 $ 22,641 $ 26,802 $ 102,664 $ 3,013 $ 3,880

Significant Accounting Polici_3

Significant Accounting Policies (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Sep. 30, 2024
Acquired Indefinite-lived Intangible Assets [Line Items]
Estimated useful live of intangible assets	10 years
Goodwill impairment loss	$ 0		$ 0
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		5,000,000
Preferred stock issued (in shares)	0		0
Employee Stock Option | Omnibus Equity Incentive Plan 2016
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
Minimum | Facilities and Equipment
Acquired Indefinite-lived Intangible Assets [Line Items]
Operating lease term (in years)	1 year
Maximum
Acquired Indefinite-lived Intangible Assets [Line Items]
Estimated useful of long-lived assets	7 years
Maximum | Facilities and Equipment
Acquired Indefinite-lived Intangible Assets [Line Items]
Operating lease term (in years)	6 years 6 months

Revenue Recognition - Contract

Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands	Dec. 31, 2024	Sep. 30, 2024
Revenue from Contract with Customer [Abstract]
Contract assets	$ 31,486	$ 23,945

Revenue Recognition - Narrative

Revenue Recognition - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2024	Sep. 30, 2024
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, 2024	Dec. 31, 2023
Disaggregation of Revenue [Line Items]
Total	$ 90,782	$ 97,850
Prime Contractor
Disaggregation of Revenue [Line Items]
Total	84,439	87,633
Subcontractor
Disaggregation of Revenue [Line Items]
Total	6,343	10,217
Time and Materials
Disaggregation of Revenue [Line Items]
Total	49,400	54,789
Cost Reimbursable
Disaggregation of Revenue [Line Items]
Total	18,143	19,751
Firm Fixed Price
Disaggregation of Revenue [Line Items]
Total	23,239	23,310
Department of Health and Human Services | Revenue from Contract with Customer | Customer concentration
Disaggregation of Revenue [Line Items]
Total	41,948	44,297
Department of Veterans Affairs | Revenue from Contract with Customer | Customer concentration
Disaggregation of Revenue [Line Items]
Total	34,099	34,680
Department of Defense | Revenue from Contract with Customer | Customer concentration
Disaggregation of Revenue [Line Items]
Total	13,355	16,871
Other | Revenue from Contract with Customer | Customer concentration
Disaggregation of Revenue [Line Items]
Total	$ 1,380	$ 2,002

Leases - Summary of Lease Balan

Leases - Summary of Lease Balances in Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2024	Sep. 30, 2024
Leases [Abstract]
Operating lease right-of-use assets	$ 7,255	$ 6,681
Operating lease liabilities - current	2,753	2,652
Operating lease liabilities - long-term	13,354	12,789
Total operating lease liabilities	$ 16,107	$ 15,441

Leases - Narrative (Details)

Leases - Narrative (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2024 USD ($) sublease sublease_option	Dec. 31, 2023 USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Lease liability recognized to acquire a right of use asset | $	$ 1,377	$ 0
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	5 years 7 months 6 days
Weighted-average discount rate	6.60%
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)	6 years 3 months 18 days

Leases - Lease Costs (Details)

Leases - Lease Costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2024	Dec. 31, 2023
Leases [Abstract]
Operating	$ 846	$ 873
Short-term	159	50
Variable	33	37
Sublease income	(49)	(67)
Total lease costs	$ 989	$ 893

Leases - Company's Future Minim

Leases - Company's Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Dec. 31, 2024	Sep. 30, 2024
Leases [Abstract]
2025 (remaining)	$ 2,814
2026	3,641
2027	3,052
2028	2,914
2029	3,013
Thereafter	3,880
Total future lease payments	19,314
Less: imputed interest	(3,207)
Total operating lease liabilities	16,107	$ 15,441
Less: current portion of operating lease liabilities	(2,753)	(2,652)
Long-term operating lease liabilities	$ 13,354	$ 12,789

Leases - Other Information Rela

Leases - Other Information Related to Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2024	Dec. 31, 2023
Leases [Abstract]
Cash paid for amounts included in the measurement of lease liabilities	$ 968	$ 1,237
Lease liabilities arising from obtaining right-of-use assets	1,377	0
Other lease information	$ 2,345	$ 1,237

Supporting Financial Informat_3

Supporting Financial Information - Accounts Receivable (Details) - USD ($) $ in Thousands	Dec. 31, 2024	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Billed receivables	$ 32,784	$ 25,904
Contract assets	31,486	23,945
Allowance for doubtful accounts	0	0
Accounts receivable	$ 64,270	$ 49,849

Supporting Financial Informat_4

Supporting Financial Information - Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2024	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Prepaid licenses and other expenses	$ 1,580	$ 1,315
Prepaid insurance and benefits	336	545
Other receivables	937	906
Other current assets	$ 2,853	$ 2,766

Supporting Financial Informat_5

Supporting Financial Information - Goodwill (Details) - USD ($) $ in Thousands	Dec. 31, 2024	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Goodwill	$ 138,161	$ 138,161

Supporting Financial Informat_6

Supporting Financial Information - Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2024	Sep. 30, 2024
Finite-Lived Intangible Assets [Line Items]
Total intangible assets	$ 164,542	$ 164,542
Total accumulated amortization	(60,335)	(56,221)
Intangible assets, net	104,207	108,321
Customer contracts and related customer relationships
Finite-Lived Intangible Assets [Line Items]
Total intangible assets	113,622	113,622
Total accumulated amortization	(44,139)	(41,297)
Covenants-not-to-compete
Finite-Lived Intangible Assets [Line Items]
Total intangible assets	637	637
Total accumulated amortization	(458)	(442)
Trade name
Finite-Lived Intangible Assets [Line Items]
Total intangible assets	13,034	13,034
Total accumulated amortization	(3,814)	(3,488)
Backlog
Finite-Lived Intangible Assets [Line Items]
Total intangible assets	37,249	37,249
Total accumulated amortization	$ (11,924)	$ (10,994)

Supporting Financial Informat_7

Supporting Financial Information - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Amortization expense of intangible assets	$ 4.1	$ 4.1
Intangible assets, remaining amortization period	7 years 1 month 6 days
Depreciation	$ 0.2	$ 0.1
Customer contracts and related customer relationships
Finite-Lived Intangible Assets [Line Items]
Intangible assets, remaining amortization period	7 years 1 month 6 days
Backlog
Finite-Lived Intangible Assets [Line Items]
Intangible assets, remaining amortization period	7 years 1 month 6 days
Trade name
Finite-Lived Intangible Assets [Line Items]
Intangible assets, remaining amortization period	7 years 6 months
Covenants-not-to-compete
Finite-Lived Intangible Assets [Line Items]
Intangible assets, remaining amortization period	5 years 3 months 18 days

Supporting Financial Informat_8

Supporting Financial Information - Estimated Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2024	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
2025 (remaining)	$ 12,340
2026	15,722
2027	14,694
2028	14,694
2029	13,734
Thereafter	33,023
Intangible assets, net	$ 104,207	$ 108,321

Supporting Financial Informat_9

Supporting Financial Information - Equipment and Improvements, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2024	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Furniture and equipment	$ 1,846	$ 1,832
Computer equipment and software	7,573	7,273
Leasehold improvements	1,852	1,614
Total equipment and improvements	11,271	10,719
Less: accumulated depreciation	(9,082)	(8,889)
Equipment and improvements, net	$ 2,189	$ 1,830

Supporting Financial Informa_10

Supporting Financial Information - Accounts Payable, Accrued Expense and Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2024	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accounts payable	$ 13,291	$ 13,421
Accrued benefits	1,679	4,519
Accrued workers' compensation insurance	2,015	1,528
Accrued bonus and incentive compensation	286	3,641
Accrued interest	711	619
Other accrued expenses	741	1,562
Accounts payable and accrued liabilities	$ 18,723	$ 25,290

Supporting Financial Informa_11

Supporting Financial Information - Accrued Payroll (Details) - USD ($) $ in Thousands	Dec. 31, 2024	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accrued leave	$ 7,912	$ 8,569
Accrued payroll	5,968	3,070
Accrued payroll taxes	1,195	981
Accrued severance	48	228
Total accrued payroll	$ 15,123	$ 12,848

Supporting Financial Informa_12

Supporting Financial Information - Debt Obligations (Details) - USD ($) $ in Thousands	Dec. 31, 2024	Sep. 30, 2024
Debt Instrument [Line Items]
Long-term debt	$ 166,959
Net bank debt obligations	162,218	$ 149,374
Less: current portion of debt obligations, net of deferred financing costs (a)	(27,595)	(12,058)
Long-term portion of debt obligations, net of deferred financing costs	134,623	137,316
Term loan amortization	19,000
Secured Debt
Debt Instrument [Line Items]
Long-term debt	142,500	142,500
Less: unamortized deferred financing costs	(4,741)	(5,184)
Term loan amortization	4,800
Current unamortized deferred financing costs	1,600
Revolving Line of Credit
Debt Instrument [Line Items]
Long-term debt	24,459	12,058
Revolving Line of Credit | Secured Debt
Debt Instrument [Line Items]
Long-term debt	$ 24,459	$ 12,058

Supporting Financial Informa_13

Supporting Financial Information - Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2024	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Interest expense	$ 3,685	$ 4,016
Interest income	(9)	0
Amortization of deferred financing costs	457	642
Interest expense	$ 4,133	$ 4,658

Credit Facilities - Schedule of

Credit Facilities - Schedule of Credit Facilities (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Dec. 31, 2024	Mar. 31, 2024	Sep. 30, 2024
Line of Credit Facility [Line Items]
Long-term debt	$ 166,959
Interest rate spread	4.60%		5.20%
Revolving Line of Credit
Line of Credit Facility [Line Items]
Long-term debt	$ 24,459		$ 12,058
Secured Debt
Line of Credit Facility [Line Items]
Long-term debt	142,500		142,500
Secured Debt | Term Loans
Line of Credit Facility [Line Items]
Long-term debt	$ 142,500		142,500
Interest	4.10%	4.10%
Secured Debt | Revolving Line of Credit
Line of Credit Facility [Line Items]
Long-term debt	$ 24,459		$ 12,058
Interest	4.10%	4.10%

Credit Facilities - Narrative (

Credit Facilities - Narrative (Details)	3 Months Ended
	Dec. 31, 2024 USD ($)	Sep. 30, 2024 USD ($)
Line of Credit Facility [Line Items]
Debt amortization fiscal year 2025	$ 23,750,000
2026	19,000,000
Debt amortization fiscal year 2027	99,750,000
Long-term debt	166,959,000
Maturity Two
Line of Credit Facility [Line Items]
Derivative notional amount	80,000,000
Interest Rate Swap
Line of Credit Facility [Line Items]
Decrease in interest expense	$ 100,000
Interest Rate Swap Due 2026
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	$ 24,459,000	$ 12,058,000
Secured Debt
Line of Credit Facility [Line Items]
2026	4,800,000
Long-term debt	142,500,000	142,500,000
Secured Debt | Term Loans
Line of Credit Facility [Line Items]
Debt amortization fiscal year 2025	19,000,000
2026	19,000,000
Debt amortization fiscal year 2027	23,750,000
Long-term debt	$ 142,500,000	142,500,000
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 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 | 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 | Maximum
Line of Credit Facility [Line Items]
Fixed charge coverage ratio	1.25
Ratio of funded indebtedness to EBITDA through maturity	4.75
Secured Debt | Term Loans | Minimum
Line of Credit Facility [Line Items]
Fixed charge coverage ratio	1.05
Ratio of funded indebtedness to EBITDA through maturity	4.25
Secured Debt | Revolving Line of Credit
Line of Credit Facility [Line Items]
Long-term debt	$ 24,459,000	$ 12,058,000
Line of credit, maximum borrowing capacity	50,000,000
Line of credit, unused borrowing capacity	11,800,000
Secured Debt | Letter of Credit
Line of Credit Facility [Line Items]
Line of credit, current borrowing capacity	$ 10,000,000

Stock-Based Compensation and _3

Stock-Based Compensation and Equity Grants - Narrative (Details) - shares	3 Months Ended
	Dec. 31, 2024	Dec. 31, 2023
Omnibus Equity Incentive Plan 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant (in shares)	800,000
Employee Stock Option | 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
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted stock units granted (in shares)	708,325	367,795
Restricted Stock Units | NEO
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted stock units granted (in shares)	312,906	169,544
Performance Shares | NEO
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted stock units granted (in shares)	156,453	84,773
Service Based Restricted Stock Units | NEO
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted stock units granted (in shares)	156,453	84,771

Stock-Based Compensation and _4

Stock-Based Compensation and Equity Grants - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2024	Dec. 31, 2023
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock option expense	$ 193	$ 620
Restricted Stock Units
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units granted (in shares)	708,325	367,795
Expected term (years)	3 years	3 years
DLH employees
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Weighted average share based compensation expense recognition period	2 years 6 months 25 days
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)	78,556	61,525
NEO | Restricted Stock Units
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of restricted stock units granted (in shares)	312,906	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)	156,453	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)	156,453	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	$ 13	$ 540
Selling, General and Administrative Expenses | Non-employee directors
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock option expense	$ 180	$ 80

Stock-Based Compensation and _5

Stock-Based Compensation and Equity Grants - Performance Based Awards (Details)	3 Months Ended
	Dec. 31, 2024 $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility	50%
December 2024 Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Minimum average price (in dollars per share)	$ 23.04
December 2023 Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Minimum average price (in dollars per share)	$ 25.65
Revenue | December 2024 Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (years)	3 years
Calculated fair value (in dollars per share)	$ 0.65
Revenue | December 2023 Awards
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 | December 2024 Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (years)	3 years
Calculated fair value (in dollars per share)	$ 1.67
Stock price | December 2023 Awards
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 - Schedule of Unrecognized Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	Dec. 31, 2024	Dec. 31, 2023
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total unrecognized expense	$ 5,841	$ 8,522
DLH employees
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total unrecognized expense	5,302	7,983
Non-employee directors
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total unrecognized expense	$ 539	$ 539

Stock-Based Compensation and _7

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, 2024	Sep. 30, 2024
Number of Shares
Options outstanding, beginning (in shares)	1,237
Granted (in shares)	0
Exercised (in shares)	0
Cancelled (in shares)	(50)
Options outstanding, ending (in shares)	1,187	1,237
Weighted Average Exercise Price
Options outstanding, beginning (in dollars per share)	$ 9.28
Granted (in dollars per share)	0
Exercised (in dollars per share)	0
Cancelled (in dollars per share)	16.01
Options outstanding, ending (in dollars per share)	$ 9.31	$ 9.28
Weighted Average Remaining Contractual Term
Weighted Average Remaining Contractual Term	5 years 9 months 18 days	6 years 1 month 6 days
Aggregate Intrinsic Value
Aggregate Intrinsic Value	$ 652	$ 1,313
Vested and exercisable (in shares)	1,127
Vested and exercisable, weighted average exercise price (in dollars per share)	$ 9.07
Vested and exercisable, weighted average remaining contractual term (in years)	5 years 8 months 12 days
Vested and exercisable, intrinsic value	$ 652

Stock-Based Compensation and _8

Stock-Based Compensation and Equity Grants - Stock Options Outstanding, Vested and Unvested (Details) - shares shares in Thousands	Dec. 31, 2024	Sep. 30, 2024
Share-Based Payment Arrangement [Abstract]
Vested and exercisable (in shares)	1,127	1,177
Unvested (in shares)	60	60
Option outstanding (in shares)	1,187	1,237

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 31, 2024	Dec. 31, 2023
Numerator:
Net income	$ 1,115	$ 2,151
Denominator:
Denominator for basic net income (loss) per share - weighted-average outstanding shares (in shares)	14,386	14,032
Effect of dilutive securities:
Stock options and restricted stock (in shares)	177	764
Denominator for diluted net income (loss) per share - weighted-average outstanding shares (in shares)	14,563	14,796
Net income per share - basic (in dollars per share)	$ 0.08	$ 0.15
Net income per share - diluted (in dollars per share)	$ 0.08	$ 0.15

Commitments and Contingencies -

Commitments and Contingencies - Contractual Obligations (Details) $ in Thousands	Dec. 31, 2024 USD ($)
Debt obligations
Debt obligations	$ 166,959
2025	24,459
2026	19,000
2027	23,750
2028	99,750
2029	0
Thereafter	0
Operating Leases
Total future lease payments	19,314
2025 (remaining)	2,814
2026	3,641
2027	3,052
2028	2,914
2029	3,013
Thereafter	3,880
Total Contractual Obligations
Total Obligations	186,273
2025	27,273
2026	22,641
2027	26,802
2028	102,664
2029	3,013
Thereafter	3,880
Facility operating leases
Operating Leases
Total future lease payments	19,314
2025 (remaining)	2,814
2026	3,641
2027	3,052
2028	2,914
2029	3,013
Thereafter	$ 3,880