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Stock-Based Compensation and Equity Grants
 3 Months Ended
Dec. 31, 2025
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, 2025, there were 0.5 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,
20252024
DLH employees (a)$550 $13 
Non-employee directors (b)97 180 
Total stock compensation expense
$647 $193 

(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 959,582 and 708,325 shares at December 31, 2025 and 2024, respectively. During the three months ended December 31, 2025 and 2024, the Company granted 427,046 and 312,906 shares of restricted stock units, respectively. During the three months ended December 31, 2025, 380,338 shares of the RSUs granted have performance-based vesting criteria and the remaining 46,708 shares have service-based vesting criteria. 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.

The RSUs granted were valued using the Monte Carlo Method, and will be amortized over the 3-year measurement period.
Volatility
50%
Grant DatePerformance Vesting BasePerformance Vesting Criteria(Years)Fair Value
December 17, 2025RevenueRevenue increase at the end of the performance period as compared to the year ended September 30, 20283$1.38 
December 17, 2025Stock price
Stock price is at least $12.62 per share average for the 30 days prior to the end of the performance period
3$1.74 
December 20, 2024RevenueRevenue increase at the end of the performance period as compared to the year ended September 30, 20273$0.65 
December 20, 2024Stock 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 
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 67,615 and 78,556 restricted stock units were issued and outstanding at December 31, 2025 and 2024, 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,
 20252024
Unrecognized expense for DLH employees (a)
3,783 5,302 
Unrecognized expense for non-employee directors
290 539 
Total unrecognized expense
$4,073 $5,841 

(a) On a weighted average basis, the unrecognized expense as of December 31, 2025 is expected to be recognized within the next 2.84 years.

Restricted stock unit activity for the three months ended December 31, 2025

  Performance Vesting
Service
Vesting
Total
Outstanding, September 30, 2025
232,461 232,460 464,921 
Granted
380,338 114,323 494,661 
Vested
— — — 
Cancelled— — — 
Outstanding, December 31, 2025
612,799 346,783 959,582 
Stock option activity for the three months ended December 31, 2025

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
WeightedAverage(in thousands)
(in thousands)AverageRemainingAggregate
Number ofExerciseContractualIntrinsic
SharesPriceTermValue
Options outstanding, September 30, 2025
937 $9.65 5.4$10 
Granted250 — — — 
Exercised
— — — — 
Cancelled— — — — 
Options outstanding, December 31, 2025
1,187 $8.85 6.30$10 
Vested and exercisable, December 31, 2025
902 $9.59 5.30$10 
Stock option shares outstanding, vested and unvested balance as follows (in thousands):
December 31,September 30,
20252025
Vested and exercisable902 902 
Unvested (a)285 35 
Options outstanding1,187 937 
(a) Certain awards vest upon satisfaction of certain performance criteria.