Group 1 - The presentation is part of the Morgan Stanley TMT Conference for 2026, which spans four days [1] - Co-CEOs of Endava, John Cotterell and Alastair Lukies, along with CFO Mark Thurston, are present for the discussion [1]

Summary of Endava Conference Call Company Overview - **Company**: Endava (NYSE: DAVA) - **Event**: 2026 Conference at Morgan Stanley TMT Conference - **Date**: March 03, 2026 Key Industry Insights - **Focus on AI**: Endava is emphasizing an AI-native approach to service delivery, termed "Endava Flow," which aims to align with client objectives and enhance efficiency in operations [2][4][34]. - **C-Suite Engagement**: The company is prioritizing conversations with C-suite executives to understand their business goals and how AI can facilitate achieving those goals [2][19][84]. - **Outcome-Based Contracts**: There is a strategic shift towards outcome-based contracts that align with client objectives, which is expected to drive better results and client satisfaction [3][19][88]. Financial Performance and Projections - **Pipeline Confidence**: Endava's management expressed confidence in a stronger fourth-quarter pipeline conversion rate, attributing this to strategic client engagement and recent contract wins [2][6][11]. - **Quarterly Growth**: The company anticipates an 8% quarter-on-quarter growth for Q4, with 70%-75% of this growth being underpinned by contracted and committed deals [11][15][191]. - **Margin Pressure**: Recent margin pressure is partly due to investments in AI capabilities, which have led to a temporary decrease in billability [188][191]. Client Engagement and Market Dynamics - **Client Reactions**: There is significant interest from existing clients regarding the new AI-driven methodologies, with positive feedback on the potential for efficiency gains [20][21]. - **Geographic Strengths**: Endava is seeing resurgence in financial services, particularly in payments, banking, and insurance sectors, with notable strength in the UK and North America [27][33]. Operational Metrics and AI Initiatives - **KPIs for AI Investments**: The company is tracking revenue growth, margin improvements, and project impacts from the Endava Flow methodology to measure the success of AI initiatives [34][39][41]. - **Operational Efficiency**: Endava has streamlined its sales process by reducing the number of salespeople and focusing on higher-quality C-suite engagement, which is expected to enhance partnership longevity [47][51]. Methodology and Competitive Advantage - **Dava.Flow Methodology**: This new delivery model is designed for agentic AI solutions, emphasizing upfront planning and understanding client needs before execution, contrasting with traditional agile methods [100][105][116]. - **Tool-Agnostic Approach**: Dava.Flow allows for flexibility in tool selection, enabling clients to adapt to new technologies without being locked into specific platforms [181][185]. Conclusion - **Future Outlook**: Endava is positioned to leverage its AI capabilities and strategic client engagement to drive growth and improve margins in the coming fiscal year, with a focus on maintaining strong client relationships and delivering guaranteed outcomes [188][192].

Core Insights - Endava PLC reported quarterly earnings of $0.21 per share, matching the Zacks Consensus Estimate, but down from $0.38 per share a year ago, indicating a decline in profitability [1] - The company achieved revenues of $244.9 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 1.73%, but down from $250.63 million year-over-year [2] - Endava's stock has underperformed, losing approximately 17.3% since the beginning of the year, while the S&P 500 has gained 0.5% [3] Earnings Performance - The earnings surprise for the recent quarter was +0.96%, while the previous quarter saw a -20% surprise [1][2] - Over the last four quarters, Endava has exceeded consensus EPS estimates two times and topped revenue estimates only once [2] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.29 on revenues of $247.21 million, and for the current fiscal year, it is $1.05 on revenues of $968.41 million [7] - The estimate revisions trend for Endava was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market [6] Industry Context - The Computers - IT Services industry, to which Endava belongs, is currently ranked in the top 36% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8]

Financial Data and Key Metrics Changes - Revenue totaled GBP 184.1 million, representing a 5.9% decrease year-on-year and a 3.3% increase from Q1 FY2026 [7][21] - Loss before tax for the quarter was GBP 7.2 million, compared to a profit of GBP 2.5 million in the same period last year [21] - Adjusted PBT was GBP 10.7 million, down from GBP 21.8 million year-on-year, with an adjusted PBT margin of 5.8% compared to 11.2% [22] - Adjusted diluted earnings per share were 16 pence, down from 30 pence year-on-year [23] Business Line Data and Key Metrics Changes - Revenue from the 10 largest clients accounted for 35% of total revenue, down from 36% year-on-year, with average spend per client decreasing from GBP 7.1 million to GBP 6.5 million [23] - North America accounted for 40% of revenue, Europe for 23%, the UK for 31%, and the rest of the world for 6% [24] - Revenue from North America decreased by 5.1%, Europe by 8.5%, and the UK by 9.1%, while the rest of the world increased by 21.8% [24][25] Market Data and Key Metrics Changes - The company experienced a 3.3% FX headwind impacting revenue, particularly in North America [33] - The rest of the world showed strong growth, driven mainly by the payments and TNT verticals [25] Company Strategy and Development Direction - The company is heavily investing in AI to establish itself as a leader in the AI space, focusing on recruitment, training, and evolving engagement strategies [5][6] - Strategic partnerships with OpenAI and other hyperscalers are being leveraged to enhance service offerings and drive demand [11][12][14] - The launch of Endava Rise aims to convert startup innovations into enterprise-ready solutions, enhancing the company's capabilities [15] Management's Comments on Operating Environment and Future Outlook - Management noted that the ongoing investment in AI-native delivery models is impacting margins but is essential for long-term growth [22][28] - The company expects revenue guidance for Q3 FY2026 to be in the range of GBP 182 million to GBP 185 million, indicating a constant currency revenue decrease of 4% to 2.5% year-on-year [29] - The outlook for Q4 is more optimistic, with expected sequential growth driven by secured deals and increased working days [34] Other Important Information - The company ended the quarter with 11,385 employees, a 2.4% decrease from the previous year [19] - Cash and cash equivalents totaled GBP 68.5 million, an increase from GBP 59.3 million at the end of June 2025 [25] - Borrowings increased to GBP 202.7 million, supporting the share repurchase program [26] Q&A Session Summary Question: Fiscal year guidance and growth drivers for Q4 - Management indicated that Q4 growth is supported by secured deals and increased working days, with underlying growth expected to be around 6% [34] Question: Details on extensions with largest payment clients - Extensions primarily involve work in switch/gateway areas, focusing on cost rationalization and enhancing customer value propositions [38] Question: Margin impact from increased investments - Investments in partnerships and AI initiatives are heavier than expected, impacting margins, with FX also contributing to margin pressures [41][43] Question: OpenAI adoption trends and displacement concerns - The relationship with OpenAI is strong, with successful enterprise adoption of ChatGPT, and management sees opportunities outweighing displacement fears in the enterprise market [44][46][49] Question: Top client spending and pipeline assumptions - Stability is expected among top clients, with a slight slowdown in healthcare but overall sequential growth anticipated [56]

Financial Data and Key Metrics Changes - Revenue totaled GBP 184.1 million, representing a 5.9% decrease year-on-year and a 3.3% increase from Q1 FY2026 [7][21] - Loss before tax for the quarter was GBP 7.2 million, compared to a profit of GBP 2.5 million in the same period last year [21] - Adjusted PBT was GBP 10.7 million, down from GBP 21.8 million year-on-year, with an adjusted PBT margin of 5.8% compared to 11.2% [22] - Adjusted diluted earnings per share were 16 pence, down from 30 pence year-on-year [23] Business Line Data and Key Metrics Changes - Revenue from the 10 largest clients accounted for 35% of total revenue, down from 36% year-on-year, with average spend per client decreasing from GBP 7.1 million to GBP 6.5 million [23] - North America accounted for 40% of revenue, Europe for 23%, the U.K. for 31%, and the rest of the world for 6% [24] - Revenue from North America decreased by 5.1%, Europe by 8.5%, and the U.K. by 9.1%, while the rest of the world increased by 21.8% [24][25] Market Data and Key Metrics Changes - The company experienced a 3.3% FX headwind impacting revenue growth, particularly from the weakening US dollar [27][43] - The company noted a lack of contribution from a significant media client in North America, affecting revenue [24] Company Strategy and Development Direction - The company is heavily investing in AI to establish itself as a leader in the AI space, focusing on recruitment, training, and evolving engagement strategies [5][6] - The Dava.Flow model is being developed to enhance client engagement and delivery speed, with a focus on outcome-based solutions [10][63] - Strategic partnerships with OpenAI and other hyperscalers are being leveraged to drive growth and innovation in AI solutions [11][12][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ongoing investment in AI-native delivery models and next-gen talent, which is impacting margins [22][28] - The company expects revenue guidance for Q3 FY2026 to be in the range of GBP 182 million to GBP 185 million, with a constant currency revenue decrease of 4% to 2.5% year-on-year [29] - Management expressed confidence in the pipeline and the potential for growth in Q4, driven by secured deals and increased working days [34][56] Other Important Information - The company ended the quarter with 11,385 employees, a 2.4% decrease from the previous year, while continuing to upskill its AI talent base [19] - Capital expenditure for the quarter was 4.4% of revenue, significantly higher than 0.2% in the same period last year, due to investments in the Payments Accelerator [26] Q&A Session Summary Question: Fiscal year guidance and growth drivers for Q4 - Management indicated that Q4 growth is supported by secured deals and an increase in working days compared to Q3 [34] Question: Details on extensions with largest payment clients - Extensions primarily involve work in switch/gateway areas, helping clients rationalize costs and enhance value propositions [38] Question: Margin impact from increased investments - Investments in partnerships and AI initiatives are slightly higher than expected, impacting margins [42] Question: OpenAI adoption trends and displacement concerns - The company is seeing strong adoption of Enterprise ChatGPT and believes that enterprise-level challenges will drive demand for their services [46][49] Question: Top client spending and pipeline assumptions - Stability is expected among top clients, with a slight slowdown in one healthcare client anticipated [56]

Financial Data and Key Metrics Changes - Revenue totaled GBP 184.1 million, representing a 5.9% decrease year-on-year and a 3.3% increase from Q1 FY2026 [6][21] - Loss before tax for the quarter was GBP 7.2 million, compared to a profit of GBP 2.5 million in the same period last year [21] - Adjusted PBT was GBP 10.7 million, down from GBP 21.8 million year-on-year, with an adjusted PBT margin of 5.8% compared to 11.2% [22] - Adjusted diluted earnings per share were 16 pence, down from 30 pence year-on-year [23] - Adjusted free cash flow was GBP 20.1 million, down from GBP 31.6 million in the same period last year [25] Business Line Data and Key Metrics Changes - Revenue from the 10 largest clients accounted for 35% of total revenue, down from 36% year-on-year, with average spend per client decreasing from GBP 7.1 million to GBP 6.5 million [23] - North America accounted for 40% of revenue, Europe for 23%, and the UK for 31%, with North America revenue decreasing by 5.1% year-on-year [24] - Revenue from Europe declined 8.5%, primarily due to weakness in payments and mobility [24] - The rest of the world saw a revenue increase of 21.8%, driven mainly by the payments and TNT verticals [25] Market Data and Key Metrics Changes - The company experienced a 5.1% revenue decrease in constant currency terms year-on-year [21] - The UK revenue decreased by 9.1%, mainly due to the reclassification of a large payments client to North America [25] - The rest of the world increased significantly, indicating growth opportunities in emerging markets [25] Company Strategy and Development Direction - The company is heavily investing in AI to establish itself as a leader in AI-native solutions, focusing on recruitment, training, and building partnerships [5][6] - Strategic partnerships with OpenAI and other hyperscalers are being leveraged to enhance service offerings and drive demand [12][14] - The launch of Endava Rise aims to convert startup innovations into enterprise-ready solutions, enhancing the company's capabilities [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ongoing challenges posed by currency fluctuations and competitive pressures but remains optimistic about the long-term growth potential driven by AI adoption [27][28] - The company expects revenue guidance for Q3 FY2026 to be in the range of GBP 182 million to GBP 185 million, indicating a constant currency revenue decrease of 4% to 2.5% year-on-year [28] - For the full fiscal year 2026, revenue is expected to be between GBP 736 million and GBP 750 million, reflecting a constant currency decrease of 3.5% to 1.5% [28] Other Important Information - The company ended the quarter with 11,385 employees, a 2.4% decrease from the same period last year [19] - Capital expenditure for the quarter was 4.4% of revenue, significantly higher than 0.2% in the same period last year, due to investments in a payments accelerator [26] Q&A Session Summary Question: Fiscal year guidance and growth drivers for Q4 - Management indicated that Q4 growth is expected due to secured deals and an increase in working days compared to Q3 [31][33] Question: Details on commitments with largest payment clients - Management confirmed extensions of work with two largest payment clients, focusing on switch/gateway type projects [36] Question: Margin impact from increased investments - Management acknowledged that investments in partnerships and AI-native delivery models are heavier than expected, impacting margins [40][41] Question: OpenAI adoption trends and market displacement concerns - Management expressed confidence in the strong relationship with OpenAI and the enterprise market opportunities, addressing concerns about service displacement [43][45] Question: Top client spending and pipeline assumptions - Management noted stability in top clients, with expectations for sequential growth and a strong pipeline for Q3 and Q4 [53][58]

Q2 FY26 Investor presentation . Disclaimer. This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation, other than statements of historical facts, are forward-looking statements. The words "believe," "estimate," "expect," "may," "will" and similar expressions are intended to identify forward- looking statements. Such forward-looking statements include, but are not limited to, the statements r ...

Core Viewpoint - Endava plc has announced its financial results for Q2 FY2026, highlighting its strategic pivot towards AI and significant investments in this area to establish itself as a leader in AI-driven business transformation [1] Financial Performance - The results cover the three months ended December 31, 2025, indicating a focus on financial metrics during this period [1] Strategic Initiatives - The company has been heavily investing in recruitment and training to enhance its capabilities in AI, which is a key component of its business transformation strategy [1]

Core Insights - Endava has announced a significant expansion of its partnership with Cognition [1] Company Summary - Endava is identified as a business transformation group [1] - The partnership expansion indicates a strategic move to enhance capabilities and offerings [1]

Core Insights - Endava has partnered with Miro to enhance its AI-native delivery model by integrating Miro's AI platform across its global operations [1] - The partnership aims to operationalize AI throughout the delivery lifecycle, improving decision-making and team alignment [1] - Endava's employee base of nearly 12,000 will benefit from this collaboration, which is expected to accelerate digital transformation for clients [1] Company Overview - Endava is a technology-driven business transformation group focused on enabling clients to accelerate growth and tackle complex challenges through an AI-native approach [1] - Miro serves over 100 million users and 250,000 customers, providing a collaborative AI workspace that enhances team productivity and innovation [1] Partnership Details - The integration of Miro into Endava's Dava.Flow™ is designed to compress decision cycles and improve stakeholder alignment [1] - Early internal adoption of Miro has shown measurable improvements in workshop outcomes and reduced process times from weeks to days [1] - The partnership will also support joint go-to-market initiatives, enhancing both companies' capabilities in transforming delivery models for large organizations [1] Strategic Goals - Endava aims to lead the industry with an AI-native, methodology-led approach to delivery, embedding AI into everyday operations [1] - Miro emphasizes the importance of viewing AI as a means to create new company-wide capabilities rather than just a technology [1] - The collaboration is expected to facilitate faster transformation programs that yield measurable business impacts for clients [1]