Core Insights - Endava and Paysafe have formed a multi-year strategic partnership aimed at accelerating the market introduction of smarter payment solutions and enhanced community engagement [1] Company Summaries - Endava is a technology-driven business transformation group focused on delivering innovative solutions [1] - Paysafe is a leading payments platform that specializes in facilitating seamless and secure transactions for businesses and consumers globally, offering services such as digital wallets, prepaid solutions, and online payment processing [1]

Core Insights - Endava plc reported mixed results for the first quarter, with adjusted earnings of 20 cents per share, surpassing market estimates of 8 cents per share, while quarterly sales were $240.314 million, below expectations of $245.910 million [1] - The company anticipates second-quarter adjusted earnings between 20 cents to 23 cents per share, with sales projected between $241.410 million to $245.456 million [1] Financial Performance - The first quarter results were impacted by an unexpected credit to a client and certain strategic pipeline opportunities that did not convert into revenue as expected [2] - Despite these challenges, the company secured a multi-year strategic relationship with a leading payments company worth up to $100 million, indicating strong client relationships [2] Stock Performance and Analyst Ratings - Following the earnings announcement, Endava shares increased by 2.2%, trading at $7.10 [3] - Analysts adjusted their price targets for Endava, with Needham maintaining a Buy rating and lowering the target from $12 to $9, Guggenheim also maintaining a Buy rating with a target reduction from $18 to $15, and JP Morgan maintaining a Neutral rating with a target cut from $13 to $10 [5]

Financial Performance - Q1 FY2026 revenue was £178.2 million, an 8.6% decline from £195.1 million in the same period last year[4] - Loss before tax for Q1 FY2026 was £(8.5) million, compared to a profit before tax of £4.2 million in the prior year[4] - Adjusted diluted EPS for Q1 FY2026 was £0.15, down from £0.25 in the same period last year[8] - Full FY2026 revenue guidance is set between £735.0 million and £752.0 million, indicating a constant currency decline of 4.5% to 2.5% year-over-year[11] - Revenue growth rate as reported under IFRS declined by 8.6%, while at constant currency, the decline was 7.3%[33] - Adjusted profit before tax for the period was £9,852,000, down from £19,232,000 in the previous year[34] - Basic and diluted earnings per share (EPS) for the period were (£0.15), compared to £0.04 in the same period last year[30] Cash and Liquidity - As of September 30, 2025, Endava had cash and cash equivalents of £47.2 million, down from £59.3 million at June 30, 2025[8] - The company’s cash and cash equivalents at the end of the period were £47,225,000, down from £52,811,000 year-over-year[32] - Net cash from operating activities increased to £12,252,000 from £4,374,000 year-over-year[36] - Adjusted free cash flow for the period was £9,209,000, compared to £3,549,000 in the same period last year[36] - The company incurred share-based compensation expenses of £7,680,000, down from £11,021,000 in the previous year[37] Client and Revenue Concentration - The number of clients generating over £1 million in revenue over the last twelve months decreased to 133 from 147 a year ago[8] - Top 10 clients accounted for 36% of revenue in Q1 FY2026, consistent with the prior year[8] Geographic Performance - By geographic region, 42% of revenue was generated in North America, up from 39% in the same period last year[8] - North America accounted for 42% of revenue, an increase from 39% in the previous year[39] Employee Metrics - The company reported a total of 11,636 employees, a decrease from 11,821 employees year-over-year[39] Strategic Developments - The company secured a multi-year strategic relationship with a leading payments company worth up to $100 million[3] Asset Management - Total assets decreased to £933,742,000 from £962,391,000 year-over-year, reflecting a decline of approximately 3.0%[31]

Core Viewpoint - Endava experienced a challenging first quarter for fiscal 2026, with significant declines in revenue and net income, leading to a sharp drop in stock price as investors reacted negatively to the results [1][5]. Financial Performance - For the first quarter of fiscal 2026, Endava reported revenue of just over 178 million British pounds ($234 million), representing a nearly 9% decrease year-over-year [2]. - Net income, not in accordance with international financial reporting standards (IFRS), fell to 9.9 million pounds ($13 million), down from 19.2 million pounds ($25.3 million) in the first quarter of fiscal 2025 [3]. - Earnings per share (EPS) were recorded at 0.15 pounds ($0.20) [3]. Analyst Expectations - Both revenue and net income figures fell short of consensus analyst estimates, which anticipated revenue of nearly 189 million pounds ($249 million) and a non-IFRS adjusted EPS of 0.18 pounds ($0.24) [4]. Management Commentary - Management acknowledged the disappointing quarter, attributing the results to an unexpected credit made to a client and certain strategic pipeline opportunities that did not convert into anticipated revenue [5]. Future Guidance - Endava provided guidance for the second quarter and the entirety of fiscal 2026, expecting revenue to be between 735 million to 752 million pounds ($968 million to $990 million), which is nearly 3% lower than fiscal 2025 [6]. - Adjusted EPS is forecasted to be between 0.80 pounds to 0.88 pounds ($1.05 to $1.16) [6].

Core Insights - Endava plc (NYSE:DAVA) reported earnings per share (EPS) of $0.20, missing the expected $0.25, but exceeded revenue expectations with approximately $239.1 million compared to the estimated $182.1 million [1][6] Financial Performance - The company's recent financial performance was impacted by an unexpected credit issued to a client and issues in its strategic pipeline, contributing to the lower-than-expected EPS [2] - Despite these challenges, DAVA's revenue performance was strong, surpassing estimates by a significant margin [2] Valuation Metrics - DAVA's price-to-earnings (P/E) ratio is approximately 19.97, indicating the price investors are willing to pay for each dollar of earnings [3][6] - The price-to-sales ratio is about 0.54, suggesting a relatively low valuation compared to its sales [3][6] - The enterprise value to sales ratio is 0.76, reflecting a modest valuation when considering total sales [3][6] Cash Flow and Debt Management - The enterprise value to operating cash flow ratio of 11.13 highlights DAVA's cash flow efficiency relative to its enterprise value [4] - The company's earnings yield stands at 5.01%, providing insight into the return on investment for shareholders [4] - DAVA's debt-to-equity ratio is 0.39, indicating a conservative use of debt in its capital structure, which is a positive sign for investors [4] Liquidity Position - DAVA maintains a strong liquidity position with a current ratio of 2.32, suggesting it can comfortably cover its short-term liabilities [5][6] - This strong liquidity, combined with a conservative debt approach, positions the company well to navigate financial challenges and capitalize on future opportunities in the technology-driven business transformation sector [5]

Core Viewpoint - Endava PLC reported quarterly earnings of $0.20 per share, missing the Zacks Consensus Estimate of $0.25 per share, and showing a decline from $0.33 per share a year ago, indicating a -20.00% earnings surprise [1][2] Financial Performance - The company posted revenues of $240.27 million for the quarter ended September 2025, which was 2.43% below the Zacks Consensus Estimate and down from $253.71 million year-over-year [2] - Over the last four quarters, Endava has surpassed consensus EPS estimates two times and topped revenue estimates only once [2] Stock Performance - Endava shares have decreased approximately 69.5% since the beginning of the year, contrasting with the S&P 500's gain of 16.2% [3] - The current Zacks Rank for Endava is 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $0.28 on revenues of $250.72 million, and for the current fiscal year, it is $1.17 on revenues of $1.02 billion [7] - The trend of estimate revisions for Endava was mixed ahead of the earnings release, which could change following the recent report [6] Industry Context - The Computers - IT Services industry, to which Endava belongs, is currently ranked in the top 29% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Endava (NYSE:DAVA) Q1 2026 Earnings Call November 11, 2025 08:00 AM ET Company ParticipantsMark Thurston - CFO and DirectorJohn Cotterell - Founder, CEO, and DirectorPuneet Jain - Associate of Equity ResearchLaurence Madsen - Head of Investor RelationsBryan Bergin - Managing DirectorAntonio Jaramillo - Equity Research Senior AssociateJonathan Lee - MD of Equity ResearchConference Call ParticipantsMaggie Nolan - Research Analyst of Technology, Media, and CommunicationsNate Svensson - Director and Senior Equi ...

Financial Data and Key Metrics Changes - Endava's revenue for Q1 FY2026 was GBP 178.2 million, an 8.6% decrease from GBP 195.1 million in the same period last year, with a constant currency decrease of 7.3% [24][26] - Loss before tax for the quarter was GBP 8.5 million, compared to a profit of GBP 4.2 million in the prior year [25] - Adjusted PBT was GBP 9.9 million, down from GBP 19.2 million year-over-year, with an adjusted PBT margin of 5.5% compared to 9.9% [25] - Adjusted diluted EPS was GBP 0.15, down from GBP 0.25 in the same period last year [25] - Adjusted free cash flow increased to GBP 9.2 million from GBP 3.5 million year-over-year [28] Business Line Data and Key Metrics Changes - Revenue from the 10 largest clients accounted for 36% of total revenue, consistent with the previous year, but average spend per client decreased from GBP 7.1 million to GBP 6.4 million, a 9.9% decline [25][26] - North America contributed 42% of revenue, Europe 24%, the U.K. 28%, and the rest of the world 6% [26] - Revenue from North America decreased by 1%, while Europe saw a decline of 12.8% and the U.K. decreased by 17.9% [26][27] Market Data and Key Metrics Changes - The unexpected client credit impacted performance, but the reclassification of a large payments client from the U.K. to North America offset this [26][27] - The rest of the world saw a revenue increase of 9% [27] Company Strategy and Development Direction - Endava is focusing on AI-native transformation, with the DavaFlow model designed to integrate AI into every phase of the delivery lifecycle [18][20] - The company is committed to disciplined cost management while pursuing growth opportunities, particularly in AI-related engagements [9][24] - Partnerships with major technology firms, including OpenAI and Google Cloud, are being leveraged to enhance service offerings and drive growth [15][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in transitioning business models and delivery approaches due to the rapid acceleration of AI [7][49] - The company expects gradual recovery in the latter half of the fiscal year, supported by large strategic deals [84] - Management emphasized the importance of shifting to outcome-based deals to improve margins and client benefits [49] Other Important Information - The company ended the quarter with 11,636 employees, a 2% decrease from the previous year, while continuing to expand its AI talent pool [21] - Capital expenditure as a percentage of revenue was 1.7%, up from 0.6% in the prior year [29] - The share repurchase program remains active, with $34.1 million remaining for repurchase [29] Q&A Session Summary Question: Can you share more detail on the unexpected client credit? - The credit was procedural and not related to remediation work, impacting revenue guidance but not indicative of client relationship decline [33][34] Question: Has there been any unusual client churn this quarter? - There has not been an increase in client churn, and the credit was from an ongoing relationship [39] Question: How are productivity gains from DavaFlow quantified? - DavaFlow is expected to drive significant productivity improvements, with potential gains in the 5x-10x range [40] Question: What is the strategy to navigate changes in business models? - The strategy focuses on accelerating the shift to AI-native approaches and increasing outcome-based deals to improve margins [49] Question: Can you provide details on the $100 million deal with a payments company? - The deal is a five-year commitment primarily focused on new development rather than managed services, representing significant new revenue [78] Question: How are capital allocation priorities balanced between AI investment and share buybacks? - The company continues to invest in AI while maintaining a share buyback program, prioritizing long-term profitability over short-term margins [60]

Endava (NYSE:DAVA) Q1 2026 Earnings Call November 11, 2025 08:00 AM ET Speaker0Good day, and welcome to Endava's first quarter fiscal year 2026 conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, th ...

Financial Performance - Endava's revenue for the three months ended September 30, 2025 (Q1 FY25) was £195.1 million, while for the three months ended September 30, 2026 (Q1 FY26) it was £178.2 million, representing a year-over-year decrease of 8.6%[88, 90] - The adjusted profit before tax for Q1 FY25 was £19.232 million, and for Q1 FY26 it was £9.852 million[94] - Adjusted free cash flow for Q1 FY25 was £3.549 million, and for Q1 FY26 it was £9.209 million[116] - The adjusted profit before tax as a percentage of revenue was 9.9% for Q1 FY25 and 5.5% for Q1 FY26[94] Client Relationships - The number of clients with revenue greater than £1 million was 147 in Q1 FY25 and 133 in Q1 FY26[97] - The average spend for top 10 clients was £7.080 million in Q1 FY25 and £6.380 million in Q1 FY26[103] - The average spend for remaining clients was £289,000 in Q1 FY25 and £278,000 in Q1 FY26[105] - Revenue from the top 10 clients accounted for 36% of total revenue in both Q1 FY25 and Q1 FY26[100] Geographical and Vertical Revenue - In Q1 FY26, Europe accounted for 28% of revenue, North America 25%, and the UK 42%[110] - By industry vertical in Q1 FY26, Payments represented 17% of revenue, Banking & Capital Markets 22%, Insurance 9%, Technology, Media & Telecom 17%, Mobility 9%, Healthcare 12%, and Other 14%[110] Employees - As of September 30, 2025, Endava had 11,636 global employees, a 1.6% decrease from Q1 FY25[62]