Summary of Endava (DAVA) Conference Call Company Overview - **Company**: Endava (DAVA) - **Event**: Citi Tech Conference - **Date**: September 05, 2025 Industry Insights - **IT Services Demand**: The IT services industry has experienced cycles of demand, with a significant boost post-COVID leading to increased technology spending. However, there has been a recent shift towards more cautious spending as enterprises seek to control budgets more effectively [5][6] - **Digital Transformation**: The digital transformation wave that began post-COVID is now seeing a pull-forward effect, leading to a hiatus similar to the early 2000s [6][7] - **AI Impact**: The introduction of AI, particularly Generative AI, is creating uncertainty in the market. While some believe it may reduce the need for IT services, Endava sees it as an opportunity for increased demand as clients require deeper integration of AI into their core systems [11][12][15] Financial Performance - **Recent Deals**: Endava closed five large deals in Q3 and eight in Q4, marking the largest order book ever closed, although this momentum is not yet reflected in revenue [17][59] - **Revenue Guidance**: The company anticipates a decline of 5% to 6% in Q1 on a constant currency basis, with a flat outlook for the full year. Approximately 70% of revenues are contracted and committed, up from 60% the previous year [53][54] - **Large Deals Definition**: Large deals are defined as those over $5 million, with some reaching up to $100 million [25] Client Behavior and Market Trends - **Client Spending**: The top 10 clients account for 37% of total revenue, up from 32%, indicating a focus on larger clients [36] - **Geographic Trends**: North America shows good momentum despite a sequential decline due to FX movements. The UK and Europe are experiencing bumpy trends, particularly in payments, which are under pressure [38][39] - **Sector Performance**: The payments sector is facing margin pressure due to new competitors and a shift in traditional players towards M&A rather than technology investment [41][43] Strategic Shifts - **Focus on Larger Clients**: Endava is trimming its long tail of smaller clients to focus on larger, more profitable accounts [35] - **Outcome-Based Pricing**: The company is shifting towards more outcome-based pricing models, moving away from time-and-materials (T&M) structures, with 23% of business now outcome-based, up from 17% a year ago [50][49] - **AI Integration**: Endava is investing in AI to enhance productivity and revenue per head, expecting a gradual increase in headcount as they recruit graduates and specialists in data and AI [52][48] Partnerships and Future Outlook - **Partnership Development**: Endava is focusing on building partnerships with hyperscalers and LLM providers, aiming for these partnerships to contribute 25% to 30% of business in the next five years, up from below 5% currently [72][73] - **Investment in AI**: The company is investing in AI capabilities, which is expected to drive higher revenues and margins over the next two to three years [49][62] Conclusion - Endava is navigating a complex IT services landscape marked by cautious client spending and the transformative potential of AI. The company is strategically focusing on larger clients, shifting pricing models, and enhancing partnerships to position itself for future growth.

Core Viewpoint - Endava's disappointing fourth-quarter 2025 financial results have led to a significant drop in its stock price, despite beating analysts' bottom-line expectations [4][6]. Financial Performance - Endava reported adjusted free cash flow (FCF) of 82.7 million British pounds in fiscal 2021, which increased to 107.2 million British pounds in fiscal 2022 and 111.5 million British pounds in fiscal 2023. However, FCF declined to 58.4 million British pounds in fiscal 2024 and further decreased to 48.7 million British pounds in fiscal 2025 [5]. - The company's revenue for fiscal 2025 was 772.3 million British pounds, but management projects sales to decline to between 750 million British pounds and 765 million British pounds for fiscal 2026 [6]. Market Reaction - Following the release of the financial results, Endava's shares dropped 32.1% from the end of last Friday's trading session through Thursday's market close [2]. - Despite a 14.7% increase in August, the stock has faced a negative start in September due to investor concerns over declining cash flow and the company's guidance for the upcoming fiscal year [1][4]. Management's Outlook - CEO John Cotterell highlighted that the company ended the quarter with its "highest ever quarterly order book," suggesting potential for future growth despite current investor disappointment [7][8].

Core Viewpoint - Endava PLC reported quarterly earnings of $0.31 per share, missing the Zacks Consensus Estimate of $0.32 per share, but showing an increase from $0.28 per share a year ago, indicating a -3.12% earnings surprise [1][2] Financial Performance - The company posted revenues of $239.41 million for the quarter ended June 2025, which was 4.22% below the Zacks Consensus Estimate and a decrease from $245.3 million year-over-year [2] - Over the last four quarters, Endava has surpassed consensus EPS estimates three times, but has only topped consensus revenue estimates once [2] Stock Performance - Endava shares have declined approximately 53.5% since the beginning of the year, contrasting with the S&P 500's gain of 9.6% [3] - The current Zacks Rank for Endava is 4 (Sell), indicating expectations of underperformance in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.38 on revenues of $252.72 million, and for the current fiscal year, it is $1.56 on revenues of $1.02 billion [7] - The outlook for the Computers - IT Services industry, where Endava operates, is currently in the bottom 39% of Zacks industries, which may negatively impact stock performance [8]

Financial Data and Key Metrics Changes - Endava's revenue for Q4 FY2025 was £186.8 million, a decrease of 3.9% compared to £194.4 million in the same period last year. In constant currency, revenue decreased by 0.7% [30] - Profit before tax for Q4 FY2025 was £3.8 million, compared to a loss of £0.4 million in the same period last year. Adjusted profit before tax (PBT) was £16.4 million, up from £14.9 million [30] - Adjusted PBT margin for Q4 FY2025 was 8.8%, compared to 7.7% in the same period last year [31] - For the fiscal year ended June 30, 2025, revenue totaled £772.3 million, a 4.3% increase from £740.8 million in the previous fiscal year [35] Business Line Data and Key Metrics Changes - Revenue from the 10 largest clients accounted for 37% of total revenue in Q4 FY2025, up from 34% in the same period last year. Average spend per client from these clients increased from £6.7 million to £6.9 million [31] - In FY2025, revenue from North America increased by 21.9%, while Europe decreased by 5.5% due to challenges in the payments and TMT verticals [38] - The healthcare sector saw a significant increase of 103.8% in revenue, primarily due to the Galaxy acquisition [40] Market Data and Key Metrics Changes - North America accounted for 38% of revenue in Q4 FY2025, Europe for 23%, the UK for 33%, and the rest of the world for 6% [31] - Revenue from North America decreased by 5.3% in Q4 FY2025, while revenue from Europe declined by 13.1% [32] - The UK market grew by 5.9%, while the rest of the world saw a decline of 5.8% [32] Company Strategy and Development Direction - The company is transitioning to become AI native, focusing on evolving its delivery model and forming new alliances to enhance its technology offerings [7][8] - Endava is expanding its partnerships, particularly with OpenAI, to strengthen its technical capabilities and drive new client acquisitions [13][15] - The introduction of flexible pricing structures, including transaction-based models, is aimed at aligning with client needs while managing associated risks [21][76] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the short-term operating backdrop, noting that many clients are recalibrating their spending [9] - The company expects revenue for Q1 FY2026 to be between £181 million and £183 million, representing a constant currency decrease of 5% to 6% year-over-year [42] - Management highlighted that the current economic environment is causing delays in client decision-making, impacting growth [99] Other Important Information - Endava's adjusted free cash flow was negative £4 million for Q4 FY2025, impacted by delayed payments due to improved terms for a key client [33] - The company reported a decrease in headcount by 5% year-over-year, with a focus on recruitment in high-demand areas such as data, AI, and cloud [28] Q&A Session Summary Question: How to reconcile 2026 growth guidance with strong order book commentary? - Management indicated that the order book includes both renewal work and new business, with some new projects taking time to ramp up into revenue [45][46] Question: Can you provide details on margin projections? - Management explained that reinstating bonuses and investing in AI will impact adjusted PBT margins, projecting a decrease of about 3% in FY2026 [49][50] Question: What is the impact of client number decline? - The decline in client numbers is attributed to the loss of small clients, while net additions in other segments remain positive [54][56] Question: What are the expectations for sequential growth after Q1? - Management expressed confidence in achieving sequential growth, supported by a higher proportion of contracted and committed revenue compared to the previous year [72][73] Question: How does the shift to flexible pricing structures impact financial outlook? - Management views flexible pricing as an opportunity, with structured contracts that secure minimum volumes while allowing for upside as new products are developed [76][78]

Financial Performance - Endava's revenue for FY25 was £772.3 million[65] - The revenue growth rate at constant currency was 24%[98] - Adjusted profit before tax for FY25 was £82.1 million[71] - Adjusted free cash flow for FY25 was £48.7 million[94] - The top 10 clients accounted for 37% of total revenue in Q4 FY25[78] Client Metrics - Endava had 619 clients in Q4 FY25[75] - The number of clients with revenue greater than £1 million was 133 in Q4 FY25[75] - The average spend from top 10 clients was £6870 thousand in Q4 FY25[82] - The average spend from remaining clients was £265 thousand in Q4 FY25[84] Workforce - Endava had 11,479 global employees as of June 30, 2025, a 50% decrease from Q4 FY24[41]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ______________________________________________________ Form 20-F ______________________________________________________ (Mark One) ¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 For the fiscal year ended June 30, 2025 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 19 ...

Q4 FY2025 & FY2025 ENDAVA ANNOUNCES FOURTH QUARTER FISCAL YEAR 2025 & FISCAL YEAR 2025 RESULTS Q4 FY2025 3.9% Year on Year Revenue Decrease to £186.8 million 0.7% Revenue Decrease at Constant Currency Diluted EPS £0.02 compared to £(0.03) in the prior year comparative period Adjusted Diluted EPS £0.24 compared to £0.22 in the prior year comparative period FY2025 4.3% Year on Year Revenue Increase to £772.3 million 6.3% Revenue Increase at Constant Currency Diluted EPS £0.36 compared to £0.29 in the prior ye ...

Group 1 - Endava (NYSE: DAVA) is a founder-led company in the IT services industry, characterized as a high-quality company with an 80% upside potential from current levels [1] - The current trading valuation of Endava reflects cyclical macroeconomic challenges rather than its long-term growth prospects [1] - The analysis focuses on identifying winners and losers in industries where corporate strategy plays a crucial role, emphasizing market structure, competitive positioning, and strategic catalysts [1]

Summary of Endava's Conference Call Company Overview - **Company**: Endava - **Industry**: IT Services and Digital Transformation - **Key Personnel**: CEO John Cotterell, CFO Mark Thurston - **Company History**: Founded in February 2000, recently celebrated its 20th anniversary [3][4] Core Service Offerings - Endava specializes in digital transformation services, focusing on ideation to production with multidisciplinary teams [4][5] - The company has evolved through various technology waves, including mobile, cloud, and currently AI [5][6] Market Position and Growth - Historically, Endava has experienced organic growth rates of 20% to 30% annually [5] - The company is currently facing challenges due to the fundamental shift brought by AI, impacting discretionary spending [6][9] AI Implementation and Challenges - The implementation of AI in enterprise environments is a significant focus, with clients requiring robust engineering solutions to avoid issues like hallucinations in AI outputs [10][11] - Business cases for AI have improved as processing costs decrease, making them more viable for clients [12][13] - Legacy systems pose challenges for effective AI implementation, but AI can assist in modernizing these systems [14][15] Deal Dynamics - There is an increase in the number and size of large deals, driven by extended ideation phases with clients [18][19] - The ideation phase for AI projects has lengthened to over a year, compared to 3-6 months during previous digital transformation waves [21][22] - Clients are learning to navigate the complexities of AI integration, which is expected to lead to a more regular cadence of deal closures [19][27] Sector Performance - **Banking and Capital Markets (BCM)**: Strong growth driven by core modernization and payments capabilities [28][29] - **Insurance**: Steady growth in the low double digits, with a focus on data and AI-driven solutions [30][32] - **Payments**: Experienced a significant reduction in revenue due to client spend pullbacks, but is expected to stabilize [35][36] - **Healthcare**: Growth opportunities are emerging, particularly in core modernization and AI integration following the Galaxy acquisition [36][39] Galaxy Acquisition - The integration of Galaxy has progressed smoothly, enhancing Endava's capabilities in healthcare and expanding its market reach [42][43] - The acquisition has allowed Endava to leverage AI tools for better client service and operational efficiency [38][39] Internal AI Utilization - Endava aims to be "AI native," with all employees using AI tools like ChatGPT to enhance productivity [48][49] - The company anticipates significant productivity gains from AI, which may lead to increased demand for services rather than cannibalization of existing models [50][53] Conclusion - Endava is navigating a transformative period marked by AI integration and evolving client needs, with a focus on maintaining growth through modernization and innovative service offerings [54][55]

Summary of Endava's Conference Call Company Overview - **Company**: Endava - **Industry**: IT Services, specifically focusing on digital transformation and AI integration Key Points and Arguments 1. **Market Shift**: Endava has been a leader in digital transformation for the past 20 years, but the advent of AI, particularly with ChatGPT, has initiated a new phase termed the "digital shift" [5][4][3] 2. **AI Integration**: The company emphasizes the importance of integrating AI into both customer-facing solutions and internal processes, which requires addressing legacy systems [7][8][6] 3. **Complexity of AI**: The engineering challenges associated with AI, such as hallucinations and regulatory compliance, have made implementation more complex than anticipated [9][8] 4. **Core Modernization**: Endava has acquired Galaxy, which provides tools for understanding and modernizing legacy code, crucial for successful AI integration [12][13] 5. **Diversification**: Since its IPO in 2018, Endava has diversified its client base across various industries and geographies, moving beyond its initial concentration in payments and financial services [14][15][16] 6. **Revenue Trends**: The company is experiencing a transition in revenue generation from traditional digital transformation projects to larger AI-enabled deals, which has caused a temporary flattening in business growth [17][18] 7. **Pipeline Development**: Endava is focused on closing larger deals, which are expected to drive future growth, despite current macroeconomic challenges [18][17] 8. **AI Skills Development**: The company has established centers of excellence to enhance AI skills among its workforce, which is essential for adapting to the new market demands [22][23] 9. **Client Engagement**: While many clients are still hesitant to adopt AI solutions, Endava is working to integrate AI into its daily operations to improve productivity [26][27] 10. **Market Opportunities**: Significant growth is anticipated in the banking and capital markets sector, which has already seen a 40% increase in activity over the past year [38][39] 11. **Automotive Sector Challenges**: The automotive industry is currently facing tariff challenges, which have slowed down technology investments, but recovery is expected within three to six months [41][42] 12. **Margin Goals**: Endava aims to improve its gross margins by shifting towards outcome-based contracts, which will allow for better margin capture compared to traditional time and materials contracts [45][46] 13. **Payments Industry**: The company continues to see growth opportunities in the payments sector, particularly as investments shift from payment processors to large banks [48][49] Additional Important Content - **AI's Role in Agile Delivery**: The integration of AI is expected to significantly enhance agile delivery processes, allowing for faster iterations and improved project outcomes [28][29] - **Revenue Composition Changes**: The structure of large deals is evolving, with a focus on immediate revenue generation rather than gradual scaling [32][33] - **Predictability of Large Deals**: There is increased uncertainty in predicting the timing of large deals due to macroeconomic factors and technological complexities [34][36] This summary encapsulates the key insights from Endava's conference call, highlighting the company's strategic focus on AI integration, market diversification, and the evolving landscape of client engagement and revenue generation.