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]

Core Insights - TRD U.S.A. has announced a multi-year expanded partnership with Endava, designating them as the Official IT Consulting Partner starting in 2026 [1][2] - The partnership aims to enhance TRD's branding presence in SRO Motorsports America and expand into IMSA in 2026 [1] Company Overview - Endava is a leading provider of next-generation technology services, focusing on enabling customers to accelerate growth and tackle complex challenges through innovative technologies and deep industry expertise [4] - As of September 30, 2025, Endava employs 11,636 individuals across various regions, including Europe, the Americas, Asia Pacific, and the Middle East [5] Partnership Details - The partnership is built on shared values of excellence, innovation, and collaboration, with Endava providing digital technology solutions to help TRD improve performance both on and off the racetrack [2][3] - Endava will utilize AI-enabled accelerators and frameworks to modernize TRD's core production systems and facilitate digital transformation [2][3] Strategic Goals - TRD emphasizes innovation as a core principle, aiming to leverage technology to unlock performance and drive long-term success [3] - The collaboration is expected to deliver data-driven solutions that enhance Toyota's competitive edge in motorsports [3]

Core Insights - Endava plc reported lower-than-expected results for Q1 FY2026, primarily due to an unexpected credit made to a client after the last earnings call [1] Financial Performance - The results for the three months ended September 30, 2025, were impacted by certain non-large strategic pipe [1]

Endava plc (NYSE:DAVA) will release earnings results for the first quarter before the opening bell on Tuesday, Nov. 11.Analysts expect the company to report quarterly earnings at 18 cents per share. That's down from 25 cents per share in the year-ago period. The consensus estimate for Endava's quarterly revenue is $182.08 million, compared to $195.05 million a year earlier, according to data from Benzinga Pro.On Sept. 4, Endava posted better-than-expected fourth-quarter earnings.Shares of Endava rose 1.4% t ...