Endava(US:DAVA)2026-02-19 12:19Financial Performance - Q2 FY2026 revenue declined by 5.9% year on year to £184.1 million, with a constant currency decline of 5.1%[2][5] - Diluted loss per share for Q2 FY2026 was £(0.13), compared to diluted earnings per share of £0.11 in the prior year[2][9] - Adjusted diluted EPS for Q2 FY2026 was £0.16, down from £0.30 in the same period last year[9] - Loss before tax for Q2 FY2026 was £(7.2) million, compared to a profit before tax of £2.5 million in the prior year[9] - Revenue for the six months ended December 31, 2025, decreased by 7.3% to £362,285, compared to £390,641 in the same period of 2024[30] - Gross profit for the six months ended December 31, 2025, was £75,266, down from £93,677 in 2024, reflecting a decline of 19.6%[30] - The company reported an operating loss of £5,865 for the six months ended December 31, 2025, compared to an operating profit of £6,363 in 2024[30] - Basic loss per share for the six months ended December 31, 2025, was £(0.28), a decline from earnings of £0.15 in 2024[31] - Adjusted profit before tax for the six months ended December 31, 2025, was £20,520, down from £41,067 in 2024[35] - The company reported a total comprehensive expense of £(9,189) for the six months ended December 31, 2025, compared to £(4,715) in 2024[30] Cash Flow and Operating Activities - Net cash from operating activities was £28.2 million in Q2 FY2026, down from £32.0 million in the same period last year[9] - Net cash from operating activities for the six months ended December 31, 2025, increased to £40,410 from £36,422 in 2024[33] - Cash and cash equivalents at the end of the period were £68,484, an increase from £60,065 at the end of December 2024[33] Revenue Guidance and Expectations - Endava expects Q3 FY2026 revenue to be between £182.0 million and £185.0 million, indicating a constant currency decline of 4.0% to 2.5% year on year[11] - Full FY2026 revenue guidance is set between £736.0 million and £750.0 million, reflecting a constant currency decline of 3.5% to 1.5% year on year[12] Client and Revenue Concentration - The number of clients generating over £1 million in revenue over the last twelve months decreased to 135 from 141 a year earlier[9][10] - Top 10 clients accounted for 35% of revenue in Q2 FY2026, slightly down from 36% in the same period last year[9] - The percentage of revenue from the top 10 customers remained stable at 35% for the six months ended December 31, 2025, compared to 34% in 2024[40] Employee and Compensation Metrics - The closing number of total employees as of December 31, 2025, was 11,385, a decrease from 11,668 in 2024[40] - Total share-based compensation expense for the six months ended December 31, 2025, was £14,176,000, a decrease of 35.5% from £21,965,000 in 2024[38] - Total direct cost of sales for share-based compensation was £9,283,000 for the six months ended December 31, 2025, a decrease of 38.4% from £15,048,000 in 2024[38] - Selling, general and administrative expenses for share-based compensation were £4,893,000 for the six months ended December 31, 2025, down 29.3% from £6,917,000 in 2024[38] Industry and Geographic Revenue Insights - North America accounted for 41% of total revenue for the six months ended December 31, 2025, up from 39% in 2024[40] - The revenue split by industry vertical shows Banking and Capital Markets increased to 22% in 2025 from 18% in 2024[40] - The geographic revenue split for the Rest of World (RoW) increased to 6% in 2025 from 5% in 2024[40] Depreciation and Amortization - Total depreciation and amortisation for the six months ended December 31, 2025, was £20,785,000, down 13.8% from £24,133,000 in 2024[39]