Endava(US:DAVA) The Motley Foolยท2025-09-05 08:42Core 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].