Financial Data and Key Metrics Changes - Endava's revenue totaled £194.8 million for the three months ended March 31, 2025, representing an 11.7% increase compared to £174.4 million in the same period last year [27] - Adjusted profit before tax (PBT) for the same period was £24.6 million, up from £15.5 million year-over-year, with an adjusted PBT margin of 12.6% compared to 8.9% [28] - Adjusted diluted earnings per share (EPS) was £0.34, exceeding the guidance of £0.31 to £0.32 [28] Business Line Data and Key Metrics Changes - Revenue from the 10 largest clients accounted for 39% of total revenue, up from 34% year-over-year, with average spend per client increasing from £5.9 million to £7.5 million, a 28% year-over-year increase [29] - North America accounted for 37% of revenue, with a growth of 37.1% year-over-year, while Europe declined by 10.4% and the UK grew by 13.2% [29] Market Data and Key Metrics Changes - The weakening of the U.S. Dollar negatively impacted revenue growth, contributing to a 3% sequential decline in Q4 [33] - North America experienced a slowdown in deal conversions, particularly in mobility and healthcare sectors, while Europe performed as expected [33] Company Strategy and Development Direction - The company is focusing on closing large deals in its pipeline, which are crucial for revenue growth, and is increasing its share buyback authorization by an additional $50 million [9][10] - Partnerships with OpenAI and Google are being formalized to enhance solutions and strengthen the company's value proposition [10][11] Management's Comments on Operating Environment and Future Outlook - Management noted that the business environment is evolving rapidly, with clients showing inconsistent behavior and a slowdown in signing large contracts due to macroeconomic uncertainties [7][8] - The company expects revenue for Q4 fiscal year 2025 to be in the range of £186 million to £188 million, reflecting a constant currency revenue change of between minus 10% year-over-year [34] Other Important Information - Adjusted free cash flow was £17.5 million for the three months ended March 31, 2025, compared to £2.2 million in the same period last year [30] - The company has repurchased approximately 2 million ADSs for $39.7 million as of April 30, 2025, with $60.3 million remaining for additional repurchases [30][31] Q&A Session Summary Question: Challenges related to execution and client demand - Management indicated that internal changes have strengthened client conversations, and while there are delays in closing deals, the pipeline is building with 24 larger deals compared to 21 previously [38][41] Question: Workforce optimization and forecasting - The workforce is shifting towards higher value skills in AI, data, and cloud, with attrition increasing due to this transition [43] Question: Pricing dynamics in the current environment - Pricing remains competitive, but average day rates are stable, with some larger deals requiring concessions to secure [51][52] Question: Growth by geography and project types - North America is facing challenges primarily due to FX headwinds, while demand for AI, data, and cloud projects remains strong [54][56] Question: Utilization rates and EPS guidance - Utilization in Q3 was about 72%, expected to remain stable in Q4, with FX impacts significantly affecting EPS guidance [88][90] Question: Integration benefits from Galaxy acquisition - Most integration benefits have been factored into guidance, with further operational efficiencies expected in FY 2026 [91][92] Question: Engagements around Gen AI - The company is seeing traction in Gen AI and scaling opportunities, with a shift towards AI-enabled product capabilities [96][99]