Endava(US:DAVA)2025-11-18 21:22Summary of Endava (NYSE:DAVA) 2025 Conference Call Company Overview - Company: Endava (NYSE:DAVA) - Date: November 18, 2025 - Speakers: Mark (CFO), Al (Chief Engagement Officer), Puneet (JPMorgan) Key Points Financial Performance - Q3 Results: Results were slightly below expectations primarily due to an unexpected credit issue with a significant client, impacting revenue and EPS [5][6] - Revenue Impact: The credit issue was not due to poor performance but was aimed at securing future work with the client. This led to a revenue shortfall, affecting EPS directly [5][6] - Pipeline Weakness: There was some weakness in the non-big deal pipeline, with fewer conversions than anticipated. However, three large deals were secured, including a five-year $100 million deal with Paysafe, which is expected to boost revenue in the second half of the year [6][7] Client Engagement and Deal Structure - Large Deals: Endava is focusing on securing large, multi-year transformational deals, particularly in financial services. These deals are characterized by immediate service delivery rather than gradual ramp-ups [12][13] - AI Integration: The company is integrating AI into its service delivery, emphasizing the importance of partnerships and long-term commitments with clients [18][19] - Client Concerns: Clients are looking for partners who can help navigate the complexities of AI implementation and ensure data security and compliance [31][33] Market Trends and Industry Dynamics - Payments Industry: Endava is well-positioned in the payments sector, which accounts for over 30% of its revenue. The company is helping clients modernize their payment platforms amidst regulatory changes and the rise of new competitors [50][52] - Sovereignty of Data: There is a growing trend towards data sovereignty in payments, particularly in Asia and South America, as governments seek to create local jobs and support local companies [51][52] Endava Flow Methodology - Endava Flow: This is described as a methodology rather than a platform, focusing on using AI agents to enhance efficiency in project delivery. It aims to streamline processes while maintaining governance and quality [56][60] - Cultural Impact: The company emphasizes a strong culture among its employees, who are motivated by working on innovative projects and contributing to significant outcomes for clients [67][69] Future Outlook - Growth Potential: The company sees significant growth potential in core modernization services, which are essential for enabling AI capabilities. However, the pace of growth has not met previous expectations [35][36] - Client Engagement Strategy: Endava is shifting its focus to higher-level C-suite engagements, addressing broader industry challenges rather than just technological solutions [65][66] Additional Insights - AI Use Cases: There is a focus on both operational efficiency and new business propositions enabled by AI, with examples from various industries, including payments and healthcare [40][43] - Regulatory Environment: The company is actively engaging with clients on regulatory matters, particularly in the context of emerging technologies like stablecoins and crypto [54][55] This summary captures the essential insights from the Endava conference call, highlighting the company's financial performance, strategic focus, and market dynamics.