Endava Announces Second Quarter Fiscal Year 2026 Results
LONDON--( BUSINESS WIRE)--Endava plc (NYSE: DAVA) ("Endava" or the "Company"), the technology-driven business transformation group whose AI-native approach combines cutting edge technology with deep industry expertise, today announced results for the three months ended December 31, 2025 ("Q2 FY2026").
"Over the past several quarters we have been investing heavily in our pivot towards AI to establish Endava as an AI leader. These investments have encompassed recruitment and training of NextGen Talent, introducing a shift towards becoming AI Native, building our Partner ecosystem and evolving our engagement strategy. I would like to flag some highlights of the quarter:
We believe we are building the operational agility required to achieve sustainable, long-term growth," said John Cotterell, Endava's CEO.
SECOND QUARTER FISCAL YEAR 2026 FINANCIAL HIGHLIGHTS:
CASH FLOW:
* Definitions of the non-IFRS measures used by the Company and a reconciliation of such measures to the related IFRS financial measure can be found under the sections below titled “Non-IFRS Financial Information” and “Reconciliation of IFRS Financial Measures to Non-IFRS Financial Measures.”
OTHER METRICS FOR THE QUARTER ENDED DECEMBER 31, 2025:
OUTLOOK:
Third Quarter Fiscal Year 2026:
Endava expects revenue will be in the range of £182.0 million to £185.0 million, representing a constant currency revenue decline of between (4.0)% and (2.5)% on a year over year basis. Endava expects adjusted diluted EPS to be in the range of £0.18 to £0.21 per share.
Full Fiscal Year 2026:
Endava expects revenue will be in the range of £736.0 million to £750.0 million, representing a constant currency revenue decline of between (3.5)% and (1.5)% on a year over year basis. Endava expects adjusted diluted EPS to be in the range of £0.80 to £0.86 per share.
This above guidance for the third quarter and full fiscal year 2026 assumes the exchange rates on January 31, 2026 (when the exchange rate was 1 British Pound to 1.37 US Dollar and 1.15 Euro).
Endava is not able, at this time, to reconcile its expectations for the third quarter and full fiscal year 2026 for a rate of revenue growth or decline at constant currency or adjusted diluted EPS to their respective most directly comparable IFRS measures as a result of the uncertainty regarding, and the potential variability of, reconciling items such as share-based compensation expense, amortisation of acquired intangible assets, foreign currency exchange losses / (gains), net, and fair value movement of contingent consideration, as applicable. Accordingly, a reconciliation is not available without unreasonable effort, although it is important to note that these factors could be material to Endava's results computed in accordance with IFRS.
The guidance provided above is forward-looking in nature. Actual results may differ materially. See “Forward-Looking Statements” below.
SHARE REPURCHASE PROGRAM:
As of January 31, 2026, the Company had repurchased an aggregate of 8,047,338 American Depositary Shares for $121.9 million under its share repurchase program. As of January 31, 2026, the Company had $28.1 million remaining for repurchase under our Board's share repurchase authorisation.
CONFERENCE CALL DETAILS:
The Company will host a conference call at 8:00 am ET today, February 19, 2026, to review its Q2 FY2026 results. To participate in Endava’s Q2 FY2026 earnings conference call, please dial in at least five minutes prior to the scheduled start time (844) 481-2736 or (412) 317-0665 for international participants, Conference ID: Endava Call.
Investors may listen to the call on Endava’s Investor Relations website at http://investors.Endava.com. The webcast will be recorded and available for replay until Wednesday March 18, 2026.
ABOUT ENDAVA PLC:
Endava is a leading provider of next-generation technology services, dedicated to enabling its clients to accelerate growth, tackle complex challenges and thrive in evolving markets. By combining innovative technologies and deep industry expertise with an AI-native approach, Endava consults and partners with clients to create solutions that drive transformation, augment intelligence and deliver lasting impact. From ideation to production, it supports clients with tailor-made solutions at every stage of their digital transformation, regardless of industry, region or scale.
Endava’s clients span payments, insurance, banking and capital markets, technology, media, telecommunications, healthcare, mobility, retail and consumer goods and more. As of December 31, 2025, 11,385 Endavans are helping clients break new ground across locations in Europe, the Americas, Asia Pacific and the Middle East.
NON-IFRS FINANCIAL INFORMATION:
To supplement Endava’s Condensed Consolidated Statements of Comprehensive Income, Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows presented in accordance with IFRS, the Company uses non-IFRS measures of certain components of financial performance in this press release. These measures include revenue (decline)/growth rate at constant currency, adjusted profit before tax, adjusted profit for the period, adjusted diluted EPS and adjusted free cash flow.
Revenue (decline)/growth rate at constant currency is calculated by translating revenue from entities reporting in foreign currencies into British Pounds using the comparable foreign currency exchange rates from the prior period. For example, the average currency rates in effect for the fiscal quarter ended December 31, 2024 were used to convert revenue for the fiscal quarter ended December 31, 2025 and the revenue for the comparable prior period.
Adjusted profit before tax ("Adjusted PBT") is defined as the Company’s (loss)/profit before tax adjusted to exclude the impact of share-based compensation expense, amortisation of acquired intangible assets, realised and unrealised foreign currency exchange losses/(gains), net, restructuring costs, exceptional people charges, and fair value movement of contingent consideration, all of which are non-cash items except for realised foreign currency exchange losses/(gains), net and restructuring costs and exceptional people charges. Our Adjusted PBT margin is our Adjusted PBT as a percentage of our total revenue.
Adjusted profit for the period is defined as Adjusted PBT less the adjusted tax charge for the period. The adjusted tax charge is the tax charge adjusted for the tax impact of the adjustments to PBT and the release of the deferred tax liability relating to Romanian withholding tax.
Adjusted diluted EPS is defined as Adjusted profit for the period, divided by weighted average number of shares outstanding - diluted.
Adjusted free cash flow is the Company’s net cash from operating activities, plus grants received, less net purchases of non-current assets (tangible and intangible). Adjusted free cash flow is not intended to be a measure of residual cash available for management's discretionary use since it omits significant sources and uses of cash flow, including mandatory debt repayments and changes in working capital.
Management believes these measures help illustrate underlying trends in the Company's business and uses the measures to establish budgets and operational goals, communicated internally and externally, for managing the Company's business and evaluating its performance. Management also believes the presentation of its non-IFRS financial measures enhances an investor’s overall understanding of the Company’s historical financial performance. The presentation of the Company’s non-IFRS financial measures is not meant to be considered in isolation or as a substitute for the Company’s financial results prepared in accordance with IFRS, and its non-IFRS measures may be different from non-IFRS measures used by other companies. Investors should review the reconciliation of the Company’s non-IFRS financial measures to the comparable IFRS financial measures included below and not rely on any single financial measure to evaluate the Company’s business.
FORWARD-LOOKING STATEMENTS:
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by the use of terms and phrases such as “believe,” “expect,” "intends," "outlook," “may,” “will,” and other similar terms and phrases. Such forward-looking statements include, but are not limited to, statements regarding our pipeline of potential large opportunities, Endava's business strategies, plans, operations and growth opportunities and Endava's future financial performance, including management's financial outlook for the third quarter and full fiscal year 2026. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements, including, but not limited to: Endava’s ability to achieve its revenue growth goals including as a result of a slower conversion of its pipeline; Endava's expectations of future operating results or financial performance; Endava’s ability to accurately forecast and achieve its announced guidance; Endava's ability to retain existing clients and attract new clients, including its ability to increase revenue from existing clients and diversify its revenue concentration; Endava’s ability to attract and retain highly-skilled IT professionals at cost-effective rates; Endava's ability to successfully identify acquisition targets, consummate acquisitions and successfully integrate acquired businesses and personnel; Endava's ability to penetrate new industry verticals and geographies and grow its revenue in current industry verticals and geographies; Endava’s ability to maintain favorable pricing and utilisation rates to support its gross margin; the effects of increased competition as well as innovations by new and existing competitors in its market; the size of Endava's addressable market and market trends; Endava’s ability to adapt to technological change and industry trends and innovate solutions for its clients; Endava's plans for growth and future operations, including its ability to manage its growth; Endava's ability to effectively manage its international operations, including Endava's exposure to foreign currency exchange rate fluctuations; Endava's future financial performance; the impact of unstable market, economic, and global conditions, as well as other risks and uncertainties discussed in the “Risk Factors” section of Endava's Annual Report on Form 20-F for the year ended June 30, 2025 filed with the SEC on September 4, 2025 and in other filings that Endava makes from time to time with the SEC. In addition, the forward-looking statements included in this press release represent Endava’s views and expectations as of the date hereof and are based on information currently available to Endava. Endava anticipates that subsequent events and developments may cause its views to change. Endava specifically disclaims any obligation to update the forward-looking statements in this press release except as required by law. These forward-looking statements should not be relied upon as representing Endava’s views as of any date subsequent to the date hereof.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Six Months Ended
December 31
Three Months Ended
December 31
2025
2024
2025
2024
£’000
£’000
£’000
£’000
REVENUE
362,285
390,641
184,098
195,589
Cost of sales
Direct cost of sales
(273,839
)
(283,066
)
(139,800
)
(143,546
)
Allocated cost of sales
(13,180
)
(13,898
)
(6,696
)
(7,025
)
Total cost of sales
(287,019
)
(296,964
)
(146,496
)
(150,571
)
GROSS PROFIT
75,266
93,677
37,602
45,018
Selling, general and administrative expenses
(81,131
)
(87,314
)
(40,556
)
(43,345
)
OPERATING (LOSS) / PROFIT
(5,865
)
6,363
(2,954
)
1,673
Net finance (expense) / income
(9,833
)
354
(4,272
)
831
(LOSS) / PROFIT FOR THE PERIOD BEFORE TAX
(15,698
)
6,717
(7,226
)
2,504
Tax on (loss) / profit on ordinary activities
635
2,381
320
4,347
(LOSS) / PROFIT FOR THE PERIOD
(15,063
)
9,098
(6,906
)
6,851
OTHER COMPREHENSIVE INCOME
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations and net investment hedge impact
5,874
(13,813
)
(719
)
9,527
Total comprehensive (expense) / income for the year attributable to the equity holders of the Company
(9,189
)
(4,715
)
(7,625
)
16,378
(LOSS) / EARNINGS PER SHARE:
Weighted average number of shares outstanding - Basic
52,957,541
59,269,752
52,877,958
59,488,389
Weighted average number of shares outstanding - Diluted
52,957,541
59,472,250
52,877,958
59,628,436
Basic (Loss) / EPS (£)
(0.28
)
0.15
(0.13
)
0.12
Diluted (Loss) / EPS (£)
(0.28
)
0.15
(0.13
)
0.11
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 2025
June 30, 2025
December 31, 2024 (1)
£’000
£’000
£’000
ASSETS - NON-CURRENT
Goodwill
478,156
473,296
500,958
Intangible assets
99,677
100,890
117,095
Property, plant and equipment
14,809
14,177
16,603
Lease right-of-use assets
41,261
41,515
47,459
Deferred tax assets
22,068
19,030
21,466
Financial assets and other receivables
6,096
5,009
9,005
TOTAL
662,067
653,917
712,586
ASSETS - CURRENT
Trade and other receivables
196,607
209,523
190,059
Corporation tax receivable
1,082
12,865
10,072
Financial assets
117
121
118
Cash and cash equivalents
68,484
59,345
60,065
TOTAL
266,290
281,854
260,314
TOTAL ASSETS
928,357
935,771
972,900
LIABILITIES - CURRENT
Lease liabilities
13,815
13,661
14,457
Trade and other payables
91,827
96,827
106,263
Corporation tax payable
3,422
7,757
6,832
Contingent consideration
74
100
3,577
Deferred consideration
2,487
3,376
4,170
TOTAL
111,625
121,721
135,299
LIABILITIES - NON CURRENT
Borrowings
202,745
180,943
123,669
Lease liabilities
32,888
33,448
37,711
Deferred tax liabilities
14,203
15,183
19,974
Tax liabilities related to Pilar II Income tax
584
584
—
Contingent consideration
—
401
1,155
Deferred consideration
278
—
—
Other liabilities
599
552
377
TOTAL
251,297
231,111
182,886
EQUITY
Share capital
1,061
1,123
1,189
Share premium
21,280
21,280
21,280
Merger relief reserve
63,440
63,440
63,440
Retained earnings
536,155
575,428
602,688
Other reserves
(54,418
)
(60,369
)
(33,872
)
Treasury shares
(2,078
)
(17,958
)
—
Investment in own shares
(5
)
(5
)
(10
)
TOTAL
565,435
582,939
654,715
TOTAL LIABILITIES AND EQUITY
928,357
935,771
972,900
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
December 31
Three Months Ended
December 31
2025
2024
2025
2024
£’000
£’000
£’000
£’000
OPERATING ACTIVITIES
(Loss) / Profit for the period
(15,063
)
9,098
(6,906
)
6,851
Income tax charge
(635
)
(2,381
)
(320
)
(4,347
)
Non-cash adjustments
37,665
46,207
17,673
22,614
Tax received / (paid)
3,894
(3,786
)
(1,787
)
(2,466
)
Research & Development Credit received
3,871
—
3,774
—
Net changes in working capital
10,678
(12,716
)
15,724
9,396
Net cash from operating activities
40,410
36,422
28,158
32,048
INVESTING ACTIVITIES
Purchase of non-current assets (tangibles and intangibles)
(11,127
)
(1,571
)
(8,037
)
(436
)
Proceeds from disposal of non-current assets
63
36
16
—
Payment for acquisition of subsidiary, net of cash acquired
(3,586
)
(5,900
)
(99
)
(5,832
)
Interest received
1,249
720
555
353
Net cash used in investing activities
(13,401
)
(6,715
)
(7,565
)
(5,915
)
FINANCING ACTIVITIES
Proceeds from borrowings
43,000
10,000
33,000
10,000
Repayment of borrowings
(23,330
)
(30,842
)
(23,330
)
(23,842
)
Proceeds from sublease
53
64
30
34
Repayment of lease liabilities
(6,583
)
(6,159
)
(3,685
)
(3,066
)
Repayment of lease interest
(855
)
(989
)
(438
)
(482
)
Grant received
10
274
10
Interest and debt financing costs paid
(5,162
)
(4,282
)
(2,694
)
(2,030
)
Payment for repurchase of own shares
(24,985
)
(2,068
)
Net cash (used in) / provided by financing activities
(17,852
)
(31,934
)
825
(19,386
)
Net change in cash and cash equivalents
9,157
(2,227
)
21,418
6,747
Cash and cash equivalents at the beginning of the period
59,345
62,358
47,225
52,811
Effects of exchange rate changes on cash and cash equivalents
(18
)
(66
)
(159
)
507
Cash and cash equivalents at the end of the period
68,484
60,065
68,484
60,065
RECONCILIATION OF IFRS FINANCIAL MEASURES TO NON-IFRS FINANCIAL MEASURES
RECONCILIATION OF REVENUE (DECLINE) / GROWTH RATE AS REPORTED UNDER IFRS TO REVENUE (DECLINE) / GROWTH RATE AT CONSTANT CURRENCY:
Six Months Ended
December 31
Three Months Ended
December 31
2025
2024
2025
2024
REVENUE (DECLINE) / GROWTH RATE AS REPORTED UNDER IFRS
(7.3
)%
5.0
%
(5.9
%)
6.6
%
Impact of Foreign exchange rate fluctuations
1.0
%
2.0
%
0.8
%
2.5
%
REVENUE (DECLINE) / GROWTH RATE AT CONSTANT CURRENCY
(6.3
)%
7.0
%
(5.1
%)
9.1
%
RECONCILIATION OF ADJUSTED PROFIT BEFORE TAX AND ADJUSTED PROFIT FOR THE PERIOD:
Six Months Ended
December 31
Three Months Ended
December 31
2025
2024
2025
2024
£’000
£’000
£’000
£’000
(LOSS) / PROFIT BEFORE TAX
(15,698
)
6,717
(7,226
)
2,504
Adjustments:
Share-based compensation expense
14,176
21,965
6,496
10,944
Amortisation of acquired intangible assets
10,170
12,182
5,149
6,036
Foreign currency exchange losses / (gains), net
4,842
(3,420
)
1,294
(2,574
)
Restructuring costs
6,531
5,494
4,093
5,494
Exceptional people charges
668
—
668
—
Fair value movement of contingent consideration
(169
)
(1,871
)
194
(569
)
Total adjustments
36,218
34,350
17,894
19,331
ADJUSTED PROFIT BEFORE TAX
20,520
41,067
10,668
21,835
(LOSS) / PROFIT FOR THE PERIOD
(15,063
)
9,098
(6,906
)
6,851
Adjustments:
Adjustments to (loss) / profit before tax
36,218
34,350
17,894
19,331
Release of Romanian withholding tax
—
(3,800
)
—
(3,800
)
Tax impact of adjustments
(4,642
)
(6,682
)
(2,397
)
(4,511
)
ADJUSTED PROFIT FOR THE PERIOD
16,513
32,966
8,591
17,871
RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE:
Six Months Ended
December 31
Three Months Ended
December 31
2025
2024
2025
2024
£’000
£’000
£’000
£’000
DILUTED (LOSS) / EARNINGS PER SHARE (£)
(0.28
)
0.15
(0.13
)
0.11
Adjustments:
Share-based compensation expense
0.27
0.37
0.12
0.18
Amortisation of acquired intangible assets
0.19
0.20
0.10
0.10
Foreign currency exchange losses / (gains) net
0.09
(0.06
)
0.03
(0.03
)
Restructuring costs
0.12
0.09
0.08
0.09
Exceptional people charges
0.01
—
0.01
—
Fair value movement of contingent consideration
—
(0.02
)
—
(0.01
)
Release of Romanian withholding tax
—
(0.06
)
—
(0.06
)
Tax impact of adjustments
(0.09
)
(0.12
)
(0.05
)
(0.08
)
Total adjustments
0.59
0.40
0.29
0.19
ADJUSTED DILUTED EARNINGS PER SHARE (£)
0.31
0.55
0.16
0.30
RECONCILIATION OF NET CASH FROM OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW
Six Months Ended
December 31
Three Months Ended
December 31
2025
2024
2025
2024
£’000
£’000
£’000
£’000
NET CASH FROM OPERATING ACTIVITIES
40,410
36,422
28,158
32,048
Adjustments:
Grant received
10
274
10
—
Net purchases of non-current assets (tangibles and intangibles)
(11,064
)
(1,535
)
(8,021
)
(436
)
ADJUSTED FREE CASH FLOW
29,356
35,161
20,147
31,612
SUPPLEMENTARY INFORMATION
SHARE-BASED COMPENSATION EXPENSE
Six Months Ended
December 31
Three Months Ended
December 31
2025
2024
2025
2024
£’000
£’000
£’000
£’000
Direct cost of sales
9,283
15,048
4,419
7,254
Selling, general and administrative expenses
4,893
6,917
2,077
3,690
Total
14,176
21,965
6,496
10,944
DEPRECIATION AND AMORTISATION
Six Months Ended
December 31
Three Months Ended
December 31
2025
2024
2025
2024
£’000
£’000
£’000
£’000
Direct cost of sales
9,282
10,413
4,691
5,233
Selling, general and administrative expenses
11,503
13,720
5,802
6,823
Total
20,785
24,133
10,493
12,056
EMPLOYEES, TOP 10 CUSTOMERS AND REVENUE SPLIT
Six Months Ended
December 31
Three Months Ended
December 31
2025
2024
2025
2024
Closing number of total employees (including directors)
11,385
11,668
11,385
11,668
Average operational employees
10,329
10,541
10,326
10,456
Top 10 customers %
35
%
34
%
35
%
36
%
Number of clients with > £1m of revenue
(rolling 12 months)
135
141
135
141
Geographic split of revenue %
North America
41
%
39
%
40
%
39
%
Europe
23
%
24
%
23
%
24
%
UK
30
%
32
%
31
%
32
%
Rest of World (RoW)
6
%
5
%
6
%
5
%
Industry vertical split of revenue %
Payments
18
%
19
%
19
%
19
%
Banking and Capital Markets
22
%
18
%
22
%
19
%
Insurance
9
%
9
%
9
%
9
%
TMT
17
%
20
%
16
%
19
%
Mobility
9
%
9
%
9
%
9
%
Healthcare
12
%
12
%
12
%
12
%
Other
13
%
13
%
13
%
13
%
FOOTNOTES
(1) Restated to include the effect of revisions arising from provisional to final acquisition accounting for GalaxE.