Endava Announces First 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 September 30, 2025 ("Q1 FY2026").
"The first quarter results were lower than guided primarily due to an unexpected credit made to a client that arose subsequent to our last earnings call as well as certain non large strategic pipeline opportunities that did not convert into revenue during the quarter as anticipated. While these factors weighed on our performance, our ability to secure a multi-year strategic relationship with a leading payments company of up to $100 million demonstrates the strength of our client relationships. This partnership will utilise the best of Endava’s global delivery capability as well as our AI and advanced engineering capabilities to streamline our client's technology platforms and enhance existing capabilities. This represents a prime example of the type of deal and partnership we are targeting utilising our capability as an AI native, technology agnostic, transformation partner,” said John Cotterell, Endava's CEO.
FIRST 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 SEPTEMBER 30, 2025:
OUTLOOK:
Second Quarter Fiscal Year 2026:
Endava expects revenue will be in the range of £179.0 million to £182.0 million, representing a constant currency revenue decline of between (8.0)% and (7.0)% on a year over year basis. Endava expects adjusted diluted EPS to be in the range of £0.15 to £0.17 per share.
Full Fiscal Year 2026:
Endava expects revenue will be in the range of £735.0 million to £752.0 million, representing a constant currency revenue change of between (4.5)% and (2.5)% on a year over year basis. Endava expects adjusted diluted EPS to be in the range of £0.80 to £0.88 per share.
This above guidance for the second quarter and full fiscal year 2026 assumes the exchange rates on October 31, 2025 (when the exchange rate was 1 British Pound to 1.32 US Dollar and 1.14 Euro).
Endava is not able, at this time, to reconcile its expectations for the second 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 October 31, 2025, the Company had repurchased an aggregate of 7,139,149 American Depositary Shares for $115.9 million under its share repurchase program. As of October 31, 2025, the Company had $34.1 million remaining for repurchase under its share repurchase authorisation.
CONFERENCE CALL DETAILS:
The Company will host a conference call at 8:00 am ET today, November 11, 2025, to review its Q1 FY2026 results. To participate in Endava’s Q1 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 Friday December 12, 2025.
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 September 30, 2025, 11,636 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 September 30, 2024 were used to convert revenue for the fiscal quarter ended September 30, 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, 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. 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.
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 second 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
Three Months Ended September 30
2025
2024
£’000
£’000
REVENUE
178,187
195,052
Cost of sales
Direct cost of sales
(134,039
)
(139,520
)
Allocated cost of sales
(6,484
)
(6,873
)
Total cost of sales
(140,523
)
(146,393
)
GROSS PROFIT
37,664
48,659
Selling, general and administrative expenses
(40,575
)
(43,969
)
OPERATING (LOSS) / PROFIT
(2,911
)
4,690
Net finance expense
(5,561
)
(477
)
(LOSS) / PROFIT FOR THE PERIOD BEFORE TAX
(8,472
)
4,213
Tax on (loss) / profit on ordinary activities
315
(1,966
)
(LOSS) / PROFIT FOR THE PERIOD
(8,157
)
2,247
OTHER COMPREHENSIVE INCOME
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations and net investment hedge impact
6,593
(23,340
)
Total comprehensive expense for the year attributable to the equity holders of the Company
(1,564
)
(21,093
)
(LOSS) / EARNINGS PER SHARE:
Weighted average number of shares outstanding - Basic
53,037,125
59,051,116
Weighted average number of shares outstanding - Diluted
53,193,752
59,430,225
Basic (Loss) / EPS (£)
(0.15
)
0.04
Diluted (Loss) / EPS (£)
(0.15
)
0.04
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2025
June 30, 2025
September 30, 2024 (1)
£’000
£’000
£’000
ASSETS - NON-CURRENT
Goodwill
479,436
473,296
486,083
Intangible assets
103,795
100,890
118,593
Property, plant and equipment
15,087
14,177
18,197
Lease right-of-use assets
43,074
41,515
50,474
Deferred tax assets
20,730
19,030
18,613
Financial assets and other receivables
6,636
5,009
9,455
TOTAL
668,758
653,917
701,415
ASSETS - CURRENT
Trade and other receivables
213,189
209,523
198,201
Corporation tax receivable
4,443
12,865
9,783
Financial assets
127
121
181
Cash and cash equivalents
47,225
59,345
52,811
TOTAL
264,984
281,854
260,976
TOTAL ASSETS
933,742
935,771
962,391
LIABILITIES - CURRENT
Lease liabilities
14,127
13,661
14,161
Trade and other payables
97,032
96,827
104,512
Corporation tax payable
7,817
7,757
5,693
Contingent consideration
104
100
6,651
Deferred consideration
2,518
3,376
5,749
TOTAL
121,598
121,721
136,766
LIABILITIES - NON CURRENT
Borrowings
193,208
180,943
132,638
Lease liabilities
34,958
33,448
40,811
Deferred tax liabilities
13,962
15,183
24,365
Tax liabilities related to Pilar II Income tax
584
584
—
Contingent consideration
90
401
—
Deferred consideration
—
—
943
Other liabilities
557
552
424
TOTAL
243,359
231,111
199,181
EQUITY
Share capital
1,046
1,123
1,180
Share premium
21,280
21,280
21,280
Merger relief reserve
63,440
63,440
63,440
Retained earnings
536,723
575,428
583,969
Other reserves
(53,699
)
(60,369
)
(43,399
)
Treasury shares
—
(17,958
)
—
Investment in own shares
(5
)
(5
)
(26
)
TOTAL
568,785
582,939
626,444
TOTAL LIABILITIES AND EQUITY
933,742
935,771
962,391
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended September 30
2025
2024
£’000
£’000
OPERATING ACTIVITIES
(Loss) / Profit for the period
(8,157
)
2,247
Income tax charge
(315
)
1,966
Non-cash adjustments
19,992
23,593
Tax received / (paid)
5,681
(1,320
)
Research & Development Credit received
97
—
Net changes in working capital
(5,046
)
(22,112
)
Net cash from operating activities
12,252
4,374
INVESTING ACTIVITIES
Purchase of non-current assets (tangibles and intangibles)
(3,090
)
(1,135
)
Proceeds from disposal of non-current assets
47
36
Payment for acquisition of subsidiary, net of cash acquired
(3,487
)
(68
)
Interest received
694
367
Net cash used in investing activities
(5,836
)
(800
)
FINANCING ACTIVITIES
Proceeds from borrowings
10,000
—
Repayment of borrowings
—
(7,000
)
Proceeds from sublease
23
30
Repayment of lease liabilities
(2,898
)
(3,093
)
Repayment of lease interest
(417
)
(507
)
Grant received
—
274
Interest and debt financing costs paid
(2,468
)
(2,252
)
Payment for repurchase of own shares
(22,917
)
—
Net cash used in financing activities
(18,677
)
(12,548
)
Net change in cash and cash equivalents
(12,261
)
(8,974
)
Cash and cash equivalents at the beginning of the period
59,345
62,358
Effects of exchange rate changes on cash and cash equivalents
141
(573
)
Cash and cash equivalents at the end of the period
47,225
52,811
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:
Three Months Ended September 30
2025
2024
REVENUE (DECLINE) / GROWTH RATE AS REPORTED UNDER IFRS
(8.6
%)
3.5
%
Impact of Foreign exchange rate fluctuations
1.3
%
1.7
%
REVENUE (DECLINE) / GROWTH RATE AT CONSTANT CURRENCY
(7.3
%)
5.2
%
RECONCILIATION OF ADJUSTED PROFIT BEFORE TAX AND ADJUSTED PROFIT FOR THE PERIOD:
Three Months Ended September 30
2025
2024
£’000
£’000
(LOSS) / PROFIT BEFORE TAX
(8,472
)
4,213
Adjustments:
Share-based compensation expense
7,680
11,021
Amortisation of acquired intangible assets
5,021
6,146
Foreign currency exchange losses / (gains), net
3,548
(846
)
Restructuring costs
2,438
—
Fair value movement of contingent consideration
(363
)
(1,302
)
Total adjustments
18,324
15,019
ADJUSTED PROFIT BEFORE TAX
9,852
19,232
(LOSS) / PROFIT FOR THE PERIOD
(8,157
)
2,247
Adjustments:
Adjustments to (loss) / profit before tax
18,324
15,019
Tax impact of adjustments
(2,245
)
(2,171
)
ADJUSTED PROFIT FOR THE PERIOD
7,922
15,095
RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE:
Three Months Ended September 30
2025
2024
£’000
£’000
DILUTED (LOSS) / EARNINGS PER SHARE (£)
(0.15
)
0.04
Adjustments:
Share-based compensation expense
0.14
0.19
Amortisation of acquired intangible assets
0.09
0.10
Foreign currency exchange losses / (gains) net
0.07
(0.01
)
Restructuring costs
0.05
—
Fair value movement of contingent consideration
(0.01
)
(0.03
)
Tax impact of adjustments
(0.04
)
(0.04
)
Total adjustments
0.30
0.21
ADJUSTED DILUTED EARNINGS PER SHARE (£)
0.15
0.25
RECONCILIATION OF NET CASH FROM OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW
Three Months Ended September 30
2025
2024
£’000
£’000
NET CASH FROM OPERATING ACTIVITIES
12,252
4,374
Adjustments:
Grant received
—
274
Net purchases of non-current assets (tangibles and intangibles)
(3,043
)
(1,099
)
ADJUSTED FREE CASH FLOW
9,209
3,549
SUPPLEMENTARY INFORMATION
SHARE-BASED COMPENSATION EXPENSE
Three Months Ended September 30
2025
2024
£’000
£’000
Direct cost of sales
4,864
7,794
Selling, general and administrative expenses
2,816
3,227
Total
7,680
11,021
DEPRECIATION AND AMORTISATION
Three Months Ended September 30
2025
2024
£’000
£’000
Direct cost of sales
4,591
5,180
Selling, general and administrative expenses
5,701
6,897
Total
10,292
12,077
EMPLOYEES, TOP 10 CUSTOMERS AND REVENUE SPLIT
Three Months Ended September 30
2025
2024
Closing number of total employees (including directors)
11,636
11,821
Average operational employees
10,332
10,627
Top 10 customers %
36
%
36
%
Number of clients with > £1m of revenue
(rolling 12 months)
133
147
Geographic split of revenue %
North America
42
%
39
%
Europe
24
%
25
%
UK
28
%
31
%
Rest of World (RoW)
6
%
5
%
Industry vertical split of revenue %
Payments
17
%
20
%
Banking and Capital Markets
22
%
17
%
Insurance
9
%
9
%
TMT
17
%
21
%
Mobility
9
%
9
%
Healthcare
12
%
12
%
Other
14
%
12
%
FOOTNOTES
(1) Restated to include the effect of revisions arising from provisional to final acquisition accounting for GalaxE.