Key Points – Endava missed on fiscal Q3 and cut its outlook after delayed client decisions, Middle East disruption, and slower pipeline conversion weighed on demand.
Revenue fell to £178.5 million, and management lowered full-year guidance, especially citing weakness in banking and capital markets. – Profitability and cash flow were under pressure as adjusted PBT dropped to £3.2 million from £24.6 million a year earlier and adjusted EPS fell to £0.05
Free cash flow turned negative, while borrowings rose to £195.8 million as the company continued share repurchases. – Endava is leaning harder into AI-driven services, with AI revenue rising to 15% of quarterly sales and Dava.Flow now deployed with 12 clients. Management highlighted new partnerships with Mastercard, Google Cloud, NatWest’s Tyl, and a U.K. bank as evidence of longer-term growth opportunities. – Globant Is an Emerging AI Play That’s Expanding Its Footprint Endava (NYSE:DAVA) reported a weaker fiscal third quarter and lowered its fourth-quarter outlook, with management citing delayed client decisions, geopolitical disruption in the Middle East and longer sales cycles for large outcome-based contracts. Chief Executive Officer John Cotterell said demand conditions remained “uneven” across several sectors, while clients continued to scrutinize technology spending.
He said the main driver of the quarterly miss and reduced Q4 guidance was slower-than-expected pipeline conversion. – Endava Trading Higher After Topping Q4 Consensus Views “This has been one of the more challenging periods Endava has faced in recent years,” Cotterell said on the company’s earnings call. He said clients in the Middle East delayed work because of the ongoing conflict, while the broader macroeconomic environment tied to the conflict weighed on client demand. He also said large, complex outcome-based contracts were taking longer to execute than planned.