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• Revenue: GBP195.6 million for the three months ending December 31, 2024, a 6.6% increase from the prior year.

• Constant Currency Revenue Growth: 9.1% increase from the same period in the prior year.

• Profit Before Tax: GBP2.5 million for the three months ending December 31, 2024, compared to GBP10.6 million in the prior year.

• Adjusted Profit Before Tax (PBT): GBP21.8 million, with an adjusted PBT margin of 11.2%.

• Adjusted Diluted Earnings Per Share (EPS): 30p for the three months ended December 31, 2024.

• Adjusted Free Cash Flow: GBP31.6 million for the three months ended December 31, 2024.

• Cash and Cash Equivalents: GBP60.1 million as of December 31, 2024.

• Borrowings: GBP123.7 million as of December 31, 2024.

• Capital Expenditure: 0.2% of revenue for the three months ended December 31, 2024.

• Revenue from Top 10 Clients: 36% of total revenue for the three months ending December 31, 2024.

• Regional Revenue Distribution: North America 39%, Europe 24%, UK 32%, Rest of the World 5%.

• Share Repurchase Program: $100 million, subject to shareholder approval.

• Guidance for Q3 Fiscal Year 2025: Revenue expected between GBP198 million to GBP200 million; adjusted diluted EPS between 31p to 32p.

• Full Year Fiscal Year 2025 Guidance: Revenue expected between GBP795 million to GBP800 million; adjusted diluted EPS between 120p to 123p.

• Warning! GuruFocus has detected 6 Warning Signs with DAVA.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Endava PLC (NYSE:DAVA) reported a 6.6% increase in revenue for the quarter, with a 9.1% increase in constant currency, indicating strong financial performance.

• The company announced its first share buyback program totaling $100 million, demonstrating a commitment to optimizing capital allocation.

• Endava PLC (NYSE:DAVA) is experiencing strong growth in the banking and capital markets sector, with a 43.6% increase over the past 12 months.

• The company is leveraging AI-enabled capabilities like Morpheus and Compass to accelerate client transformations, contributing to a solid pipeline of opportunities.

• Client satisfaction remains high, with 92% of clients likely to recommend Endava PLC (NYSE:DAVA) and 90% likely to repurchase services.

Negative Points

• Profit before tax decreased significantly to GBP2.5 million from GBP10.6 million in the same period last year, indicating a decline in profitability.

• The adjusted PBT margin decreased to 11.2% from 12.4% in the prior year, reflecting margin pressure.

• Endava PLC (NYSE:DAVA) is facing challenges in the payments vertical, with some larger clients reducing spend.

• The company has seen increased softness in the UK and Rest of World regions due to a worsening macroeconomic environment, leading to unplanned project ramp downs and delays.

• Revenue from Europe and the Rest of the World declined, with Europe down 0.6% and the Rest of the World down 43.5%, indicating regional challenges.