Endava plc Q2 FY2026 earnings call

John Cotterell and Mark Thurston talked about the company's shift to AI. They mentioned investments in AI - native talent, partner ecosystem, and engagement strategy. There was strong interest in Dava Flow. Examples of AI projects were given, like helping a global payments network with a chargeback dispute system and a global specialty insurer. Strategic partnerships were expanded, including with OpenAI, AWS, Paysafe, Miro, and Cognition. Client wins were noted, such as working with a PayNetNets joint venture, Accor Plus, a vehicle manufacturer, Bolero International, and a global life sciences company. The company had 11,385 Endavans, focusing on streamlining roles and upskilling AI talent.

Revenue for the quarter was £184,100,000, a 5.9% year - on - year decrease and a 3.3% increase from Q1 FY 2026. North America accounted for 40% of revenue, Europe 23%, the UK 31%, and the rest of the world 6%. Year - on - year, North America revenue decreased 5.1%, Europe's declined 8.5%, the UK's decreased 9.1%, and the rest of the world's increased 21.8%. Adjusted PBT for the quarter was £10,700,000 with an adjusted PBT margin of 5.8%. Adjusted free cash flow was £20,100,000, down from £31,600,000 in the same period last year. Cash and cash equivalents ended at £68,500,000, and borrowings rose to £202,700,000.

For Q3 fiscal year 2026, revenue is expected to be in the range of £182,000,000 to £185,000,000, with constant currency revenue decreasing 4% - 2.5% year - on - year and adjusted diluted EPS expected 18p - 21p per share. For full year fiscal 2026, revenue is expected in the range of £736,000,000 to £750,000,000, constant currency revenue decreasing 3.5% - 1.5% year - on - year and adjusted diluted EPS expected £0.80 - £0.86 per share. Revenue guide is largely maintained in absolute terms, but constant currency growth is stronger by 1% for the full year. Q4 has increased working days compared to Q3, with underlying sequential growth expected.

Q: Bryan Bergin inquired about fiscal year guidance and drivers for Q4 growth.

A: Tyler DuPont stated that Q3 has FX headwind and lower working days, underlying growth in Q3 is around 4%, Q4 has increased working days, and underlying sequential growth is about 6% due to secured deals.

Q: Bryan Bergin asked about extending commitments with largest payment clients.

A: Mark Thurston replied that it was extensions of work with two largest payments clients, mostly extensions on run - rate level, and work in switch or gateway type space.

Q: Kate Kronstein questioned about margin and investments.

A: Tyler DuPont said there is heavier investment in the second half and FX impacts revenue growth more than margin.

Q: Antonio Jaramillo asked about top line guidance and pipeline.

A: Tyler DuPont mentioned that top 10 clients are stable, dominated by payments clients, pipeline is around 95% contracted and committed in Q3, and 70% - 75% in Q4.

Q: Jonathan Lee asked about Dava Flow adoption and signings.

A: Mark Thurston said Dava Flow is applied to outcome - based deals, velocity of signings is normal, and larger deals have more due diligence.