Endava plc (NYSE: DAVA) reported weaker‑than‑expected first‑quarter fiscal 2026 results before the U.S. market open today and cut its full‑year guidance. Shares fell sharply in early trading as investors digested a year‑over‑year revenue decline and softer outlook; the company also announced an expanded multi‑year partnership with Toyota Racing Development (TRD U.S.A.).
Quick takeaways
- Q1 FY26 revenue: £178.2M, –8.6% y/y (–7.3% constant currency).
- IFRS diluted EPS:£(0.15); Adjusted diluted EPS:£0.15.
- FY26 outlook cut: revenue now £735–£752M (cc –4.5% to –2.5%); adjusted EPS £0.80–£0.88.
- New deal flow: CEO flagged a multi‑year payments deal “up to $100M.”
- Brand expansion: TRD U.S.A. names Endava Official IT Consulting Partner for 2026+, expanding into IMSA.
By the numbers: Q1 FY26 (quarter ended Sept 30, 2025)
- Revenue: £178.2M (vs. £195.1M a year ago), –8.6%; –7.3% at constant currency.
- Loss before tax: £(8.5)M (vs. +£4.2M).
- Adjusted PBT: £9.9M (5.5% margin) vs. £19.2M (9.9%).
- IFRS diluted EPS: £(0.15); Adjusted diluted EPS: £0.15 (vs. £0.25).
- Cash from operations: £12.3M; Adjusted free cash flow: £9.2M.
- Cash & equivalents (Sept 30): £47.2M.
Business mix & clients. Endava ended the quarter with 11,636 total headcount; 133 clients generated over £1M on a rolling‑12‑month basis. Revenue mix: North America 42%, UK 28%, Europe 24%, RoW 6%. By industry: BCM 22%, Payments 17%, TMT 17%, Healthcare 12%, Mobility 9%, Insurance 9%, Other 14%.
What management said
CEO John Cotterell noted results were “lower than guided primarily due to an unexpected credit made to a client” and slower conversion of some pipeline opportunities. He added Endava has secured a multi‑year strategic relationship with a leading payments company “of up to $100 million.” Business Wire
Outlook: Q2 and FY26 guidance (and how it changed)
- Q2 FY26 (Dec quarter): revenue £179–£182M (cc –8% to –7% y/y); adjusted diluted EPS £0.15–£0.17.
- FY26 (year to June 2026): revenue £735–£752M (cc –4.5% to –2.5% y/y); adjusted diluted EPS £0.80–£0.88.
Versus September guidance: On Sept 4, Endava guided FY26 revenue to £750–£765M and adjusted EPS £0.82–£0.94; today’s ranges are lower on both revenue and earnings.
Capital returns. As of Oct 31, Endava had repurchased ~7.14M ADSs for $115.9M, with $34.1M left under its authorization.
Stock reaction
Pre‑market headlines flagged a double‑digit drop on the miss and reduced guidance; early reports showed declines exceeding 20% before the open.
Street & consensus context
Several trackers noted the quarter missed consensus on both EPS and revenue. Investing.com highlighted adjusted EPS of £0.15 vs. £0.18 expected and revenue of £178.2M vs. ~£188.8M expected. Zacks similarly called out a shortfall versus its EPS consensus.
New today: TRD U.S.A. partnership expands
Separately, TRD U.S.A. (Toyota Racing Development) announced a multi‑year expanded partnership naming Endava its Official IT Consulting Partner in 2026 and beyond, with Endava’s presence extending into IMSA next season. TRD cited plans to leverage Endava’s AI‑enabled accelerators to modernize core production systems.
Sector exposure snapshot
The quarter’s mix underscores Endava’s tilt toward financial services (Payments + BCM = ~39%) and TMT, with North America now the largest geography (42%) and the Top 10 clients at 36% of revenue. While order timing remains a headwind, management’s mention of a large payments deal and ongoing share repurchases are near‑term offsets.
Key dates to watch
Endava is slated to present at multiple investor conferences over the next month, including the Morgan Stanley 25th European TMT Conference (Nov 13, Barcelona), J.P. Morgan Ultimate Services (Nov 18), Needham Tech Week (Nov 21), UBS Global Technology & AI (Dec 2–3) and TD Cowen IT Services & Digital Engineering Summit (Dec 9).
