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 March 31. 2026 (“Q3 FY2026″).
“This has been one of the more challenging periods Endava has faced in recent years. Demand remains uneven across sectors, deal cycles continue to be extended, and clients are scrutinizing technology spending more carefully than at any point since the macro slowdown began. Against this backdrop, revenue came in below expectations, margin contracted, and we recognized a non-cash goodwill impairment.
We are disappointed by these outcomes, but it is important to distinguish near-term execution challenges from our long-term strategic positioning. During the quarter, we accelerated our transition toward AI-native delivery and deepened our presence in payments transformation work. We also engaged more directly with senior client decision-makers on enterprise-scale AI initiatives.
We recently announced a collaboration with Mastercard combining our AI-native engineering and industry expertise with Mastercard’s global reach and data-driven products and services. Additionally, we were selected as a strategic partner by Tyl by NatWest, NatWest Group’s merchant-payments arm, to modernize and expand its payments-acceptance platform.
These initiatives, and others like them, have moved our AI driven business up from 5% of total revenue a year ago in Q3FY25. to 15% of total revenue in Q3FY26. showing the underlying momentum of our pivot.
By keeping our teams focused on these priorities and serving as trusted partners to decision-makers who are redefining their technology roadmaps, we believe we are positioning Endava to convert today’s headwinds into tomorrow’s momentum,” said John Cotterell, Endava’s CEO.
THIRD QUARTER FISCAL YEAR 2026 FINANCIAL METRICS:
Revenue for Q3 FY2026 was £178.5 million, a decline of 8.4% compared to £194.8 million in the same period in the prior year.
Revenue decline at constant currency (a non-IFRS measure)* was 6.4% for Q3 FY2026.
Loss before tax for Q3 FY2026 was £(372.0) million, compared to profit before tax of £13.6 million in the same period in the prior year.
Adjusted profit before tax (a non-IFRS measure)* for Q3 FY2026 was £3.2 million, or 1.8% of revenue, compared to £24.6 million, or 12.6% of revenue, in the same period in the prior year.
Loss for the period was £(394.4) million, resulting in diluted loss per share of £(7.55), compared to profit for the period of £10.9 million and diluted earnings per share (“EPS”) of £0.18 in the same period in the prior year.
Adjusted profit for the period (a non-IFRS measure)* was £2.6 million, resulting in adjusted diluted EPS (a non-IFRS measure)* of £0.05. compared to adjusted profit for the period of £20.1 million and adjusted diluted EPS of £0.34 in the same period in the prior year.
During the quarter, an impairment of £364.6 million was recognised against goodwill, which is included as an exceptional item in the condensed consolidated statements of comprehensive income. This goodwill impairment has arisen due to the performance of the Company in the year to date, as well as management’s reforecast of the Company’s future performance through to FY31 and into perpetuity, by comparing the Company’s recoverable amount derived from future forecasts to the Company’s enterprise value. No goodwill impairment was recognised in the same period in the prior year.
During the quarter the Group incurred a tax charge of £23.2m relating to the derecognition of the entire UK deferred tax asset. The amount is included as an exceptional item in the condensed consolidated statements of comprehensive income. The derecognition follows a reassessment of the recoverability of the deferred tax asset based on updated expectations for future UK taxable profits. The reassessment is consistent with the reforecast of the company’s future performance considered in the assessment of the recoverable value of goodwill.
CASH FLOW:
Net cash used in operating activities was £(0.4) million in Q3 FY2026. compared to net cash from operating activities of £18.7 million in the same period in the prior year.
Adjusted free cash flow (a non-IFRS measure)* was £(3.1) million in Q3 FY2026. compared to £17.5 million in the same period in the prior year.
At March 31. 2026. Endava had cash and cash equivalents of £48.4 million, compared to £59.3 million at June 30. 2025.
* 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 MARCH 31. 2026:
Headcount totaled 11.225 at March 31. 2026. with an average of 10.166 operational employees in Q3 FY2026. compared to a headcount of 11.365 at March 31. 2025 and an average of 10.272 operational employees in the same period in the prior year.
Number of clients with over £1 million in revenue on a rolling twelve-month basis was 129 at March 31. 2026 compared to 136 clients at March 31. 2025.
Top 10 clients accounted for 40% of revenue in Q3 FY2026. compared to 39% in the same period in the prior year.
By geographic region, 38% of revenue was generated in North America, 23% was generated in Europe, 33% was generated in the United Kingdom and 6% was generated in the rest of the world in Q3 FY2026. This compares to 37% in North America, 22% in Europe, 35% in the United Kingdom and 6% in the Rest of the World in the same period in the prior year.
By industry vertical, 23% of revenue was generated from Payments, 22% from BCM, 9% from Insurance, 16% from TMT, 8% from Mobility, 11% from Healthcare, and 11% from Other in Q3 FY2026. This compares to 19% from Payments, 21% from BCM, 9% from Insurance, 18% from TMT, 8% from Mobility, 12% from Healthcare, and 13% from Other in the same period in the prior year.
