Shares of Endava Ltd (DAVA) plummeted 28.93% in pre-market trading on Thursday following the release of its fourth-quarter fiscal year 2025 results and disappointing guidance for fiscal year 2026. The technology-driven business transformation group reported a year-over-year revenue decrease and provided a cautious outlook, significantly disappointing investors.

For Q4 FY2025, Endava reported revenue of £186.8 million, representing a 3.9% decrease compared to the same period last year. Although the company's adjusted diluted earnings per share (EPS) for the quarter improved slightly to £0.24 from £0.22 in the prior year, it wasn't enough to offset concerns about future growth. The company's CEO, John Cotterell, noted that "the short term operating backdrop remains volatile and many clients continue to recalibrate the timing of spending," signaling ongoing challenges.

The market's negative reaction was further fueled by Endava's guidance for fiscal year 2026. The company expects full-year revenue to be in the range of £750.0 million to £765.0 million, representing a constant currency revenue change between -1.5% and 0.5% year-over-year. Additionally, Endava projects adjusted diluted EPS for FY2026 to be between £0.82 and £0.94, potentially lower than the £1.13 reported for FY2025. This cautious outlook, coupled with the recent revenue decline, has led to the sharp drop in Endava's stock price as investors reassess the company's growth prospects in a challenging economic environment.