Shares of Endava Ltd (DAVA) tumbled 6.59% in pre-market trading on Wednesday following the release of its third-quarter fiscal year 2025 results and lowered guidance for the fourth quarter. The UK-based technology services provider faced challenges in the current business environment, leading to slower revenue growth and reduced expectations for the upcoming quarter.

Endava reported Q3 revenue of £194.8 million, representing an 11.7% year-over-year increase. However, this figure fell short of the FactSet consensus estimate of £197.6 million. The company cited a challenging business environment, with clients showing reluctance to sign larger contracts amid economic uncertainties. CEO John Cotterell noted, "The opportunity pipeline continues to grow but the conversion into revenue is not happening as we would have expected."

Adding to investors' concerns, Endava provided lower-than-expected guidance for its fiscal fourth quarter. The company now expects Q4 adjusted earnings per share to range between £0.22 and £0.24, significantly below the FactSet estimate of £0.34. This downward revision in guidance, coupled with the revenue miss, appears to be the primary driver behind the stock's pre-market plunge. Despite these challenges, Endava's board of directors has authorized an additional $50 million share repurchase program, signaling confidence in the company's long-term strategy and cash flow outlook.