Endava Announces Third Quarter Fiscal Year 2025 Results

Q3 FY2025

11.7% Year on Year Revenue Increase to GBP194.8 million

12.4% Revenue Increase at Constant Currency

Diluted EPS GBP0.18 compared to GBP(0.03) in the prior year comparative period

Adjusted Diluted EPS GBP0.34 compared to GBP0.22 in the prior year comparative period

LONDON--(BUSINESS WIRE)--May 14, 2025-- 

Endava plc $(DAVA)$ ("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, 2025, the third quarter of its 2025 fiscal year ("Q3 FY2025").

"The business environment continues to evolve rapidly and the quarter just ended has been challenging. Clients' desire to innovate remains strong; however, they are slow at signing larger contracts in the current uncertain macroeconomic environment. The opportunity pipeline continues to grow but the conversion into revenue is not happening as we would have expected. In this uncertain environment, we are focusing on what we can control to best position the business for the long term. Additionally, our board of directors has authorized the repurchase of up to $50 million of additional Endava shares, reflecting our confidence in our cash flow outlook and long-term strategy," said John Cotterell, Endava's CEO.

THIRD QUARTER FISCAL YEAR 2025 FINANCIAL HIGHLIGHTS:

   -- Revenue for Q3 FY2025 was GBP194.8 million, an increase of 11.7% compared 
      to GBP174.4 million in the same period in the prior year. 
 
   -- Revenue increase at constant currency (a non-IFRS measure)* was 12.4% for 
      Q3 FY2025. 
 
   -- Profit before tax for Q3 FY2025 was GBP13.6 million, compared to loss 
      before tax of GBP(0.5) million in the same period in the prior year. 
 
   -- Adjusted profit before tax (a non-IFRS measure)* for Q3 FY2025 was 
      GBP24.6 million, or 12.6% of revenue, compared to GBP15.5 million, or 
      8.9% of revenue, in the same period in the prior year. 
 
   -- Profit for the period was GBP10.9 million, resulting in diluted earnings 
      per share ("EPS") of GBP0.18, compared to loss for the period of GBP(1.7) 
      million and diluted loss per share of GBP(0.03) in the same period in the 
      prior year. 
 
   -- Adjusted profit for the period (a non-IFRS measure)* was GBP20.1 million, 
      resulting in adjusted diluted EPS (a non-IFRS measure)* of GBP0.34, 
      compared to adjusted profit for the period of GBP12.7 million and 
      adjusted diluted EPS of GBP0.22 in the same period in the prior year. 

CASH FLOW:

   -- Net cash from operating activities was GBP18.7 million in Q3 FY2025, 
      compared to net cash from operating activities of GBP3.0 million in the 
      same period in the prior year. 
 
   -- Adjusted free cash flow (a non-IFRS measure)* was GBP17.5 million in Q3 
      FY2025, compared to GBP2.2 million in the same period in the prior year. 
 
   -- At March 31, 2025, Endava had cash and cash equivalents of GBP68.3 
      million, compared to GBP62.4 million at June 30, 2024. 

* 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, 2025:

   -- Headcount totaled 11,365 at March 31, 2025, with an average of 10,272 
      operational employees in Q3 FY2025, compared to a headcount of 11,025 at 
      March 31, 2024 and an average of 10,127 operational employees in the same 
      period in the prior year. 
 
   -- Number of clients with over GBP1 million in revenue on a rolling 
      twelve-month basis was 136 at March 31, 2025, compared to 142 clients at 
      March 31, 2024. 
 
   -- Top 10 clients accounted for 39% of revenue in Q3 FY2025, compared to 34% 
      in the same period in the prior year. 
 
   -- By geographic region, 37% of revenue was generated in North America, 22% 
      was generated in Europe, 35% was generated in the United Kingdom and 6% 
      was generated in the rest of the world in Q3 FY2025. This compares to 30% 
      in North America, 28% in Europe, 35% in the United Kingdom and 7% in the 
      Rest of the World in the same period in the prior year. 
 
   -- By industry vertical, 19% of revenue was generated from Payments, 21% 
      from BCM, 9% from Insurance, 18% from TMT, 8% from Mobility, 12% from 
      Healthcare, and 13% from Other in Q3 FY2025. This compares to 24% from 
      Payments, 14% from BCM, 9% from Insurance, 24% from TMT, 10% from 
      Mobility, 4% from Healthcare, and 15% from Other in the same period in 
      the prior year. 

OUTLOOK:

Fourth Quarter Fiscal Year 2025:

Endava expects revenue will be in the range of GBP186.0 million to GBP188.0 million, representing a constant currency revenue change of between (1.0)% and 0.0% on a year over year basis. Endava expects adjusted diluted EPS to be in the range of GBP0.22 to GBP0.24 per share.

Full Fiscal Year 2025:

Endava expects revenue will be in the range of GBP771.5 million to GBP773.5 million, representing a constant currency revenue increase of between 6.0% and 6.5% on a year over year basis. Endava expects adjusted diluted EPS to be in the range of GBP1.11 to GBP1.13 per share.

This above guidance for the fourth quarter and full fiscal year 2025 assumes the exchange rates on April 30, 2025 (when the exchange rate was 1 British Pound to 1.34 US Dollar and 1.18 Euro).

Endava is not able, at this time, to reconcile its expectations for the fourth quarter and full fiscal year 2025 for a rate of revenue growth or decline at constant currency or adjusted diluted EPS to their respective most directly comparable IFRS measures as a result of the uncertainty regarding, and the potential variability of, reconciling items such as share-based compensation expense, amortisation of acquired intangible assets, foreign currency exchange losses / (gains), net, and fair value movement of contingent consideration, as applicable. Accordingly, a reconciliation is not available without unreasonable effort, although it is important to note that these factors could be material to Endava's results computed in accordance with IFRS.

The guidance provided above is forward-looking in nature. Actual results may differ materially. See "Forward-Looking Statements" below.

SHARE REPURCHASE PROGRAM:

As of April 30, 2025, the Company had repurchased 1,975,906 American Depositary Shares ("ADS") for $39.7 million under its share repurchase program. As of April 30, 2025, the Company had $60.3 million remaining for repurchase under its share repurchase authorization. Additionally, the Board of Directors of Endava has approved an additional $50 million of share repurchases under the existing program.

CONFERENCE CALL DETAILS:

The Company will host a conference call at 8:00 am ET today, May 14, 2025, to review its Q3 FY2025 results. To participate in Endava's Q3 FY2025 earnings conference call, please dial in at least five minutes prior to the scheduled start time (844) 481-2736 or (412) 317-0665 for international participants, Conference ID: Endava Call.

Investors may listen to the call on Endava's Investor Relations website at http://investors.Endava.com. The webcast will be recorded and available for replay until Wednesday June 11, 2025.

ABOUT ENDAVA PLC:

Endava is a leading provider of next-generation technology services, dedicated to enabling its customers to accelerate growth, tackle complex challenges and thrive in evolving markets. By combining innovative technologies and deep industry expertise with an AI-native approach, Endava consults and partners with customers to create solutions that drive transformation, augment intelligence and deliver lasting impact. From ideation to production, it supports customers with tailor-made solutions at every stage of their digital transformation, regardless of industry, region or scale.

Endava's clients span payments, insurance, finance and banking, technology, media, telecommunications, healthcare and life sciences, mobility, retail and consumer goods and more. As of March 31, 2025, 11,365 Endavans are helping clients break new ground across locations in Europe, the Americas, Asia Pacific and the Middle East.

NON-IFRS FINANCIAL INFORMATION:

To supplement Endava's Condensed Consolidated Statements of Comprehensive Income, Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows presented in accordance with IFRS, the Company uses non-IFRS measures of certain components of financial performance in this press release. These measures include revenue growth/(decline) rate at constant currency, adjusted profit before tax, adjusted profit for the period, adjusted diluted EPS and adjusted free cash flow.

Revenue growth/(decline) rate at constant currency is calculated by translating revenue from entities reporting in foreign currencies into British Pounds using the comparable foreign currency exchange rates from the prior period. For example, the average currency rates in effect for the fiscal quarter ended March 31, 2024 were used to convert revenue for the fiscal quarter ended March 31, 2025 and the revenue for the comparable prior period.

Adjusted profit before tax ("Adjusted PBT") is defined as the Company's profit before tax adjusted to exclude the impact of share-based compensation expense, amortisation of acquired intangible assets, realised and unrealised foreign currency exchange (gains)/losses, net, restructuring costs, and fair value movement of contingent consideration, all of which are non-cash items except for realised foreign currency exchange (gains)/losses, net. Our Adjusted PBT margin is our Adjusted PBT as a percentage of our total revenue.

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