Endava (DAVA) 46th Annual William Blair Growth Stock Conference summary

Company overview and strategic positioning

• Operates as a next-gen technology services provider with a strong engineering heritage and focus on digital transformation and AI-native solutions.

• Diversified industry exposure, with payments as the largest segment, but expanding into healthcare, mobility, and other verticals through M&A.

• Maintains long-term, sticky client relationships, with about 90% of revenue from recurring clients annually.

• Global footprint with 11,000 employees across 32 countries, leveraging nearshore and onshore delivery models.

• Building strategic partnerships with hyperscalers like OpenAI and Google to enhance AI-native offerings.

AI-native transition and delivery methodology

• Undergoing a significant pivot from traditional time & materials (T&M) digital transformation to AI-native delivery, investing heavily in retraining and tooling.

• Dava.Flow, the proprietary AI-native delivery methodology, emphasizes tool-agnostic, agent-driven processes with humans in the loop for governance.

• The methodology accelerates project delivery, enabling outcome-based and fixed-price commercial models, reducing uncertainty and increasing speed.

• AI-native business now represents 15% of revenue, tripling in size over 12 months and offering higher profitability than legacy T&M work.

• Focus on developing agent-ready backlogs and rapid iteration, with governance and evolution phases ensuring compliance and continuous improvement.

Market trends, client dynamics, and financial performance

• AI adoption is high in experimentation but low in scaled production; enterprises are frustrated with ROI, creating opportunities for external service providers.

• Clients are shifting from internal experimentation to seeking partners for scalable AI solutions, with increasing demand for outcome-based contracts.

• Revenue for the last quarter was GBP 178.5 million, below expectations due to elongated deal cycles and macro headwinds, especially in the Middle East.

• Adjusted PBT margin dropped to 1.8% in Q1, impacted by investment in AI capabilities and lower revenue conversion.

• Client base is being streamlined to focus on larger, multi-year engagements, increasing client concentration and stability among top clients.