Endava (DAVA) Q1 2026 earnings summary

Executive summary

• Revenue for Q1 FY26 was £178.2 million, down 8.6% year-over-year, primarily due to an unexpected client credit, lower pipeline conversion, and ongoing market challenges.

• Loss before tax was £8.5 million, compared to a profit of £4.2 million in the prior year.

• Adjusted profit before tax was £9.9 million, with a margin of 5.5%, both significantly lower than prior years.

• Secured a multi-year, up to $100 million strategic partnership with a leading payments company, representing significant net new revenue.

• Over 70% of services are now AI-related, with accelerated transition to AI-native delivery and continued investment in digital transformation.

Financial highlights

• Adjusted profit before tax was £9.9 million, down from £19.2 million year-over-year.

• Adjusted PBT margin declined to 5.5% from 9.9% year-over-year.

• Adjusted diluted EPS was £0.15, down from £0.25 year-over-year.

• Adjusted free cash flow rose to £9.2 million from £3.5 million year-over-year.

• Cash and cash equivalents at quarter-end were £47.2 million; borrowings increased to £193.2 million.

Outlook and guidance

• Q2 FY26 revenue expected between £179 million–£182 million, a 7–8% year-over-year decrease.

• Q2 adjusted diluted EPS expected between £0.15–£0.17.

• FY26 revenue guidance is £735 million–£752 million, a 2.5%–4.5% decrease year-over-year.

• FY26 adjusted diluted EPS expected between £0.80–£0.88.

• Guidance reflects signed large deals and more conservative pipeline conversion assumptions.