Endava (DAVA) CMD 2024 summary

Market trends and strategic positioning

• AI is accelerating a digital shift, expanding the addressable market by requiring core modernization beyond traditional product ideation and delivery.

• 70% of enterprises believe AI will significantly impact them within 18 months, but only 38% are actively implementing it, highlighting a gap in execution.

• Organizations face engineering, security, and business case challenges in adopting AI, with increased scrutiny on ROI and fiscal discipline.

• The company is leveraging tools, accelerators, and the recent GalaxE acquisition to enhance core modernization capabilities and client outcomes.

• Dava.X was introduced to unify technical competencies horizontally across industries, focusing on both near-term acceleration and long-term innovation, and supports AI enablement, cloud adoption, and emerging technologies.

Strategic focus and business transformation

• Emphasis on leveraging AI and digital transformation to drive innovation and efficiency for clients, positioning as a leading strategic technology partner.

• Focus on helping clients grow revenue, reduce costs, and increase speed to market through advanced technology solutions.

• Expansion of capabilities in payments, cloud, cybersecurity, and sustainability to address evolving client needs.

Financial outlook and business model evolution

• Full-year revenue guidance is $800–810 million, representing 10–11.5% constant currency growth, with adjusted EPS of 112p–115p.

• Margins are expected to improve through the year, though not yet at historical levels.

• Over 80% of revenue is currently time and material, but outcome-based contracts are expected to grow, especially with AI-driven projects.

• Diversification has increased since IPO, with a broader industry and geographic footprint, and North America now the largest segment.

• The India delivery capability, enabled by the GalaxE merger, is opening new client opportunities and supporting a global delivery model.