Endava (DAVA) Investor Day 2024 summary

Market trends and strategic positioning

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

• Only 38% of enterprises are actively implementing generative AI, but 70% expect significant impact within 18 months.

• Business cases for transformation face higher scrutiny due to increased fiscal discipline and technical complexity.

• Businesses are prioritizing revenue growth, cost reduction, efficiency, and speed to market through AI enablement and digital strategies.

• The company is leveraging tools, accelerators, and recent acquisitions (e.g., GalaxE) to enhance modernization capabilities.

Business model evolution and delivery

• Dava.X was created to unify technical competencies horizontally across industries, focusing on both current and future technologies.

• Accelerators, such as those from GalaxE, and proprietary frameworks like Morpheus and Cloud Migration Programme Calculator, enable faster, more productive delivery and are integrated into the Dava.X framework.

• The global delivery model now includes India, Vietnam, and expanded nearshore capabilities, supporting large programs.

• Internal adoption of AI tools (e.g., ChatGPT Enterprise, custom GPTs) is driving productivity and innovation across all functions.

• The company maintains a strong culture and delivery quality across all geographies, with positive client feedback on new locations.

Financial outlook and operational performance

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

• Adjusted PBT margin for Q1 is 9.9%, with profitability expected to improve but not yet at historical levels.

• Achieved a revenue CAGR of 22.6% and headcount CAGR of 16.6% from FY18 to FY24, with revenue rising from £217.6m in 2018 to £794.7m in 2024 and headcount from 4,819 to 12,085.

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

• Outcome-based models are seen as margin-accretive and align with client demand for measurable results.