Endava (DAVA) Q2 2026 earnings summary

Executive summary

• Q2 FY2026 revenue was £184.1 million, down 5.9% year-over-year but up 3.3% sequentially from Q1.

• The company is investing heavily in AI, talent, and partnerships, with proprietary methods like Dava.Flow and notable client wins in payments and digital transformation.

• Strategic partnerships with OpenAI, AWS, Google Cloud, Microsoft Azure, and others are driving new opportunities, especially in payments and financial services.

• Over 25 years of experience navigating technological shifts, maintaining high client retention and trusted partnerships.

• Embedded AI across operations, with Dava.Flow and strong ecosystem partnerships, driving measurable client outcomes.

Financial highlights

• Adjusted profit before tax for Q2 FY2026 was £10.7 million (margin 5.8%), down from £21.8 million (margin 11.2%) year-over-year.

• Adjusted diluted EPS was £0.16, down from £0.30 year-over-year.

• Adjusted free cash flow was £20.1 million, down from £31.6 million year-over-year.

• Cash and cash equivalents were £68.5 million at quarter end, up from £59.3 million at June 30, 2025.

• Top 10 clients accounted for 32–35% of revenue, with average spend per top 10 client at £12.8 million.

Outlook and guidance

• Q3 FY2026 revenue expected between £182–£185 million, a constant currency decline of 4% to 2.5% year-over-year.

• Q3 adjusted diluted EPS guidance: £0.18–£0.21.

• FY2026 revenue guidance: £736–£750 million, a constant currency decline of 3.5% to 1.5% year-over-year.

• FY2026 adjusted diluted EPS guidance: £0.80–£0.86.

• Underlying sequential growth expected in Q3 and Q4, with Q4 benefiting from more working days and deal ramps.