Endava Q3 FY2026 Earnings: AI Transition Faces Challenges
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 21 2026
0mins
Source: seekingalpha
- Revenue Miss: Endava reported Q3 FY2026 revenue of GBP 178.5 million, falling short of expectations primarily due to Middle Eastern clients delaying projects amid ongoing conflict, which adversely affected overall performance and pipeline conversion rates.
- AI Business Growth: The company's AI-driven revenue surged from 5% to 15% of total revenue, amounting to GBP 27 million, indicating the potential of its strategic pivot; however, this shift also brought higher margin pressures that impacted overall profitability.
- Financial Adjustments and Outlook: CFO reported a significant noncash goodwill impairment of GBP 364.6 million, resulting in a pre-tax loss of GBP 372 million, while Q4 guidance was lowered to GBP 181 million to GBP 185 million, reflecting market uncertainties and slower conversion rates.
- Market Response and Risks: Management acknowledged that client caution on discretionary spending and extended deal cycles pose significant risks, particularly in Banking and Capital Markets, with expectations for Q4 recovery being weaker than previously anticipated.
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Analyst Views on DAVA
Wall Street analysts forecast DAVA stock price to rise
6 Analyst Rating
2 Buy
4 Hold
0 Sell
Moderate Buy
Current: 3.220
Low
8.00
Averages
10.00
High
15.00
Current: 3.220
Low
8.00
Averages
10.00
High
15.00
About DAVA
Endava plc is a technology service provider. The Company provides a combination of engineering, industry expertise and a customer-centric mindset, to consult and partner with its customers to create technological solutions that transform businesses into the artificial intelligence (AI)-driven digital shift. The Company provides solutions to its customers from ideation to production at every stage of their digital transformation, regardless of industry, region or scale. It uses its proprietary enterprise agile delivery framework, known as The Endava Adaptive Model, or TEAM, with its three component structure comprising an Engagement Model to guide the interaction with its clients; an Interaction Model, called TEAM Enterprise Agile Scaling, or TEAS, which defines how it implements agile delivery at all levels of scaling, and Engineering Practices that guide its people to deliver effective and technical solutions for its clients.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Endava Under Investigation for Possible Securities Law Violations
- Declining Financial Performance: Endava plc reported third-quarter fiscal 2026 revenue of £178.5 million, an 8.4% year-over-year decline, with adjusted diluted EPS at £0.05, significantly lower than £0.34 in the prior year, indicating severe market challenges.
- Goodwill Impairment Impact: The company disclosed a £364.6 million goodwill impairment, a significant financial adjustment that not only affects the balance sheet but also raises investor concerns about future profitability, exacerbating market uncertainty.
- Guidance Downgrade: Endava lowered its fiscal 2026 revenue guidance to £721.8 million to £725.8 million, with adjusted diluted EPS expectations of £0.45 to £0.49, leading to a sharp decline in investor confidence and a substantial drop in stock price.
- Legal Investigation Initiated: Johnson Fistel, PLLP is investigating whether Endava violated federal securities laws, and if confirmed, this could lead to legal liabilities for the company, further impacting its stock price and market reputation.
See More
Endava Q3 FY2026 Earnings: AI Transition Faces Challenges
- Revenue Miss: Endava reported Q3 FY2026 revenue of GBP 178.5 million, falling short of expectations primarily due to Middle Eastern clients delaying projects amid ongoing conflict, which adversely affected overall performance and pipeline conversion rates.
- AI Business Growth: The company's AI-driven revenue surged from 5% to 15% of total revenue, amounting to GBP 27 million, indicating the potential of its strategic pivot; however, this shift also brought higher margin pressures that impacted overall profitability.
- Financial Adjustments and Outlook: CFO reported a significant noncash goodwill impairment of GBP 364.6 million, resulting in a pre-tax loss of GBP 372 million, while Q4 guidance was lowered to GBP 181 million to GBP 185 million, reflecting market uncertainties and slower conversion rates.
- Market Response and Risks: Management acknowledged that client caution on discretionary spending and extended deal cycles pose significant risks, particularly in Banking and Capital Markets, with expectations for Q4 recovery being weaker than previously anticipated.
See More
Endava PLC Reports Revenue Decline Amid AI Transition
- Revenue Decline: For the quarter ended March 31, 2026, Endava PLC reported revenue of GBP 178.5 million, an 8.4% decrease year-over-year, reflecting challenges in uneven demand across sectors and leading to lowered revenue guidance.
- Pre-Tax Loss: The company reported a pre-tax loss of GBP 372 million, including a non-cash goodwill impairment of GBP 364.6 million, which significantly impacted financial results and highlighted pressures on profitability.
- AI-Driven Business Growth: Despite challenges, Endava's AI-driven business now accounts for 15% of total revenue, up from 5% a year ago, indicating progress in its transformation strategy that may drive future revenue growth.
- Increased Capital Expenditure: As of March 31, 2026, capital expenditure represented 1.6% of revenue, up from 0.6% in the prior year, demonstrating the company's intent to invest in technology and infrastructure to support future business development.
See More
Endava (DAVA) Q3 2026 Earnings Transcript
See More
Endava Reports Q3 FY2026 Earnings with Revenue Decline
- Financial Performance Decline: Endava reported a Q3 FY2026 non-GAAP EPS of £0.05 and revenue of £178.5 million, reflecting an 8.4% year-over-year decline, indicating pressure on the company's market competitiveness and profitability challenges.
- Employee Count Changes: As of March 31, 2026, Endava's total headcount was 11,225, with an average of 10,166 operational employees in Q3 FY2026, down from 10,272 in the same period last year, highlighting the company's efforts in cost control amidst declining revenues.
- Stable Client Base: Endava had 129 clients generating over £1 million in revenue as of March 31, 2026, down from 136 in 2025, indicating potential client attrition risks, especially as the top 10 clients accounted for 40% of total revenue.
- Cautious Revenue Outlook: The company expects future revenue to range between £181.0 million and £185.0 million, representing a year-over-year decline of 3.5% to 1%, reflecting uncertainties in the market environment and concerns over profitability.
See More
Endava Set to Announce Q3 Earnings on May 21
- Earnings Announcement: Endava (DAVA) is set to release its Q3 earnings on May 21 before market open, with consensus EPS estimate at $0.27, reflecting a 20.6% year-over-year decline, while revenue is expected at $248.58 million, indicating a 27.6% year-over-year growth potential.
- Historical Performance: Over the past two years, DAVA has surpassed EPS estimates 88% of the time and revenue estimates 100% of the time, showcasing a strong track record of financial performance and market confidence.
- Estimate Revision Trends: In the last three months, EPS estimates have seen 2 upward revisions and 5 downward revisions, while revenue estimates have experienced 2 upward and 2 downward revisions, indicating market uncertainty regarding the company's future performance.
- Market Focus: Despite facing margin pressures from its AI pivot and elusive growth, Endava's participation in the Morgan Stanley Technology, Media & Telecom Conference has attracted investor attention, potentially influencing its future market performance.
See More
Endava Under Investigation for Possible Securities Law Violations
- Declining Financial Performance: Endava plc reported third-quarter fiscal 2026 revenue of £178.5 million, an 8.4% year-over-year decline, with adjusted diluted EPS at £0.05, significantly lower than £0.34 in the prior year, indicating severe market challenges.
- Goodwill Impairment Impact: The company disclosed a £364.6 million goodwill impairment, a significant financial adjustment that not only affects the balance sheet but also raises investor concerns about future profitability, exacerbating market uncertainty.
- Guidance Downgrade: Endava lowered its fiscal 2026 revenue guidance to £721.8 million to £725.8 million, with adjusted diluted EPS expectations of £0.45 to £0.49, leading to a sharp decline in investor confidence and a substantial drop in stock price.
- Legal Investigation Initiated: Johnson Fistel, PLLP is investigating whether Endava violated federal securities laws, and if confirmed, this could lead to legal liabilities for the company, further impacting its stock price and market reputation.
See More
Endava Q3 FY2026 Earnings: AI Transition Faces Challenges
- Revenue Miss: Endava reported Q3 FY2026 revenue of GBP 178.5 million, falling short of expectations primarily due to Middle Eastern clients delaying projects amid ongoing conflict, which adversely affected overall performance and pipeline conversion rates.
- AI Business Growth: The company's AI-driven revenue surged from 5% to 15% of total revenue, amounting to GBP 27 million, indicating the potential of its strategic pivot; however, this shift also brought higher margin pressures that impacted overall profitability.
- Financial Adjustments and Outlook: CFO reported a significant noncash goodwill impairment of GBP 364.6 million, resulting in a pre-tax loss of GBP 372 million, while Q4 guidance was lowered to GBP 181 million to GBP 185 million, reflecting market uncertainties and slower conversion rates.
- Market Response and Risks: Management acknowledged that client caution on discretionary spending and extended deal cycles pose significant risks, particularly in Banking and Capital Markets, with expectations for Q4 recovery being weaker than previously anticipated.
See More
Endava PLC Reports Revenue Decline Amid AI Transition
- Revenue Decline: For the quarter ended March 31, 2026, Endava PLC reported revenue of GBP 178.5 million, an 8.4% decrease year-over-year, reflecting challenges in uneven demand across sectors and leading to lowered revenue guidance.
- Pre-Tax Loss: The company reported a pre-tax loss of GBP 372 million, including a non-cash goodwill impairment of GBP 364.6 million, which significantly impacted financial results and highlighted pressures on profitability.
- AI-Driven Business Growth: Despite challenges, Endava's AI-driven business now accounts for 15% of total revenue, up from 5% a year ago, indicating progress in its transformation strategy that may drive future revenue growth.
- Increased Capital Expenditure: As of March 31, 2026, capital expenditure represented 1.6% of revenue, up from 0.6% in the prior year, demonstrating the company's intent to invest in technology and infrastructure to support future business development.
See More
Endava (DAVA) Q3 2026 Earnings Transcript
See More
Endava Reports Q3 FY2026 Earnings with Revenue Decline
- Financial Performance Decline: Endava reported a Q3 FY2026 non-GAAP EPS of £0.05 and revenue of £178.5 million, reflecting an 8.4% year-over-year decline, indicating pressure on the company's market competitiveness and profitability challenges.
- Employee Count Changes: As of March 31, 2026, Endava's total headcount was 11,225, with an average of 10,166 operational employees in Q3 FY2026, down from 10,272 in the same period last year, highlighting the company's efforts in cost control amidst declining revenues.
- Stable Client Base: Endava had 129 clients generating over £1 million in revenue as of March 31, 2026, down from 136 in 2025, indicating potential client attrition risks, especially as the top 10 clients accounted for 40% of total revenue.
- Cautious Revenue Outlook: The company expects future revenue to range between £181.0 million and £185.0 million, representing a year-over-year decline of 3.5% to 1%, reflecting uncertainties in the market environment and concerns over profitability.
See More
Endava Set to Announce Q3 Earnings on May 21
- Earnings Announcement: Endava (DAVA) is set to release its Q3 earnings on May 21 before market open, with consensus EPS estimate at $0.27, reflecting a 20.6% year-over-year decline, while revenue is expected at $248.58 million, indicating a 27.6% year-over-year growth potential.
- Historical Performance: Over the past two years, DAVA has surpassed EPS estimates 88% of the time and revenue estimates 100% of the time, showcasing a strong track record of financial performance and market confidence.
- Estimate Revision Trends: In the last three months, EPS estimates have seen 2 upward revisions and 5 downward revisions, while revenue estimates have experienced 2 upward and 2 downward revisions, indicating market uncertainty regarding the company's future performance.
- Market Focus: Despite facing margin pressures from its AI pivot and elusive growth, Endava's participation in the Morgan Stanley Technology, Media & Telecom Conference has attracted investor attention, potentially influencing its future market performance.
See More
