Highlights

  • Endava reports Q2 revenue of USD 247.6M, surpassing analyst estimates of USD 179.87M.
  • Adjusted PBT margin declined to 5.8% from 11.2% prior, impacted by AI-native delivery investments.
  • Shares traded down 3.7% following capital moves and partial ADS repurchases totaling USD 121.9M.

Endava (NYSE:DAVA) released its Q2 FY26 earnings, reporting EPS of USD 0.22, beating consensus estimates of USD 0.21. Revenue for the quarter reached USD 247.6M, above analyst expectations of USD 179.87M. The company updated FY26 guidance to EPS between USD 1.10–1.18 and Q3 guidance to USD 0.25–0.29 per share.

Despite the revenue beat, profitability came under pressure due to accelerated investments in AI-native delivery and next-generation talent. Adjusted PBT fell to GBP 10.7M, with margins declining to 5.8% from 11.2% in the prior year. Management attributed approximately three percentage points of margin reduction to these investments.

AI Strategy and Client Engagement
Endava highlighted growing traction for its Dava Flow platform and broader AI-native shift. Partnerships with OpenAI, Miro, and Cognition expanded agentic coding capabilities and delivery traceability. Key client wins included cloud-native cross-border payment development for PayNet NETS JV, renewals with major payments customers, and new engagements across hospitality, EV, banking, and life sciences.

Revenue in GBP terms for Q2 was GBP 184.1M, reflecting a 5.9% year-over-year decline but a sequential increase of 3.3%. Guidance for Q3 and FY26 suggests modest constant-currency declines, indicating continued top-line pressures amid ongoing investments.

Capital Management
The company repurchased approximately 8M ADSs for USD 121.9M, partially funded by borrowings that rose to GBP 202.7M. Cash balances ended at GBP 68.5M. Following the earnings release,

Share Performance
Endava shares traded down 3.7% to USD 5.04.

With brokerage assessments diverging, Endava is navigating a phase marked by AI-focused delivery investments, strategic partnerships, and selective capital allocation. Market participants are monitoring execution milestones and margin trajectory as the company works toward its updated FY26 guidance.

FAQs

Q1. What is Endava’s updated FY26 guidance?
Endava expects FY26 EPS between USD 1.10–1.18 and Q3 EPS between USD 0.25–0.29.

Q2. How did AI investments impact margins?
Adjusted PBT margin fell to 5.8% from 11.2%, with ~3 percentage points attributed to AI-native delivery and talent investment.

Q3. What capital moves did Endava make this quarter?
The company repurchased ~8M ADSs for USD 121.9M, partially funded by borrowings that rose to GBP 202.7M.