Endava Q3 revenue falls 8.4% to £178.5m, flags £181-185m Q4 guidance
Endava posted Q3 revenue of £178.5m, missing the £183.87m analyst consensus and declining 8.4% year-over-year, while adjusted diluted EPS of £0.05 beat the £0.02 forecast. The quarter included a £364.6m non-cash goodwill impairment and Q4 revenue guidance of £181m-£185m, below the £194.52m consensus.
1. Q3 Financial Results
Endava posted Q3 revenue of £178.5m, down 8.4% year-over-year and missing the £183.87m consensus. Adjusted diluted EPS was £0.05, above the £0.02 forecast but below prior-year’s £0.34. The quarter included a £364.6m non-cash goodwill impairment.
2. Fourth Quarter & Full-Year Guidance
For Q4 Endava expects revenue of £181m-£185m, below the £194.52m consensus midpoint and implying a 1.0%-3.5% constant currency decline. Adjusted diluted EPS guidance is £0.09-£0.13 per share. FY2026 revenue is forecast at £721.8m-£725.8m, under the £738.49m projection, with EPS of £0.45-£0.49.
3. AI Growth and Partnerships
AI-driven services comprised 15% of Q3 revenue, up from 5% a year earlier. New partnerships were secured with Mastercard and Tyl by NatWest. These tie-ups aim to strengthen the company’s digital payments and banking technology offerings.
4. Demand Environment Challenges
CEO John Cotterell highlighted uneven demand across sectors and extended deal cycles, noting clients are scrutinizing technology spending more intensely. These factors contributed to the revenue shortfall and cautious guidance. Management expects the macro slowdown to continue influencing spending patterns.