Endava Reports GBP372M Pre-Tax Loss, AI Revenue Jumps to 15%
Endava posted a GBP372 million loss before tax in Q3 2026, reversing last year’s profit, as revenue declined 8.4% YoY (down 6.4% constant currency). AI-driven services rose to 15% of revenue from 5% and the company joined Google's AI Agent partner program to drive new global engagements.
1. Financial Results
In Q3 2026, Endava recorded a GBP372 million loss before tax, a reversal from profit in the prior year, as revenue fell 8.4% year-over-year (down 6.4% on a constant currency basis). Declining cash generation led management to focus on reducing leverage ahead of a planned FY27 refinancing.
2. AI-Driven Business Expansion
The company’s AI-driven services grew to 15% of total revenue, up from 5% a year earlier, reflecting rising demand for complex, outcome-based projects. Over 75% of staff now use AI daily, and more than 1,000 engineers have been trained on the Dava.Flow AI delivery framework.
3. Google AI Agent Partnership
Endava was invited into the Google AI Agent partner program, positioning it to secure new strategic engagements across North America, APAC and Europe. CEO John Cotterell highlighted collaborations with NatWest and Mastercard as examples of its expanding AI-driven deal pipeline.
4. Capital Allocation Outlook
CFO Mark Thurston noted that cash generation underperformed in Q3 but is expected to improve in Q4, with a key focus on lowering debt as part of a broader funding review. Management is assessing how to optimize capital allocation ahead of its FY27 refinancing.