Key Points
Endava topped earnings-per-share estimates, but key performance metrics show no signs of growth.
The company ended the quarter with its highest-ever order book, but guidance for the new fiscal year was underwhelming.
Management remains convinced Endava’s issues are tied to macro concerns, but investors are waiting to see if there are deeper issues weighing on the business.
Here's our initial take on Endava's (NYSE: DAVA) financial report.
Key Metrics
| Metric |
Q4 2024 |
Q4 2025 |
Change |
vs. Expectations |
| Revenue |
194.4 million British pounds |
186.8 million British pounds |
-4% |
Met |
| Earnings per share |
0.22 British pounds |
0.24 British pounds |
9% |
Beat |
| Clients with 1 million British pounds in annual revenue |
146 |
133 |
-9% |
n/a |
| Headcount |
12,085 |
11,479 |
-5% |
n/a |
Endava Remains Stuck in Neutral
We are now 18 months removed from British IT consulting firm Endava seeing its shares lose half their value following a disappointing earnings report, and the recovery still looks like a long-term project.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »
Endava beat watered-down earnings-per-share expectations in its fiscal fourth quarter, which ended June 30, but revenue declined 4% year over year. Other key metrics show no sign of growth on the horizon. Endava's headcount fell by 5% from a year ago. Headcount is a useful measure with consulting firms because they adjust hiring based on anticipated future workload.
Endava is also struggling to diversify its client base. The number of clients generating at least 1 million British pounds in revenue fell to 133 at June 30 from 146 a year ago. And the company's top 10 clients accounted for 37% of revenue in the recently completed quarter, up from 34% in the same period last year.
About 38% of revenue was generated in North America, similar to the revenue mix a year ago.
Immediate Market Reaction
Investors were disappointed with the quarter as well as with the guidance for what is to come. Endava stock, already down 52% year to date, was down another 22% in premarket trading ahead of the market opening in New York.
What to Watch
The bull case from Endava today is that the company is simply caught up in a difficult macro environment. Tariffs, inflation, and questions about the economy have put big corporate IT projects on hold, limiting new business opportunities for now.
The bear case is that AI has permanently disrupted the IT consulting industry.
Endava's guidance for its new fiscal year doesn't give bulls much to get excited about. The company sees first-quarter earnings of between 0.17 and 0.19 British pounds per share, well short of the 0.27 British pounds consensus estimate. For the year, management is forecasting earnings of 0.82 to 0.94 British pounds per share compared to a consensus estimate of 1.12 British pounds.
CEO John Cotterell remains optimistic, noting that Endava exited its fiscal year with its highest-ever quarterly order book.
This could indeed be a timing issue, as Cotterell implies in his remarks. But with the stock off more than 80% since the beginning of 2024 even before Thursday's drop, the market appears to be in no mood to give the company the benefit of the doubt.
Helpful Resources
Should you invest $1,000 in Endava Plc right now?
Before you buy stock in Endava Plc, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Endava Plc wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $661,268!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,045,818!*
Now, it’s worth noting Stock Advisor’s total average return is 1,048% — a market-crushing outperformance compared to 184% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of August 25, 2025
Lou Whiteman has positions in Endava Plc. The Motley Fool has positions in and recommends Endava Plc. The Motley Fool has a disclosure policy.
