Endava plc

Good day and welcome to the INDAVA second quarter 2026 results. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star and then two. Please note this event is being recorded. I would now like to turn the conference over to Lauren Samatson, Head of Investor Relations and ESG. Please go ahead.

Thank you. Good afternoon, everyone, and welcome to end of our second quarter of our fiscal year 2026 conference call. As a reminder, this conference call is being recorded. Joining me today are John Cotterell, Endava's Chief Executive Officer, and Mark Thurston, Endava's Chief Financial Officer. Before we begin, a quick reminder to our listeners. Our presentation and our accompanying remarks today include forward-looking statements, including but not limited to statements regarding our guidance for Q3 fiscal year 2026 and for the full fiscal year 2026, the impact of headwinds facing our industry and business, trends in our industry, including with respect to development with AI, enhancement to our technology and offerings, the benefits of our partnerships, demand from clients for our technology services, our ability to create long-term value for our clients, our people and our shareholders, and our business strategies, plans, operations, and growth opportunities. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statement. Actual results and the timing of certain events may differ materially from the results or timing predicted or implied by search forward-looking statements, and reported results should not be considered as an indication of future performance. Please note that these forward-looking statements made during this conference call speak only as of today's date, and we undertake no obligation to update them to reflect subsequent events or circumstances other than to the extent required by law. For more information, please refer to the risk factors section of our annual report filed with the Securities and Exchange Commission on September 4th, 2025, and in other filings that NDAAVA makes from time to time with the SEC. Also, during the call, we'll present both IFRS and non-IFRS financial measures. While we believe the non-IFRS financial measures provide useful information for investors, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with IFRS. Reconciliations of such non-IFRS measures to the most directly comparable IFRS measures are included in today's earnings press release as well as the investor presentation, both of which you can find on our investor relations site or on the SEC website. The link to the replay of this call will also be available on our website. With that, I'll turn the call over to John.

Thank you, Laurence, and welcome, everyone. We appreciate you joining us for our second quarter fiscal year 2026 earnings call. Earlier this month, Endava passed 26 years since its founding. During these years, we've been through significant technology shifts, each time with a founder mindset intent on driving transformation as fast as possible in order to emerge as a leader. Today, my mindset is no different as the AI shift is underway. Over the past several quarters, we've been investing heavily in our pivot towards AI to establish Endava as an AI leader. These investments have encompassed recruitment and training of next-gen talent, introducing a shift towards becoming AI native, building our partner ecosystem, and evolving our engagement strategy. I'd like to flag some highlights of the quarter. Revenue totaled £184.1 million, representing a 5.9% decrease year on year, and up 3.3% from Q1 FY26. We're seeing strong initial interest with clients on Darva Flow, our AI native engagement lifecycle. We continue to expand our network of strategic partners and broaden several existing relationships, further extending our reach. A Paynet Nets joint venture, recently appointed as Nexus Technical Operator by Nexus Global Payments, has selected Endava to design and build its cloud-native cross-border payment switch on AWS, underscoring our depth in the payment vertical. We believe we are building the operational agility required to achieve sustainable long-term growth. Over the quarter, we advanced several enterprise-scale AI projects that illustrate both the breadth of client demand and the speed at which AI-native delivery models can create measurable impact. We're helping a leading global payments network modernize a critical driver of revenue the chargeback dispute system that currently needs more than 1,000 people to run. The challenge is a rule book that amounts to thousands of pages and is hard for anyone to follow. Our system uses AI to read those rules, turn them into clear, checkable logic, and link each one to the right data so cases can be routed and analyzed automatically. Halfway through the six-month projects, early results are promising. The new system is easy to use, fully auditable, and will sharply cut manual effort while making decisions more consistent when it goes live. Over several years, we've helped a leading global specialty insurer use AI and data science to streamline pricing, insight generation, and automated data ingestion. Traditional operating models limited impact, so facing increasing competitive pressure and new entrants, the insurer committed to a faster AI native approach. Working with the client, we set up a ring-fenced incubator inside the organization that can build an end-to-end AI native insurer while keeping clear governance and visibility for leadership and underwriting teams. The program has three linked workstreams. Digitization, the automation of submission, data enrichment, pricing, and quoting. Hypothesis-driven change, which tests value-add ideas such as new data sources and new revenue models. And tactical value creation, which feeds proven ideas back into business as usual in partnership with stakeholders. To date, the digitization workstream has been rolled out across two business lines. Using agent-based delivery, we stood up a fully operational AI-native workflow in roughly three weeks and built a backlog of more than 50 improvement hypotheses. Though still early, the results underline how rapidly AI-native capabilities can scale when governance and execution are explicitly tuned for speed. These milestones show that the initiative has moved beyond experimentation and is now entering a more mature, scaled phase of AI implementation across the organization. Let me now turn to DAVA Flow. client interest continues to build. Clients report faster delivery, tighter control, and full traceability versus legacy models. In a recent project, we opened with a signal session, the first step in an engagement, where agents and teams capture, enrich, and interrogate markets, clients, and operational signals to test assumptions and define a clear value hypothesis. In just 90 minutes, the session gathered live inputs, ran synthetic workshops, and produced an opportunity assessment, market and strategic insights, product requirement documents, and an agent-ready backlog, work that would normally take several weeks. Two live DarvaFlow engagements now sit at different delivery stages. Early results show higher productivity, better quality, and strict policy adherence. Autonomous agents manage routine tasks under policy as code governance, freeing engineers for orchestration and critical decisions. Over the coming quarter, we expect to broaden the delivery portfolio, convert growing interest into larger outcome-driven programs, and further refine the model using feedback from live engagements. I will now turn to recent developments in our strategic partnerships. January marked the completion of our first year as an official services partner of OpenAI, and we are seeing growth in demand as clients scale proofs of concepts into enterprise-wide deployment of enterprise chat GPT. Our partnership with OpenAI's go-to-market team is resulting in a pipeline of potential opportunities across industries such as insurance, healthcare, and life sciences, and public sector. In collaboration with OpenAI, we've been engaged by Evoke, one of the world's leading betting and gaming operators, to roll out enterprise-wide chat GPT enablement and role-specific AI training. that supports responsible generative AI adoption and measurable productivity gains. Additionally, last quarter, we broadened our expertise across OpenAI's product suite, continuing to graduate additional sales and technical specialists from our intensive training programs across APAC and EMEA. Demand for our services across all three of our major hyperscaler partners, AWS, Google Cloud and Microsoft Azure, is accelerating, primarily fueled by clients' core modernization initiatives to retire costly legacy systems and by their accelerating adoption of AI solutions. With AWS in particular, we secured several notable wins and renewals, particularly in the financial services sector in the UK, USA, and Asia Pacific. Clients are asking for repeatable proven solutions that de-risk technology change. In response, we released two new AWS marketplace offerings, cloud application engineering and an AWS landing zone accelerator. Our multi-year strategic partnership with Paysafe, a leading payments platform, aims at enhancing innovation in payments and digital community engagement, notably fan engagement. As part of accelerating DAVA flow, we have forged two complementary partnerships. First, with Miro, by embedding their AI innovation workspace across our global delivery network. Through this process, we increase the speed of decision making, improve team alignment, and enable scalable AI-driven workflows that provide clients with greater speed and confidence in their AI transformation journey. Second, our partnership with Cognition broadens the reach of our agentic coding, giving thousands of AI native engineers access to Windsurf and Devon and strengthening our joint go-to-market for enterprise-grade outcomes. Together, these partnerships deepen the capabilities of Dalva Flow, from collaborative ideation through automated code delivery. creating an end-to-end AI-powered change delivery engine. We believe our partner ecosystem, ranging from global hyperscalers and sector leaders to emerging scale-ups, is essential to both client outcomes and our profitable growth. To support this initiative, in November, we launched DAVA Rise, a venture acceleration program that converts startup innovation into solutions deployable at enterprise scale. By connecting high potential ventures within Java's AI-native global delivery capabilities and established client relationships, Java Rise accelerates the path from concept to enterprise-ready solutions. This collaborative model gives clients access to emerging technologies that address specific business challenges and deliver measurable impact across industries. We launched the inaugural DavaRise cohorts in partnership with Octopus Ventures, selecting ventures in their portfolio whose offerings align with identified client needs. I'd like to highlight several client wins that demonstrate the tangible value we are delivering. As I mentioned earlier, a Paynet Nets joint venture recently appointed as Nexus technical operator by Nexus Global Payments has selected Endava to design and build its cloud native cross-border payment switch on AWS. The platform is intended to interconnect national instant payment systems into a single real-time network, advancing global interoperability. The appointment of the Paynet Nets joint venture follows a competitive multi-vendor tender and underscores Endava's expertise in real-time payments architecture and delivery. We extended our strategic delivery commitments with two of our largest payments customers, reinforcing the strength and retained trust and delivery assurance we continue to enjoy with these major industry names. We worked with Accor Plus, a leading lifestyle loyalty subscription program in the hospitality sector, to successfully overhaul their payments infrastructure and loyalty program across Asia-Pacific. In the first phase of the project, we replaced their legacy processor with a scalable plug-and-play solution, simplifying the loyalty architecture to support rapid membership growth and deploying the solution across 10 markets. In the first 30 days following launch, product page conversion increased by 39%. providing a core plus with a more reliable, scalable foundation for future expansion. At the end of December, we expanded a strategic partnership with a manufacturer of electric vehicles, replacing a leading global technology services competitor in this arena. The new Workstream adds an AI-enabled digital CRM to raise delivery efficiency and elevate customer and digital experience. Endava has entered into a three-year strategic partnership with BOEX, a banking-grade software company that simplifies the B2B trade of goods and enables the secure, compliant digitization of international trade processes. Our partnership supports the development and expansion of BOEX's product portfolio, giving organizations the confidence to operate at a scale that was previously too complex and costly for most. Additionally, Through Endava's DAVA Rise program, Endava is working closely with BOAX to accelerate product build outs and take advantage of mutual partnership opportunities. Endava is partnering with a global life sciences company to turn its agentic AI prototypes into governed platform supported products that can be measured and replicated across the business. The program accelerates delivery of safe, repeatable AI at scale while defining and helping implement the organizational changes needed across talent, operating model, and the culture for the company to become an AI-first enterprise. To drive adoption and demonstrable results, Endava has also introduced dynamic solution squads that co-create with domain owners through a structured outcomes-focused approach. We ended the quarter with 11,385 endowments representing a 2.4% decrease from the same period last year. We continue to streamline roles in areas of softer demand while broadening and upskilling our AI talent base, embedding new capabilities across the business to help clients integrate new technologies into their workflows. Before we close, I want to thank every endowment. Your dedication and professionalism continue to steer us through a fast moving technology landscape and convert change into tangible results for our clients. I'll now hand over to Mark for a closer look at our quarterly financial results and guidance for the upcoming quarter and the remainder of the fiscal year.