Endava plc

Good day and welcome to the NDAAVA third quarter fiscal year 2026 conference call. 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 your telephone keypad and to withdraw your question, please press star then two. Please note today's event is being recorded. I would now like to turn the conference over to Laurence Madsen, Investor Relations Manager. Please go ahead.

Thank you. Good afternoon, everyone, and welcome to Endava's third 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 Q4 fiscal year 2026 and for the full fiscal year 2026, the impacts of headwinds facing our industry and business, trends in our industry, including with respect to developments with AI, enhancements 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, our long-term strategic positioning 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 statements. Actual results and the timing of certain events may differ materially from the results or timing predicted or implied by such 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 Security 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 RFIS. 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 relation website or on the SEC website. A 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 third quarter fiscal year 2026 earnings call. I'll address first the issues that are top of mind for the investment community. This has been one of the more challenging periods Endava has faced in recent years. Demand conditions remain uneven across several sectors, deal cycles continue to be extended, and clients are scrutinizing technology spending more carefully than at any point since the macro slowdown began. Against this backdrop, the primary driver of the quarter's miss and the lowered Q4 guide was a slower-than-expected pipeline conversion. Factors impacting the revenue miss in the quarter and the lower revenue guide include clients located in the Middle East delaying work due to the ongoing conflict, a slowdown in overall client demand due to the macro and economic environment arising from the complex, And finally, large complex outcome-based contracts taking longer to execute than planned. During the quarter, we took a goodwill impairment of £364.6 million, which is a non-cash accounting adjustment, which does not impact our liquidity, delivery capability, client commitments, or ability to invest in the business. Mark will provide additional details on these items shortly. Although we're disappointed by these outcomes, we believe it's important to distinguish clearly between near-term execution challenges and long-term strategic positioning. Over the past several quarters, we have accelerated our transition towards AI native delivery, expanded relationships with leading hyperscalers, deepened our presence in payments transformation and increased engagement with senior client decision makers pursuing enterprise scale AI initiatives. What we are seeing now is a market moving beyond experimentation. Clients are increasingly looking for partners who can help them operationalize AI securely, integrate it into complex enterprise environments and connect investment directly to measurable business outcomes. Each new wave of technology change has triggered the same entrepreneurial reflex inside Endava. Move first, learn fast, and scale what delivers impact. The rapid emergence of artificial intelligence is simply the latest inflection point. And in recent quarters, we have concentrated talent, investment, and partner collaboration on embedding AI across our delivery model to ensure Endava is ready to lead clients through what comes next. Robust, enterprise-grade IT services are essential for enabling AI leaders to scale their products safely and quickly. And thanks to our deep AI native delivery framework and expanding partnership with both OpenAI and Google, We believe Endava is well positioned to provide the secure integration, cloud orchestration, and compliance layers that make that growth possible. This quarter, we made strides in our go-to-market approach and in the evolution of our business model. We are transforming our go-to-market approach by engaging directly with key decision makers to show how AI can accelerate their transformation priorities while deepening partnerships. We're moving to outcome-based contracts. For example, PGX, a modular accelerator call for next generation payment platforms delivered through a data flow ties our success to measurable improvements in clients' payment operations. We're continuing to progress selected client engagements as part of our AI native shift with data flow. We now have 12 clients where data flow is deployed as compared to three last quarter. We're seeing progress in our shift from a traditional digital transformation business towards an AI-driven business. These initiatives and others like them have moved our AI-driven business up from 5% of total revenue a year ago in Q3 FY25 to 15% of total revenue in Q3 FY26. or 27 million pounds. This shows the scale of the pivot Endava has undertaken during the past 12 months, and now gives us an AI driven base that we believe will continue to expand. Margins on this AI driven business are higher than our traditional digital transformation business. Let me share a few headlines for progress on this shift in the quarter. As part of our go-to-market pivot, we expanded our strategic partner network, enlarging our market reach and solution set. I want to highlight our recently announced collaboration with Mastercard, which combines Indava's AI-native engineering and industry expertise with Mastercard's global reach and data-driven products and services. Together, we believe, we have a powerful engine to accelerate the adoption and scale of next-generation payments and immersive experiences for Endava's clients worldwide. We aim to unlock value at pace, bringing solutions to market faster for Endava's clients with initial focus on high growth sectors, such as insurance and healthcare, with additional attention on telco, mobility, and travel. On AI adoption, clients are moving beyond isolated productivity pilots. They now want to create AI native initiatives inside their existing organizations and to launch entirely new businesses that embed AI in both build out and day-to-day operations. Although these engagements sit at different stages of maturity, we're seeing increasing numbers implemented into production. Adoption is becoming more operational, more governed, and more tightly linked to measurable results. Over the coming quarters, we will focus on expanding our delivery portfolio with the goal of turning this interest into larger outcome-based programs. As part of our go-to-market strategy, we are investing strongly in partnerships, particularly those with the hyperscale. By combining our depth of industry expertise with the scale of AWS, Google Cloud, and Microsoft, We are producing accelerators and marketplace solutions that tackle our clients' most complex challenges. We expect to launch more than 15 marketplace offerings this year, of which 10 are already live. And we are aligning Davaflow with each hyperscalers platform. Together, these initiatives are expected to cut time to value and help clients realize measurable returns on their technology investments. Today, I want to share some of the momentum we're achieving with Google. Through our collaboration with Google, we've added new clients this year, particularly in financial services, retail, and gaming. Enterprises are partnering with us to accelerate their cloud transformation and harness Google's AI capabilities. For long book insurance, we migrated and set up the AI security guardrails on an AI-driven underwriting platform for warranty and indemnity insurance. making a transformative step forward in digital underwriting. Built on Google Cloud, the solution uses advanced AI to automate key stages of the underwriting cycle, from submission triage and risk assessment to pricing and due diligence, while keeping underwriters firmly in control through a human-in-the-loop dashboard. Their innovation in AI-powered insurance and insurtech is designed to support considerable productivity gains, cost reduction, and speed to revenue for Longbrook Insurance. Building on our enterprise AI progress, Google has invited Endava to participate in the Google AI Agent Partner Program, a program traditionally limited to their largest global system integrators. The initiative, now open to a small cohort of AI-disrupted partners, recognized for expertise with Gemini Enterprise and Vertex AI is already generating new strategic engagements in North America, APAC and Europe. For example, we recently finalized an agreement to implement Gemini Enterprise at a leading UK high street bank. The project is expected to deliver an enterprise grade agent gallery that lets the bank's developer community register, govern and discover custom built agents. fully integrated with Google data platforms, such as BigQuery and Cloud Storage. The solution is expected to provide timely, actionable data that improves efficiency and supports revenue growth at scale. A year ago, we began applying our AI-enabled engineering expertise to longstanding client needs in payments, a domain where we have more than 20 years' experience. modernizing gateway and merchant services estates. We believe the sector now faces three concurrent requirements. One, lowering the marginal cost of scaling. Two, tightening operational efficiency and control. And three, keeping run to innovate around embedded commerce, omni-channel acceptance, platform consolidation, and marketplace models. Our answer is PGX delivered through DavoFlow. BGX provides a reusable core, spanning digital acceptance, orchestration and routing, merchant portals, onboarding, settlement, fraud management, developer tooling, partner-slash-ISV enablement, and back-office services. So clients can modernize selectively and still differentiate at the product and experience level. Shared configurable components cut scaling costs. Standardized orchestration and back office services boosts efficiency and leaves headroom to innovate. Crucially, PGX supplies the data and workflow layer needed to introduce AI-enabled operations and agentic commerce across the front office, onboarding, servicing, and back office. Built with agentic AI and strict human-in-the-loop governance, PGX demonstrates that accelerated AI-assisted engineering can meet the quality and compliance demands of complex regulated payments environments. Early market reception is encouraging, with new signings in the last three months. Interest is already expanding beyond financial services into other sectors where modern payment capability is becoming central to customer engagement, efficiency and growth. First, we have been selected as a strategic partner with TIL by NatWest, NatWest Group's merchant payments arm, to modernize and expand its payments acceptance platform. Under the partnership, Endava will deploy DavaFlow together with components of PGX to speed the rollout of new fully integrated products and services while improving flexibility, scalability, and end-to-end performance across the payments lifecycle. Working jointly, the two companies have mapped a business and technology roadmap that links specific feature deliveries to defined market opportunities and associated revenue targets. For NatWest, the partnership represents a material investment in strengthening its merchant payment offering. For Endava, this partnership adds an additional and significant large-scale complex engagement with a leading UK financial institution, reinforcing our credentials in payments transformation. Second, PGX continues to gain momentum with two additional wins, one with a global payments provider and another with a pan-European energy retailer. Both clients chose the accelerator to cut operating costs, simplify estates and accelerate time to market. DataFlow supplies the delivery engine that converts these modernization programs into measurable commercial value and seamless connectivity to ecosystem partners such as payment schemes, acquirers, POS hardware, and compliance providers. Some other client wins. We have also recently renewed our longstanding partnership with Slovenia's Ministry of Finance and Financial Administration through to 2028. bringing the relationship to more than two decades. Under the new agreement, we will continue to operate and enhance eDAVKI, the national tax portal that serves hundreds of thousands of taxpayers, integrates over 200 tax-related services, and processes more than 12 million electronic documents each year. eDAVKI delivers a secure, integrated experience that has eliminated postage costs, accelerated processing times, and given the authority near real-time visibility across its core revenue systems, demonstrating Endava's ability to modernize mission-critical, high-volume platforms at a national scale. The insurance company, North Standard, now regards Endava as a trusted extension of its technology organization, combining strong cultural alignment with deep technical expertise to deliver consistently high-quality outcomes. The success of the partnership and the value delivered by our team gave our client the confidence to extend the engagement for a further two years and expand into additional roles and delivery teams. Our collaboration with a global brand and vehicle manufacturer has progressed from standalone engineering projects to an embedded partnership that has designed, built, and operated cloud native data platforms for connected vehicle services, real-time performance monitoring, provided around-the-clock support services, and delivered logistic systems covering more than 80 facilities in nearly 30 countries. We are currently using AI-enabled delivery frameworks to create modern production operation systems designed to improve lifecycle management, enhance data visibility, and raise efficiency in production-critical environments, all underpinned by our disciplined approach to high-performance, scalable, and compliant architecture. Let me turn to Davaflow and AI projects. Over the quarter, Davaflow has shifted from exploratory use to enterprise adoption. We enhanced the framework through a combination of partnerships and by applying it in two large-scale live engagements. Firstly, a large-scale implementation engagement in a regulated high assurance environment. And secondly, the Nexus Technical Operator Programme, a previously announced engagement in the payments vertical. We have also continued to advance an AI-enabled human movement analysis platform for a leading high-performance sports organisation, with the quarter focused on validation robustness and operational readiness. Working closely with domain experts, We refined evaluation logic to improve alignment between system outputs and expert expectations, strengthened the core analytics pipeline, and expanded synthetic data sets to improve performance across real-world scenarios. We also introduced more structured measurement through accuracy dashboards, regular comparisons to previous versions, and standardized evaluation against labeled data. Although still early, the increasing level of stakeholder validation underlines that the program is moving steadily towards a production-ready solution. We applied the same agent-centric principles to a very different challenge, streamlining engineering knowledge for a European-based media and entertainment group. The client struggled with fragmented engineering knowledge locked in Jira, Confluence, GitHub, and Microsoft 365. which lengthened incident resolution, delayed sprint planning, and hampered onboarding. Indaba delivered a Google Cloud agent space pilot that unifies these sources behind a secure role-based natural language interface, automatically retrieving the most relevant tickets, code, and documentation in one view. Since Go Live, engineers report a roughly 60% reduction in time spent locating material, and cut onboarding time by 30%, translating into faster coordination and measurable gains in overall delivery productivity, whilst also validating our agentic approach and further strengthening our partnership with Google Cloud. To conclude, I want to thank our employees across Endava. Our teams continue adapting quickly to technological change, while supporting clients through increasingly complex transformation programs. We remain focused on discipline execution, operational accountability, clients' delivery quality, and positioning Endava for long-term relevance in the next generation of enterprise technology services. With that, I'll hand the call over to Mark, who will walk through this quarter's financial performance and our guidance for the rest of the fiscal year.