Shares of Endava Ltd (DAVA) plummeted 29.35% in intraday trading on Tuesday following the release of disappointing first-quarter fiscal year 2026 results and lowered full-year guidance. The digital transformation consulting company reported a significant year-over-year revenue decline and lower earnings, falling short of market expectations.
For Q1 FY2026, Endava reported revenue of £178.2 million, representing an 8.6% year-on-year decline, or a 7.3% decline at constant currency. Diluted earnings per share fell to £(0.15), compared to £0.04 in the prior year period, while adjusted diluted earnings per share decreased to £0.15 from £0.25. The company attributed the disappointing results to an unexpected client credit issue and certain anticipated pipeline opportunities not converting into revenue as expected.
Adding to investor concerns, Endava revised its full fiscal year 2026 guidance downward. The company now expects revenue between £735.0 million and £752.0 million, representing a constant currency revenue change of between (4.5)% and (2.5)% year over year. Adjusted diluted earnings per share are projected to be in the range of £0.80 to £0.88, down from the previous forecast of £0.82 to £0.94. Despite the challenges, Endava announced a positive development in securing a multi-year strategic relationship with a leading payments company, valued at up to $100 million, which was not enough to offset the negative sentiment surrounding the results.
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