DAVA - Earnings call transcript Q3 2022

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Operator

Good morning. My name is Rob(ph), and I will be your conference operator today. At this time, I would like to welcome everyone to the Endava Third Quarter Fiscal Year 2022 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question-and-answer session. Instructions]. [Operator you. Thank of Head you begin may Laurence Investor conference. your Madsen, Relations,

Laurence Madsen

welcome morning, Call. Third Good you. to everyone Conference Thank XXXX and Endava's Year Quarter Fiscal

a being call this As recorded. reminder, conference is

Executive are Cotterell, Chief today Officer. Mark me Joining Financial Endava's Chief Thurston Officer, John Endava's and

we to listeners. quick reminder a begin, Before our

geographic for future our the remarks year full expansion. Our guidance XXXX include growth perceived year fiscal and statements, forward-looking of today regarding opportunities fiscal anticipated and XXXX and our statements including QX and for

digital many regarding and benefit and Endava's demand expectations to our businesses Our transformation of our ability industries, and advances, to expand our client of for necessity expectations existing The Endava digital ability partnerships, Anticipated for therefrom. technological services. industry companies trends. Potential transformation future for and relationships.

which attract of the by forward-looking retain to implied as date. the performance. results of an statements results forward-looking to could execute no be events the extent to indication And only refer law. speak multiple And statements may as today's are subject Actual during our the XXXX. the XX, Factors events Risk this those statements. measures other contains non-IFRS annual by Please XX.X during ability factors certain in IFRS the measures. included objectives, Please forward-looking made both present subsequent statements. timing the press reflect today's financial as them important on call predicted contained filed IFRS can of of of to other from or to than to actual required conference filed A sustainability update company undertakes results circumstances which earnings and note be on section and on that, forward-looking in timing well Commission considered call in the results link obligation or F the website. to that I'll report a the SEC our or actual contained on our employer statements reported XX future not and results, also SEC call, find could risks from Also, geographies. is such with and materially the should reconciliation that as employees and Exchange X-K, as or of September XXXX, that these you and statements. differ And Investors and cause These on any report ability forward-looking Securities in those The the in over from of choice to to Our of uncertainties we'll materially Relations call to current our differ on updated non-IFRS the there. XX, materially available to replay release, Form Form cause Exhibit John. With March turn this with to discussion differ be will to our

John Cotterell

existing where report on. take to business supply carefully to business favorable continue therefore expanding pleased We and ones. in we balance remain the we selective environment XXXX. on Thank be performance like you for update financial all three business joining ended months us well. to to pleased here our XX, you on you're thank and demand that work very in a and the provide very I'm be we with an taking I and to new for We're Laurence. March hope all outweigh I'd today clients

a of very potential not Central impacted Ukraine. been mindful ability in the to serve centers. the risks we in And our locations clients war thoughtful we remain as Europe the Our managing for delivery has by to choose geopolitical from countries And about where expand.

over should across period delivery location, multiple individual any risks year reported and for business effective, QX planning multi-site £XXX.X fiscal delivery clients a the revenue for for to our be increase year-on-year in the XX.X% £XX.X prior XXXX, spreading provides of one constant million, £XXX.X representing period contingency model making period XX.X% And year. required. of in associated of a ended highly the delivery agile distributed with £XX.X tax in a a from reducing the our million million currency representing centers, increase year. from Additionally, million the approach, with year-on-year adjusted for prior quarter it in We an in same profit the same

new the of work revenue increased continues the The scaling the at quarter. expansion year, the ended our quarter growth driven clients. the in by same projects of Our with spend acquisition the be to clients, these growth clients larger accounts and for existing increase. by the continued from a both active of of the strong ones and year-on-year period existing XX.X% continues drive to clients XXX We up XXX of and end the prior during

last us year, increase. grew Importantly, number of representing year-on-year a with total paying XX.X% excess in year we period £X same compared a XXX the the larger of clients to of £XX in per clients billion

of strongly XX our continues spend and to average March XXXX. months the was the grow the top in year-on-year XX.X% XXst, up Additionally, ended clients three

continues for ended and XXst, the XXXX. March U.S. three America revenue the the to North expand months in strongly business from Our grew XX.X%

by well the intact in sub-segments Revenue in of driven by growing and Over payments all with strong financial quarter vertical. same strong demand insurance, vertical last growth the year, banking and and markets fiscal as our capital as in year-on-year, that and XX% particularly services mobility.

and interest strongly. and we're of its an expanding data while chain Our believe We be demand applications. key XX.X% as around clients many Healthy other There emerging to ecosystems a seeing of frictionless industries our are year-on-year, metaverse mobility opportunity such this supply continues the topic much it, remains transformations driver. occurring technology as Endava autonomous represents entire in vertical digital the also an broadening by from grew acceleration. in of being as driven [Indiscernible] payments, for pressures. the with Up insights, very vehicles, area

reality augmented Microsoft's headsets of and are For already virtual like interest increasing practical using example, HoloLens. in we seeing an applications

XD virtual to business applications, and logistics for recently for consumer applications showing training areas experiences industrial have and the applications toys, furniture developed and We tourists. rooms, like workers, for assistance virtual

user skills, XD suited services, work software testing often our projects acquire including infrastructure, on Such All also to automation, data blend teams back-end other analytics, work involve of to ideally design, well. these teams. specialized experience, applications are lead or cross-functional and as and or delivery for for of graphical a generating engineering,

solve We Creator growth Unity are technology investing good as problems. leverages joined recently customer Unity in network, we see And the the space opportunities. to Certified other which

power the center metaverse is innovative diverse, on creators the economy. membership-based Endava as of The three-day. With the of focused real-time ecosystem at putting such

based and Endava We're the both been when tools on We're demand working the in platform of gaming transact also which working application segments, the expand chain for services publishing token-based in with banks, media standardization a North products participants reviewing as also consensus, metaverse, commodity highlight accelerating leads working operations, in the providers the world's the in virtual and to been and that vertical, reusable in line working to NFTs. and largest a We've Comngo, with infrastructure. agricultural the with deliver heavily their also companies, has working and gallery provide the our in as several transact seeing and we flexible offerings. platform building trading their next together of design platform, productivity based early product efficient of we're on the execution a we'd the user with In for and securely monetize well oil block company America visualization, technology economics technology a through will increased to and documents. industry's number streamline businesses authorized their U.S. gaming with leading towards finance to block clients, view and chain disruption games. back-end servicing European, a and both scalable chain micro to on of network XX that their We're Covanta's of of to for fundamental of agricultural expertise trade decentralization of platform, [Indiscernible] trade a As platforms the next-generation engineering like global [Indiscernible]. on iteration we noticed platform issuance American the backed technologies. movement some and Europe. bulk clients building for North it management. helping our are Ethereum with for the software including focused company, Starting global where telecommunications leading block evolution an automation by media the using internal will metaverse enhancing trading and enabling comes blockchain-enabled We're of

a processes They mosque, on, million De autonomous worlds. teams. active monthly software we're interacts running whose scrum on the the few sophisticated, WebX with small games, approximately have ecosystem. of with applications, universe data-driven team, which and with many Also of Endava goal measurement media organizations, marketplaces, on -centralized media, financial global XX We include Mehta which advertising include a [Indiscernible], works -centralized working primary a chain software to platforms base business in optimization NFV transparent user at block is metaverse and grew more a Finally, company, users over later create last video to started protocols. de applications. years, way

technology with the vast new media areas as of we've scale new also experiences. for the gaming disruption of European into latency and wave disruption of In a a the this client, a gaming telco supports aligns bought, large see is the accelerated of telecom in created of is mobile and leveraging goal scaled vertical cloud-native to experience. XG long-term how redefine theme, opportunities media, XG availability their to unprecedented has line delivered supporting sold. Our we and Similar partnership networks low evolution with platform, the enable to technology moving valued, recently period

a By year. period models, we adoption a from conversions with keeping grow XX,XXX transactions. partners offerings, That's commerce platforms, demand, increased XXX with with facilitate layer [Indiscernible]. frictionless stabilize look over and key with as ended We recently $ managing service their XX.X% their about able and experiment increase customer increased monitor joined are e-commerce merchants in business space partnership time the allows partner. reach as same of tools expertise them gateway to a This European the To same connecting ecosystem over currently by are They from critical business upgrading of provide to X,XXX pace this quarter merchants customers escalating with adaptation. We another with and software SaaS last experience. continue large to the business. $ that complex with to applications excited the of area to very also platform part innovation rate and of is and track and unit We're with I'm Endava that payments for client, XG application direction travel For low-vol in Further, clients. strategic new the 's evolve supporting Stripe. our platform. announced Stripe telecom growth on ecosystem perspective. our customer payments we new new people and new

While located need. recruiting our people countries recruiting the our in competition we talent unchanged. success retaining And we intense, the I'm for is on talent focus where in pleased best are that the remains and

continue geographical and our diversification. We expansion

team expanding locations Poland, Toronto, delivery We centers in and In several plans add our in Walbrzych are the Gdansk coming and have more currently Canada. in to we two months.

our progressing center with actively Monterrey, where Our well expansion in recruiting. Mexico are we is in delivery

Malaysia, also opened APAC Dubai, center in Lumpur, to UAE. new in customers, very clients to close location and We a delivery service recently our a Kuala

XXXX up continued give demand Endava over opportunity to region. ambitions. our Endavans LATAM We ended going support North America, professional the the meet to Additionally, to accelerate quarter we staff year-on-year. in in At we're to their the and our XX% the continue for them presence. in growth with achieve strong

program, master them offered is being we of their help focused goals One well well achieve classes recently our which on award-winning mental tools to and our being. workshops, Endava

through for As and on losses, awareness friendly the work workshops, together mask practices, environmentally we we're getting and home both in come relevant caring on environment, at digital increasing resources. keen at

one Campaign and the campaign, example You our culture. of our our aims has tree by plant this both each to an a Program at [Indiscernible]. we sent of been furthering thank-you Thank Year ecological our As I'm note delighted CSR addressing another, recently Endava Endavan that Under efforts, the Forest for awarded collaborative

donation We forward yous. sending our forest the locations wanted have together so trees we launched five an more planted sharing our keeping e-thank mash are to and Endava humanitarian look gratitude XX,XXX and we Ukraine, being XX,XXX growing continue planted we and May. million. as €X We to Endavans in near to by raised respond crisis of employee in campaign

results, services front and remains confident to of We're demand Our our combined on Moldavia help execute Ukraine of us global Ukrainians and remain our will Romania. the to our in the borders efforts ground in on thousands our and objectives. our for excited strong. with at the NGOs of navigating by donations environment macroeconomic Demonstrated ability remain and financial in about challenging a opportunities working

for I've performance and our Let and business adaptability me they deliver end excellence and by clients. our who quarter thanking provide I through will continue call quarter now the to their fiscal enable our the guidance to just the for the and people innovation, our for as the on the resilience Mark, financial discussed. and pass that you They will for coming walk opportunity quality, to year. results

Mark Thurston

in was increase a XX.X% compared the the million was million the XXXX compared tax ended same prior period same in constant period period £XX.X year. months currency, three fiscal Profit same £XXX.X to for a before totaled prior million the year revenue in QX £XX.X million revenue Endava's over in March for year the in John, £XXX.X to prior XXXX growth in year, the rate our XX.X% Thanks a

tax adjusted same March ended the year. period the Our three in profit for prior XXXX million million before to was XX, the £XX.X for compared months £XX.X

adjusted total the three currency a is ended acquired exclude company's tax which revenue, tax, all the gains, compared months is PBT defined Adjusted of for Our of unrealized in the as margin adjusted prior percentage non-cash before compensation the to same was impact period are the year. to as and and XXXX, expense, margin realized MoSys, of for XX.X% intangible XX, PBT before share-based PBT XX.X% tax before adjusted amortization profit adjusted or profit of items adjusted profit assets exchange foreign March

John Cotterell

was diluted period ten XX% months diluted £XX the eps calculated for year, XX.X fiscal ended revenue million XX, our three adjusted three revenue calculated largest on XX, from shares for compared to compared for Our for same ended same last for months XX XXXX period the of £XX on March million as March prior the to year. $ $ XX% XX-XX, accounted China's, clients the to the in

And fiscal for largest America £X.X representing average spend in for year-over-year the for XXXX. our XX the increase. million for clients period year. from months Additionally, increased for revenue of compared XXXX March the the ended XX, the ended same for XX% of unchanged of last three per to America three year XX% X%, unchanged March last fiscal ended XX.X% over the period the XXXX, fiscal million a of North accounted in year, Europe period same the of the months In from March XX, same to revenue revenue last quarter North the months year. client XX% period accounted to XX.X% same XX% UK year. Revenue £X.X fiscal while three from XX% rest accounted from last fiscal accounted XXXX, the same the XX, compared from grew world

Mark Thurston

grew XX, the all services X in XX.X%. X payments of and in revenue from XXXX accounts Comparing for of world financial the the revenue compared prior ended XX, the months from of quarter which year. Revenue XXXX quarter same non-current compared our for year. is same March XXXX plus to last grew provided activities period and XX.X% X cash the Revenue XX% fiscal of for accounted XXXX. from TMT XX.XX% year. industry and Europe adjusted our for during operating compared of same assets. and ended XX.X%, rest same quarter. the accounted free grew the the turn financial period and XX% of XX, We less by in from flow, Revenue months, verticals and other to in March Revenue the for grew purchases revenue XX% now now our of periods, prior March We grants net XXXX cash net grew to XX.X% grew services UK revenue X payments grew from to the of received the of months for XX.X%, in the XX% XX% ended in over same three same intangible tangible period XX%

XXXX, for the strong. cash March XXXX achieving the cash £XX.X year. to last compared of All for XX-XX, XX, At XX a Our XXXX. ended as ended adjusted £XX.X at same X.X% cash to a three period last million million X.X% fiscal in XX, CapEx revenue period and million £XXX.X the same March March was XXth, months three during end million year. months percentage the fiscal compared the period remain £XX.X was flow free compared equivalents to

Our guidance year growth will XX% adjusted diluted expects is constant to pence for fiscal revenue representing be Endava eps of million the range QX, XX a a of of in to as follows. in currency share. XX%. per be million to revenues expects XXX XXX range XX to between XXXX Endava

guidance year £XXX guidance will million, as Q&A. for adjusted range and growth representing QX ready fiscal Endava the one we and rates exchange expects XXXX are per X.XX XX.X%. comments. year million end to is of pound year £X.XX of share. This assumes the full XXXX, that exchange £XXX EPS diluted in be the be to rates full £X.XX and prepared the Operator, Our at revenues This Endava the expects XX.X% follows. of to British our $ now of above between concludes fiscal open year euro. for range X.XX in XXXX constant April, was when year currency to fiscal for line to the

Operator

of Shirvaikar And question your Citi. Ashwin from comes Instructions]. the first from line [Operator's

open. is Your line

Ashwin Shirvaikar

tough that you a talk seems Good your that was head things growth morning. growth, My your the adapt Could pretty regards how more to all you on market count head you approach, Good count recruiting front. with obviously, Well, quarter little the just continued to like of in well. quarter. Hope question breadth solid. where you're with recruit tactics, regards to to, your given having are be

Operator

some gentlemen, difficulties, and Ladies experiencing Please we're live. We're technical standby.

John Cotterell

we on a really recruit the problem we can question, how on our organization. end, on but just yes, hard continue into we up It that. Apologies people your for focus technical to great looks had like following

attract in As you the we know, that requires evolution recruiting. of we We choice seek that and the to we're constant and cities locations way operate of in be employer in which our actually [Indiscernible] that the highlighted recently participate that that and safe we to has business. scheme to in share the into enables Endavan the helped every equity of improved business

are, the in Latin ahead diversifying I so saw area. on, in and We as months America. as growth pushing over been last also, Central say a strong touched big, such new start off other is in Latin Europe Mexico has XX will We push countries you XX% there America into Poland.

expanding refining on. footprint by to that So our headcount different and continuing We're in were you geographical success proposition growth that markets. touching in employee see

Ashwin Shirvaikar

then And with greater past. with commentary regards is to the consistent supply being demand than the

which you as in applies key there had said also in and that it so review you walk line of that client to in for type also through look you You we of I'm assuming clients. Might coming useful -- be factors being some conditions, selection terms opportunities. the speak, Ukraine, from Russia, that you're as terms a relates if business selective maybe opportunities to could Belarus

John Cotterell

Yeah.

Belarus. Ukraine, clients we to no or be Just very stuff in or clear, have Russia,

Ashwin Shirvaikar

[Indiscernible]

John Cotterell

And plans so. to Yeah, no do yeah.

delivering grow share on working want way. where that our see positive significant is models. client's clients we is project to technical And scale a prioritization on that so can really relationship then we single industries actually the we much a don't develop We're on less for if in we to by felt clear, relationship prolonged where expand. Our long-term can new can think wallet the impact business our interested we some transformation clients

That those the of diversifying geographic that other is and The vertical into spread are mix focus verticals change. on that of to across and experiencing business helps dimension globe to get the us clients. some technology-driven

the those here suppliers you of criteria the Russia, them opportunities We seeing apply and applied other. you coming Belarus we to to Ukraine, that out with to we're through, on talking coming of clients touching us. some delivering little have Now the opportunities same that like, particularly bit in a if

opportunities shift We're where we're only that touched and long-term not benefit from the to that that others just those coming I So where on see geographies. on. taking reacting short-term at we that

Ashwin Shirvaikar

putting approach of to all that so you're Okay, seems the new aren't consistent in that prior there. conditions

John Cotterell

us, within know a For in there's feels we're it within usual all turmoil lot much very of it's our but of I stable. client as business terms very global Endava, how base, operating.

Ashwin Shirvaikar

it. you. Got Thank

Operator

from Your Cowen. next line comes the question from of Bergin Bergin Bryan

Your line is open.

Bryan Bergin

Hi, you. Thank good afternoon. good morning,

First front. question on demand

guided to or XX So I all that's growth XX% think organic. [Indiscernible] on better, comp. XX% And

but beyond that very of, be fiscal any change as just the of 'XX. just we to think front, on or decision-making in confident any think caution So through pockets pace client Have curious near-term particularly in you Europe? mindful

John Cotterell

Europe. -- very demand past remains across includes over morning, that Western -- the Good our clients in has probably and XX been re-emphasizing very in Bryan. we that in it's remains as Central pipeline, months. Europe, strongly in the in No the just it and strong business not worth Europe And are Europe

projects which experience in into on today Our engaged see as usual, change way we the has key on. that's have pressures the strong on. pressure. of The cut visible on and to as prioritize is projects cutting they that global it's clients going continue we're the pattern on just back the of continuing periods investment their take as we was And [Indiscernible] these over are that spend in to back spend I as pipeline IT as years prioritize times business We to that to touching and need that you previous been still budgets. on been just

Bryan Bergin

follow up And very and Moldova, good. on commentary. release the so in gave your Okay, good you then detail

on bit like little talk from that and around a verticals about pace from shift front. different the to if country being the the embroiled if Just things the specific Can then could delivered that more specific war? balance became delivery there services Moldova? first specialized Any work are on PCP, you there? of or to activities, client the nature are wanted How the specific, in So from at pace. from reacting you what operations? combos, in what of dig to And just region clients PCP delivered presumably lastly

John Cotterell

Okay. doing across locations. much is as what other we in What our we're Moldova same the very do delivery

will revenue that We in touched about work very X% of the to doing. come it's down them. with in very of the just overall Planned and relates growing because as in they're Endava the our supportive. release, is diversifying our line the It teams will faster proportion very to to remain we be a people over and in across reaction and committed business geographically As growing we strategy Moldova Moldova that our we've and articulated. positive

We continue and direction way. in a work demand Moldova in to see positive that going flowing into

question, just which I think if wall the BCP territory. the flows on the onto touching Moldovan on is

which we more it distributed delivery course, risk delivery are BCP it as there easier a associated operate -- multiple so evening reduces task a spread approach of opening my with things individual basis, delivery The clients one that plans in I of a that in We and monitoring situation place day, in remarks this our Ukraine on in should multi-site Moldova. And touched of effective relocation client. morning which is one we teams the any be real way have matter your and of provides we location. the includes is So and have model our actually the twice centers force, on which agile across planning possibility makes to the

for we from we instance, are need means another to of deliver but in our do XX% that we into also people location. for in those working clients whom for relocate officers that them, relocate clients, and countries. can them other So if infrastructures Moldova, already exist Which

highlight the portion of and staff encouraged passport made is Romanian years relocation, that either of travel terms in or e-passport, the Moldova, of and sites within them it to our wanted which for EU over do higher on. to it in have client Now, so to because easier has to things them the one we we've Bulgarian

be regardless citizens European the we other and level of relocate, relocating to will their where need up they And speed EU from countries opening point-of-view. and so crisis if the the refugee they that do doors within as will have a countries of to process, Union, locations,

of see more in very needed is scenario actually pace we the peers much and straightforward shift and and So that perhaps [Indiscernible] Ukraine. of [Indiscernible] in our it with is some being that if who Russia disaster was visible got

Bryan Bergin

Okay. very Very thorough. much. Thank you

John Cotterell

Bryan. Thanks,

Operator

comes from Morgan line the from Faucette Stanley. question next of James Your

line is open. Your

James Faucette

Thank count given demand very the you that XX% you the the are given the growth that impacting about demand hiring in how environment, to is feel what much. and head of that growth thinking a I growth satisfy still the wanted ability thinking maximum that the you'd means or quarter about growing in comfortable Great. of to about and acceleration, long-term are for looks? years? that, guess growth you -- next ask And in I rate part as outlook how few the current your out

Mark Thurston

Hi James.

limit said, as think quality terms in about candidates we tend recruiting us the into XX% as view we the business. I for to upper being of

in And in remains that juniors want We XX% wish, terms quality maintain place quickly to really as had so beyond us us, flex distribution accelerate were have to teams with great, to that XX%. for clients. limit that we're able we to above able which been and more we more senior caused it's seed our to a upper issue that for

seen we ahead the above is we've a I XX%. is year the have I as think, continue to the has about fiscal meeting see, been current beyond cost seen and will demand So the which XX%, think with limit, we we've the higher that And upper historically the than we outlook demand years it's where as can. best been that, set it been of

elevated at we're limit. still we that levels So remain think but looking within demand, I of XX%,

think to I of [Indiscernible] candidates. XX% around the quality So because ability

John Cotterell

terms that growth, We're XX% that head price increases growth on able in revenue just also we're convert the of slightly that of should add saying to higher that because count to here than it.

James Faucette

be Understood. would and may And creating and some of but and to about that dislocation how right sets how lot thinking skill and Obviously, terms seeing. just of future you M&A, Endava's could a are then there's what about I be think valuations on additional acquisitions? to in team, adding now quickly thinking opportunities wondering it capabilities you that you're

John Cotterell

to We're We're scanning and and to that balancing America the the offer North M&A [Indiscernible] ones are We interesting. continue are which - also seeing opportunities pushing Asia that within Pac. going opportunities, markets diversification. for geographic on particularly

we're deals we a components. there's acceleration in that that looking bring that sometimes in M&A other three actually technology Often get we're right The dimension is specific opportunities will element from boost of some interested all give that for sectors M&A. the an and

we continue I businesses whether that certainly sensible look these pricing on sure could undertake. out able M&A we current So we being acquire, to focus that deals would keep as but and to not I'm that expectations any the eye good sort market do it. will part for of we of for an on affecting smaller the is of comment whether

James Faucette

That's great. Thank you much. very

John Cotterell

Thanks, James.

Operator

the line Your Maggie next from of comes Nolan question Blair. from William

Your is line open.

Maggie Nolan

geographies. Thank America a you others of some any verticals is forward company? at going you, look about other of and of at a build-out past your when allocation to North of a resources the talked on here, And geographies congratulations. the In the bit compared your growth efforts your this team, particular as sales particular more driver your there emphasis that for point, a or than industry from we've

John Cotterell

sales if The Maggie. pretty we North -- Morning, at operation much and America. will have the team distribution, an we in excellent look

got still terms haven't want we up of building moved It's the I've and bit really more Our complex Little to on strength. and and before, into to that we market countries do touched regions multiple and Italy Benelux sort presence of European from languages the on and we've in so Spain, in more just in team, -- is Scandinavia. yet. German-speaking as

that's a focus. future So

that area actually putting is of energy and the into in the of environment out an East other world, Sydney Australia. The and Middle Dubai and real we're rest Asia-Pacific traction Singapore, getting

space seeing seeing -- healthcare So -- space, focus but point-of-view in in push A as we're the of us, well. retail, those actually areas in to me. opportunities that North we are the continue opportunities -- market, as is reasonably good particularly the the America for center we're other for small in mobility,

continue will as we those diversification continue on in push So our geographically sectors. to we

Maggie Nolan

you've then in seen typical And of clients? bucket, NSAs that statements given you. seeing work you or of large client with duration nice increase Thank an the are in that growth Okay. the

John Cotterell

Yes.

the of So engage going project, on piece work to to have we'll small. them small work. be first the fairly that -- a will that's see with tend then Proof-of-concept clients as on their business, pattern the start ideation production. will with experience of that impact we getting is that into And that perhaps on the they

business, the business the year will us we success and then arrangements. has we assurance engage that a around that the costs of contracts, our in still of with my terms As X-X clients long-term other give will they discussions type pull those in into get we up having for day of price of little in benefit going out recognition forward. per bit utilization of And

long-term and through deals. more come scaling into of those and in fully more opportunities with larger, mature we're more course, logic clients we're As of seeing category, that

Maggie Nolan

you. Thank

John Cotterell

Thanks, Maggie.

Operator

Mayank Your next Tandon from Needham. from question line of comes the

open. Your line is

Mayank Tandon

morning. and the metrics around the terms attrition, in that Thank over of we rate about inflation. your the Mark Congrats, then terms I several the also hit did When ask and across impact expectations just wanted on you. in quarters? supply on key how next how of and that's to the on tracking been should side, quarter. Good think John base margin

John Cotterell

Thanks, Mayank.

balance still Mark, you sensible it's on attrition, that at attrition. about the the we We're half on up the XX% quarter point do stable. the inflation? last So want below a target XX%, which cover on fairly is as

Mark Thurston

rise, our XX, margin was is of of due that Most the to is in Yeah, the QX X.X%. pressure the quarter days goes down percentage which experience in yeah. going working January, the [Indiscernible] of lower stepped so quarter pay coming main but actually from XX X through impact cost gross Xst day, there where about per we about to through.

implicit was then that and about what rate is from to inflation on X% [Indiscernible] actually X% we probably pretty cost but of for conversations average and [Indiscernible] wage a as from was we about course lost we of QX with mitigated the result utilization increases. will pay head, per on of now that is but saw So that. start recruit about happen the elevation clients that It offset

Mayank Tandon

firms Could [Indiscernible] bit talk helpful Thank pure and the you. just color. have And you in maybe the That's you're little new like different How activity. plays and it. Got bigger market compete that general about a also quick logo the in follow-up very with around a the both you around competition head-on. color from where tracking of you advantage. vertical

John Cotterell

Yeah.

respect usual peers. and to continues for large very be The activity remains that business us. So much our ourselves in as market to very

likes we in [Indiscernible] against to and and sales the the market very product run integrated of activity when creative Accenture a direct in more very up likes where EPAM is So ideas, players multi-disciplinary some we engineering logos. competitors, across don't directly and run capability relatively the the larger and ability actually strong teams, beat the but who differentiation rare. versus of often the some obviously, do, acquisition we in like which aim to are more operating strongly and we're established, against strong it's the Accenture against our and compete up of differentiation -- the them We're to new new of of counts, remains is IDH Globant

markets. last the similar very over has been competitive that the or reporting remains what three to landscape to years it we've been four So

Mayank Tandon

Great job you. Thank on quarter.

John Cotterell

you. Thank

Operator

line Your next Bank. question Bryan of comes Keane from the Deutsche from

is open. Your line

Brian Keane

on given it said higher X. from Was Just demand effect side is? side, a couple how versus and of cost went I the historical? clarifications. are high into Mark, January you little supply a impacts the the the labor those that increase How bit think is

Mark Thurston

X% but I see we QX. X% quarter last was the typically, we up elevated, said was attrition put mean, but normal markedly which can that XX%, of in average terms X%, we've in you it times, so. in increase out, on was sequentially so figures done a not on quarter's Yes, this

pitched right we've the level. think at I about

focus think packages. in I at workforce the on got managed increase ahead, then job it a to in do sensible we've can and the we've stability that So

John Cotterell

situation compared if that U.S. we the guys pressures, inflationary in nothing Bryan, are there you is that what operate the we whilst got it's you in experiencing in, geographies like here the

the are also clients. price we're And within to discussions to control able that, that able so we with that have frame

Brian Keane

target that then manageable. a the you're it And will X%, the XX able are pricing it pricing, you to throughout next be range or months? trying quite is year, the much seems there how Yes, to of north of capture get for

John Cotterell

Yes.

that's past. a for. rate, have mean, actually think at in what we rates to put historically, I been Monday able looking up the higher our we're I

that increases deliver very able the be through still confident net enter I'm year. rates calendar So the effects those of to we'll concurrent

Brian Keane

materially this have Got or actually work other on it, and clarification. of Ukraine in those more taking vendors then just that one just additional at unfortunate impacted guys is Are from the it been war discussions you from point? some

John Cotterell

No.

We couple that up. sized that numbers through have projects coming of we've there started None that shifting of quarter's is hit much our We ramping are May. seen yes, very reasons. April, will have wheelhouse in work in But last is across.

Brian Keane

for Thanks taking it. Got questions. the

John Cotterell

you. Thank

Operator

And the question Jamie Friedman of from comes line your next Susquehanna. from

Your line open. is

Jamie Friedman

afternoon. Good Hi.

could had you this know on could congratulations relationship? results. in mentioned the remarks, Stripe release John, I on your the it, but echo strong if a you the had elaborate prepared you me you Let about press

John Cotterell

Sure.

that in of we a And enables is alongside with getting in engage Stripe it. obviously So well. have world to the player their the us joined and payments [Indiscernible] best which exciting and them, implementing one Stripe is essentially outflow know share, -- we very the clients

some a retail et us of and cetera, that. through good So for from already it's a seeing good the pipeline space, route coming we're into

Jamie Friedman

though, over follow-up, to Did then was technology years. just change about vertical here my you disruption how you these mobility maybe and and wave look payments Slide anything retail me got lived the relative thinking by that and of though? like for some it Because got XX, the at this looking some And between bigger are growth of it's as I the out? you these looks smaller. More generally,

John Cotterell

too the are years that being that it's more wouldn't those to much defined that specific you new those so as in schematic not through. more of ahead. opportunities which can individual waves. the slide, And stepping following the are payments by than through we're I'm coming is single of sure different the -- there Yeah, way drawn -- what areas just we're the attract a technology [Indiscernible] waves shape going on that are the that example, I highlighting feel are technologies The impacted attention I and there with think in industries much

the capital payments as like get through graph new the and got more it's a future just give we to strong banking as looks We the visibility with will going the lot as metaverse, on what push as out where and going on it. are the areas, broadcast media coming of happening change. color on. that's that and space, quarter strong how lot so investment impacting markets next through some the going I view the banking one well I change. that we out quite bit the is little the and a on because historic, maybe some media through another have front actual a have more push one, the at The a significant space, in a payments might arena, there, in touched we'll the retail that space and other side of little insurance of digitalization games, to lot bit on happening we see well technologies arena, areas We of a see but the mobility. just then that well that's as

new of and vehicles goods under Just so lots that is and is products shifts the technologies whole and approaches area in of the one of will which exciting one, process, of created huge one side ability these to a different buy opportunities. loss mobility in ways what move XG capture that be and the has for logistics Retail is different opening the telco e-commerce can technology, running and been under of wafers space banner. the moving the years we Mobility or on. people to

activity lot drive change a to So continues -- of healthcare.

space digital is need Sorry, well. of enable diagnostics to touch We're lot capability. going the a on I so that just work on. as improvements to doing in and in The that

business which way excited in that we've And providing given the the operates to driving and the is growth that's change our outlook consumer and really, remain the that we technology what's you. So really experience. opportunities about

Jamie Friedman

perspective. your appreciate Always time. Dynamic

John Cotterell

Jamie. Thanks,

Operator

no this closing And Cotterell, John to I Mr. turn there further you are time. back call over remarks. questions at for some the

John Cotterell

for today. all joining you Thank you. us Thank

Thank for very We services to and verticals geographies. it's all of remain on you'll position. about business months noted, earnings a As our you. great And forward our have our positive in call. you demand strong. look few remains next to our And across speaking

Operator

today's call. for you concludes This conference Thank participation. your

disconnect. may now You

Endava (DAVA) 12 May 222022 Q3 Earnings call transcript