DAVA - Earnings call 2 2024

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Operator

Good morning, and welcome to the Endava Second Quarter Fiscal year 2024 Results Conference Call. [Operator Instructions] Please note this event is being recorded.I would now like to turn the conference over to Laurence Madsen, Head of Investor Relations. Please go ahead.

Laurence Madsen

Thank you. Good afternoon, everyone, and welcome to Endava's Second Quarter of Fiscal Year 2024 Conference Call.

begin, conference Endava's being Mark Chief Chief Officer.Before this are me Thurston, reminder, to Financial Cotterell, reminder John Executive we a call recorded.Joining is today Endava's our As listeners. quick a officer, and

or call that other as update macroeconomic reflect of be headwinds include today's business, as the to create our performance. events limited and note but the the statements subject strategies, undertake XXXX, events contained full conditions Please regarding guidance our fiscal today them differ risk statements grow by cause we in this including synergies statements from year Solutions, transaction plans required made and fiscal operations.These predicted overall forward-looking certain statements, for and by may to including, such statements. the year people and future extent to demand Our for our presentation timing headwinds our our to are speak or of subsequent QX geopolitical including obligation remarks clients, and results facing of implied expansion XXXX an that in law. in global forward-looking the and indication differ climate investment or results for and on offerings, of impact our should ability materially only accompanying statements Actual impacts circumstances could materially uncertainties forward-looking our from and adverse our to on and results business the conference to not considered than of industry industry to, forward-looking shareholders, from date, ability no and the acquisition our reported to and verticals, the these technology cost-saving and not actual during our the long-term and enhancements for from initiatives revenue, and clients financial our such our GalaxE and timing growth impact our technology our value and to business, of our particular, those expected the on overall and our the results services, performance,

Risk Annual with please and XX, of information, XXXX.Also, financial refer Report Commission section the present and Factors filed on our Exchange measures. the both to non-IFRS more the during Securities call, we'll IFRS For September

While the investors, IFRS. intended included such link in presented earnings information accordance as we a also not replay financial release, most turn in the will information both non-IFRS are of the the can measures directly of well financial provide to to our presentation in available website. or be IFRS non-IFRS on A investor to which substitute considered Reconciliations Investor press this with information be the believe as call the our measures call useful you on SEC today's the for isolation Relations presentation, as is I'll of on this of that, to measures for John. comparable or site find website.With the over

John Cotterell

today us our for be XXXX.As and hope to ended months X to We're update the the to business challenging. here to pleased I XX, be our you noted joining performance an continues release, financial thank all like on for we and December you're environment in obviously, I'd all well. provide press

business. Payments believe spending, positioned guidance we said, and on particularly Markets and in verticals. Our projects Banking results have a and IT and the discretionary Capital reflect strong and very headwinds in we well That

that environment, we this while to our to make spend in and our again. value well continue are shareholders.We people key ensure discretionary the to sure despite pursue current Endava be current up work demand, to seeing are We demand as clients, position to in the want positioned be CapEx are confident create opportunity the term, a there's trends is for the that we very softness right-sized attractive. short X cautious. done, We when to in business year also longer clients and be for for is of our continues investments long-term picks are budgets us our our for One, being strategy continue We're to up while ourselves lot in in necessary making deferred the market. term, to

but go broader, put how the have for it, the And diversified the growing now expertise. and footprint. we delivery slow and demand ramp-up unfolds.Secondly, are one for for Endava, vertical year we relevance client to substantial budget a technology seeing and As thirdly, importance deeper with see a going are of

Given organic us way facing talent and advantage to; and difficult opportunities help many inorganic and in revenue, the invest number technology delivery a to investments take times and these capabilities; accelerate disciplined strategy. others growth great acquisition we're secondly, and our our our trends, diversify of attract invest in leadership; that continuing and domain one, in are to thirdly, our evaluate to add make

environment. current investments these of given near-term lower in Some may market margins result the

to period the quarter than systems. before adjusted to margin. our margin.Some optimization from XXXX, million year we we as in the program before make to scaled of complexity being pipeline of expected started order this growth.Let the representing profit projects million to pursuing focused result been while in are our expectations, year-on-year decrease spend our in eliminating will revenue are hesitancy. production-ready Alongside but to to profit are our in last yet, prior the invest XX.X longer have takes further this a work our improve reported results. disciplined same us investing We a numerous change sizable tell year. We and a pounds, strategic objectives.Moving but to business for investing. in adjusted GBP build these term to large client you when while some competitiveness profit XX% and GBP an corporate with remain We to in clients our where hesitating constant the remained million an facilitate believe strategic courage growth, tax times, have totaling discovery period have currency, GBP the in currency representing for we before mentioned constant have return reducing enable projects know, and done, invest of tax has inefficiencies. uncertain not medium XXX.X in where now sure XX.X% fiscal for X.X% to As the initiatives it up simultaneously me QX short-term revenue on on tax XXX.X We in to we of commit of organic needed XX% We growth about others expectations continue the on we we growth adjusted quarter ended

will with key focus, industry is global We a differentiator. competitive continue which our

to a capability. our Therefore, a They and available and thought our invent our realized. that build regions, operations, in technologies an capabilities.The client clients our that Additionally, will for be leadership we the momentum is quarters.We requested we clients industries and focused that senior new in PODs are and are one sales are ensure we work dozen alongside and combined multi-disciplined a development and with leaders core working verticals competencies, we be ensure technologies. effective well near-shore clients consistency rapidly. continue our increasing called able high thought together emerging result, delivery in with fast leadership greater as will to use of collaboration around of cost more order more manager resulting existing singularly around dealmakers new further scale very In for on the built technology our per will coming organization, quickly. and domain. integration to delivery we are to delivery experts and will of in acceleration Endava Endava deliver opportunity a to a leading enterprise benefits and January, delivery and last been close-to-client our this establish in technology being from our bringing this in accelerate the of months, invest differentiation see future exceptional more as technologies at We're go-to-market against across to were new our exercise delivery a using of the set starting region within automation as addition to to industry work. delivery dealmakers scale.We're the systems thought-leading together activity outcomes boom our and which senior demonstrating embrace helping rebranding Increasingly, the propositions our larger received. our of to shift creating in pull evolving and PODs an represent by skills are leadership, locations explore and participate want accelerators front, delivery a to industry XX to period who And end teams the technologies focus teams has the teams slowdown opportunity undertook competitors key at PODs and times, difficult industry appropriate verticals.On attracting delivery is in scale hired under to across help we across

delivery Solutions We know-how and return.In met healthcare the base and of intelligent GalaxE in invest of is nearly strengthen Tim it the the XXXX even offshore excited base.GalaxE in companies, to time We healthcare embedded establish believe these exciting create of capabilities well sector to provider will healthcare the delivery will foundation was arenas, with I'm sales to significantly client and a expands results computing. and his in our significant largest North India. Tim and we services markets visited deepest strategic employees. our delivery right an go-to-market date, India, Bryan, vertical, acquisition as between leadership product stronger centers This our and our our our X,XXX acquisition U.S.Additionally, in AI, the talent delivery management scale vision can of global This our X and our announce global delivery delivery in to further for IT cybersecurity, this which brings leading transformation the Endava. physical the with India, are cloud, American strengthen release to on and I'm to about today, in with synergies with GalaxE India. the in started I to GalaxE world to building and blue-chip footprint acquisition PODs of the presence is revenue where now team as these GalaxE, to our their our capabilities efforts and digital a team in is automation, diversifying and thrilled companies. technology as development has by the in sustainability, U.S. vertical expanding and decades expands CEO, pool fast-growing lay quantum, and footprint aligns addition

of understanding existing the In enterprise Mark enabling delivering work, transformation insightful provide addition, tech-enabled facilitating alongside allow partnership existing delivering GalaxE provider expanding remediation go has details Equiniti, with enabled a next-generation of and strong accelerator into excited capability, strength opportunities Endava's transaction our enterprise outcomes. shareholder, we we more leading that retirement and shortly.I'm open will services. that This systems on announced us developed to a in strategic deeper will and yesterday predictable capability, share change. new technology and to are more of the international

our We delivers transformative Endava of million relationship capital product deal GBP vertical. our in and the strengthens roadmap. for their growth X-year significant and have existing established a tech delivery support partnership to XX markets This of X-year

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which partnering the ways personalized more launch web collaborating the market, immersive, space, acquisition ongoing board. worked gamers experiences their We mobile in strategy. Endava member with in-car the to and experience, the OEM for both product them our game support platforms transactional aimed their explore with across industry-leading to suite direct-to-consumer and Delta's we bring many improved design From on brands the of we compelling landscape. satisfaction, different aviation rewards community-focused establish deals, continue loyalty best-in-class cutting-edge, are game.In is increased automotive office to our customer the strategic reshaping are We'll to offers to helping investment improve Sync, user floor the partners leading helping global are enticing problems casual leverage products a of value and implementation processes, customers Through Delta confines approach, fostering in agile experience.We plant revenue. working engagement. and back console strategy a support and interfaces with Delta exclusive tailored experience the a has of monetization of bear delivered and enjoy programs, to technology new customer time Delta their solve at beyond and to and of brand into and are customer clients Airlines, revolutionize streamlined platforms, of segments operations capabilities to creating to through Endava and a with

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a developed and benefits continue triage.Internally, we in and major our the in generative center projects areas starting AI compelling we Our are deep Cloud to examples in Kernel at partnership finalists assistant voice tools, the in client automation AI-based recent our are Endava text a seeing Microsoft Google and about X producing pharmacy material, on way, call held early of relationships providers our generative in tangible with critical We I'm an Semantic in our recently exciting bear of a participating XX% to knowledge the a smoothly, industry, recently on, advances We fruit.Here some healthcare latest U.K. insurer. increasing working targeting excited of total AI AI hackathon illustrating and integrating processes, explore few with as with multi-day based global prospects a major the Pac our technology are spread across of insight prototype global expanding the care Charlotte held platform sales of offices prototypes helping in workforce. are right And generate with firm.Globally, to innovation Asia this for generating footprint. use how as Lab XX year, U.S. well our on has practical production of competition. of this insights acquisitions Innovation productivity equity business, the the in teams the of in private and of applied for our

to leveraging trusted education, free event by we this a current bridging continue decrease and skills year. our these headwinds. period a focused refugees launch and the the supporting for to environmental Resilient technical protect I'd NGO last our the persevere ended Endavans complex communities.We users through societal like is environment, for with in Australia on fire, thank our recently help around determination Building XX,XXX an X.X% technology expertise matching issues. employees, gap to the training providing I from inclusive their XX,XXX the with leadership. for with take demand a We go-to-market an quarter of world.Additionally, preparedness In easy-to-use up and, in Australians, are empowering the homes gauge areas all opportunity commitment solution as partnerships mentioned solve Niya, recruitment also of including resilience and the with to we strengthening of to the and providing senior NGOs bushfire same dedicated as to in talent opportunities app tailored Council their teamed We to earlier,

and on products and business our to through the continue walk quarter overtake and Mark, headwinds return quarter and the the you call our maintaining growth.I exciting now their for culture and provide manage pass will health to creating believe organizational our coming activities term, will long who to for us will fiscal financial new year. see in solutions the clients' the We commissioning results clients exploring guidance and for We the for customers. and will

Mark Thurston

constant we totaled was the down fiscal XXXX, same period December X.X% year, a prior currency revenue inorganic before quarter a prior XXX.X previous same XXX.X the X revenue within XX.X for million year, million GBP to XX.X% XXXX million QX ended In GBP period Profit tax for over prior GBP John.Endava's decrease year. from year positive last months GBP the by period period Thanks, same in was compared in to you provided same the our compared the the contribution the constant the to in reflected in the revenue XX.X range the in million quarter.Sequentially, during year. and prior declined currency, the quarter. the on XX, X.X% in X.X% in

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

Our December was adjusted XX, margin the months XX.X% prior period to profit compared XXXX, the year. X in ended tax before XX.X% for the same for

revenue for last per North the same same fiscal last XXXX, XXXX, to to North while revenue our same representing as the revenue average to year. XXXX, the X.X the for period adjusted last December per fiscal during ended year.Revenue period compared share over world compared for year X.X% accounted the fiscal XXXX, to in of X XX, of accounted same XXXX, of December X.X% December compared for period calculated last on XX, million to of the same Europe period the for earnings XX% of months the accounts the XXXX, XX diluted of the grew Revenue now XX.X% rest for for XX% XX, December period largest period year, to to fiscal largest the and to accounted compared XX% last from XX% period in for the free fiscal same months compared XXp period XX% XX% our the the from XX, ended revenue client spend for December over fiscal December compared period December from compared from of the X XX.X to XX.X X% adjusted ended the declined declined clients months million as year. for months on the diluted XX compared to last shares from months calculated the million X.X decrease.In X compared same XX% the December shares.Revenue same period fiscal XXXX, XX.X in for The over and for ended year XX, last year-over-year last XXp for XX, December X America ended XX, and ended in GBP flow months December for year, million prior diluted accounted from clients period fiscal decreased X period Our was GBP ended same ended GBP X XX% XXXX, X% to year. fiscal for months Other a year. for revenue accounted XXXX, cash GBP compared revenue ended Revenue period of XX% accounted the of of same revenue year for same XX% America period X.X% fiscal the ended from and Revenue the XX.X% X% year.Our X the revenue revenue year to last XX.X%. XX.X accounted period periods, U.K. accounted X insurance over X XX, XX% XX% to and months year.Revenue the for fiscal grew compared the in the fiscal to XX, same same XX.X% year.Revenue payments rest last XX.X% year. markets in same the the world the of of the mobility and for X.X%. year from months grew XX% in declined from compared the declined fiscal the The capital X% ended Revenue ended to last X million XXXX, for months fiscal Europe XXXX, December for Comparing over fiscal revenue last X same compared in XXXX, grew fiscal for from XX% months last in XXXX, X declined period U.K. and The fiscal XX% XX% last same over XX.X%, million December period accounted year, TMT accounted same X.X% XX, XX, same the last same period the and year. year. period declined months months in the last year. for last XX, XX, same for banking compared revenue December was fiscal XX% last for same the period in the last X ended XX% the from fiscal

in X.X% acquisition XX, some stock, this fiscal XXXX. in expenditure with million, to X we same cash is progress. compared XXX Whilst of the equivalents slow large deals and pipeline million grow and of June cash being to a Our revenue cash to 'XX. Capital XXXX, GalaxE announced period XX, general call, with On number December period strengthening million not conditional percentage QX last totals for is current approvals upon up to GBP and for of our USD December conditions in to XXXX, was April of $XX the of XXX.X future performance. for GBP expected end has compared outlook full-year the the at to the primarily John last the progressed therefore, year.As to at number XX, highlighted pipeline. have in mentioned, deals months remained turning Consideration as close strong at the X.X% large ended we our XXX.X customary to closing a today. the guidance.Now, million at Transaction in acquisition been contemplated our continued and XXXX, and of fiscal completion earnings value, early and subject they

banking This macro In won in have and in the markets. projects a taking proving are across being large mainly in is transformation take weakness hesitancy environment and over largely we ramp environment. clients.This phase, to In the on companies and view work. and verticals. banking are capital uncertain cautious production are are all the remain precedence that macro deals the seeing among phase of IT we delayed. regulatory resulted addition, discovery case creating In and work payments This to industry very slow in payments, pronounced given a budgets, has into has release been most the capital markets, we seeing slower up

be the reflects set QX, a in are pipeline narrow have uncertainty but are top guide, range conversion.The we the seeing X.X% and the program for pyramid. a respectively. for a on mentioned actively in managing midpoint would we where will John revenue appropriate QX of focus for QX, setting uncertainty quarter, seniority sequential As bottom and our this we QX, wider whilst range the the optimization which environment around set given our particular this on headcount persists, focus in business in growth earlier with range Consequently, on X% that

to me these reflects achieving.With we HX to that headcount and Guidance the now an result, we As anticipate underway been savings a take set has turn in context, expect guidance. with reduction. exceptional let charge associated actions with the

between exchange diluted fiscal X.XX year-over-year and January in to the assumes XX% be QX year to X.XX share. of revenue to representing million XXX the concludes XXXX GBP follows. prepared ready X year to of X% to expects Endava for as full-year EPS the for constant XXXX diluted above for the fiscal EUR to was million, be between on in be expects XXp QX a of XXX GBP of share.Our fiscal per the guidance currency adjusted range GBP and This open USD in range representing range the a million GBP million, XXXX, XX, rates follows. constant XXp to and GBP guidance revenue exchange line are currency year year is rate we Endava basis. adjusted our expects per year-over-year revenue is a GBP XXXX to to comments.Operator, X.XX decrease guidance range for revenue XXX expects decrease and to Q&A. XX% XXXX of fiscal Endava EPS Endava XXX as X% be Our full on basis. GBP in X.XX. now and on This

Operator

Citi. first Instructions] comes of question Ashwin our from Shirvaikar [Operator And

Ashwin Shirvaikar

I regards range then when for range, of organic some or X.X% to and included? relatively you contribution with so to on? was get sorts X% bookings, the you're so growth with growth, making hoping so. wide bookings much relation is assumptions to what sequential to implied have made revenue How in of the sequential And course XQ, to you look corrections conversion clarity to bookings, at pipeline the GalaxE

Mark Thurston

will comments April. any from we said in Thanks, GalaxE. Ashwin. guide it The early doesn't include the We contribution hope complete prepared that

QX, on with exclude In a for conversion So guide guide at large it end guide, the at pipeline previously. range why obviously had we've top does we that respect. speed for the the pipeline that's around converted than put QX. the more we have the been we setting issues in have of was and assumptions which Basically, the conservative

win commence at we ] is mean, about The conversion takes that I So the with for. be [ to the of would when conversion rate. work. actually stage when win we from it typically other about at I time around, and rate, the time looking actually talk figure.We're a are guided sort tend and and about yields We we, higher at to And the going rate of this XX% of -- make deeds party that of rate go contracted XX%. our the conversion this contraction committed, proportion XX% win or looking

we year the with and done. what win be it's consistent actual assumption there yet release I because rate willing haven't saying as did calendar his are said they certainly in So, the to the of to myself, John we them, this slower.And comments budgets even through clients is going But either changed around and because to it's do. though somewhat not being are have is that rates for conversion are quarter there first constrained, work us

bottom a the we're of as cautious -- see at sequential the QX. where range at going So, conservative, we're view that top we the actually But of little if the growth taking to QX basically from is range. putting not

the of the which the of would like range XXX, So QX. is something the range bottom be top for

Ashwin Shirvaikar

say, a asking -- more now walk a it South Is And India, perspective? there a plus presence out Hopefully, diversified looking in which alluded risk that. clients Asia, for for specific can through LatAm, kind standard Understood. to a X plus from X sorts Central let's a it diversification have, is you that was are to necessity Europe delivery. things what Or management Or remark, ask sort of? of clients will perspective? Is of of do? then from prepared a

John Cotterell

is. Thanks, Yes. Yes, it Ashwin.

that the that larger cost being on, places more they able that remain move move we're that that some like as a becomes ability able to more We've service. clients different to is to bit the delivery, LatAm that also into get while. of getting scale Southeast not that. of augment our the just hinting the that projects to of It's larger mix Central India. Europe, Also the a talent to to of just able targeting the and access part mix. and have, but into India pricing so effective bit at a a want introducing out sort it we've you a why things reason a and us being been of proportions by little and delivery see Some more for been not little do of Asia, capabilities spend essentially, being It's another competitive to expensive balance with pool more touched

first GalaxE step actually delivering. the India deal, we our into With take

Ashwin Shirvaikar

geopolitical that of rather risk? question. this gist is guess cost driving than was So, the my I

John Cotterell

us. about for more than much it's competitive pricing Yes, risk geopolitical

Operator

Jain question Morgan. comes Puneet from of next The J.P.

Puneet Jain

as are seeing the declines for Follow up asked. basis, push you seeing? pricing clients like, talk are on you trends Like, you like-to-like to about sequential continuing what well? price to And can like Ashwin

John Cotterell

our we're It that The within stable, the actually Latin But widen from pretty and up So of making I is small of America. by out attractive point finding opens diversified client Central delivery previously the footprint even Europe finding pricing us arguably we're we operating have footprint in, to that work delivery costs delivering wouldn't wider through. just ability a available of actually to locations, increases parcels the view, getting stable. zones is comment, more a pricing i.e., in we're that was was in having clients

Puneet Jain

details can cost that, expect you Got planned the more program? are optimization to savings? you does And share many how potential importantly, business around Like heads ensure in you like And disruption how that delivery? to any more going it. cut, not create

Mark Thurston

termination is overlap we which of phase, looking to at in initial comments lead to that areas the up sort the addressing built bench prepared the the SG&A of of result pipelines as and and is So the costs I to have basically deals right. outlined in that going a slipping

losing anticipate external and about we're which the GBP call the cost X.X really, as overlap we perspective the is be the we of from place, will verticals. part, GBP So, with drive XX annual that on it about million. is of this closely sales where horizontal of it focusing the our to we part sort a go-to-market we PODs our the savings utilization streamline. seek XXX get to where be again, we're technology staff, into in well, about some focus more million and should And organization, will more staff. about And closely want we first as on where that in of that, termination program will basically more of higher sort to But people. again, generate industry push that put the talked aligning John area, There we'll looking a at and delivery

X So phases. it's initially

The at phase and look SG&A. is to first address bench

streamline basically across simplify phase the reducing board. and to by duplication Second is

Operator

question Maggie Nolan Blair. The William from next of comes

Jesse Wilson

This is for Jesse on Maggie.

second first, in be about margins, the given margins. revision So, the question to guidance still you I a trough Are expecting fiscal the quarter had to here?

Mark Thurston

i.e., quarter on, you the to one second say When December? mean you quarter, fiscal we've the just reported

Jesse Wilson

Yes.

Mark Thurston

QX. little go further I to a we've in of terms got would say bit

be I is think our nadir. going that to

We will branch making also some exercise latter that's quarter. that it in in margin bit despite investments but quarter, we in the happening through see going a And a the the SG&A. weakness on reduction of little gross part have we're is of

PBT we the growth be of sub-XX%. sort reduce, more adjusted impact QX, sequential terms program on the So we be margin profitability the the where to see But and low in be in then adjusted to revenue nadir anticipate, probably an that improve, so be double then will quarter in a starts digits. we will which we'll will would and have gross March delivering PBT, as of eventually

John Cotterell

the M&A. we're I transaction dealmakers. on don't this carve We mean, in during pretty PODs. it's out quarter, also heavily. bringing that worth investing saying in the investing We're We're costs our

QX hits strongly. that pretty so And

part all QX. of that's pressure margin So the in

Jesse Wilson

talked this how the one talk profile you In paid make and then for Could you've sense have Got follow how what business, others past? are a past, margin And it. multiple helpful you That's larger. one that about compares? And of and obviously, you this bit to is the about up. the the makes me. acquisitions my of and pursuing as and sure growth the maybe X% in goes type well that done

John Cotterell

XX% strategic us. but I for go little over it a something really for Yes. we we to over is and talked mean, is we'd strategic. this XX%, said Sure. X% that about XX%, was And really

largest.Secondly, in a our time and one U.S. long lot being pretty at absolutely revenues, team. If spent there. I guys went is healthcare, you step pretty The They ours and They've the is takes XX my a in that in is our crucial. years market out model the It's of target do talent and step needs with the and it of U.S. out of the it, it's look earlier confident the of largest in call, time which operating terms up see and on offshore to delivery decades to We being that's of we it largest India to they adds region it for been been sort a crucial. GalaxE the experience. our world bring big with moves strong India a grips how pool, be great that vertical. to client of there, for strategic. forward largest that to a really to there it's over with got it delivery operation.Thirdly, healthcare very touched

as vertical, this a one pretty separate pulling a of this year, It's I'm more as next sure having of result So, sectors Mark, also deal. that through out, the we'll stable done period. be

of with calls we area would yesterday through was and belief healthy, which clients and time accelerators, that set team work.The have to They're very bunch in. fit client how spent ability I've they going did, to best I a the astounding. very ours. had frankly great through they were in which deliver. an client invest that working a calls terms a So, a And very, in ever of quite business, growing a well of They're GalaxE acquisition as their bit of

lot do the terms, We've done this lot for on deal a us right So, the execution the on anything financials? well side sure properly. the as integration strategic plans a that through.Mark, went making just is how work of in we around of as I

Mark Thurston

add similar that a No, deliver odd do, America, not people to broadly high are we their functions, X% it guide growth in onboard, to run likely is I that to will head it invest really. complete, full-year They support we proportion when business, mean, X,XXX North expect as the just outlined. them need which revenue that have and we our per they we of But profitability of Endava, although does about in the we've is very XX% lean. private headcount. a similar to

Operator

question The Cowen. comes from next Bryan of TD Bergin

Bryan Bergin

also entirely there clients are have kind Or of I mention heard year. delayed their here, cancellations actually, I period? budgets outlook through potentially Because up went client is if the you release? IT year-end On that guess, occurred this this

understand of lost half they first ramp still 'XX? meaning growth help 'XX, delayed the you you of cross with the your XQ trying for the of growth expected in some bigger line programs to prior potentially So, can that table fiscal calendar to in really, fiscal these versus aspect are on the you revenue that And potential.

John Cotterell

about is budget our seeing let Thanks, there not just up. them where this of Bryan. against detail some from. We're Mark budgets it. we year I'll work, there IT get confidence is go need to in the of them backlog through yet. budgets, spending But comes just an upturn And that's that. client of do seeing the to you're later are We some on Because right, hesitancy. it

Mark Thurston

talking pipeline, delays exactly the conversion I about in question our that when I has That's the of right. the and been issue. was mean, opening

something the guide We the we in for now we to of the are terms us, of TCV. of in And gone were in X of GBP in heard been remains deals the actual anticipated gives gained space. above that today, numbers. And actually but before The us, monitor much larger Equiniti haven't And mean, there have which is I up of when erosion And we value in play. pricing by we mid-November, absolute other it stable number despite XX referenced sort from on think of which hopper we the players in are we an talking of in sort was or dealt into we've X.So, million GBP are coming the facing up illustration we announce that pipeline up volume the we've have John we've When with XX%. able that And compared November as a which million our in we've would I issue base. has from look back larger for been at we've the deal, seen deals, it couple, deals uncertainty only conversion. that comments sort land with over deals. Christmas. lost

Bryan Bergin

here year. the as half of on investment level driven? much then the if making move sense the to utilization just near margin better line give how able could talk you investment And about us is to term, front, helpful. in are you're near-term a of second driven And top you considerations That's through Okay. versus quantify the you

John Cotterell

Yes.

maybe for be about but, will that utilization sort quarter, so. is quarter a the We XX below the which So, was think say, December, XX%. bit to reasonably QX it current of low, in or little

normal to until will take announced revert go something be we high will is are that It into effect. actions bench the just that more as to we going QX. then So the quite

investments, and XX%, heading continue in activities. our be terms towards a we we'll sales So, XX%.In of invest marketing up to actually

landed that in invested of GalaxE, quite of Obviously, So, terms deal-related lot deal revenue. about it around we've moment, money we have just fees. X% is the the about of with with a

QX, So it's we pretty in and then integration. M&A crunchy have ongoing

systems, So, of as the but simplification year GalaxE, and also into well. then our we 'XX. as and P&L had that America be Pac continual will us complete will continue board for a end, we this which that Asia looking on will on take And X processes North investment that will deal we at and in a FY by before we're roll

and So, want we simplified processes get make just to for that lean scale. the have to future sure we

Operator

Faucette of next comes question Stanley. The James Morgan from

Antonio Jaramillo

mentioned James around This and Jaramillo well. on the about know for I dig a client in Mastercard first. ask is more not follow-up to wanted have had the spend, that was but marquee just contemplated namely that I previously, Worldpay. on Antonio I Faucette. And then you guide, in wanted as also to I

Mark Thurston

Yes.

I the for So, I those which off But our mean, in U.K., headwinds. came which a us. headwind is mean, you'd Mastercard in Mastercard Worldpay. Vocalink we've streams One, with X split FY 'XX. largest payments is work that peak been and facing being are of quite they into in clients expect part X

of is non-Vocalink work have been lower So, fiscal flat we're in set 'XX. expectations. it Where with FY indeed performing where actually is That levels. our headwinds is or elements 'XX, 'XX the seeing than budgets line below in

to through investment with what off around gone Worldpay, again, concrete November.And slightly to that where transaction into back new yet, off but we view but of to But get they terms of it's we we has expect any in lost come are growth, slightly delayed as with some we to put areas we are we in But anticipated some again in plans our spend pick And competitors. them it to from level The previously anticipated intend in is up seen their compared sensitive. we've are we have has backed don't their ground that we backer. place, not the spend So, PE have they that anticipated. although what seeing a Mastercard, November. areas come able

flat slightly is well. it as again, So there

Antonio Jaramillo

know in year? rest my on embedded opportunity. the guys area highlighted to the up. then payments ask that looks in any there's and what the And you for past. of I helpful. shoots that have curious the for green I follow That's that wanted also it I'm if like more

John Cotterell

of stronger Yes. the areas. Embedded payments is one

If have acquiring places the and their The are opportunity the Clients you them. the where where continuing in higher-margin payments, surface to are by pulled more rather areas, has are like getting invest forward areas, embedded pulling there for look open they where is and proposition systems, than differentiated, so with continuing market. payments been traditional them in areas to under back. the new existing the on, invest right with banking the the areas they investment

that's where we're coming So, through. new work continuing to see

Operator

Katri question comes of Moshe Securities. next The Wedbush from

Moshe Katri

discuss just I just want the maybe go and acquisition. GalaxE back to

we the Should also then needed that is You dilutive you're what business. to indicated into to that at are need that somewhat at you of that given for doing first the Endava's. some investments headcount the assume and margins the India? investments the revenue some per in billable par year, with acquisition in But you least you indicated make make dilutive, the

Mark Thurston

a year, guide from in for although terms of, the it will improving I don't EPS contribution it, I on mean, think think No. will full I a terms in the it make do revenue perspective. of

in take business the Endava capability basically their And public them part. support function and to up nearshore from some sort investment it some company sort is finance make our private Indian speed. of on investments then that And of farshore world the to have of take We model. plugging functions again, some to the will into the

term, or probably it dilutive. earnings So, months I be the is near think for won't X which so,

that it'll thereafter, it earnings earnings neutral. But be will be we think positive. I anticipate

Moshe Katri

at still up? makes we clients wait-and-see sense. has changed anything That looking changed pipeline And here, quarter terms kind Okay. the conversion in ramp Are a or mode looking and budgets of things then in at the have since of ended?

John Cotterell

a little there So, through starting are ease we're off February signs clients bit. are that to getting I as mean,

signed, that same in the that to that. in You want Equiniti getting the I clients think And quarter. announced others seeing budgets, looking signed actually are We're wasn't across come the do that saw yesterday we're through. their looking deal earlier at that they industry are trend. at the also things seeing of the some we got and the it seeing

Operator

Bank. from is question Keane of next Deutsche The Bryan

Bryan Keane

maybe recently? rate being Mark, how's on what's GalaxE, of economy? company the growth the by revenue I guess normalized growing it and impacted the more it Is

Mark Thurston

growth expectation have haven't rates December Their calendar Well, sort 'XX. moment, December is so a of they to [ course, sort the ], but But 'XX the they growing of substantive probably around about year-end there, look of into concluded XX% at they're XX%. XX%.

be is mentioned to So, just they us. systems in are growing them will of an you won't continent investment, function, move the financial quite said, And it one is put like is for because platform. finance onto they different I but be long sort their place, as Endava.So is the don't caveat I expect organization us needs that our us prohibitive carry profile to nicely, similar in that with would to we a that The SG&A actually. the caveat the from

So, to there. establish we presence need some do

as to good. prospects under think they So good, think the than ownership I were growth are the were. are And Endava they going they profitability I probably is and be better

Bryan Keane

is So, on you somewhere think constant you a XX% that grow currency near revenue they can outlook guys growth possible? think normalized the basis, to

John Cotterell

Absolutely. Yes.

of them more enterprise these them transformation accelerate to was think see the to will of GalaxE, give to deeper their into get spend scale, have to hesitated that we have opportunity we as us scale. that access the clients. both do actually capability, the GalaxE cross-fertilizing Endava, who larger we business. little drive core about, opportunities because help because the fact, we with capabilities and bit and I that widen together, they their with our talking a Endava the large businesses, In because of clients accelerators there's accelerators

on some process. combine good underlying very revenue businesses top as there's we So, of the opportunities the

Bryan Keane

you And do of out there? could the Just expect TBD a that and then now to timeline the where it you and calendar uncertain to of year too is when point? 'XX? it guys visibility improve it. beginning demand do is at environment think conversions, have you Got the know question any Difficulty] environment just maybe Or just on thought? this kind know?[Technical Do Is it

Operator

Spencer The comes question from Anson Susquehanna. next of

Spencer Anson

you up became evolve an forward? we indication going that demand the Did seen you might have And standing macro question? be since hear environment How conditions to the what guys more things difficult? for watch get should

Operator

conference the be hold while reconnected. is to operator. have the do seem get the you This technical experiencing me. holding. We speakers line Pardon We we speaker a for Please issue. reconnected.Thank

Laurence Madsen

back. you Can Hello? We're hear us?

Operator

question. your repeat please Spencer,

Spencer Anson

became How that we difficult? since have environment seen you macro up? what the more projects indicate look should for demand standing conditions might evolve And be signs

John Cotterell

work. sort And people I as giving enough outlined, seen sort particularly pull I guess Difficulty] we with our ]. we've it has of of U.K. to macros, it something through the suppose to progressing at hesitancy the moment, [Technical do exposure, and with Europe [ and

the it of a building the up. It's of bigger stage. number. of from actually, the that change of commit much clients not just to we're indication them, the this actually building work willingness size a gave a of But up, deals of is I perspective. at And so seeing sort pipeline

Operator

our concludes This any like Cotterell I John back the session. would turn for question-and-answer remarks. to conference to over closing

John Cotterell

Yes.

us So, today. joining thank you for all

see, As levels. to the you. speaking earnings you tech And in look to our profitability order a return you next our Endava Thank forward waves a as gather in growth medium We investing strength. we're continue to gearing leader call. can in in as historical facilitate and to term we're Endava to

Operator

now for has may you presentation, conference today's Thank disconnect. concluded. attending you The and now

Endava (DAVA) 29 Feb 242024 Q2 Earnings call transcript