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Investing.com -- Endava plc (NYSE:DAVA) reported third-quarter fiscal 2026 results that missed revenue expectations, sending shares down 21% as the technology services company grapples with uneven demand and extended deal cycles.
The company posted revenue of £178.5 million for the quarter ended March 31, 2026, falling short of the £183.87 million analyst consensus and declining 8.4% YoY from £194.8 million in the prior year period. Adjusted diluted EPS came in at £0.05, beating the £0.02 consensus estimate, though down from £0.34 in the year-ago quarter. The company also recognized a £364.6 million non-cash goodwill impairment during the quarter.
"This has been one of the more challenging periods Endava has faced in recent years. Demand remains uneven across sectors, deal cycles continue to be extended, and clients are scrutinizing technology spending more carefully than at any point since the macro slowdown began," said CEO John Cotterell.
For the fourth quarter of fiscal 2026, Endava expects revenue between £181.0 million and £185.0 million, representing a constant currency decline of 1.0% to 3.5% YoY. The midpoint of £183.0 million falls below the analyst expectation of £194.52 million. The company projects adjusted diluted EPS of £0.09 to £0.13 per share.
For the full fiscal year 2026, Endava forecasts revenue of £721.8 million to £725.8 million, below the consensus of £738.49 million, reflecting a constant currency decline of 5.0% to 6.0% YoY. Adjusted diluted EPS is expected to range from £0.45 to £0.49 per share.
Despite near-term headwinds, Endava noted its AI-driven business grew to 15% of total revenue in the third quarter, up from 5% a year ago. The company announced partnerships with Mastercard and Tyl by NatWest during the period. Adjusted profit before tax was £3.2 million, or 1.8% of revenue, compared to £24.6 million, or 12.6% of revenue, in the prior year quarter.
