Endava (NYSE:DAVA), in its Q4 and fiscal year 2023 earnings call, reported a revenue of GBP189.8 million for Q4, marking a 5.2% YoY increase, and a total of GBP794.7 million for the fiscal year 2023, a 21.4% YoY increase. The company announced an extended partnership with Mastercard (NYSE:MA), highlighted its continued investments in AI, and emphasized its focus on diversification and global expansion. Despite the revenue growth, the company expects a challenging revenue outlook for Q1 2024, but anticipates stronger activity and revenue growth in Q3.
Key takeaways from the call include:
- Endava's Q4 revenue increased by 5.2% YoY, while its full fiscal year revenue rose by 21.4%.
- The company is expanding its presence in the Middle East and Asia Pacific through acquisitions and organic growth.
- Endava has established strategic partnerships with companies such as Stripe, checkout.com, and Mastercard.
- The company is investing in AI propositions and synthetic data and sees great potential for growth in these sectors.
- Despite the revenue growth, the company expects a challenging Q1 2024, but anticipates stronger activity and revenue growth in Q3.
Endava's revenue for fiscal year 2023 was GBP794.7 million, a 21.4% increase from the previous year. However, the company expects a decrease in revenue in Q1 2024, with projected revenue between GBP186 million and GBP187 million. The adjusted tax rate is expected to rise from 19.4% in FY '23 to 21.3% in FY '24.
The company highlighted its achievements and partnerships in the digital transformation space, including being awarded Stripe's UK&I Partner of the Year and establishing a strategic partnership with checkout.com. Endava also achieved various competencies and partner designations with AWS, Google (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT) Azure, and Salesforce (NYSE:CRM).
Despite the challenging revenue outlook for Q1 2024, the company is optimistic about the market opportunities in the medium to long term. It anticipates a recovery in the US market faster than Europe and the UK, with the US showing signs of recovery in Q2 or Q3.
Endava has been investing in AI and synthetic data, seeing interest from clients in using AI models for various applications. The company also discussed the demand for AI-related services, such as data preparation and synthetic data, and is optimistic about the market opportunities in these sectors.
The company's ongoing efforts in diversification and global expansion were highlighted, with a particular focus on the Middle East and Asia Pacific. Endava has been expanding its alliance ecosystem and its presence in these regions through acquisitions and organic growth. In Australia, the company is working on driver and occupant monitoring system technology and collaborating with a global life sciences company.
Endava's Q4 and fiscal year 2023 earnings call reflected the company's focus on diversification, global expansion, and innovation in technology and solutions, while also acknowledging the challenges and headwinds in the market. Despite the challenging outlook for Q1 2024, the company remains optimistic about its growth potential in the medium to long term.
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