UK's Endava Q3 revenue falls 8.4% on weak demand, posts goodwill impairment

Endava

21/05/2026 12:28

Overview

UK technology services firm's fiscal Q3 revenue fell 8.4% yr/yr to £178.5 mln

Adjusted diluted EPS for Q3 dropped to £0.05 from £0.34 a year earlier

Company recognized £364.6 mln goodwill impairment and derecognized UK deferred tax asset

Outlook

Endava expects Q4 revenue between £181.0 mln and £185.0 mln, down 3.5%-1.0% y/y

Company expects Q4 adjusted diluted EPS of £0.09 to £0.13

Endava expects FY2026 revenue of £721.8 mln to £725.8 mln, down 6.0%-5.0% y/y

Result Drivers

WEAK CLIENT DEMAND - Co said demand remained uneven across sectors, with clients extending deal cycles and scrutinizing technology spending

GOODWILL IMPAIRMENT - Co recognized £364.6 mln non-cash goodwill impairment due to performance and revised future forecasts

AI-NATIVE TRANSITION - Co accelerated transition toward AI-native delivery and increased AI-driven business to 15% of revenue

Company press release: ID:nBw3rwNVxa

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q3 Revenue
GBP 178.54 mln
Q3 Net Income
-GBP 394.44 mln
Q3 Gross Profit
GBP 33.21 mln
Q3 Operating Income
-GBP 370.63 mln


Analyst Coverage

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", 5 "hold" and no "sell" or "strong sell"

The stock recently traded at 3 times the next 12-month earnings vs. a P/E of 5 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)