Endava Reports Mixed Q2 FY2026 Results Amid AI Pivot
Event summary
- Endava's Q2 FY2026 revenue rose sequentially by 3.3% to £184.1 million but declined year-over-year by 5.9%.
- The company reported a loss before tax of £7.2 million, compared to a profit of £2.5 million in the same period last year.
- Endava's adjusted free cash flow decreased to £20.1 million from £31.6 million year-over-year.
- Headcount reduced to 11,385 employees as of December 31, 2025, down from 11,668 a year earlier.
The big picture
Endava is navigating a strategic shift towards AI-native solutions, aiming to establish itself as an industry leader. The company's mixed Q2 FY2026 results reflect the challenges of this transition, including revenue declines and increased investments in talent and technology. The broader context involves intense competition in the technology services sector and the need for companies to adapt to evolving client demands for AI-driven solutions.
What we're watching
- Revenue Recovery
- Whether Endava can sustain sequential revenue growth amid a challenging macroeconomic environment.
- AI Strategy Execution
- The pace at which Endava's AI-native approach translates into tangible client wins and revenue growth.
- Cost Management
- How effectively Endava can control costs while investing in its AI pivot and strategic partnerships.
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