Endava revenue declines 8.4% as enterprise IT spending curbs profitability

Endava (NYSE:TAVA) reported an 8.4% drop in revenue for its third fiscal quarter, reflecting prolonged deal negotiation cycles and a broad pull-back in discretionary technology spending across major corporate sectors.

The London-based software development and digital transformation provider reported revenue of £178.5 million for the three months ended March 31, 2026, down from the same comparative period in the prior year.

On a constant-currency basis, the top-line decline was mitigated slightly to a 6.4% drop.

Management noted that corporate buyers are subjecting technology budgets to heightened scrutiny, making this one of the more challenging operational stretches the company has seen in recent years.

The combination of compressed operating margins and a non-cash goodwill impairment charge significantly affected the company's bottom-line results.

Endava reported a diluted loss per share of £7.55 for the quarter, compared to a diluted earnings per share of £0.18 a year earlier.

Adjusted diluted earnings per share, which strips out the impact of the impairment and related restructuring expenses, fell to £0.05 from £0.34 in the prior year period.

Despite the near-term macroeconomic headwinds, the firm accelerated its targeted transition toward high-margin, AI-native service delivery and specialized financial services infrastructure.

Revenue derived from Endava's AI-driven initiatives expanded rapidly, climbing to 15% of total revenue during the quarter, up from 5% in the same period last year.

Operationally, Endava advanced its strategic positioning through high-profile enterprise collaborations.

The company formalized a partnership with Mastercard to integrate its automated engineering services with the payments processor's global distribution network.

Additionally, the company was selected by Tyl by NatWest—the merchant-services division of NatWest Group—to upgrade and manage its core merchant payments-acceptance infrastructure.

In parallel with its financial reporting, the company continued capital preservation measures through its ongoing equity stabilization initiatives.

As of March 31, 2026, Endava had repurchased 8,047,338 American Depositary Shares for an aggregate total of $121.9 million, leaving $28.1 million available under its board-approved buyback authorization.