Endava PLC (NYSE:DAVA) stock rose 2.45% (As on November 12, 11:24:35 AM UTC-4, Source: Google Finance) after the company missed the analyst expectations for the first quarter of FY26. The first quarter results were lower than guided, primarily due to an unexpected credit made to a client that arose subsequent to the last earnings call, as well as certain non-large strategic pipeline opportunities that did not convert into revenue during the quarter as anticipated. Revenue from the 10 largest clients accounted for 36% of revenue, for the three months ended 09/30/2025, in line with the same period last fiscal year. The average spend per client from the 10 largest clients decreased from £7,100,000 to £6,400,000 the three months ended 09/30/2025, as compared to the three months ended 09/30/2024, representing a 9.9% year-over-year decrease.  In the three months ended 09/30/2025, North America accounted for 42% of revenue, Europe for 24%, UK for 28%, while the rest of the world accounted for 6%. Revenue from North America decreased by 1% for three months ended 09/30/2025, over the same period last fiscal year. The decrease was driven by FX, with underlying constant currency growth. Comparing the same periods, revenue from Europe declined 12.8% due mainly to weakness in the TMT and mobility verticals. The UK decreased 17.9% due mainly to the reclassification of the client referred to above to North America. And the rest of the world increased 9%.

DAVA in the first quarter of FY26 has reported the adjusted earnings per share of 20 cents, missing the analysts’ estimates for the adjusted earnings per share of 25 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue decline of 8.6 percent to $240.27 million in the first quarter of FY26, missing the analysts’ estimates for revenue by 2.43%. The adjusted PBT for the three months ended 09/30/2025 was £9,900,000, compared to £19.2 million the same period in the prior year. The adjusted PBT margin was 5.5% for the three months ended 09/30/2025, compared to 9.9% for the same period in the prior year.

Additionally, the adjusted free cash flow was £9,200,000 for the three months ended September 30, 2025. Up from £3,500,000 during the same period last fiscal year. The cash and cash equivalents at the end of the period totaled £47.2 million at 09/30/2025, compared to £59,300,000 at 06/30/2025, and £52,800,000 at 09/30/2024. Capital expenditure for the three months ended 09/30/2025, as a percentage of revenue were 1.7%, compared to 0.6% in the same period last fiscal year.