Why Endava Shares Are Slipping Today

Digital transformation, agile development, and intelligent automation services provider Endava Plc DAVA reported fourth-quarter FY23 revenue growth of 5.2% year-on-year to £189.8 million ($237.52 million), beating the consensus of $233.43 million.

Margin: The adjusted PBT margin was flatish Y/Y at 20.2%. 

Adjusted EPS was £0.57 ($0.71), beating the consensus of $0.56.

Endava generated £33.3 million in operating cash flow in Q4 and held £164.7 million in cash and equivalents.

"Demand from new and existing clients continued to drive revenue growth in the quarter and for the fiscal year, leading to a revenue increase of 4.8% in constant currency for Q4 FY2023 and 16.6% in FY2023. While we continue to see clients delay new projects due to the uncertain macroeconomic environment, we see high levels of sales activity as clients are once again prioritizing digital transformation projects," said John Cotterell, Endava's CEO.

Outlook: Endava sees Q1 FY24 revenue of £186.0 million - £187.0 million, implying a constant currency revenue decline of (2.0)% - (1.0%). Endava expects an adjusted EPS of £0.34 - £0.35 vs. consensus $0.61.

Endava sees FY24 revenue of £780.0 million - £795.0 million, indicating constant currency growth of 1.0% - 3.0% vs. consensus $1.03 billion. Endava sees adjusted EPS of £1.52 - £1.62 vs. consensus $2.71.

Price Action: DAVA shares traded lower by 11.68% at $45.04 premarket on the last check Tuesday.