- Endava reported Q2 FY2024 revenue of £183.6 million, down 10.6% year over year in reported terms (down 8.1% in constant currency) with a gross margin of 24.4% and an adjusted PBT margin of 12.4%. The result reflects softer discretionary IT spend and slower ramp of large projects, offset by ongoing investments to position for mid-term growth.
- Management signaled a disciplined business optimization program to restore longer-term targets of around 20% constant currency organic revenue growth and 20% adjusted PBT margin, even as near-term margins face pressure from investments in growth, pods, talent, and M&A-related costs. The GalaxE acquisition, announced contemporaneously, is a strategic accelerator that expands Endava’s U.S. healthcare footprint and Indian delivery capabilities, and is expected to contribute around 4% to full-year growth once closed (targeted early April 2024).
- The company is actively pursuing diversification of delivery footprint (India, Southeast Asia, LatAm, Central Europe) to improve competitive pricing, access to talent, and project scalability. A major emphasis on AI, cloud, intelligent automation, cybersecurity, quantum, sustainability, embedded and physical computing pods aims to accelerate future growth across verticals. The outlook remains cautious in the near term due to pipeline conversion delays, but the long-term thesis centers on leveraging the broadened delivery network and accelerators to regain growth momentum.