Endava delivered a solid QQ2 2025 performance in GBP terms, with revenue of £195.6m, up 6.6% year over year and 9.1% in constant currency, underpinning a diversified services mix and a growing AI-enabled transformation agenda. However, profitability remained modest in the quarter, with operating income of £1.7m and net income of £6.9m, as the company incurred a £5.5m exceptional restructuring charge related to cost optimization ahead of GalaxE integration. Management signaled that margin improvement will flow from ongoing cost controls and the gradual realization of synergies from GalaxE, with the expectation of a margin recovery into future quarters. Cash generation remained robust, delivering £31.6m of free cash flow and ending the period with £60.1m of cash on hand, while net debt stood at £115.8m on £175.8m of gross debt. The Board approved a $100m share repurchase program, reflecting continued capital allocation discipline. Looking ahead, Endava reaffirmed its guidance for FY2025: Q3 revenue of £198-£200m (cc growth 13-14% YoY) and adjusted diluted EPS of £0.31-£0.32; full-year revenue of £795-£800m (cc growth 8.5-9%), and adjusted diluted EPS of £1.20-£1.23, based on January 31, 2025 FX rates. The near-term backdrop includes macro softness in the UK and rest of world, a softer Payments vertical, and ongoing integration efforts, balanced by strong momentum in Banking & Capital Markets and AI-enabled core modernization opportunities. The combination of AI-driven offerings (Morpheus, Compass, Ray, Dash) and a scalable services platform positions Endava to capitalize on a multi-year AI-enabled transformation cycle, albeit with longer sales cycles and execution risk during integration. Investors should monitor: (1) conversion of large deals and ramp timing into Q4, (2) progress on GalaxE synergies and cost optimization, (3) macro development in UK/rest of world, and (4) utilization and pricing dynamics, including the ongoing shift to higher-value, potentially outcome-based engagements.