Endava plc (NYSE:DAVA) shares sank more than 14% in premarket trading Tuesday after the IT services and digital transformation company posted disappointing fiscal first-quarter 2026 results and issued a downbeat outlook for the rest of the year.

The company reported earnings of £0.15 per share, missing analyst expectations of £0.18, while revenue came in at £178.2 million, below the £188.78 million consensus estimate. On a constant-currency basis, revenue declined 7.3% year over year.

Adjusted profit before tax fell sharply to £9.9 million, or 5.5% of revenue, compared to £19.2 million (9.9%) in the same period last year.

“The first quarter results were lower than guided primarily due to an unexpected credit made to a client that arose subsequent to our last earnings call as well as certain non large strategic pipeline opportunities that did not convert into revenue during the quarter as anticipated,” said John Cotterell, CEO of Endava.

“While these factors weighed on our performance, our ability to secure a multi-year strategic relationship with a leading payments company of up to $100 million demonstrates the strength of our client relationships,” he added.

Looking ahead, for the second quarter of fiscal 2026, Endava expects revenue between £179 million and £182 million, representing a 7% to 8% constant-currency decline, and falling short of the £185.6 million analyst consensus.

The company also projected adjusted diluted earnings per share between £0.15 and £0.17, below market expectations of £0.21.

For the full fiscal year 2026, Endava guided for revenue between £735 million and £752 million, implying a 2.5% to 4.5% constant-currency decline, compared with the £754.5 million expected by analysts. Adjusted diluted EPS is forecast in the range of £0.80 to £0.88, versus the consensus estimate of £0.85.

The weak outlook underscores ongoing headwinds in the IT consulting sector, as clients remain cautious on discretionary spending and large digital transformation projects.

Endava stock price

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