Endava expects adjustments of up to 4% of 2025 revenue, faces control weaknesses and reporting delay
Key Facts
On October 28, Endava said its audit committee had concluded that specified quarterly results should no longer be relied upon, following an investigation into agreements with parties that were both customers and suppliers. The company said some of those agreements lacked economic substance or had been negotiated and priced as a single arrangement. It initially estimated that revenue adjustments for fiscal 2026 would equal about 2%–4% of fiscal 2025 revenue. The restatement also includes non-cash adjustments to certain balance sheet items, including goodwill and intangible assets, and will reduce adjusted profit before tax. The investigation affects financial reporting and controls, while the company has yet to complete its financial statements for the year ended June 2026.
The periods whose results should no longer be relied upon cover the quarter ended September 30, 2025, the quarters ended December 31, 2025, and the quarter ended March 31, 2026. They therefore include results for the three and six months ended December, as well as the three and nine months ended March. Endava said the counterparties to the agreements under investigation accounted for about 1.5% of its total customers as of March 31, 2026. The company does not expect to adjust fiscal 2025 results or restate prior fiscal years or earlier periods within those years. It will restate the affected periods in fiscal 2026.
In a late filing notice submitted to the U.S. Securities and Exchange Commission on November 3, Endava said it had been unable to file its annual Form 20-F for the fiscal year ended June 30, 2026, by its scheduled deadline of November 2. It said it had not completed its financial statements and therefore could not reasonably estimate the total impact of the restatement on fiscal 2026 results. However, it expects results for that year to decline compared with fiscal 2025. It also expects to report one or more material weaknesses in internal control over financial reporting and cited deficiencies including “tone at the top.” The filing delay is linked to the incomplete financial statements and ongoing work to assess the impact of the adjustments.
The company said the agreements involved parties that were both customers and suppliers, and that some transactions lacked economic substance or were negotiated and priced as a single arrangement. It provided its initial estimate of the adjustments based on 2025 revenue, while noting that the restatement also includes non-cash balance sheet adjustments and a decline in adjusted profit before tax. In fiscal 2025, Endava reported revenue of 772.3 million pounds, up 4.3% from 740.8 million in the previous year. Profit before tax that year fell to 24.1 million pounds, compared with 27.0 million in fiscal 2024. The company said it does not expect the adjustments to extend to 2025 results, although that year’s revenue is used as the benchmark for estimating the initial scale of the adjustments.
The accounting developments coincided with changes in senior management. Chief Financial Officer and board member Mark Thurston resigned from both positions effective October 25, 2026, and Conor McShane continued as interim CFO while a replacement is sought. General Counsel and Company Secretary Rohit Botalingam also resigned from both positions effective October 26. Rob Machin became interim CEO and an executive director on the board effective November 2, 2026. Company founder John Cotterell informed the board of his intention to retire as CEO on October 19, 2027, while remaining founder, strategic adviser and a board member.
Endava expects its remediation plan to include strengthening accountability and compliance, improving accounting and reporting procedures, hiring additional qualified finance staff, and expanding governance and training. The company said details of the plan will be included in the annual report. The chairman and audit committee chair affirmed their commitment to completing the investigation and issuing audited results, with corrective action based on the final findings. The disclosure quoted them as saying: “The Board is committed to acting in the best interests of the company and its shareholders as we work to complete our investigation and issue our audited results.” The company added that it is assessing the restatement’s impact on its past compliance with covenants under its revolving credit facility and is in discussions with lenders. It estimated cash and cash equivalents at about 55 million pounds as of September 30, 2026.
Endava shares closed at 1.75 dollars on November 6, 2026, according to EL7 data. That price alone does not establish the impact of the accounting disclosures on trading. The shares had fallen more than 10% in after-hours trading in September, following the CFO’s placement on administrative leave and the announcement of an accounting investigation. In its October 28 disclosure, the company said the audit committee had concluded that results for the specified periods should no longer be relied upon, then notified the SEC on November 3 that its annual report would be delayed. The company’s next step is to complete the investigation and issue audited results, with details of the remediation plan to be presented in the annual report.