Q2 2024 Endava PLC Earnings Call

Operator: Good morning and welcome to the Endava Second Quarter Fiscal Year 2024 Results Conference Call. All participants will be in listen-only mode.

Good morning, and welcome to the <unk> second quarter fiscal year 'twenty 'twenty four results conference call.

All participants will be in listen only mode.

Operator: Should you need assistance, please signal a conference specialist by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your touchtone phone.

Should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

After todays presentation, there will be an opportunity to ask questions.

To ask a question you May Press Star then one on your Touchtone phone.

Operator: To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Laurence Madsen, Head of Investor Relations. Please go ahead.

With China. Your question. Please press Star then two.

Please note this event is being recorded.

I would now like to turn the conference over to Lauren Smith.

Madsen head of Investor Relations. Please go ahead.

Laurence Madsen: Thank you. Good afternoon, everyone, and welcome to Endava's second quarter of fiscal year 2024 conference call. As a reminder, this conference call is being recorded. Joining me today are John Cotterell, Endava's Chief Executive Officer, and Mark Thurston, Endava's Chief Financial Officer.

Thank you good afternoon, everyone and welcome to the second quarter of fiscal year, 2020 four conference call.

During this conference call is being recorded joining me today are John Contrail, and Davis, Chief Executive Officer, and my first N and M S Chief Financial Officer before we begin a quick reminder, to our listeners our presentation and our our companion remarks today include forward looking statement.

Laurence Madsen: Before we begin, a quick reminder to our listeners, our presentation and our accompanying remarks today include forward-looking statements, including but not limited to statements regarding our guidance for Q3 fiscal year 2024 and for the full fiscal year 2024, the overall headwinds facing our industry and business, including adverse macroeconomic conditions and the global geopolitical climate, and the impacts of such headwinds on our ability to grow revenue, and in particular, growth and expansion in The impact of our investment and cost-saving initiatives on our financial performance. Our acquisition of Galaxy Solutions, including expected synergies from their transaction and the overall impact on our business. Announcements about our technology and offerings, demand from clients for our technology services, our ability to create long-term value for our clients, our people, and our shareholders, and our business strategies, plans, and operations. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. The actual results and the timing of certain events may differ materially from the results or timing predicted or implied by such forward-looking statements, and reported results should not be considered as an indication of future performance.

This included including but not limited to statements regarding our guidance for Q3 fiscal year 'twenty 'twenty four and for the full fiscal year, 2020 for the overall headwinds facing our industry and business, including adverse macroeconomic conditions and the global geopolitical climate.

And the impact of such headwinds on our ability to grow our revenue and in particular growth and expansion in our industry vertical.

The impact of our investments and cost saving initiatives on our financial performance.

Quick question of Galaxy solutions, including expected synergies from the transaction and the overall impact on our business and then some in store technology and offerings demand from clients for our technology services, our ability to create long term value for our clients our people and our shareholders.

And our business strategies plans and operations.

These statements are subject to risks and uncertainties that could cause actual results to differ materially from those.

And in the forward looking statements actual results and the timing of certain events may differ materially from the results or timing predicted or implied by such forward looking statements and reported results should not be considered as an indication of future performance. Please note that these forward looking statements.

John E. Cotterell: Please note that these forward-looking statements made during this conference call speak only as of today, and we undertake no obligation to update them to reflect subsequent events or circumstances other than to the extent required by law. For more information, please refer to the risk factors section of our annual report filed with the Securities and Exchange Commission on September 19, 2023. Also, during the call, we'll present both IFRS and non-IFRS financial measures. While we believe the non-IFRS financial measures provide useful information for investors, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with IFRS. Reconciliations of such non-IFRS measures to the most directly comparable IFRS measures are included in today's earnings press release, as well as the investor presentation, both of which you can find on our investor relations site or on the SEC website. A link to the replay of this call will also be available on our website. With that, I'll turn the call over to John.

During this conference call speak only as of today's date, and we undertake no obligation to update them to reflect subsequent events or circumstances.

And then to the extent required by law for more information. Please refer to the risk factors section of our annual report filed with the Securities and Exchange Commission on September 19 2023.

Also during the call we'll present, both I F Rs and non <unk> financial measures well, we believe the non ifr financial measures provide useful information for investors.

Sanitation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with our forest reconciliations of such non <unk> measures to the most directly comparable I FRS measures are included in <unk>.

<unk> earnings press release, as well as your Investor presentation, both of which you can find on our Investor relations site or on the Sec's website link to the replay of this call will also be available on our website with that I'll turn the call over to John.

John E. Cotterell: I'd like to thank you all for joining us today, and I hope you're all well. We're pleased to be here to provide an update on our business and financial performance for the three months ended December 31st, 2023. As we noted in our press release, obviously, the environment continues to be challenging. Our results and guidance reflect headwinds in IT spending, particularly on discretionary projects, and in the payments and banking and capital markets vertical. That said, we believe we have a very well-positioned and strong business. We are confident that despite the current softness in demand, in the longer term, the opportunity for us is very attractive. We want to make sure Endava continues to be well positioned, and creates long-term value for our people and our shareholders.

I'd like to thank you all for joining us today.

Oh, well, we're pleased to be here to provide an update on our business and financial performance for the three months ended December 31st 2023.

As we noted in our press release, obviously the environment continues to be challenging.

Our results and guidance reflect headwinds in it spending, particularly on discretionary projects and in the payments and banking and capital markets verticals.

That said, we believe we have a very well positioned and strong business.

We are confident that despite current softness in demand in the longer term the opportunity for us is very attractive.

We want to make sure and auto continues to be well positioned to create long term value for our clients our people and our shareholders.

John E. Cotterell: We continue to pursue our strategy, to ensure that while we are right-sized for the current demand environment, we are also making necessary investments in our business to position ourselves for when discretionary capex picks up again. We're seeing three key trends in the market. One, while budgets are up this year and there's a lot of work to be done, in the short term, spend is being deferred as clients continue to be cautious.

We continue to pursue our strategy to ensure that while we are right sized for the current demand environment. We are also making necessary investments in our business to position ourselves for when discretionary capex picks up again.

We're seeing three key trends in the market.

One while budgets are up this year and there's a lot of work to be done.

In the short term spend is being deferred as clients continue to be cautious.

John E. Cotterell: As one client put it, we have the budget for a substantial ramp up with Endava, and we are going to go sleuth to see how the year unfolds. Secondly, we are seeing deeper demand for vertical and technology expertise. And thirdly, the growing importance and relevance of a broader, diversified delivery footprint. Given these trends, we're continuing to make organic and inorganic investments in a disciplined way to, number one, diversify our revenue and our delivery, and invest in technology and domain capabilities. Secondly, attract great talent and take advantage of the difficult times many others are facing to invest in and add to our leadership. And thirdly, evaluate acquisition opportunities that help us accelerate our growth strategy. Some of these investments may result in lower near-term margins given the current market environment. But, as we know, it takes courage to invest in uncertainty.

There's one client push it we have the budget for a substantial ramp up with indaba.

But again to go slow for now and see how the year unfolds.

Secondly, we are seeing deeper demand for vertical and technology expertise.

And thirdly, the growing importance and relevance of a broader diversified delivery footprint.

Given these trends we are continuing to make organic and inorganic investments in a disciplined way.

Two number one diversify our revenue delivery and invest in technology and domain capabilities.

Secondly, attract great talent and take advantage of the difficult times many of us are facing to invest in and adds to our leadership.

And thirdly evaluate acquisition opportunities that help us accelerate our growth strategy.

Some of these investments May result in lower near term margins given the current market environment.

As we know it takes courage to invest in uncertain times, but we continue to make sure we are being disciplined in pursuing our strategic objectives.

John E. Cotterell: But we continue to make sure we are being disciplined in pursuing our strategic objectives. Moving on to our results, we reported revenue totaling £183.6 million for Q2 of our fiscal year 2024, representing an 8.1% year-on-year decrease in constant currency from £205.2 million for the same period in the prior year. We ended the quarter with an adjusted profit before tax for the period of £22.7 million, representing a 12.4% adjusted profit before tax margin.

Moving on to our results, we reported revenue totaling 183.6 million pounds for Q2 of our fiscal year 2024, representing an eight 1% year on year decrease in constant currency from 205.2 million pounds.

In the same period in the prior year.

We ended the quarter with an adjusted profit before tax for the period of $22 7 million pounds, representing a 12.4% adjusted profit before tax margin.

John E. Cotterell: Some of the large projects we mentioned last quarter have not scaled up to expectations, while others have remained in the pipeline for longer than expected, as a result of client hesitancy. We now have numerous projects where discovery work has been done, but clients are hesitating on when to commit the sizable spend needed to build production-ready systems, alongside this short-term change to our growth expectations. We started a business optimization program in order to facilitate a return to the medium term to our 20% constant currency organic revenue growth and 20% adjusted profit before tax margin. We remain focused on investing in growth while simultaneously reducing corporate complexity and eliminating inefficiency.

Some of the large projects, we mentioned last quarter have not scaled up to expectations yet.

Those have remained in the pipeline for longer than expected as a result of client hesitancy.

We now have numerous projects where discovery work has been done but clients are hesitating on when to commit the sizable spend needed to build production ready systems.

Alongside this short term change to our growth expectations. We have started our business optimization program in order to facilitate a return to the medium term.

Well, 20% constant currency organic revenue growth and 20% adjusted profit before tax margin.

We remain focused on investing in growth, while simultaneously, reducing corporate complexity and eliminating inefficiencies.

John E. Cotterell: We believe this will improve our competitiveness and enable us to further invest in Let me tell you about some of these strategic initiatives where we are invested. We will continue with our global industry, which is a key capacitive differentiator. Additionally, we are increasing our use of automation and accelerators to deliver outcomes for our clients more quickly. Increasingly, we are being requested to participate in larger-scale enterprise systems integration work. And as a result, this will be a focus of activity in the coming quarter. We are bringing together our close to client delivery and near shore delivery teams under one manager per region in order to further build consistency in our delivery capability.

We believe this will improve our competitiveness and enable us to further invest in growth.

Let me tell you about some of these strategic initiatives, where we are investing.

We will continue with our global industry focus, which is a key competitive differentiator.

Additionally, we are increasing our use of automation and accelerators to deliver outcomes for our clients more quickly.

Increasingly we are being requested to participate in larger scale enterprise systems integration work and as a result, this will be a focus of activity in the coming quarters.

We are bringing together all close to client delivery and nearshore delivery teams under one manager per region.

Just to further build consistency in our delivery capability.

John E. Cotterell: We're starting to see the benefits of our combined sales and client delivery operation, resulting in a more cost-effective organization, greater collaboration across industries and regions, and the development of senior multi-disciplined leaders that will ensure Endava is able to continue to scale. We're using this slowdown period as an opportunity to invest in senior go-to-market leadership. Attracting dealmakers who are difficult to shift in the boom times, and we undertook a rebranding exercise at the end of January, which has been very well received. In the last 12 months, we hired a dozen dealmakers from leading competitors across our industry vertical.

We're starting to see the benefits of our combined sales and client delivery operations, resulting in a more cost effective organization.

Later collaboration across industries and regions and the development of senior multi disciplined leaders that will ensure and daughter is able to continue to scale.

What are you using this slowdown period as an opportunity to invest in senior go to market leadership, attracting dealmakers, who are difficult to shift in the boom times and we undertook a rebranding exercise at the end of January which has been very well received.

In the last 12 months, we hired a dozen dealmakers from leading competitors across all our industry verticals.

On the technology front, we want to help our clients embrace unexplored new technologies more rapidly.

John E. Cotterell: On the technology front, we want to help our clients embrace and explore new technologies more rapidly. Therefore, in addition to our core delivery, we are creating new teams called pods that will be singularly focused on helping our clients accelerate and invent the future around new and emerging technologies. PODs represent an opportunity for differentiation by demonstrating our thought and delivery leadership across industry verticals, against a key set of technologies and capabilities.

Therefore in addition to our core delivery competencies, we are creating new teams called pulse that will be singularly focused on helping our clients accelerate and invent the future around new and emerging technologies.

Pulse represent an opportunity for differentiation by demonstrating our thoughts and delivery leadership across industry verticals.

<unk>, a key set of technologies and capabilities.

<unk> pulled together existing indaba experts with exceptional thought and delivery leadership with a fast evolving technology Tonight.

They will work with our industry teams to establish thought leading propositions around high momentum technologies.

John E. Cotterell: The pods pull together existing Endava X.. with exceptional thought and delivery leadership within a fast-evolving technology domain. They will work with our industry teams to establish thought-leading propositions around high momentum technologies, and work alongside our delivery locations to ensure that appropriate skills are built and available at scale as acceleration is realized. We are building pods for AI, cloud, intelligent automation, cybersecurity, quantum, sustainability, embedded, and physical computing.

And working alongside our delivery locations to ensure that appropriate skills are built and available at scale is acceleration is realized.

We are building pullets.

AI cloud intelligent automation cybersecurity quantum sustainability embedded and physical computing.

We believe this is the right time to invest in these go to market technology and sales arenas and these efforts will lay an even stronger foundation on which to scale as markets return.

In addition to the release of our results today I am thrilled to announce our acquisition of Galaxy solutions to strengthen our health care vertical as well as establish delivery capabilities in India.

John E. Cotterell: We believe this is the right time to invest in these go-to-market technology and sales arenas, and these efforts will lay an even stronger foundation on which to scale as markets return. In addition to the release of our results today, I am thrilled to announce our acquisition of Galaxy Solutions to strengthen our healthcare vertical, as well as establish delivery capabilities in India. This is our largest acquisition to date, and it aligns with our strategic vision of expanding our global delivery footprint and further diversifying our revenue base. Galaxy was started in 1993 by its CEO, Tim Bryan, and is a leading provider of digital transformation and product development services to blue chip U.S. companies, with a significant client base in healthcare and delivery capabilities in India.

This is our largest acquisition to date and it aligns with our strategic vision of expanding our global delivery footprint and further diversifying our revenue base.

Alex He was started in 1993 by the CEO, Tim Brian and is a leading provider of digital transformation and product development services to Blue Chip U S companies with a significant client base in the health care vertical and delivery capabilities in India.

I met with Tim and his leadership team and visited their delivery centers in India.

I'm excited about the synergies we can create between the two companies.

Acquisition significantly expands our presence in the fast growing and exciting health care sector in the U S.

Additionally, with Galaxy, a global delivery footprint now expands to India, the deepest talent pool in the world.

John E. Cotterell: I met with Tim and his leadership team and visited their delivery centers in India, and I am excited about the synergies we can create between the two companies. This acquisition significantly expands our presence in the fast-growing and exciting healthcare sector in the U.S., additionally with Gallagher. Our global delivery footprint now expands to India, the deepest IT talent pool in the world, where Galaxy has nearly 1,200 employees. It will strengthen our North American management and brings Decade of offshore delivery know-how to Endava. In addition, Galaxy has developed a strong accelerator-enabled capability, facilitating the understanding of existing enterprise systems and enabling change.

We're galaxy has nearly 200 employees.

Galaxy will strengthen our north American management team and brings decades of offshore delivery knowhow to endeavour.

In addition, galaxy has developed a strong accelerator enabled capability facilitating the understanding of existing enterprise systems and enabling change this capability alongside of indoor was existing strength in delivering next generation technology will allow us to open new opportunities.

And go deeper into enterprise transformation work, delivering more insightful and predictable outcomes.

Mark will provide more details on the transaction shortly.

I'm excited to share that we announced yesterday that we're expanding our strategic partnership with a quantity a leading international provider of tech enabled shareholder retirement and remediation services. We have established a five year partnership of 75 million pounds to support that.

John E. Cotterell: This capability, alongside of Endava's existing strength in delivering next-generation technology, will allow us to open new opportunities and go deeper into enterprise transformation, delivering more insightful and predictable outcomes. Mark will provide more details on the transaction shortly. I'm excited to share that we announced yesterday that we're expanding our strategic partnership with Aquinity, a leading international provider of tech-enabled shareholder retirement and remediation services. We have established a five-year plan of $75 million to support the delivery of transformative product and tech roadmap. This deal strengthens our existing three-year relationship and delivers significant growth for Endava in our capital markets. As a result, Equinity has become one of Endava's top 10 clients globally.

Delivery of a transformative product and tech roadmap. This deal strengthens our existing three year relationship and deliver significant growth for indaba and our capital markets first cool.

With the extension of this partnership equity has become one of <unk> top 10 clients globally.

This revenue is net new and as an example of a sizeable project opportunities that are being slower to convert and expect it to last quarter.

I'd like to provide you with an update on projects. We are working on in North America.

In our banking and capital markets vertical we are working with early warning services and launching pays.

And easy online checkout solution offered by banks and credit unions.

And all of it is accelerating speed to market with the expediting of test environments and the development of an SDK for merch and integrations, we continue to drive market expansion as an integration partner early warning, enabling indaba to drive value across all verticals.

John E. Cotterell: This revenue is net new and is an example of the sizable project opportunities that were slower to convert than expected last quarter. I'd like to provide you with an update on projects we are working on in North America. In our Banking and Capital Markets vertical, we are working with early warning services in launching PayPal, an easy online checkout solution offered by banks and credit unions.

And the other is working with a leading Fintech company in the alternative investment space based in North America.

A two plus year partnership started with a platform envisioning project working directly with their entire S. E suite to translate our growth ambitions into executable backlogs in order to jumpstart and actionable delivery plan.

He helped build out their snowflake based data Lake and end to end data pipeline, enabling sales and operational reporting. Additionally, we provide ongoing support for internal integrations with systems and external integrations with pure reporting providers.

John E. Cotterell: Endava is accelerating speed to market with the expediting of test environments and the development of an SDK for merchant integration. We continue to drive market expansion as an integration partner of Early Warning, enabling Endava to drive value across all those that it works with a leading fintech in the alternative investment space based in North America. Our two plus year partnership started with a platform envisioning project, working directly with their entire team to translate their growth ambitions into executable backlogs in order to jumpstart an actionable delivery plan. We helped build out their Snowflake-based data lake and end-to-end data pipeline. Enabling Sales and Operational Reports Additionally, we provide ongoing support for internal integrations with systems and external integrations with reporting providers. Endava is working with the American Endowment Foundation, or AEF, one of the nation's largest independent donor advice fund sponsors, to help modernize their donor advised fund platform.

Indaba is working with the American Endowment foundation or AE F. One of the nations largest independent donor advised fund sponsors to help modernize their donor advised fund platform.

We are supporting their leadership team with their digital transformation journey. The goal is to harness technology and automation to optimize the end to end fund management process by improving the user experience for firms financial advisers donors and internal E F team members.

By Curating, a seamless interface for both existing clients and prospective partner firms, where he will help to scale and streamline aes overall internal operational efficiency.

And our TMT vertical we are working for a large U S sports media company organizing that date by building a platform to centralize monitor and show Interactive reports financial information.

The financial data Visualizations encompass details relating to ticketing events payments customer information video visualization that streaming.

John E. Cotterell: We are supporting their leadership team with their digital transformation journey. The goal is to harness technology and automation to optimize the end-to-end fund management process by improving the user experience for firms, financial advisors, donors, and internal AEF team members by curating a seamless interface for both existing clients and prospective partners. We will help to scale and streamline AEF's overall internal operational efficiency. In our TMT vertical, we are working for a large US sports media company, organizing their data by building a platform to centralize, monitor, and show interactive reports for financial information. The financial data visualizations encompass details relating to ticketing, events, payments, customer information, video visualization, and streaming. Centralized information allows our client to make real-time database decisions and monitor their top sales indicators.

The centralized information allows our client to make real time database decisions and monitor that top sales indicators.

Mobile gaming remains an important revenue contributor for clients in the gaming sector. We are collaborating with a global brand in both the console and casual game market reshaping their direct to consumer platforms to revolutionize their monetization strategy.

Through the implementation of streamline processes exclusive deals tailored a compelling transactional interfaces and loyalty rewards programs. We are enticing mobile game is to explore web platforms fostering a more immersive community focused user experience beyond the confines of the game.

In the aviation space and the other is partnering with Delta Airlines, helping them launch and support Delta sink a suite of personalized experiences and offers aimed at creating new ways for customers to enjoy their time on board.

And the other worked with delta to establish a cutting edge agile product strategy and design approach, which is improved customer satisfaction increased member acquisition and delivered value to strategic partners through customer engagement.

John E. Cotterell: Mobile gaming remains an important revenue contributor for clients in the gaming industry. We're collaborating with a global brand, in both the console and casual game, reshaping their direct-to-consumer platform to revolutionize monetization Through the implementation of streamlined processes, exclusive deals, tailored and compelling transactional, and Loyalty Rewards Program. We are enticing mobile gamers to explore web platforms, fostering a more immersive community-focused In the aviation space, Endava is partnering with Delta Airlines, helping them launch and support Delta Sync, a suite of personalized experiences and offers aimed at creating new ways for customers to enjoy their time on board.

We will continue to bring to bear all capabilities in support of delta's ongoing investment into industry, leading products and the best in class customer experience.

We are working with many of the leading brands across different segments of the automotive OEM landscape.

From back office and plant flow operations to in car experience, we are helping our clients leveraged technology to solve problems and improve revenue.

For example, we used optical character recognition and artificial intelligence to digitize paper vehicles documentation, which expedited processing.

Improved accuracy reduced manual labor, we used computer vision and synthetic data generation techniques to accelerate and deepen learning for AI models. We're also helping a top comic leverage virtual reality and AI to optimize and validate the design of production processes to reduce.

John E. Cotterell: Endava worked with Delta to establish a cutting-edge agile product strategy and design approach, which has improved customer satisfaction, increased member acquisition, and delivered value to strategic partners through customer engagement. We will continue to bring to bear our capabilities in support of Delta's ongoing investment in industry-leading products and the best in class customer experience. We work with many of the leading brands across different segments of the automotive OEM market. From back office and plant floor operations to in-car experience, we are helping our clients leverage technology to solve problems and improve revenue. For example, we used Optical Character Recognition and Artificial Intelligence to digitized paper vehicle documentation, which expedited the process, improved accuracy, and reduced manual labor.

We used the time required.

To commission and build.

And lastly, we are helping to design and deploy a scalable cloud architecture to enable over the air capabilities familiars of vehicles.

On the technology side, we are rapidly moving to the point, where AI touches just about every project. We continue to see a wide variety of work in our pre sales pipeline right across the ideation to operation cycle, and we continue to see a significant increase in client.

Interest in exploring the potential of generative AI.

These conversations are becoming more focused as clients want to investigate specific applications for that business. This is happening across several industry verticals.

Including insurance Pharmaceuticals technology gaming telecoms banking and capital markets in many cases clients are taking steps and exploring potential applications and we helped them do this through workshops and practical proof of concept work.

We are also seeing some more forward looking organizations start to actively explore new types of application such as AI agent automation.

John E. Cotterell: We used computer vision and synthetic data generation techniques to accelerate and deepen learning for AI. We are also helping a top carmaker leverage virtual reality and AI to optimize and validate the design of production processes to reduce the time required. Commission and Bill. And lastly, we are helping to design and deploy a scalable cloud architecture to enable over-the-air capability for millions of users. On the technology side, we are rapidly moving to the point where AI touches just about every project. We continue to see a wide variety of work in our pre-sales pipeline, right across the ideation to operation cycle. And we continue to see a significant increase in client interest in exploring the potential of generative AI. These conversations are becoming more focused as clients want to investigate specific applications for their business.

Combinations of generative AI with other emerging technologies, such as knowledge graph.

Clients are increasingly looking to us for their AI implementation roadmaps in particular in the insurance and tech sectors.

A few examples of our involvement here include work with a large U S insurer to explore how they can use generative AI to grow their business a workshop to demonstrate how generative AI can help a london market insurer and advisory engagement to explore personalization of Omnichannel customer communications for <unk>.

Large telecoms company as well as creating a number of generative AI powered tools for wealth Tech company.

And also building an evaluation framework for a question answering bolt in the gaming industry.

We're also pleased with the level of client interest in our in house generative AI based platform, which enables the exploration of a wide range of potential applications of the technology through practical prototype implementations alongside of our clients. Two examples include cogeneration for pharmaceutical statistics.

John E. Cotterell: This is happening across several industries, including insurance, pharmaceuticals, technology, gaming, telecoms, banking, and capital markets. In many cases, clients are taking steps to exploring potential applications, and we help them do this through workshops and practical proof of concept work. We are also seeing some more forward-looking organizations start to actively explore new types of applications, such as AI agent automation, and combinations of generative AI with other emerging technologies, such as knowledge. Clients are increasingly looking to us for their AI implementation roadmap, particularly in the insurance and tech sectors. A few examples of our involvement here include work with a large US insurer to explore how they can use generative AI to grow their business, and a workshop to demonstrate how generative AI can help a London market ensure... Advisory Engagement to Explore Personalization of Omnichannel Customer Communication for a Large Telecom, as well as creating a number of generative AI-powered tools for a wealth tech

For a global pharmaceutical company and a multi agent prototype, which took a claim through multiple stages and scenarios for a large U S insurer.

Our deep partnership relationships with major technology providers continue to bear fruit here.

Here are a few tangible examples of projects we are working on starting with an exciting generative AI based prototype of a voice and text based call Center assistant on Google Cloud for a major U K insurer.

We recently held a multi day hackathon at our offices in Charlotte to explore the latest advances in Microsoft Symantec kernel platform targeting the health care industry and developed two compelling prototypes in the areas of pharmacy automation.

And critical care triage.

Internally, we are seeing the early benefits of generative AI in our processes.

With production use of tools, increasing productivity and generating sales material producing client insight for our private equity business as well as helping to generate insights on our workforce.

John E. Cotterell: Building and Evaluation Framework [inaudible] for a question answering bot in gaming. We're also pleased with the level of client interest in our in-house generative AI based platform, which enables the exploration of a wide range of potential applications of the technology through practical prototype implementations alongside our client. Two examples include code generation for pharmaceutical statistics for a global pharmaceutical company and a multi-agent prototype which took a claim through multiple stages and scenarios for a large U.S. insurer. Deep Partnership Relations with major technology providers continue to bear fruit. Here are a few tangible examples of projects we are working on, starting with an exciting generative AI-based voice and text-based call center assistant on Google Cloud for a major UK insurer. We recently held a multi-day hackathon at our offices in Charlotte to explore the latest advances in Microsoft's Semantic Kernel platform targeting the healthcare industry and developed two compelling protocols in the areas of pharmacy automation and critical care triage.

We recently held our indaba innovation lab with a total of 75 teams participating in this global innovation competition and this year, 80% of the finalists applied AI in some practical way.

Illustrating how knowledge of AI is spread right across the firm.

Globally, our recent acquisitions in Asia Pac and in the U S are integrating smoothly and I'm excited about the prospects of our expanding global footprint.

We continue trusted partnerships with engineers supporting inclusive education, including near an NGO dedicated to bridging the technology skills gap for refugees by providing free training and matching talent with opportunities around the world.

Additionally, we are also leveraging our technical expertise to help solve complex environmental and societal issues.

We recently teamed up with the resilient building Council in Australia to launch a bushfire resilience tailored for Australia, and empowering users to gauge their preparedness in the event of a fire, providing an easy to use solution to protect homes and communities.

We ended the quarter with 11539 employees, a five 3% decrease from 12183 in the same period last year.

John E. Cotterell: Internally, we're seeing the early benefits of generative AI in our process, with production use of tools increasing productivity and generating sales material, producing client insight for our private clients, as well as helping to generate insights on our work. We recently held our Endava Innovation Lab, with a total of 75 teams participating in this global innovation competition, and this year, 80% of the finalists applied AI in some practical way, illustrating how knowledge of AI has spread right across the firm. Globally, our recent acquisitions in Asia-Pacific and in the U.S. are integrating smoothly, and I am excited about the prospects of our expanding global footprint. We continue trusted partnerships with NGOs, including NIA, an NGO dedicated to bridging the technology skills gap for refugees by providing free training and matching talent with opportunities around the world.

In the current environment, our recruitment is focused on areas of demand and as I mentioned earlier, the strengthening of our senior go to market leadership.

I'd like to take this opportunity to thank all in dogs that our commitment and determination as we persevere through these headwinds.

We will continue to manage the business for the long term.

Maintaining our culture, and organizational health and creating exciting solutions for our clients and their customers.

We believe clients activities and exploring in commissioning new products will overtake the headwinds and see us return to growth.

I will now pass the call onto Mark who will walk you through our financial results for the quarter and provide guidance for the coming quarter and fiscal year.

Thanks, John.

And Thomas revenue totaled $183 6 million times for the three months ended December 31st two.

2023 pads.

At 205 2 million pounds in the same period prior year a.

At 10, 6% increase over the same period in the prior year.

At constant currency, our revenue declined eight 1% from the same period.

Within the range, we provided to you last quarter.

John E. Cotterell: Additionally, we are also leveraging our technical expertise to help solve complex environmental and societal issues. We recently teamed up with the Resilient Building Council in Australia to launch a bushfire resilience app tailored for Australia. Empowering users to gauge their preparedness in the event of a fire, providing an easy-to-use solution to protect homes and communities.

Flagship at five 3% close to inorganic contribution during the course.

Sequentially revenue was down by three 6% in constant currency on the previous quarter.

Yeah.

Profit before tax for Q2 fiscal year, 2024 was $10 6 million pounds compared to transit point 7 million pounds in the same period in the prior year.

Our adjusted profit before tax for the three months ended December 31st 2023, $22 7 million pounds compared to 43 million pounds in the same period in the prior year.

John E. Cotterell: We ended the quarter with 11,539 employees, a 5.3% decrease from 12,183 in the same period last year. In the current environment, our recruitment is focused on areas of demand and, as I mentioned earlier, the strengthening of our senior go-to-market leadership. I'd like to take this opportunity to thank you all and everyone.

Our adjusted profit before tax margin was 12, 4% for three months ended December 31st 2023.

At 29% for the same.

Same period in the prior year.

Our adjusted diluted earnings per share was 33.

Three months ended December 31, 2023 calculated on 58 6 million diluted shares as compared to 59 pence.

Same period in the prior year calculated on 58 zero million got it.

Due to chance.

John E. Cotterell: Thank you all for your commitment and determination as we persevere through these headwinds. We will continue to manage the business for the long term, maintaining our culture and organizational health and creating exciting solutions for our clients and their customers. We believe our clients' activities in exploring and commissioning new products will overtake the head... CS return. I will now pass the call on to Mark, who will walk you through our financial results for the quarter and provide guidance for the coming quarter and fiscal year. Thanks, John.

Revenue from our 10 largest clients accounted for 34% revenue.

And at December 31st 2023 compared to 31%.

Same period last fiscal year.

The average spend per client from our 10 largest clients increased from $6 5 million pounds $6 3 million pounds.

Three months ended December 31st 2020 as.

Mark S. Thurston: Endava's revenue totaled £183.6 million for the three months ended December 31, 2023, compared to £205.2 million in the same period in the prior year, a 10.6 percent decrease over the same period in the prior year. In Costs and Currency, our revenue declined 8.1% from the same period in the prior year, within the range we provided to you last quarter and reflected a 5.3% positive inorganic contribution during the quarter. Consequently, revenue was down by 3.6%, cost and currency on the previous call. Profit before tax for Q2 fiscal year 2024 was £10.6 million, compared to £20.3 million in the same period in the prior year.

From your upgrade 1.3 per cent.

Have you tried to call in 22.3 per cent on the rest of the world cruise 44.8%.

70 from pediments declined 20.8% for three months ended December 31st 2023.

Period last fiscal year.

And accounted for 26% of revenue <unk> 29 per cent.

Saint period last fiscal year.

Revenue from Bryan King and capital markets to call at 25.2 per cent.

Mark S. Thurston: Our adjusted profit before tax for the three months ended December 31st, 2023, was £22.7 million, compared to £43 million for the same period in the prior year. Our adjusted profit before tax margin was 12.4% for the three months ended December 31, 2023, compared to 20.9% for the same period in the prior year. Our adjusted diluted earnings per share was 30 pence for the three months ended December 31, 2023, calculated on 58.6 million diluted shares, as compared to 59 pence for the same period in the prior year, calculated on 58.0 million diluted shares.

Months ended December 31st 2023.

Saint period last fiscal year and accounted for 14% of revenue compared to 17%.

In the same period last fiscal year.

Revenue from insurance grew 10.4 per cent for the three months ended December 31st 2023.

The same period last fiscal year.

And accounted for 8% of revenue compared to 70 per cent in the same period last fiscal year.

Revenue from T. M T declined 5.2 per cent.

Months ended December 31st 2023 of the same period last fiscal year.

<unk> for 23% of revenue compared to 22% in the same period last fiscal year.

Revenue for mobility declined 4.1% for three months ended December 31st 2023.

Saint period last fiscal year <unk>.

<unk> send the revenue compared to 10%.

The same period last fiscal year.

Mark S. Thurston: Revenue from our 10 largest clients accounted for 34% of revenue for the three months ended December 31, 2023, compared to 31% Endava Plc Sponsored ADR Class A The average spend per client from our 10 largest clients decreased from £6.5 million, 3.3 million pounds, clear for the three months ended December 31st, 2023 as compared to the three months ended December 31st, 2022, representing a 3.1% year-over-year D In the three months under December 31, 2023, North America accounted for 31% of revenue compared to 33% in the same period of the last fiscal year. Europe accounted for 26% of revenue compared to 23% in the same period of the last fiscal year. The UK accounted for 34% of revenue compared to 39% in the same period last fiscal year, while the rest of the world accounted for 9% compared to 5% in the same period last fiscal year. However, revenue from North America declined 14.5% for three months ended December 31, 2023 compared to the same period last fiscal year.

<unk> <unk> <unk> <unk> 3.3 per cent. The three months ended December 31st 2023.

<unk> period last fiscal year.

Now accounts for 18% of revenue compared to 16 per cent in the same period last fiscal year.

Just a free cash plan was 33.6 million pounds for the three months ended December 31st 2023, compared to 37.0 million pounds. During the same period last fiscal year.

No cash and cash equivalents at the end of that period remains strong.

Hundred and 98.6 million pounds of December 31st 2023, compared to 164.7 million pounds at June 30th 2023.

Capital expenditure.

Three months ended December 31st 2023 is a percentage of revenue, 0.8% compared to 2.0 per cent in the same period last fiscal year.

It's Shawn mentioned, we announced acquisition of Galaxy today.

Consideration for this acquisition turtles up to 405 million U S dollars primary in cash some stock Mcclatchy million dollars conditional upon future performance.

Transaction is expected to close in early April 20th 24 subject to the completion customer closing conditions.

<unk> and therefore, it's not contemplated and all current gardens.

Now turning to our outlook for Q3 until your physical 24.

Last plantings cool, we highlighted a number of lost data is being progressed and Ah <unk> banking hotline.

What's the last deals Plotline is continuing to grow in number <unk>.

Mm slides request.

In addition deals that we have long lodge that you remain in this stuff with fries and a proving sites around pop into the production phase.

The uncertain macroenvironment collecting hesitancy among coins.

This is mainly pain <unk>.

Mark S. Thurston: Comparing the same periods, revenue from Europe grew 1.3%; revenue from the UK declined 22.3%, and the rest of the world, group 44.8. Revenue from payments declined 20.8% for the three months ended December 31, 2023, over the same period last fiscal year and accounted for 26% of revenue compared to 29% in the same period last fiscal year.

This weakness is most pronounced in payments and banking capital markets.

Payments companies are taking a very cautious <unk> environments. This.

As a result, it it's really sobriety purchase and we are seeing project thing to like.

And banking and capital markets, we are seeing <unk> take precedence.

Last transformation.

<unk> the revenue guards were set tomorrow arrange for two three given where we are in the cold, Sir but set a wider range around Q for which reflects necessity, we are saying hotline conversion.

Mark S. Thurston: Revenue from banking and capital markets declined 25.2% for the month ended December 31st, 2023, over the same period last fiscal year and accounted for 14% of revenue compared to 17% in the same period last fiscal year. Revenue from insurance grew 10.4% for the three months ended December 31, 2023, over the same period last fiscal year and accounted for 8% of revenue compared to 7% in the same period last fiscal year. Revenue from TMT declined 5.2% for the three months ended December 31, 2023, over the same period last fiscal year and accounted for 23% of revenue compared to 22% in the same period last fiscal year.

The top and bottom of arrange for Q4 would be 7%.

0.5% sequential growth on the Bitcoin Q3, respectively.

Consequently.

<unk> office optimization program that you mentioned that earlier reflects on actually managing head count appropriate image environment.

<unk> focus on a seniority pyramid.

As a result, we expect to take an exceptional charge <unk> associated with headcount reduction.

God, It's just being set with these actions under way reflects the savings we anticipate the cheating.

The dotcom sex, let me now turn to the gardens.

Oh God is could you three fiscal year 2024 is as follows.

<unk> expects revenue to be in the range of 174 billion pounds 276 million pounds.

Representing constant currency revenue decrease of between 12% and 11% on a year over year basis.

<unk> expects adjusted diluted EPS to be in the range of 17 to 19 <unk>.

Mark S. Thurston: Revenue from mobility declined 4.1% for the three months ended December 31, 2023, over the same period last fiscal year, and accounted for 11% of revenue compared to temperature in the same period last fiscal year. Revenue from other grew 3.3% for the three months ended December 31, 2023, over the same period last fiscal year, and now accounts for 18% of revenue compared to 15% in the same period last fiscal year. Our adjusted free cash flow was £33.6 million for the three months ended December 31, 2023, compared to £37.0 million during the same period last fiscal year. Our cash and cash equivalents at the end of the period remain strong at £198.6 million at December 31st 2023 compared to £164.7 million at June 30th 2023. Capital expenditure for the three months ended December 31, 2023, as a percentage of revenue, was 0.8% compared to 2.0% in the same period last fiscal year.

<unk> 2024 is as follows.

<unk> expects revenue to put in a range of 722 million pounds 735 pounds.

Representing constant currency revenue decrease between 7% and 5% on a year over year basis.

<unk> expects suggested <unk> to paint a range.

109 to 122 <unk>.

This is about gardens, two three fiscal year 2024, and the full fiscal year 2024 assumes exchange rates on January 31st 2024, and the exchange rate with one British pound to 1.27 U S dollar.

1.17.

<unk> comments, operator, when I'm ready to open lines secure ninth.

We will now begin the question and answer session to ask a question you May press star one on your telephone keypad.

If you are using a speaker phone please pick up your handset before pressing the keys.

To withdraw your question. Please press start in too.

At this time, we will pass momentarily took some bowler roster.

Mmm.

And our first question comes from Ashwin Sri-lanka City. Please go ahead.

Uhm. Thank you.

I was hoping to get some clarity with regards to the sequel.

<unk> the implied sequential grilled range for four Q relatively wide range 2027, and a half or so.

How much Galaxy contribution is included and then when we locate organic.

<unk>.

What sorts of course corrections have you made with you know with the assumptions you're making.

Mark S. Thurston: As Sean mentioned, we announced the acquisition of Galaxy today. Consideration for this acquisition totals up to US$405 million, primarily in cash, with some conditional upon future performance. The transaction is expected to close in early April 2024, subject to the completion of customary closing conditions and approvals, and therefore is not contemplated in our current guidance. Now turning to our outlook for Q3 and four-year fiscal 2020. On our last earnings call, we highlighted the number of large deals being progressed and a general strengthening of pipelines. However, whilst the large steel pipeline has continued to grow in number and volume, it has been slowed to the grass.

You know in relation to.

The conversion of book.

Bookings pipeline bookings booking revenue and so on.

No it doesn't.

Include any consultation from Galaxy <unk> comments.

It will complete.

Early April.

Does exclude.

Uhm, we've always had issues with the speed of which hotline cause to the nurse.

Q for.

Uhm.

<unk> the assumptions around hotline conversion.

We have been more conservative.

God does he have previously said when we say looking.

<unk>, we typically looking at 70 per cent of the gallery figure.

Mark S. Thurston: In addition, deals that we have long longed for largely remain in the discovery phase and are proving slow to ramp up into the production phase, given the uncertain macro environment creating hesitancy among clients. This has mainly been the case across all industry books. This weakness is most pronounced in payments and in banking and capital markets. Payments companies are taking a very cautious view on the micro environment.

Hi, this time around survey cheaper sense.

And conversion right Uhm I'm gonna spell back <unk>.

When <unk> 50 per cent of the.

<unk> visa because.

Conversion right.

The the time from that will make.

The contractions with a cough.

She had commenced work so we haven't changed the assumption.

Mark S. Thurston: This has resulted in the slow release of IT. We are seeing projects being delayed. In banking and capital markets, we are seeing registry work take precedence over last transformation. As for setting the revenue guide, we have set a narrow range for Q3, given where we are in the process, and set a wider range around Q4, which reflects the necessity we are seeing in pipeline conversion. The top and bottom of the range for Q4 would be 7% and 0.5% sequential for growth on the midpoint for Q3. Consequently, whilst this uncertainty persists, our business optimization program, which John mentioned earlier, will focus on actively managing headcount appropriately in this environment, with a particular focus on our seniority program. As a result, we expect to take an exceptional charge in H2 associated with head count reduction.

Assistance with what we have done but the actual conversion right.

It's gonna be so much slower and agile.

<unk> myself because.

Purchase Uhm, alright, being constrained certainly through the first quarter of the calendar here and class or not willing to release, some even though they're saying that there is work better for us to do so we are taking a cautious cube the top.

Top of the range uhm, but if uhm actually that is not as conservative basically putting them if possible.

See.

Literal sequential cross going from 2324.

Arrange would be something like 176.

<unk>.

And then there was a remark prepared remark which alluded to.

Client asking for dive.

Diversified delivery.

Hopefully you can.

Mark S. Thurston: Guidance has been set with these actions underway and reflects the savings we anticipate achieving. With that in mind, let me now turn to the guidance. Our guidance for Q3 fiscal year 2024 is as follows; Endava expects revenue to be in the range of £174 million to £176 million, representing a constant currency revenue decrease of between 12% and 11% on a year-over-year basis. Endava expects its adjusted diluted EPS to be in the range of 17 to 19 pence per share.

Walk through that is <unk> a.

So now is it now a necessity to have.

A N.

India.

South Asia, plus <unk> plus.

You know some presence in central Europe.

Is that kind of a standard ask from a risk management perspective.

You know two or three will do what specific sorts of things clients looking for from a diversification perspective.

Yeah. Thanks aspirin.

Yes. It is some of the things that you touched on essentially we're getting into larger projects.

Mark S. Thurston: Our guidance for full year fiscal year 2024 is as follows. Endava expects revenue to be in the range of £722 million to £735 million, representing a constant currency revenue decrease between 7% and 5% on a year-over-year basis. Endava expects adjusted diluted EPS to be in a range of £109.00 to £122.00 per share. This guidance for Q3 fiscal year 2024 and the full fiscal year 2024 assumes the exchange rates on January 31st 2024, when the exchange rate was one British pound to 1.27 US dollars and 1.17 Euro. This concludes the offer pack comment.

Larger proportions spend the clubs have they want to see that mix of us not just being able to do the.

The more expensive.

Central Europe.

Uhm delivery.

Being able to.

Okay ma'am.

With some more cost effective.

Delivery capabilities out of places like India and Southeast Asia.

Scale. It will also it it becomes cause the Max.

Move into a different sort of service, it's just a <unk>.

Let's see balance our pricing a little bit more.

Competitive.

Are you, saying that Oh, sorry.

Access to the talent pool is another reason why we'd be totally see India.

<unk> can figure that out for awhile with the Galaxy do we actually take off a step into.

Operator: Operator, we are now ready to open the line for Q&A. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key.

And date of delivery.

The cost is driving this rather than a geopolitical risk I guess that was.

The gist of my questions.

Yes.

Much more about competitive pricing.

Risk for us.

Thank you.

The next question comes from plenty to chain of J P. Morgan. Please go ahead.

Ashwin Vassant Shirvaikar: To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble the roster. Sponsored ADR Class A, and our first question comes from Ashwin Shirvaikar of Citi. Please go ahead. Thank you. Um, I was hoping to get some clarity with regard to the implied sequential growth range for 4Q, a relatively wide range, so zero to seven and a half or so. How much Galaxy contribution is included? And then when we look at organic sequential growth, what sorts of course corrections have you made with the assumptions you're making in relation to the conversion of bookings, pipeline to bookings, bookings to revenue, and so on? Thanks, Ashwin. The guide doesn't include any contribution from Galaxy.

Yeah, Hi, Thanks for taking my question follow up to <unk> <unk> can you talk about like the pricing <unk> you see.

And are you seeing like on sequential basis.

Continue to push for like to like price declines asthma.

So the pricing the we're finding is actually stable.

The Dodgers quite delivery comment I was making was was the ability to widen also printing clients by having a wider footprint.

And more cost attractive from a client.

<unk>.

<unk>, we previously wouldn't have available to us.

I'm, just delivering out of central Europe, and Latin America.

But within designs that were all pricing and we're actually finding pricing is pretty style arguably April getting smaller increases.

[noise] got it and can you share more detail around the plan optimize business optimization program like how many heads you expect to potential cost savings and more importantly, how are you going to ensure that that does not.

Mark S. Thurston: We said in prepared comments that we hope it will complete early April, so it does exclude in that respect. In setting the guide, we've obviously had issues with the speed at which pipeline is converted, and that's why we put a large range on the guide for Q4. Basically, the assumptions around pipeline conversion for Q4 have been more conservative at the top end of the guide than we have previously been. When we, at this stage, looked at the proportion of contractors committed, we were typically looking at about 70% of the guided figure. We're actually going higher this time, around 80%. We're taking a cautious view at the top of the range, but if that is not as conservative, we're basically putting it at the bottom of the range where we see little sequential growth going from Q3 to Q4. The bottom of the range would be something like 176, which is the top of the range for Q3.

Hate any disruption.

Saturday.

She'll say, which is going to lead to the elimination cost.

Wow.

In the prepared comments, especially looking areas of overlap and SG&A and dressing.

The <unk> as a result of deals as hotlines sleeping too right.

So we're we're losing about.

450 people there'll be some nature termination costs <unk>.

And it should generate a new savings without 23.

Pounds.

But this is a tough.

John E. Cotterell: And then there was a remark, a prepared remark, which, [inaudible] Some presence in Central Europe, sort of is that kind of a standard ask from a risk management perspective, or, you know, two out of three will do, or what specific? The sort of things our clients are looking for from a diversification perspective. Yeah, thanks, Ashwin.

The first part really off the program that we want to put in place that will be looking basically.

Because the market.

The organization.

<unk> sales and delivery.

<unk>.

When we get some <unk> in that area, we will seek to sort of streamlined and again John too.

About the cost on the call as well, which is to push more technology from a horizontal slats D C.

John E. Cotterell: Yes, it is some of the things that you touched on. Essentially, as we're getting into larger projects and larger proportions of the spend that clients have, they want to see that mix of us not just being able to do the more expensive Central Europe and LATAM delivery but also being able to augment that with some more cost-effective delivery capabilities out of places like India and Southeast Asia and being able to scale that a little bit more so that it becomes part of the mix. It's not a move into a different sort of service. It's just a move to get the ability to balance our pricing a little bit more and remain competitive by introducing that. Also, you know, access to the talent pool is another reason why we've been targeting India, and we've been hinting at that for a while with the Galaxy deal. We actually take our first step into India delivery. So cost is driving this rather than geopolitical risk, I guess. That was the gist of my question. Yes, it's much more about competitive pricing than geopolitical risk growth. Thank you.

<unk> and again as we should focus more closely on that way.

<unk> hi.

Utilization with <unk>. So it's initially to say this is the first phase is to address that should look at you in a second phase, especially streamlined and simplified.

<unk> location.

<unk> Oh.

Mmm.

Got it thank you.

The next question comes from Maggie Norwin William Blair. Please go ahead.

Alright. Good afternoon. This is jesse on for Maggie.

So first I had a question about margins are you still expecting.

The physical second quarter to be the trough and margins.

Given the revision to gardens here.

When you say fiscal second cruelty available and we've just to go over to them.

It's December.

Yes.

I I <unk> I think that is going to be.

We will see a little bit of weakness in the garage and just fine uhm.

French production extra songs, that's going on in a quota.

Is happening in the last part of the cool Sir.

We also have some investments that we're making <unk> insensitive adjusted P. D. T will pay in Q3 for the course of March I will be probably 10%.

Puneet Jain: The next question comes from Puneet Jain of J.P. Morgan. Please go ahead. Yeah, hi, thanks for taking my question. Following up on what Ashwin asked, can you talk about the pricing trends you are seeing? And are you seeing, on a sequential basis, clients continuing to push for like to like price declines as well? So the pricing that we're finding is actually stable. The diversified delivery comment I was making was the ability to widen our footprint in clients by having a wider footprint in more cost-attractive from a client point of view delivery locations. I.e.

<unk> the program starts to have a more impact on profitability.

Let me see the sequential so the garage and rubbery that we anticipate gross margin will improve essentials of cheese, and then we will be delivering justice J D T which would be.

Low low double digits.

I mean, it's also it saying that during the school to investing.

Pretty heavily we bring you to make sure. This was the best thing is of course.

We we don't come about transaction costs on M&A <unk> pretty strongly vessel.

Mark S. Thurston: It opens up parcels of work that we previously wouldn't have available to us, just delivering out of Central Europe and Latin America, but within the zones that we're operating in, we're actually finding pricing is pretty stable, arguably even getting small increases through. And can you share more details about the planned business optimization program? Like how many heads you expect to cut and the potential cost savings? And more importantly, how are you going to ensure that this does not create any disruption in delivery?

<unk> pressure in case right.

Got it that's helpful and makes sense to me and then for my follow up in the past you've talked about pursuing acquisition that are five per cent of the business and obviously this one.

Is a bit larger could you talk about how the growth and margin profile compares and maybe what type of.

Multiple you paid and how you make sure that.

This one goes well as the others have done in the past.

Yeah sure I mean, we talked about five to 10 cents and we said recovery.

Mark S. Thurston: So the initial phase, which is going to lead to the termination costs that I outlined in the prepared comments, is basically looking at areas of overlap in SG&A and addressing the bench that we have built up as a result of deals and pipelines slipping to the right. So we're losing about 450 people. There will be a termination cost of about £7.5 million, and it should generate annual savings of about £23 million. But this is the first part, really, of the program that we want to put in place, where we'll be looking basically at the go-to-market part of the organization, where we're aligning sales and delivery more closely, and where we get some overlap in that area, we will seek to sort of streamline.

Something that was really strategic and this is a little <unk>, but.

But it is really strategic for us if you if you look at it H B C U S largest regional.

<unk> subsequent revenues is absolutely crucial thing to talk about.

For a long time at.

<unk> and step up that a USA stood a large or small.

Uhm needs to pay all of the address.

Secondly, I <unk> wish we touched on earlier in the cold.

And you know that's pretty strategic cycling decades of experience sleeping upgrading that for over 20 years and that.

Sort of offshore delivery model is pretty crucial I went out to India with my team and we spent a lot of time with the galaxy guys out there really got to grips with how they do it.

Comfort on the race.

Mm, that's very very strong delivery operation.

Uhm thirdly, it's a big step forward and health care takes.

Mark S. Thurston: And again, you know, John talked about the pods on the call as well, which is to push more technology from a horizontal perspective into these three verticals. And again, as we sort of focus more closely on that, we anticipate that it will provide higher utilization with our staff, our external focusing staff. So it's initially in two phases. The first phase is to address the bench and look at SG&A. The second phase is basically to streamline and simplify by reducing duplication across the organization. [inaudible] Thank you.

<unk> one of our.

Largest first tools they'll be calling that out I'm pretty sure. That's J mock yeah I have a separate first call as a result of having <unk>.

And it's also it was a.

We will stable sectors through this period, so grey area. So the best thing.

Growing business very healthy.

And they have a bunch of accelerators, which <unk> very very well at all so we spent quite a bit of time as a team working through how that would work.

The client calls.

I did which was yesterday, where where frankly astounding.

Margaret Marie Niesen Nolan: Thank you. The next question comes from Maggie Nolan of William Blair. Please go ahead. Hi, good afternoon. This is Jesse on behalf of Maggie.

The the best staff client pool, so I've ever had going through an acquisition.

In terms of clients belief and galaxy and their ability to deliver.

Jesse Louis Wilson: So first, I had a question about margins. Are you still expecting the fiscal second quarter to be the trough and margins given the revision to guidance here? I wouldn't say fiscal second quarter; I mean the one we've just reported on, by the quarter to December. Yeah. I would say we've got a little bit further to go in terms of Q3. I think that is going to be our nadir.

So a.

A lot of plans around how we do the integration properly. We we've done a lot of work and I'll make sure. This is the right deal for us.

And execution serves as well as succeeded strategic.

I just went through.

Oh, if anything on the financials.

Uhm.

I mean, the 1600 out people that way on boats.

Mark S. Thurston: We'll see a little bit of weakness in the gross margin, despite a French production exercise that's going on in the quarter, but it is happening in the latter part of the quarter. And we also have some investments that we're making through SG&A. So the nadir in terms of adjusted PBT will be in Q3, so the quarter to March, where we'll probably start at 10%.

There's a high portion of the <unk>.

<unk> <unk> <unk> <unk> <unk>.

For all the the similar revenue.

<unk> Unprofitability is.

Similar to and talk about what about we will need to invest.

And spot functions, which is a private this.

John E. Cotterell: But then as the program starts to have more impact on profitability, and we see the sequential sort of growth in revenue that we anticipate, gross margin will improve, eventually, and then we will be delivering an adjusted PBT, which would be low double digits. I mean, it's also worth saying that during this quarter, we're investing pretty heavily, we're bringing in the dealmakers, and we're investing in the pods. We don't carve out transaction costs for M&A.

Rosemary Lee.

But we expect.

When it does complaints <unk>, 4% to Oh guide fully across we've just that line.

Got it thank you put yourself.

Thank you.

The next question comes from buying Paragon P. D. Cowan. Please go ahead.

Hi, Thank you on the outlook here, they're also cancellations out of our current of clients kind of went through their year end period or or is this entirely delayed release, because I heard you mentioned client I T. Budget's actually I guess potentially up this year. So I'm trying to understand the aspect of lost revenue versus delayed growth potential.

John E. Cotterell: So that hits Q3 pretty strongly. So that's, that's all part of the margin pressure in Q3. Got it.

Jesse Louis Wilson: That's helpful and makes sense to me. And then, for my follow-up, in the past, you've talked about pursuing acquisitions that are 5% of the business, and obviously, this one is a bit larger. Could you talk about how the growth and margin profile compares and maybe what type of multiple you paid and how you make sure that this one goes well as the others have done in the past? Yeah, sure.

Or some of these bigger programs that you expected to help you with that prior fiscal <unk> still on the table and calendar twenty-four meaning potentially they can cross the line for you in the first half of your fiscal twenty-five.

Thanks, Bye and I'll I'll, let me tell you some of the details, but you're right we have same client budgets.

John E. Cotterell: I mean, we talked about five to 10%, and we said we'd go over 10% for something that was really strategic. And this is a little over 10%.

T budget sob, we're just not seeing them spending it yes.

Some of the confidence about.

Later in the year comes from because there is a backlog at work there is subject to go against it.

John E. Cotterell: But it is really strategic for us. If you look at it, it moves the US to being our largest region in terms of client revenues. That is absolutely crucial. It's been a target of ours for a long time, and it's great to see it step up there. The US is the largest market in the world and needs to be our largest. Secondly, it has the Indian talent pool, which we touched on earlier in the call. And, you know, that's pretty strategic.

To get through this has to say.

Yeah that that sounds <unk>.

Question when he was talking about the <unk> the version of <unk> <unk>, we haven't seen original in the face.

Russ pricing remains stable.

Five comments.

Comments referred from other plans.

And in terms of some sort of lots of deals with trust.

John E. Cotterell: They bring decades of experience; they've been operating there for over 20 years. And, you know, that sort of offshore delivery model is pretty crucial. I went out to India with my team, and we spent a lot of time with the Galaxy guys out there, really got to grips with how they do it, and are confident that it's a very, very strong delivery model.

Tales Survivor, 5 million or 10 million T C V data.

Salim has gone up.

The number of deals when we look at it from when we were talking in the <unk>. We we've lost a couple but we have games sort of five so we were up in absolute numbers.

Actual value.

We now have in the hall.

Compared with back in November.

John E. Cotterell: Thirdly, it's a big step forward in healthcare. It takes healthcare to be one of our largest verticals, so we'll be pulling that out, I'm pretty sure, next year, Mark, as a separate vertical as a result of having done this deal. It's also one of the more stable sectors in this period, so a great area to invest in. They're a growing business, very healthy, and they have a bunch of accelerators, which fit very, very well with ours. We spent quite a bit of time as a team working through how they would work. The client calls that I did, which was yesterday, were frankly astounding.

575 cents and a much larger deals coming into play I mean, I think John reference Yeah could itchy data, which is something that we anticipate with land before Christmas and we were the only being able to announce today, which will give you an illustration.

Of the issues that we've been <unk>.

Okay. That's helpful.

On the margin Friday could you could talk about near term utilization considerations as you move through the second half year and are you able to quantify the level of investment you're making here in the near term just to give us a better sense of how much of the investment driven versus top line driven.

John E. Cotterell: They're the best set of client calls that I've ever had going through an acquisition in terms of clients' belief in Galaxy and their ability to deliver. A lot of plans around how we do the integration properly. We've done a lot of work on making sure that this is the right deal for us in execution terms, as well as the strategic side that I just went through. Mark, anything on the financials? No, not really.

Yeah, so utilization for current cause we're so close to December.

Recently that sort of 67%, we think it will be a cute free mega eligible Bachelor lifestyle.

Saint 66, Oh, sorry, so the French will be quite high until the options that we just announced the fake effects and we will then reverse something that is more normal just be going to Q4, so we'll be heading up towards the 68 69.

Mark S. Thurston: I mean, the 1,600 odd people that are on board, there's a high proportion of them in North America, about 30% of the headcount. They deliver broadly the same revenue per head that we do, and profitability is similar to Endava, although we will need to invest in their support functions, which, as a private business, they have run very lean. But we expect when it does complete, it is likely to add 4% to our guide for year-on-year growth that we've just outlined. Got it.

Sent in terms of investments, we continue to actually invest in ourselves marketing activities. It is yeah.

Around about a moment at 6% of revenue, we obviously with the deal that we have just line it with Galaxy, we've invested quite a lot of money in terms of skill related fee service is pretty crunching Keith Street, and then we have ongoing M&A integration. So we we had.

Bryan C. Bergin: Thank you. Thank you. The next question comes from Bryan Bergin of TD Kallen. Please go ahead.

Two before this too in Asia, and North America that we will complete by the email, but that will continue as we check on hold galaxy, which will run on each with like 25.

Bryan C. Bergin: Hi, thank you. On the outlook here, are there also cancellations that have occurred because clients kind of went through their year-end period? Or is this entirely a delayed release? Because I heard you mention client IT budgets are actually, I guess, potentially up this year. So trying to understand the aspect of lost revenue versus delayed growth potential. And really, are some of these bigger programs that you expected to help you with that prior fiscal 4Q growth ramp still on the table in calendar 24, meaning potentially they can cross the line for you in the first half of your fiscal 25? Thanks, Bryan.

Then we were looking also a simplification of all our processes and systems.

That will be a continue P&L investment forest cloud.

So we just want to get Lee for the future and make sure that we have to find processes to scale.

Okay. Thank you.

The next question comes from James Faucet of Morgan Stanley. Please go ahead.

Hey, guys. Thank you for the question.

This is Antonio had a meal on for James Faucet.

I wanted to dig in more on the marquee client spend namely around Mastercard and also world play I know previously you had mentioned that was not contemplated in the guy, but I just wanted to ask about that first and then I have a follow up as well.

John E. Cotterell: I'll let Mark do some of the detail on that, but you're right; we are seeing client budgets and IT budgets go up. We're just not seeing them spend it yet. And that's where some of our confidence about an upturn later in the year comes from, because there is a backlog of work, and there is a budget to go against it. We just need to get them through this hesitancy. That's exactly right. I mean, in the opening question, when it was talking about the delays in the conversion of the pipeline, that has been our issue. We haven't seen erosion on the base.

Yeah. So I mean, we will be facing quite a headwind payments as you'd expect with our two largest clients demos carbon will pay but I apologize headwinds <unk> card.

<unk> two streams discipline at first when we should vocalink in the U K.

Which came off patient at 23.

So it is well with an F Y twenty-three all our fiscal 23.

Mark S. Thurston: And actually, for us, pricing remains stable, despite comments we've heard from other players in the space. And in terms of our sort of larger deals, which for us, we monitor deals that are over about 5 million or 10 million TCV, the volume has gone up in terms of deals. When we look at it from when we were talking in the guide in mid-November, we've lost a couple, but we have gained sort of five. So we're up in absolute numbers.

Thanks for forming in line with expectations, where we were seeing headwinds is in the number Colin comments, where budgets are being set slash Leslie daily blood twenty-three level. So we we've seen some come off in terms of what we previously interest Patrick Masker.

But we are seeing some areas, where we are able to get into new areas of crust.

The level that we anticipate back in November.

And we'll pay again this is come off slightly from our view in November.

Bryan C. Bergin: And the actual value that we're now in the hopper compared with back in November is up by 75%. And there are much larger deals coming into play. I mean, I think John referenced the equity deal, which was something that we anticipated would land before Christmas, and we've only been able to announce today, which sort of gives an illustration of the issue that we've been facing as we've dealt with the uncertainty of pipeline conversion. Okay, that's helpful.

The transaction has gone through with that P E faxed backer.

As yet we don't have any concrete plans around to spend.

In Tennessee put in place, but we expect them to pick up investment.

<unk> <unk> <unk>.

Have less lost uhm.

<unk> passages, but again it is funny side I spend compared to what we anticipate and it is slightly flatter as well.

Mark S. Thurston: And then on the margin front, could you talk about near-term utilization considerations as you move through the second half here, and are you able to quantify the level of investment you're making here in the near term, just to give us a better sense of how much is investment driven versus top line driven? Yeah, so utilization for the current course, which is the quarter to December, was reasonably low, about 67%. We think it will be, in Q3, maybe a little bit below that, but say 66 or so.

That's helpful. Thank you and then for my follow up I wanted to ask more on the embedded payments opportunity I know that you guys have also highlighted that in the past I'm curious if there's any green shoots in that area and what it looks like for the rest of the year.

Famous is is one of the stronger areas.

If you look under the surface with.

Mm payments their their areas like traditional acquiring.

Investment cause painful right back clients are getting by with our existing systems, rather than pulling them forward and continuing to invest in them.

The places where they are continuing to invest as the new areas the dining areas the embedded payments areas and so on.

Mark S. Thurston: So the bench will be quite high until the actions that we just announced take effect, and we'll then revert to something that is more normal as we go into Q4. So we'll be heading up towards 68, 69%.

When I have the opportunity for more differentiation nauseated proposition in the market.

We have a continuing to see new without coming through.

Great. Thank you guys for the questions.

Okay and.

The next question comes from machine Catherine Wedbush Securities. Please go ahead.

Mark S. Thurston: In terms of investments, we continue to actually invest in our sales and marketing activities. So it is around, at the moment, about 6% of revenue. We have, obviously, with the deal that we have just landed with Galaxy, invested quite a lot of money in terms of deal-related fees. So it's pretty crunchy in Q3.

Yeah. Thanks, I just wanted to go back and just at the maybe discuss the Galaxy <unk> acquisition, you indicated that the regular pro double head count in the margins are <unk>, but then you also indicated that you needed to make some investments in the business.

Mark S. Thurston: And then we have ongoing M&A integration. So we had two before this deal in Asia-Pacific and North America that we will complete by the year end. But that will continue as we take on board Galaxy, which will roll on into FY25.

We assume that the acquisition is at least dilutive somewhat dilutive for the first year given some of the investments that you to make into into what you're doing in India.

[laughter].

No I mean.

In terms of.

I think <unk>.

James Eugene Faucette: And then we're also looking at simplification of our processes and systems. And that will be a continual P&L investment for us as well. So we just want to get lean for the future and make sure that we have simplified processes to scale. Okay, thank you. The next question comes from James Faucette of Morgan Stanley. Please go ahead. Hey guys, thank you for the question. This is Antonio Jaramillo on behalf of James Faucette

<unk> Yeah <unk>.

Will make a contribution in terms of improving although it will be from originally expected. We we have to make some investments basically international finance function on some of the school functions.

Taken from the private world up to public company space and.

And then again it is plugging the engine.

Sure capability <unk>.

Yeah sure Uhm, the business model and that will take some investment on our part so I think for the the new year. So.

Antonio Deveen Jaramillo: I wanted to dig in more on the marquee client spend, namely around MasterCard and also WorldPlay. I know previously you had mentioned that was not contemplated in the guide, but I just wanted to ask about that first. And then I have a follow-up as well. Yeah, so I mean, we've been facing quite a headwind in payments, as you'd expect with our two largest clients being MasterCard and WorldPay. But they are part of those headwinds.

We should probably six months or so.

It won't be just <unk> I think it would be a nice neutral but that after we anticipate that it will.

The earnings positive.

Okay. Okay that makes sense and then looking at client's budget and looking at the pipeline conversion here has anything changed since the quarter ended are we still kind of in.

Mark S. Thurston: I mean, MasterCard is split into two streams of work for us, one of which is Vocalink in the UK, which came off peak in FY23, so it is lower than FY23, our fiscal 23. That is performing in line with expectations. Where we're seeing headwinds is in the non-Vocalink elements of work, where budgets have been set flat or actually indeed below, you know, FY23 levels. So we've seen some come off in terms of what we previously anticipated with MasterCard, but we are seeing some areas where we are able to get into new areas of growth, although it's not at the level that we anticipated back in November. And WorldPay, again, has come off slightly from our view in November, although the transaction has gone through with their PEE backer.

And Ah wait and see mode or things have changed in in terms of ramp up.

So I mean, there are sometimes as we're getting through February the client's historian so a just a little bit and I saw it in the courtesy deal that we announced yesterday.

<unk> wasn't getting signed earlier in the call Sir.

And.

Clients are looking for that budget is looking at the things that I wanted to I was seeing some of that come through I I actually saying all those across the industrials I, saying that with the same same trend.

Understood. Thank you.

The next question is from.

Brian Keane off Deutsche Bank. Please go ahead.

Hi, Thanks for taking my question Mark I guess on Galaxy, what's the normalized revenue growth rate of the company and and maybe how was it growing up more recently as it being impacted by the economy.

Mark S. Thurston: As yet, we don't have any concrete plans around the spends that they intend to put in place, but we expect them to pick up investment as we are sensitive that they have lost ground to their competitors. But again, that spend is slightly delayed compared to what we anticipated. So again, it is slightly flat there as well.

Well I <unk>.

Well I could have it sent me here and I understand I haven't concluded December 23.

Because right.

<unk> <unk> <unk> <unk>.

The expectation sort of growing into Canada, 24 is probably around 10, 15%. So they are growing.

Antonio Deveen Jaramillo: That's helpful. Thank you. And then for my follow-up, I wanted to ask more about the embedded payments opportunity. I know that you guys have also highlighted that in the past. I'm curious if there are any green shoots in that area and what it looks like for the rest of the year.

No actually actually.

And as I said that I sort of financial profile is similar to us.

John E. Cotterell: Yeah, embedded payments is one of the stronger areas. If you look under the surface with payments, there are areas like traditional acquiring where the investment has been pulled right back. Clients are getting by with their existing systems rather than pulling them forward and continuing to invest in them.

<unk> <unk> <unk> <unk> <unk> the.

The SG&A that you would expect from an organization like a dog.

So it'd be nice the system's investment I mentioned finance function at least be put in place, but we thought must be prohibitive for us because we will just move the monthly.

Platform belonged caveat is in a different confidence to us so we do need to establish.

John E. Cotterell: The places where they are continuing to invest are in new areas, the open banking areas, the embedded payments areas, and so on, where they have the opportunity for a more differentiated, higher margin proposition in the market. So that's where we're continuing to see new work coming through. Great.

Some presence that so called the profitability is good and I think the growth prospects, good and I think that probably.

<unk> ownership then they were I think we're.

So on a on a on a normalized basis, you think they can grow to.

Moshe Katri: Thank you guys for the questions. Thank you. The next question comes from Moshe Katri of Woodbush Securities. Please go ahead.

Somewhere near the 20 per cent constant currency riveting roof at outlook that you guys think as possible.

Moshe Katri: Hey, thanks. I just want to go back and maybe discuss the Gallusky acquisition. You indicated that the revenue per billable headcount and the margins are at par with Endava's, but then you also indicated that you needed to make some investments in the business. Should we assume that the acquisition is at least dilutive, somewhat dilutive for the first year, given some of the investments that you need to make into what you're doing in India?

Oh, yes, absolutely in fact, we think that as we get to go there's opportunity.

Cross socializing the capabilities of the businesses.

The accelerator thought I was talking about it actually see opportunities to accelerate.

<unk> and the Galaxy business Galaxy, because we widen the capability, we give them scale.

They do have lost clients.

Titled the spendable with them because of that scale.

Because of the access to these accelerators.

Mark S. Thurston: No. I mean, in terms of, I think, the guide on EPS for the full year, I don't think it will make a contribution in terms of improving it, although it will from a revenue perspective. We have to make some investments, basically, in that sort of finance function and some of the support functions to take them from the sort of private world up to public company speed. And then, again, it is plugging the Indian offshore capability into the Endava nearshore business model. And that will take some investment from our part. So I think for the near term, which is probably six months or so, it won't be earnings diluted. I think it will be earnings-neutral. But thereafter, we anticipate that it will be earnings-positive. Okay, that makes sense.

That will help us.

Drive a little bit deeper into enterprise transformation with all our clients.

So there's some very good revenue opportunities as we can pull out the businesses.

On top of the <unk>.

Got it got it and then just on the demand quite she didn't timeline and conversions. When do you know guys expect maybe that the far do you have any visibility to know is at.

The beginning of calendar, you're 25 is it kind of TBD environment out there just where do you think the environment could improve at this point or is it just just too uncertain to know.

The next question comes from Spencer Anson Susquehanna. Please go ahead.

Moshe Katri: And then looking at clients' budgets and looking at the pipeline conversion here, has anything changed since the quarter ended? Are we still kind of in a wait-and-see mode, or have things changed in terms of ramp-up? I hope this helped you. If it did, please like, comment, and subscribe. I'm James Faucette.

Great. Thank you.

Have you seen the demand environment evolves and smack 'em conditions became more difficult.

And what should we watch for to get an indication that things might be standing up.

Forward.

Thank you.

James Eugene Faucette: I'll see you next time. Bye. So, I mean, there are signs as we're getting through February that clients are starting to ease off a little bit. You saw it in the Aquinity deal that we announced yesterday that got signed, wasn't getting signed earlier in the quarter. And, you know, clients are looking at their budgets, looking at the things that they want to do. And we're seeing some of that come through.

Did you guys you're the question.

Pardon me this is the conference.

Seem to be experiencing a technical issue. Please hold while we get the speakers reconnected.

Okay. Thank you for holding we do have the speaker line right cabinet.

Mmm.

John E. Cotterell: I actually think others across the industry are also seeing that we're seeing the same trends on this list. Thank you. The next question is from Bryan Keane of Deutsche Bank. Please go ahead. Hi, thanks for taking my question. Mark, I guess on Galaxy, what's the normalized revenue growth rate of the company? And maybe how is it growing more recently?

The other one.

We're back can you hear me.

Hello.

Hello.

Please repeat your question.

I hope you've seen the demand environment evolved since macro conditions became more difficult.

Should we look for indicate that.

Bryan Connell Keane: Is it being impacted by the economy? Well, they have a December year-end at the moment, so they haven't concluded December 23, but the growth rate's there. They've subscored it, of course, but it looks about sort of 10%. Their expectation of growing into Canada 24 is probably around 10% to 15%, so they are growing quite nicely, actually. And as I said, their sort of financial profile is similar to us.

<unk> might be standing up.

Thank you.

The moment that sort of backlash retail that line is we've seen it through hesitance change progressing with.

I guess it has something to do with alright.

Our exposure, particularly say Europe in UK.

Right.

Getting people.

So we're actually seeing much of a change.

Mark S. Thurston: The one caveat is that they don't carry the SG&A that you would expect from an organization like Endava. So the systems investment, I mentioned the finance function, will at least be put in place, but that won't be prohibited for us because we will just move them on to our platform. The one caveat is that it is on a different continent to us, so we do need to establish some presence there.

Dispatch it.

Work is building.

So authentication.

A ticket deals.

Sorry.

Number it's just the willingness of <unk>.

Great. Thank you.

John E. Cotterell: So the profitability is good, and I think the growth prospects are good, and I think they're probably going to be better under Endava ownership than they were as they were. So on a, on a, on a normalized basis, do you think they can grow to somewhere near the 20% constant currency revenue growth outlook that you guys think is possible? Oh yes, absolutely. In fact, we think that as we get together, there's an opportunity to cross-fertilize the capabilities of the businesses, the accelerators that I was talking about, to actually see opportunities to accelerate both core Endava and the Galaxy business. Galaxy, because we've broadened their capability, given them scale; they do have large clients who have hesitated to spend more with them because of their scale. Endava, because of access to these accelerators that will help us drive a little bit deeper into enterprise transformation with our larger clients.

Thanks very much.

This concludes that question and answer session I would like to turn the conference back John Cachao for any closing remarks.

Yeah. So thank you for joining us today as you can see where the best thing any dog or an on site.

And the medium size.

Profitability and growth.

I'm wearing gearing in dog to continue is Anita freak out of strength.

We look forward to speaking to you in our next <unk>. Thank you.

The conference have now concluded. Thank you for attending today's presentation and you may now disconnect.

[music].

Bryan Connell Keane: So there are some very good revenue opportunities as we combine the businesses. You've got one on top of the other. Got it, got it. And then just on the demand question about timelines and conversions, when do you guys now expect maybe that to thaw? Do you have any visibility to know? Is it, you know, the beginning of calendar year 25? Is it kind of a TBD environment out there? Just where do you think the environment could improve at this point? Or is it just too uncertain to know?

Bryan Connell Keane: The next question comes from Spencer Anson of Susquehanna. Please go ahead. Great, thank you. How have you seen the demand environment evolve since macro conditions became more difficult? And what should we watch for to get an indication that things might be stabilizing?

Spencer Anson: Going forward. Thank you. Did you guys hear the question? Pardon me, this is the conference operator. We seem to be experiencing a technical issue. Please hold while we get the speakers reconnected. Thank you for holding. We do have the speaker line reconnected.

Operator: We're back. Can you hear us? Hello?

Operator: Spencer, please repeat your question. How have you seen the demand environment evolve since macro conditions became more difficult, and what signs should we look for to indicate that that projects might be standing on? Thank you. I suppose at the moment that's sort of macros, as we've sort of outlined it as we've seen it through hesitancy and progressing with work. I guess it has something to do with our exposure, particularly to Europe and the UK, and with giving people.

Mark S. Thurston: So we're not actually seeing much of a change from that. But actually, the work is building up, given this sort of indication of the pipeline of bigger deals, building up to size and number. It's just the willingness of clients to commit at this stage.

Spencer Anson: Great, thank you. I'll track it back. Thank you. This concludes our question and answer session. I would like to turn the conference back over to John Cotterell for any closing remarks. Yes, I thank you all for joining us. Endava Plc Sponsored ADR Class A, Return in the medium term to our historical profitability and growth, and we're gearing Endava to continue as a leader as tech waves re-gather. We look forward to speaking to you in our next... The conference is now concluded. Thank you for attending today's presentation, and you may now disconnect. Endava Plc Sponsored ADR Class A, The Advertising Agency of the U.S. Department of State Endava Plc Sponsored ADR Class A, BF-WATCH TV 2021 [inaudible] Endava Plc Sponsored ADR Class A