Endava (NYSE:DAVA) has just turned in a mixed Q2 2026 scorecard, with revenue of £184.1 million, a basic EPS loss of £0.13 and net income loss of £6.9 million, set against a trailing twelve month picture that shows £743.9 million of revenue, a small EPS loss of £0.05 and a net income loss of £2.9 million. Over the past few quarters, revenue has moved from £195.6 million and EPS of £0.12 in Q2 2025 to £184.1 million and EPS of a £0.13 loss in Q2 2026, while quarterly net income shifted from a £6.9 million profit to a £6.9 million loss. This leaves investors focused on how quickly margins can stabilise from here.

See our full analysis for Endava.

With the latest numbers on the table, the next step is to see how this earnings profile lines up against the widely held narratives about Endava's growth potential and risk profile.

Losses Replace Last Year’s Profits

• Endava swung from a £6.9 million net income in Q2 2025 to a £6.9 million net loss in Q2 2026, while trailing twelve month net income moved from £21.2 million in Q4 2025 to a £2.9 million loss by Q2 2026.
• Bears argue that rising automation and tougher competition could cap demand, and the recent move into losses gives that view some support:
  • Net income has been negative for the latest two quarters, with Q1 2026 and Q2 2026 showing losses of £8.2 million and £6.9 million respectively, compared with profits in all four quarters of 2025.
  • Trailing twelve month revenue growth of 2.9% per year sits below the 10.3% US market benchmark, which critics see as a sign that Endava may struggle to offset cost pressures if growth stays modest.

Bears who see these losses as the start of a tougher phase will want to test that view against the full cautionary case in 🐻 Endava Bear Case.

Modest 2.9% Growth vs. Market

• Over the last year, Endava’s revenue grew at 2.9% per year to £743.9 million on a trailing twelve month basis, compared with 10.3% growth for the wider US market benchmark.
• Analysts with a more balanced view see slower top line growth but still point to AI tools and long term deals as potential supports:
  • AI enabled offerings like Morpheus and Compass and a focus on larger, longer duration contracts are cited as ways to deepen client relationships even while recent quarterly revenue has hovered in the £178 million to £196 million range.
  • Consensus inputs expect revenue to grow 4.5% annually over the next three years and margins to improve from 2.3% to 7.0%, which contrasts with the current trailing twelve month net loss and highlights how much needs to change for that scenario to play out.

Low 0.2x P/S and DCF Gap

• At a share price of £4.42, Endava is shown trading on a P/S of 0.2x compared with 0.8x for peers and 1.6x for the US IT industry, and the analysis data cites a DCF fair value of £17.27, with the current price 74.4% below that estimate.
• Bulls argue that AI driven delivery and high value contracts could make this valuation gap look too wide if profitability improves:
  • Forecasts in the dataset point to earnings growth described as very large, with an expectation that Endava becomes profitable within three years, which is a very different picture to the current trailing twelve month £2.9 million loss.
  • Supporters highlight AI native delivery models such as Endava Flow and partnerships with OpenAI, AWS, Microsoft and Google Cloud as reasons why future margins could look closer to past profitable periods like Q3 2025, when net income was £10.9 million.

If you want to see how that bullish valuation story fits together with the numbers just reported, check out the 🐂 Endava Bull Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Endava on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

With sentiment split between cautious and optimistic, it helps to move fast and check the underlying data yourself before opinions harden. To see what the current optimism is based on, take a closer look at the 3 key rewards.

See What Else Is Out There

Endava is facing recent losses, modest 2.9% revenue growth against a 10.3% benchmark and a shift from past quarterly profits to current net income pressure.

If that mix of weaker profitability and softer growth gives you pause, compare it with companies screened for resilience and stability by checking 64 resilient stocks with low risk scores.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.