Good afternoon, my name is Puneet Jain. I'm from Payment Processing and IT Services team here at JP Morgan. Glad to have you here with us, John, Endava's President and CEO, and Matt, the company's CTO. The format of this presentation is going to be fireside chat. I'll start with a few questions, and then, we'll open the floor for questions from the audience. So welcome, both of you. Really appreciate you joining us and doing dinner as well last night. So John, maybe I'll start with you. So you reported your first quarter results yesterday, where you talked about you're seeing some stability near term and expect improvement in the second half of this fiscal year. So maybe if you can briefly recap your results and share, like, the trends that you're seeing across your clients. Sure. So, I mean, probably the most useful way of looking at it is in a quarterly sequential basis. So we reported a 0.6% drop, in what is our Q1 against the Q4 of the last financial year. If you looked at it on a constant currency basis, we were actually up 0.2%. So, you know, I think that, probably lines up with the word stability, in the sense that, you know, the dip that has been going on has flattened off. Looking forward to the guide, we are seeing streams of work coming through, many of which we are in the early stages of working on, which have led us to, on a quarterly sequential basis, again, seeing things step up, in Q3 and Q4, which is January through June, of next calendar year. So, you know, that's, that's the general context of what we see happening in the business. No, that's great. So how much visibility you have, like, on the projects that you expect to ramp up in second half? And can you give us an example of the type of work that clients are committing right now that should ramp up, later on? Sure. I mean, we, when we look at our forecasting, we actually look at all of the elements of, existing business and the pipeline that's coming through. We attach weightings to the pipeline on the basis of, how well progressed it is, through the pipe, and therefore our likelihood of actually winning and closing that business. All of that gets put together. We reforecast the whole business every month, and that gives us a really solid view of, what's coming through. Off the base, off that, with a little bit of conservatism added, obviously, we then produce the guide that, we put out to market. The sorts of projects that are coming through are actually the typical projects that we've, been working on for, many years, since the foundation of the business. Most of them are actually in the someone described it to me in the offensive space, as in about growing the top line, adding capability to a client's business. There is a little bit of the cost-saving stuff, but we don't see as much of that or as many of other organizations that have been sitting in this seat. That is, that is good news from our point of view, 'cause ultimately, we see the the revenue-driving projects as being the longer-term, more sustainable ones. As, as you build new product for client and expand it successfully in their marketplaces, it drives ongoing growth. Historically, for us as a business, where we deliver, you know, 20%-25% organic growth, we'll see 18%-20% of that being existing clients spending more with us, so that's why it's so important to us- Yep ... that we're helping build new product. In terms of the specific areas, one of the big areas of growth for us is embedded finance. The thing about embedded finance is it takes a banking product that traditionally you would go to a bank, and they would process it within their system and come back to you maybe days or weeks or months later, whether they would, you know, what that product would look like and how much it would cost and all the rest of it. Embedded finance is all about making that available through an API to other organizations, who can then build it into their own customer journeys. So an example would be, I'm hiring a scooter for 10 minutes, and I want to buy some insurance. How do you get a quote for that insurance that can get put in front of the consumer, and they can spend that money instantaneously and be insured for 10 minutes? Got it. So is it fair to say, like, the pipeline or the movement of deals in the pipeline is better now than what it was six months, nine months ago? Oh- and it should drive this? Definitely. I mean, no comparison. Yeah. The way that I would characterize it is we went through the COVID exuberance of people spending lots of money on technology. As headwinds started to come into economies and people were uncertain about the outlook, the finance directors have grabbed back control of budgets, of prioritization, which projects do we wanna do, as opposed to doing most projects. And you know, we want proper business cases attached to those projects, and that you know, six months ago, was adding levels of diligence to project sign-off that meant almost nothing was coming through. Yep. You put that alongside some of the projects that were coming to an end, and that's what drove the dip in our revenues that we were seeing six months ago. That dipping has slowed down, and in fact, I'd largely say it's stopped and is being overtaken by the new project work that's coming through. So off the stabilization, the baseline that we've had over the last couple of quarters, we expect to see, as we get into Q3, the work picking up through this new pipelines coming through. How strong, like, is this imperative among your clients to execute some of these projects? Let's say we are heading into client budget cycle. If in two months, three months, like, if macro remains uncertain, or if there is another macro issue that drops, whether it's geopolitical in macroeconomy, could the macro realities force finance function to pull back that spending again? Or you think the strategic imperative to do these projects among business leaders to invest in technology is strong enough to overcome those headwinds? Yeah, I think the dynamic of a hiatus around what are our priorities—which is what we've been through over the last nine months—is a little bit different to the macro. Should we be adjusting our overall budget up and down? And as we see it, having prioritized the projects that we're kicking off with clients, they will follow through on that. If they want to make budgetary savings, they will make that on less high-priority projects. So, you know, at Endava, if the market grows by 2% or shrinks by 2%, is not such a material impact on our growth rate because we're about taking the priority projects and market share through that. Got it. No, that makes sense. So let's talk about, like, the verticals. Like, and it was great to see increased disclosures yesterday. So you talked about embedded finance as one area. Who's like a typical client, and is it like the scooter company in that example, or would it be insurance company, or the payments company? All of the above. So if you look at embedded finance, we end up working with the providers of the service, the bank or the payments company, to put that service together, and make it available with contracts, et cetera, across the API. And then we work with the organizations that are gonna consume that product, across many industries. So, insurance, we see it in health, we see it in the mobility space, not just the scooter-type example, but also how you put payments in cars, et cetera. We see it in retail, whether that be online or in-store. There are many ways in which you can see the customer journey across many industries, can then buy an embedded finance product as part of the customer journey, which is then, you know, more profitable for the retailer or the merchant that's consuming it, and adds a new revenue stream. Can you also talk more about mobility? Like, it seems like it's 10%-11% now. It is. I mean, mobility, we see as a long-term technology wave. You know, you stand back from it, and you go, over the next 20 years, autonomous vehicles are gonna completely transform mobility. Logistics, automotive, travel, the way in which that is delivered to people, the business models attached to it are going to completely change. And is already changing as people anticipate those trends coming through. I don't know whether you want to expand on that a little bit. Yeah, as John said, there's so many different opportunities that emerge when you actually take a step back, and you consider it. So we can look at it from a horizontal perspective and enabling a payment flow. But you've got to kind of question even some of the kind of like fundamentals around transport at this particular moment in time, in terms of if we're surrounded by autonomous vehicles, do you need car parking spaces? If you are in a position where you can rent transport for short durations of time, what does that do in terms of insurance companies? There's so much that we see can be impacted by the mobility wave that we're really excited about where it's taking us. Yeah. How are you investing to prepare yourself for those eventual use cases? Like, in what form, like, those investments look like? Is it, like, more like the hiring consultants or, folks who can help think and offer those use cases to your clients? Yeah, I mean, definitely within the industry verticals, it's about having subject matter experts. Subject matter experts for us are people who have been there, done that, got the T-shirt, the people who are thinking in new and creative ways inside of that space, not just people who are used to producing a PowerPoint deck and saying, you know, "Here's what I think is gonna come next." I think if you take those subject matter experts within that field, and then you apply great engineering talent behind it, you've got an opportunity to really ideate new things with your clients in a very short period of time, and that creates a very virtuous flywheel in terms of, okay, I can see that Endava is an organization that can help us think about exploring a new space, because you bring all of the thinking and the engineering talent together in one place. Right now, from an investment perspective, it's finding those subject matter experts who can help us direct ourselves within that broad vertical and on that technology wave, and it's the continued investment in our engineering talent. ... Yep. And continuing on the theme, like I wanted to ask this question for GenAI, but it's applicable here as well. So all those folks, like the foot soldiers, like the, at Endava, thousands of people like, who interact with your customers on day in, day out, how do you train them, like, to think of new use cases, whether it's of generative AI, or of mobility, or any of emerging technology? Ironically, it's probably more about trying to contain their enthusiasm to a certain extent. I mean, when you take 8,000 or 9,000 engineers and you and new technology is constantly appearing, one of the challenges you have is: how do I stop 10 generative AI proof of concepts around the same topic from occurring? We've always been very proud around how we invest internally, and we've just completed our innovation event, which is run globally. Each country goes through an activity of teams being given time and opportunity to come up with ideas to explore both technology, but also business problems. And then we collect them together in one location, where they effectively get to go pitch their ideas. That's great because there's lots of new things that we've never thought of. This year's winner was in the life sciences space, which is definitely gonna give us an example that we can now go and talk to our clients about and say, "Have you thought about this application of technology in that space?" But what it means is there's a constant desire in our engineering teams to learn, to adapt, and to go on that continuous evolution that's required. That's how I'm imagining, like, you share, like, the best practices and knowledge- Absolutely ... from one vertical, from one part of Endava- Correct - across others. Correct. So as much as we focus on our verticals and our industries from a go-to-market perspective, and being able to really highlight that we know something very well from an industry perspective, we view engineering as a very broad capability. Mm-hmm. There's very much a pass-it-on culture inside our organization, where there's a constant flow, both within geographies, but more broadly in terms of sharing that expertise and knowledge with one another. As I said, it's more about trying to make sure that it's coordinated than trying to foster the fire, so to speak. Yeah. No, that makes sense. Let's officially talk about GenAI. So what's your sweet spot like in that? Like, what is like a typical GenAI project or engagement looks like? Yeah. So, I'll take one step back, and then I'll answer the question on generative AI, which is, generative AI or AI technology is something that's been around for 30+ years. I mean, you and I were talking before we came on stage. And, within Endava, we've actually been solving problems for our clients using AI technology for a number of years, and therefore, GenAI is great, and it's providing a new kind of model of interaction, and it's definitely an impressive piece of technology, but we saw it coming. We had people who were involved in the early prototypes of GPT -2 and even one, and, as John and I were talking the other day, this time last year, when we were going to talk at our earnings call, we wanted to go and talk about GPT-3 and what we could see coming on the horizon, and, we were told that it was all gonna be too confusing for people to talk about these large language models. Twelve months later, it's all anyone can talk about. In terms of what are we doing with our clients right here, right now, we've gone beyond the stage of just having kind of curious conversations to getting down to specific use cases, and we break those down really into three specific areas. One's around manual efficiency. How can we help a single individual be more efficient within their role? The next one is around process augmentation. So within an overall business process, what can be enabled by an AI process, what can be used to actually help deliver that overall overarching business process? And then the most advanced conversations are around autonomous agents. It's the idea that you have one or two, or more, artificial intelligent agents interacting with one another, with a human supervising the input and output between those various models. Most of the conversations and the contracts we're signing go in, let's say, number one, but we're definitely moving closer to having those, let's say, level three conversations with clients and actually being very realistic in what can be delivered and achieved. That's great. It's been, like, almost a year since, like, the ChatGPT or- Yep ...... GPT-3 was launched. Now clients have, like, one year to understand and to test, like, various applications of generative AI, in their business environment. So what needs to happen next for them to invest, in a big way, or for the investments or the spending to match the hype? Yeah, I think initially there was, to the hiatus that John was talking about, there was, "Have I just been introduced to a technology that means I have to rip up my entire roadmap, the vision of where I'm going with my organization and my products over the next couple of years, and do I just need to see what happens next?" I think we've moved beyond that stage, and what people are realizing is it's about a productivity gain, it's about an improvement. It's not about necessarily replacing people with the technologies- Yeah ... that exist right now. When we talk to our clients, there's effectively a bifurcation of thinking around data and what needs to be done. There is a school of thought and a school of clients who are very keen sorting out the underpinnings of their organization. So data projects, sorting out data lineage, data strategies, all of these, type of capabilities before then applying generative AI on top of it. And the other school of thought and other client conversations revolve around the fact of, I have such a mess, can I just not put generative AI over the top of that mess and somehow, rationalize the output that comes out of it? And we're helping clients kind of like, move through those kind of two worlds. And you might say, why two? Why not be definitive and pick one or the other? I think that's part of the excitement of the technology. Who knows what we could- Yeah be able to do by applying a model over something that's quite messy and what comes out as a result. So that kind of space of an investment and what do clients have to do next. But I would kind of conclude by saying, as it is always the case, what is the benefit that you're trying to deliver for your client? You can't just use a technology for the purpose of using a technology. What is the thing that you're actually trying to make better? Yeah. No- I think just one thing that I'd add to that. So, you know, Endava has always been about, pulling together the human and the technology dimensions of these things. And the issue emerges in the AI space just as much as other areas of technology, which is, how can this be done in a way that people are gonna trust, and they're gonna find it, you know, instinctively usable, et cetera. And as we get into the AI space, you're gonna hit, regulatory issues. Yep. There have been some IP issues that are hopefully getting fixed. Does that mean our IP disappears into helping train these models? All of these have been concerns that enterprises have. I think the IP one's getting fixed, the regulatory one's probably growing, in terms of needing to understand how regulation's gonna hit the space, and what it's okay to do and what it isn't okay to do as a result. More visible over the pond in Europe, perhaps, than in the U.S. at the moment, but it's starting to become visible here. Got it. Got it. No, like, that's, like, one thing, like, that we often wonder about—debate internally, like, is, like, are clients at a point that they realize that they need to rip their old legacy IT systems and replace them with more modern, like, can generative AI drive this wave of core modernization? And, and is this like the... whether it's the interest rates being high, because that will involve CapEx, and like, the, this current macro environment, is this the right environment for clients to do that? And, and I think, like you said, like the answer is both. Some yes, some- It is. I mean, I think around that kind of modernization question, we all know when we look inside, enterprise organizations, there is still technology lurking around from the '70s and '80s, which has proved- Yeah ... very difficult to extract out of the organization. And as smart as the technology around generative AI is, it's as good as the models have been trained on, so the underlying datasets. So being able right now to be able to reason with a large language model around kind of like a COBOL system and kind of, you know, connect direct this and the underlying underpinnings of how that all works, it's highly probable the large language model has never seen that. So that technology isn't going to solve that problem for that client. So actually, the core of I need to go through a transformation, I need to understand, you know, with people who understand the business process, to go and look at it and lift it up, is still core to what you're gonna have to do. It's just not capable within the models- Yeah ... that exist today. It's very rare in our industry that you just tear up the existing and do something completely new. An evolutionary approach that's gonna take you there step by step is much more viable. If you do the rip-up and try and do something completely new, you tend to end up with a massive program that takes too long. Yep. And is not conducive to success. I don't think GenAI is gonna help fix that problem. Got it. Got it. At this time, are there any questions from audience? Hi, I'm wondering if you could just talk a little bit more about the payments vertical and kind of what's doing well there, what the demand environment's like, and maybe outside of embedded finance, if you consider it within there. Sure. So, one of the things that I would say about payments vertical is that through trends like embedded finance, through open banking, et cetera, it is spreading more horizontal than the vertical that it used to be. So I expect over time that we will see payments as a vertical decline slowly. It won't be because we're doing less payments work, it'll just be spreading horizontally across our other verticals. If you look within the payments vertical, I think there's a shift from a growth market and market share to a value add equation, and therefore, how you can protect your pricing and your margins within the business. And that's where the investment space that we're finding opportunities with clients sits. Hi, similar question. In embedded payments and embedded finance, if the traditional players have more legacy systems and they're trying to open up and amplify their platform, does that create more work for you to do to help these companies get there? I'm just curious about their preparedness. ... Absolutely it does. And that's part of what we've been doing for the last 10 years-15 years with clients. You know, you always get a mix of—it's the same question that we were just tackling, which is, do you build and evolve the existing legacy, if you like, systems, or do you create a new product with a completely new infrastructure and leapfrog what you've got? And we see both of those trends happening with clients and have been over the last 10 years or so. You know, and we see that happening today, you know, with some of the very large products that we're creating are complete leapfrog type mindsets that the organizations are at a scale where they can do that. When you guys went public, you talked about a long-term revenue growth rate of kind of 20% +. Since then, obviously, we've seen growth accelerate and cloud modernizations push. I guess, as you guys think about that growth rate over the long term, and perhaps organizations doing more internally and being more penetrated on the cloud side, is there a risk that the long-term growth rate comes down from that? And I guess if that were to happen, what would be the primary driver to kind of bring long-term growth below your long-term model? So our thesis and what we're focusing on in terms of scaling the business is to get back towards 20%+ organic, with some M&A layered on top. What do we think will drive that? It's all the technology waves that are coming through industries. And those are growing rather than shrinking, frankly. There are more technologies and more opportunities now than there were five years ago or 10 years ago, respectively. And so we expect that to drive that trend. It'll still be that shift with clients of moving spend from, you know, keeping the lights on towards what's the strategic and game-changing technologies that we can adopt in our organizations. And as we're an organization that sits in that latter space, we expect to be beneficiaries of that trend. Now, that doesn't mean IT budgets grow at that level. IT budgets go back to growing at a much lower level than that. But because of where we sit, we'll be taking market share and therefore pulling in those higher levels of growth. This one. To follow up there, what do you think about your growth algorithm within that 20%+? How much is existing versus new clients, and kind of what are the key dynamics behind that? Sure. I mean, so this is a metric that we've been monitoring for years. Obviously, it's been a little bit different this year with the hiatus that we've been through. But where we've been putting in 20%-25% organic growth, between 18%-20% of that has been existing clients spending more with us, i.e., doubling down on the products that we've helped them create, that are succeeding in the market, and upping their spend, either to take it into new jurisdictions or to add functionality, on an already successful base. And then the new clients have been in the 5%-7% space, of adding new clients in any particular year. That's around the new products, the ideation that we do to get those new pieces of work, and then they drop into the existing client, become part of what we're scaling each year. So it's fundamental to us that we scale the existing client base, as the real engine for growth in the business. Hey, guys. Thanks again. I'll ask a mobility question a little bit differently than I asked it before. New area and exciting area for you guys. So that strikes me as an area that's got a lot of greenfield opportunity, not very established relative to what it's gonna look like. So why have you guys been so strong in that area, and what's your sort of right to win in mobility? Do you wanna...? I'll start. Okay. I think around some of our initial client work that we did in the mobility space was definitely enabled through some of the strong relationships that we'd actually brought from orthogonal industries. So we weren't necessarily mobility experts or supply chain experts at the point that we started working with the clients. We were bringing traditional core software engineering, architecture, cloud experience into that domain. I think what changed and where the acceleration happened was back to that SME point, where we realized that by investing in key individuals to start helping us think more expansively within that sector, that we could then start increasing and accelerating. And what we found as we started to go on that journey was, whether it was an automotive company, whether it was a shipping logistics provider or a warehousing company, they were facing a common set of challenges in terms of a very old legacy IT infrastructure that people were very uninterested in because it was seen as being so far away from what was required to operate a business. And actually, there was an epiphany, which is kind of where we're going, you know, to quote Back to the Future, "You know there are no roads." So how are we gonna really embrace that technology? What are we gonna need to be able to start riding that wave? So I think we probably started off in the sector very much from just being reliant upon being good at what we were good at, from a core perspective, but it's that layering that's really allowed us to start accelerating, and we look forward, and it's definitely one where we can see even more opportunity opening up in the greenfields that you're talking about. Matt's describing a 10-year journey there. Yeah. This is not something that started a year ago. So yeah, and I think also mobility is one of those areas where the embedded finance, where some of the cross-industry things actually really help in developing the story. And so that's given us a real entry point into large customers. There's a lot of very large players in this space. And so you know, once you get a footprint and do a good job, there's a lot of opportunity to scale within the industry. That's great. On that note, we wrap up. Thanks very much. Thank you for your time. Thank you very much for having us.