Well, good morning, everybody. My name's Tom Blakey. I'm the Infrastructure, Technology and Software Analyst here at KeyBanc. That includes the folks that make everything work in the technology world. That's the way I kind of define the Endavas of the world. We're joined here with Mark, the CFO of Endava, and the Head of IR Laurence is in the front row here for the audience. We'll just maybe, you know, jump right in. I keep getting the question, and you've gotten it 100x this week, Mark. So this is a company who's been a phenomenal executor the last 3, 5, if not 10 years. You know, we just kind of see, you know, what, you know, maybe just break down what happened in terms of the recent guidance lower. Yeah. So we had a significant pullback in our, the utilization of the second half, and just a significant sort of sequential growth going into FQ3, which is recorded in March and June to about 66% and subsequently about 10%. And the guidance we just put out last week was actually a sequential -4% and then quite a wide range around Q4. And the root cause of it has been pipeline conversion. And the conference that we had back in November, we had, I guess, two streams to it, which was around when we're talking about big deals for us, that's over $5 million Sterling TCV. We had a growing pipeline of opportunities. We had something like 15 of these big deals in flow. So they're going down the pipeline where you are shaping the opportunity, creating the proposal, contracting, and then you start work. So at the time we'd won one of those deals, five have since sort of converted but at a slower pace than anticipated. And to give you some sort of a little bit of example of that, one of the deals we've won was with a large UK retailer. And when we start working, we go through this ideation to production process, as we call it, which is initial phase of discovery and creating the backlogs for the ramp of work. So you can start quite small with, you know, two teams, and you could be, you know, at scale, you know, about 10 teams. That ideation phase has taken a lot longer with this individual retailer, which I think is a mixture of sort of the U.K. macro pressures. And then another one of those deals that we anticipated landing sooner, which we announced on the call, was Equiniti. It's a GBP 70 million deal over 5 years. We thought that was going to land in December and start in January, almost like immediately. We only signed it, I think, on the 28th of February. And again, this is part of clients doing extra due diligence, an assessment before they push the button. Now, the pipeline, particularly just to keep the comments to the big deals, continues to grow. So, end of January, we have 17. So, five have sort of converted, albeit they're not ramping at the pace that we expected. We have five going through the pipeline, so proposals and hopefully to signature. We lost three, which is usual and anticipated. One of them was a PE opportunity for a digital bank in the Middle East, which has, we think, gone away completely. The business case didn't sort of stand up. But the other two are around having wider capability from our perspective, so ERP implementation capability, which we could have done if we'd partnered, but it's not really in our wheelhouse. So we qualified it out as we went down the proposal sort of process. What's interesting is, you know, we've got 17 big deals now at the end of January, but the actual total contract value is over 50% higher. So there's this buildup of work. Of the total of the deals? Okay. Just these big deals. But in terms of the existing work that we'd won, which was always going to be a sort of a risk around the previous guide, was how quickly it was going to ramp up. And pretty much across the piece, but more strongly, a pullback has been in banking, capital markets, and payments. But across the piece, that ramp-up phase hasn't happened as our usual cadence. And when we talk to clients about why that is, we get a generic comment, which is basically, you know, "We have the budget, but actually, we're going to be cautious, because we don't want to sort of stop a program in midstream. We'd rather sort of defer and see what happens." Now, there's a little bit of nuance to that. This, you know, we've got budget, but we're not going to spend it. So if you look across some of the sectors, banking and capital markets, I think it is sort of macro sort of driven in the economic environment. We're pretty heavy in payments and banking and capital markets in the U.K. U.K.'s in recession. So, I'll take that comment at face value. If you look at payments where we have had quite a significant pullback, it feels as though it's a little bit more strategic where clients have got some pivot in terms of the technology solution from a strategic, you know, perspective that they're going to take so that move away from, you know, acquiring to things like real-time payments, for instance, or Open Banking. And so there's an extra degree of, you know, sort of due diligence in the decision-making process. We see that sort of in TMT. We're seeing something that is a little bit more strategic in mobility, particularly in the automotive space where clients, we've got five out of the 10 sort of global car manufacturers as clients. We're thinking they're going down the Google route in terms of the in-car tech, but there's been a pause to think about actually, are we going down a different route? So i t's strategic in sort of nature. And again, the part of the sort of conflicting sort of message, but it all comes back to, "We've got budget, but we're being reticent," is, say, in travel, which is for us, airlines. So, you know, they are spending, but again, we, you know, we quoted Delta on the call. They are pausing while they're assessing, you know, the macro sort of outlook. Yeah. So it feels like heightened level of caution and pullback, but the work is there. People have budgets for it. It's just a question of when it will come through. So what we've done in terms of the guide is take that on board. So we've layered in some additional caution, particularly in our Q4, which is the quarter of June, around the amount of pipeline that we're going to carry in that guide, which is quite a wide range for us. It's about a $10 million range. We usually go tighter about $5 million. So at the bottom of the range, it's flat, basically, on Q3. In terms of sequential growth, and that assumes, you know, 15% of the pipeline. It converts at the normal rates, which is about 50%. Fifteen? 1/3? And 15% is the proportion of the pipeline that we have in that, Q4 bottom of the range guide. The top is 20%. And that compares with a normal cadence of conversion, which would be about 30%. So, we think we've layered in the requisite level of caution. We have this work backing up, and people are telling us they have the budgets to spend, which is very different to, "We, we don't have the budget, so this thing is not progressing." And the confidence also comes in that when you start these, John refers to it as a backlog, but it's ideation, which is basically you work with a client working out what the at-scale solution is. We have worked that through with them, and they want to keep that work going, but it's just this confidence in terms of ramp. Is that the same for payments specifically? Because that was a great last point you made about that. That was going to be my question about where we are. Because hesitation is one thing where, you know, I don't talk. I don't pick up your phone call anymore. Yeah, yeah, yeah. And one is hesitation where, you know, maybe you didn't ramp the 200 billable headcount as fast as you wanted to. Yeah. But you still have that small team engaged with the s pecifically in payments? Yeah. It's not like they sort of stopped the work. Yeah. They are still doing it expeditiously, it's like double-checking in some respects. We think we're going to go this way, but let's just do a further bit of work, or let's get some further sort of approval. Yeah. You know, higher up the chain. So they're not truncating the teams. When you do the postmortem on this, do you is there something specific at Endava, whether it be vertical or something either further down in terms of expertise, like a specific thing that you're ideating about, Mark? Like, it seems because it seems pretty broad, and it seems. In, you know, conversations that I'm having with investors that this could be company-specific. So I just want to, you know, now that you've had, you know, a couple you know, some time to think about it, you know, how specific or, you know, what other examples are, you know, for Endava-specific that are causing these delays? Or could it just be macro? Well, I think we've got some specifics, which is concentration around payments for financial services, so payments, banking, capital markets, and insurance, which is disproportionately high, if you look at our, our peer group. And I'm sort of talking about EPAM and Globant here in particular. And there's been, you know, from our perspective, a severe sort of pullback in that space. We've also got the PE, you know, exposure, which is very sort of subdued at the moment. We're also, well, overexposed, but that's just the nature of the beast. About 60% of our revenues are in Europe and the U.K. U.K. is in recession at the moment. If you look at, you know, companies like Globant, less focused on payments for financial services, I think it's about 18%, mainly sort of North America. So it's, I think, in part, it is around the mix of the industry verticals that we're in, and we need to diversify away from that. And that's part of the main reason for the move in, you know, with the acquisition GalaxE.Solutions that we announced. Yeah. Yeah, Yeah, perfect summary. into healthcare. And part of it is also, you know, geography. Again, we want to diversify away from Europe into North America. And again, sort of that GalaxE.Solutions M&A helps us on that journey. And it may be also to do with the nature of the spend. We're very much into sort of innovation and change. So it may have a higher discretionary, it's very strategic, but it may have a more discretionary nature than some of the work that some of our peers are doing. Then we talk a little bit more about that before we get back to GalaxE.Solutions. The discretionary nature of the work versus, you know, versus cost optimization or other. Yeah. You know, other areas. Is that did that uptick for Endava in this last? W e've always been mainly about business acceleration and strategy d riving products for clients. Sometimes there was a little bit of cost optimization, but I, you know, I know so over the last 12 months, certainly among the peer group, there was a lot of talk about more cost optimization work that they were doing. That really didn't change, you know, for us. I mean, it's, it's hard to define what you mean sometimes by cost efficiencies, whether you're now, no doubt, we'll probably talk about AI, but, you know, that's an efficiency, you know, technology. Yeah, ecosystem. Yeah, which we're involved in. But we don't do something where we will take somebody's, you know, IT function and run it for less. So, you know, we are about building sort of new products and innovation. And potentially, that's where we've faced, you know, stronger headwinds than the others. Have you maybe just a quick clarification on the PE, maybe get an update in terms of where we are? Yeah. Percentage of revenue there and segue into what kind of, like, revenue breakout could you offer us in terms of and including a discussion about the capabilities that Endava has around GenAI? Yeah. So, PE was for us about sort of 23% of revenue. Now, we don't call it as a specific industry vertical. It's embedded across all of our industry verticals. Yep. Whether it's payments or TMT or mobility. We saw a serious pullback, I think, about May last year with, I won't call it a credit crash, but Silicon Valley Bank, etc., and the bank issue. So they pulled out very strong. So we're about sort of 16% of revenue at the moment. That will change, actually, going forward because Worldpay is our sort of second biggest client. That is now going to be under PE ownership, so that will bump up going forward. Yeah, yeah. I've heard that. Yeah. But that is probably a potential upside. Yeah. If there are any sort of upsides in the narrative sort of today. But the PE portfolio is pretty much stable. The Equiniti deal that we called out is actually a PE-backed business in banking and capital markets, so it flies somewhat in the face of, you know, what I've just been saying. So it is active there. And we tend to work with PE businesses where they are building disruptive product in a marketplace. So it plays very much into our sort of, you know, our wheelhouse in terms of what we do. So it's subdued. It's stable. I don't think we see any improvement, despite, you know, interest rates on the way down. We do hear talk that investment is taking place and witness the Equiniti, but we haven't noticed any significant uptick. I guess the other thing, just because I touched on Worldpay, which is, you know, our second biggest client in the payments industry vertical, part of the changes that are going on in the payments space so, you know, Worldpay was under FIS. There's a perception that there was underinvestment in their product suite, and a lot of work was done in India. And they've lost competitiveness as a result of that. But under PE ownership, and we haven't worked with them on the backlogs yet because they've only just moved ownership at the beginning of February, that there is a sense that they will bring that work back from India to nearshore locations and partner with companies, you know, such as Endava to, you know, sharpen up, you know, that product set. Again, we haven't got any of this in the guide b ecause we don't have the visibility on it, but it is a potential upside. Okay. Just on that GenAI question, I mean, are you breaking out, or do you want to break out any type of exposure you have currently or where you expect that to be in fiscal 2025? No. I mean, we're seeing a lot of engagement with it across all the industry verticals. So it's moved on from, you know, "What do we do about this?" So sort of high-level sort of thoughts with each of the industry verticals, to something that's a bit more meaningful where clients are starting to engage in, you know, pilots, with us. I mean, there's a, and again, the way we're using it, the example I'll give is in the insurance space is, people are looking at it more from an efficiency perspective. So we're doing a piece of work with a U.K. insurer I think they're a motor insurer where, it's in their call centre, contact centre, where they receive inquiries from clients. The AI tool that's sitting alongside the call handler but is listening in on the call and is actually uploading, you know, the data and the query that is coming into their system. So the call operator is doing the whole thing without a keyboard, and it is also then able to, you know, go off and consult with other systems so that, you know, if somebody has a household insurance policy as well, there's a motor insurance policy. So we're talking with them about that sort of concept. So that's manual efficiency. But there's then we call it sort of augmented process where part of the manual process will be, you know, performed by an AI tool. And then you can have the next stage, which would be augmented agents where you have a number of these large language models interacting together but being moderated by a human. Now, that's an exploration piece of work at the moment, but it is pretty much emblematic of where we are at this stage. Most of the conversations with clients will include an AI component to it because it's about what. Sorry, sorry. Go ahead. What is the solution to this, and what are the technologies that we're going to bring to bear with it? So we're not splitting it out, per se. On the call, we talked about pods, this new sort of concept, which is basically about pushing, you know, technology where we as a firm will have some thought leadership position on it. And it's AI, I won't call it a center of excellence, but it's people who are thinking about it from a product sort of perspective and helping push that product if I can use that word. I know the word services business. You know, through the industry vertical so it resonates with the insurance company as opposed to somebody in a payments company as opposed to a retailer and then thinks about how we build up the capability at scale in our nearshore delivery sort of capabilities. So that's the sort of role of pods. We really believe Endava is in building out that, specifically related to AI or GenAI kind of talent staff. We've got the people. Okay. It's creating a tighter focus around it. And because it's, I think it will pick up, you know, if it's going to be meaningful in 12 months, I would be reasonably sort of surprised. Three years, yes. Yeah. So it's about how do you scale it up to an industrial level where you're deploying on an enterprise basis rather than, you know, a proof of concept that I've just illustrated. And I think also, the other thing, you know, going back to this insurance example so they, the clients are 2,000-person call center. And one of the sort of questions is, well, what could we actually make it so that you could provide this service without people, so make it completely automated? And the computing power required to do it at the moment is immense. You know, it wouldn't be worth actually replacing the 2,000 people with it. So that the rest of the stack has to improve before there'll be enterprise engagement with AI is our sort of belief as well. Okay. Maybe just taking that one more step back to the pricing. I think you made some commentary about a step up in terms of competitive nature of some of the larger new deals. Can maybe you just walk through but then I think your CEO made some comment that you might there are some takings in price. So maybe just kind of clarify what you're seeing in the market right now with regard to pricing. Yeah, yeah. So for us, pricing is stable, which is also interesting when we obviously listen to what our peers are saying. So, and when I make that comment, we look at the average day rate. Okay. And for the last sort of three quarters, it has been pretty static, actually. That doesn't mean there are you know, it's a normalized sort of figure. So there'll be some elements where we are having to sharpen our pencil to secure work, which I think is what John's reference was to. There are others where, you know, we can command, you know, the premium that we have done in, you know, previous quarters. We're in an environment now where pricing is flat, but which is quite different to where we were about a year ago, where we were almost seeing sequential price increases quite modest, measured on this sort of average day rate which is about sort of it could be as much as 2% quarter-on-quarter. So we're zero at the moment. And it is a competitive, you know, environment. We, you know, we look at some of the comments we've heard from the peers about them wanting to take share or fight back. Yeah. And again, it comes down to, you know, looking at our competitiveness in terms of our structure and, you know, you know, how we deliver and where we deliver from. And he, I think he was also sort of making that comment in the context of GalaxE.Solutions with India. Right. Which is, is this a, you know, a defensive move from a cost perspective? And it can be construed that way, where there's only player in our peer group that doesn't have Indian offshore capability. But we're not doing it from a defensive perspective. GalaxE.Solutions itself sells into the U.S., so it is a diversification away from, you know, the U.K. It is mainly a healthcare. About 75%-80% of their revenue is healthcare. So it's a diversification sort of play. Will that become a new vertical or? Well, we have healthcare in Endava anyway. You already do? Okay. But we're mainly around sort of pharma and wearables. Got it. Got it. This is mainly in the payer, pharmacy area. Okay. They're large end customers, basically. It's complementary from that perspective. They don't do the engineering that we do, which is why, you know, they're based in India. They have a product suite. So they call it a product, but we call them accelerators, which is how do you deliver work more quickly and how you create diagnostics over the client's, you know, estate. So that you can solve the problems more quickly and deliver the work more sort of quickly. And these are these are pretty sort of compelling. They would take us probably, more in. I'm thinking more widely about sort of revenue synergies. Yeah. Because we could deploy them with some of our larger clients in our other industry verticals because it would accelerate work and create diagnostics for those sort of, platforms. You said you were being asked by clients for that. Is that part of those larger deals that you examined earlier in the conversation, like those large 15 deals? It can be. I mean, we sometimes get it qualified out. So clients will come to you. You get some of our larger clients; it's like, "You do a great job in" let's call it the innovation space and product build. "And actually, we could do with your help over here." And it's not an acceptable answer to say, "Well, that's not really what we do." The toolset that GalaxE has would enable us to be effective in that area. What's the order of magnitude we're talking there? Right? Say you have a $100 existing client, and now that business where, if I'm understanding correctly, you were typically walking away from. Now you won't have to. Is that a 5% lift, a 30% lift? I mean. I thought I wouldn't be. It's hard because there's so many different verticals and customers. Yeah. I won't be drawn, I mean, we had a workshop, basically. Let's just say, is it meaningful? It sounds like they're. It could be very meaningful. I mean, the synergies from our side deploying their tools across our largest clients. So it takes us into adjacent areas. If you want to be simplistic, we're in sort of innovation. It takes us further into. I won't. I think John used the word systems integration, but it's not like implementing ERP. Sure. It's getting more into the underlying core of their systems, and using it as a diagnostic tool. So it. What does that do to the gross margin profile of? I think it, I don't think it would disrupt it, actually. Okay. I mean, if we look at what GalaxE.Solutions, their historic financials, you know, their revenue per head they have a different, you know, onshore, offshore mix, but their revenue per head is very comparable to us. And their EBITDA margins are very comparable to us, even at, you know, it's a pre-scale level. So about, you know, they're about 18%-20%. So they are just focused really on this approach to market, if I can call it that. They're very focused on, you know, pharma, healthcare. They haven't broadened it out at all. We will get revenue synergies from them because one of the things we've picked up in the due diligence calls is that they love the work that GalaxE.Solutions does, but one of the things that has held them back is they don't have the scale that we have. I think it's an opportunity with the existing client base, but we can also use these, these products across our client base. Did you say 18%-20% margins at currently? Currently, yes. At GalaxE? For India for GalaxE, yes. Wow. I mean, so with the scale, obviously, those could go up. And then the revenue per head is the same at GalaxE.Solutions? Yeah. Because they'll have less expensive labor. They've got it. It's difficult to do. They have, like, 30% onshore. So they have a lot of people in North America. Oh, so it's in the U.S., yeah. And then they have 70% in India. So you've got that onshore-offshore. The mix. Offshore mix. Got it. Got it. But it's very comparable to what we have with our, you know, 5%-10% onshore and 90% nearshore. Are there any questions from the audience, maybe? A couple yes, sir. Please. You talk about Worldpay as the customer. You mentioned that they did their work offshore, and it lost their competitiveness. Yeah. Effectively, you bring that work onshore. Is that the comparison? So, from what I understand from conversations I've heard, is that they under the FIS. Yeah. There was a push to invest less. And the best way of doing that is to go to a cheaper geography, which is India. Exactly. I think they lost their competitiveness doing that. So in the eyes of the Worldpay client set, it started to lose its compelling sort of nature. We've heard from the change in ownership from FIS, I think maintain, I think 45% or something like that with the new entity. But under the new owner, the PE-backed owner, they wanted to move that work back to nearshore. And nearshore is like a 2-hour time difference rather than an 8, 10-hour time difference. It's speedy interactions, and so on and so forth. Yeah. So, you know, our wheelhouse. You know, we deliver largely for them from places like Romania and Central Europe. So they want; they've said they want to bring it back. They will either do some of it themselves, or they will give it to a provider, and they will probably give a fair size of it to us, given, you know, the history that we have had with them. Just to get sort of background on this, they lost competitiveness because they were not. They were blaming sort of offshore, but is it really offshore? Is it kind of they didn't really do the right thing, investing? I'm just curious. How do they, because they obviously want to change in delivery. Doesn't matter what they like or who they like, but the point is that that's the way. I think we tend to, when we deliver, because of the nearshore model, work very closely with product owners, not technologists. And I don't know how, under FIS, they. You're talking to the wrong person. But the way I understand it is they were led through technology. And the technologists, rather than the product owners, were pushing lower costs, which is using, typically, India. And in terms of the shaping of the product that was coming from nothing to do with, you know, the quality of their Indian people and all the rest of it, you know, because we're going to have about 1,600 people there. You know, they're smart people. They have lost competitive edge with their product set. And externally, it's probably being classified, or there's a sense, it's lack of investment. What that will mean in terms of increased investment is they will bring it closer onshore, which has a higher cost, typically. And this is talking about Worldpay. They will retain some of that in-house, but based on what we've seen, and we've had a very long heritage with Worldpay under its various ownerships, they will probably partner with us very strongly because of the quality of the work and innovation that we bring. Yeah. Thanks. Can I just, just sneak in one in under the wire here? Given the nature of your business, when revenues go down, you can't just, you know, obviously, let people go. Yeah. Walk us through what you expect the cadence of gross margins to, you know, kind of like end the year, the fiscal year ending in June here and maybe what your outlook is for fiscal year. Yeah. Yeah. So So we, coming up to December, were maintaining quite a high bench for us. So that is people not actively on client-facing work and generating fees. So we were heading towards double digits, and the anticipation that the work when it came through, that bench goes to work and drives the gross margin. So we had a low gross margin, something like 32.5% on an adjusted basis in Q2, the course of December. We expected it to pick up from there as that bench burnt down in the demand curve that we were seeing. That obviously hasn't happened. It's declined, and it will either pick up or remain sort of flat. So we've taken action on the bench. We've sort of announced restructuring. So we're losing 450 people. It won't have a meaningful impact on gross margin this quarter because, basically, we're losing some of those people for one month of the quarter in March, basically. Most of that impact will be felt in Q4, which is the quarter to June. So what it sort of does is it sort of right-sizes the bench for the demand that we're seeing in the near term. So the gross margin should recover up to about sort of 36% in Q4, which is what it was in Q1, at the revenue levels that we're having at the top of the guide. Now, what needs to really happen for meaningful margin improvement is for sequential quarter-on-quarter revenue growth. Right. Right. The bench, I think, is normalized. If all that work that is building up that we think is building up, we could have quite a strong acceleration. That would be a good problem to have. We've got better. Because it's like we had, in sort of COVID, where things paused, and then it went very strong. And then it's, "Can you keep up with the demand that you're getting?" But we know that we could do that because we did it through COVID. Right. That, that's the way that sort of margin gets rebuilt. Very clear. Thank you so much for your time, Mark. Okay. Very clear. Good luck. Thank you very much, Tom. Thank you.