It's the line. Looks like most of the concerts I sang at. All right. Good afternoon. My name is Puneet. I'm from JPMorgan's Payment Processing and IT Services team. Glad to have here with us Endava. We have Mark, who's obviously, you all know, CFO of the company, and Al, who's Chief Engagement Officer. If you have any questions on fintech, feel free to ask him. He's the fintech guru here. The format of this presentation is going to be fireside chat. I'll start with a few questions, and then we'll open for questions from the audience. Welcome. Thank you, both of you. Appreciate it. Thank you. Let's start with third quarter results. You reported recently results came in slightly below expectations. Talk to us, what are the trends, high-level trends you are seeing? What were the drivers for the weakness or for the shortfall? What do you expect going forward? Yeah. It was mainly a top-line hit or miss. We suffered an unexpected credit with a significant client. It was not driven by poor performance or delivery issues. It was basically to secure future sort of pipeline of work with them. It was unexpected, and it was issued after, or the discussion was entered into after the guide. Now, that taking the revenue off, it impacted our EPS. It went straight through to the bottom line. We were just short on the revenue, and we would have been in the middle of the EPS for the quarter, if not for that item. We did see also some weakness on our non-big deal pipeline. If you recall, back in May, we said we were offering guidance but stripping out big deals. It was just run rate and Dava. There was some slight weakness. We did convert pipeline, but not as much as anticipated. As a consequence, we looked at the rest of year outlook and trimmed some of that pipeline. It was not all bad news. We secured three large deals. Paysafe, which I can now name since the call, a five-year $100 million deal, which Al was quite instrumental in securing, and an insurance client and Toyota Racing Development as well. Those really add the momentum to the second half of our revenue outlook because they produce step-changing revenue. As a result of that, we have, I would call it, a flattish quarter ahead, Q2, minus this credit issue. The momentum picks up in the second half, basically from those contributions from big deals. With the sort of operational leverage that Endava has, I'd expect it to be relatively flat from an EPS perspective for the next couple of quarters. Q4, we start to sort of pick it up. Let's talk about the credit issue that you experienced. First, I'm assuming it is non-recurring. This is like a one-time thing. Just this client, it should not repeat with any other clients. Correct. Or some. Is it tied to vendor consolidation that many clients are doing? How is it different from that vendor consolidation? We do not believe so. It was not do this and you remain part of the pack going forward. Basically, the client sought similar arrangements, if I can call it that, from the rest of their source suppliers and made it pretty clear that if we did not participate, then it would diminish our opportunity of further work or size of work with them going forward. The client, we have had experience previously, but not of this sort of scale. And also the sort of downside that they are implying from the discussions. We think it is one-off in nature. You can never say something will not repeat, but it is pretty unusual. We got notice of it very late. It was after the quarter had sort of closed, but it obviously reflected what was going on in the quarter. We booked it accordingly. Got it. Got it. Let's talk about the other side, the large deals that you're winning. Obviously, we know that you've been trying to pursue those deals for a while. There is a lot of focused effort that has gone in winning those deals. Talk to us, how is the profile of those deals different from the deals that larger diversified companies like Accenture, Cognizant talk about? The size you mentioned is $100 million. Is that? Yeah. Yeah. They are significant from Endava's perspective, probably not from an Accenture perspective. They do not tend to be managed service in structure. We tend to be, we are known for innovation and driving businesses forward and transformational. These engagements that we are securing, and there is a lot of appetite, so it is a very strong pipeline that we have, but it is not in the guide, as you may sort of clear. They are quite heavy in financial services, and that has been picking up, Paysafe being a sort of example of that. They tend to be also multi-year. We want to lock in a transformational journey and partnership with large clients for at least three to sort of five years. Now, these arrangements can take time to negotiate and agree. Most of them have the nature of actually starting almost like immediately. We announced a deal with Reed exhibitions, I think back in sort of September. Now, there's a lead time whilst there's a discovery phase, and then the services sort of start from the 1st of January. Most of these deals do start in the new sort of calendar year. There isn't the profile of a gradual ramp typically. There are services that start, and we start to deliver that service. Maybe, Al, you'd like to talk about Paysafe in particular because it's typical of the arrangements that we're trying to put in place with these big deal structures. Yeah. Happily. I always get confused because I'm a simple rugby player, which is you talk Q3, which is obviously our Q1. Q1. Yeah. Interestingly, in this industry, you get the sort of end-of-year, start-of-year thing, and we fall between two stools. It is quite an important thing to remember when we talk about ramp-ups as well and people spending budgets sometimes a year. I think there are three elements to a deal that are going to really matter to investors in companies like Endava, which is, A, are we starting to see AI creep into the delivery? Endava has built an incredible track record of an amazing net promoter score over the years of being a great delivery engine. All the customers are very satisfied. That was in the agile period, and now we are talking about an AI period. We have not lost that muscle memory. The 12,000 Endavans are all still completely committed to delivering. The second thing is, how meaningful is the commitment? Rather than the sort of SOW, I've got a project, it's a race to the bottom, you're competing against other outsourcers. Those aren't really the deals that interest Endava. We're much more interested in, you make a commitment, we'll make a commitment, build a joint team and go and get stuff done. That's important. The third piece is time. I mean, it's interesting today to be here when certainly back in my home country, in the U.K., the headline news is the Alphabet CEO talking about maybe a correction, maybe a bubble in AI. It's fascinating to me. There's this sort of gap between the practitioners in AI, the developers of AI, the people investing trillions of dollars in AI, and then your average company that is trying to deploy AI. There is no one really bridging that gap and acting as a bridge between the AI technology and the business outcome. If you think of the amount of data that certain companies hold, if you can apply AI to that, you are going to transform that business. The third piece to these strategic deals is longevity. If you go back a year, ChatGPT 3, 4, now 5, the world is evolving very quickly. If you have locked in a partnership, and I do not say locked in in a negative way, I mean in a commitment way, then you are really well placed to learn. I think most of the C-suite that I talk to are getting quite fatigued about the silver bullet pitch, AI is going to transform your business. It probably will, just like mainframe to blade frame did, machine learning did. There is not one silver bullet. They're looking for partners. I think you'll see Endava, as we've done with Paysafe, do far more long-term committed partnerships with leading companies. Two questions on that. Some of these deals, like the multi-year deals, the AI can have two types of applications. It can help improve an operation. Correct. Right? Business operation, you don't need, making up an example, tellers and replace them with AI or augment them with AI. Yeah. AI can make coding more efficient. You can create an application much more faster, efficiently using AI. What's the bigger driver? Using AI to transform your operations or AI to improve your coding? I think let's go back to a couple of the transactions. Like Reed exhibitions and others where you get a step change. Basically, I think as I was pointing out, there's a lot of disruption caused by AI. The technology future is uncertain. If you've got to navigate that as a corporate, that is quite challenging. I know a lot of corporates are engaging with AI, but I think the key issue is then how do you roll it out at an enterprise level? You have it into the core systems. You are not exactly future-proofing, but how do you navigate your way through a big sort of change? I think how certainly in some of the engagements that the clients are approaching it is they want to give us the problem in some respects. You take elements of my IT function. A lot of it will be development and innovation. I want you to navigate that path for me. What I, as a client, get out of it is a certainty in terms of cost. I want quality and innovation as part of that. In Endava, it is up to you. That is reliant on us interpreting what AI can do. We need to drive efficiencies and improvement. That is where we talked about methodology, EndavaFlow comes into that. It is outsourcing in some respects the issue for us to manage. That is how some of these engagements are starting to be sort of formulated. I think that is the early stage. It is effectively, I think, cost efficiency. I think it will develop more widely than that to what Al's point about sort of partnership. Yeah. I use an American term because I'm here in New York. Like a great American football team, it's defense and offense. I think a lot of clients are saying, "I'm hearing, no one's proven it to me yet, but I'm hearing that AI is going to create efficiency in my cost base, in my management of data, in my clarity of data." I'd like to do that because that always helps my numbers. Also, are there new propositions? Are there new mousetraps? Are there new things that I can do? I mean, I think we live in a fascinating era of colliding industries. If you look at payments, an industry that I've been close to for many years, as a horizontal, payments is touching everything. Government transformation, global movement of money, right down to efficiency in your local government, in your towns, in your cities. I think that Endava's track record of being able to, as Mark put it, take over pieces of work for clients, prove that you can get efficiency, but then add into that a bit of sizzle and say, "Here's a new proposition. Here's something you could do with that data that you couldn't have done before." That's where we've got to be positioned. In many ways, our size is very helpful as a company. I think you mentioned Accenture. I think if you're a company of hundreds and hundreds of thousands of people, that's a long journey. That's a long transformation. We've spent the last two and a half years making sure every Endavan is fully compliant with the ability to make AI useful. I think we're in pretty good shape. Yeah. I think certainly John was here. We're not a product company, but we have a methodology about how we build and deliver. In the agile world, it was teams and teams. It was the distributed agile way that we delivered. Now it's EndavaFlow. That is essentially what our product or our unique positioning is going to be in this AI-driven environment. Talk to us like governance issues. Like the clients, we often hear like the reason many of those AI pilot projects are stuck in that phase is because clients are not comfortable with data security, change management, because future AI is going to interact with their employees, customers. Talk to us like how can Endava handle your clients in overcoming some of those challenges? I think because we've had to overcome those issues ourselves around security, compliance. I mean, we operate in financial services, which is heavily sort of compliant. So we know the benchmark that is required. Taking clients on that journey, it does start off small, Puneet. It's not going to be a big step into EndavaFlow. You have to show what it can do, a glimpse of what it can do. You do need a pilot or proof of concept to onboard a client with. That's how you build the trust around it. The government governance guardrails need to be in place. If you can demonstrate that knowledge upfront that you know where the pitfalls and bad traps are, it gives confidence in clients to make those bigger sort of steps forward. That becomes like a way for you to win share by helping clients get there. Yes. I think our approach, we think, is differentiated with EndavaFlow because it is basically building on the legacy of, let's call it, ideation to production that you have heard us sort of talk about. It is in an AI world. I think we call it signals, the start of the sort of process. There are the stages that you should see as you go through the life cycle using EndavaFlow. It has a componentized structure to it. It is not like we have invented EndavaFlow and we push everything through the sausage machine. You can take elements of it out and use it in the TNM world. I think that is the sort of beauty of it. It is sort of flexible like agile is. I think it is quite differentiated from what I understand others have been talking about. Yeah. Core modernization, like helping clients modernize their data, move to cloud and whatnot to be ready for AI, that has to be one of your core competencies. Talk to us about the traction that you are seeing, whether through EndavaFlow or otherwise, from clients in those services. Why are we not seeing, and it's not just for Endava I think, it's for everyone else too, not improved growth rates as clients are spending on core modernization to be ready for AI? I think it's one of the big prizes certainly for Endava. It's a big increase in share of wallet. We've typically, historically worked outside core legacy sort of systems and plugged into them. I think with EndavaFlow, the transformation of the core to make AI enabled into the cloud is the big prize for us. Because I think using the accelerators, that's the term we use, but the automations, the tools to do it, the speed at which it can be done, the reduced cost it can be done, the visibility about the progress, that makes those big monolithic changes feasible. Now, it hasn't moved at the rate that we thought it would do based on comments we were making 12 months ago. I think the whole AI journey is sort of settling down. I know the technology is moving very quickly, but I think enterprises understand where they are at the moment. I think they understand that they're going to need help from firms like Endava to make that enterprise-wide step change they need to. Part of that enterprise-wide step change is helping them out with the core. I don't think anybody has moved on it, but that is the big prize for us. I think using EndavaFlow and our accelerators will give certainty and give clients confidence to do it so that they can meet at the end of the day their requirements in terms of return on capital. They're going to have to invest to do this. I think just to add in there, so we're absolutely clear. The question is the right one, which is why is our industry not seeing the numbers come through? We have to represent at these events also the conversations that we're in. A year ago, everyone, it was almost impossible to get through the internal person that had been promoted to the head of AI who was saying, "I'm making a religious bet. I'm the expert. I used to be a risk manager. Now I wear jeans and a T-shirt and I'm now an AI person." I think the C-suite are starting to get pretty frustrated with that. We've seen that in every single cycle. Yesterday at the London Stock Exchange, we launched a new initiative called Endava Rise, which is basically a platform, an accelerator, a lab, if you like, where we're going to bring in some of the most exciting scale-ups in the world and present them to the Fortune 500 and then utilize our AI tools to demonstrate how we can accelerate their growth. Because a lot of big companies are saying, "Show me, don't tell me." I don't want to go and fight for budget internally until I've seen it work. I think that was quite a clever move. Someone who was talking there yesterday, a very successful U.K. entrepreneur, which is like hen's teeth, obviously. This person was talking about every time you set up a company and you exit it, you start at the beginning again. What's so nice about Endava, to your previous question, is the ticket to the game already exists. Are you compliant? Do you understand governance? Can I trust you to look after regulated data in the Middle East where we have a strong practice now in financial services? Do you understand hybrid cloud, sovereignty of data? They're things that are just muscle memory to this company. The stuff that comes after that. Now, I'm not sure that many people in our space can say that. They're talking about AI as the solution to everything. We're saying, "No, no. You get into partnership with Endava, the check's already written. Like the mortgage is covered. It's now what do you do next with your business?" I think that's quite important. That's interesting. Let's talk about the AI use cases. There's so much focus on efficiency, whether it can read documents faster, it can automate customer care. Everything's about efficiency. You talked earlier about adding some small sizzle. Is that extra sizzle, is that related at all to consumer-facing applications of AI? Things that can help your clients grow revenue. Just look at Agentic AI, Agentic Commerce. If you're Mastercard at the moment, and they've made this is all public. They've made these announcements recently. We're moving now to instant tokenization of consumer data, anonymization, and the ability to make payments within ChatGPT or within an app or whatever it might be without ever having to go through that whole mother's maiden name in a thigh measurement process. That is a vision, a glimpse, if you like, of what's coming next. That's true in every industry. Toyota, who Mark mentioned earlier, Toyota have just had their Toyota race in North America have just had their most successful season for years. We were heavily involved in building some of their AI capability in predictability of race circuits and all. These are the things that are going to come above the surface. We weren't hired for those. Endava was hired to bring efficiency into the back office. We were hired to try and help them take out cost. It's then when we start to build these longer relationships, we can come up with ideas and ideation. With one of our med tech clients at the moment, we've taken out a huge amount of time in that phase one process of data assimilation. That will not make the drug any quicker to build, but it will get you to the start line quicker. I think all these are examples within the business of where we can now build to add the sizzle. That is what Endava has always done. We sort of landed and then people have seen what we have done and taken us into new areas. It is building on what we have always done. Yeah. I'll open floor for questions from audience after this. I'm sure there'll be many questions on Agentic Commerce. Can something like that drive the step change in your AI adoption as well as in your growth rates? If you don't mind, Mark, I'll jump in. He'll kick me if I overstep the mark. I think we've been Endava, I'm only nine months in, but I've been a client of Endava for 16 years, a very happy client. I think we've purposefully not made very big public bets on AI per se. We've talked about learning it because any student should go and learn what the latest doctrine is. I think we've talked about business outcomes. I think Endava has been very good at saying, "We listen to our clients. We're agnostic of technology. We don't make big religious bets. When our clients are ready, we'll then take them on the journey they need to go on." Some of that might be taking over an inefficient technology department and making it more efficient. We're not ashamed of that. That's great business for us. We'll only do that nowadays if that also involves them getting glimpses of our new capability. We are definitely not out here, and I'm very proud of that, out here saying, "One day we're going to flick a switch and everything is going to be AI-ified." We're here saying, "We serve our clients, they serve their clients, and that's why they keep hiring us." Mark and I were talking about this actually earlier today. I hope, I believe when we're here next time, we'll be demonstrating a huge acceleration in these conversions and all the rest of it. Most of the deals that I'm seeing in the market today still start with, "I've got this year's budget. I need to get this efficiency. I'm excited about the future, but can you guys do what we've always known you can do? Our job is to blend into that some of the soon. Yeah. All right. Any questions from the audience? I did indeed want to ask about Agentic Commerce. You touched on it a little bit, but maybe just within the payments vertical overall, could you talk about how important that is from a use case standpoint? Maybe even broader than that within the payments vertical, kind of what are you seeing, any trends beyond Agentic Commerce that you'd call out? Yeah, of course. I mean, and you'll be all over this anyway, but it's taken a Dodd-Frank and other things. It's taken a while for the regulatory shift in interchange to really come into force, but it's really arrived now. We're seeing that in loyalty schemes. How do you fund them? Lots of banks saying, "Well, I used to use interchange to fund those sorts of things." What is the new model for that? You've then, because of the global volatility in the payment space and certainly the geopolitical space, we were moving to this sort of one-size-fits-all payments model. Now we're looking at much more innovation islands. Lots of national governments looking to put real-time payments in place. Lots of leaders of nations saying sovereignty of data is incredibly important. I think a lot of people speculating that the fact both Visa and Mastercard are perceived as U.S. companies, does that create challenges for them? I think those are brilliant businesses. The four-party model is a pretty hard thing to pull down. A huge percentage of the work that Endava has done, hence the reason I was a big client over the years, has been to enable this shift in payments, our payment gateway accelerators, what we are doing to help people modernize their platforms. I only see that getting faster and faster at the moment. The thing is, if you look at most industries and you say, "Here's a new incumbent like a Revolut or a Stripe or an Adyen," as soon as these companies have got through the governance or the firewall of regulation, because their platforms are so much more fit for purpose, they've just accelerated to enormous scale very, very quickly. The incumbents, whether that's a bank with a merchant acquiring business or whether that's a Fiserv or whether that's an FIS or a Global or a Worldpay, are having to react. The difference is these aren't startups. These are $100 billion companies. We are in that space particularly super well placed. I believe it's 30+% of our revenue. We've got teams that have built real-time payment systems for many, many companies. I think for us, it's good. To answer your question more on the themes I'm seeing, I'm certainly seeing people look at sovereignty of data in payments as a way to create local jobs and help local companies, particularly in Asia, particularly in South America, some in Europe, but probably more so in those first two markets. Yeah, and payments is about 15%. Just to correct. Right, banking and capital markets. Yeah. Hey, thanks for taking the question. As a follow-up to the payments question, the other kind of big buzzword in payments aside from Agentic Commerce is stablecoins. Can you talk about what your clients are or if they are trying to incorporate stablecoins into their kind of payments workflow and what applications you see as being kind of most relevant for these companies over the next three to five years? Thank you. Yeah, I mean, I think candidly, we do not profess to be an expert in that particular area, but we have enough people in our payments practice that understand it well enough as a footing tool. We are talking to lots of our banking clients, lots of our government clients about what, in fact, I hosted a very VIP delegation from Vietnam a couple of weeks ago. It is public, so it is not new news who came to the U.K., who are doubling down on crypto as a nation. We were advising them on applying right touch regulation and rules of law to that environment. That for us is an in for Endava. That is a way of demonstrating that we understand what it means to run a regulated payments environment. I think on the individual technologies itself, the U.K. has been a bit behind the curve on this for me, which is where I spend most of my time. I think the U.S. is opening up to it more now. Yeah, I can ask one of my team if it's helpful. Andy Davis probably is the right guy to help you with that. Thank you guys so much again. Could I circle back to the EndavaFlow platform and ask you to just explore the potential economic impact of clients shifting more towards EndavaFlow for their engagements with Endava? Thanks. Yeah, it's not a platform. I'll call it a methodology or way of working. It's basically using agents to deliver work of what would have been humans, for want of a better word. Maybe to just simplify it, we sort of envisage where a Scrum team to deliver work would have been eight people. The new Scrum team would be like four people and four agents. It's the whole sort of methodology about how that work is delivered, the governance, because it can move very quickly through each of the phases. There's no equivalent in an agentic AI world of daily standups, feedback loops, the testing scenarios. It flows very, very, very sort of quickly. It's thinking through the whole process from initiation right through to the production phase and not getting in the way of it, but having the right governance and checks around it, the human in the loop. It's a methodology. It's a proprietorial methodology using agents. These are our tools and accelerators as well. It's how do you orchestrate them and put the right balances and checks in. I think it's, I agree, it's a movement. Because John and Mark, long before I arrived, took the right decision, no question, to invest heavily in this area by going AI native ourselves. Across Endava, if you come to the locations, everybody is using AI. When we talk to clients, there's a real authenticity about it because we're saying, "This is the," and you've seen some of the costs that we've been able to take out of the business, some of the efficiency that we're getting by using it. I think that makes the job much easier for me, engaging with clients and saying, "No, here are the examples that have worked for us. Do you want to go on that journey?" As Mark says, it's called EndavaFlow because it is a movement. It's a behavior. It's not a platform and it's not a product. I think that's resonating quite well because everyone's being asked to make a religious bet at the moment. Just one more question, Kutsha. You're in an organization that's dominated by technology people, engineers, et cetera, et cetera. Generally, the natural reaction to seeking growth is to come out with a thing that says, "Here, we have a better thing now." Sometimes there's opportunities in commercial execution. You just get better at the soft side of the business in some respects, who we're targeting, getting higher up in the organizations. There's probably 50 things under that stack of things. Are you working on that as well too? I know we haven't asked any questions in that area, so I was just curious about the commercial execution side. Are you asking about the go-to-market or? Yeah. Also how it affects the culture. Yeah. We've always been industry-led. It's about what are the, how's technology going to impact the industries that we serve? What we're focusing on now is to take it up a level to the C-suite in terms of what are the big issues that need resolving at that level with our propositions. It's always proposition-led. It's the outcomes in terms of what it's led. The technology is almost sort of secondary in that respect. The technology is important because it's driving some of these themes of disruption and change in the industries. AI is causing big disruption, and we are feeling it ourselves, but it's causing issues with clients. It's how do we create solutions for clients that deal with that? We advise them, but we can go beyond that and also sort of build. It is solution-driven, market-driven, but you have to have technical competence, engineering capability. We have a very strong engineering sort of heritage, which is very sort of valuable. But it is how do you hone it and build the solutions that the client wants and the outcomes the client wants that is the key. Let me add to that. This isn't perhaps always understood about Endava. The culture in Endava, it's a superb question. 11,000, 10,500 of the Endavans are in what we call our locations, 62 locations from Eastern Europe to Vietnam to South America. Okay? 37% female. These are people who, when you go and visit these locations, the mayor of the town turns up because we're the biggest employer. The embassy will turn up because it's very important. We're giving these people incredible lives. In many cases in Romania and Moldova and others, 100 clicks from a war zone. This is really material to your question because these are hungry, driven people. They're not fascinated by the technology per se. They're excited about working on projects that are exciting. We have an internal channel called Dava Studios. When we can show that Toyota have just had their best season on the racetrack and show the Toyota car winning because we built the AI dashboard, that's what motivates them. They're motivated by working on cool stuff. What I say to the engagement team, the growth team, is if we're not explaining why we got the CEO's attention in that organization and why they chose Endava, then we're letting our teams down because they're working on game-changing stuff. I think that's the other thing. Endava, and I will say this because John's a good friend of mine. John, by his very nature, is a very humble guy. Endava had many, many great years as a very humble organization, delivered well in agile. We have to get above the parapet and point out to people some of the stuff that we're working on. The numbers are a consequence. They will come through. It's actually about working on brilliant stuff that other people want to replicate. Thank you. All right. Thank you so much. Not at all. Thank you. Very good. Thanks, guys. Thank you.