Endava to Restate FY26 Results After Audit Probe; CFO Out, Interim CEO Named
DAVA sits 21% above its 52-week low of $1.6 on light trading volume (0.3× avg).
Summary
Endava will restate fiscal 2026 results after its audit committee found improper accounting on certain customer and supplier deals, with revenue adjustments of roughly 2%-4% of prior-year revenue. The CFO and general counsel have resigned, an interim CEO is taking over, material weaknesses are expected, and the annual report will be filed late.
Key Events · Legal and Risk Events · DAVA
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FY26 Restatement Confirmed
Audit committee found accounting for certain customer/supplier agreements was incorrect; fiscal 2026 results will be restated and the Affected Periods (Q1-Q3 FY26) should no longer be relied upon.
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Revenue Hit 2%-4% of FY25
Preliminary revenue adjustment equals approximately 2%-4% of prior fiscal 2025 revenue, with non-cash goodwill and intangible write-downs reducing adjusted profit before taxes.
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Material Weaknesses Expected
Management expects to report one or more material weaknesses in internal control over financial reporting, including tone at the top, and is developing a remediation plan for the 2026 Annual Report.
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Covenant Risk Under Review
Endava is assessing the restatement's impact on prior financial covenant compliance under its revolving credit facility and is in discussions with lenders; preliminary cash was about £55 million at September 30, 2026.
Analysis · DAVA · Technology
The audit committee found that certain fiscal 2026 customer-and-supplier agreements either lacked economic substance or were priced as a single arrangement, so revenue was misstated. Endava will restate FY26, with revenue adjustments equal to roughly 2%-4% of prior-year (FY25) revenue, plus non-cash write-downs to goodwill and intangibles that cut adjusted pre-tax profit. The company also expects to report one or more material weaknesses in internal controls, including tone at the top, and is checking whether the restatement breaches covenants on its revolving credit facility. Leadership is being replaced: the CFO and general counsel have resigned and the CEO is stepping back, with an AlixPartners interim CFO and an internal interim CEO installed. The 20-F will miss its November 2, 2026 deadline, so a Form 12b-25 late-filing notice is coming and prior FY26 guidance is withdrawn. With about £55 million of cash, the combination of restatement, control failures and covenant uncertainty is the core risk to the thesis.
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At the time of this filing, DAVA was trading at $1.94 on NYSE in the Technology sector, with a market capitalization of approximately $110.2M. The 52-week trading range was $1.60 to $9.88. This filing was assessed with negative market sentiment and an importance score of 9 out of 10.