Endava plc is undergoing significant changes in leadership and financial reporting following an internal investigation into its accounting practices. The company announced that it will restate its previously reported fiscal 2026 financial results, with an expected revenue impact of approximately 2% to 4% of its prior fiscal 2025 revenue. This development is crucial for the company as it seeks to enhance its financial controls and governance.

Founded in 2000, Endava plc operates in the computer programming services sector (SIC: 7371) and is listed on the New York Stock Exchange under the ticker DAVA. The company has been involved in providing next-generation technology services, focusing on enabling clients to accelerate growth and tackle complex challenges.

The recent SEC filing reveals that the Audit Committee's investigation found incorrect accounting treatment for certain customer and supplier agreements. As a result, the company will restate its fiscal 2026 results, which will include non-cash adjustments affecting balance sheet accounts. Importantly, Endava does not expect to restate any prior fiscal years or periods within those years.

Endava's findings indicate that certain agreements lacked economic substance or were improperly negotiated, leading to non-compliance with accounting standards. The company is currently assessing the impact of this restatement on its financial covenant compliance under its revolving credit facility.

In light of these developments, the company is implementing several leadership changes. Mark Thurston, the Chief Financial Officer, resigned effective October 25, 2026, and Conor McShane has been appointed as the Interim Chief Financial Officer. Additionally, John Cotterell, the CEO and founder, announced his decision to retire effective October 19, 2027, but the Board has decided to appoint Rob Machin as the Interim CEO starting November 2, 2026. Machin brings over three decades of IT industry experience, including more than 15 years at Endava.

The Board and management are committed to enhancing financial controls and governance in response to the investigation's findings. They plan to implement remedial measures, including hiring additional qualified finance personnel and improving governance and training for relevant staff.

Endava's Chairman, Trevor Smith, emphasized the company's strong foundation and commitment to acting in the best interests of its shareholders during this transition. The company remains focused on disciplined execution and advancing its AI-native strategy.

Looking ahead, Endava does not expect to file its 2026 Annual Report by the November 2, 2026 deadline due to the ongoing investigation and leadership changes. The company intends to file a Notification of Late Filing with the SEC and will announce the timing of its fiscal fourth quarter and full year 2026 earnings release as soon as practical.

As this situation unfolds, it underscores the importance of robust financial controls in the computer programming services industry, as companies navigate complex client agreements and regulatory requirements.