Endava Ltd (DAVA) shares plummeted by 5.34% in pre-market trading on Friday, February 21st, 2025, following the release of the company's second-quarter fiscal 2025 earnings report. The decline reflects weakening demand and regional challenges faced by the technology services provider.

The company reported a 6.6% year-over-year increase in revenue to £195.6 million for the quarter ended December 31, 2024. However, profit before tax declined significantly to £2.5 million from £10.6 million in the same period last year, indicating a drop in profitability. The adjusted profit before tax margin also decreased to 11.2% from 12.4% in the prior year, reflecting margin pressure.

Endava cited increased softness in the UK and Rest of World regions due to a worsening macroeconomic environment, leading to unplanned project ramp downs and delays. The company also faced challenges in the payments vertical, with some larger clients reducing spend. Additionally, revenue from Europe and the Rest of the World declined, with Europe down 0.6% and the Rest of the World down 43.5%, indicating regional challenges.