Endava Ousts Finance Chief as Accounting Probe Deepens, Shares Tumble 23%

Endava shares fell 23% after suspending CFO Mark Thurston and opening an accounting review; William Blair downgraded the stock and the 20-F filing is delayed.

Endava's stock came under heavy selling pressure on Tuesday, dropping 23% to EUR 1.88, after the IT services provider sidelined its finance chief and launched an internal review of its accounting practices. The upheaval has rattled investors already wary of the company's delayed financial reporting.

CFO Suspended Pending Contract Review

Mark Thurston was relieved of his duties as Chief Financial Officer effective Monday, following concerns raised by external auditors about how Endava has been accounting for certain contracts with customers and suppliers. The board acted on a recommendation from its audit committee, which has enlisted independent outside counsel to examine the company's accounting treatment of those agreements.

Endava has not disclosed the specific contract terms under scrutiny or the financial magnitude of the questionable entries, nor has it provided a timeline for when the external investigation might conclude.

AlixPartners Executive Steps In

To keep its finance function running, the board appointed Conor McShane of consulting firm AlixPartners as Interim CFO. The appointment was made last Friday and took effect Monday. McShane will also serve as principal accounting officer while the probe runs its course, holding the post until the review wraps up and a permanent leadership structure is settled.

Analyst Downgrade and Legal Scrutiny Mount

William Blair downgraded Endava shares from "Market Perform" to "Underperform" on Tuesday, citing the uncertainty surrounding the accounting review and the abrupt change at the top of the finance department. Separately, US law firm Glancy Prongay Wolke & Rotter has opened an investigation into possible violations of US federal securities laws, and media reports indicate additional law firms are pursuing their own inquiries on behalf of shareholders. Those reports of potential litigation have added to the nervousness in the market, though Endava has reported no operational impact so far.

Annual Filing Pushed to November

The internal investigation has delayed the release of Endava's financial results. The company now expects to publish fourth-quarter and full-year fiscal 2026 figures — for the year ended June 30 — along with its annual report on Form 20-F by November 2, 2026, which would still meet the regulatory filing deadline with the SEC. No date has been set for the customary earnings conference call.

The latest decline brings Endava's year-to-date loss to 66%. Even before the current turmoil, the company was drawing attention: in the third quarter of fiscal 2026, which ended March 31, the software services provider generated revenue of GBP 178.5 million, while a goodwill impairment of GBP 364.6 million weighed heavily on its balance sheet at the time. Resolving the accounting questions now presents yet another organizational challenge for the firm.