Shares of tech company Endava (DAVA 1.02%) have skyrocketed by nearly 110% in 2021 alone. The company just reported its earnings results for the first quarter of its fiscal 2021. In this segment of Backstage Pass, recorded on Nov. 17, Fool.com contributors Trevor Jennewine and Brian Withers discuss the company's performance during the three-month period and catalysts for future growth.
Trevor Jennewine: Endava's another IT consultancy specializing in a range of emerging technologies, mobile connectivity, social media, blockchain, augmented reality. They really focus on helping incumbent enterprises, big established companies, helping them keep pace with changes in technology. This company is about four times smaller than EPAM Systems. The market caps are around $9 billion here. They are headquartered in London, Endava does present in British pounds. If I say dollar, I mean pounds. The company just reported their first quarter for fiscal 2022 results, and revenue came in at a 148 million pounds.
It was up 55%. Earnings per share came in at 36 cents, up 200%. The adjusted figure came in at 49 cents, up 88% and that was in line. A beat on the top line, in-line earnings on the bottom line. Not bad and you can see the stock has performed very well over the past year, just like EPAM has. Today, it was down about a half percentage points, the market seemed relatively indifferent to the figures. A few highlights from the quarter, the company now has 658 total clients. Those up 31%, and they have over 93 clients that are generating over one million pounds in revenue per year, and that's up 41%.
Bringing new clients on board at a steady clip, but they are also ramping them up to higher spends quickly. Similar to EPAM, this company had cash from operations drop a little bit 7% for similar reasons, just changes in working capital that looked like they're going to be transitory. The outlook for the second quarter is strong. They're looking for revenue of a 151 million pounds that will be up 48%, and adjusted earnings of 43 cents per diluted share, they're up 48%.
Again, like Brian mentioned, this is another "picks and shovels" play. They should only continue to benefit as digital transformation continues to play out. That's not something that happens and then it's over. Digital transformation continues to occur. It's important to stay up with changes in technology and this company is a great partner. I like both of the IT consulting companies we've talked about today.
Brian Withers: When I looked at Endava, one of the things that they do that's unique, is something they call a near-shoring, for their development teams. They have development teams in lower-cost regions, but they are in the same time zones as their customers. It enables developers to talk directly with potentially the end users of the software that they are working on to enable a tighter development cycle. I think that's one of the benefits that Endava customers enjoy and why they keep coming back.
