And I think it’s that engineering capability which is going to be crucial to actually seeing these opportunities and these solutions brought to life and scaled in clients, which is why we’ve invested in that space and brought it to life. It also has benefits in the sales cycle, in the sense that we’re able to sandbox very quickly solutions that relate to client workflows and actually bring those to life rather than some sort of PowerPoint, this is what could be done type discussion. And that helps clients go down the learning curve of value generative AI and how it can impact their organization. So that’s why we call that out. We like the phrase MLOps that brings to life the engineering related to putting these machine learning capabilities into client solutions, similar to the DevOps capability that got built around implementing cloud solutions.
Nate Svensson: Thanks, appreciate the color.
John Cotterell: Thanks.
Operator: The next question is from James Faucette of Morgan Stanley. Please go ahead.
Antonio Jaramillo: Hey, guys. Good morning. This is Antonio Jaramillo on for James Faucette. I have one question. I’m just curious if you guys could more broadly talk about your capital allocation strategy going forward? I know that, like you guys have had a concerted effort in the APAC region and just curious on that first?
John Cotterell: So the broad principle is that, you know, we’ve looked at buybacks that concluded that actually we’re better conserving our capital for the right M&A opportunities. M&A that is going to push us down that diversification route. We’re still — for many years ago, diversifying out of financial services and out of the U.K. And we continue to push on that M&A is one of the really helpful routes to achieving that diversification. So our capital focuses around using that to drive M&A. And the areas that we’re particularly keen to grow on are the U.S. at the moment, but also some of the countries in Europe where we don’t have a presence as we see opportunities there. So that’s what we’ll be focusing on in terms of where we put our money.
Antonio Jaramillo: Got it, that’s all very helpful. And then for my second question, I know that you had mentioned that in your guide, you’re sort of flatlining your private equity activity, but have you seen any meaningful activity in that group? And if you could touch on that, that’d be great?
John Cotterell: Yes, so I mean, the PE space, our approach to market is that we have a diligence business that engages with PE’s early in their diligence process around acquiring businesses. And through doing that, we help them frame their investment thesis and what they want to do from a technology point of view, as well as all the other aspects of why they’re buying the business. And through that, that then leads to downstream work as we help them execute on those transformations. Now, that’s actually been pretty quiet. The last three or four months, we have seen a significant pickup in that diligence work and some of those deals getting executed upon. Now it is a long cycle sales process, because we work with the PE’s in shaping the investment thesis.
They then execute on the deals. They normally have some work that they want to do with the management teams in terms of shaping the strategy up around that investment thesis. And then putting their business cases together and then executing on it. So it can be six, 12 months downstream before that work starts to come through. But we’re seeing those early signs of activity in terms of deals happening and that work going on. We wouldn’t expect it to have a significant impact on this financial year, but it’s a good sign for the next financial year.
Antonio Jaramillo: Perfect. Thanks, guys.
John Cotterell: Thank you.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to John Cotterell for closing remarks.
John Cotterell: So thank you all for joining us today. We’re excited about the market opportunities over the medium to long-term from all of the technology waves that continue to emerge, some of which we’ve outlined on the call. We’re gearing Endava to continue as a leader as these tech waves gather strength and look forward to speaking to you on our next earning call in February.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
