John Cotterell: There are signs as we’re getting through February that clients are starting to ease off a little bit. You saw it in the Equiniti deal that we announced yesterday. That got signed, wasn’t getting signed earlier in the quarter. And the clients are looking at their budgets, looking at the things that they want to do. And we’re seeing some of that come through. I actually think others across the industry also seeing that. We’re seeing the same trend.
Operator: The next question is from Bryan Keane of Deutsche Bank.
Bryan Keane: Mark, I guess on GalaxE, what’s the normalized revenue growth rate of the company and maybe how’s it growing more recently? Is it being impacted by the economy?
Mark Thurston: Well, they have a December year-end at the moment, so they haven’t concluded December 2023. But the growth rates there [indiscernible] 10%. The expectation sort of growing into calendar 2024 is probably around 10% to 15%. So they are growing quite nicely actually. As I said, their sort of financial profile is similar to us, with the one caveat is they don’t carry the SG&A that you would expect from an organization like Endava. So, the systems investment, I mentioned the finance function that needs to be put in place, but that won’t be prohibitive for us because we will just move them on to our platform. The one caveat is it is in a different continent, so we do need to establish some presence there. So, the profitability is good. And I think the growth prospects are good. And I think they’re probably going to be better under Endava ownership than they were as they were.
Operator: On a normalized basis, you think they can grow somewhere near the 20% constant currency revenue growth outlook that you guys think is possible?
John Cotterell: Oh, yes, absolutely. In fact, we think that as we get to go, there’s opportunity cross-fertilizing the capabilities of the businesses, the accelerators that I was talking about to actually see opportunities to accelerate both core Endava and the GalaxE business. GalaxE, because we widen their capability, we give them scale, they do have large clients who hesitate to spend more with them because of that scale. Endava, because of the access to these accelerators, that will help us drive a little bit deeper into enterprise transformation with our larger clients. So there’s some very good revenue opportunities as we combine the businesses on top of the [Technical Difficulty] process.
Bryan Keane: Just on the demand question and timeline and conversions, when do you now guys expect maybe that to fall? Do you have any visibility to know – is it the beginning of calendar year 2025? Is it kind of a TBD environment out there? Just where do you think the environment could improve at this point or is it just too uncertain to know?
Operator: Next question comes from Spencer Anson of Susquehanna. Please go ahead.
Spencer Anson: How have you seen the demand environment evolve since macro conditions became more difficult and what should we watch for to get an indication that things might be standing up going forward? Did you guys hear the question?
Operator: Pardon me, this is the conference operator. We seem to be experiencing a technical issue. Please hold while we get the speakers reconnected. Thank you for holding. We do have the speaker line reconnected.
Spencer Anson: How have you seen the demand environment evolved since macro conditions became more difficult? And what signs should we look for indicate that products might be standing up?
Mark Thurston: I suppose, at the moment, are sort of macros, as we’ve sort of outlined, as we’ve seen it through hesitancy and progressing with work. I guess it has something to do with our exposure, particularly for Europe and UK [Technical Difficulty] giving people pause. So we’re not actually seeing much of a change from that perspective. But, actually, the work is building up. I gave sort of indication of the pipeline of bigger deals building up, the size of them. The number is just the willingness of clients to commit at this stage.
Operator: Thanks very much. This concludes our question-and-answer session. I would like to turn the conference back over to John Cotterell for any closing remarks.
John Cotterell: Yeah. So, thank you all for joining us today. As you can see, we’re investing in Endava in order to facilitate a return in the medium term to our historical profitability and growth levels. And we’re in gearing Endava to continue as the leader as tech waves regather strength. We look forward to speaking to you in our next earnings call. Thank you.
Operator: The conference has now concluded. Thank you for attending today’s presentation. And you may now disconnect.
