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Nagarro Unveils Q2 2025 Financial Results

Nagarro, a global leader in digital engineering, has announced its unaudited financial results for the second quarter of 2025, showcasing an impressive performance amid ongoing global economic challenges. With a focus on innovation and service delivery, Nagarro has demonstrated resilience, achieving a year-on-year revenue growth of 4.7% in constant currency.

Financial Highlights

In Q2 2025, Nagarro reported revenues of €252.0 million, marking a 3.2% increase from €244.1 million from the same period in 2024. The currency-adjusted revenue growth for the second quarter was 4.7% compared to the previous year. Organic revenue growth, also assessed in constant currency, reached 3.8%, translating to 2.4% organic revenue growth on a Euro basis. Nagarro’s gross profit surged from €73.3 million in Q2 2024 to €83.7 million in Q2 2025, leading to a gross margin that improved to 33.2% from 30.0% year-on-year.

Despite these positive indicators, Nagarro faced significant headwinds. Issues such as the impairment of internal loans and cash from Nagarro SE due to US dollar depreciation against the Euro adversely affected the adjusted EBITDA, which dropped to €30.5 million (12.1% margin) from €35.5 million (14.5% margin) year-over-year. The overall EBITDA experienced a slight decline, decreasing from €32.8 million in Q2 2024 to €32.0 million in the latest quarter

Year-to-Date Performance

Further examining the half-year outcomes, Nagarro’s revenues totaled €498.9 million in the first half of 2025, reflecting a 3.4% increase compared to €482.4 million during the same period in 2024. The company experienced a 3.6% rise in currency-adjusted revenue growth for the first half of 2025. Organic growth within the first half stood at 2.8% in constant currency, equating to 2.6% on a Euro basis. Gross profits in the first six months also rose, climbing from €146.9 million in 2024 to €159.3 million in 2025, with the gross margin increasing to 31.9% from 30.5%.

The adjusted EBITDA for H1 2025 reached €60.8 million (12.2% margin), down from €74.7 million (15.5% margin) the previous year, primarily due to the same currency-related impairments affecting profitability. The EBITDA itself saw a drop from €68.8 million in H1 2024 to €65.0 million in 2025.

Client Base Growth and Dividend Announcement

Nagarro's client base also saw growth, with the number of clients generating annual revenues exceeding €1 million rising from 184 as of June 30, 2024, to 188 as of the same date in 2025. Furthermore, during the annual meeting held on June 30, 2025, a dividend of €1.00 per share was approved, totaling €12.6 million, representing 13.1% of EBIT from the previous year.

Financial Guidance Update

As of January 23, 2025, Nagarro projected revenue of €1.020 to €1.080 billion for the full year. However, the company now expects its revenue to be nearer to the lower end of this range, estimating a gross margin target of 30%, slightly lower than the 30.4% in 2024. The company aims to maintain an adjusted EBITDA margin of between 13.5% and 14.5%, lowered from previous expectations.

In conclusion, Nagarro's financial landscape presents a blend of robust growth and challenges as it navigates through macroeconomic headwinds. With a dedicated focus on customer-centric innovation, Nagarro continues to position itself as a resilient player within the digital engineering industry. The financial results reflect not only the company’s performance but also its unwavering commitment to adapting in an ever-changing global market.