Nagarro Reports Strong Q2 2025 Results Despite Global Challenges

Nagarro's Financial Performance for Q2 2025

Nagarro, a leading company in digital engineering, has recently unveiled its unaudited financial results for Q2 2025, reflecting a robust performance despite a challenging global economic landscape. This announcement includes the company's half-yearly financial report, showcasing continuous growth and operational efficiency.

In Q2 2025, Nagarro reported a revenue of €252.0 million, marking a year-over-year increase of 3.2%, compared to €244.1 million during the same period in 2024. When adjusted for constant exchange rates, the growth year-over-year equates to an impressive 4.7%. Furthermore, organic revenue growth for the quarter stood at 3.8% in constant currency, translating to 2.4% in euros.

The gross profit for the quarter also witnessed a significant rise, totaling €83.7 million, which is an increase from €73.3 million in Q2 2024, resulting in a gross margin of 33.2% for Q2 2025, up from 30.0%. Such performance underscores Nagarro's strong operational efficiency and market positioning in the digital engineering space.

However, Nagarro faced some challenges influencing its adjusted EBITDA. The reevaluation of intercompany loans and cash reserves due to the weakening U.S. dollar against the euro had a substantial impact, resulting in an adjusted EBITDA of €30.5 million (12.1% of revenue), down from €35.5 million (14.5% of revenue) in the previous year. The total impact on adjusted EBITDA from currency revaluation and hedging operations over the first half of 2025 amounted to a negative €18.0 million.

The earnings before interest and taxes (EBIT) for Q2 showed a marginal increase to €23.4 million from €23.1 million year-over-year. Nonetheless, the net profit took a dip, decreasing to €8.3 million from €12.0 million in Q2 2024. This decline was primarily attributed to a higher tax burden resulting from withholding taxes on intercompany dividend payments, a concern affecting profitability.

One positive note in Nagarro's results is the increase in significant clients; the number of clients generating over €1 million in annual revenue rose from 184 as of June 30, 2024, to 188 as of June 30, 2025.

Nagarro also declared a dividend of €1.00 per share, totaling €12.6 million, which was reported during the annual general meeting held on June 30, 2025. This is aligned with the company's commitment to returning value to its shareholders.

First Semester Performance

The financial report for the first half of 2025 indicates a revenue increase to €498.9 million, representing a 3.4% growth year-over-year from €482.4 million during the same time frame in 2024. Adjusted for constant currency, the growth rate was noted at 3.6%. The organic revenue increase for the first half was recorded at 2.8% in constant currency, equivalently 2.6% in euros.

The gross profit during this period rose to €159.3 million compared to €146.9 million in the previous year's first half, leading to a gross margin of 31.9%, up from 30.5% in 2024. However, the adjusted EBITDA for the first half was reported at €60.8 million (12.2% of revenue), down from €74.7 million (15.5% of revenue) a year prior. Similarly, the EBITDA decreased to €65.0 million from €68.8 million.

The net profit for this period also saw a decline, falling to €19.6 million from €28.6 million, largely due to the same increased tax obligations mentioned earlier.

Challenges and Outlook

As of June 30, 2025, Nagarro's cash balance stood at €121.8 million compared to €192.6 million at the end of 2024. Additionally, the company's debts decreased to €300.7 million from €329.6 million over the same period. At the end of June, Nagarro employed 17,447 professionals, sustaining a strong workforce amid global uncertainties.

In light of these results, Nagarro has updated its revenue guidance for 2025. Previously projected between €1,020 and €1,080 million, the company now anticipates revenues closer to the lower end of this range, targeting a gross margin around 30%, slightly below 30.4% from 2024. The adjusted EBITDA margin is expected to range between 14.5% and 15.5%. Despite solid operational performances, currency reevaluation of its intercompany loans is predicted to influence the margin further downward.

Furthermore, Nagarro plans to hold a video call with analysts and investors on August 14, 2025, to discuss these results further, reflecting its transparency and commitment to shareholder engagement. For further information, you can visit Nagarro's website.