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Nagarro's FY 2025 Financial Performance Report

Nagarro, a global leader in digital engineering, has recently published its audited financial statements and annual report for the fiscal year 2025, demonstrating a resilient performance in a challenging economic landscape. According to the reports released, Nagarro's revenue climbed to €999.3 million, marking a growth of 2.8% compared to €972.0 million in 2024. Notably, when adjusted for constant currency, the growth rate stands at a promising 6.1%.

The gross profit also reflected positive trends, rising to €321.3 million, up from €295.8 million in the prior year. As a result, the gross margin increased from 30.4% to 32.2%. However, the company faced some headwinds with adjusted EBITDA decreasing to €138.2 million, down from €147.5 million. This reduction resulted in an adjusted EBITDA margin of 13.8%, which still fell within the management's revised guidance of 13.5% to 14.5%.

The decline in adjusted EBITDA can be attributed to several factors, including an unrealized foreign exchange loss of €15.5 million on intra-group loans. Additionally, a one-time expense of €12.4 million related to new labor codes rolled out in India impacted earnings significantly. This situation underlines the intrinsic link between geopolitical and regulatory changes and their impact on global operations.

The earnings before interest and tax (EBIT) fell to €83.0 million, down from €96.7 million in 2024, while the net profit decreased to €39.5 million from €49.2 million in the previous year, reflecting a year-on-year decrease of 19.7%. Despite these challenges, Nagarro managed to onboard 180 clients contributing over €1 million in annual revenue, indicating a slight drop from 186 in 2024. The firm's strategic shift towards stabilized managed services following the successful completion of numerous projects over the past year is a pivotal reason for this change.

Operating cash flows showed strength, growing to €102.8 million compared to €86.5 million in 2024. Nagarro also increased the utilization of its non-recourse factoring program by €8.8 million during 2025. Furthermore, the company improved its days of sales outstanding metric, reducing it from 88 days at the end of 2024 to 82 days by the close of 2025.

At the conclusion of the fiscal year, Nagarro reported a cash balance of €124.6 million, a decrease from €192.6 million in 2024. Meanwhile, total loans and borrowings decreased to €310.1 million from €329.6 million, reflecting a prudent approach towards financial management.

Moreover, in a notable move to enhance shareholder value, Nagarro repurchased 919,421 shares throughout FY 2025, at a total cost of €67.8 million. This action reinforces Nagarro's commitment to delivering long-term value, as the Management and Supervisory Boards are set to propose a €1.00 per share dividend at the Annual General Meeting. This proposed distribution highlights the company's ongoing dedication to shareholder returns.

Nagarro operates on a global scale, employing around 18,000 professionals across 38 countries, providing digital solutions that empower clients to innovate and lead in their respective markets. The company's commitment to agility and a fluidic approach underpins its strategy for sustainable growth.

In conclusion, while Nagarro faces certain challenges reflected in their financial results, they remain steadfast in their pursuit of strategic growth and operational excellence. As they adapt to the evolving market dynamics, the company is well-positioned to leverage its robust client base and innovative mindset to continue thriving in the forthcoming years.