Nagarro Reports Q3 2026 Results with 2.7% Revenue Growth Year-to-Date

Nagarro Reports Unaudited Financial Performance for Q3 2026

In a recent disclosure, Nagarro, a global frontrunner in AI-native development and transformation, announced its unaudited financial results for the third quarter of 2026. The report highlights a slight yet encouraging revenue increase of 2.7% in constant currency for the first nine months of the year, culminating in a total revenue of €755.5 million, compared to €753.4 million during the same period in the previous year.

As companies navigate through a complex economic landscape, Nagarro's results indicate a mix of resilience and challenges. The year-on-year revenue growth, when measured in constant currency, signifies the company's ability to maintain a stable performance despite fluctuations in exchange rates, marking an increase of 0.3% in euro terms.

The first nine months of 2026 revealed that organic revenue growth was modestly flat at 1.2% based on constant exchange rates, reflecting a decline of 1.2% when assessed in euro terms. This variance suggests that while Nagarro is retaining its existing clientele, it is also facing headwinds in attracting new business.

Nagarro's gross profit figures remained fairly consistent, reporting €243.1 million with a gross margin of 32.2%. This marginal decrease from €243.5 million in 2025 (32.3% margin) demonstrates a cautious approach in managing operational costs amidst fluctuating revenues.

The adjusted EBITDA for the first three quarters saw a rise to €107.3 million, which translates to an encouraging adjusted EBITDA margin of 14.2%, increasing from 13.9% a year earlier. However, the overall EBITDA saw a downturn to €99.0 million compared to €108.5 million in the previous year, largely due to a surge in expenses related to special effects and stock-based compensation, which added up to €12.1 million in net costs.

Despite a reduction in EBITDA, Nagarro’s net income for the nine-month period improved to €42.5 million, reflecting a 3.8% increase from the previous year. This uptick can be attributed to lower withholding taxes on internal group dividend payments, signifying effective financial management strategies.

Q3 2026 Insights

Turning to the most recent quarter, Nagarro reported revenue of €255.0 million for Q3 2026, compared to €254.6 million in Q3 2025. Although this reflects a nominal growth rate of 0.2% in euro terms, on a constant currency basis, the revenue experienced a slight dip of 0.2%. Organic revenue for the third quarter faced a decline of 1.6% in constant currency, suggesting a persistent struggle in growth avenues within this timeframe.

The gross profit for the third quarter remained steady at €83.9 million, showing a gross margin of 32.9%—a slight decrease from 33.1% in 2025. Adjusted EBITDA for Q3 fell to €38.3 million, representing a drop in margin to 15.0% from the previous year's 17.3%. This decline reflects increased operational pressures and investment in stock compensations which amounted to €6.4 million.

Earnings before interest and taxes (EBIT) also saw a decline to €23.8 million, down from €34.9 million in Q3 2025. Yet, this reduction was somewhat offset by a decrease in income tax expenses, resulting in a final net income of €12.7 million for the quarter, which is significantly lower than €21.4 million in the same period prior.

Interestingly, the number of Nagarro's clients generating over €1 million in revenue within the past twelve months increased from 184 to 186 between June and September 2026. This growth underscores the company's sustained engagement with high-value clients, which is a positive indicator amidst fluctuating overall revenue trends.

Furthermore, cash flow from operations rose slightly to €77.7 million, reflecting improvements in customer collections and reduced tax payments on intra-group dividends. The company achieved a reduction in the days sales outstanding (DSO) metric, improving from 82 days at the end of December 2025 to 80 days by September 30, 2026.

With a modest total of €124.3 million in cash and cash equivalents, Nagarro continues to maintain a solid financial footing. Financial liabilities decreased to €278.0 million, illustrating prudent management in debt servicing during the period.

Nagarro, with a workforce of approximately 18,499 employees across 39 countries, remains committed to innovating in the AI-native technology landscape, dedicated to merging human intelligence with technological capabilities efficiently and responsibly.

For more insights and updates, check Nagarro’s website at www.nagarro.com.