#Germany #Q3 Results #Munich #Financial Growth #Nagarro

Nagarro Reports Q3 2026 Results

On November 13, 2026, Nagarro, a prominent player in AI-driven engineering and transformation, announced its unaudited financial results for the third quarter of 2026. The company's report revealed a reasonable growth trajectory, maintaining a stable operational performance despite facing various economic challenges.

In the first nine months of 2026, Nagarro achieved revenues of €755.5 million, which reflects a slight increase from €753.4 million in the same period of 2025. This translates to a year-on-year growth of 2.7% in constant currency terms. However, when evaluated in euros, the growth rate appears modest at 0.3%.

The organic revenue growth also mirrored this pattern, showing a 1.2% increase on a constant currency basis, while the euro equivalent depicted a decrease of 1.2%. Gross profit numbers remained largely stable at €243.1 million, maintaining a margin of 32.2%, slightly down from 32.3% year-on-year.

The adjusted EBITDA grew to €107.3 million (equivalent to 14.2% of revenues), an increase compared to the previous year's €104.8 million (representing 13.9% of revenues). However, total EBITDA slipped to €99.0 million from €108.5 million in 2025, primarily due to a rise in net extraordinary expenses of €12.1 million. These expenses were heavily influenced by a €14.4 million increase in stock-based compensation - a cost that was somewhat offset by a decrease in research expenses.

The report highlights a notable decline in EBIT, plummeting to €73 million from €82.3 million compared to the same period last year. Conversely, net profit exhibited a modest growth to €42.5 million, slightly up from €41 million in 2025, attributed to reduced withholding taxes on intergroup dividends.

Q3 2026 Performance
Analyzing the third quarter results, Nagarro reported revenues reaching €255.0 million compared to €254.6 million in Q3 2025. The revenue growth remained virtually static with a mere 0.2% change year-on-year, while the constant currency comparison indicated a slight decrease of 0.2%. The anticipated organic growth for the quarter dropped by 1.6%, translating to a 1.2% decrease in euros.

Gross profits for this quarter held steady at €83.9 million, corresponding to a gross margin of 32.9%, which is marginally down from 33.1% in Q3 2025. Adjusted EBITDA values also witnessed a downturn to €38.3 million, showcasing a decline compared to €44.0 million from the prior year. The overall EBITDA for Q3 fell to €32.5 million from €43.5 million in 2025.

This decrease was primarily spurred by lower EBITDA adjusted figures alongside an increase in net extraordinary expenses. Specifically, stock-based compensation surged by €6.4 million, but was partially mitigated by the absence of research expenses amounting to €1 million. As a result, EBIT fell to €23.8 million, down from €34.9 million in 2025, despite a minor tax expense reduction contributing to a net income of €12.7 million compared to €21.4 million last year.

The operational cash flow indicated positive growth, reaching €48.2 million, significantly increased from €34.7 million in the same quarter of the last year, attributed to enhanced receivables management and lowered taxes on dividends. Notably, the average days sales outstanding (DSO) improved, dropping from 82 days to 80 days.

Nagarro's cash and cash equivalents remained stable at €124.3 million, while the company reduced its debts to €278.0 million from €310.1 million; this decline is primarily due to the repayment of revolving credit lines.

Conclusion

Nagarro continues to demonstrate resilience in the ever-changing landscape of AI-enhanced engineering and service provision. The slight uptick in revenue along with stringent cost management efforts highlights the company's strategic approach to navigating current market challenges. With a team of 18,499 professionals spread across 39 countries, Nagarro remains positioned for a positive trajectory in the coming quarters. For more detailed financial insights and future forecasts, please visit Nagarro's official website.