#Germany #Munich #revenue growth #financial report #Nagarro

Nagarro's Resilient Q2 2025 Results

On August 14, 2025, Nagarro, a prominent player in the digital engineering landscape, unveiled its unaudited financial results for Q2 2025. Despite the prevailing global economic headwinds, the company demonstrated impressive figures that reflect both its operational efficiency and strategic adaptability.

Financial Highlights

Nagarro reported a revenue increase to €252.0 million for Q2 2025, marking a 3.2% rise from €244.1 million in Q2 2024. When adjusted for constant currency, the year-over-year revenue growth stood at 4.7%. This consistency in growth highlights Nagarro's ability to navigate the turbulent economic environment effectively. Their organic Year-Over-Year revenue growth was recorded at 3.8% in constant currency, translating to a 2.4% growth in Euro terms.

Gross profit for the same quarter soared to €83.7 million from €73.3 million, resulting in a gross margin improvement from 30.0% to 33.2% year-over-year. This highlights the company’s focus on maintaining strong profitability even in challenging conditions.

However, Nagarro faced challenges with its Adjusted EBITDA, which fell to €30.5 million (12.1% of revenue) compared to €35.5 million (14.5% of revenue) in Q2 2024. The decline was attributed mainly to revaluation losses on inter-company loans stemming from fluctuations in currency exchange rates, particularly the weakening of the US dollar relative to the Euro, which affected their financial metrics significantly.

Year-to-Date Performance

For the first half of 2025, Nagarro reported revenue of €498.9 million, a 3.4% increase compared to €482.4 million in the first half of 2024. The constant currency revenue growth for H1 2025 was slightly higher at 3.6%. Moreover, the gross profit for this period increased to €159.3 million from €146.9 million, contributing to a gross margin of 31.9% versus 30.5% the previous year.

However, the company’s Adjusted EBITDA declined to €60.8 million (12.2% of revenue) from €74.7 million (15.5% of revenue) in H1 2024. This downturn echoes the concerns raised in Q2 due to income tax expenses rising from withholding taxes on inter-company dividends.

Operational Efficiency and Client Growth

Nagarro has continued to invest in operational efficiencies, which has reflected positively in its client growth. The number of clients generating over €1 million in annual revenue increased from 184 to 188 year-over-year, demonstrating the company's expanding footprint in the digital engineering market.

Despite the financial fluctuation, Nagarro's cash balance managed to remain robust at €121.8 million by the end of June 30, 2025. Nonetheless, the loans and borrowings decreased to €300.7 million from €329.6 million, showing an effort to manage debt and liquidity in a careful manner.

Supervisory Board Updates

The company's Supervisory Board also saw restructuring, with Martin Enderle appointed as Chair while overseeing the Nomination and Remuneration Committee. The strategy and risk oversight roles have been efficiently handled by Hans-Paul Buerkner and Jack Clemons respectively, ensuring that Nagarro maintains a strong governance framework.

Future Guidance

Looking ahead, Nagarro has adjusted its expectations for the year, projecting revenue between €1,020 and €1,080 million for 2025, leaning towards the lower end of this forecast due to external economic pressures. Despite this adjustment, the company aims to maintain a gross margin close to 30%, reaffirming its commitment to operational excellence while navigating the complexities of the market.

Conclusion

In conclusion, Nagarro's Q2 2025 financial results underscore its robust market position and strategic resilience. While the company confronts currency valuation issues and associated financial ramifications, its growth metrics and operational strategies position it well for future challenges. Investors keen on following Nagarro's ongoing journey will have the opportunity to participate in an analyst call to discuss these insights further, demonstrating transparency and commitment to shareholder engagement.

For more information, please visit Nagarro's official site.