Nagarro (NA9) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was €247 million, up 3.6% year-over-year, with an adjusted EBITDA of €30.2 million and a margin of 12.2%.

• FY 2024 revenue reached €972 million, with a gross margin of 30.4% and constant currency growth of 7.2%.

• Net profit declined to €11.2 million in Q1 2025, reflecting a challenging environment and client caution.

• Diversification across industries and regions is a core strategy, with no single sector or geography dominating revenue.

• Strategic growth initiatives target Japan, Edge AI, and the German Mittelstand, with significant impact expected from 2026.

Financial highlights

• Q1 2025 operating cash flow was €29.8 million; cash balance at €162 million.

• Net leverage ratio at 1.5x as of March 31, 2025, improved from 1.7x at year-end 2023.

• Days sales outstanding improved to 81 days from 88 at year-end.

• Share buybacks totaled 556,000 shares as of May 9; €41 million spent repurchasing shares.

• Top 5 clients contributed about 15% of Q1 2025 revenue.

Outlook and guidance

• FY 2025 revenue guidance is €1,020–1,080 million, with an adjusted EBITDA margin of 14.5–15.5%.

• 2025 guidance remains unchanged, with growth acceleration expected in H2 if hiring keeps pace.

• Growth initiatives in Japan, Edge AI, and the Mittelstand expected to contribute a few million in 2025, with larger impact in 2026.

• April and May 2025 revenue trends are steady and in line with projections.

• Management continues to evaluate bolt-on acquisitions and deepen strategic partnerships.