Nagarro (NA9) Q2 2025 (Retail Investors) earnings summary

Executive summary

• Achieved moderate growth and strong operational efficiency in a slow IT services demand environment, with significant FX fluctuations and non-cash accounting losses impacting results.

• Strategic focus on accelerating return to double-digit growth through new opportunities, partnerships, and governance enhancements, including AI, data, and cloud initiatives.

• Continued increase in clients generating over €1 million in revenue and high client satisfaction, with NPS at 66–67.

• Wage inflation and attrition levels remained moderate, with a net reduction in workforce to improve efficiency.

• Acquisition of Notion Edge France expanded SAP Customer Experience capabilities.

Financial highlights

• Q2 2025 revenue reached €252 million, up 3.2% year-over-year (4.7% in constant currency); H1 2025 revenue was €498.9 million (+3.4% YoY).

• Gross margin improved to 33.2% in Q2 and 31.9% in H1, driven by productivity gains.

• Adjusted EBITDA for Q2 was €30.5 million (margin 12.1%); H1 Adjusted EBITDA was €60.8 million (margin 12.2%), both impacted by €18.0 million in FX losses.

• Net profit for H1 2025 was €19.6 million, down from €28.6 million year-over-year.

• Cash balance at quarter-end was €121.8–122 million; net leverage ratio at 1.8x.

Outlook and guidance

• Full-year 2025 revenue expected near the lower end of €1,020–1,080 million guidance due to currency effects.

• Gross margin target maintained at ~30%; adjusted EBITDA margin revised to 13.5–14.5% from 14.5–15.5%.

• Management sees medium-term strength for digital specialists, with AI and digital transformation as growth drivers.