Nagarro's Financial Highlights for Q2 2025
Nagarro, a prominent player in digital engineering, has recently unveiled its financial results for the second quarter of 2025. Despite facing global macroeconomic hurdles, the company recorded a strong performance with a notable increase in revenue and gross profit.
Revenue Growth and Profit Margins
The unaudited figures show that Nagarro's revenue surged to €252.0 million, marking a year-over-year growth of 3.2% from €244.1 million in Q2 2024. Crucially, when adjusted for constant currency, the year-over-year growth reached 4.7%. Organic growth likewise remained positive at 3.8% in constant currency, translating to a 2.4% growth in Euro terms.
In addition to revenue, Nagarro's gross profit experienced significant growth, increasing to €83.7 million in Q2 2025, compared to €73.3 million in the same period of the previous year. This resulted in an enhanced gross margin of 33.2%, a notable improvement from the 30.0% achieved a year earlier.
Impact of Currency Exchange Rates
Despite strong operational success, Nagarro faced challenges related to currency exchange rates. The company's Adjusted EBITDA was negatively affected by approximately €18.0 million due to the revaluation loss on inter-company loans and the depreciation of the US dollar against the Euro. Consequently, the Adjusted EBITDA for Q2 2025 came in at €30.5 million, representing 12.1% of revenue, down from €35.5 million (14.5% of revenue) in Q2 2024.
Comparative EBITDA Results
EBITDA also saw a slight decline, recorded at €32.0 million in Q2 2025 compared to €32.8 million in Q2 2024. However, EBIT showed a marginal increase, rising to €23.4 million from €23.1 million year-over-year. Net profit for the quarter decreased to €8.3 million from €12.0 million, mainly due to increased tax expenses.
Highlights from H1 2025
Nagarro's performance in the first half of 2025 closely mirrored these trends. The cumulative revenue for H1 2025 reached €498.9 million, an increase of 3.4% from €482.4 million in H1 2024. The constant currency revenue growth for this period stood at 3.6%, with organic growth slightly higher at 2.8% in constant currency terms, translating to a 2.6% increase in Euros.
Gross profit in H1 also saw a positive trajectory, climbing from €146.9 million in H1 2024 to €159.3 million in H1 2025, leading to a gross margin increase from 30.5% to 31.9% year-on-year.
Challenges and Strategic Adjustments
Even with a robust top line, Nagarro's Adjusted EBITDA declined to €60.8 million in H1 2025 from €74.7 million in the prior year, largely owing to persistent currency challenges. The market adaptability and strategic initiatives remain key as the company navigates changes in the global landscape.
Leadership and Governance Updates
Nagarro's Supervisory Board has been restructured, with Martin Enderle serving as Chair. Enderle leads the Nomination and Remuneration Committee, furthering the company's commitment to strong governance. Other key members include Hans-Paul Buerkner heading the Strategy Committee and Jack Clemons chairing the Audit Committee.
Future Outlook and Guidance
Looking forward, Nagarro anticipates its revenue for 2025 to fall between €1,020 and €1,080 million. The company is committed to maintaining a gross margin of around 30% and has adjusted its expectations on the Adjusted EBITDA margin to between 13.5% and 14.5%, reflecting the ongoing challenges posed by currency fluctuations.
A meeting has been scheduled for stakeholders to elaborate on these results and future directives. This platform will provide clarity into Nagarro's strategic path amidst evolving market conditions.
About Nagarro
Nagarro is recognized as a leader in digital engineering, enabling clients to transition into agile, digital-first entities. The company embodies a spirit of innovation and global collaboration, employing approximately 17,400 professionals across 39 countries, and continues to aspire towards transforming the technological landscape.
Frequently Asked Questions
What were Nagarro's revenue and gross profit figures for Q2 2025?
Nagarro's revenue for Q2 2025 was €252.0 million with a gross profit of €83.7 million.
How did Nagarro perform compared to Q2 2024?
In Q2 2025, Nagarro's revenue grew by 3.2% compared to the same period in 2024, while gross profit saw a 14.2% year-over-year increase.
What caused the decline in net profit for Q2 2025?
The decline in net profit to €8.3 million was primarily due to increased income tax expenses related to withholding taxes on dividends from subsidiaries.
What adjustments did Nagarro make regarding future guidance?
Nagarro expects its 2025 revenue to be closer to the lower end of previous guidance, adjusting the outlook for Adjusted EBITDA margin to between 13.5% and 14.5% due to currency impact.
Who leads Nagarro's Supervisory Board?
Martin Enderle serves as the Chair, supported by other experienced leaders in key strategic roles.
