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August 13, 2021 - Nagarro, a global leader in digital engineering and technology solutions, today stated its unaudited financial numbers for Q2 2021 (April 1, 2021 – June 30, 2021) and released its half-yearly report.

Demand continued to be strong for Nagarro's services, while supply was significantly constrained by hiring challenges and Covid-19 disruptions. Revenue grew to €127.3 million in Q2 2021, up 21.1% YoY from €105.1 million in Q2 2020, and up 10.0% QoQ from € 115.7 million in Q1 2021. Constant currency YoY revenue growth for Q2 2021 was 24.7%. Gross profit increased to €38.0 million in Q2 2021 from €36.0 million in Q2 2020. Gross margin dropped to 29.9% in Q2 2021 from 34.2% in Q2 2020. Adjusted EBITDA decreased by 9.8% YoY to €19.0 million (14.9% of revenue) in Q2 2021, from €21.0 million (20.0% of revenue) in Q2 2020. It should be noted here that Q2 2020 results had included the effect of temporary salary cuts in response to the pandemic.

EBITDA dropped by 26.9% YoY to €15.4 million, from €21.0 million in Q2 2020. The main EBITDA adjustments were on account of stock option expense of €2.9 million and expenses of €1.8 million related to the rollover of non-controlling interest. EBIT decreased by 38.9% YoY to €9.6 million, from €15.7 million in Q2 2020. Net profit decreased by 38.2% YoY to €5.6 million against €9.1 million in Q2 2020. The cash balance decreased by €5.8 million from December 31, 2020 to €101.9 million.

H1 results

Nagarro also released its very first half-year report. Revenue grew to €243.0 million in H1 2021 (January 01, 2021 – June 30, 2021), up 12.5 % YoY from €216.0 million in H1 2020. Constant currency revenue growth for H1 2021 was 16.3%. Gross profit increased to €72.1 million in H1 2021 from €70.9 million in H1 2020. Gross margin dropped to 29.7% in H1 2021 from 32.8% in H1 2020. Adjusted EBITDA grew 5.1 % YoY to €37.5 million (15.4% of revenue) in H1 2021, up from €35.7 million (16.5% of revenue) in H1 2020. EBITDA dropped by 8.4 % YoY to €32.7 million, down from €35.7 million in H1 2020. EBIT decreased by 14.3 % YoY to €21.4 million, from €24.9 million in H1 2020. Net profit decreased by 12.1 % YoY to €13.3 million against €15.1 million in H1 2020. 

“Nagarro’s revenue growth continued, despite an overheated job market and the afflictions of the second wave of Covid-19 in India”, said Manas Fuloria, co-founder. “We again added over 1000 professionals in this quarter, including fresh graduates, net of attrition. The company retains its revenue and Adjusted EBITDA guidance for 2021. However, we are reducing our gross margin guidance from 32% to 29% because of unprecedented wage inflation, while the effect of our remedial steps will lag the increase in wages. We have other operational levers to still feel comfortable about our Adjusted EBITDA guidance for 2021.”

The company will offer an earnings call (analyst meeting) on August 13 at 2 pm Central European Summer Time, 8 am in New York City and 8 pm in Singapore. The telephone dial-in numbers for audio and the URL for the online presentation can be found below and here.


Key figures - Quarterly

 

Q2 2021

kEUR

Q2 2020

kEUR

Change in percent

Q1 2021

kEUR

Change in percent

Revenue

127,322

105,131

21.1%

115, 724

10.0%

Cost of revenues

89,328

69,198

29.1%

81,715

9.3%

Gross Profit

38,038

35,977

5.7%

34,054

11.7%

Adjusted EBITDA

18,960

21,014

-9.8%

18,559

2.2%

           

Revenue by country

         
Germany

30,754

27,106

13.5%

30,554

0.7%

US

45,413

37,936

19.7%

39,271

15.6%

           

Revenue by Industry

         
Automotive, Manufacturing & Industrial

21,123

14,144

49.3%

18,860

12.0%

Energy, Utilities and Building Automation

10,875

8,407

29.4%

9,412

15.6%

Financial Services and Insurance

14,687

14,067

4.4%

13,055

12.5%

Horizontal Tech

12,020

9,332

28.8%

11,965

0.5%

Life Sciences and Healthcare

9,149

8,057

13.5%

8,866

3.2%

Management Consulting and Business Information

7,889

7,874

0.2%

7,904

-0.2%

Public, Non-profit and Education

11,107

8,558

29.8%

9,323

19.1%

Retail and CPG

17,715

12,262

44.5%

16,067

10.3%

Telecom, Media and Entertainment

9,483

10,123

-6.3%

9,113

4.1%

Travel and Logistics

13,273

12,306

7.9%

11,161

18.9%

Key figures - Half-Yearly

 

H1 2021

kEUR

H1 2020

kEUR

Change in percent

Revenue

243,046

216,039

12.5%

Cost of revenues

171,043

145,196

17.8%

Gross profit

72,092

70,932

1.6%

Adjusted EBITDA

37,519

35,692

5.1%

       

Revenue by country

     
Germany

61,309

58,356

5.1%

US

84,684

75,075

12.8%

       

Revenue by Industry

     
Automotive, Manufacturing & Industrial

39,983

29,535

35.4%

Energy, Utilities and Building Automation

20,287

18,590

9.1%

Financial Services and Insurance

27,742

26,764

3.7%

Horizontal Tech

23,985

18,423

30.2%

Life Sciences and Healthcare

18,015

16,322

10.4%

Management Consulting and Business Information

15,792

15,864

-0.5%

Public, Non-profit and Education

20,429

17,897

14.2%

Retail and CPG

33,782

25,202

34.0%

Telecom, Media and Entertainment

18,596

21,101

-11.9%

Travel and Logistics

24,435

26,341

-7.2%

       
   

H1 2021
Percent

H1 2020

Percent

Revenue concentration (by customer)

     
Top 5  

13.9%

13.9%

Top 6-10  

10.8%

10.4%

Outside of Top 10  

75.3%

75.6%

Segment Information

 

H1 2021

kEUR

H1 2020

kEUR

Change in percent

Central Europe

 

 

 
Revenue

84,822

80,633

5.2%

Cost of revenues

59,882

55,781

7.4%

Gross profit

24,939

24,852

0.4%

       

North America

     
Revenue

84,698

75,276

12.5%

Cost of revenues

59,691

49,167

21.4%

 Gross profit

25,007

26,108

-4.2%

       
 

Rest of Europe

     
Revenue

37,001

32,487

13.9%

Cost of revenues

26,775

22,518

18.9%

 Gross profit

10,315

10,057

2.6%

       

Rest of the World

     
Revenue

36,525

27,644

32.1%

Cost of revenues

24,694

17,730

39.3%

Gross profit

11,831

9,914

19.3%

Gross profit, gross margin and Adjusted EBITDA are neither required by nor presented in accordance with, IFRS. Non-IFRS measures should not be considered in isolation or as a substitute for results under IFRS.

Gross profit is calculated on the basis of total performance which is sum of revenue and own work capitalized.

Rounding differences may arise when individual amounts or percentages are added together.

Earnings call (analyst meeting) information

The earnings call will involve a telephone dial-in for audio plus an online presentation.

+43 1 3865461 Austria local
+358 9 42720657 Finland local
+33 4 82 98 62 47 France local
+49 69 247471834 Germany local (English)
+91 11 7127 9191 India local
+39 02 6006 3140 Italy local
+47 815 03 466 Norway local
+48 12 200 52 45 Poland local
+34 912 66 19 31 Spain local
+46 40 688 75 30 Sweden local
+44 20 3872 0880 United Kingdom local
+1 516-269-8980 United States local

Online presentation login:
https://webcast.meetyoo.de/index.html?e=W0ggs1O1p826

About Nagarro

Nagarro, a global digital engineering leader, helps clients become innovative, digital-first companies and thus, win in their markets. The company is distinguished by its entrepreneurial, agile, and global character, its CARING mindset, and its approach of “Thinking Breakthroughs”. Nagarro employs over 10,000 people in 26 countries. For more information, visit www.nagarro.com.
FRA: NA9 (SDAX, ISIN DE000A3H2200, WKN A3H220)