Nagarro posts 21.1% YoY revenue growth in Q2, 24.7% in constant currency

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13 Aug, 2021, 11:58 GMT

MUNICH, Aug. 13, 2021 /PRNewswire/ -- 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	Q2 2020		Q1 2021
	kEUR	kEUR	Change in percent	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 and 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	H1 2020
	kEUR	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 and 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	H1 2020
	Percent	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	H1 2020
	kEUR	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 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.

Dial-in numbers:
+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)

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