Nagarro (NA9) Q2 2024 (Retail Investors) earnings summary

Executive summary

• Q2 2024 saw moderate improvement over Q1, with steady demand despite a challenging macroeconomic environment and high client satisfaction, as the company leveraged the period to enhance customer satisfaction and expand its client footprint, focusing on data- and AI-led transformation.

• The number of clients generating over €1 million in revenue increased to 184, with attrition levels close to historical averages.

• Strong operating cash flows and a healthy cash balance were maintained, with a workforce of 18,301 professionals at quarter-end.

Financial highlights

• Q2 2024 revenue reached €244.1 million, up 2.1% quarter-over-quarter and 7.6% year-over-year in constant currency; H1 2024 revenue was €482.4 million, up 5.7% year-over-year.

• Adjusted EBITDA for Q2 2024 was €35.5 million, with H1 2024 at €74.7 million (15.5% margin), and gross margin at 30.0% (new method).

• Net profit increased to €28.6 million in H1 2024.

• Cash balance at quarter-end was €121.4 million.

• Top five clients contributed 14% of revenue, with a diversified client base.

Outlook and guidance

• 2024 revenue guidance is around €1 billion, with an adjusted EBITDA margin target of approximately 14% and targeted gross margin of ~31% (current method).

• Management remains cautious, expecting demand recovery but unable to predict exact timing due to market instability.

• CSAT score expected to remain near 92% for 2024.