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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 |
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)
