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November 12, 2021: Nagarro, a global leader in digital engineering and technology solutions, today stated its unaudited financial numbers for Q3 2021 and released its nine-month statement.
Reflecting strong demand, revenue grew to €141.0 million in Q3 2021, up 33.7% YoY from €105.4 million in Q3 2020, and up 10.7% QoQ from €127.3 million in Q2 2021. Constant currency YoY revenue growth for Q3 2021 was 33.6%. Gross profit grew to €40.0 million in Q3 2021 from €34.9 million in Q3 2020. Gross margin dropped, changing from 33.1% in Q3 2020 to 28.4% in Q3 2021. Adjusted EBITDA grew by €1.3 million from €20.4 million (19.4% of revenue) in Q3 2020 to €21.7 million (15.4% of revenue) in Q3 2021. It may be noted that Q3 2020 also included the effect of salary cuts in response to the onset of the Covid-19 pandemic. In addition, wage inflation and the carrying of a large number of trainees weighed on the gross margin and on the Adjusted EBITDA in Q3 2021 despite some relief from reduced travel and reduced utility bills.
EBITDA increased by €1.6 million from €17.6 million in Q3 2020 to €19.2 million in Q3 2021. Our most significant adjustments to EBITDA in Q3 2021 are the expense on stock option of €1.6 million and expenses of €0.5 million related to the rollover of non-controlling interest. EBIT increased by €1.1 million from €12.4 million in Q3 2020 to €13.4 million in Q3 2021. Net profit decreased by €0.7 million to €8.4 million in Q3 2021 from €9.1 million in Q3 2020.
Nine-month results
Nagarro’s 9M 2021 revenues grew to €384.0 million, up from €321.4 million for the same period in 2020, a growth of 19.5%. In constant currency, the revenue growth was 22.1%. Gross profit grew to €112.1 million in 9M 2021 from €105.9 million in 9M 2020. Gross margin dropped, changing from 32.9% in 9M 2020 to 29.2% in 9M 2021. Adjusted EBITDA grew 5.5% from €56.1 million (17.5% of revenue) in 9M 2020 to €59.2 million (15.4% of revenue) in 9M 2021.
EBITDA decreased by €1.4 million from €53.3 million in 9M 2020 to €51.9 million in 9M 2021. EBIT decreased by €2.5 million from €37.3 million in 9M 2020 to €34.8 million in 9M 2021. Net profit decreased by €2.5 million to €21.7 million in 9M 2021against €24.2 million in 9M 2020.
“Nagarro’s revenue growth continued, despite an overheated job market”, said Vaibhav Gadodia, Managing Director. “We again added over 1,100 professionals in this quarter, including fresh graduates, net of attrition. The company has raised its revenue guidance for 2021 to €525 million, while it retains its gross margin and Adjusted EBITDA margin guidance.” The company will offer an earnings video call (webcast) on November 12 at 10 am Central European Time, which is 4 am in New York City and 5 pm in Singapore. To participate in the earnings video call, participants can register here for the webcast.
Key figures – Quarterly
|
Q3 2021 kEUR |
Q3 2020 kEUR |
Change in percent |
Q2 2021 kEUR |
Change in percent |
|
| Revenue |
140,954 |
105,394 |
33.7% |
127,322 |
10.7% |
| Cost of revenues |
100,991 |
70,532 |
43.2% |
89,328 |
13.1% |
| Gross Profit |
40,008 |
34,926 |
14.5% |
38,038 |
5.2% |
| Adjusted EBITDA |
21,709 |
20,442 |
6.2% |
18,960 |
14.5% |
|
Revenue by country |
|||||
| Germany |
32,229 |
27,353 |
17.8% |
30,754 |
4.8% |
| US |
50,623 |
36,600 |
38.3% |
45,413 |
11.5% |
|
Revenue by Industry |
|||||
| Automotive, Manufacturing & Industrial |
24,882 |
15,776 |
57.7% |
21,123 |
17.8% |
| Energy, Utilities and Building Automation |
11,852 |
9,159 |
29.4% |
10,875 |
9.0% |
| Financial Services and Insurance |
17,503 |
13,918 |
25.8% |
14,687 |
19.2% |
| Horizontal Tech |
13,883 |
8,496 |
63.4% |
12,020 |
15.5% |
| Life Sciences and Healthcare |
9,607 |
6,902 |
39.2% |
9,149 |
5.0% |
| Management Consulting and Business Information |
8,539 |
9,666 |
-11.7% |
7,889 |
8.2% |
| Public, Non-profit and Education |
10,355 |
6,746 |
53.5% |
11,107 |
-6.8% |
| Retail and CPG |
19,324 |
13,549 |
42.6% |
17,715 |
9.1% |
| Telecom, Media and Entertainment |
10,517 |
9,792 |
7.4% |
9,483 |
10.9% |
| Travel and Logistics |
14,491 |
11,390 |
27.2% |
13,273 |
9.2% |
Key figures - Nine months
|
Nine-month period ended September 30 |
2021 kEUR |
2020 kEUR |
Change in percent |
| Revenue |
384,001 |
321,433 |
19.5% |
| Cost of revenues |
272,034 |
215,728 |
26.1% |
| Gross profit |
112,100 |
105,858 |
5.9% |
| Adjusted EBITDA |
59,228 |
56,134 |
5.5% |
|
Revenue by country |
|||
| Germany |
93,538 |
85,709 |
9.1% |
| US |
135,307 |
111,674 |
21.2% |
|
Revenue by Industry |
|||
| Automotive, Manufacturing & Industrial |
64,865 |
45,310 |
43.2% |
| Energy, Utilities and Building Automation |
32,139 |
27,750 |
15.8% |
| Financial Services and Insurance |
45,245 |
40,681 |
11.2% |
| Horizontal Tech |
37,868 |
26,919 |
40.7% |
| Life Sciences and Healthcare |
27,622 |
23,223 |
18.9% |
| Management Consulting and Business Information |
24,331 |
25,530 |
-4.7% |
| Public, Non-profit and Education |
30,785 |
24,643 |
24.9% |
| Retail and CPG |
53,106 |
38,751 |
37.0% |
| Telecom, Media and Entertainment |
29,113 |
30,893 |
-5.8% |
| Travel and Logistics |
38,925 |
37,732 |
3.2% |
|
Nine-month period ended September 30 |
2021 |
2020 Percent |
|
|
Revenue concentration (by customer) |
|||
| Top 5 |
14.3% |
13.8% |
|
| Top 6-10 |
11.0% |
10.1% |
|
| Outside of Top 10 |
74.7% |
76.1% |
Segment Information
|
Nine-month period ended September 30 |
2021 kEUR |
2020 kEUR |
Change in percent |
|
Central Europe |
|
|
|
| Revenue |
129,607 |
119,639 |
8.3% |
| Cost of revenues |
92,332 |
83,398 |
10.7% |
| Gross profit |
37,276 |
36,240 |
2.9% |
|
North America |
|||
| Revenue |
135,636 |
111,674 |
21.5% |
| Cost of revenues |
96,892 |
72,121 |
34.3% |
| Gross profit |
38,743 |
39,553 |
-2.0% |
|
Rest of Europe |
|||
| Revenue |
56,934 |
47,866 |
18.9% |
| Cost of revenues |
40,635 |
32,827 |
23.8% |
| Gross profit |
16,432 |
15,192 |
8.2% |
|
Rest of the World |
|||
| Revenue |
61,824 |
42,254 |
46.3% |
| Cost of revenues |
42,175 |
27,382 |
54.0% |
| Gross profit |
19,649 |
14,872 |
32.1% |
Note:
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 the sum of revenue and own work capitalized. Rounding differences may arise when individual amounts or percentages are added together.
