FRANKFURT, Germany, Nov. 12, 2021 /PRNewswire/ — 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 2021 against €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

Q3

Q2

2021

2020

Change

2021

Change

kEUR

kEUR

%

kEUR

%

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 and 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

2020

Change

kEUR

kEUR

%

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 and 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

%

%

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

2020

Change

kEUR

kEUR

%

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 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%

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.

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