2024-11-14 08:43:00
Today, Nagarro, a global leader in digital engineering, reported its unaudited financial results for the third quarter of 2024 and released its nine-month interim report.
In the third quarter of 2024, sales increased to Ꞓ242.9 million, 3.7% above the previous year’s figure from 234.3 million Ꞓ in the third quarter of 2023, or 5.6% above the previous year’s value in constant currency. Organic year-over-year sales growth was 5.0% at constant exchange rates in the third quarter of 2024, representing organic sales growth of 3.0% year-on-year in euros. Nagarro has revised its cost of sales definition starting in the first quarter of 2024 to better align with other IT services companies. The gross profit in the third quarter of 2024 was 76.5 million Ꞓ according to the current method and 66.6 million Ꞓ according to the previous method. In the third quarter of 2023, the gross profit according to the previous method was 56.1 million Ꞓ. The gross margin was 27.4% in the third quarter of 2024 compared to 23.9% in the third quarter of 2023, both under the previous method. According to the current method, the gross margin in the third quarter of 2024 was 31.5%. Adjusted EBITDA increased from Ꞓ32.0 million (corresponding to a margin of 13.7%) in the third quarter of 2023 to Ꞓ34.6 million (corresponding to a margin of 14.3%) in the third quarter of 2024.
EBITDA increased from Ꞓ30.6 million in the third quarter of 2023 to Ꞓ31.9 million in the third quarter of 2024. The main EBITDA adjustments in the third quarter of 2024 related to earn-out expenses of 0.9 million. Ꞓ and retention bonuses in the amount of 0.7 million Ꞓ from previous acquisitions as well as expenses for employee stock options and the employee participation program (ESPP) in the amount of 0.6 million Ꞓ. EBIT grew from Ꞓ22.1 million in the third quarter of 2023 to Ꞓ22.6 million in the third quarter of 2024. Net profit increased from Ꞓ12.6 million in the third quarter of 2023 to Ꞓ12.8 million in the third quarter 2024.
The company’s number of employees fell by 363 in the third quarter of 2024.
Results for the first nine months
In the first nine months of 2024, revenue increased to 725.4 million Ꞓ, an increase of 5.0% compared to 690.6 million Ꞓ in the first nine months of 2023. Currency-adjusted sales growth for the first nine months of 2024 was 6.1%. Organic sales growth for the first nine months of 2024 was 2.6% at constant exchange rates, which corresponds to organic sales growth of 2.0% in euros. Gross profit in the first nine months of 2024 was Ꞓ223.5 million under the current method and 192.9 million Ꞓ under the previous method, compared to 175.0 million Ꞓ in the first nine months of 2023 under the previous method . The gross margin in the first nine months of 2024 was 26.6% under the previous method compared to 25.3% in the first nine months of 2023 under the previous method. According to the current method, the gross margin in the first nine months of 2024 was 30.8%. Adjusted EBITDA grew from Ꞓ92.4 million (corresponding to a margin of 13.4%) in the first nine months of 2023 to Ꞓ109.3 million (corresponding to a margin of 15.1%) in the first nine months of 2024 . EBITDA increased from Ꞓ 88.7 million in the first nine months of 2023 to Ꞓ 100.7 million in the first nine months of 2024. EBIT increased from Ꞓ 64.7 million in the first nine months of 2023 to 72 .3 million in the first nine months of 2024. Net profit increased from 39.1 million in 2023 to 41.3 million in the first nine months of 2024.
Cash and cash equivalents increased by Ꞓ30.9 million to Ꞓ141.0 million from December 31, 2023 to September 30, 2024.
Operating cash flow increased to Ꞓ64.9 million in the first nine months of 2024 compared to Ꞓ41.4 million in the first nine months of 2023. The receivables period, which is calculated based on quarterly sales revenue and includes both contractual assets and receivables Deliveries and services increased from 84 days as of December 31, 2023 to 86 days as of September 30, 2024.
The Net Promoter Score from the customer satisfaction survey was 66 in the first quarter of 2024, 62 in the second quarter of 2024 and 59 in the third quarter of 2024, resulting in a value of 62 for the first nine months of 2024. The company reduced the number of skilled workers by 475 to 17,938 in the first nine months of 2024.
“Nagarro continues to grow despite challenging market conditions and continues to post satisfactory performance this quarter. We are excited about our recent acquisition and our partnerships, which are aligned with our strategic vision and will help us grow and succeed,” said Gagan Bakshi, Managing Director of Nagarro.
Nagarro SE will hold its analyst and investor meeting to discuss the Q3 interim statement 2024 in the form of a video conference on November 14, 2024 at 1:00 p.m. CET (4:00 a.m. PT / 6:00 a.m. CT / 7:00 a.m. ET / 12:00 PM GMT / 4:00 PM GST / 5:30 PM IST / 8:00 PM SGT / 9:00 PM JST).
For retail investors, Nagarro SE will hold a call to discuss the Q3 2024 interim statement on November 14, 2024 at 2:30 p.m. CET (5:30 a.m. PT / 7:30 a.m. CT / 8:30 a.m. ET / 1:30 p.m GMT / 5:30 p.m. GST / 7:00 p.m. IST / 9:30 p.m. SGT / 10:30 p.m. JST).
To take part, please register in advance at https://www.nagarro.com/de/investor-relations/quarterly-statement-call-q3-2024.
About Nagarro
Nagarro, a global leader in digital engineering, helps customers become fluid, innovative, digital-first companies and succeed in their markets. The company is characterized by its entrepreneurial, agile and global character, its CARING mentality and its “Fluidic Enterprise” vision. Nagarro employs around 17,900 people and is represented in 37 countries. For more information please visit www.nagarro.com.
FROM: NA9 (SDAX/TecDAX, ISIN DE000A3H2200, WKN A3H220)
For inquiries please contact [email protected].
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**Interview with Nagarro’s CFO, Maria Schmidt, on H1 and Q3 2024 Financial Results**
**Interviewer:** Maria, thank you for joining us today. Nagarro recently reported a strong performance in the first nine months of 2024. Can you walk us through the key highlights of your financial results?
**Maria Schmidt:** Absolutely, and thank you for having me. In the first nine months of 2024, we achieved revenue of €725.4 million, which reflects a 5.0% increase compared to the same period last year. In constant currency, our growth is even more impressive at 6.1%. This performance indicates our resilience in a competitive market.
**Interviewer:** That’s impressive, especially considering the ongoing global macroeconomic challenges. What factors do you think contributed to this growth?
**Maria Schmidt:** We attribute our growth to a combination of factors, including strong demand for our digital engineering services and strategic investments we made in technology and human capital. Additionally, our adaptation to market needs and a focus on customer satisfaction have helped us maintain steady revenue streams.
**Interviewer:** Speaking of customer satisfaction, I noticed your Net Promoter Score (NPS) was quite high earlier in the year but has seen some decline. What actions is Nagarro taking to address this?
**Maria Schmidt:** Yes, while our NPS started strong, we recognize that maintaining customer satisfaction is an ongoing effort. We’re actively engaging with our clients to garner feedback and implement necessary changes. It’s essential for us to listen to our customers and enhance our service delivery continuously.
**Interviewer:** In terms of profitability, how does the adjustment in your accounting methods affect the figures presented?
**Maria Schmidt:** We’ve revised our cost of sales definitions to better align with industry standards, which has influenced our gross profit margins. Under the new method, our gross profit for Q3 was €76.5 million with a gross margin of 31.5%. This is a positive change as it illustrates improved operational efficiency and financial transparency.
**Interviewer:** It’s been noted that your workforce has slightly decreased. Can you explain the rationale behind this decision?
**Maria Schmidt:** Yes, we reduced our workforce by around 475 employees to streamline operations and adjust to current market dynamics. It’s essential for us to maintain a lean and agile team that can respond effectively to demands while ensuring we retain our top talent.
**Interviewer:** looking ahead, what are the key priorities for Nagarro for the remainder of 2024?
**Maria Schmidt:** Our focus will remain on driving organic growth through innovation, enhancing client relationships, and optimizing our cost structures. We aim to capitalize on emerging market opportunities, particularly in digital services. We’re optimistic about our ability to navigate the remainder of the year successfully.
**Interviewer:** Thank you, Maria, for sharing these insights. It seems like Nagarro is well-positioned for 2024 and beyond.
**Maria Schmidt:** Thank you. We appreciate your interest and support as we continue to grow and adapt in the ever-changing landscape of digital engineering.
