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Investing.com -- Nagarro SE stock dropped 3% after the digital engineering company lowered its full-year adjusted EBITDA margin guidance while maintaining revenue expectations at the lower end of its previous forecast range.
The company now expects its adjusted EBITDA margin to be between 13.5% and 14.5% for fiscal year 2025, down from the previous guidance of 14.5% to 15.5%. Nagarro also indicated that its revenue would be near the lower end of its previously announced range of €1,020-1,080 million, representing a 5% to 11% YoY increase.
For the second quarter, Nagarro reported revenue of €252 million, up 3.2% YoY, with organic growth of 2.4%. Gross profit rose 14% YoY to €83.7 million, improving the gross margin to 33.2% from 30.0% in the same quarter last year.
Despite the gross margin improvement, adjusted EBITDA declined 18% YoY to €30.5 million, resulting in a margin of 12.1%, down from 14.5% in the second quarter of 2024. The company’s operating cash flow turned negative at -€3.7 million compared to €1.7 million in the prior year, with cash conversion at -12%.
Nagarro’s workforce decreased by 5% YoY to 17,447 full-time employees, including 15,907 engineering professionals. The company reported a free cash flow of -€5.3 million, a slight improvement from -€6.4 million in the same period last year.
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