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Investing.com -- Shares of Nagarro (NYSE:NGRR) climbed 6% after the company released its preliminary financial results for the fiscal year 2024, which indicated a slower growth in top-line revenue in the fourth quarter but a significant increase in profitability.
The preliminary adjusted EBITDA of €146.5 million surpassed analyst expectations by 7%, coming in higher than the consensus of €136.5 million. The technology consulting firm reported that its FY24 revenue reached €972 million, marking a 6.6% increase year-over-year (YoY) and a 7.2% rise on a constant currency basis, exceeding the consensus estimate of €959 million.
The gross profit under a new calculation method stood at €295.8 million, with a margin of 30.4%, a slight improvement of 30 basis points YoY. Adjusted EBITDA saw a 16% YoY increase, with the margin expanding to 15.1% from 13.8% in the previous fiscal year.
Nagarro also demonstrated a stronger balance sheet, with net debt improving to €137 million, or 0.9 times adjusted EBITDA, compared to €165 million or 1.3 times adjusted EBITDA in FY23. This financial resilience is further underscored by management’s intention to distribute a dividend to shareholders, targeting between 10% and 20% of EBIT.
The company had previously announced that the publication of the audited FY24 report would be delayed by two weeks, as KPMG, their new auditor, required additional time to finalize the process. The market initially reacted negatively to this news, with shares dropping 12% on Monday.
However, with the preliminary figures now public and the reassurance that the retrospective profit and loss impact from goodwill adjustments due to a rectified purchase price allocation approach are non-material, investor sentiment appears to have shifted positively.
Investors are now looking forward to the audited FY24 figures and first-quarter 2025 results, which are scheduled to be published on May 15. The recovery in Nagarro’s share price suggests that the market is optimistic about the company’s ability to bounce back from the earlier losses, pending the final audit approval from KPMG.
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