Nagarro SE (NA9) Q2 2026 Earnings Report

The call presented a mix of strengths and headwinds. Key positives include solid H1 revenue growth (4.2% CC), strong Q2 margin metrics (gross margin >32%, adjusted EBITDA 15%), outstanding customer satisfaction (NPS 70, CSAT 93.2) and strategic recognition and client wins. Offsetting these are decelerating Q2 growth, Germany/Austria revenue declines, lower operating cash flow versus prior year driven by receivable timing, modest leverage (net liabilities EUR 246.6m, net leverage 1.7x), and P&L volatility from FX and ESOP adjustments. Management highlighted opportunities to improve sustainable profitability and expects remediation actions by Q4, while a pending combination with Persistent introduces strategic upside but regulatory uncertainty. Overall the positives and negatives are roughly balanced, producing cautious confidence but not a clear overwhelmingly positive picture.

Management's guidance was cautious but concrete: H1 revenue was €501m (4.2% constant‑currency YoY; Q1 +6.5%, Q2 +2.0%) with Q2 gross margin above 32% and adjusted EBITDA margin of 15.0% (noting some FX assistance), and management said they expect pending collections to be received in Q3 (first 1.5 months of Q3 have been “very productive”), which should help reduce DSO (86 days at June 30 vs 85 a year ago) and improve operating cash flow (Q2 OCF €29.8m; H1 OCF €29.5m). They reiterated a strong liquidity position (cash €131.3m, working capital €236.2m, net liabilities €246.6m, net leverage 1.7x), minimal CapEx (€1m, <1% of six‑month revenue) and fewer financing outflows (H1 financing outflow €22.1m vs €95.8m prior year), and said there are significant low‑hanging opportunities to lift sustainable profitability through higher utilization and streamlined investments with visible improvements expected by Q4.