Nagarro Se (NGRRF) Q1 2025 Earnings Call

Investor webinar replay

Replay transcript excerpt

Thanks everybody for joining this call. From past experience, we know that a lot of you have also joined the previous call that we have, the earnings call. So as in past earnings calls, we will keep this a little brief by way of presentation and open up more time for Q&A. So with that, maybe we just go straight into quarter one and the results of quarter one. We have revenue of 247 million Euro and adjusted EBITDA of €30.2 million, which is an adjusted EBITDA margin of 12.2%. And as I said on the earnings call, the performance is in fact a little better than it looks for a couple of reasons. One, we have a few million of deferred revenue from this quarter. What we call deferred revenue is when we have done the work, but the contracting isn't completed, maybe because the client is in a hurry to move forward with the work, but we're not ready to invoice it and not ready to book revenue yet. This is not unusual in our business, but our deferred revenue has gone from about 2 million at year end in December 31st, 2024, all the way up to 5.5 million at the end of Q1. So the delta is an amount that if we actually had recognized that, that would bolster both the top line and drop directly to the bottom line. We also have significant negative currency effects on adjusted EBITDA in Q1. The change in exchange rates, especially the Euro-US exchange rates, leads to a 5 million negative impact on the adjusted EBITDA as we define it. Roughly 4 million of that is due to re-evaluation of intercompany loans, and roughly 1 million of that is from re-evaluation of the money that we hold in banks. So taken together, Q1 was stronger than the numbers would suggest. And based on the demand evolution that we have seen so far, and also the trajectory of our cause, we do not make any changes t...