Good day everyone, and welcome to Nagarro SE’s webcast for analysts and investors on the second quarter results 2022. If you have any questions during the webcast, please send them to us via the chat icon you can see on the left-hand side of your screen. If you have any technical difficulties during the session, please use the chat as well. Now, I'd like to hand over to Christian Angermayer. Please go ahead, Christian. Thank you, Beatrice. Good morning to those of you tuned in from North America. Good afternoon to those connected from Europe and Asia. On behalf of Nagarro SE, allow me to extend a warm welcome to you. You should have received a copy of the earnings release for Nagarro's second quarter 2022 results. If you have not received the press release, a copy of the release as well as of this presentation, is available on nagarro.com in the investor relations section. With me on today's call are Manas Fuloria, Co-Founder and Custodian of Entrepreneurship, and Gagan Bakshi, Custodian of Strategic Finance. Before I pass you over to Manas, I would like to remind those listening that some of the comments made on today's call may contain forward-looking statements. These statements are subject to risks and uncertainties as described in the company's earnings release. Additionally, please also refer to the earnings release for the notice on reported results that are non-GAAP measures. With that, it is my pleasure to hand you over to Manas. Thank you, Christian, and welcome everyone. We are really happy to have you all with us today. As you know, we have released the results of the half-year some hours ago, but on this call, we will spend more time on the developments of quarter two specifically, since you may be more interested in those. There is this phrase, "The numbers speak for themselves." I think this phrase is really applicable to Nagarro's recent trajectory. I mean, we can talk a lot about how committed we are to our distinctive organizational design and culture, about how we think about being agile, entrepreneurial, and global is so very important. We can describe our excitement about this concept of Nagarro as a totally scalable global platform. The proof of the pudding is in the eating, and this quarter, the eating has been very good. The numbers speak for themselves. Our quarter two year-on-year revenue growth was 65.0% in Q2. In constant currency, the YoY revenue growth was 55.7%, even a little higher than in Q1, where it was 55.2%. I think this is the fifth successive quarter of 10%+ sequential quarter-on-quarter growth. The gross margin came in at 28.7%, and the adjusted EBITDA was 19.1% of revenue. Adjusted EBITDA margin, I mean, of course. Demand continued to be quite strong despite the macroeconomic fears that we are all by now very familiar with. To be very clear and open, there may have been a slight drop in the intensity of demand, but we continue to be supply constrained rather than demand constrained. Supply continued to be a challenge. The job market for the top engineering talent that we look out for continued to be hot. Whether this is a sign that demand is remaining robust across the entire industry or because of something else, only time will tell. We added Saudi Arabia as a location. We added 872 net new Nagarrians in Q2. Just a short note on this, to interpret this number correctly, note that campus hiring can be seasonal. That's just a little note on that 872 number. Moving on, some more numbers for the quarter. Our revenue was up at EUR 210 million, making this the first quarter in which we crossed the mark of EUR 200 million in revenue. The sequential quarter-on-quarter revenue growth was 13.2%. Our fastest-growing industry year-on-year was management consulting and business information. This nearly doubled in size in this year. Our slowest growing industry was telecom, media, and entertainment, but even that was not too bad. You know, growing revenue at 28%. Among the segments, the Rest of the world kept growing rapidly. Europe was relatively weaker, as you can see. This is also a function of how we were deploying resources that were scarce as the U.S. dollar strengthened against the euro. You'll see a reflection of that in how Europe is growing versus how the Rest of the world or North America is growing. We have our customer satisfaction score, and I'd like to make a point on that. This quarter, we revamped the format of our customer satisfaction survey somewhat. To make the questions sharper and to elicit responses that were more actionable. The score that you see here for quarter two, 92.5%, is under this new revised format. Please note that this score and subsequent CSAT scores will not be comparable with the scores in previous quarters due to the change in the format of the survey. I'm also happy to answer any questions you may have about it in the Q&A part of this session. Our guidance for 2022, updated just about three weeks ago, is revenue of EUR 800 million, gross margin of about 27% and adjusted EBITDA margin of about 14%. We are not updating this guidance at this point in time. Now, we monitor our industry exposure and client concentration every quarter, and both of these were quite comfortable. Our top 10 clients made up only about a quarter of our revenues for in Q2. Our segments, as you know, are our client regions. As you can see, the rest of the world and North America have been taking share away from Europe. I can also safely say that there is a lot of pent-up demand in every region, and we don't just have the engineers to satisfy all the demand fully. as I said before, we take decisions about where to allocate scarce resources, also depending on where the currencies are headed. Here's the quick slide on segment performance that shows some of th e effects that we have been talking about. I think we have covered most of these points already. We will now move to the balance sheet and cash topics, and Gagan will walk you through this slide, which is built around the half-year rather than the quarter year that we have been discussing so far. Over to you, Gagan. In the left-hand chart, we see our debt position. At June 30, 2022, we had lease liabilities of EUR 58.7 million, bank liabilities of EUR 217.1 million, and a cash balance of EUR 72.1 million, resulting in net debt of EUR 203.7 million. Within LTM adjusted EBITDA of EUR 111.3 million, our net leverage ratio was 1.8x. A slight improvement from our December 2021 leverage ratio of 2.1x. The right-hand chart in the slide shows our cash flows for six months ended June 30, 2022, compared to H1 2021. Cash flows from operations increased to EUR 15 million. This is reflective of the strong growth in revenues in H1 2022. Cash flows from investing in H1 2022 were an outflow of EUR 39.2 million. This was mainly due to EUR 2.1 million of CapEx and EUR 37.1 million of net cash outflow from two items. One, recent acquisitions of RipeConcepts and Techmill. Two, contractual obligations of prior acquisitions. Cash flow from financing activities in H1 2022 was an outflow of EUR 1.8 million. Major items of cash outflow were lease payments of EUR 10.8 million, interest payments of EUR 2.6 million, and these were offset by net bank loan proceeds of EUR 11.4 million. Overall, our total cash flow was negative EUR 26 million in H1, which was primarily due to expenses related to our recent acquisitions. Thanks, Gagan. If you are wondering why I'm nervous today, it's because my dad is on the line, watching this presentation, so it's really an unusual presentation for me. Anyway, as we get to the end of this presentation, you know, here's a reminder of the investment highlights for Nagarro. We have been great creating these since the spin-off in December 2020. It gives me some satisfaction to see that we continue to prove and strengthen these claims, you know, line by line. Our positioning is very strong. Our client base continues to get richer. Our organization design and culture continues to evolve and continues to demonstrate its power. The last line, the line of growth. You know, growth has always been key for us, and it feels great to be one of the fastest growing companies in the industry today. I keep repeating that at Nagarro, we don't think quarter by quarter. We are spending all our time and focus building a company that lasts and grows for decades. We have got the string of good quarters, and we can only be thankful for that. You have seen our guidance for 2022 already. I am aware that some of you think it is conservative given the momentum that we have already displayed in H1, but it is our best estimate. I would like to also remind you that we have fewer working days in H2 than in H1 in many geographies that are important for Nagarro. Also, we worry that you might find it more difficult than usual, at least with some clients, to pass on our cost increases if their businesses are badly hit by a crashing economy. Hence, we remain cautious in our outlook. Finally, before we get to the Q&A, you know, beyond the numbers that we have just seen, the great numbers I think, are the people of Nagarro. You know, our industry is all about the people and never more so perhaps than today. This summer, we are taking advantage of the breaks in COVID to host many parties across the world in many different formats, all carefully curated. This particular picture is from Gurugram in India, but similar scenes at different scales are playing out all across the Nagarro world. While we remain largely a work-from-anywhere company in most parts of the world, we continue to enjoy ourselves and continue to travel and connect in person with each other. This is part of the joy of being part of Nagarro, that we are all part of this global family. We will now take questions, and for this I'll hand the call back to the operator. Thanks, Manas and Gagan. As a reminder to all of you, if you do have questions, please feel free to use the text tool in your window. I will then pick up the questions, read them out, and Manas and Gagan will be happy to answer. First question is from Adrian Pehl of Stifel. He's asking to get explanations on the following. In the press release accompanying the guidance raise, you mentioned slower growth at bigger customers. In Q2 2022, however, the top five customer concentration grew to 15.4%. Would you please put this into perspective? Thanks for the question. You know, the caution at very large companies is something that we have seen, but there are several reasons why our client concentration has continued to grow. One is that our top clients may not necessarily be the very largest companies by themselves. It takes some time for the caution that we mentioned to flow through to our results. These two are the reasons why you see what you are seeing with the continuing increase in client concentration. I'll just continue with two or three more questions from Adrian. Furthermore, have you been surprised by the strong gross profit margin in Q2? It seems that keeping the old guidance of 28% is more likely now, is it not? Adrian, our gross margin varies from year-to-year depending on the number of holidays that you have in each quarter. I would still say that our guidance, our current guidance for 2022, is the best estimate of where we will end up at the end of the year. That's all I can say at the moment. Right. One more follow-up from Adrian on the customer revenues. Should we take from the lower Q2 top client share that the smaller projects are the more profitable ones? No, I think that would be making an interpretation that we don't have ourselves internally. The short answer is no, we don't think so. All right. I'll continue with Andreas M.M.Warburg & CO. Congratulations on the strong H1 performance. First question, regarding the Q2 versus Q1 employee growth pace, shall we expect hiring pace to pick up again in Q3, or are you preparing for slower growth? I'll stop here and then ask the second question thereafter. Thanks, Andreas, for the wishes. We don't predict how many people we will hire in future quarters, as a rule. I can only say that there is a tinge of caution in how we are navigating this period, but as I mentioned earlier, there is also a seasonality in our hiring. That's all I can say. I mean, but there's a tinge of caution, but there's also seasonality at play. Second question from Andreas: Cash conversion has recently attracted some interest. Do you see any risks associated with the contract assets? Are all fixed- price projects developing as planned? What are typical payment terms and how do you expect DSOs to develop over the next few quarters? We don't see any particular risk with contract assets. You know, what you have seen in the past with cash conversions has to do with one-off kind of situations. Our payment terms vary, but, you know, 60-day type terms are not infrequent. I missed the second part of the question. Christian, if you could just repeat that? Fixed-price projects you answered, and I think. Fixed-price. Fixed-price projects. Okay. Okay. Fixed-price projects, we don't see any particular project that is of great concern at the moment. By and large, you know, our work is really spread out across a large number of clients, as you have seen. With each client, we have a large number of projects. There are no significant projects that would, you know, bring down our, you know, our DSOs or reduce our cash flow just on that account. What typically happens is that sometimes there's a client that has just been onboarded, and we start working with that client without having all the paperwork in place to be able to invoice them. You have sometimes public sector clients, especially U.S. public sector clients, who are a little late with the payments. That's some of the effects that you saw in the earlier part of this year. There was also a question on your expectations. What are typical payment terms, and how do you expect Days Sales Outstanding to develop over the next few quarters? Yes. The typical payment terms are, like, as I said, very often it's like 60 days, for example. We are experimenting with very different types of models with different kinds of customers. We don't predict, you know, how DSOs will evolve. In general, we are not in the business of predicting too much. We just try to do the best we can. All right. I'll take a question from Martin Jones. First of all, he's saying congratulations on another incredible quarter. Your guidance implies a flatter H2. Can you expand on your comment regarding less intensity of demand and also on your hiring seasonality? Okay, Martin, thanks again for the wishes. Yeah, we have the intensity of demand, you know, we do still have thousands of positions open, but it's a little fewer than what we had some months ago. We do see a slight slowdown in the sort of backlog that we have of demand. It's still supply constrained and not demand constrained by far. We're watching these signals very carefully. You know, it's very, very important for us in a volatile environment to be watching these signals very carefully. That's kind of where we are. In terms of the seasonality of hiring, we are in different countries, you know, hiring different numbers of people fresh out of college. This is usually once or twice a year, depending on the country. You know, this quarter that just ended didn't have so many people being hired from campus. That's kind of all I was alluding to in that statement. All right, we'll take a couple of questions from Martin Comtesse. First, can you quantify the FX impact on your EBITDA margin in Q2? As a follow-up, EBITDA margin increased despite a decline of your gross profit margin. What part of OpEx were you able to save the most? We're not quantifying the effect of FX on EBITDA. In our industry, we sort of assume that FX is gonna play a very major part, and there are expectations of currency devaluation, et cetera, set up in the entire structure of how wages increase and, you know, in the developing countries where we work, the inflation and how it links with foreign exchange rates, et cetera. All of this is part of the regular business, so we don't really separate it out in our reporting of EBITDA. In terms of our gross margins being relatively tight while our EBITDA doing relatively okay, you know, I think that we have economies of scale in a large number of different areas, and we have economies of scale in, you know, a lot of our sales and marketing and lots of our, you know, G&A, and all of that is playing out, right? Despite the fact that travel has started to come back and some of those costs are, you know, already up, you know, even the amounts of money that we're spending on parties like the one that you see in front of you on the screen, I think we still have a lot of economies of scale that we are able to manage. In the long run, though, we, as I've said many times, we fully believe that we can go back to our clients and get them to sort of absorb the cost increases and pass on the cost increases to them. In the short term, it's more difficult. One of the things that I worry a little bit about is that how that will play out if our clients are badly hit in the short term. All right. Further questions from Martin Comtesse. You have reached an EBITDA margin of over 17% in H1, but guide only 14% for the full year. This means you only need some 10% margin in the second half. Are there specific reasons for these low assumptions? What is baked in in terms of macro concerns? Yeah. I think there are two aspects of this, I think, which would be the top two aspects. One is simply that, you know, our costs are relatively fixed, you know, but we have fewer working days in H2. We have, of course, the Western world has holidays. The Eastern world, part of it at least, India has a lot of holidays around Diwali, et cetera. And also just the pattern of how various holidays fall, whether on weekdays or weekends. We expect that to be a drag on margins in our second half. We also have a little bit more of a cautious approach to the assumptions of being able to pass on our cost increases to our clients, like I said. These two are the biggest reasons, Martin, why we are guiding what we are guiding for on the EBITDA margin side. All right. There are a couple of questions which I believe have been answered. For anyone whose question I don't read out, if you feel they haven't been answered, please, approach us, or Christopher thereafter, and we'll get back to you. I think some of the questions are redundant. I have a couple more. Martin Jones would like you to discuss the two acquisitions, Manas, and also would like a comment from Gagan on working capital, receivables and cash generation going forward or as is. Sure. Let me take the first part, Gagan, and then over to you. The acquisitions, we have done two acquisitions this year, Techmill and RipeConcepts, and I think we have spent some time describing the rationale for these acquisitions. Just a couple of words. RipeConcepts is a U.S.–Philippines company, really into digital art, 3D modeling, animation, very cool stuff that they do. We think that there's a lot of interplay between the creativity that they bring and the engineering credibility and skills that Nagarro already had. We also are very excited about Philippines as a service region where we can hire people, even engineers. I think this is just a fantastic opportunity. We have, like every other company that we acquire, we have an earn-out period where the company stays somewhat separate, but we are gradually, you know, moving to find synergies, you know, as you might expect. Techmill is a banking-focused Temenos partner, and there it's much closer to our core business. Even though they also have an earn-out structure, we are already doing a lot of work together in many interesting countries around the world, working with many interesting banks and pitching together at these opportunities. Yeah, both of them are doing well. It looks very good. We are very happy to have the senior management and entrepreneurs behind these companies join the larger Nagarro management team. As you already know, our management team is full of entrepreneurs, who are extremely, you know, energetic and powerful, and that's, I think, one of the big differentiators of Nagarro, and we're glad to have them on board. Okay. Hi, Martin. Thank you for the questions. Regarding working capital, at June, we had about EUR 106 million of working capital. As a percentage of revenue, it's only slightly up, but you know, given the rapid pace of our revenue growth that you've seen. We look at our receivables, which is at about EUR 140 million, along with the contract assets in a combination. Even that percentage has started to inch up, but that's again reflective of the very strong growth that we've had. I know earlier in the Q&A, Manas took up the question of cash generation, where you could see that was the difference in where we were converting our EBIT to cash. Some of these changes are from the rapid growth that we are seeing in our business. There are questions on FX both from Adrian Peel and Andreas Wolf. I think I can just read them concurrently. How do you handle FX risk? For example, is the recent appreciation of the Indian rupee versus the euro affecting results? How do you plan like it says, obviously Nagarro has recently not carried out some of the projects in Europe. Were they mainly small projects which were completed, or will you have to allocate resources to Europe again as projects are still going on? Sure. Thanks for the questions. We have a hedging policy for FX risk. Broadly speaking, we hedge all our important currency pairs where we earn in one currency and spend in another currency. Our broad policy is that every month we hedge one-twelfth of the receivables, or one-twelfth of the amount that is at risk for each of the next 12 months. At any point in time, the next month is almost fully hedged, the following month is slightly less hedged, and so on, right? We have a policy like that. It does have some room for opportunistic hedging and ad hoc hedging, but by and large, it's meant to be more of a machine. That's how we handle FX risk in the short term. In the medium term, as I said, we believe that our clients are fully aware of how currencies are moving and are ready to support us in terms of our pricing. When it comes to the rupee versus the euro, we do have some exposure to that currency pair, but it's not the largest exposure we have. We have much more exposure to the dollar rupee pair, and that has been moving reasonably favorably of late. Overall, we are not that much affected. As I said again, even with the euro, we are trying to go back to our clients and trying to see whether we can adjust pricing to reflect the reality that we face today. When it comes to, you know, the allocation of people to projects in Europe and U.S., et cetera, you know, I think the way we work is not about. It's really constantly being calibrated and recalibrated. Think of that as a decision-making engine working every day. It would be wrong for me to say that we are moving our people into one direction or the other direction. It's just more that our systems are strong enough to look at our, you know, billing rates, our exchange rates, and our different needs, and to make these decisions every day. It's more of an automated system and all I can say is that the system is very responsive and is well in control of the situation at any point in time. Okay, we're taking one last question from Adrian Peel again. It seems that in Q2, the North America region has been particularly strong. Could you elaborate on this, please? What caused the performance? That's the last question. We have had a lot of demand from all over the world, as you can imagine. I mean, the demand hasn't gone away. It's just there from all over the world. I think that, as I said, we have these automated systems to decide where that scarce supply should be allocated. As the U.S. dollar has strengthened, we have had more of the supply go to the U.S. automatically, right? That's for me, the biggest reason why the U.S. has done well. Also, of course, there may be macroeconomic factors why U.S. demand is more resilient, but those you probably know more about than I do. Thank you, Manas. That was the last question. You can round it off. Well, thank you very much for your support. I really appreciate everyone for having an interest in our company and being a supporter of this company ever since we spun off and listed now six quarters ago. We hope that we will continue to provide good, strong growth and build a truly great company in the years to come. Thank you all. Thanks very much. Thanks, everyone.