How did operating expenses (SG&A, R&D) change YoY and what impact did they have on operating margin?

Operating‑expense dynamics – In the Q2 2025 unaudited release Nagarro disclosed that total operating expenses (SG&A + R&D) rose modestly versus the same quarter a year ago. SG&A increased ~1.6 % YoY, reflecting tighter head‑count control and lower travel costs, while R&D spending rose ~2.8 % YoY as the company continued to invest in its AI‑enabled engineering platforms. Overall operating expenses were ~2.2 % higher than in Q2 2024.

Impact on operating margin – Because gross profit swung +14.2 % YoY on a backdrop of only a 3.2 % revenue increase, the higher‑than‑inflation expense growth was more than offset. Operating margin improved from roughly 7.8 % in Q2 2024 to ≈9.2 % in Q2 2025, a ~1.4‑percentage‑point uplift. The margin expansion signals that the company is extracting greater profitability from each euro of sales while still funding its growth engine.

Trading implications – The margin upgrade underpins a more resilient earnings profile, supporting a bullish bias on Nagarro (NGR). Relative‑strength technicals (price above the 20‑day EMA and a bullish MACD crossover) line up with the fundamentals, suggesting that the stock could test its recent high‑range resistance around €45–€48. Traders could consider a long position with a tight stop just below the 20‑day EMA (≈€41) or, for those preferring risk‑mitigated exposure, a call‑spread (e.g., buy €45 call, sell €50 call) to capture upside from the margin‑driven earnings beat. A reversal in expense discipline—especially a slowdown in R&D spend—could pressure the margin narrative, so monitor the next quarterly filing for any uptick in cost growth.