A word about Nagarro. For those who are new to Nagarro, and maybe a reminder for those who already know the company, we are a leader in creating digital products and digital solutions for blue chip companies throughout the world. We are a global company domiciled in Germany. We have an unusual, highly differentiated organizational design and culture that delivers agility, entrepreneurship, and a global mindset. Next slide, please. Next slide, please. Is it just me or Kyle, can you please advance the slide? Okay. Okay, thank you. This mix of agility, entrepreneurship, and a global mindset has once again delivered excellently for Nagarro in 2022. Our revenue grew from EUR 546 million to EUR 856 million, up 56.8% from 2021. In constant currency it was 48% and 39% in organic constant currency.
These, you will agree, are simply great growth numbers. Wage inflation and attrition declined in 2022 in general. We ended the year with a gross margin of 28.9% and an adjusted EBITDA margin of 17.3%, which translates to an adjusted EBITDA of EUR 148 million. Today we reiterate our guidance for 2023. We still feel comfortable about it. Revenue of EUR 1.020 billion, not including the acquisitions we make in 2023. A gross margin of 28% and an adjusted EBITDA margin of 15%. Next slide, please. Let me just keep moving while you catch up with the slides. Here it there. Q4 for Nagarro is often weak and unpredictable because of the fewer working days we have. We have holidays in different parts of the world.
The accumulated leaves. It's become even more unpredictable after COVID because the leave-taking patterns have shifted. This Q4 we did better than expected and had better revenues and margins than anticipated. Nagarro's Q4 revenue was EUR 231 million. The Q4 gross margin was 28.9%. The Q4 adjusted EBITDA was EUR 30.5 million, which was 13.2% of revenue. Q4 2022 revenues were 42.6% higher than Q4 2021 revenues. The constant currency year-on-year revenue growth was 33.4%, and the organic revenue growth in constant currency was 27.5% for Q4. There was a considerable macro uncertainty going towards the end of the year, we hired cautiously, also banking on earlier investments that we had made in hiring. We ended the year with 18,250 Nagarrians.
Our operating cash flow increased to EUR 36.8 million. The quarterly days of sales outstanding, DSOs, including the contract assets and including the trade receivables, dropped to 68 days from 79 days in the previous quarter and from 71 days in Q4 2021. Next slide, please. These words will come to haunt me. Next slide, please. Here it is. In Q4, North America grew the fastest year-over-year. It grew 63.6%, followed closely by the rest of the world, which has been growing strongly of late. Europe trailed in growth. In particular, Central Europe trailed in growth. Over to Gagan for to say a few words on the balance sheet and on the cash.
Thank you, Manas. While we wait for the slide to come up, you've just heard about our Q4 2022 and FY 2022 prelims. To support our rapid growth from a balance sheet perspective, our focus is to maintain a balanced net leverage position while ensuring adequate liquidity. In the left-hand chart, for the 12 months ended December 31, 2022, we're showing financial liabilities of EUR 216.5 million. This amount consists of our syndicated credit facility, various working capital facilities, bank loans, and liabilities from factoring. Our lease liabilities were EUR 55.8 million, that's the green bar. With a positive cash balance of EUR 110.2 million, our net leverage stood at EUR 162.2 million at the year-end 2022.
With an adjusted EBITDA of EUR 148.1 million, as mentioned before, our net leverage ratio is at 1.1x. The company's liquidity position at year-end 2022 is comfortable. Now on to our cash flows. These numbers are shown on the right-hand chart. For the year FY 2022, the total cash flow was a positive EUR 9.2 million against a negative EUR 8.8 million in the previous year. Our operating cash flow in FY 2022 increased to EUR 82.3 million from EUR 44 million in FY 2021, primarily on the back of our rapid growth year-to-date. Cash outflow from investing activities for 2022 was EUR 44.8 million as an outflow, as compared to a cash outflow of EUR 52.8 for the comparable period last year.
Finally, the cash outflow from financing activities was EUR 28.3 million this year. Overall, we had another solid operating performance in FY 2022, which reflects our strong organic growth and continued commitment to M&A. With this, I hand over back to Manas. Thank you all.
Thanks, Gagan. This slide that we have here is the Nagarro investment highlights. It's mostly unchanged since we listed in December 2020. It's worth going over it once again line by line to see how Nagarro has performed in these two years and lived up to its promise. We said that we were engineering DNA digital leaders. We said that we had an enterprise agile approach. This was really tested during COVID and post-COVID, and I think we did well. We said that we had large blue chip clients. In these two years we have added more logos, we have added more case studies, we have added more testimonials. You may have seen them on the Internet. We said that we were a differentiated, agile, entrepreneurial and global company.
As we have doubled in size in terms of headcount and as we have worked remotely, you have seen how that has come into play. We said that we could grow organically and we have shown that we can grow organically. I mean, 40%, nearly 40% organic constant currency growth this year is just an example. We said we could grow via M&A and we have done five acquisitions at least significant acquisitions since spinoff. Maybe a couple of smaller ones, including the two recent ones. Infocore, largely serving German clients, and MBIS, largely serving clients in Turkey. We said that we could demonstrate attractive margins and an upside potential, which I think we have been doing. In just two years, we have nearly doubled revenue and nearly doubled EBITDA. I think it's really significant.
This sort of performance, it seems like a miracle, but of course it's not a miracle. To make this happen, thousands of Nagarrians have worked very, very hard. We have trained hard. We have learned new skills. We have built new capabilities for the organization. We have marketed the company. We have competed in RFPs. We have sold. We have designed software. We have delivered software. We have created value. We have made acquisitions. We have integrated acquisitions. We have grown the company. We have grown it profitably. If you follow us on LinkedIn or any of our social channels, you can see just how much is going on every single week and every single day throughout the world in this company. Maybe you can just turn the slides off because it's not really over the slides anymore.
Perhaps with this backdrop, right, of this performance, you will understand why we are a little bit surprised and bewildered that this great success is being obscured by one simple question. Why? Why were some of the phones listed on the website not working? At one level, it's a very simple question with a very simple answer. All our clients are long-term clients. You know, most of our business comes from existing clients. Our software teams, they work very closely with these clients from day to day. They use, you know, Teams or Slack or other collaboration channels. You know, they work from home very often. Since COVID especially, a lot of them work from home, and sometimes they use the mobile phone, right? Almost no one in our industry, in most parts of the world, uses landlines or faxes any longer, right?
Especially after COVID. We did miss taking these phone numbers off our website. It's just as simple as that. If our customers were really using landlines, we would have known that these numbers were not working. It's not really that simple a question because I believe that behind this innocent question and simple question, there are some unspoken insinuations. There is a negative narrative which is lurking in the shadows without being spoken. Let me call it out. Let me call it out and let me spotlight a number of facts, yeah, for you. Fact one. Nagarro has a long, long history and a long, long track record. Some of you may know Nagarro only since it listed. You have two years in the stock market.
Before that, we were more than nine years as part of a listed company, as one of the divisions of a listed company. Nearly 11 years in the listed company world, okay. The history of Nagarro stretches back even further. For example, Nagarro was set up as Softcon in Munich nearly 35 years ago, working with Siemens uninterruptedly since then. Yeah. The part of Nagarro where I come from, Conflux, was set up in 1996. ANECON in Vienna was set up in 1998. Has been working since 1998. Nagarro was founded as iQuest in Romania also in 1988. Nagarro was founded as Objectiva in the U.S. and China in 2001. Nagarro was founded as Drive Concepts in the U.S. and the Philippines in 2008.
Nagarro was founded as Vocria in the U.S. in 2010, and so on. Even the company we just acquired a couple of days ago, MBIS, was started more than 25 years ago. These are all real companies. They're real companies with real entrepreneurs and good reputations, real employees who are mostly still with us, yeah? All of this is real history and real track record in the real world, yeah? It looks like an overnight success, but this overnight success has been more than a couple of decades in the making across a large number of streams and a large number of entrepreneurs. That's the first fact. The second fact is that Nagarro's clients are real.
If I just start with A for automotive, we have stories and case studies and testimonials from Audi, BMW, Suzuki, Jaguar Land Rover. It's all on the website. It's on the website. This sort of blue chip kind of list of clients, this propagates across industries. It's in traditional industries like, you know, Austrian Railway or it's in modern industries. It's like digital media advertising platforms like Adform. It's in like battery-making companies for EVs. It's in different industries, right? One of our biggest clients, as you have known, since we were talking about operating cash flows, is one of the world's leading cities. Here, I'm in Frankfurt today, and here in Frankfurt, we work with Lufthansa. These are old relationships. We've been working with Lufthansa for nearly 15 years.
I have a letter from 2010, I think, from the CEO and the CIO of Lufthansa at that time, congratulating us on a great project we did almost 13, 14 years ago. If you fast-forward to today, two weeks from now, we have a delegation from Lufthansa visiting our offices in India. We have the group CIO of Lufthansa. We have the CIO of Lufthansa Airlines. We have the CIO of Swiss. We have the CIO of Lufthansa Cargo. We have the CIO of Miles & More. We have the CEO of Lufthansa Systems. We have the group head of procurement. I mean, these are long relationships. These are very deep relationships. These are real clients, real people, real projects touching your lives every day, yeah? Just talk to any of our clients. These are real clients. The third fact, yeah?
Nagarro's employees are real. If you go to LinkedIn, you can see the profiles of at least 15,000 Nagarrians around the world as they should be. You can do all kinds of analysis that you want on where are they located, what they're doing. It's all there. It's all on the web. You can chat with any one of them. You can ask them any kind of questions that you like, right? I'll go further. In a couple of weeks in Gurgaon, we have our South Asia event. It's called Jalsa. We expect about 10,000 people from South Asia to congregate for this event, and then a couple of hundred from the rest of Nagarro globally to congregate for this event. I would invite anyone on this call, everyone on this call, to come and visit us at Jalsa.
A number of our clients come to Jalsa, and you can come in there, you can count the people, you can touch and feel them and make sure they're real. If you stay back a few days, you can meet the clients. You can, you know, say hello to the Lufthansa team. You're all welcome, right? This is a real company. This is a real company. I know that our success is really astonishing, but we're growing fast, and that's a good thing. We're innovative in the way we look at building a great company, and that's a good thing. We are global, and we want to be a global company in today's fractured world, and that's a good thing, right? I just want you to just take that and think about it when you can.
Just still to dispel any remaining concerns, we have this time added some data as an appendix to our regular slide deck. Some of this data compromises us a little bit with respect to competitors, but given all the brouhaha around these topics, we thought it's better to just put it out there. If you can jump to slide 10, Kyle. We have published in this slide by country where our revenue is coming from, where our revenue is being serviced, and where we are holding cash at the end of the year. It's all transparently out there. If anybody wants to dig deeper, it's relatively easy. By the way, we had offered to do a deep dive with data like this also to certain journalists, right? You can see that this data is quite concentrated.
You can see that if you just pick the U.S. and three countries in Europe, Germany, Austria, Romania, and India, over 75% of our revenues are generated from these countries. Over 75% of our revenue service is from these countries. Over 75% of the cash balances of over EUR 110 million are from these countries. If you want more data, if you want bank account numbers, et cetera, we can just provide it. I mean, it's all out there. It's. There's nothing that we need to sort of protect. Can you go to the next slide, please? In this slide, some questions about revenue per employee have been addressed. Revenue per employee, you know, is based very much on location.
We have done our math, and we have seen that our revenue per employee is very respectable, very much comparable with our peers based on location. I've also given some other data here on how the revenue per employee changes if you are a fast-growing company and you're summing your revenue across four quarters where you're growing very fast quarter on quarter. Anyway, I just leave it for you to take a look and do your own math with respect to competitor numbers. Can you go to the next slide, please? In this, we are showing our quarterly days of sales outstanding and their evolution from quarter one in 2019. In recent years, we also do some factoring, so you have some effect of that in reducing DSOs.
Even if you were to add that up, you would find that the overall picture is roughly the same as what it was pre-COVID. That's our DSOs. Can you go to the next slide, please? Here we show you how operating cash flow as a percentage of revenue varies throughout the year. You can see why taking a number from Q4 2020, or end of the year FY 2020 was not an appropriate comparable because of the emergency COVID measures that we had to take to conserve cash, or that we decided to take to conserve cash. This chart should help straighten the narrative about what is happening with Nagarro's operating cash flow. Next slide, please.
Finally, just to give you a picture of, you know, where we are coming from and where we are going, right? Just go back to 2017 and see what we are, we are racking up. I think we are just a company that has figured out how to be a leader in this space. We have a lot of real work to do, of course, a lot of real challenges, but we are very optimistic that we have built a great company to continue to do great things. That's what I had to present. We will now take questions. I would request each person to have a maximum of three questions. You can turn on your cameras while answering. This is a new feature in this new format that we have.
Maria, can you please help us by presenting the first question?
Yes, Manas, sure. We are waiting to get the first question.
I'm sorry. I should have asked it earlier, perhaps. People could have put the questions in.
Yeah. Please just, click on that, as a participant, and you will be forwarded to the queue.
While we wait, I would also like to offer that, you know, I am in Europe a few times this month. I'm in Frankfurt this evening or tomorrow morning. If anybody wants to do dinner or breakfast, we can meet. We're also in London, Gagan and I, a couple of times for two conferences this month. The JPMorgan Small Cap/Mid Cap CEO CFO Conference in London, the Jefferies Pan-European Mid-Cap Conference also in London. We also do a virtual conference, the ODDO BHF TMT Forum. Either at these conferences or on the sidelines or outside the conferences, we'd be very happy to meet up with you if you have any need for physical meetings. Maybe someone from Lumi can step in and make clear the instructions of how to, how people can ask questions. Perhaps there's a little bit of doubt.
We still have people joining the queue as we speak. It's just taking them a little bit longer than anticipated.
Yes, we still have 20 minutes, so we have time for a lot of questions.
Let's take the first question, which comes from Momentum Financial. Please go ahead.
Can you hear me? Hello?
Yes, we can.
Okay. Thank you. Well, first of all, I want to congratulate you not only on the results that I think are impressive, but also on the response to this kind of short attack. I think, you know, it's important to set a really good tone, and I think that you did it, and you were addressing all those kind of concerns without overreacting. Congratulations on that. My question would be around the factoring, because I saw one slide where you are referencing that, the factoring, but I don't know, and maybe today is not the day, but when you provide the detailed results, if you can provide more color on the levels of factoring and the interest paid, I think it's something that's not a concern as such, but I think it's something very, very useful because of course, with the interest rate hike is something to consider.
Yes, absolutely. Gagan, do you want to say a few words to that?
I'd like to say that, you know, the most important piece of factoring is that it is a non-recourse financing. That's important for us because with non-recourse, all risk and rewards associated with ownership are transferred to the factor. These are solid clients that we are factoring. It only leads a small percentage of our total revenues. It's one of the ways, one of the many ways for us to manage our liquidity along with our bank credit facilities, our lease facilities, and it's a working capital financing mix, if you may say. There is a full description of our facilities and how we do it on page 72 and page 73 of our annual report 2021. Obviously, when we come out with full details in our new annual report, we will discuss it further.
All right. let's take the next one, which comes from Andreas Wolf, from Warburg. Andreas, please go ahead.
Hi, everyone. Congratulations on 2022 and the growth that you have achieved. Given the improvements in free cash flow that we've seen, especially in the last quarter, and in 2022 over 2021, would you consider buybacks going forward, or do you see M&A as being still more attractive to further build your business? That's my first question. The second is on the growth trajectory in 2023. If I look at the sequential employee growth, it was 1% if I'm correct. Your full-year guidance for 2023 implies 19% revenue growth if I did the math correctly. How shall we compare those two numbers?
Should we expect employee growth to accelerate going forward, or are you comfortable with the current employee numbers to be able to carry out the services that you have to carry out in order to achieve this revenue that you have targeted for 2023? Then maybe, related to the remarks that you made before. Given the, let's say, views on how a company or how closely a company should be to their clients, maybe you could also, it might sound a bit basic, elaborate on how clients actually find you and make sure that you are considered in the tenders. Obviously, Nagarro has a good track record here, just to provide more clarity here. Thank you.
Thanks, Andreas for the questions. They're all great questions. Let me start with the third one, because it's the most exciting one, about how clients find us. Clients find us sometimes. Very occasionally, a client will find us on the internet and hear about us and come reach out to us, maybe, somehow. Mostly, clients come through referrals. Either they come, people who have worked with us changing jobs or new clients hear about what work we are doing elsewhere or one of the big three consulting companies referring clients to us. That is one big channel. We are also, of course, always out there chasing clients, right? I was this Monday at Barcelona at the Mobile World Congress. We had a booth there.
We had a speaking slot there. We're just meeting a lot of potential new clients. We were also, I think, either last week or this week at this aviation festival, and pretty much all throughout the year, pretty much every week, we are meeting clients, either at these events, we are either going in, you know, to their offices, setting up meetings. There's just a lot of activity, and some of it is on our LinkedIn pages, et cetera, but there's just a lot of activity in outreach to clients, right? That's your third question, but I answered it, first. About buybacks. Our lawyers tell us that with the preliminary numbers that we have released, we are not free of insider information, and we are still in a quiet period till the annual report comes out.
Not only can we not do buybacks, we can also not comment on buybacks, right? It's a quiet period, let's just. Unfortunately, I can't answer that question. In terms of employee growth and the growth trajectory of the company, you know, last quarter of last year was a bit like entering a bend in a car at high speed. You don't know what's on the other side of the bend, and you had to just figure out how hard to tap the brakes. We took it a little cautiously, and I think the effect of that caution will spill over into Q1.
I think we are very well set up to both resume hiring, starting, let's say Q2, the numbers starting to add up. We have people, especially youngsters, who are available to sort of deploy into projects after being trained. I think that while the Q4 hiring numbers look low and maybe Q1 will also be subdued, but we are well on track to. We feel very comfortable about meeting our targets for the full-year. Thanks, Andreas, for your questions, and thanks for the support.
All right. Let's move on to Adrian Pehl from Stifel. Adrian, please raise your question.
I hope you can hear me well.
Hello, Adrian. Yes.
Hey. Now? Okay, good. Yeah, thanks for taking my question, actually. First of all, I would like to start with financial questions. Looking at your numbers and listening to what our peer companies have said, could you describe a little bit the situation as regards pricing? Should we take it that price increases are still coming through? Is that kind of a subsequent movement that we see here, actually? The second question is related a little bit again to the hiring pattern. I know you're not frequently publishing attrition rates, but maybe from an incremental basis, could you give us an idea how, you know, the last maybe two, three quarters have fared on this? I probably have some governance related questions, but maybe start with that.
Okay, great. In terms of pricing, you know, we have a mixed kind of situation where many clients are okay with supporting price increases to reflect our increased costs. There is the occasional client that is not. It is for us at the moment, more or less like a regular year, I would say. Nothing too wild in either direction. We also have a rather regular year in terms of wage and inflation. I think that's one part. In attrition. Our attrition is again also back to more or less regular levels. You know, it's no longer a problem. Actually, by the way, you know, to the previous question that Andreas had that, you know, why did your hiring slow down so much?
I mean, again, we are also trying to predict attrition. Attrition is surprisingly very much normal. It's neither too low nor too high. It's very much like a normal year. Which always said is in the range of, you know, 12%-15%, but right now it's for us.
Good afternoon. Hope you can hear me.
Yes, we can. Good afternoon.
Okay, perfect. I would also like to come back to the question of the first questioner about the factoring. If I look into the Q3 report, we can see also a positive effect in terms of operating cash flow from factoring. Can you provide us some details if you had also some positive effects in Q4 from factoring?
Yes, we have had. Again, I'll speak a bit in general terms. I think we have to wait for the final numbers to have the exact numbers out. While there has been an effect of factoring in Q4, the larger effect is not factoring. Factoring is a smaller effect compared to the overall improvement of numbers.
Okay, let's move on to Nicolas David from ODDO. Please, Nicolas, go ahead.
Yes, good afternoon. Thank you for taking my questions and congrats for this very good year and all the best for 2023. Yes. My first question regarding M&A. Could you comment strategic rationale about the acquisition in Turkey you did recently? Because it's a kind of a volatile market in terms of political and monetary environment. What is the rationale here? What kind of client are you pursuing here? My second question would be on your EBITDA margin guidance, because you ended up the year pretty strong in terms of gross margin, and you had a strong EBITDA margin in 2022. What would prevent you to keep a good margin or a strong margin like that in 2023?
I mean, you are expecting two point of margin decline, which is pretty, pretty high. Maybe linked to that, did you estimate the potential impact of the working days on your margin for 2023? Yes, my last question would be, if you look at Q4, it's a question that has already been asked because I had some problem to connect but regarding the main sectors where you saw some slowdown in Q4 and early 2023, could you comment on that? Which sectors are growing very fast and which are slowing down a bit? Thank you.
Great. Thanks, Nicolas, and thanks for the wishes. The first question is about the strategic rationale for acquiring MBIS in Turkey. There are two or three different aspects to it. One is that the Middle East is a very fast-growing market for us and for the whole IT industry, there's lots of money being spent in upgrading companies throughout the region. Turkey is an excellent takeoff point for that market. This company is a strong SAP company. It's a little bit counter-cyclical. Well, counter-cyclical is maybe the wrong word, it's a little bit stable in terms of volatility. You know, services like SAP services. This company is excellent at its own proprietary developments, that we can leverage in other parts of the world.
Its clients have, mostly, you know, hard currency denominated, you know, sort of, rates with MBIS or whether it's explicit or it's implicit and revised frequently, we are protected from some of that. It's a company with five founders who have been with the company more or less, throughout. Very, very impressive people. That's what we are trying to build, you know, and try to build Turkey as a base for the region and, yeah. It's a very exciting deal for us. Now, the second on the EBITDA margin.
I think we have said this a few times that we, in the short term, are more or less targeting a minimum of 15% EBITDA margin and trying to maximize growth based on that. The environment itself is very, very unpredictable. You have as, you know, Adrian said, pricing possibilities, changes in pricing. You may have changes in currencies, you may have changes in wage inflation. When we, when we forecast or project our numbers, we forecast what we think we can accomplish at a minimum. That's the reason why we have a 15% out there. In the medium term, we are, we have said this before, we want to raise this EBITDA margin to higher levels.
As the volatility of the past few quarters and years maybe passes through, then we can do it in a more stable way. Finally, in terms of the slowdown, I have actually. We have been talking about this for a while, that we have. In fact, I was going through our presentation from the listing, and we said that we are a company that plays at the intersection of two spaces, the enterprise space and the, you know, more digital products and services space. Run the business and change the business. I think that this computation will hold us in good stead in this time to come. We are not overly exposed to the ISV or product engineering space. We are in a large number of verticals.
We have diversified deliberately. We have talked a lot about it. We have answered a lot of questions why we are spread so thin. I think we have built these capabilities at different verticals that will allow us to weather this slowdown better than other peers. That's at least our expectation. Thank you so much, Nicola.
Okay, we have one final question from Joaquin Heredia Lasso. Please go ahead.
Hello, Manas. I would like to congratulate you on the last quarter results and for the full-year. I would also like to congratulate on the excellent reply to that article. Regarding that article, I would like to point out that they raised some doubt about the auditor. Do you plan to change the auditor? The second one regarding the auditor, what do you think about the post on the LinkedIn? They post a lot about Nagarro.
Who post on LinkedIn?
Yeah. The auditor sends a lot of post on the LinkedIn about the auditor, on audit r esults. What do you think about that?
Okay. I don't know the last part. I will check it up and maybe get back to you after the call. This is a good question. First of all, you know, I think that I must say that it is the job of journalists to investigate. I appreciate the people are just doing their job, and thank you for your compliments in how we have handled it. You know, I think that the auditor, I will just say this, that the supervisory board is very satisfied with Lauren company, who have been with Allgeier and then Nagarro for a long time, and have been very diligent and very professional over all these years. Very professional.
That said, it is my understanding that for some time now, and not triggered by recent events, but for some time now, the supervisory board has been planning to launch the legally required process for the change of the group auditor for Nagarro for 2024. This is not actually a management board topic, it's a supervisory board topic, but I can confirm that the supervisory board has been planning to launch this selection or whatever the required process, legally required process is for the change of group auditor for 2024. That's all I think we had time for today. Thank you all for supporting us and being there for us. As I said, we are, I'm in Frankfurt today and tomorrow morning and in London a couple of times.
Gagan and I are there a couple of times this month. If you would like to set up meetings, please just ping us. Thanks once again, and the company will just continue to do its job regardless of what else is happening around us, yeah. Our job is just to deliver on results and performance, a good performance, and that's what we will keep at. Thank you very much and have a great day.
Thank you.