NAGA Group Reports 51% Revenue Increase in First Half of 2022, Re-Entering UK

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The NAGA Group (XETRA: N4G) has released its financial results for the six-month period ending June 30, 2022, showing consolidated revenue of EUR 35 million, up from EUR 23.2 million in the same period the year prior. It was an increase of nearly 51% from the previous year.

Additionally, it created a negative consolidated EBITDA of EUR 2.7 million over the course of the six months as opposed to EUR 0.2 million in the same period last year. According to NAGA, “The EBIT and net profit were significantly negatively impacted by depreciations, mostly driven by the strong devaluation of crypto assets.”

According to an earlier report, the company earned 18 million euros in revenue over the first three months. Thus, in the second quarter of 2022, the company with a German stock exchange made revenue of EUR 17 million.

In 2022, NAGA’s European operations generated over EUR 24 million, the majority of which came from Germany.

“2022 was a challenging year for NAGA. Coming out of a very bullish and promising market environment in 2021, our plans were ambitious and clear,” NAGA said. “However, the war in Ukraine, the pressure around monetary policy changes, the rising inflation, and the crypto crash triggered by Terra/Luna, Celsius, and FTX dominated the (very negative) headlines this year.”

The business also emphasized its attempts to significantly reduce costs. It has cut its personnel by 20% and lowered marketing expenses for all three platforms (NAGA Trader, NAGAX, and NAGA Pay). Even the operational costs for both NAGA Pay and NAGAX were “significantly reduced research and development costs for NAGAX and NAGA Pay,” along with R&D expenses.

NAGA said that it had decreased the cost base from EUR 20,000,000 in the first quarter to EUR 12,000,000 in the fourth quarter. From EUR 1,609 at the year’s peak to EUR 613, it had a significant decrease in the cost per customer acquired.

The company’s other performance KPIs have improved despite the lower costs. There are currently 2,114 average monthly first-time depositors with the company, up from 1,235 in the first quarter. Further, the average number of active traders went from 27,000 in Q1 to 28,000 in Q4, while the average number of monthly transactions rose from approximately 664,000 to 771,000.

The business obtained licenses in Estonia and Seychelles this year and is now preparing to re-enter the UK markets in 2023.

“Central to our growth objectives is the targeted re-entry into the UK market”, NAGA continued. “By year-end 2021, we had exited the UK – NAGA’s best market to date and also the largest CFD market in the world – and had to reallocate budgets to other countries, resulting in various inefficiencies (including an increase in customer acquisition costs). We aim to re-enter the UK market and reactivate our existing customer base by Q2 2023. This will enable us to achieve immediate EBITDA effects at minimized costs.”

The price of NAGA’s XETRA-traded shares plummeted in 2022, following a negative trend that began at the end of October 2021. The broker’s stock price has fallen by more than 85% since January. However, as of the time of publication, NAGA’s share prices had increased by more than 4.5 percent since the release of the half-yearly report.

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