Exclusive: NAGA posts 43% decline in 2H-2022 Revenues
FNG Exclusive… Germany/Cyprus based, social trading focused Retail FX and CFDs broker NAGA Group (ETR:N4G) has put up a new company info and data page at url group.naga.com, providing more transparency regarding the company and its operations. As part of that initiative the company has committed to monthly trading updates hosted by NAGA CEO Ben Bilski, which will include a discussion of recent events and management’s view on next steps, as well as open Q&A with the CEO.
The new page, and an uploadable Trading Update 2022 pdf, also provide some interesting insight into how NAGA has done over the past few months, at a time when its stock price fell to 52-week lows.
On the top line, NAGA Group – which operates offshore (St Vincent & The Grenadines) site naga.com and CySEC-licensed nagamarkets.com – saw its Revenues decline by about 43% in the second half of 2022. NAGA earlier reported Revenues of €35 million for the first half of 2022 (following a delay due to a restating of NAGA’s 2021 and YTD 2022 results and forecasts, and parting ways with auditor E&Y), and is now showing on its info page estimated full-year 2022 Revenues of €55 million – meaning that Revenues fell by 43% to €20 million for the last six months of the year. In its earlier-released Trading Update NAGA was estimating FY 2022 Revenues of between €57-60 million.
NAGA is also reporting that it did about $13.5 billion in monthly trading volume in 2022, or total annual volumes of roughly €150 billion. Following a fairly slow Q2 and Q3, the company is reporting a significant pickup in trading volumes in Q4, to about €14.3 billion (USD $15.5 billion) monthly. There was also an increase in copy trading activity by NAGA clients during the year.
In the overall picture, NAGA operated at a loss in 2022, with the company estimating expenses totaling €59 million for the year. Management said that its focus is to turn the company to be cash profitable by Q2 2023, while building its regulatory license map and seeking YoY growth of at least 25% moving forward.
As part of that initiative, NAGA has embarked on a restructuring which began in mid 2022, which has reduced quarterly expenses from about €20 million for Q1-2022 down to €12 million in Q4. To accomplish that the company had to cut about 20% of its staff, while also cutting R&D and operating expenses in its NAGAX crypto and NAGA Pay units.
Already NAGA has been successful in lowering its average client acquisition costs, from well above €1,000 in the first half of 2022 to well below that mark in 2H-2022 – and just €613 (estimated) for Q4.
Another interesting shift at NAGA has been its main geographic target markets. NAGA exited the UK market at the end of 2021 (Hard Brexit), which accounted for more than half of Revenues in 2021. Today Germany is NAGA’s number one market (about one-third of total client volume in 2022) and Poland #2 (17%), with the company also seeing growth in the “rest-of-world” segment, presumably via its offshore arm in St Vincent & The Grenadines, NAGA Global LLC.
Other initiatives planned for 2023 at NAGA include the launch of a NAGA Institutional Desk for volume traders, and a return to the UK market – which as per above generated €17 million of Revenue for the company as recently as 2021.