Shares of Retail FX and CFD brokerage firm NAGA Group AG traded up by 12% on Monday, after the company released preliminary financial figures for the just-completed 2020 year, and some bullish forecasts for 2021.
Operationally, Hamburg based, social trading focused NAGA said that it saw new highs in terms of trading volume and the number of real money transactions during Q4. Over €40 billion in client trading volume and over 1.9 million transactions were processed in Q4, which marks increases of more 33% and 20% respectively to the previous quarter. NAGA’s monthly trading volumes during Q4 averaged about $16 billion, versus just under $13 billion in Q3.
On the top line, NAGA said that it expects to record total revenue of €25.9 million for all of 2020 – which means that the company brought it revenue of €6.7 million during Q4, just off Q3’s record of €7.1 million. NAGA expects EBITDA of around €6 million for 2020. In 2020 NAGA recorded €120 billion in total client trading volume (2019: €44 billion) and 6.3 million transactions (2019: 2.9 million). The number of active users has more than doubled in the course of the year.
Customer deposits were over €50 million at year end 2020, which is also a doubling compared to the previous year.
What seems to have moved the stock today was company’s bold prediction that, based on the strong development in 2020, further global expansion and the rising client demand for digital investing and banking products, NAGA provides revenue guidance of €50-52 million for 2021, with projected 2021 EBITDA of €13-15 million.
That again is a very bold prediction – that the company will average €12.5-13.0 million in revenue per quarter this year – given that as per above NAGA’s best ever quarter so far was €7.1 million. The company did note that it plans to obtain further licensing for the brokerage business, and also for the banking business for 2021.
NAGA CEO Ben Bilski commented:
“2020 was definitely a special one for us. We are happy with the overall development of our platform and the business. Our strategy of marketing NAGA globally and focusing on customer support and platform quality has had the first significant effects. We see 2020 as an intermediate step to further strong growth, which is why we decided to invest more in marketing again in Q4 instead of looking at the EBITDA margin only. We are now free of operational legacy from the restructuring and can fully attack in 2021.”
“We started 2021 with the strongest week in our company’s history and recorded over 200,000 transactions and EUR 4 billion in trading volume with sales in the seven-digit range. This clearly shows that our strategy of continuing to invest in marketing is paying off more and more. It is essential to build more brand exposure for NAGA and secure further market share. The interest in the capital markets, digital currencies and banking sector is higher than ever and will continue to grow. We are confident that we will be able to expand our business further, and the start in Australia (subject to regulatory approval) will also give us additional power.”
“In the light of the strong growth of our Neo-Banking App NAGA Pay, our short-term goal is to build a digital bank parallel to the trading platform.”
NAGA was the best performing stock among the publicly traded Retail FX brokers tracked by FNG in 2020, up more than sixfold.