Hamburg, Germany-based Retail FX and CFD brokerage NAGA Group AG (ETR:N4G) has released a statement on its preliminary full-year 2023 results, indicating that the company beat expectations after a very strong fourth quarter.
The social trading-focused broker, which operates CySEC-licensed NAGA Markets (nagamarkets.com) and offshore Seychelles-based NAGA Capital (naga.com), said that Revenues for 2023 amounted to 45.5 million euros, or just under $50 million. Of the group EBITDA for the year amounted to approximately €7 million. NAGA noted that both figures were well above analysts’ most recent expectations, which had forecast average sales of €38.5m and EBITDA of €5.2m for 2023.
In 2022 NAGA brought in €57.6 million in revenue – 21% higher than in 2023 – but out-of-control costs led the company to post a net loss of €37 million for the year in 2022, prompting a series of cost-cutting measures (more about that below).
NAGA Group agreed to merge with Capex.com late last year in a deal that will see Capex.com and its shareholders led by founder and CEO Octavian Patrascu inject capital and gain control of 75 % of the merged entity. At the time of the announcement, the parties already disclosed that NAGA’s revenue was expected to be $50 million for 2023 (and Capex.com’s $40 million), so the revenue amount shouldn’t really come as a surprise to the company. Buy.
During 2023 NAGA said it saw over 132,000 account openings (FY22: 243,000) and more than 9.2 million transactions (FY22: 8.6 million), with 4.8 million being “copy” transactions (FY22 : 3.5 million). Customer transaction volume at NAGA totaled €143 billion for 2023 (22: €137 billion), or approximately $13 billion per month. Active users at the end of the year exceeded 21,000 (FY 2022: 18,700). As a result, all unique user metrics have shown a strong upward trend with higher average activity, deposit size and lifetime value.
On the cost side, NAGA said it successfully focused on operational and marketing efficiencies and significantly reduced overall expenses. Marketing expenses amounted to €5.5m (FY2022: €28.5m), leading to the company’s best gross cost per acquisition at €447 (22: €1510) per new capitalized trading account.
NAGA CEO Michael Mylonas commented:
“We are delighted that our disciplined approach and continuous efforts to make NAGA profitable have yielded such strong results. We’ve seen improved customer quality, as well as improved platform stability and strong user metrics that make us confident for the coming months. Especially in light of our recently announced Merger, NAGA will play a critical role in delivering strong results next year combined with Capex.com’s rapidly growing user base and revenue creating an exciting new equity story for the Group.”
After December 19, 2023 and the announcement of the merger between NAGA and Capex.com, as mentioned above, Octavian Patrascu is expected to assume the position of CEO of NAGA Group in the coming days after a successful registration by him in the overwhelming majority of 8,226,000 convertible notes were issued along with the injection of nearly $9 million into NAGA. Mr. Patrascu, in the coming weeks, will reveal his plans for the technology road map and the evolution of NAGA.
In addition, NAGA as well as Capex.com also plan to release forecasts and guidance in the coming weeks for fiscal 2024 as the first steps for the M&A transaction are underway, although the transaction is still subject to customary closing conditions and regulatory approvals.