NAGA Group swings to profit in 2023 despite revenue hit

abdelaziz Fathi

NAGA Group, a provider of brokerage services, cryptocurrency platform NAGAX and neo-banking app NAGA Pay, announced the financial results for the fiscal year ending December 2023.

For the 2023 financial year, the group’s brokerage business revenue was reported at €45.5 million. This figure represents a +20 percent decline from the previous year’s revenue of €57.6 million. However, the company’s EBITDA showed a marked improvement, reaching around €7 million, a sharp contrast to the previous year’s loss of €-13.7 million.

Following a restructuring in the summer, NAGA decreased its cost base by nearly two thirds when compared with the same period in the year earlier whilst keeping new customer growth above 2022 levels.

Meanwhile, the broker optimized its user acquisition strategy, drastically reducing its marketing and sales spending. In the first nine months of 2022, the company spent approximately €26 million, while in 2023, this figure was trimmed to just €4 million for the same period. Notably, the average net acquisition cost per new account dropped from €1,269 in 2022 to €181 in 2023. Despite the reduced budget, NAGA Group acquired around 10,000 new funded accounts in the first three quarters of 2023, only 19% less than the previous year.

Other business highlights show that NAGA Group observed growth in all core Key Performance Indicators (KPIs) when comparing the quarters of 2023 to the same period in 2022.

In its latest report, the publicly traded fintech attributed the bulk of its solid performance to the strong trading activity. In particular, active accounts increased to 20.4K traders in 2023, traded volume rose to €110 billion, and client equity reached €34 million as of September 30, 2023. New equity contributions from new accounts also saw strong growth, translating to €913 per new account, and the average monthly churn rate improved from 8.4% to 5.3%.

NAGA’s neo-banking app experienced consistent double-digit growth throughout 2023. NAGA Pay, which offers investment in stocks and crypto via its mobile app, contributed €0.25 million to the group’s revenue in 2023 and aims to break even as a standalone project in Q4.

In December, NAGA disclosed its merger with the UAE-based Capex.com. Together, the combined operations will manage eight global licenses, projecting an annual trading volume of USD 300 billion for 2023. The combined entity has set an ambitious target to grow their user base to 5 million by 2025, with particular emphasis on expanding within the MENA region.

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