NAGA reports customer growth as costs continue to be reduced

Hamburg, September 2, 2022 - NAGA Group AG (XETRA: N4G, ISIN: DE000A161NR7),  operator of the neobroker NAGA, the cryptocurrency platform NAGAX and the  neobanking app NAGA Pay, announces further trading updates in addition to today's  mandatory announcement. 

New crypto card program launches on 07.09.2022 

Leading banking-as-a-service provider Contis by Solaris and NAGA Pay are launching  a VISA-approved card program that will allow users to spend both fiat and  cryptocurrency in real time at the point of sale. The NAGA Pay app will unlock the "Pay  with Crypto" feature for all customers in the app stores on Sept. 07, 2022. 

"With our "Pay with crypto" feature, our users can set at any time with which currency - whether euros or cryptocurrencies - they want to pay at the checkout or online. The  entire transaction happens in real time and is automatically executed in the background  by our EU-regulated crypto exchange NAGAX. Over 50 cryptocurrencies are supported  and can be deposited and withdrawn directly in the NAGA Pay app via the blockchain.  Contis' Buffer solution also offers the feature that in case a user does not have enough  money in the account for payment, they can balance it with cryptocurrencies in real time.  Thus, there is complete flexibility and the user can set at any time which cryptocurrencies  held should be used for payment," Benjamin Bilski, founder and CEO of NAGA,  commented on the product launch. 

Healthy customer growth with reduced costs 

NAGA management also reports that since the end of Q2 2022, active work has been  done to reduce group costs and monthly cost reductions of over 15% have already been  achieved in this regard. By the end of the current year, monthly costs will be reduced by  around 25% to 30% compared to the last 12 months. In parallel, the focus on optimizing  marketing spend is paying off. In the last two months, around 50,000 registrations have  been recorded. The costs per customer have improved by over 40% and show a further  positive trend.

"The market situation has changed drastically. Whereas nine months ago the focus was  on sales growth, profitability and cash flow are the new core KPI, especially in the growth  and technology stocks. NAGA has invested heavily in expansion and technology, and  as a result has also delivered triple-digit percentage growth in recent years. The narrative  is now changing and we will focus on bringing cash EBITDA into positive territory while  continuing to show solid growth. This will take a few months. We have managed to  develop one of the most advanced broker platforms, a regulated crypto exchange, and  a full-featured payment app. Now it's all about efficient customer growth and scaling. We  are firmly convinced of our business model and will successfully follow this path," says  Benjamin Bilski. 

Technical adjustments to historical results due to audit delays 

Audit failures on the part of Ernst and Young in the area of capitalization of customer  acquisition costs lead to necessary technical adjustments of closing figures from 2020  and 2021. NAGA reports that revenues in 2021 will amount to approximately EUR 53  million, which represents an increase in revenues of over 100% compared to 2020.  EBITDA, however, will fall to EUR -4.3 million due to IFRS adjustments in the area of  customer acquisition costs. 

Management also announces that the audited financial statements will be published on  the company's website in the second half of September 2022. The delays were  significantly caused by the complexity of the audits, adjustments and resource  constraints on the audit side. 

NAGA Group AG also announces that the cooperation with Ernst & Young will be  terminated and a new auditor will be proposed for election at the upcoming Annual  General Meeting 2022.