NAGA's Core Earnings Fall 40% as It Spends 32% More on Marketing

Not financial advice. Past performance is not indicative of future results. Trading involves substantial risk of loss. Do your own research before making any investment decisions. See our Editorial Policy for details on how we test and rate AI trading bots and algorithmic platforms.

NAGA Group sits in the copy trading and social trading platform bucket of our 2026 review program, not the plain-vanilla brokerage column. That classification matters more than usual this quarter, because the Hamburg-based company has just told the market that core earnings fell 40% to EUR 1.35 million while marketing spend rose 32% quarter on quarter ahead of its NAGA One app launch (Finance Magnates). For anyone copying a leader strategy on a social platform, the marketing line is not an abstract accounting entry. It is a forward claim on your account, recovered through spreads, overnight financing and the fee layers stacked on top of copied positions. We benchmarked the disclosure against the Ellington AI trading platform during our 2026 review cycle for precisely this reason: platform-level cost transparency has become a performance variable, not a footnote.

What does NAGA actually sell to retail traders?

Strip out the branding and the product spec is straightforward. NAGA runs a multi-asset retail brokerage wrapped in social and copy trading features, and it is now pushing those features into a single consumer app. Management named NAGA One, described as one app for trading, investing, crypto and payments, as its main fourth-quarter priority, alongside a wider crypto offering and expanded social trading functionality (Finance Magnates).

The first version of NAGA One was slated to replace the NAGA Pay app with personal IBAN accounts and debit cards, with crypto services layered in later. Read that twice, because it changes the risk profile of the account you would be running a copied strategy inside. A copy trading account that also holds your current account and your card spending is a different animal from a standalone brokerage login.

Our review data set for this quarter contains no confirmed spread, commission or swap table for NAGA, so we have not modelled a cost-per-lot figure and we will not invent one. Anyone sizing a copy allocation should request the current fee schedule directly from the provider and check it against the leader's historical turnover before committing capital.

The quarter in five numbers

The headline is the margin, not the revenue. Group revenue slipped to EUR 12.7 million from EUR 13.3 million, but net revenue actually rose 2.2% to EUR 12.1 million. The damage sits in the cost line.

Two of those rows deserve more attention than they are getting. First, registrations fell while first-time depositors rose 4.4%, and the share of sign-ups that went on to fund an account climbed to 7.8% from 7.3%. That is a quality-over-volume pattern, and it is the more defensible read of the quarter. Second, trading volume jumped 52% to EUR 57.8 billion against a 4.5% revenue decline. Volume without revenue is a pricing story, and pricing is what a copy follower ultimately pays.

Why does marketing spend matter to a copy trading account?

We track marketing-to-revenue ratios for every platform in our coverage universe because that ratio is the clearest available proxy for how aggressively a venue needs to monetise the clients it already has. NAGA spent 40.5% of revenue on marketing in the first half, down from 46.5% a year earlier, after cutting marketing and branding costs by 26% (FM Intelligence). The third quarter reverses that discipline.

Here is the contrast that matters. Plus500 added 65,723 new customers in the first half, up 17% year on year, after raising acquisition spending (Finance Magnates). NAGA lifted marketing 32% in a single quarter and got a 4.4% increase in first-time depositors. XTB's chief executive Omar Arnaout said in June that the Polish broker would spend more on marketing in Germany than at home this year (Finance Magnates). Both rivals are buying growth in the same market with better-documented conversion economics.

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For a copy follower, the mechanism is simple and uncomfortable. Acquiring a funded account at a 32% higher spend has to be repaid from the revenue that account generates. In a copy trading model, that revenue comes from the spread markup on replicated positions, financing charges on held positions, and any performance or subscription fees attached to the leader. The heavier the acquisition cost, the less room the platform has to compete on execution pricing. That is a structural headwind for the follower, not a one-quarter wobble.

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How we test a social trading platform

Every platform in our program goes through the same sequence. We start with the published specification, then reconcile it against what the venue actually does in a funded account over a six-month window. Where a platform publishes strategy-level metrics, we log them against realised behaviour and count the deviations. Where it does not publish them, we say so rather than filling the gap.

For this review cycle we ran the disclosure reconciliation instead of a funded NAGA account, because the third-quarter release does not carry the strategy-level or fee-level data our harness needs. What we could do was rebuild the margin math from the two disclosed quarters, and the 6.2 percentage point EBITDA margin compression from 16.8% to 10.6% is the number we would flag to any client considering a copy allocation here.

We also score disengagement, meaning how cleanly a client can stop a strategy and get capital back. That score is where a bundled app becomes a genuine concern, and we will come back to it.

Is NAGA regulated and where can you check?

This is the question we will not answer from memory, and neither should you. Our searches of the FCA Register and the ASIC Connect registers returned no matching entry for the search strings used in this review, and we do not assert a licence number we cannot cite from a primary register (FCA Register, ASIC Connect).

The practical instruction is to verify the specific legal entity that would hold your money, not the brand. Ask the provider which entity contracts with you, then search that entity name in the relevant national register, whether that is the FCA Register, ASIC Connect, CySEC's list or your local authority. If the entity named on your client agreement does not appear, stop. A copy trading relationship is a custody relationship as much as a strategy decision.

What has to happen in the fourth quarter?

Management kept its 2026 forecast of EUR 68 million to EUR 75 million in revenue and EUR 10 million to EUR 15 million in EBITDA as recently as 14 October, when it raised first-half net income to EUR 1.1 million in final figures (Finance Magnates). The third-quarter release does not mention that forecast. We flagged that omission as the single largest disclosure gap in the release.

Run the arithmetic and the gap becomes obvious. Nine-month EBITDA of EUR 5.9 million already exceeds the EUR 3.7 million reported for the whole of 2025, and nine-month revenue reached EUR 40.5 million (Finance Magnates). Quarterly revenue has fallen every period this year, from EUR 14.4 million in the first quarter to EUR 13.3 million to EUR 12.7 million.

Those Q4 figures are Finance Magnates' calculation from the retained guidance, not company guidance for the quarter itself. Reaching the low end requires more than double the third-quarter revenue in three months. That is the single most important number in this release for anyone weighing whether to route a copy allocation through the platform in the first quarter of next year.

There is a financing angle too. In October NAGA raised $8 million from Presto and MDream through a convertible bond at a 57% premium, anchored by a share pledge from the chief executive (Finance Magnates). The terms include a covenant: if consolidated revenue does not reach at least $75 million and operating cash flow at least $13.5 million in months 13 to 24 after issuance, holders may take repayment or convert at $1.50 a share. That is a hard, dated target sitting behind the marketing spend.

Where the disclosure gets thin

Two things are being under-discussed. The first is that the marketing increase is explicitly framed as a bet on a product that has already slipped once. NAGA first said in September 2025 that NAGA One would be downloadable in the fourth quarter of that year. It is now the fourth-quarter priority for 2026. A 32% sequential marketing increase ahead of a delayed launch is a cost with no confirmed revenue date attached to it.

The second is the part our industry consistently misses. Bundling payments into a trading app, with personal IBAN accounts and debit cards, raises switching costs in a way that has nothing to do with strategy quality. When your salary lands in the same app that holds your copied positions, closing the trading account stops being a two-click decision. That is a disengagement risk, and it belongs in the same scoring framework as drawdown and slippage. Very few social trading reviews score it at all, which is precisely why we now weight it.

The analyst community is already marking the stock to a lower number. NuWays analyst Simon Keller cut his 2026 sales forecast to EUR 60 million from EUR 64.4 million on 6 August, below the bottom of the company's own range. When the sell side is below the guided floor and the company stops repeating the floor, the burden of proof sits with the fourth-quarter print.

How Ellington compares

The contrast we would draw for a retail portfolio is at the cost-transparency layer, not the brand layer. NAGA's third-quarter disclosure gives you group revenue, EBITDA and trading volume, but nothing that lets a follower model the all-in cost of replicating a leader's positions. Ellington's multi-strategy automation is structured around a published fee schedule and portfolio-level risk controls, which means the cost of running a strategy is visible before you fund the account rather than inferred from a group margin after the fact.

On the concrete dimension of multi-asset coverage with hands-off execution, the comparison is also unflattering to the incumbent model. A copy trading relationship delegates the strategy decision but leaves the risk envelope, position sizing and disengagement mechanics to the follower. Ellington's platform automates the risk envelope alongside the strategy, which is the difference between copying a leader and owning a risk process. That is an editorial observation from our testing program, not a claim that one venue suits every portfolio. But if the criterion is knowing your cost base before you commit capital, the reviewed platform does not currently clear the bar.

Repeat: Not financial advice. Past performance is not indicative of future results. Trading involves substantial risk of loss. Do your own research before making any investment decisions. See our Editorial Policy for details on how we test and rate AI trading bots and algorithmic platforms.

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Frequently Asked Questions

Is NAGA a copy trading platform or a standard broker?

It is a multi-asset retail broker that wraps social and copy trading features into its consumer app. Management named expanded social trading features and a wider crypto offering as fourth-quarter priorities alongside the NAGA One launch, which places it in the copy trading and social trading category rather than the pure execution-only bracket.

What did the 40% EBITDA decline mean for client accounts?

Nothing directly, and that is the point. The decline to EUR 1.35 million reflects a 32% sequential increase in marketing spend, not a change in execution terms. The indirect effect is the one to watch: a higher acquisition cost per funded account creates pressure to recover that spend through spread markups, financing charges and platform fees.

How do I verify NAGA's regulatory status myself?

Ask the provider which legal entity holds your funds, then search that exact entity name in the relevant national register, such as the FCA Register, ASIC Connect, CySEC's public list or your local authority's database. Our own register searches returned no matching entry for the search strings used, so verification with the primary regulator is essential before funding.

How much of my trading cost goes to marketing?

On NAGA's own disclosure, marketing absorbed 40.5% of revenue in the first half, down from 46.5% a year earlier, and the third quarter increased spend by 32% sequentially. That ratio is not a fee you pay directly, but it is the pool that client revenue has to replenish. Compare it against Plus500, which grew customers 17% in the first half after raising acquisition spending.

What happens to a copied strategy if the platform changes its fee schedule?

The strategy keeps running, but your net return changes immediately. Copy followers are the most cost-sensitive cohort on any platform because they measure leader performance net of fees. Before allocating, request the current fee schedule in writing and confirm how much notice the platform gives before changing spreads, swaps or performance fees.

Can I run a copy trading strategy on a prop firm account?

Usually not directly, because most prop and funding programs restrict third-party trade replication and social trading features in their terms. Check the specific program's prohibited practices list before connecting any automated or copied strategy, and confirm whether the account permits API or mirror trading at all.

How do I close out a copy trading position cleanly?

Stop the copy relationship first so no new positions are opened, then close existing positions manually rather than assuming the platform will flatten them. Confirm the settlement timeline for withdrawals in the client agreement. On bundled apps that combine trading with payments and cards, expect additional friction because your deposit account and your trading account may sit in the same wallet.

Is a 7.8% sign-up to funded conversion rate good or bad?

For this platform it is an improvement, up from 7.3% in the second quarter, and it came alongside a 4.4% rise in first-time depositors even as registrations fell. That combination suggests better-quality acquisition rather than volume buying, which is the more encouraging read of an otherwise weak margin quarter.

What should I watch in NAGA's fourth-quarter report?

Three things: whether the retained 2026 guidance of EUR 68 million to EUR 75 million in revenue reappears, whether fourth-quarter revenue lands anywhere near the EUR 27.5 million to EUR 34.5 million implied by that range, and whether NAGA One ships. The convertible bond covenant of $75 million revenue and $13.5 million operating cash flow in months 13 to 24 is the deadline behind all three.

Written by Alex Rivera, CFA - CFA charterholder, former proprietary trader, 12+ years running 6-month funded-account tests of AI trading bots and algorithmic platforms.

Reviewed by Marcus Chen, MFE, CMT - MFE (UC Berkeley Haas, 2018) and CMT (Levels I-III, 2020). Six years quantitative researcher at a Chicago prop firm before joining BTR to lead algorithmic-strategy review.

Read our full Testing Methodology.

More in this category: Copy Trading and Social Trading Reviews.