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October 27, 2023 - Publicly listed Polish retail broker XTB has announced its third quarter results for 2023.
In 3Q 2023, XTB reported EUR 26.9 mn consolidated net profit and acquired 67.5 thousand new clients. Thanks to marketing activities, in the environment of lower volatility in the financial and commodity markets, the number of active users of XTB investment platform and mobile app increased to an all-time high and reached 223.1 thousand.
Consolidated net profit amounted to EUR 26.9 mn (-45.6% y/y) and operating revenues reached EUR 61.2 mn (-25.3% y/y)
- 67.5 thousand new clients acquired in Q3 (+50.7% y/y)
- A record-breaking 223.1 thousand active clients (+47.1% y/y)
- Significant increase in clients’ trading activity. The volume of trading on CFD instruments increased to 2.01 mn lots (+26.1% y/y)
In 3Q 2023, XTB generated a net profit of EUR 26.9 mm compared to EUR 49.4 mn a year before (decrease by 45.6%). After the nine months of 2023, consolidated net profit reached EUR 118.4 mn compared to EUR 152.7 mn a year earlier (decrease by 22.4%). In 3Q 2023, the operating costs reached EUR 36.6 mn (3Q 2022: EUR 27.7 mn).
Number of active clients at an all-time high
XTB has a solid foundation in the form of a constantly growing client base and, more significantly for the company, the number of active clients. In 3Q 2023, XTB acquired 67.5 thousand new clients and since the beginning of the year, the number of new clients has reached 235 thousand (vs. 44.8 thousand in 3Q 2022 and 145.8 thousand after the nine months of 2022). The number of active clients is growing extensively and in 3Q 2023 it reached an all time high: 223.1 thousand (+47.1% y/y).
Increased transactional activity of XTB clients is expressed in the number of CFD contracts concluded in lots. In 3Q 2023, trading in derivatives amounted to 2.01 mn lots, an increase from 1.59 mn lots a year before. The profitability per lot decreased to EUR 30 vs. EUR 51 in 3Q 2022.
Revenue structure by instrument classes
Looking at XTB's revenues in terms of the classes of instruments responsible for their creation, the CFDs based on commodities took the lead in the third quarter of 2023. Their share in the structure of revenues on financial instruments reached 47.7%. This is a consequence of the high profitability of CFDs instruments based on oil, gold and wheat.
The second most profitable asset were CFD instruments based on indices.Their share in the revenue structure was 25.4% and the US stock indices dominated in this category with the leaders being US 100 and US 500.
CFDs based on currency pairs accounted for 22.2% of total revenues in 3Q 2023. The most profitable financial instruments in this class were those based on the EURUSD, USDJPY and GBPUSD currency pairs.
Operating costs
The operating costs in 3Q 2023 increased to EUR 36.6 mn by EUR 8.9 mn compared to the corresponding period of the previous year (EUR 27.7 mn in 3Q 2022). The most important changes (increase by EUR 3.9 mn) were recorded in costs of remuneration and employee benefits resulting from dynamic development of the company and thus the increase in employment. Marketing costs increased by EUR 2.8 mn, mainly due to higher expenditure on online marketing campaigns.
New product launches and strong product pipeline
In 3Q 2023, XTB continued to work on broadening its product offering and rolled out an ETF-based product for long-term, passive investing - the Investment Plans. In September, the Investment Plans were launched in Romania, and in the following weeks the product was made available to the investors in other European markets including Slovakia, Czechia, Portugal, Italy, Germany and Spain. For promoting the idea of passive investing, XTB was awarded by the investors community in Poland with the “Passive Revolutionary” award.
Omar Arnaout, CEO of XTB, commented on the results, “XTB is a place where all investors are welcomed, regardless of their investment experience or risk appetite. As we strive to meet their expectations, we work hard to enhance our investment platform when it comes to our product offering and customer experience. In September, we started the rollout of our new product - the Investment Plans and in the coming weeks we will be adding even more functionalities to the Plans. I’m convinced that thanks to the broadening of our product offering we’re going to strengthen our competitive advantage in key markets”.
Commenting on Foreign Expansion, the company made these closing statements in its report:
"XTB, with its strong market position and dynamically growing client base, is increasingly boldly building its presence in non-European markets, consistently pursuing the strategy of creating a global brand. The Management Board of XTB puts the main emphasis on organic growth, on the one hand increasing the penetration of European markets, and on the other successively building its presence in Latin America, Asia and Africa. Following these actions, the composition of the capital group may expand with new subsidiaries. It is worth mentioning that geographical expansion is a process carried out by XTB on a continuous basis, the effects of which are spread over time. Therefore, one should rather not expect sudden, abrupt changes in the Group's results on this account.
XTB’s development is also possible through mergers and acquisitions, especially with entities that would allow the Group to achieve geographical synergies (complementary markets). The Management Board intends to carry out transactions of this type only if they are associated with tangible benefits for the Company and its shareholders.
Currently, the Management Board's efforts are focused on reaching the mass client with its offer. This is crucial for XTB’s further dynamic development and building a global brand. This goal is also served by the addition of new products to the offer in 2023 and subsequent years. The Management Board estimates that the results of this works will give a much higher yield than if the available resources were invested in launching operations in South Africa. For this reason, the start of operations of XTB Africa (PTY) Ltd. has been postponed until at least 2024."
Detailed information summarizing the activities of the XTB Group in 3Q 2023 as well as preliminary financial and operating results are presented here.
