XTB Sees Dull Q4 Profits despite Solid Client Activities

Thursday, 02/02/2023 | 06:52 GMT by Arnab Shome
  • The broker added 51,038 new clients in the quarter.
  • It has postponed the launch of XTB Africa until at least 2024.
XTB

Polish FX/CFDs broker XTB (WSE: XTB) has reported a significant profit slide in the fourth quarter of 2022 in the preliminary quarterly financials. The revenue of the company strengthened year-over-year but plummeted significantly quarter-over-quarter.

Revenue of XTB Dropped

According to the official numbers, its total operating income or revenue for three months between October and December came in at PLN 216.7 million (around $49 million), which is almost 45 percent below the PLN 391.3 million it generated in the previous quarter. This made Q4 the least-performing period for the company, which generated revenues of PLN 439.8 million and PLN 396.4 million in Q1 and Q2, respectively.

However, XTB's latest quarterly revenue increased by 18.1 percent year-over-year. The platform generated only PLN 183.5 million in the fourth quarter of 2021.

In addition, the company's profits took a heavy dent in the last three months of 2022. It reported a net profit of PLN 50 million, almost 79 percent lower than the previous quarter and 27.1 percent below the comparable quarter (Q4) of 2021.

Despite the poor Q4 numbers, the performance of the previous three quarters made 2022 one of the best-performing years for XTB. The total yearly revenue increased by 130 percent to PLN 1.444 billion with a 222 percent jump in net profit to PLN 765.7 million.

Check out the FMLS22 session on "What CFDs Traders Value Most & How They Choose Their Brokers."

Solid Client Metrics of XTB

XTB reported solid improvement across all client metrics in Q4 with a surge in activities. More than 1.7 million lots of CFDs instruments with a nominal value of $548.7 billion were traded on the platform in the three months, which is higher than the two previous consecutive years. Additionally, in terms of traded lots, the CFDs volume jumped by 60.3 percent year-over-year.

Further, XTB added 51,038 new clients to its platforms between October and December, which is a yearly increase of 19.6 percent. This figure is also higher than the new onboards in Q2 and Q3. The broker ended the quarter with 160,995 average active clients, concluding the year with a jump of 26.6 percent. On top of that, it improved from Q2 2022's 149,992 and Q3 2022's 151,658.

"The priority of the Management Board is to further increase the client base leading to the strengthening of XTB's market position in the world by reaching the mass client with its product offer. These activities are and will be supported by a number of initiatives, including the introduction of new products or promotional campaigns," the quarterly report stated.

Moreover, XTB has already onboarded 42,300 new clients in January, moving towards the Management Board's ambition "to acquire, on average, at least 40-60 thousand new clients quarterly."

An XTB ad featuring its ambassador Conor McGregor, an MMA star.

South Africa Launch Postponed

Though headquartered and listed in Poland, XTB has expanded its non-European presence significantly over the years. It launched services under a Dubai subsidiary in October 2021 and gained a South Africa license to advance its African activities. However, the broker confirmed the postponement of its launch of XTB Africa at least until 2024.

"Currently, the Management Board's efforts are focused on reaching mass clientsโ€ฆThis is crucial for the further dynamic development of XTB and building a global brand. This goal is to be served by new products added to the offer in 2023 and in the consecutive years. The Management Board estimates that the effects of these works will give a much higher output than if the available resources were invested in launching operations in South Africa," the broker stated.

Polish FX/CFDs broker XTB (WSE: XTB) has reported a significant profit slide in the fourth quarter of 2022 in the preliminary quarterly financials. The revenue of the company strengthened year-over-year but plummeted significantly quarter-over-quarter.

Revenue of XTB Dropped

According to the official numbers, its total operating income or revenue for three months between October and December came in at PLN 216.7 million (around $49 million), which is almost 45 percent below the PLN 391.3 million it generated in the previous quarter. This made Q4 the least-performing period for the company, which generated revenues of PLN 439.8 million and PLN 396.4 million in Q1 and Q2, respectively.

However, XTB's latest quarterly revenue increased by 18.1 percent year-over-year. The platform generated only PLN 183.5 million in the fourth quarter of 2021.

In addition, the company's profits took a heavy dent in the last three months of 2022. It reported a net profit of PLN 50 million, almost 79 percent lower than the previous quarter and 27.1 percent below the comparable quarter (Q4) of 2021.

Despite the poor Q4 numbers, the performance of the previous three quarters made 2022 one of the best-performing years for XTB. The total yearly revenue increased by 130 percent to PLN 1.444 billion with a 222 percent jump in net profit to PLN 765.7 million.

Check out the FMLS22 session on "What CFDs Traders Value Most & How They Choose Their Brokers."

Solid Client Metrics of XTB

XTB reported solid improvement across all client metrics in Q4 with a surge in activities. More than 1.7 million lots of CFDs instruments with a nominal value of $548.7 billion were traded on the platform in the three months, which is higher than the two previous consecutive years. Additionally, in terms of traded lots, the CFDs volume jumped by 60.3 percent year-over-year.

Further, XTB added 51,038 new clients to its platforms between October and December, which is a yearly increase of 19.6 percent. This figure is also higher than the new onboards in Q2 and Q3. The broker ended the quarter with 160,995 average active clients, concluding the year with a jump of 26.6 percent. On top of that, it improved from Q2 2022's 149,992 and Q3 2022's 151,658.

"The priority of the Management Board is to further increase the client base leading to the strengthening of XTB's market position in the world by reaching the mass client with its product offer. These activities are and will be supported by a number of initiatives, including the introduction of new products or promotional campaigns," the quarterly report stated.

Moreover, XTB has already onboarded 42,300 new clients in January, moving towards the Management Board's ambition "to acquire, on average, at least 40-60 thousand new clients quarterly."

An XTB ad featuring its ambassador Conor McGregor, an MMA star.

South Africa Launch Postponed

Though headquartered and listed in Poland, XTB has expanded its non-European presence significantly over the years. It launched services under a Dubai subsidiary in October 2021 and gained a South Africa license to advance its African activities. However, the broker confirmed the postponement of its launch of XTB Africa at least until 2024.

"Currently, the Management Board's efforts are focused on reaching mass clientsโ€ฆThis is crucial for the further dynamic development of XTB and building a global brand. This goal is to be served by new products added to the offer in 2023 and in the consecutive years. The Management Board estimates that the effects of these works will give a much higher output than if the available resources were invested in launching operations in South Africa," the broker stated.

About the Author: Arnab Shome
Arnab Shome
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About the Author: Arnab Shome
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
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