XTB, a leading online trading company publicly listed on the Warsaw Stock Exchange (WSE: XTB), reported a record-breaking consolidated net profit of EUR 64.4 million for Q1 2023, which was an impressive increase of 19.9% year-over-year (YoY).

Record Net Profit for XTB in Last Quarter

This historically best performance can be attributed to the ongoing high volatility in financial and commodity markets driven by geopolitical tensions and banking crises. Additionally, XTB's strategic marketing initiatives significantly contributed to a substantial increase in client numbers and transactional activities.

Operating revenues for Q1 2023 reached EUR 113.1 million, compared to EUR 94.6 million in Q1 2022, while operating costs rose to EUR 39.2 million from EUR 28.2 million during the same period.

The preliminary report for the past quarter shows that the results are better not only on an annual basis but also on a quarterly basis. Compared to Q4 2022, one of the worst quarters in XTB's recent performance, the net profit increased fivefold.

"Preliminary results for the first quarter of 2023 turned out to be record-breaking in many respects," Omar Arnaout, the CEO of XTB, commented. "Our strategy based on expanding the customer base and continuous investment in technology and new products brings the expected results."

In contrast, XTB reported a total net profit of EUR 163.3 million for the entirety of 2022. If the broker can sustain remarkable momentum from Q1 2023 into the next quarter, it is poised to surpass its previous year's financial performance within just nine months of 2023.

XTB's Impressive Client Acquisition and Trading Volume Growth

In Q1 2023, XTB attracted 104,200 new clients, bringing their total clientele to 703,900, which is a 46.1% increase YoY and more than 100% quarter-over-quarter (QoQ). Notably, the number of active clients rose to 215,700 from 149,800 in Q1 2022 by 44% YoY.

"In the first quarter of 2023, we focused our activities on the promotion of the capital market by engaging our ambassadors. These efforts resulted in a record number of acquired customers," Arnaout added.

This growth translated into an increase of 18.2% in trading volume on contracts for difference (CFDs) instruments, reaching 1.86 million lots compared to 1.56 million in the corresponding period of 2022. Profitability per lot in Q1 2023 was EUR 62, which was a slight increase from EUR 61 in Q1 2022.

In Q1 2023, CFDs based on commodities dominated XTB's revenue structure, accounting for 48.8% of revenue from financial instruments, which is up from 30.2% in Q1 2022. Natural gas and gold were the most profitable instruments in this category. CFD instruments based on indices constituted 45.3% of revenue in Q1 2023, which is down from 57.4% in Q1 2022. Forex -based CFDs represented 4.2% of total revenue, compared to 9.4% a year earlier.

XTB Wants to Lower Market Entry Threshold

Omar Arnaout commented that alongside launching the "Invest Responsibly" project and consistently investing in free educational materials for clients, XTB is working to make the financial world more accessible to new investors.

The broker aims to lower the entry barrier for individuals seeking to independently "challenge the market" and has introduced 'fractional shares' as a new product to allow that. These shares made their debut in select markets at the beginning of Q2, and XTB plans to expand their availability to other countries soon. As exclusively revealed to Finance Magnates, the service should be available in Poland and Spain within the next few weeks.

"We are proceeding according to the planned schedule. I can reveal that the introduction of Fractional Shares to two additional markets – Poland and Spain – is just a matter of weeks," the XTB's CEO disclosed.

In March, the Management Board of XTB announced its decision to pay its shareholders 50% of the company’s estimated net profit of PLN 761.6 million ($171.6 million) in 2022 as dividends.