XTB announces a 43% increase in Q3 income

X-Trade Brokers, better known as XTB, has released its preliminary financial and operating results for the third quarter of 2021, noting a strong consolidated net profit for the period. According to the report, the company made a net profit of €22.2 million, compared to €15.4 million in the same period last year, an increase of 43.9%.

XTB reported over 38,566 new customers, which is a significant increase from 21,159 customers in 3Q 2020, an increase of 82.0%. As a result, the broker's revenues increased by 40.9% on an annual basis.

The significant factor determining the level of revenues was a steadily growing customer base, combined with their strong trading activity, as reflected in the number of transactions concluded per batch and the nominal value of the turnover achieved. Trading volume in CFD instruments amounted to 1,044,399 lots (Q3 2020: 759,000), and a profitability per lot amounted to EUR 41.9.

XTB reported that commodity-based CFDs took the lead in revenues. Strong profitability in gold, silver and natural gas CFDs generated significant profits. Revenues from currency-based CFDs reached 14.9% of all revenues, compared to 20.2% a year earlier, when the most popular financial instruments in this class were based on the EUR/USD pair.

XTB has a strong base in the form of a steadily growing client base and number of active clients. This is key to the amount of recurring revenue in the future. Since the beginning of the year, the group has set a new record in this area, acquiring 146,437 new customers compared to 73,613 a year earlier, an increase of 98.9%. This is the effect of the continued optimisation of the sales and marketing strategy, greater penetration of existing markets, the successive introduction of new products into the offer and expansion into new geographical markets. As well as the number of new customers, the average number of active customers also reached a record level. It rose from 53,310 to 106,958, an increase of 100.5% compared to the previous year.

The "0% commission" offer is supported by a marketing and advertising campaign with the participation of a new XTB brand ambassador, José Mourinho.

The board's ambition for 2021 was to acquire at least 110,000 new traders. This target was reached in July this year. The Board of Management assumes that in the following periods it will be possible to acquire at least 30,000 new customers per quarter on average. In the first 3 weeks of last month, XTB acquired a total of 9,100 new customers.

XTB places great emphasis on the geographical diversification of revenues. The country from which the group derives more than 15% of its revenues is Poland, with a share of 31.1% in the third quarter of 2021 (third quarter of 2020: 34.6%). The share of other countries in the geographical revenue structure does not exceed 16% in any case.

XTB is also focusing on diversification of sectoral revenues. For example, the group is developing institutional activities under the X Open Hub brand, under which it provides liquidity and technology to other financial institutions, including brokerage houses. Revenues from this segment are subject to significant quarterly fluctuations, similar to the retail segment, which is typical of the business model adopted by the group.

XTB's business model includes high volatility of revenues depending on the period. Operating results are mainly affected by: (i) the volatility of the financial and commodity markets; (ii) the number of active clients; (iii) the volume of transactions concluded in financial instruments; (iv) general market, geopolitical and economic conditions; (v) competition in the forex market and (vi) the regulatory environment.

In general, the group's revenues are positively affected by increased financial market activity, as in these periods a higher level of turnover is achieved by the group's clients and profitability per lot is higher.

About XTB

XTB Group is a leading provider of crypto CFDs alongside 2,100 forex, stock, index, commodity and ETF CFDs. The multi-regulated broker holds licenses with several trusted agencies, including the UK's Financial Conduct Authority (FCA) and the Cyprus Securities & Exchange Commission (CySEC).

Clients can invest and speculate with up to 1:30 leverage and can use the broker's mobile trading alert service to gain market insight. XTB offers two real accounts, aimed at retail traders and professional investors.