XTB's 4th quarter numbers dissappoint despite solid client data

Polish foreign exchange and futures (Forex/CFD) broker XTB (WSE:XTB) reported a significant drop in earnings in the fourth quarter in its preliminary quarterly financial statements. The company's revenue strengthened year-over-year but fell sharply quarter-over-quarter.

XTB revenue plummets
According to official figures, the company's operating income or total revenue for the three months October to December amounted to PLN 216.6 million (approximately $48 million), almost 46% of less than the PLN 391.2 million generated in the previous quarter. The fourth quarter is therefore the worst performing period for the company, which generated revenues of PLN 439.7 million and PLN 396.3 million in the first and second quarters, respectively.

However, XTB's latest quarterly revenue increased by 18% year-on-year. The platform only generated PLN 183.4 million in the fourth quarter of 2021.

In addition, the company's profits suffered a sharp drop in the last three months of 2022. It reported a net profit of PLN 49 million, almost 80% lower than the previous quarter and 27% less than the comparable quarter (Q4) of 2021.

Despite the poor numbers, the performance of the previous three quarters made 2022 one of the best performing years for XTB. Total annual revenue increased by 129% to PLN 1.443 billion and net profit jumped by 221% to PLN 765.6 million.

Solid client data
XTB reported solid improvement in all customer metrics in the fourth quarter, with a strong increase in business. More than 1.6 million lots of CFD instruments with a face value of $548.6 billion were traded on the platform in the three months, which is higher than the previous two consecutive years. Furthermore, in terms of lots traded, the volume of CFDs increased by 60.2% compared to the previous year.

Additionally, XTB added 51,037 new customers to its platforms between October and December, representing a year-on-year increase of 19.5%. This figure is also higher than the number of new customers onboarded during the second and third quarters. The broker ended the quarter with an average of 160,994 active clients, ending the year with a jump of 26.5%. On top of that, it improved from 149,991 in Q2 2022 and 151,657 in Q3 2022.

"The priority of the management committee is to further increase the customer base leading to the strengthening of XTB's market position globally by reaching the mass customer with its product offering. These activities are and will be supported by a number of initiatives, including the introduction of new products or promotional campaigns," the quarterly report says.

Additionally, XTB has already onboarded 42,290 new customers last month, moving it closer to the board's ambition "to acquire, on average, at least 35-55,000 new traders per quarter."

An XTB commercial featuring its ambassador Conor McGregor, a brilliant MMA fighter:


Launch in South Africa postponed
Although headquartered and listed in Poland, XTB has significantly expanded its presence outside of Europe over the years. It launched services under a Dubai subsidiary in November 2021 and obtained a license for South Africa to advance its African business. However, the broker has confirmed the postponement of the launch of XTB Africa at least until 2024.

“Currently, the efforts of the management committee are focused on reaching mass customers... This is crucial for the continued dynamic development of XTB and the building of a global brand. new products added to the offering in 2023 and in subsequent years. The Management Committee believes that the effects of this work will yield a much higher return than if the available resources were invested in launching operations in South Africa,” says the broker.

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.