Following a disappointing Q2, Poland based Retail FX and CFDs broker XTB (WSE:XTB) has reported its preliminary results for Q2 2024 indicating a nice bounce-back in the third quarter of the year, although activity (and profitability) did not return to record Q1 levels.
XTB Revenues and Profits
Revenues at XTB for the third quarter of 2024 came in at PLN 470 million (USD $118 million), up by 23% from Q2’s $96 million. Net Profit rose by 27% QoQ, to PLN 204 million ($51 million), versus $40 million in Q2.
The results were released after the company’s shares closed for trading on Wednesday, so it will be very interesting to see how they trade come Thursday morning. XTB shares tumbled by more than 10% in early September after it was exclusively reported here at FNG that XTB controlling shareholder Jakub Zablocki had cashed out $135 million worth of shares in a secondary offering, taking his stake in the company below 50% for the first time.
XTB Trading Volumes
Trading volumes at XTB averaged $232 billion monthly in Q3-2024, up 12% from $207 million per month in Q2-2024. The company’s profitability per 1 million USD transaction volume in Q3 also rose to 174, from 154 in Q2.
XTB Clients
Regarding clients and client acquisition, in the third quarter of 2024 XTB acquired 108,104 new clients compared to 67,505 a year earlier, an increase of 60.1%. The number of active clients was at a record high during the Q3-2024 period, increasing from 281,101 last year to 474,117, an increase of 68.7% y/y.
XTB Asset Classes Traded
Looking at XTB’s revenues by asset class traded, in the third quarter of 2024 CFDs based on indexes led. Their share in the revenue structure in the period was 44.9% (Q3 2023: 25.4%). This is a consequence of the high profitability on CFD instruments based on the US 100 index, the German DAX index of stocks (DE40), and the US 500 index. The second most profitable asset class was CFDs based on commodities. Their share of the financial instruments revenue structure reached 38.2% compared to 47.7% a year earlier. This is a consequence of the high returns on CFDs based on gold, natural gas and oil prices. Revenues from currency-based CFD instruments accounted for 14.6% of total revenues, compared to 22.2% in the previous year. The most profitable financial instruments in this class were CFDs based on cryptocurrency Bitcoin, the EURUSD currency pair, and the cryptocurrency Ethereum.
XTB Expenses
XTB operating expenses in the third quarter of 2024 amounted to PLN 208.5 million, PLN 43.5 million higher than in the same period of the previous year (Q3 2023: 165.0 million). The most significant changes were in:
- salaries and employee benefits, an increase of PLN 16.1 million, mainly due to an increase in the number of employees;
- marketing costs, an increase of PLN 13.0 million, mainly due to higher expenses for online marketing campaigns, which included the kickoff of a new marketing campaign that launched in September 2024 centered around new brand ambassador Zlatan Ibrahimović;
- commission costs, an increase of PLN 10.1 million, as a result of higher amounts paid to payment service providers through which clients deposit their funds on transaction accounts; and
- other external services, an increase of PLN 4.3 million, mainly due to higher expenses for IT systems and licenses (an increase of PLN 4.2 million y/y).
Due to the dynamic development of XTB, the Management Board estimates that the total costs of operations in 2024 could increase by around a one-fifth to the level observed in 2023. The priority of the Management Board is to continue to grow the client base and build a global brand. As a result of the activities implemented, marketing expenses may increase by about one fifth compared to the previous year.
More highlights from XTB’s Q3 2024 results follow below.
