The third quarter of 2024 was a consecutive period of dynamic business development and building a client base for XTB. As a result, the Group acquired 108,1 thousand new clients (an increase of 60,1% y/y), while the number of active clients increased by 68,7% y/y from 281,1 thousand to 474,1 thousand. Consolidated net profit amounted to PLN 203,8 million compared to PLN 121,1 million a year earlier. Consolidated revenues amounted to PLN 470,2 million (Q3 2023: 281,0 million) with operating expenses of PLN 208,5 million (Q3 2023: PLN 165,0 million).
Operating income
In the third quarter of 2024, Group revenues amounted to PLN 470,2 million (increase by 67,4% y/y). Important factors determining its level were high volatility on financial and commodity markets in July and August, understood as the occurrence of long and clear trends on stock and commodity markets, and the constantly growing number of active clients (increase of 68,7% y/y), connected with their high transaction activity expressed, among other things, in the number of CFD contracts concluded in lots (decrease of 4,9% y/y). As a result, the volume of transactions in CFD instruments amounted to 1 912,4 thousand lots (Q3 2023: 2 011,5 thousand lots), profitability per lot amounted to PLN 246 (Q3 2023: PLN 140).
XTB places great importance on the geographical diversification of revenues, consistently implementing the strategy of building a global brand. The country from which the Group derives more than 20% of revenues each time is Poland, with a share of in the third quarter of 2024 47,47% (Q3 2023: 22,2%). Due to the overall share in the Group’s revenues, Poland was separated for presentation purposes as the largest market in terms of revenues in the Group. The Group breaks down its revenues by geographic area according to the country of the XTB office in which the client was acquired. The exception is the Middle East region, which also presents revenues from clients from this market acquired by the subsidiary XTB International Ltd. based in Belize.
XTB puts also strong emphasis on diversification of segment revenues. Therefore the Group develops institutional activities under 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 fluctuations from period to period, analogically to the retail segment, which is typical for the business model adopted by the Group.
Expenses
Operating expenses in the third quarter of 2024 amounted to PLN 208,5 million, PLN 43,6 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 15,3 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;
• 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;
• other external services, an increase of PLN 5,1 million, mainly due to higher expenses for IT systems and licenses (an increase of PLN 4,2 million y/y).
On a q/q basis, operating expenses increased by PLN 3,1 million, primarily due to PLN 3,6 million higher costs of salaries and employee benefits, mainly resulting from an increase in employment.
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.
The final level of operating costs will depend on the rate of employment growth and the level of variable remuneration components paid to employees, the level of marketing expenditure, the dynamics of geographical expansion into new markets and the impact of possible new regulations and other external factors on the level of revenues generated by the Group.
The level of marketing expenditure will depend on its impact on the Group’s results and profitability, the rate of international expansion and the degree of client responsiveness to the actions taken. Employment growth in the Group is driven by its dynamic development in both on the existing and new markets. The level of variable remuneration components is influenced by the Group’s results.
Clients
XTB has a solid foundation in the form of constantly growing client base and the number of active clients. In the third quarter of 2024 Group acquired 108 104 new clients compared to 67 505 a year earlier, which means an increase of 60,1%. The number of active clients was at a record high during the period analysed, increasing from 281 101 to 474 117, an increase of 68,7% y/y.
The Board’s priority is to continue to grow the client base, which will strengthen XTB’s position in the global marketplace by reaching the mass client 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 Management Board’s target for 2024 is to acquire an average of at least 65-90 thousand new clients per quarter. As a result of the activities implemented, the Group acquired a total of 129,7 thousand new clients in the first quarter of 2024, 102,6 thousand new clients in the second quarter of this year and more than 108,1 thousand new clients in the third quarter of this year. In turn, 47,2 thousand new clients were acquired in October 2024.
XTB’s marketing activities are essential for driving the company’s growth. By collaborating with athletes who serve as XTB ambassadors, the Group enhances its market position and boosts brand recognition in key global markets. In the second quarter of 2024, an agreement was signed with a new global ambassador, former footballer Zlatan Ibrahimovic, who is considered one of the most renowned athletes in the world. The first advertising spot with his participation, was released on 22 September 2024. Once again, XTB has decided to collaborate with a renowned world-class athlete, whose social media profiles are followed by more than 120 million people worldwide.
All-in-One Investment App
The Management Board’s ambition is for XTB to become the leading all-in-one investment application in Europe, providing clients with easy, smart and efficient ways to trade, invest and save, while giving them instant access to their money.
XTB’s transformation from a CFD broker to an All-in-One investment application has progressed over the past few years. This will continue into 2024 and beyond.
Product pipeline
In 2024, XTB will continue to focus on acquiring new clients and expanding it by those interested not only in investing but also in widely understood financial products.
As such, the Company is not only enriching its offering, but also introducing changes aimed at enhancing the user experience of the investment platform and mobile application. All those changes and improvements have been carefully planned, which is reflected in the continuous growth of the Product and Technology department and the ongoing works and developments in the research & development area, including those related to the implementation of AI-driven solutions.
At the turn of the third and fourth quarters, on 2 October 2024, XTB introduced a long-awaited individual retirement account (IKE) to its offering, allowing clients from Poland to invest under a tax shelter. As XTB sees potential in the further growth of long-term investment products, this offer will also be implemented in other global markets, including the UK, where the company plans to act as an ISA Manager.
At the beginning of October, a virtual wallet with a multi-currency card debuted on the Czech and Portuguese markets. Thanks to this product, XTB clients in these markets can now effectively manage their finances – both active and passive investments, as well as payments. The multi-currency card supports cashless payments in stores, mobile transactions, and contactless cash withdrawals from ATMs worldwide. The card, issued under a Mastercard license by DiPocket UAB (an electronic money institution registered by the Bank of Lithuania), can be added to Apple Pay and Google Pay wallets, making everyday payments even more intuitive.
Thanks to this product, clients will be able to make payments between their XTB accounts instantly. Real-time alerts will support financial control and expense management. The introduction of a virtual wallet with a multi-currency card is another step that illustrates the evolution that XTB has experienced. From an investment platform, well-known among active market participants, to an investment super-application for people who want to manage their finances effectively, both in the short and long term.
In other markets, the product will be introduced gradually over the coming weeks.
In addition, at the end of March 2024, the company launched a new social service, XTB Social, which allows users in selected markets to receive alerts on transactions of selected traders. Clients also receive insights into their portfolios and key statistics on the trades of those they observe. Within XTB Social, client data is completely anonymised and classified based solely on the basis of the investment return achieved or the level of risk taken. In June 2024, the Company decided to suspend this service in the European Union due to the position issued by the Financial Supervision Commission on 29 May this year regarding the conditions for the provision of social trading services by investment firms. In the coming months, following a thorough review of this position, XTB will take a decision on the continuation of the XTB Social service and its future form.
In 2025 and beyond, XTB plans to add other new products to its offering.
The above product roadmap is based on the current knowledge and resources. It is therefore subject to change and modification, including as a results of XTB’s collaboration with third parties.
Dividend
XTB’s dividend policy assumes that the Management Board recommends to the General Meeting of Shareholders the payment of dividend in the amount which takes into account the level of net profit presented in the Company’s standalone annual financial statements and a number of various factors concerning to the Company, including the prospects for further operations, future profits, cash requirements, financial situation, the level of capital adequacy ratios, expansion plans, legal requirements in this respect as well as FSA guidelines. In particular, the Management Board will be guided by the need to ensure an adequate level of the Company’s capital adequacy ratios and the capital required for the Group’s growth when making its dividends payment proposals.
The Management Board maintains that its intention is to recommend to the General Meeting in the future to adopt resolutions on the payment of dividends, taking into account the factors indicated above, in the amount ranging from 50% to 100% of the Company’s standalone net profit for a given financial year. The unit net profit for the nine months of 2024 amounted to PLN 669,2 million.
The levels of XTB’s total capital ratio (IFR) by date in Q1-Q3 2024 are presented in the chart below.
The total capital ratio informs about the ratio of own funds to risk-weighted assets, in other words, it shows whether the brokerage house is able to cover the minimum capital requirement for market, credit, operational and other risks with its own funds. At the end of the third quarter of 2024 the total capital ratio in the Company was 207,0%.
Cash and cash equivalents
XTB invests part of its cash in bank deposits and financial instruments, i.e. government bonds, bonds guaranteed by the State Treasury and corporate bonds guaranteed by the banks. As of 30 September 2024, the XTB Group’s total own cash and bonds amounted to PLN 1 789,3 million, which represents 31,2% of the total balance sheet, of which 1 250,0 million was in cash and PLN 539,3 million was bond
For XTB, the first half of 2024 was a consecutive period of dynamic business development and client base building. As a result, the Group acquired a record 232,3 thousand new clients (an increase of 38,9% y/y), while the number of active clients increased by 50,5% y/y from 307,5 thousand to 462,8 thousand.
XTB’s dynamic operational growth, combined with favourable market conditions, resulted in record financial results in the first half of 2024. The consolidated net profit amounted to PLN 463,0 million compared to PLN 421,0 million in the previous year. Consolidated revenues amounted to PLN 937,8 million (H1 2023: PLN 830,7 million), with operating expenses of PLN 410,4 million (H1 2023: PLN 341,6 million).
Operating income
The first half of 2024, XTB’s revenues reached a record level of PLN 937,8 million (increase by 12,9% y/y). Important factors determining its level were the high volatility on financial and commodity markets in Q1 2024, understood as the occurrence of long and clear trends on stock and commodity markets, a higher number of corrections and trend reversals in Q2 2024, and the constantly growing number of active clients (increase by 50,5% y/y), connected with their high transaction activity, expressed, among other things, in the number of CFD contracts concluded in lots (increase by 8,7% y/y). As a result, the volume of transactions in CFD instruments amounted to 3 931,0 thousand lots (H1 2023: 3 615,5 thousand lots), profitability per lot amounted to PLN 239 (H1 2023: PLN 230).
Looking at XTB’s revenues in terms of the instruments classes responsible for their creation, it can be seen that in the first half of 2024 CFDs based on commodities lead. Their share of the revenue structure in the first half of 2024 was 48,2% (H1 2023: 38,5%). This is partly due to the high profitability of CFD instruments based on gold, natural gas and cocoa prices. The second most profitable asset class was CFD based on index. Their share of the financial instruments revenue structure reached 37,2%, compared to 51,8% a year earlier. This is a consequence of the high returns on CFDs based on the US 100 index, the German DAX (DE40) stock index or the US 500 index. Revenues from currency-based CFD instruments accounted for 10,3% of total revenues, compared to 7,7% in the previous year. The most profitable financial instruments in this class were CFDs based on cryptocurrency Bitcoin, the USDJPY currency pair and the cryptocurrency Ethereum.
XTB places great importance on the geographical diversification of revenues, consistently implementing the strategy of building a global brand. The country from which the Group derives more than 20% of revenues each time is Poland, with a share of 50,9% (H1 2023: 48,7%). Due to the overall share in the Group’s revenues, Poland was separated for presentation purposes as the largest market in terms of revenues in the Group. The Group breaks down its revenues by geographic area according to the country of the XTB office in which the client was acquired. The exception is the Middle East region, which also presents revenues from clients from this market acquired by the subsidiary XTB International Ltd. based in Belize.
XTB puts also strong emphasis on diversification of segment revenues. Therefore the Group develops institutional activities under 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 fluctuations from period to period, analogically to the retail segment, which is typical for the business model adopted by the Group.
Expenses
Operating expenses in the first half of 2024 amounted to PLN 410,4 million, PLN 68,8 million higher than in the same period of the previous year (H1 2023: PLN 341,6 million). The most significant changes were in:
• salaries and employee benefits, an increase of PLN 23,5 million, mainly due to an increase in the number of employees;
• marketing costs, an increase of PLN 20,1 million, mainly due to higher expenses for online marketing campaigns;
• commission costs, an increase of PLN 14,9 million, as a result of higher amounts paid to payment service providers through which clients deposit their funds on transaction accounts;
• other external services, an increase of PLN 5,6 million, mainly due to higher expenses for IT systems and licenses (an increase of PLN 5,2 million y/y).
On a q/q basis, operating costs were slightly higher than in the first quarter of 2024.
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-fourth 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-third compared to the previous year.
The final level of operating costs will depend on the rate of employment growth and the level of variable remuneration components paid to employees, the level of marketing expenditure, the dynamics of geographical expansion into new markets and the impact of possible new regulations and other external factors on the level of revenues generated by the Group.
The level of marketing expenditure will depend on its impact on the Group’s results and profitability, the rate of international expansion and the degree of client responsiveness to the actions taken. Employment growth in the Group is driven by its dynamic development in both on the existing and new markets. The level of variable remuneration components is influenced by the Group’s results.
Clients
XTB has a solid foundation in the form of constantly growing client base and the number of active clients. In the first half of 2024 Group reported another record in this area, acquiring 232 316 new clients compared to 167 200 a year earlier, which means an increase of 38,9%. Similarly to the number of new clients, the number of active clients was also record high. It increased from 307 511 to 462 771, i.e. by 50,5% y/y.
The Board’s priority is to continue to grow the client base, which will strengthen XTB’s position in the global marketplace by reaching the mass client 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 Management Board’s target for 2024 is to acquire an average of at least 65-90 thousand new clients per quarter. As a result of the activities implemented, the Group acquired a total of 129,7 thousand new clients in the first quarter of 2024, and 102,6 thousand new clients in the second quarter of this year. In turn, 36,2 thousand new clients were acquired in July 2024 and 19,8 thousand new clients were acquired in the first 15 days of August 2024.
XTB’s marketing activities are essential for driving the company’s growth. By collaborating with athletes who serve as XTB ambassadors, the Group enhances its market position and boosts brand recognition in key global markets. In the first half of 2024, Conor McGregor and Iker Casillas starred in XTB advertising campaigns (though Casillas’ ambassadorial role ended on June 30, 2024).
Furthermore, in the second quarter, XTB signed an agreement with a new ambassador who will feature in XTB advertisements later this year. Once again, XTB aims to collaborate with a globally renowned athlete who commands a social media following of over 120 million people worldwide.
All-in-One Investment App
The Management Board’s ambition is for XTB to become the leading all-in-one investment application in Europe, providing clients with easy, smart and efficient ways to trade, invest and save, while giving them instant access to their money.
XTB’s transformation from a CFD broker to an All-in-One investment application has progressed over the past few years. This will continue into 2024 and beyond.
Dividend
XTB’s dividend policy assumes that the Management Board recommends to the General Meeting of Shareholders the payment of dividend in the amount which takes into account the level of net profit presented in the Company’s standalone annual financial statements and a number of various factors concerning to the Company, including the prospects for further operations, future profits, cash requirements, financial situation, the level of capital adequacy ratios, expansion plans, legal requirements in this respect as well as FSA guidelines. In particular, the Management Board will be guided by the need to ensure an adequate level of the Company’s capital adequacy ratios and the capital required for the Group’s growth when making its dividends payment proposals.
The Management Board maintains that its intention is to recommend to the General Meeting in the future to adopt resolutions on the payment of dividends, taking into account the factors indicated above, in the amount ranging from 50% to 100% of the Company’s standalone net profit for a given financial year. The unit net profit for the first half of 2024 amounted to PLN 457,5 million.
The levels of the total capital ratio (IFR) of XTB on individual days in the first half of 2024 are presented in the chart below.
The total capital ratio informs about the ratio of own funds to risk-weighted assets, in other words, it shows whether the brokerage house is able to cover the minimum capital requirement for market, credit, operational and other risks with its own funds. At the end of the first half of 2024 the total capital ratio in the Company was 222,0%.
Cash and cash equivalents
XTB invests part of its cash in bank deposits and financial instruments, i.e. government bonds, bonds guaranteed by the State Treasury and corporate bonds guaranteed by the banks. As of 30 June 2024, the XTB Group’s total own cash and bonds amounted to PLN 1 675,2 million, which represents 32,2% of the total balance sheet, of which 1 249,6 million was in cash and PLN 425,6 million was bonds.
