– In 2024, XTB clients completed 167.6 million transactions, 18% more than the previous year.
– Client assets at the end of 2024 amounted to PLN 27.4 billion (+58.4% YoY). The largest and fastest-growing category consists of stocks and ETPs deposited by clients in XTB accounts, whose value increased by 126.6% YoY, reaching PLN 13.7 billion by the end of 2024.
– As of the end of February 2025, XTB had 1.49 million clients worldwide.
– Pension products garnered significant interest from clients in Poland – of the 72,000 new IKE accounts opened in 2024 across all brokerage houses, nearly 40% belong to XTB clients.
– Last year, nearly 80% of new clients from the EU began investing in XTB by purchasing stocks, ETPs, or opening an investment plan.
XTB published its annual report summarizing key financial and operational results achieved in 2024. In many respects, it was a record year for the company: PLN 1.87 billion in consolidated operating income (+15.8% YoY), PLN 856.9 million in net profit (+8.3% YoY), and PLN 986.7 million in operating profit (+6.8% YoY).
Growth in client base, their investment activity, and assets
In 2024, XTB acquired 498,000 new clients, representing a 59.8% year-over-year increase. The company’s goal is to acquire between 150,000 to 210,000 new clients per quarter. In January and February of this year alone, 137,752 new clients joined XTB. As of the end of February, XTB had 1.49 million clients.
The transactional activity of XTB clients also increased, with clients completing 167.6 million transactions in 2024, 18% more than the previous year.
Last year, nearly 80% of new clients in the European Union began investing by purchasing stocks, ETPs, or opening an investment plan. This aligns with XTB’s strategic goal of building a universal investment app that will become the first choice for individuals who want to manage their finances.
In Poland, there was significant interest from clients in pension products, specifically the IKE account. In 2024, XTB clients opened 29,000 such accounts, accounting for 40% of all new IKE accounts opened in brokerage houses. It is worth noting that the IKE account was introduced by XTB only at the beginning of October 2024.
“We are pleased with the results achieved in 2024. We are happy with both the increasing number of new clients and the growth in their transactional activity. Our passive investment offering, including investment plans and interest on free funds, is very competitive in many of the markets we operate in, which positively impacts new client acquisition. We are also effectively reaching younger investor groups who stay with us for the long term,” said Paweł Szejko, CFO at XTB.
At the end of 2024, XTB’s client assets totaled PLN 27.4 billion (+58.4% YoY). The largest increase (+126.6%) was observed in the nominal value of instruments deposited by clients in XTB accounts, which amounted to PLN 13.7 billion. The value of client cash increased by 65.5% to over PLN 3.7 billion, while the nominal value of derivative instruments rose by PLN 1.1 billion to PLN 10 billion.
Growing share of the Middle East in revenue structure
Central and Eastern Europe remains the largest contributor to XTB’s revenue, with its share rising to 63.9% in 2024 (+3.1% YoY). By the end of 2024, revenue from this region grew by 21.7% to PLN 1.96 billion. Poland plays a key role in this region, with revenue from this market increasing by 26.5% YoY, showing that XTB has the potential for further growth in markets where its position is already dominant.
Western Europe is a region where the company plans to intensively expand in 2025. The increase in revenue from this region will be supported by the expansion of the product offering and the introduction of ISA accounts in the UK (Q4 2024), with plans to add PEA accounts for clients in France in the coming weeks.
The most dynamically developing region for XTB remains the Middle East, whose share of the company’s revenue at the end of 2024 reached 10.9%, compared to 7.3% a year earlier. Revenue from this region increased by 72.5% YoY to PLN 203.1 million.
“We see a very large potential in the Middle East region, which is one of the fastest-growing markets for our operations. In the coming days, we will open a new, larger office in the United Arab Emirates, and acquiring a new license opens up a range of opportunities for promoting our products and optimizing costs. The Asian market also holds significant growth potential, where we have obtained a license that will allow us to offer our products – stocks and ETPs – to clients,” commented Paweł Szejko, Board Member for Finance at XTB.
2025.03.03
XTB ranked among the top companies in the WIG30 for outstanding investor relations!
The “Parkiet” daily recently published the results of its annual study on companies’ communication with the market. We are pleased to announce that we achieved third place among the WIG30 companies in the rating of individual investors, exceeding the average score. Additionally, we ranked among the top ten in the financial institutions category, which confirms the high level of XTB’s communication with the market. Our results reflect a very positive outcome, combining the ratings from both groups of survey participants.
Trust is one of the most essential components of a functioning capital market. Building long-term, solid relationships with investors is a key part of our mission. Paweł Szejko, CFO and member of the XTB management board, commented:
– The success of IR activities is based on several factors. The first is transparency and openness in communication, as well as equal access to information. It may seem obvious, but without this foundation it is difficult to talk about valuable communication.
Thank you for recognizing my efforts in such a meaningful way!
You can read more on Parkiet (the article is in Polish).
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).
Looking at XTB’s revenues in terms of the instruments classes responsible for their creation, it can be seen that in the third quarter of 2024 CFDs based on indexes leaded. Their share in the revenue structure in the period analysed 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) or the US 500 index. The second most profitable asset class was CFD 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 are quoted. 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 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.
The first quarter of 2024 was a consecutive period of dynamic business development and building a client base for XTB. Clear long trends in the stock and commodity markets made trading in financial instruments further strongly attractive to many investors. As a result, the Group acquired a record 129,7 thousand new clients, which is an increase by 24,5% y/y, while the number of active clients increased by 45,5% y/y from 260,1 thousand to 378,5 thousand.
XTB’s dynamic operational growth and favourable market conditions translated into very strong financial results in the first quarter of 2024. Consolidated net profit amounted to PLN 302,7 million compared to PLN 302,8 million a year earlier. Consolidated revenues amounted to PLN 555,9 million (Q1 2023: PLN 537,6 million) with operating expenses of PLN 205,0 million (Q1 2023: PLN 184,2 million).
Operating income
In the first quarter of 2024, XTB reached a record level of revenues of PLN 555,9 million (increase by 3,4% y/y). Significant factors determining the level of revenues were high volatility in the financial and commodity markets and the constantly growing number of active clients (increase by 45,5% y/y), connected with their high transaction activity expressed in the number of CFD contracts concluded in lots (increase by 6,5% y/y). As a consequence the transaction volume in CFD instruments amounted to 1 964,9 thousand lots (Q1 2023: 1 845,2 thousand lots), a profitability per lot amounted to PLN 283 (Q1 2023: PLN 291).
Looking at XTB’s revenues in terms of the classes of instruments responsible for their creation, it can be seen that in the first quarter of 2024 CFDs based on commodities leaded. Their share of the revenue structure in the first quarter of 2024 was 48,7% (Q1 2023: 48,8%). This is due in part to the high profitability of CFD instruments based on natural gas, gold and cocoa prices. The second most profitable asset class was CFD based on index. Their share of the revenue structure on financial instruments reached 41,9%, compared to 45,3% a year earlier. This is a consequence of the high yield on CFDs based on the German DAX (DE30) stock index, the US 100 index or the US 500 index. Revenue on currency-based CFD instruments accounted for 6,7% of total revenue, compared to 4,2% a year earlier. The most profitable financial instruments in this class were CFDs based on the bitcoin cryptocurrency and the USDJPY currency pair.
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 51,8% (Q1 2023: 52,1%). 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
The operating costs in the first quarter of 2024 amounted to PLN 205,0 million and were PLN 20,7 million higher compared to the same period a year earlier (Q1 2023: PLN 184,2 million). The most important changes occurred in:
• costs of remuneration and employee benefits, an increase by PLN 9,5 million, mainly due to an increase in employment;
• commission costs, an increase by PLN 6,2 million resulting from higher amounts paid to payment service providers through which clients deposit their funds in transaction accounts;
• other external services, an increase by PLN 2,9 million as a result of mainly higher expenditure on support database systems (increase by PLN 3,1 y/y).
In q/q terms, operating costs increased by PLN 17,3 million, mainly due to higher online and offline marketing expenses by PLN 12,0 million, higher commission expenses by PLN 3,1 million resulting from higher amounts paid to payment service providers through which customers deposit their funds in transaction accounts.
Due to the dynamic development of XTB, the Management Board estimates that in 2024 the total costs of operating activities may be even higher by about a one-fourth to the level we observed in 2023. The priority of the Management Board is to further increase the client base and build a global brand. As a consequence of the implemented activities, expenditures on marketing may increase by about one-fifth compared to the previous year.
The final level of operating costs will depend on employment growth rate and the level of variable remuneration components paid to employees, the level of marketing expenditures, the dynamics of geographical expansion into new markets and the impact of potential product interventions and other external factors on the level of revenues generated by the Group.
The level of marketing expenditures depends on their impact on the Group’s results and profitability, the rate of foreign expansion and the degree of client responsiveness to the actions taken. The employment growth in the Group will be driven by its dynamic development, both on the existing and new markets. The amount 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 quarter of 2024 Group reported another record in this area, acquiring 129 747 new clients compared to 104 206 a year earlier, which means an increase of 24,5%. Similarly to the number of new clients, the number of active clients was also record high. It increased from 260 095 to 378 476, i.e. by 45,5% 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 objective for 2024 is to acquire, on average, at least 65-90 thousand new clients per quarter. As a result of the implemented activities, the Group acquired in the first quarter of this year 129,7 thousand new clients, while in April 2024 35,6 thousand new clients were acquired.
Marketing is XTB’s second engine. To strengthen its market position and global visibility, the Group works with successful athletes who are XTB brand ambassadors, such as Conor McGregor and Iker Casillas. A new brand ambassador is planned for 2024.
All-in-One Investment App
The Management Board’s ambition is for XTB to become the leading all-in-one investment application in Europe, offering its clients 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 a universal 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.
In order to achieve it, XTB plans to strengthen its product offer and implement enhancements aimed at improving customer experience of both – the desktop platform as well as the mobile app. 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.
The first quarter of 2024 was marked with broadening of the passive product portfolio. Investment Plans, the ETF-based product allowing to invest in 350 ETFs, was enhanced with the autoinvest feature enabling clients to decide how often and how much money they want to invest regularly in their individual portfolios. As a result, the product has become even more attractive for clients looking for mid- and long-term investment opportunities when compared to solutions provided by XTB competitors.
In addition, at the end of March 2024, the Company launched a new social service, XTB Social, which allows users to receive trade alerts from 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 fully anonymised and classified based solely on the investment return achieved or the level of risk accepted.
In the upcoming quarters, passive investment offering will be supplemented by bonds. XTB clients will gain access to another asset class: government bonds (i.e. issued by Poland, the US or Germany) and corporate bonds issued by renowned, global companies with a relatively stable rating (from AAA to BBB-). Thanks to leveraging the same mechanism as in the case of fractional shares, investing in bonds will be possible with only a small amount of money. The third quarter of 2024 should see the launch of a product long awaited by clients in the Polish market – IKE and IKZE accounts. Currently, only a fraction of adults in Poland use it but the interest is growing every year. As XTB sees potential in the further growth of long-term investment products, this offer will be implemented also in other global markets, including the UK, where the company plans to act as ISA Manager.
At the end of 2024, XTB plans to launch a product that will accelerate its transformation towards the everyday platform for managing personal finance. Virtual wallet and a multi-currency card will enable XTB clients to make instant local payments, transfers, card transactions and currency exchange. Thanks to this product, clients will be able to make payments between their XTB accounts instantly. Real-time notifications will support finance control and expense management. In 2025 and in the following years, XTB plans to add other new products to its offer.
The above product plan is based on the current knowledge and resources. Therefore, it can be modified and changed, including due to the reasons resulting from XTB’s cooperation with third parties.
Basically FinTech
XTB as a technology entity operating in the financial sector, conducts continuous work involving the design and development of highly innovative, comprehensive solutions in the field of transactions and online investments in financial instruments (“research and development”). This makes the Company a FinTech organization. The purpose of the aforementioned work is to develop innovative technologies and solutions to further develop the product offering in particular. XTB owns of a number of proprietary technological solutions, including the modern xStation trading platform.
The work realised in Q1 2024 was aimed at developing the tools necessary for the efficient functioning of XTB’s trading systems, effective execution of orders, efficient onboarding of new clients and further development of tools to support the company’s internal processes as a result of identified development needs. The research areas focused on functionalities and operational security of systems, processes and databases. There was also research and development work focused on the development of new electronic trading systems.
In view of the business strategy adopted, which is based on the development of new technologies, an IT Development Department has been separated within the structure of XTB, in which a significant part of the staff is made up of people performing research and development work. The work has a significant, almost strategic impact on the business activities conducted by XTB. This not only translates into the level of revenue generated by XTB but is also crucial in the process of building and maintaining a highly competitive position of the Company on the global capital market.
The table below presents the number of people employed in the IT Development Department and the costs incurred by the department:
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 quarter of 2024 amounted to PLN 300,1 million.
On 23 April 2024, the Management Board of XTB S.A. adopted a resolution pursuant to which it recommended to the Supervisory Board and the General Meeting of the Company that the standalone net profit for 2023 in the amount of PLN 787,1 million be distributed as follows:
• by paying a dividend of PLN 590,2 million, i.e. PLN 5,02 per share;
• retention of the remaining part of the profit in the amount of PLN 196,9 million at the disposal of the Company, allocating it to reserve capital.
The levels of the total capital ratio (IFR) of XTB on individual days in Q1 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 quarter 2024 the total capital ratio in the Company was 139,0%.
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 March 31, 2024 the total value of own cash and bonds in the XTB Group was PLN 2 128,4 million, out of which PLN 1 332,3 million was cash and PLN 796,1 million was bonds.
The year 2023 was a further period of dynamic business development and building a client base for XTB. The continued volatility in the financial and commodity markets and a high inflationary environment meant that trading in financial instruments continued to be a very attractive proposition for many investors. As a result, the Group acquired a record 312,0 thousand new clients and the number of active clients increased by 51,0% y/y from 270,6 thousand to 408,5 thousand.XTB’s dynamic operational growth, combined with favourable market conditions, resulted in record financial results for 2023 year. Consolidated net profit amounted to PLN 791,2 million compared to PLN 766,1 million a year earlier. Consolidated revenues amounted to PLN 1 588,3 million (2022 r.: PLN 1 444,2 million) with operating expenses of PLN 694,2 million (2022 r.: PLN 558,6 million).
Revenues
In 2023, XTB reported record increase in revenue from PLN 1 444,2 million to PLN 1 588,3 million, i.e. by 10,0% y/y. Significant factors determining their level were high volatility in the financial and commodity markets and the constantly growing number of active clients (increase by 51,0% y/y), connected with their high transaction activity expressed in the number of CFD contracts concluded in lots (increase by 16,5% y/y). As a consequence, the transaction volume in CFD instruments amounted to 7 416,5 thousand lots (2022: 6 365,6 thousand lots), and a profitability per lot amounted to PLN 214 (2022: PLN 227).
The Group’s operating income is generated from: (i) spreads (the differences between the “offer” price and the “bid” price); (ii) fees and commissions charged by the Group to its clients; (iii) swap points charged (being the amounts resulting from the difference between the notional forward rate and the spot rate of a given financial instrument); and (iv) net results (gains offset by losses) from Group’s market making activities. The table below presents percentage share of income categories in gross gain on transactions in financial instruments .
Looking at XTB’s revenues in terms of the classes of instruments responsible for their generation, it can be seen that in 2023 CFDs based on index were in the lead. Their share in the structure of revenues on financial instruments reached 47,8% compared to 46,4% in the previous year. This is due to the high profitability of CFD instruments based on the US 100 index, the German DAX index (DE30) or the US 500 index. The second most profitable asset class was CFD based on commodities. Their share in the revenue structure in 2023 was 39,9% (2022: 33,8%). This is due to the high profitability of CFD instruments based on natural gas, gold and oil prices. Revenues from CFDs based on currencies accounted for 10,1% of total revenues, compared to 17,0% in the previous year, with the most profitable financial instruments in this class being CFDs based on the EURUSD and USDJPY currency pairs.
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.
Operating expenses
Operating costs in 2023 amounted to PLN 694 231 thousand and were PLN 135 664 thousand higher than in the previous year (2022: PLN 558 567 thousand). The most significant changes were in:
• costs of remuneration and employee benefits, an increase by PLN 67 113 thousand, mainly due to an increase in the number of employees and higher provisions for variable remuneration components (bonuses);
• marketing costs, an increase of PLN 41 555 thousand resulting mainly due to higher expenses for online marketing campaigns;
• other external services, an increase by PLN 14 174 thousand, mainly as a result of higher expenses for: (i) IT systems and licenses (up by PLN 7 809 thousand y/y); (ii) legal and consulting services (up by PLN 3 404 thousand y/y) and (iii) IT support services (up by PLN 2 015 thousand y/y).
• commission costs, which increased by PLN 7 451 thousand as a result of higher amounts paid to payment service providers through which clients deposit their funds on transaction accounts.
On a quarter-on-quarter basis, operating expenses increased by PLN 22 703 thousand mainly due to PLN 10 496 higher online marketing expenses, PLN 6 826 thousand higher salary and employee benefits expenses, mainly as a result of an increase in the number of employees, and PLN 3 679 thousand higher commission expenses, as a result of higher amounts paid to payment service providers through which clients deposit their funds on transaction accounts.
As a result of XTB’s growth, the Board estimates that total operating expenses in 2024 could be up to a quarter higher than what we saw in 2023. The Board’s priority is to continue to grow its client base and build a global brand. As a result of ongoing activities, marketing expenses could increase by around a third compared to last year.
The final level of operating expenses will depend, in particular, on the rate of employment growth and the level of variable remuneration paid to employees, the level of marketing expenditure, the rate 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 an assessment of its impact on the Group’s performance and profitability, the pace of overseas expansion and the degree of customer responsiveness to the activities undertaken. Employment growth in the Group will be contributed by its dynamic growth, both in existing and new markets. In turn, variable remuneration components will be influenced by the Group’s performance.
Clients
XTB has a solid foundation in the form of constantly growing client base and the number of active clients. In 2023, the Group recorded a further record in this area, acquiring 311 971 new clients compared to 196 864 a year earlier, an increase of 58,5%. Similar to the number of new clients, the number of active clients was also a record. It increased from 270 560 to 408 528, i.e. by 51,0% y/y.
These activities are supported by a number of initiatives, including the Investment Plans that have been introduced, which allow savings to be invested intelligently. Thanks to the new product, clients can easily set up their Plan and invest specific funds – starting from the amount of PLN 50. It is possible to launch up to 10 Investment Plans at the same time. Setting up and running Investment Plans at XTB is completely free of charge, as long as the monthly turnover does not exceed EUR 100 00, in which case the commission is 0,2%, minimum EUR 10.
In addition, from April 2023, XTB allows investment in selected European and non-European markets in company shares and ETFs at a fraction of their price. Fractional shares offer greater flexibility and control over investments. This makes it easier for clients to tailor their investment portfolio to their individual financial goals and risk tolerance. In November 2023, XTB introduced another new feature, i.e. interest on free funds in client accounts. The interest is calculated daily and paid to the account at the end of the month. Interest is offered for the following currencies: PLN, EUR, USD, GBP, CZK and RON.
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 objective for 2024 is to acquire an average of at least 65-90 thousand new clients per quarter. In January 2024, the Group acquired a total of 41,6 thousand new clients, in February 2024: 41,2 thousand new clients, and in the first 25 days of March 2024: 39,1 thousand new clients. Consequently, in March 2024, the total number of XTB Group clients exceeded 1 million.
Marketing is XTB’s second engine. To strengthen its market position and global visibility, the Group works with successful athletes who are XTB brand ambassadors, such as Conor McGregor and Iker Casillas. A new brand ambassador is planned for 2024.
All-in-One Investment App
The Management Board’s ambition is for XTB to become the leading all-in-one investment application in Europe, offering clients 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 a universal investment application has progressed over the past few years. This will continue into 2024 and beyond.
Product plan
In 2024, XTB will continue to focus on acquiring new clients and expanding the target group to be able to reach potential users interested in investing and also, more broadly, financial products and finance management.
In order to achieve it, XTB plans to strengthen its product offer and implement enhancements aimed at improving customer experience of both – the desktop platform as well as the mobile app. 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.
The beginning of 2024 was marked with broadening of the passive product portfolio. Investment Plans, the ETF-based product allowing to invest in 350 ETFs, was enhanced with the autoinvest feature enabling clients to decide how often and how much money they want to invest regularly in their individual portfolios. As a result, the product has become even more attractive for clients looking for mid- and long-term investment opportunities when compared to solutions provided by XTB competitors.
In the upcoming quarters, passive investment offering will be supplemented by bonds. XTB clients will gain access to another asset class: government bonds (i.e. issued by Poland, the US or Germany) and corporate bonds issued by renowned, global companies with a relatively stable rating (from AAA to BBB-). Thanks to leveraging the same mechanism as in the case of fractional shares, investing in bonds will be possible with only a small amount of money.
At the same time, social trading will be launched. It will enable XTB clients to follow the transactions made by other users, whose investment strategy they find interesting or eye-catching. As part of this product, client data will be anonymized and classified based on the return on investment achieved as well as their risk appetite.
Third quarter of 2024 will mark the debut of the product that was long awaited by Polish clients – namely IKE and IKZE accounts. Currently, only a fraction of adults in Poland use it but the interest is growing year on year. As XTB sees potential in the further growth of long-term investment products, this offer will be implemented also in other global markets, including the UK, where the company plans to act as ISA Manager.
At the end of 2024, XTB plans to launch a product that will accelerate its transformation towards the everyday platform for managing personal finance. Virtual wallet and a multi-currency card will enable XTB clients to make instant local payments, transfers, card transactions and currency exchange. Thanks to this product, clients will be able to make payments between their XTB accounts instantly. Real-time notifications will support finance control and expense management.
In 2025 and beyond, XTB plans to add other new products to its offerings.
The above product plan is based on the current knowledge and resources. Therefore, it can be modified and changed, including due to the reasons resulting from XTB’s cooperation with third parties.
Basically FinTech
XTB as a technology entity operating in the financial sector, conducts continuous work involving the design and development of highly innovative, comprehensive solutions in the field of transactions and online investments in financial instruments (“research and development”). This makes the Company a FinTech organization. The purpose of the aforementioned work is to develop innovative technologies and solutions to further develop the product offering in particular. XTB owns of a number of proprietary technological solutions, including the modern xStation trading platform.
The research and development work carried out in 2023 was aimed at developing the tools necessary for the efficient operation of XTB’s trading systems, effective execution of orders, efficient process of acquiring new customers (so-called onboarding) and further development of tools to support the company’s internal processes as a result of identified development needs. The research areas focused on functionalities and operational security of systems, processes and databases. There was also research and development work focused on the development of new electronic trading systems.
In view of the business strategy adopted, which is based on the development of new technologies, an IT Development Department has been separated within the structure of XTB, in which a significant part of the staff is made up of people performing research and development work. The work has a significant, almost strategic impact on the business activities conducted by XTB. This not only translates into the level of revenue generated by XTB but is also crucial in the process of building and maintaining a highly competitive position of the Company on the global capital market.
The table below presents the number of people employed in the IT Development department and the costs incurred in related to the design and development of highly innovative, comprehensive solutions in the field of transactions and online investment solutions:
In the third quarter of 2023 XTB reported a consolidated net profit of PLN 121,1 million compared to PLN 236,2 million a year earlier. Consolidated revenue amounted to PLN 275,7 million (Q3 2022: PLN 391,3 million) and operating expenses amounted to PLN 165,0 million (Q3 2022: 132,5 million). During the period, the Group acquired 67,5 thousand new clients, while the number of active clients amounted to 223,1 thousand compared to 151,7 thousand a year earlier, which is an increase of 47,1% y/y.
Revenues
In the third quarter of 2023, the Group’s revenues decrease by 29,5% y/y, i.e. from PLN 391,3 million to PLN 275,7 million. This decrease was contributed by a lower profitability per lot of PLN 108, amounting to PLN 137 (Q3 2022: PLN 245). Significant factors determining their level were lower volatility in the financial and commodity markets in the third quarter of 2023, understood as the presence of long and clear trends, compensated in part by an increase in the number of active clients (increase of 47,1% y/y), combined with their high trading activity represented by the number of CFD contracts concluded in lots. Consequently, the transaction volume in CFD instruments amounted to 2 011,5 thousand lots (Q3 2022: 1 594,6 thousand lots).
XTB has a solid foundation in the form of constantly growing client base and the number of active clients. From the beginning of the year, the Group recorded a further record in this area, acquiring 234 704 new clients compared to 145 826 a year earlier, an increase of 60,9%. Similar to the number of new clients, the number of active clients was also a record, increasing by 47,3% y/y, from 224 339 thousand to 330 357.
The priority of the Management Board is to further increase the client base leading to the strengthening of XTB’s global position by reaching the mass client with its product offerings. The ambition of the Management Board in 2023 is to acquire, on average, at least 40-60 thousand new clients per quarter. These activities are supported by a number of initiatives, including the first passive investment product introduced in September 2023, which allows clients to build up to 10 strategies based on ETFs. Each strategy can consist of up to 9 ETFs. Investors have a choice of over 350 exchange traded funds currently available on the xStation 5 platform. The client determines the percentage of each ETF included in the plan.
The product is currently launched in 6 markets: Czech Republic, Slovakia, Germany, Portugal, Romania and Italy. It will also be launched in Spain and Poland in the fourth quarter of this year. According to the company, the product is attracting considerable interest despite the lack of significant marketing activity around it.
In addition, from April 2023, XTB will allow you to invest in selected European and non-European markets in company shares and ETFs at a fraction of their price. Fractional shares offer greater flexibility and control over investments. This makes it easier for clients to tailor their investment portfolio to their individual financial goals and risk tolerance.
Following the realized activities, the Group acquired a total of 104,2 thousand new clients in the first quarter of 2023, in the second quarter of this year 63,0 thousand new clients, and more than 67,5 thousand new clients in the third quarter of this year. In turn, 26,3 thousand new clients were acquired in October 2023.
In order to strengthen its market position and global recognition, XTB cooperates with titled athletes who are XTB brand ambassadors. In February 2022, an advertising campaign was introduced featuring titled combat sports athlete, the first Polish woman in the UFC organization and a champion in the organization, as well as three-time world champion in Thai boxing – Joanna Jędrzejczyk.
In September 2022, promotional activities were launched featuring Conor McGregor, another XTB brand ambassador – the Irish mixed martial arts (MMA) and UFC fighter. Conor McGregor is the biggest combat sports star in the world and the highest paid athlete according to a list compiled by Forbes. In addition to being a fighter, Conor is also a successful business person as an investor in number of interesting projects.
Jiří Procházka, a Czech fighter, one of the one of the top MMA fighters, UFC champion, also became the face of XTB brand. This cooperation ended in May 2023.
Iker Casillas, former Real Madrid footballer, considered one of the best goalkeepers of all time, also joined the XTB ambassador team in 2022. He currently serves as deputy general manager of the Real Madrid Foundation.
XTB, thanks to its cooperation with such celebrities as Joanna Jędrzejczyk, Conor McGregor, Jiří Procházka or Iker Casillas, has started to promote the investment solutions it offers, in particular convincing that investing in different types of assets is accessible to everyone, with tools that make it easier to enter the world of investment into the world of investment: through daily market analyses, as well as numerous educational materials.
Looking at XTB’s revenues in terms of the classes of instruments responsible for their creation, it can be seen that commodity based CFDs led the way in the third quarter of 2023. Their share in the structure of revenues on financial instruments reached 47,7%. This is a consequence of high profitability on CFD instruments based on oil, gold and wheat quotes. The second most profitable asset class was CFD instruments based on indices. Their share in the revenue structure in the third quarter of 2023 was 25,4%. The most profitable instruments in this class were CFDs based on the US 100 and the US 500 index. Revenue on CFD instruments based on currencies accounted for 22,2% of total revenue, where the most profitable instruments in this class were CFDs based on the EURUSD, USDJPY and GBPUSD currency pairs.
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 20,7% in the third quarter of 2023 (Q3 2022: 49,3%). 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.
The business model used by XTB combines features of the agency model and the market maker model, in which the Company is a party to transactions concluded and initiated by clients. XTB does not engage, in proprietary trading for its own account in anticipation of changes in the price or value of the underlying instruments (so-called proprietary trading).
The hybrid business model used by XTB also uses an agency model. For example, on the majority of trading in CFD instruments based on cryptocurrencies, XTB hedges these transactions with third-party partners, virtually ceasing to be the other party to the transaction (legally, of course, it is still XTB). The Company’s fully automated risk management process limits exposure to market changes and forces it to hedge positions in order to maintain appropriate levels of capital requirements. In addition, XTB executes directly on regulated markets or alternative trading venues all transactions in shares and ETFs and CFDs instruments based on these assets. XTB is not a market maker for this class of instruments.
It is inherent in XTB’s business model that revenues are highly volatile from period to period. Operating results are affected primarily by: (i) volatility on financial and commodity markets; (ii) the number of active clients; (iii) the volume of their transactions in financial instruments; (iv) general market, geopolitical and economic; (v) competition in the FX/CFD market and (vi) the regulatory environment.
As a general rule, the Group’s revenues are positively affected by higher activity in the financial and commodity markets due to the fact that in such periods see higher levels of trading by the Group’s clients and higher profitability per lot. Periods of clear and long market trends are favourable for the Company and it is at such times it achieves the highest revenues. Therefore, the high activity of the financial and commodities markets generally leads to increased trading volume on the Group’s trading platforms. Conversely, a decrease in this activity and the related decrease in trading activity of the Group’s clients generally leads to a decrease in the Group’s operating income. Accordingly, the Group’s operating income and profitability may decline during periods of low activity in the financial and commodity markets. In addition, a more predictable trend may emerge in which the market moves in a limited price range. This leads to market trends that can be predicted with a higher probability than in the case of larger directional movements in the markets, which creates favourable conditions for trading within a narrow market range (range trading). In this case, a higher number of profitable trades are observed for clients, leading to a reduction in the Group’s market making result.
Volatility and market activity is driven by a number of external factors, some of which are market specific and some of which may be linked to general macroeconomic conditions. It can significantly affect the Group’s revenues in subsequent quarters. This is characteristic of the Group’s business model.
Expenses
In the third quarter of 2023 operating expenses amounted to PLN 165,0 million and were higher PLN 32,4 million to the same period a year earlier (Q3 2022 r.: PLN 132,5 million). The most significant changes occurred in:
• costs of salaries and employee benefits, an increase of PLN 14,7 million mainly due to the increase in employment;
• marketing costs, an increase of PLN 10,0 million mainly due to higher expenditures on marketing online and offline campaigns;
• other external services, an increase by PLN 2,8 million as a result of mainly higher expenditure on: (i) legal and advisory services (increase by PLN 1,6 million y/y); (ii) IT systems and licenses (increase by PLN 1,0 million y/y).
In q/q terms, operating costs increased by PLN 7,6 million mainly due to PLN 3,8 million higher offline marketing expenses and PLN 2,3 million higher salary and employee benefits expenses, mainly resulting from an increase in employment, as well as 0,7 million higher commission expenses resulting from higher amounts paid to payment service providers through which clients deposit their funds on transaction accounts.
As a result of XTB’s rapid growth, the Board estimates that total operating expenses in 2023 could be as much as a quarter higher than what we saw in 2022. The Management Board’s priority is to further increase the client base and build a global brand. As a consequence of the ongoing activities, marketing expenditure may increase by less than a fifth compared to last year.
The final level of operating expenses will depend, in particular, on the rate of employment growth and the amount of variable remuneration paid to employees, on the level of marketing expenses, on the rate of geographical expansion into new markets and on the impact of possible new regulations and other external factors on the level of revenues generated by the Group.
The level of marketing expenses will depend on an assessment of its impact on the Group’s performance and profitability, the pace of overseas expansion and the degree of client responsiveness to the actions undertaken. Employment growth in the Group will be contributed by its dynamic growth, both in existing and new markets. In turn, variable remuneration components will be influenced by the Group’s performance.
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 reiterates that its intention is to recommend the General Meeting in the future to adopt resolutions on the payment of dividend, taking into account the factors indicated above, in an amount ranging from 50% to 100% of the Company’s standalone net profit for a given financial year. The standalone net profit for the nine-months period of 2023 amounted to 540,6 million.
The levels of the total capital ratio (IFR) of XTB on individual days in Q1-Q3 2023 are presented in the chart below.
At the end of the third quarter of this year the total capital ratio in the Company amounted to 174,2%. 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.
Cash and cash equivalents
XTB invests part of its cash in bank deposits and in financial instruments with a 0% risk weight, i.e. in treasury bonds and bonds guaranteed by the State Treasury. As at September 30, 2023 the total value of own cash and bonds in the XTB Group was PLN 1 629,1 million, which PLN 1 236,4 million was cash and PLN 392,7 million for bonds.
In the first half of 2023 XTB reported a consolidated net profit of PLN 421,0 million compared to PLN 479,6 million a year earlier. Consolidated revenue amounted to PLN 818,9 million ( H1 2022: PLN 836,2 million), and operating expenses amounted to PLN 341,6 million (H1 2022: PLN 267,8 million). During the period, the Group acquired a record 167,2 thousand new clients, while the number of active clients increased by 44,4% y/y from 190,1 thousand to 274,5 thousand.
Revenues
In the first half of 2023, r. the Group’s revenues decreased by 2,1% y/y, from PLN 836,2 million to PLN 818,9 million. Contributing to this decline was a lower profitability per lot of PLN 48, amounting to PLN 226 (H1 2022: PLN 274). This decrease is mainly the results of lower volatility in the financial and commodity markets in Q2 2023, compensated in part by the constantly increasing number of new clients (increase by 65,5% y/y), combined with their high transactional activity expressed in the number of CFD contracts concluded in lots. Consequently, trading in derivatives amounted to 3 615,5 thousand lots (H1 2022: 3 050,7 thousand lots).
XTB has a solid foundation in the form of constantly growing client base and the number of active clients. In the first half of 2023, the Group recorded another record in this area by acquiring 167 200 new clients compared to 101 030 a year earlier, an increase of 65,5%. Analogous to the number of new clients, the number of active clients was also a record. This rose from 190 088 to 274 450, i.e. an increase of 44,4% y/y.
The priority of the Management Board is to further increase the client base leading to the strengthening of XTB’s market position globally by reaching the with its product offering to the mass client. The ambition of the Management Board in 2023 is to acquire, on average, at least 40-60 thousand new clients per quarter. These activities are supported by a number of initiatives, including the offer, introduced on April 11, 2023, to invest in the Romanian market (expanded in other markets, including: the Portuguese, Czech, Slovak, Polish, Italian or Spanish markets) in company shares and ETFs for a fraction of their price. Fractional shares allow greater flexibility and control over investments. This makes it easier for clients to tailor their investment portfolio to their own unique financial goals and risk tolerance.
Following the ongoing activities, the Group acquired a total of 104,2 thousand new clients in the first quarter of 2023, and nearly 63,0 thousand new clients in the second quarter of this year. In turn, 22,8 thousand new clients were acquired in July 2023.
In order to strengthen its market position and global recognition, XTB cooperates with titled athletes who are XTB brand ambassadors. In February 2022, an advertising campaign was introduced featuring titled combat sports athlete, the first Polish woman in the UFC organization and a champion in the organization, as well as three-time world champion in Thai boxing – Joanna Jędrzejczyk.
In September 2022, promotional activities were launched featuring Conor McGregor, another XTB brand ambassador – the Irish mixed martial arts (MMA) and UFC fighter. Conor McGregor is the biggest combat sports star in the world and the highest paid athlete according to a list compiled by Forbes. In addition to being a fighter, Conor is also a successful business person as an investor in number of interesting projects.
Jiří Procházka, a Czech fighter, one of the one of the top MMA fighters, UFC champion, also became the face of XTB brand. This cooperation ended in May 2023.
Iker Casillas, former Real Madrid footballer, considered one of the best goalkeepers of all time, also joined the XTB ambassador team in 2022. He currently serves as deputy general manager of the Real Madrid Foundation.
XTB, thanks to its cooperation with such celebrities as Joanna Jędrzejczyk, Conor McGregor, Jiří Procházka or Iker Casillas, has started to promote the investment solutions it offers, in particular convincing that investing in different types of assets is accessible to everyone, with tools that make it easier to enter the world of investment into the world of investment: through daily market analyses, as well as numerous educational materials.
Looking at XTB’s revenues in terms of the classes of instruments responsible for their creation, it can be seen that CFDs based on indices led in the first half of 2023. Their share in the structure of revenues on financial instruments reached 51,8%. This is a consequence of the high profitability on CFDs instruments based on the US 100 index, the German DAX stock index (DE30) or US 500 index. The second most profitable asset was CFD instruments based on commodities. Their share in the revenue structure in the first half of 2023 was 38,5%. The most profitable instruments in this class were CFDs based on natural gas and gold quotation. Revenues on CFDs instruments based on currencies accounted for 7,7% of total revenues, where the most profitable financial instruments in this class were those based on the USDJPY and EURUSD currency pair.
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 47,9% (H1 2022 r.: 39,8%). 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.
The business model used by XTB combines features of the agency model and the market maker model, in which the Company is a party to transactions concluded and initiated by clients. XTB does not engage, in proprietary trading for its own account in anticipation of changes in the price or value of the underlying instruments (so-called proprietary trading).
The hybrid business model used by XTB also uses an agency model. For example, on most CFD instruments based on cryptocurrencies, XTB hedges these transactions with third-party counterparties, virtually ceasing to be the other party to the transaction (legally, of course, it is still XTB). The Company’s fully automated risk management process limits exposure to market changes and forces it to hedge positions in order to maintain appropriate levels of capital requirements. In addition, XTB executes directly on regulated markets or alternative trading venues all transactions in shares and ETFs and CFDs instruments based on these assets. XTB is not a market maker for this class of instruments.
XTB’s business model includes high revenue volatility from period to period. Operating results are affected primarily by: (i) volatility in the financial and commodity markets; (ii) the number of active clients; (iii) the volume of their transactions in financial instruments; (iv) general market, geopolitical and economic; (v) competition in the FX/CFD market; and (vi) the regulatory environment.
As a general rule, the Group’s revenues are positively affected by higher activity in the financial and commodity markets due to the fact that in such periods see higher levels of trading by the Group’s clients and higher profitability per lot. Periods of clear and long market trends are favourable for the Company and it is at such times it achieves the highest revenues. Therefore, the high activity of the financial and commodities markets generally leads to increased trading volume on the Group’s trading platforms. Conversely, a decrease in this activity and the related decrease in trading activity of the Group’s clients generally leads to a decrease in the Group’s operating income. Accordingly, the Group’s operating income and profitability may decline during periods of low activity in the financial and commodity markets. In addition, a more predictable trend may emerge in which the market moves in a limited price range. This leads to market trends that can be predicted with a higher probability than in the case of larger directional movements in the markets, which creates favourable conditions for trading within a narrow market range (range trading). In this case, a higher number of profitable trades are observed for clients, leading to a reduction in the Group’s market making result.
Volatility and market activity is driven by a number of external factors, some of which are market specific and some of which may be linked to general macroeconomic conditions. It can significantly affect the Group’s revenues in subsequent quarters. This is characteristic of the Group’s business model.
Expenses
Operating expenses in H1 2023 amounted to PLN 341,6 million and were PLN 73,8 million higher than in the comparable period (H1 2022: PLN 267,8 million). The most significant y/y changes occurred in:
• costs of salaries and employee benefits, an increase of PLN 31,8 million, mainly due to an increase in employment;
• marketing costs, an increase of PLN 30,9 million resulting mainly from higher expenditures on online marketing campaigns;
• other external services, increase by PLN 7,6 million as a result of incurring mainly higher expenditure on: (i) IT systems and licenses (increase by PLN 3,8 million y/y); (ii) legal and advisory services (increase by PLN 2,1 million y/y) and (iii) market data services (increase by PLN 0,8 million y/y).
On a quarterly basis, operating expenses decreased by PLN 26,8 million, mainly due to PLN 26,6 million lower offline marketing expenses.
As a result of XTB’s rapid growth, the Board estimates that total operating expenses in 2023 could be as much as a quarter higher than what we saw in 2022. The Management Board’s priority is to further increase the client base and build a global brand. As a consequence of the ongoing activities, marketing expenditure may increase by around a fifth compared to last year.
The final level of operating expenses will depend, in particular, on the rate of employment growth and the amount of variable remuneration paid to employees, on the level of marketing expenses, on the rate of geographical expansion into new markets and on the impact of possible new regulations and other external factors on the level of revenues generated by the Group.
The level of marketing expenses will depend on an assessment of its impact on the Group’s performance and profitability, the pace of overseas expansion and the degree of client responsiveness to the actions undertaken. Employment growth in the Group will be contributed by its dynamic growth, both in existing and new markets. In turn, variable remuneration components will be influenced by the Group’s performance.
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 reiterates that its intention is to recommend the General Meeting in the future to adopt resolutions on the payment of dividend, taking into account the factors indicated above, in an amount ranging from 50% to 100% of the Company’s standalone net profit for a given financial year. The standalone net profit for the first half of 2023 amounted to PLN 422,8 million.
The levels of XTB’s total capital ratio (IFR) at individual dates in the first half of 2023 are presented in the chart below.
At the end of the first half of the year, the Company’s total capital ratio was 164,3%. The total capital ratio provides information on the ratio of own funds to risk-weighted assets, or to put in other words, it shows whether a brokerage house is able to cover the minimum capital requirement for market, credit, operational and other risks with its own funds.
Cash and cash equivalents
XTB invests part of its cash in bank deposits and financial instruments with a 0% risk weighting i.e., in government bonds and bonds guaranteed by the State Treasury. As at June 30, 2023, XTB Group’s total own cash and bonds amounted to PLN 2 030,9 million, of which PLN 1 651,1 million was in cash and PLN 379,9 million in bonds.
In the first quarter of 2023 was another period of dynamic business development and building a client’s base for XTB. The group acquired a record 104,2 thousand new clients, an increase of 88,3% y/y, while the number of active clients increased by 44,1% y/y from 149,7 thousand to 215,7 thousand. This also contributed to the increase in the trading volume of clients on CFD instruments expressed in lots – an increase from 1,6 million to 1,8 million, i.e. 18,2% y/y.
XTB’s dynamic operational growth, coupled with favourable market conditions, translated into record-breaking financial results in the first quarter of 2023. Consolidated net profit amounted to PLN 302,8 million compared to PLN 252,6 million a year earlier. This is an increase of PLN 50,2 million. Consolidated revenues amounted to PLN 531,6 million (Q1 2022: PLN 439,8 million) with operating expenses of PLN 184,2 million (Q1 2022: 131,0 million).
Revenues
In the first quarter of 2023, XTB recorded a record level of revenue. They increased by 20,9% y/y, i.e. by PLN 91,8 million, from PLN 439,8 million to PLN 531,6 million. Significant factors determining their level were high volatility in the financial and commodity markets and the constantly growing number of active clients (increase by 88,3% y/y), connected with their high transaction activity expressed in the number of CFD contracts concluded in lots. As a consequence the transaction volume in CFD instruments amounted to 1 845,2 thousand lots (Q1 2022: 1 560,7 thousand lots), and a profitability per lot amounted to PLN 288 (Q1 2022: PLN 282).
XTB has a solid foundation in the form of constantly growing client base and the number of active clients. In the first quarter of 2023 Group reported another record in this area, acquiring 104 206 new clients compared to 55 333 a year earlier, which means an increase of 88,3%. Similarly to the number of new clients, the number of active clients was also record high. It increased from 149 729 to 215 703, i.e. by 44,1% y/y.
The priority of the Management Board is to further increase the client base leading to the strengthening of XTB’s market position in the world by reaching the mass client with its product offer. The ambition of the Management Board in 2023 is to acquire, on average, at least 40-60 thousand new clients quarterly. As a result of the implemented activities, the Group acquired in the first quarter of this year 104,2 thousand new clients, while in April 2023, 20,6 thousand new clients were acquired.
In order to strengthen its market position and worldwide recognition, XTB cooperates with titled athletes who are the ambassadors of the XTB brand. In February 2022, an advertising campaign was launched with the participation of the titled martial arts competitor, the first Polish woman in the UFC organization and the champion of this organization, as well as the three-time world champion in Thai boxing – Joanna Jędrzejczyk.
In September 2022, promotional activities were launched with the participation of Conor McGregor, another XTB brand ambassador – Irish mixed martial arts (MMA) and the UFC fighter. Conor McGregor is the biggest martial arts star in the world and the best rewarded athlete according to Forbes list. Conor is not only a fighter, but also a successful person in business as an investor in many interesting projects.
The face of the XTB brand is also Jiří Procházka, a Czech fighter, one of the leading MMA fighters, UFC champion. Thanks to this cooperation, XTB plans to continue its intense promotional activities.
The team of XTB ambassadors was also joined in 2022 by Iker Casillas, a former Real Madrid footballer, considered one of the best goalkeepers of all time. He is currently the Deputy Director General of the Real Madrid Foundation.
Thanks to the cooperation with such personalities as Joanna Jędrzejczyk, Conor McGregor, Jiří Procházka or Iker Casillas, XTB started promoting the offered investment solutions, in particular, convincing that investing in various types of assets is available to everyone, using the tools provided that facilitate entry into the world of investments: through daily market analysis, as well as numerous educational materials.
Looking at XTB’s revenues in terms of the classes of instruments responsible for their creation, it can be seen that in the first quarter of 2023 CFDs based on commodities. Their share in the structure of revenues on financial instruments reached 48,8% compared to 30,2% a year earlier. The most profitable instruments in this class were CFDs instruments based on quotations of natural gas and gold. The second most profitable asset class was CFD based on index. Their share in the revenue structure in the first quarter of 2023 was 45,3% (Q1 2022: 57,4%). The most profitable instruments in this class were CFDs instruments based on the German DAX index (DE30), the US 100 index and the US 500 index. Revenues on CFDs based on currencies accounted for 4,2% of all revenues compared to 9,4% year earlier, where the most profitable instruments in this class were CFDs on currency pairs EURUSD.
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 51,6% (Q1 2022 r.: 27,3%). 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.
XTB’s business model includes high volatility of revenues depending on the period. Operating results are mainly affected by: (i) volatility on financial and commodity markets; (ii) the number of active clients; (iii) volume of concluded transactions on financial instruments; (iv) general market, geopolitical and economic conditions; (v) competition on the FX/CFD market and (vi) regulatory environment.
As a rule, the Group’s revenues are positively affected by higher activity of financial markets due to the fact that in such periods, a higher level of turnover is realized by the Group’s clients and higher profitability per lot. The periods of clear and long market trends are favourable for the Company, and it is at such times that it achieves the highest revenues. Therefore, high activity of financial markets and commodities generally leads to an increased volume of trading on the Group’s trading platforms. On the other hand, the decrease in this activity and the related decrease in the transaction activity of the Group’s clients leads, as a rule, to a decrease in the Group’s operating income. Due to the above, operating income and the Group’s profitability may decrease in periods of low activity of financial and commodity markets. In addition, there may be a more predictable trend in which the market moves within a limited price range. This leads to market trends that can be predicted with a higher probability than in the case of larger directional movements on the markets, which creates favourable conditions for transactions concluded in a narrow range trading. In this case, a greater number of transactions that bring profits to clients is observed, which leads to a decrease in the Group’s result on market making.
The volatility and activity of markets results from a number of external factors, some of which are characteristic for the market, and some may be related to general macroeconomic conditions. It can significantly affect the revenues generated by the Group in the subsequent quarters. This is characteristic of the Group’s business model.
Expenses
The operating costs in the first quarter of 2023 amounted to PLN 184,2 million and were PLN 53,2 million higher compared to the same period a year earlier (Q1 2022: PLN 131,0 million). The most important changes occurred in:
• marketing costs, an increase by PLN 30,8 million resulting mainly from higher expenditure on online and offline marketing campaigns;
• costs of remuneration and employee benefits, an increase by PLN 16,9 million, mainly due to an increase in employment and higher provisions for variable remuneration components (bonuses);
• other external services, an increase by PLN 2,7 million as a result of mainly higher expenditure on: (i) support database systems (increase by PLN 1,2 million y/y); (ii) market data delivery services (increase by PLN 0,6 million y/y) and (iii) legal and advisory services (increase by 0,5 million y/y);
• commission costs, an increase by PLN 1,8 million resulting from higher amounts paid to payment service providers through which clients deposit their funds in transaction accounts.
In q/q terms, operating costs increased by PLN 26,0 million, mainly due to PLN 13,4 million higher costs of salaries and employee benefits resulting mainly from an increase in employment and an increase in provisions for variable remuneration components (bonuses), higher by PLN 13,0 million of marketing costs related mainly to higher expenditures on online marketing campaigns.
Due to the dynamic development of XTB, the Management Board estimates that in 2023 the total costs of operating activities may be even higher by about a one-fourth to the level we observed in 2022. The priority of the Management Board is to further increase the client base and build a global brand. As a consequence of the implemented activities, expenditures on marketing may increase by about one-fifth compared to the previous year.
The final level of operating costs will depend on the level of variable remuneration components paid to employees, the level of marketing expenditures, the dynamics of geographical expansion into new markets and the impact of potential product interventions and other external factors on the level of revenues generated by the Group. The level of marketing expenditures depends on their impact on the Group’s results and profitability, the rate of foreign expansion and the degree of client responsiveness to the actions taken. The employment growth in the Group will be driven by its dynamic development, both on the existing and new markets. The amount of variable remuneration components is influenced by the Group’s results.
Dividend
The XTB dividend policy assumes recommendation by the Management Board to the General Meeting a dividend payment in the amount taking into account the level of net profit presented in the standalone annual financial report of the Company and a variety of factors relating to the Company, including prospects for further operations, future net profits, demand for cash, financial situation, the level of capital adequacy ratios, expansion plans, legal requirements in this area and KNF guidelines. In particular, the Management Board, when submitting proposals for dividend payment, will be guided by the need to ensure an appropriate level of the Company’s capital adequacy ratios and the capital necessary for the development of the Group.
The Management Board maintains that its intention is to recommend the General Meeting in the future to adopt resolutions on the payment of dividend, taking into account the factors indicated above, in the amount of 50% to 100% of the Company’s standalone net profit for a given financial year. The standalone net profit for the first quarter of 2023 amounted to PLN 299,8 million.
The levels of the total capital ratio (IFR) of XTB on individual days in Q1 2023 are presented in the chart below.
At the end of the first quarter of this year the total capital ratio in the Company amounted to 136,7%. 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.
Cash and cash equivalents
XTB invests part of its cash in bank deposits and in financial instruments with a 0% risk weight, i.e., in treasury bonds and bonds guaranteed by the State Treasury. As at March 31, 2023 the total value of own cash and bonds in the XTB Group was PLN 1 906,6 million, which PLN 1 535,2 million was cash and PLN 371,5 million for bonds.
The year 2022 was a further period of dynamic business development and building a client base for XTB. High volatility in the financial and commodity markets as well as the environment of negative real interest rates have made trading on financial instruments very attractive for many investors. As a result, the Group acquired a record 196,9 thousand new clients and the number of active clients increased by 35,9% y/y from 190,5 thousand to 258,8 thousand. This translated into a significant increase in the volume of clients’ trading on CFD instruments expressed in lots – an increase from 4,1 million to 6,4 million lots, i.e. by 55,1% y/y.
XTB’s dynamic operational growth, coupled with favourable market conditions, translated into record-breaking financial results in 2022. Consolidated net profit amounted to PLN 766 096 thousand compared to PLN 237 830 thousand a year earlier. Consolidated revenues amounted to PLN 1 444 249 thousand (2021: PLN 625 595 thousand) with operating expenses of PLN 558 567 thousand (2021: 348 772 thousand).
Revenues
In 2022, XTB reported record increase in revenue from PLN 625 595 thousand to PLN 1 444 249 thousand, i.e. by 130,9% y/y. Significant factors determining their level were high volatility in the financial and commodity markets and the constantly growing number of active clients (increase by 35,9% y/y), connected with their high transaction activity expressed in the number of CFD contracts concluded in lots (increase by 55,1% y/y). As a consequence the transaction volume in CFD instruments amounted to 6 365,6 thousand lots (2021: 4 104,6 thousand lots), and a profitability per lot amounted to PLN 227 (2021: PLN 152).
XTB has a solid foundation in the form of constantly growing client base and the number of active clients. In 2022 the Group reported another record in this area, acquiring 196 864 new clients compared to 189 187 a year earlier, which means an increase of 4,1%. Similarly to the number of new clients, the number of active clients was also record high. It increased from 190 452 to 258 799, i.e. by 35,9% y/y.
The priority of the Management Board is to further increase the client base leading to the strengthening of XTB’s market position in the world by reaching the mass client with its product offer. These activities are and will be supported by a number of initiatives, including the introduction of new products or promotional campaigns. The ambition of the Management Board in 2023 is to acquire, on average, at least 40-60 thousand new clients quarterly. In January 2023, the Group acquired a total of 42,3 thousand new clients, while in February 2023, it was 36,5 thousand of new one.
For example, on January 9, 2023, XTB launched a new promotion “Free share for a good start” consisting in receiving a free share worth up to USD 30 for opening an account with XTB and making a deposit of any amount.
In order to strengthen its market position and worldwide recognition, XTB cooperates with titled athletes who are the ambassadors of the XTB brand. In February 2022, an advertising campaign was launched with the participation of the titled martial arts competitor, the first Polish woman in the UFC organization and the champion of this organization, as well as the three-time world champion in Thai boxing – Joanna Jędrzejczyk.
In September 2022, promotional activities were launched with the participation of Conor McGregor, another XTB brand ambassador – an Irish mixed martial arts (MMA) and the UFC fighter. Conor McGregor is the biggest martial arts star in the world and the best rewarded athlete according to Forbes list. Conor is not only a fighter, but also a successful person in business as an investor in many interesting projects.
The face of the XTB brand is also Jiří Procházka, a Czech fighter, one of the leading MMA fighters, UFC champion. Thanks to this cooperation, XTB plans to continue its intense promotional activities.
The team of XTB ambassadors was also joined in 2022 by Iker Casillas, a former Real Madrid footballer, considered one of the best goalkeepers of all time. He is currently the Deputy Director General of the Real Madrid Foundation.
Thanks to the cooperation with such personalities as Joanna Jędrzejczyk, Conor McGregor, Jiří Procházka or Iker Casillas, XTB started promoting the offered investment solutions, in particular, convincing that investing in various types of assets is available to everyone, using the tools provided that facilitate entry into the world of investments: through daily market analysis, as well as numerous educational materials.
Looking at XTB’s revenues in terms of the classes of instruments responsible for their creation, it can be seen that in 2022 CFDs based on index were in the lead. Their share in the structure of revenues on financial instruments reached 46,4% compared 32,8% year earlier. This is a consequence of high profitability on CFD instruments based on the US 100 index, the German DAX index (DE30) or the US 500 index. The second most profitable asset class was CFD based on commodities. Their share in the revenue structure in 2022 was 33,8% (2021: 49,3%). This is a consequence of high profitability on CFD instruments based on quotations of natural gas, gold and oil prices. Revenues on CFDs based on currencies accounted for 17,0% of all revenues, compared 12,5% year earlier, where the most profitable financial instruments in this class were CFD based on currency pairs EURUSD and GBPUSD.
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 41,4% (2021: 33,5%). 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’s business model includes high volatility of revenues depending on the period. Operating results are mainly affected by: (i) volatility on financial and commodity markets; (ii) the number of active clients; (iii) volume of concluded transactions on financial instruments; (iv) general market, geopolitical and economic conditions; (v) competition on the FX/CFD market and (vi) regulatory environment.
As a rule, the Group’s revenues are positively affected by higher activity of financial markets due to the fact that in such periods, a higher level of turnover is realized by the Group’s clients and higher profitability per lot. The periods of clear and long market trends are favourable for the Company and it is at such times that it achieves the highest revenues. Therefore, high activity of financial markets and commodities generally leads to an increased volume of trading on the Group’s trading platforms. On the other hand, the decrease in this activity and the related decrease in the transaction activity of the Group’s clients leads, as a rule, to a decrease in the Group’s operating income. Due to the above, operating income and the Group’s profitability may decrease in periods of low activity of financial and commodity markets. In addition, there may be a more predictable trend in which the market moves within a limited price range. This leads to market trends that can be predicted with a higher probability than in the case of larger directional movements on the markets, which creates favourable conditions for transactions concluded in a narrow range trading. In this case, a greater number of transactions that bring profits to clients is observed, which leads to a decrease in the Group’s result on market making.
The volatility and activity of markets results from a number of external factors, some of which are characteristic for the market, and some may be related to general macroeconomic conditions. It can significantly affect the revenues generated by the Group in the subsequent quarters. This is characteristic of the Group’s business model.
Operating expenses
The operating costs in 2022 amounted to PLN 558 567 thousand and were PLN 209 795 thousand higher than in the previous year (2021: PLN 348 772 thousand). The most important changes occurred in:
• marketing costs, an increase by PLN 102 268 thousand resulting mainly from higher expenditure on online and offline marketing campaigns;
• costs of remuneration and employee benefits, an increase by PLN 60 765 thousand, mainly due to an increase in employment and higher provisions for variable remuneration components (bonuses);
• commission costs, an increase by PLN 18 178 thousand resulting from higher amounts paid to payment service providers through which clients deposit their funds in transaction accounts;
• other external services, an increase by PLN 11 533 thousand as a result of mainly higher expenditure on: (i) support database systems (increase by PLN 4 166 thousand y/y); (ii) market data delivery services (increase by PLN 2 807 thousand y/y); (iii) legal and advisory services (increase by PLN 2 762 thousand y/y) and (iv) recruitment costs (increase by PLN 1 967 thousand y/y).
The “Parkiet” daily recently published the results of its annual study on companies’ communication with the market. We are pleased to announce that we achieved third place among the WIG30 companies in the rating of individual investors, exceeding the average score. Additionally, we ranked among the top ten in the financial institutions category, which confirms the high level of XTB’s communication with the market. Our results reflect a very positive outcome, combining the ratings from both groups of survey participants.
On a quarter-on-quarter basis, operating expenses increased by PLN 22 703 thousand mainly due to PLN 10 496 higher online marketing expenses, PLN 6 826 thousand higher salary and employee benefits expenses, mainly as a result of an increase in the number of employees, and PLN 3 679 thousand higher commission expenses, as a result of higher amounts paid to payment service providers through which clients deposit their funds on transaction accounts. 
As a result of XTB’s growth, the Board estimates that total operating expenses in 2024 could be up to a quarter higher than what we saw in 2023. The Board’s priority is to continue to grow its client base and build a global brand. As a result of ongoing activities, marketing expenses could increase by around a third compared to last year. 
In November 2023, XTB introduced another new feature, i.e. interest on free funds in client accounts. The interest is calculated daily and paid to the account at the end of the month. Interest is offered for the following currencies: PLN, EUR, USD, GBP, CZK and RON.
XTB has a solid foundation in the form of constantly growing client base and the number of active clients. From the beginning of the year, the Group recorded a further record in this area, acquiring 234 704 new clients compared to 145 826 a year earlier, an increase of 60,9%. Similar to the number of new clients, the number of active clients was also a record, increasing by 47,3% y/y, from 224 339 thousand to 330 357. 
st in selected European and non-European markets in company shares and ETFs at a fraction of their price. Fractional shares offer greater flexibility and control over investments. This makes it easier for clients to tailor their investment portfolio to their individual financial goals and risk tolerance. 
