Following what was something of a disappointing 2021, Poland based online trading group XTB S.A. (WSE:XTB) began 2022 on the right foot, posting (by far!) its best quarter ever with record revenues and profits for Q1 2022.

Overall, Revenues at XTB totaled PLN 439.8 million (just north of USD $100 million) in Q1, with Net Profit of PLN 252.6 million ($57 million). By comparison, XTB averaged $35 million in Revenue and $13 million in profit during each quarter of 2021.

Driving the growth in financial success was a sharp rise in client CFD trading volumes at XTB.com in Q1, with the company posting average monthly trading volume of $210 billion, versus $145 billion for all of 2021.

XTB noted that it has a solid foundation in the form of a constantly growing client base and the number of active clients. In the first quarter of 2022, the Group acquired 55,333 new clients compared to 42,760 a quarter earlier, an increase of 29.4%. This is the effect of continuing the optimized sales and marketing strategy, bigger penetration of already existing markets, successive introduction of new products and expansion into new geographic markets. The number of active clients was at a record high in the period, increasing from 127,174 to 149,726, i.e. by 17.7%, on a q/q basis.

The ambition of the Management Board in 2022 is to acquire, on average, at least 40 thousand new clients quarterly. As a result of the implemented activities, the Group acquired a total of 55.3 thousand new clients in the first quarter of 2022, while in the first 25 days of April 2022, 12.8 thousand new clients were acquired. The priority of the Management Board is to further increase the client base leading to the strengthening of XTB’s market position globally.

These activities will be supported by a number of initiatives, including a new advertising campaign launched on February 14, 2022 with the participation of the new XTB brand ambassador – Joanna Jędrzejczyk – a titled martial arts competitor, the first Polish woman in the UFC organization and a champion in this organization, as well as a three-time world champion in Thai boxing. XTB, thanks to the cooperation with Joanna Jędrzejczyk, 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 2022, CFDs based on index were in the lead. Their share in the structure of revenues on financial instruments reached 57.4% compared to 39.9% a year earlier. This is a consequence of high profitability on CFD instruments based on the US 100 and US 500 indexes, the German DAX stock index (DE30) or the Russian RUS 50 index. The second most profitable asset class was commodity CFDs. Their share in the structure of revenues in the 1st quarter of 2022 was 30.2% (Q1 2021: 53.8%). The most profitable instruments in this class were CFDs based on quotations of crude oil, gold and natural gas prices. Revenues on CFDs based on currencies accounted for 9.4% of all revenues, compared to 2.7% a year earlier, where the most profitable financial instruments in this class were based on the EURUSD currency pair.

The Group’s B2B institutional arm X Open Hub also got off to a strong start in 2022, with Revenues of PLN 15.7 million, versus PLN 2.0 million for all of 2021.

Foreign expansion

XTB with its strong market position and dynamically growing client base builds its presence in the non consequently European markets, implementing a strategy on building a global brand. The XTB Management Board puts the main emphasis on organic development, on the one hand increasing the penetration of European markets, on the other hand successively building its presence in Latin America, Asia and Africa. Following these activities, the composition of the capital group may expanded by new subsidiaries.

It is worth mentioning that geographic expansion is a process carried out by XTB on a continuous basis, the effects of which are spread over time. Therefore, one should not expect sudden, abrupt changes in the group results on this action. Currently, the efforts of the Management Board are focused on expansion into the Middle East and Africa markets. The development of XTB is also possible through mergers and acquisitions, especially with entities that would allow the Group to achieve geographic synergy (complementary markets). Such transactions will be carried out, only when they will bring measurable benefits for the Company and its shareholders. XTB is currently not involved in any acquisition process.

Some more financial and operating stats for XTB in Q1 follows: