XTX Markets Almost Doubles Its Revenue in 2020, Profit Gains

XTX Markets Limited, which is a London-based multi-asset markets maker, has reported a 92 percent jump in its revenue for the year 2020, ending on December 31, according to its latest Companies House filing.

In absolute terms, the FCA-regulated company generated £651.9 million in revenue last year, compared to the previous year’s £339.8 million.

The growth in the revenue was boosted by the rise in the trading demand since the beginning of 2020 when the Covid-induced economic lockdowns made the markets too volatile. The continued increase in retail trading also benefited the company.

Last year, XTX Markets Ltd also rebalanced its risks and moved all UK staff contracts and ownership of the intellectual property to a sister entity, XTX Markets Technologies Limited, which generated £400 million in revenue in the period. If the revenues of the two entities are combined, XTX’s 2020 business went past the $1 billion mark.

Higher Expenses

The increased market activities, however, also resulted in higher administrative costs. As seen on the filing, the yearly administrative expense of the company spiked to £441.96 million from 2020’s £142.72 million.

“While the company’s administrative expense grew significantly, it was as expected as in line with the group reorganization during the year and directors consider these costs to be appropriate given the levels of business activity during the year, with costs predominantly driven by the service fees paid to a related entity, technology infrastructure costs, market data and variable compensation cost,” the company noted.

Considering other incomes and expenses, the company ended the year with a pre-tax profit of £202.96 million, increasing yearly by around 3.4 percent. The net profit of £149.9 million came in with a margin of 23 percent.

The company has decided to distribute £174.6 million in retained profits as dividends to the immediate parent company.

XTX is known for providing electronic Spot FX liquidity, along with seminar services for equities and other asset classes. According to the company, it is the largest liquidity provider of Spot FX and European equities. The company is now focused on building out its client franchises.

It is only a six-year-old company and has already made a mark on the trading industry. XTX is now planning to launch new trading strategies and continuing the growth of its Systematic Internaliser (SI) in the UK and Europe, along with the expansion of its counterparty offerings.