XTB sharesfell for a second consecutive session today (Monday), sliding to an intradaylow of 86.40 PLN before recovering to around 89.22 PLN, a decline of roughly2.5% on the day. The pullback, which stretches over two trading sessions, hastaken the Warsaw-listed broker (WSE: XTB) to its lowest levelsince February 24, and represents a roughly 9% retreat from the stock'sall-time high of 96.94 PLN reached just two weeks ago on March 10.Thepressure dates back to March 19, when XTB published its consolidatedannual report for 2025, showing record revenues that masked a sharp deterioration inprofitability. Trading the following day opened with heavy selling, with sharesdropping from around 94.98 PLN to an intraday low of 90.10 PLN before closingat 91.58 PLN, the steepest single-session decline the stock had seen sinceNovember 2025.XTB’s Record Revenue,Shrinking ProfitsThe numbersat the top of the income statement were unambiguously strong. Total operatingincome rose 14.6% year-over-year to PLN 2.15 billion in 2025, a company record,according to the annual report.But operating costs rose nearly three timesfaster, up 48.2% to PLN 1.31 billion, leaving net profit at PLN 644.2 million,down 24.8% from PLN 856.9 million in 2024. Earnings per share fell from PLN7.29 to PLN 5.48 over the same period.The singlelargest driver of the cost increase was marketing. XTB's marketing bill rose69.6% to PLN 584.9 million in 2025, including PLN 405 million in onlinespending alone, up from PLN 262.3 million a year earlier. Staff costs followed,rising 32.6% to PLN 413 million, while IT and licensing expenses nearly doubledto PLN 73 million from PLN 39.4 million. The net profit margin contracted fromroughly 46% in 2024 to around 30% in 2025, a shift investors are struggling tolook past.Two furtherline items stand out from the report. Financial costs surged from PLN 1.1million in 2024 to PLN 94.6 million in 2025, driven almost entirely by foreignexchange losses of PLN 93.1 million, primarily the result of PLN strengtheningagainst the dollar and euro. Revenue per active client also fell 32.5%, fromPLN 2.7 thousand to PLN 1.8 thousand, a metric that reflects the dilutiveeffect of bringing in large volumes of lower-activity accounts.The Cost Guidance ThatUnnerved MarketsIf the 2025 numbers were the catalyst, it is the company's own forward-looking commentary in the annual report that has kept sellers engaged. The management board states directly in the report: "In 2026, total operating costs may be up to approximately 30% higher compared to what we observed in 2025. The Management Board's priority is the continued growth of the client base and building a global brand. As a result, marketing expenditures may increase by approximately 50% compared to the previous year," according to the 2025 annual report. The company adds that in the medium term, meaning the 2027 to 2029 horizon, marketing costs could grow 30% to 40% annually, with the assumption that the average cost of client acquisition remains broadly in line with the 2023 to 2026 range.Forinvestors who had priced in both growth and margin recovery, that kind ofguidance leaves little room for optimism in the near term. Thefirm had forecast full-year 2025 net profit of around PLN 673 million back inJanuary, a figure that ultimately proved reasonably close to the mark,though the context of the cost trajectory heading into 2026 has shifted thepicture considerably.The Client BetCEO OmarArnaout has been consistent in framing client acquisition as the company'sdefining priority, and the 2025 numbers bear that strategy out. XTB added864,286 new clients during the year, a 73% jump from 498,438 in 2024, pushingthe total base past 2.16 million. In an interviewpublished in February,Arnaout called reaching two million new clients annually "completelyrealistic" within a few years, noting that "it took us 20 years tohave a million clients" and that "in 2025, we acquired over 860,000clients."Moreover, asked in an April 2025 interview at XTB's Warsaw headquarters which KPIs matter more, revenue and profit or client acquisition, Arnaout did not hedge:"Iwould be lying if I said profit wasn't important to us. But I'll be honest.Even when we present slightly worse financial results to institutionalinvestors, if we see that our client acquisition was very high, clients areactively using our application and are satisfied with it, and deposits werestrong with significant increases in trading volumes, personally, that's moreimportant to me than the financial results. It builds a base for a significantincrease in profits over time. The end goal will always be reaching the highestlevel of profits."That viewis difficult to reconcile with the market's reaction, and the tension is afamiliar one for XTB investors. The company keeps delivering on client growth,while the market keeps discounting the earnings that growth produces. The averagecost per new client acquisition was PLN 677 in 2025, broadly in line with prioryears, but that efficiency metric does not, on its own, resolve the question ofwhether the aggressive spend is a temporary investment or a structural shift inthe cost base.Profitabilityper lot, a key operating metric, also deteriorated, falling 21.8% to PLN 215from PLN 275 in 2024. Volume grew sharply but at diminishing returns. On aquarterly basis, Q4 2025 was the weakest period of the year, with net profit ofjust PLN 160.3 million, compared to a peak of PLN 302.7 million in Q2.Africa Exit andInstitutional WeaknessThe annualreport also disclosed thesale of XTB's South African subsidiary for $645,000 to an unnamed buyer, closingout an eight-year attempt to enter the African continent that never generated asingle client transaction. The deal, signed on February 17, 2026, and stillpending FSCA regulatory approval, represents a minor write-off in financialterms, but it underscores a pattern of geographic retreats outside XTB'sEuropean core.Separately,the company's institutional segment, operated under the X Open Hub brand, sawrevenues fall 48.3% year-over-year to PLN 42.5 million in 2025, a notablereversal from the PLN 82.3 million generated in 2024. The segment, whichprovides liquidity and trading technology to other financial institutions, isknown for revenue volatility, but the scale of the decline adds another layerof nuance to what was otherwise a strong top-line year.Technicals Remain StrongFrom atechnical perspective, the picture remains within a broader consolidationrange. The stock has been trading between approximately 86 PLN, a support leveldefined by the gap formed during the January and February rally, andapproximately 96 PLN, the vicinity of the all-time high.At 89.22PLN, the shares sit closer to the lower end of that range than the upper, butremain well above the early 2025 lows that preceded the strong rally nowpartially reversing. XTB shareshave experienced sharp pullbacks before, including a 25% decline from peak to troughin mid-2025, only to recover fully and push to new highs.Whetherthis episode follows a similar path depends on whether investors conclude thatthe company's aggressive spending is building lasting franchise value, oreating into the very earnings that justified the stock's premium valuation inthe first place.This article was written by Damian Chmiel at www.financemagnates.com.