eToro’s Strategic Moves: Record Profits and New Acquisition

eToro impressed with robust second-quarter performance, recording a significant net income of $53 million, surprising market expectations. Despite these impressive financial results, the trading platform’s stock experienced an 8% decline, closing at $31.15 on NASDAQ on Tuesday, the day markets opened.

Impressive Financial Outcomes?

Yes, eToro’s financial performance in Q2 was substantial. The company reported a 77% surge in GAAP net income year-on-year, climbing from $30 million to $53 million. The adjusted diluted earnings stood at $0.68 per share, surpassing the predicted $0.61 and notching the fourth consecutive quarter of exceeding market forecasts.

Several operational metrics showed positive growth, with equities trading making the most substantial impact, raising the net contribution by 9% to $229 million. Funded accounts saw an 18% increase, totaling 4.28 million, while assets under administration reached $19.2 billion. eToro’s total cash, cash equivalents, and short-term investments were valued at $1.2 billion.

Shani observed that clients have been actively rotating capital across different markets, not focusing on a single asset class throughout the quarter.

What Happened to Cryptocurrency Trading?

Crypto trading at eToro faced considerable setbacks, mirroring broader industry trends. The platform recorded a steep 73% drop in cryptocurrency trades in July, with numbers falling to 1.4 million compared to the previous year. The average investment per crypto trade also plummeted by 50% to $182.

Consequently, the revenue from crypto dealings shrank by 30%, totaling $1.34 billion compared to $1.9 billion a year prior. Meanwhile, the equities and commodities sectors delivered more promising returns, with net income reaching $141 million, overshadowing the $19.7 million derived from crypto assets. For the first quarter of this year, crypto profits comprised just 5% of the net trading profit.

• eToro’s net income climbed by 77% to $53 million in Q2 2026.
• Crypto trades on the platform plummeted by 73% in July 2026.
• Revenue from crypto activities experienced a 30% decline.
• TradeZero buyout paves the way for eToro’s US expansion.

In an ambitious move, eToro revealed a $231 million acquisition of TradeZero, aiming to extend its footprint in the United States. Founded in 2015, TradeZero is an online brokerage catering to active traders in the US, Canada, and other territories. This acquisition, paid in cash and stock, is expected to conclude in the first half of 2027 pending regulatory approval.

This strategic acquisition is vital to establish necessary broker-dealer infrastructure in the US, essential for offering regulated products. TradeZero generated about $80 million in revenue over the past year, maintaining an 81% gross margin and reflecting a valuation over 2.9 times its sales.

Acting on eToro’s behalf, Jefferies facilitated the transaction, marking eToro’s third acquisition deal this year. Following its entrance into the New York market, having secured approval through BitLicense, eToro continues its strategic expansion.

Assia emphasized that acquiring TradeZero is vital to building eToro’s presence in the US and accelerating the company’s push into regulated markets.

eToro’s acquisition of TradeZero represents a strategic advance in capturing the US market. Founded in 2007 and headquartered in Tel Aviv, eToro operates an extensive global trading platform, enabling millions to access diverse financial markets such as stocks, crypto, and commodities.