Key Highlights

• eToro reported Q2 2026 net contribution of $229 million, up 9 percent year-over-year, with adjusted EBITDA up 9 percent to $78 million and adjusted diluted EPS of $0.68, beating the $0.61 estimate by 11.48 percent.

• Trading contribution from Capital Markets surged 25 percent to $142 million, with trades up 64 percent, while crypto net contribution fell to $11 million due to a $2 million negative valuation impact on corporate crypto holdings.

• The company announced a planned Acquisition of TradeZero for up to $230 million to $231 million in cash and stock, expected to close in the first half of 2027.

• Funded accounts grew 18 percent year-over-year to 4.28 million, with Assets under administration up 19 percent to $19 billion.

Capital Markets Trading Surges While Crypto Contribution Softens

eToro Group Ltd. (NASDAQ:ETOR) reported second quarter net contribution of $229 million, up 9 percent year-over-year, with adjusted EBITDA of $78 million representing a 34 percent margin. eToro is an Israeli financial technology company operating a multi-asset social trading and Investment platform, enabling approximately 3.5 million funded accounts across 75 countries to trade and invest in equities, cryptoassets, commodities, currencies, and options. Trading contribution from capital markets, spanning equities, commodities, and currencies, surged 25 percent to $142 million with trades up 64 percent year-over-year, while crypto net contribution fell year-over-year to $11 million, including a $2 million negative valuation impact on the company's corporate crypto holdings, which ended the quarter at a balance of $30 million.

Net interest income rose 7 percent to $49 million, and eToro Money contribution grew 44 percent to $26 million, reflecting continued growth in the company's banking-adjacent product offerings. Management said the Diversification of Revenue across capital markets, crypto, interest income, and eToro Money continues to reduce the company's dependence on any single asset class's trading volumes or price Volatility for overall profitability.

TradeZero Acquisition Expands US and Canadian Market Access

eToro announced a planned acquisition of TradeZero for up to $230 million to $231 million in cash and stock, expected to close in the first half of 2027, with TradeZero having generated approximately $80 million in revenue over the Trailing Twelve Months at gross margins above 80 percent. Management said the deal is expected to be adjusted EPS accretive in the first full year post-completion, and is intended to strengthen eToro's U.S. and Canadian presence by adding self-clearing, shorting, and Options and futures capabilities that complement eToro's existing social trading platform.

Executives said the acquisition reflects a broader strategic priority of deepening the company's capabilities in its most mature, high-value markets, rather than pursuing geographic expansion into new, less-established regions, with TradeZero's existing infrastructure viewed as complementary rather than duplicative of eToro's own platform capabilities.

July KPIs Show Mixed Signals Amid Lower Crypto Prices

July key performance indicators showed funded accounts up 18 percent year-over-year to 4.32 million, but assets under administration declined 5 percent to $18.5 billion due to lower crypto prices, with trades flat year-over-year. Management noted early August showed improvement and said it expects adjusted operating expenses in the third quarter to be slightly higher than the second quarter as the company continues investing in Marketing and research and development.

The company highlighted several strategic initiatives during the quarter, including the launch of a new AI-driven eToro app, expansion of its App Store to more than 75 apps, launch of eToro Edge for active traders, expansion of agent and agentic investing capabilities, subaccounts, eToro Work, a Zengo acquisition, investment in Extended for on-chain perpetuals, and 15 times year-over-year growth in savings AUM, alongside a $1.2 billion cash position and $87 million in share repurchases during the quarter.

Conclusion

eToro's second quarter demonstrated resilient growth in capital markets trading even as crypto contribution softened due to lower valuations on corporate holdings, with the company's diversified revenue base across trading, interest income, and eToro Money continuing to support overall profitability. The planned TradeZero acquisition represents a deliberate strategic investment in deepening U.S. and Canadian market capabilities rather than pursuing new geographic expansion, positioning the company to offer a broader range of trading functionality to its most valuable markets. Continued growth in funded accounts and assets under administration, the eventual close and integration of TradeZero, and the durability of recent product launches including eToro Edge and the new AI-driven app are likely to shape results into 2027.