eToro published its second quarter results on 11 August 2026, and on the same day filed a separate announcement of an acquisition. Both filings were made to the US Securities and Exchange Commission on the same date.
Errors or inaccuracies are possible. Spotted something that looks wrong? Write to me and I will correct it.
The Quarter
| The quarter | A year ago | Change | |
|---|---|---|---|
| Net contribution | $229 million | $210 million | +9% |
| Net income (GAAP) | $53 million | $30 million | +77% |
| Adjusted net income | $63 million | $54 million | +17% |
| Adjusted EBITDA | $78 million | $72 million | +9% |
| GAAP diluted EPS | $0.58 | $0.31 | |
| Adjusted diluted EPS | $0.68 | $0.56 | |
| Funded accounts | 4.28 million | 3.63 million | +18% |
| Assets under administration | $19.2 billion | $17.5 billion | +10% |
And cash, cash equivalents and short-term investments stood at $1.2 billion as of 30 June.
Three Different Growth Rates in the Same Report
Note that the numbers do not move together:
Net contribution rose 9%. Adjusted EBITDA rose 9%. Adjusted profit rose 17%. And GAAP profit rose 77%.
And that teaches something. When the broadest operating measure and the adjusted operating measure both move by exactly 9%, 9% is the growth rate of the business.
The 77% is not a growth rate - it is a difference between two points in time at each of which there were non-operating items. The company itself presents the adjusted figure alongside it, and that is precisely what it is meant to correct.
This does not mean the $53 million is not real. It means the business underneath grew 9%, not 77%.
And the Gap I Consider the Centre of the Report
Funded accounts grew 18%. Assets under administration grew 10%.
Meaning the average money per account fell.
And the July metrics, which the company published alongside the report, sharpen this considerably:
| July metric | The figure | Year-over-year change |
|---|---|---|
| Funded accounts | 4.32 million | +18% |
| Assets under administration | $18.5 billion | -5% |
| Capital markets trade count | 48.5 million | Flat |
| Average amount per trade, capital markets | $207 | -23% |
| Crypto trade count | 1.4 million | -73% |
| Average amount per trade, crypto | $182 | -50% |
| Interest earning assets | $6.8 billion | -8% |
| Money transfers | $1.1 billion | +10% |
Assets under administration went from plus 10% in the quarter to minus 5% in July.
And crypto trade count fell 73% - while the average amount per such trade fell a further 50%. When both the number of trades and the amount per trade fall, total volume falls several times over.
And in capital markets too, which looks stable on trade count, the average amount per trade fell 23%.
The picture that emerges: more users, each of them doing less.
The Acquisition
On the same day eToro announced an agreement to acquire TradeZero, a US online brokerage focused on active traders.
| Aggregate consideration | Up to $231 million |
| Composition | Cash and up to 2.5 million newly issued Class A common shares |
| Target revenue | About $80 million in the twelve months ended 30 June 2026 |
| Gross margin | 81% during the second quarter of 2026 |
| Expected closing | The first half of 2027, subject to regulatory approvals |
The company states the transaction is expected to be accretive to adjusted EPS in the first year after completion, and that this is its third acquisition signed this year.
And what it brings: TradeZero was founded in 2015 and holds a Bahamas broker-dealer serving international clients, a US broker-dealer operating since 2019, a Canadian operation since 2022 and a European entity. Meaning infrastructure and licences, not only customers.
eToro CEO Yoni Assia describes the deal as a faster path to launching products for US customers. Jefferies served as exclusive financial adviser to eToro, and J.P. Morgan to TradeZero.
What the Company Launched in the Quarter
A new app consolidating trading, investing, wealth management and banking around the company's AI agent. An app store already offering more than 75 applications built by developers, partners and professional investors. Agent Portfolios, allowing AI agents to be connected to dedicated portfolios within the account. Sub-accounts. A US RIA licence.
And in wealth management: assets under management in its UK savings offering grew 15 times year over year. And the company's payment card was issued across Europe at a volume that grew by more than 30% in a single quarter.
הזווית שלי
דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
This is a report in which the quarter and the month that followed it tell two different stories, and the company published both. That deserves credit.
The quarter itself is good. Net contribution rose 9%, adjusted EBITDA rose 9%, accounts grew 18%, and the company is profitable.
But I am not excited by the 77% headline in net income. When the broad operating measure and adjusted EBITDA both move by exactly 9%, 9% is the growth. The 77% is a comparison between two points in time, not a rate.
And what genuinely holds my attention is the gap between the number of accounts and what happens inside them.
Accounts grew 18% and assets under administration grew 10% in the quarter - and by July assets had already fallen 5%. On a trading platform, an account is only a vessel. What generates revenue is what passes through it. And every activity metric the company published for July is falling: amount per trade in capital markets minus 23%, crypto trades minus 73%, amount per crypto trade a further minus 50%, and interest earning assets minus 8%.
Part of this is clearly the crypto cycle, and that is not the company's fault. But the 23% fall in the average amount per trade in capital markets is not crypto - it says the average user is committing less on each action.
And against that background, the acquisition looks very logical to me - and may reveal more than it says.
eToro is paying up to $231 million for a business serving active traders. That is precisely the attribute its own metrics show weakening. A company adding users but losing activity per user is buying activity. And that is a reasonable decision, particularly when the target operates at an 81% gross margin.
What I do put a question mark on is the timetable. Closing is expected in the first half of 2027 - close to a year from now, and subject to regulatory approvals. A brokerage deal spanning three regulatory regimes is not a simple transaction. Until it closes, the effect on results is zero - and the company will have to get through that period with the metrics it has today.
And what I will check next quarter is one figure: whether assets under administration return to growth. Because if accounts keep rising 18% and assets keep falling, then the company is succeeding at acquisition and failing at deepening - and that is a problem one acquisition does not solve.
