eToro Reports Q3 Net Contribution Down 13% to $186 Million

Etoro Group (NASDAQ: ETOR ) reported third-quarter financial results on Tuesday. The transcript from the company's third-quarter earnings call has been provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Summary Etoro Group reported a 13% year-over-year decline in net contribution to $186 million and a 56% decline in adjusted EBITDA to $34 million, primarily due to lower crypto trading activity and increased marketing investments. Funded accounts rose 18% year over year to 4.39 million, and equity assets under administration reached $11.5 billion, marking a 24% increase. The company completed the rollout of a new app leveraging AI for faster product delivery.

Etoro Group launched several strategic initiatives, including 24/7 trading across multiple assets, prediction markets for international users, and the introduction of Etoro Edge for active traders. The pending acquisition of TradeZero and LB Financen are expected to expand their market presence in the US and Latin America. A $250 million share repurchase program was announced, reflecting the company's confidence in long-term growth and commitment to shareholder value. Management highlighted the increasing role of AI in transforming trading and marketing operations, aiming to enhance user engagement and reduce customer acquisition costs.

Full Transcript Daniel Amir (Head of Investor Relations) Hi, my name is Daniel Amir, Head of Investor Relations. This webcast is being recorded and will be available for replay in the investors section of Etoro's website. Our earnings press release, investor presentation and October monthly spreadsheet are now available on our website at investors.etoro.com. Today I'm joined by Yoni Assia, our CEO, and by Meron Shani, our CFO.

Following the prepared remarks, we will conduct a Q and A session and answer questions from both institutional research analysts and a selection of the most upvoted questions previously submitted by Etoro's retail shareholders. Before we begin, I want to note that today's discussion contains forward-looking statements, including statements about goals, business outlook, industry trends, market opportunities, expectations for future financial performance and similar items, all of which are subject to risks, uncertainties and assumptions.

You can find more information about these risks and uncertainties in the press release that we issued today and in the Risk Factors section of our filings at sec.gov. Actual results may differ, and we undertake no obligation to revise or update any forward-looking statements. Finally, during today's meeting we will discuss non-GAAP financial measures. These non-GAAP financial measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP.

Definitions and a reconciliation of GAAP to non-GAAP measures are available in our press release, investor presentation and on the sec.gov website, as applicable. With that, I will pass the call to Yoni. Alexander Jonathan Assia (Chief Executive Officer) Thank you, Daniel, and thank you to everyone joining us today. Welcome to Etoro's third quarter 2026 earnings call.

After Meron and I conclude our prepared remarks, we'll open the call for your questions. Our vision is to enable our customers to access all financial markets across trading, investing, wealth management and neobanking. In Q3 we completed the rollout of the new Etoro app, which was written with AI and enables us to deliver new products at much higher speed. Funded accounts rose 18% year over year to 4.39 million, and equity assets under administration reached a record of $11.5 billion, up 24% year over year and more than double the $5 billion reported two years ago.

In the third quarter of 2024, total assets under administration were $20.8 billion. Following a strong first half, lower volatility across equities, commodities and crypto created headwinds and softened trading activity in the third quarter. Periods of elevated activity and volatility are typically followed by a cooling off, as we saw in 2018 and 2022. This reinforces the importance of our diversified business model across regions, product lines and asset classes.

In addition, in the month of November we've so far seen a pickup in equity activity versus October driven by higher volatility. We are accelerating product delivery across all product lines as AI reshapes how people access and interact with the markets and as a new generation of investors seeks greater choice, more connected ways to invest and increasingly uses intelligent tools. Now let me walk you through some of the highlights of the quarter. Let's start with trading.

This quarter we continued to expand access to 24/7 trading, giving users greater flexibility to respond to market events and manage their portfolios whenever opportunities arise. Always-on is an important part of our vision. We're seeing capital markets move onto the always-on rails of crypto, and users are expecting the same flexibility across a broader range of assets. Today Etoro offers 24/7 trading across multiple assets including crypto, indices, commodities and equities.

As 24/5 trading has demonstrated, with nearly a quarter of daily volumes occurring outside traditional hours, we believe 24/7 trading can drive meaningful incremental activity as it is fully deployed next year. Furthermore, prediction markets are now live for international users in selected markets, giving them another way to engage with markets. Through Etoro and Zengo, we are also giving users more buying power. Etoro has a large base of crypto holders and long-term equity investors who can now benefit from more buying power.

Our new buying power capabilities enable our customers to convert positions into additional margin that can be invested in stocks and crypto. The expansion of buying power and additional margin accounts should increase the asset-based revenues. We also launched Etoro Edge, our desktop trading experience designed for more active users with professional-grade charting, analytics and a dedicated working space for trading across multiple asset classes. Since the launch we have seen significant growth, with week-over-week record volumes on the new platform.

Combined with buying power and the planned acquisition of TradeZero, our new app and Edge strengthen our ability to serve more sophisticated, higher-frequency traders who want deeper capabilities, greater flexibility and faster execution. Together, these capabilities significantly expand our opportunity to serve the broader active trader market. We believe agentic trading is the next evolution of trading, and Etoro is at the forefront of this shift. We're building an intelligence and connectivity layer that brings together Tori, external AI connectors and dedicated agentic accounts to enable more of our users to use AI to trade actively in their accounts.

Tori, our AI agent, now delivers our customers proactive insights, helping users better understand their portfolios, identify opportunities and stay informed wherever they are. Rather than waiting for users to search for information, the experience increasingly anticipates what matters to them and delivers relevant insights when they need them. Tori can also help users take action, including managing their portfolios. We've recently added official connectors for Claude, ChatGPT and Grok.

Customers can find us in the official stores and connect their Etoro accounts. Through connectors and dedicated agentic accounts, users can access intelligent portfolio management with clear rules and control, bringing sophisticated investing capabilities to a much broader audience. Usage of APIs and agentic trading users increased 250% quarter over quarter. The Etoro App Store, which launched last quarter, now offers more than 250 apps, further expanding the tools and capabilities available to our users.

Looking ahead, we believe agentic trading and investing can transform how people discover opportunities, make decisions and manage their portfolios. Collective intelligence has always been at the heart of Etoro. We pioneered social investing and we continue to lead it today. That was clear last week at our Pro Investor Summit, where more than 300 pro investors from 37 countries came together with our top-tier clients and Etorians to share their experience, perspectives and approach to the market.

It is my favorite event of the year, and I couldn't be prouder of the talent and expertise across the Pro Investor program. We continue to expand the offering of our alpha portfolios that use quantitative strategies, AI and proprietary data to generate alpha for our users. We've recently launched 26 Smart Portfolios in the US following the receipt of our RIA license. Smart Portfolios provide managed, diversified portfolios that automatically allocate and rebalance investments based on defined strategies and risk profiles.

Their US launch marks an important milestone as we prepare to bring more of Etoro's product offering to US users following the completion of the TradeZero acquisition. Last week we announced an agreement to acquire LB Financen, a leading digital investment and neobanking platform in Argentina, with crypto, broker-dealer and neobanking licenses. This acquisition gives us a strong foundation for expanding Etoro's platform in Argentina and, over time, across Latin America. Latin America is seeing rapid growth in retail participation driven by macro shifts and increased digital penetration.

Finally, an update on our pending acquisition of TradeZero. We announced the transaction in August for approximately $225 million and continue to expect it to close in the first half of 2027, subject to the required regulatory approvals and other customary closing conditions. TradeZero is highly complementary to Etoro. It strengthens our US active trading capabilities, gives us entry into Canada, and adds proprietary technology and infrastructure.

It also creates clear product opportunities. Etoro users will gain access to TradeZero's futures, prediction and options capabilities, while TradeZero users will gain access to Etoro's crypto offering and international reach. We expect the acquisition to be accretive to adjusted EPS in the first full year post completion, before synergies. Lastly, alongside today's earnings announcement, we introduced a $250 million share repurchase program, reflecting our confidence in Etoro's long-term growth prospects and our commitment to creating shareholder value.

We believe our shares are undervalued, and our profitable business model and strong cash generation provide the flexibility to repurchase shares while preserving the ability to pursue strategic opportunities. Our four M&A transactions this year demonstrate that we remain focused on both disciplined growth and shareholder returns. The timing and amount of any repurchase will depend on market conditions and other factors. With supportive macro trends, financial discipline and continued focus on innovation and execution, we're well positioned to drive long-term value.

With that, I will now pass along the call to Meron to discuss our financial results. Meron Shani (Chief Financial Officer) Thank you. Yoni, third quarter net contribution was $186 million, down 13% year over year, and adjusted EBITDA was $34 million, down 56%. Lower net contribution and higher investment in marketing than a year ago reduced profitability.

Lower crypto contribution was the main driver for the decline in total net contribution, partly offset by higher capital markets contribution. Total assets under administration was $20.8 billion, unchanged year over year, and funded accounts increased 18% to 4.39 million, including the impact of acquisitions. Let's take a closer look at our third quarter financials by business line. Compared to a year ago, our net trading contribution from capital markets, equities, commodities, and currencies increased 21% year over year to $88 million due mainly to a more favorable asset mix leading to better take rates.

The quarter-over-quarter decline was largely associated with softer seasonal trends that led to lower trading activity in both equities and commodities. Our net trading contribution from crypto increased 141% quarter over quarter to $26 million, reflecting a recovery in crypto trading activity and pricing during August and September, a trend that continued into October. However, contribution declined by 53% year over year, primarily due to lower trading activity in crypto. As we have experienced in prior crypto cycles, volatility in crypto activity is to be expected, and our diversified business model provides resilience across market environments.

The quarterly contribution included a $6 million positive valuation impact from our corporate crypto holdings, bringing the underlying contribution from customer activity to $20 million. Net interest income contributed $50 million, down 19% year over year, largely due to an 11% decrease in interest-earning assets with lower users' margin book and lower crypto activity. Etoro Money's contribution declined 5% year over year to $20 million, largely due to lower customer activity in the third quarter. Adjusted OpEx was $152 million, up 1% quarter over quarter and within our guidance.

Adjusted selling and marketing expense was $68 million. This was broadly in line with the second quarter, despite lower net contribution, reflecting incremental marketing cost associated with the launch of our new app and refreshed brand. We expect this cost to decline in the fourth quarter. At the same time, we are transforming our marketing function to become more AI-native across execution, brand building, measurement, and channel mix, enabling us to operate more effectively in this new environment.

Adjusted R&D and G&A and operating expenses were $37 million and $48 million, respectively. Our adjusted diluted EPS for the quarter was $0.26, compared to $0.60 in the third quarter of 2025. Our net income for the first nine months of 2026 was $150 million, compared to $147 million in the same period of 2025. Moving to our balance sheet, we ended the quarter with $1.2 billion in cash, cash equivalents, and short-term investments, and generated $21 million in free cash flow from operations.

We have a strong balance sheet, and our robust cash position and generation allow us to pursue various strategic uses of capital as appropriate. Now let me share a few comments on fourth-quarter trends. As part of our quarterly results, today we also released our October monthly KPIs. The month of October has seen similar trends to Q3.

Our capital markets and crypto businesses saw year-over-year decline in both total number of trades and invested amount per trade. Assets under administration was $19.2 billion, down 6% year over year, and funded accounts were 4.42 million, up 18% year over year. We expect our adjusted OpEx for the fourth quarter to be lower than in Q3. In addition, as Yoni mentioned, we also announced a $250 million share repurchase program that reflects our commitment to create shareholder value.

To summarize, we are confident in our ability to capture new opportunities, create value through TradeZero and LB Finance's acquisitions, and further strengthen Etoro Group's leadership in global trading and investing. With that, Daniel, let's move to Q&A.

Alexander Jonathan Assia (Chief Executive Officer) Once the acquisition is completed and approved by regulators, we plan to embed all of TradeZero's capabilities, which include margin trading, short futures, prediction markets, and, coming soon, perpetuals, into the main core Etoro app that will include copy trading as well as crypto and our smart portfolios we've just recently launched, which will bring basically the core Etoro app, which is now the new app, to be on par with the global offering of Etoro Group. And in parallel, we will continue the TradeZero products as well for the active trader segment. Daniel Amir (Head of Investor Relations) Thank you, Yoni.

Operator. OPERATOR Certainly. And our next question from the phone lines comes from the line of Bill Katz from TD Cowen. Your question, please.

Bill Katz (Analyst at TD Cowen) Great, thank you very much. So maybe a two-part question. I was wondering if you could talk about your plans to accelerate ARPU, average revenue per user. And then could you expand on your comments of using AI to potentially decelerate, or how you're going to use AI to enhance the sales and marketing?

I think last quarter you had mentioned that your marketing and sales would be down sequentially, and that doesn't seem to be the case, and yet the account growth is relatively tepid. Just trying to sort of figure out the ROIC and a way to sort of increase the revenue per user. Thank you. Alexander Jonathan Assia (Chief Executive Officer) Sure.

So we've always created new products, and then we're looking at the attachment of products sold to those new users and to existing users as the way to expand ARPU. Some of those new products right now include the Edge platform, which is more targeted towards the active trader, as well as API trading and AI connectors, etc. We believe that through both the more advanced users, automated trading, and AI, we're going to see an increase in trading activity, which will increase, again within the active trader segment, ARPU over time, and we continuously attach more new products to the existing audience to increase ARPU.

Regarding sales and marketing, we're seeing an amazing shift right now with the ability of AI to create ads and to actually personalize a lot of the marketing activity towards specific audiences.