eToro Group Q3 2026 Earnings Results & Report

eToro Group EPS Results

• Actual EPS: $0.26
• Consensus EPS: $0.27
• Beat/Miss: Missed by -$0.01
• One Year Ago EPS: $0.53
• EPS Beat Rate: 5 of last 6 quarters

eToro Group Revenue Results

• Actual Revenue: $1.49 billion
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

eToro Group (NASDAQ:ETOR) operates an online investing and trading platform that combines access to financial markets with social investing features. Depending on a user’s location, the platform offers instruments such as stocks, exchange-traded funds and cryptoassets, as well as other trading products.

The company’s features include tools for researching and discussing investments and CopyTrader, which lets users view and automatically mirror the portfolios of other investors. Product availability varies by jurisdiction and is subject to local regulations.

Founded in 2007, eToro serves customers in multiple countries. Co-founder Yoni Assia leads the company as chief executive officer.

eToro Group Q3 2026 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: Q3 net contribution fell 13% year over year to $186 million and adjusted EBITDA declined 56% to $34 million, mainly reflecting weaker crypto activity and higher marketing investment. October activity remained soft, with assets under administration down 6% year over year.
• Positive Sentiment: Funded accounts grew 18% year over year to 4.39 million, while equity assets under administration rose 24% to a record $11.5 billion. Total assets under administration were $20.8 billion, unchanged year over year.
• Positive Sentiment: eToro completed its new app rollout and highlighted expansion of Edge, 24/7 trading, and AI-driven tools including Tori and external AI connectors. API and agentic-trading users increased 250% quarter over quarter, though management’s expectations for broader adoption remain forward-looking.
• Positive Sentiment: The company announced a $250 million share repurchase program and expects Q4 adjusted operating expenses to be at least 5% lower than Q3. Management said repurchases will depend on market conditions and other factors.
• Neutral Sentiment: eToro expects its pending TradeZero acquisition to close in the first half of 2027, subject to approvals, and says it could expand U.S. active-trading capabilities; management expects it to be accretive to adjusted EPS in the first full year after completion, before synergies. The announced LB Finanzas acquisition is intended to support expansion in Latin America, with management targeting $100 million in regional revenue within two to three years.

Presentation

[Daniel Amir, Head of Investor Relations at eToro]

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 is now available on our website at investors.etoro.com.

[Daniel Amir, Head of Investor Relations at eToro]

Today, I am joined by Yoni Assia, our CEO, and by Meron Shani, our CFO. Following the prepared remarks, we will conduct a Q&A session and answer questions from both institutional research analysts and a selection of the most upvoted question 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.

[Daniel Amir, Head of Investor Relations at eToro]

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 take no obligation to revise or update any forward-looking statements. Finally, during today's meeting, we will discuss non-GAAP financial measures.

[Daniel Amir, Head of Investor Relations at eToro]

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 reconciliation of GAAP to non-GAAP measures is available in our press release, investor presentation, and on the sec.gov website as applicable. With that, I will pass the call to Yoni.

[Yoni Assia, CEO at eToro]

Thank you, Daniel. 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 will 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 enable us to deliver new products at much higher speed.

[Yoni Assia, CEO at eToro]

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 reached $20.8 billion.

[Yoni Assia, CEO at eToro]

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 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.

[Yoni Assia, CEO at eToro]

In addition, in the month of November, we have 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 use intelligent tools. Now, let me walk you through some of the highlights of the quarter. Let us start with trading.

[Yoni Assia, CEO at eToro]

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. What we're seeing in capital markets moving onto Always On rails of crypto, and users expecting the same flexibility across a broader range of assets.

[Yoni Assia, CEO at eToro]

Today, eToro offers 24/7 trading across multiple assets, including crypto, indices, commodities, and equities. As 24/5 trading 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.

[Yoni Assia, CEO at eToro]

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 enables 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 assets-based revenues. We also launched eToro Edge, our desktop trading experience designed for more active users with professional-grade charting analytics and dedicated working space for trading across multiple asset classes.

[Yoni Assia, CEO at eToro]

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 strengthens 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.

[Yoni Assia, CEO at eToro]

We believe agentic trading is the next evolution of trading, and eToro is 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.

[Yoni Assia, CEO at eToro]

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.

[Yoni Assia, CEO at eToro]

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.

[Yoni Assia, CEO at eToro]

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.

[Yoni Assia, CEO at eToro]

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 U.S. 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.

[Yoni Assia, CEO at eToro]

Their U.S. launch marks an important milestone as we prepare to bring more of eToro's product offering to U.S. users following the completion of the TradeZero acquisition. Last week, we announced an agreement to acquire LB Finanzas, a leading digital investment and neobanking platform in Argentina with crypto, broker-dealer, and neobanking licenses.

[Yoni Assia, CEO at eToro]

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.

[Yoni Assia, CEO at eToro]

TradeZero is highly complementary to eToro. It strengthens our U.S. 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 markets, and option capabilities, while TradeZero users will gain access to eToro's crypto offering and international reach.

[Yoni Assia, CEO at eToro]

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.

[Yoni Assia, CEO at eToro]

Our four M&A transactions this year demonstrate that we remain focused on both disciplined growth and shareholders' 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, CFO at eToro]

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.

[Meron Shani, CFO at eToro]

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.

[Meron Shani, CFO at eToro]

The quarter-over-quarter decline was largely associated with softer seasonal trends that led to a 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 a lower trading activity in crypto.

[Meron Shani, CFO at eToro]

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.

[Meron Shani, CFO at eToro]

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.

[Meron Shani, CFO at eToro]

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.

[Meron Shani, CFO at eToro]

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 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.

[Meron Shani, CFO at eToro]

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.

[Meron Shani, CFO at eToro]

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 Assia 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 Finanzas acquisitions, and further strengthen eToro's leadership in global trading and investing. With that, Daniel Amir, let's move to Q&A.

[Daniel Amir, Head of Investor Relations at eToro]

To change in 2027.

[Yoni Assia, CEO at eToro]

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, coming soon, perpetuals, into the main core eToro app. That will include copy trading, as well as crypto, and our Smart Portfolios, which 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. In parallel, we will continue the TradeZero products as well for the active trader segment.

[Daniel Amir, Head of Investor Relations at eToro]

Thank you, Yoni. Operator?

[Operator]

Certainly. Our next question from the phone lines comes from the line of Bill Katz from TD Cowen. Your question, please.

[Bill Katz, Senior Equity 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. Could you expand on your comments of using AI to potentially decelerate, or how you are 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. 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.

[Yoni Assia, CEO at eToro]

Sure. So, we've always created new products. We are 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, et cetera.

[Yoni Assia, CEO at eToro]

We believe that through both the more advanced users, automated trading, and AI, we are going to see an increase in trading activity, which will increase, again, within the active trader segment ARPU over time. We continuously attach more products to the existing audience to increase ARPU. Regarding sales and marketing, we are 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.

[Yoni Assia, CEO at eToro]

If you look at the different target audiences in eToro, everything from the crypto to now the crypto native, together with Zengo, to the active trader with Edge and the AI trader, we are able with AI to target those customers with specific ads, both internally and externally. We believe that the use of AI and personalizing the messaging towards those target audience over time will reduce CAC.

[Operator]

Thank you. Our next question comes from the line of Devin Ryan from Citizens JMP. Your question, please.

[Devin Ryan, Head Of Financial Services And Financial Technology Research at Citizens JMP]

Thanks so much. Good morning. A question on agentic trading, and just love to get a sense of how you think adoption will play out. Do you have any views around the timeline of when we will see much more material adoption. Also love to hear about what you think will differentiate the winners in agentic. Many of us think it will be pretty material, but what do you think will differentiate, and why do you think eToro will be well-positioned to win business in this front. Thanks.

[Yoni Assia, CEO at eToro]

Sure. As an example, last week we had our Pro Investor Conference with about 500 people in the crowd. I have asked how many people are using right now AI in their portfolio, and about 95%, 98% raised their hands. I then asked how many people are actually using AI to trade actively in their account, and it was about 5%.

[Yoni Assia, CEO at eToro]

I believe that gap will eventually close within the next six to 12 months. As I mentioned in the past, I believe by the end of next year, we are going to see more agentic trades happening on eToro than actual clicks in the platform. What differentiates the different players is the ability to create skills, tools, expose the right datasets through the APIs. We have built a lot of these tools and backend systems for our own quant team.

[Yoni Assia, CEO at eToro]

The quant team that have been building in eToro, both the datasets, but also the skills of how do we look at the data, how do we create the guardrails around trading, and how do we build basically the quantitative trading systems internally in eToro. Those are all being exposed to our customers. I think another significant moat over time is going to be the regulatory side.

[Yoni Assia, CEO at eToro]

I think that you will need to access platforms that have the right licenses to be able to trade and for the trading to be automatic in their accounts. So, I think this is a process where people are using already AI. We are seeing our customers attaching both external connectors and their AI agents, but I think the process is more gradual for them to actually connect sub-accounts and trade gradually and trust more AI to actively trade in their accounts. We have lost audio? Do we have any other questions? I think we might have lost audio. Apologies, there might be a technical issue.

[Daniel Amir, Head of Investor Relations at eToro]

Oh, no. Something happened. We did have a technical issue right here. Just a moment, guys. Apologies. Just a moment.

[Yoni Assia, CEO at eToro]

Apologies. We have a technical issue with the audio, it seems.

[Daniel Amir, Head of Investor Relations at eToro]

Oh, man. Just a moment. Apologies on this, guys. I don't know why we have a technical issue with the audio. Our apologies.

[Yoni Assia, CEO at eToro]

Can they hear us?

[Daniel Amir, Head of Investor Relations at eToro]

Let me see if we have another question while you try to find the audio.

[Yoni Assia, CEO at eToro]

One second. Technical issue. I hope you can hear us.

[Daniel Amir, Head of Investor Relations at eToro]

Question about Smart Portfolios and the rollout and adoption of Smart Portfolios.

[Yoni Assia, CEO at eToro]

Yes. Apologies. Our audio has broken, so we're hearing it from the other room. I understand there's a question about Smart Portfolios. We have recently launched the Smart Portfolios in the U.S. under our RIA license. We have brought 26 new Smart Portfolios to the U.S. With the completion of the acquisition of TradeZero, we also plan to bring the more active and leveraged Smart Portfolios into the U.S., which include our quantitative trading strategies and our Alpha Portfolios.

[Yoni Assia, CEO at eToro]

A lot of the focus globally has been on the quantitative portfolios and how we use AI to create actively managed portfolios that are also market neutral and long-short portfolios. Apologies again. It seems like we need to hear the questions with someone going into the other room to bring the questions.

[Yoni Assia, CEO at eToro]

We are very excited also and looking forward towards the Anthropic IPO this quarter that we are happy to see that is starting with the roadshow. We have had a very successful SpaceX IPO, as we all remember from when we launched the SpaceX IPO, and we are a retail distributor. I am very proud that it was announced that we will be a retail distributor for the Anthropic IPO as well.

[Yoni Assia, CEO at eToro]

While waiting, we can speak a bit about what we have also seen last week at the Pro Investor Conference. We have had reps from SpaceX introducing Grok Bot to our Pro Investors. As part of the process, we have actually been teaching our clients how to use external AI to trade in their accounts.

[Daniel Amir, Head of Investor Relations at eToro]

How do you make Smart Portfolios? How do you make the user a winner, and what has their adoption been so far?

[Yoni Assia, CEO at eToro]

We have just recently launched Smart Portfolios in the U.S. The way we introduce Smart Portfolios is through the product. A lot of the automation in the product and product marketing is about how do you attach the right products to the right customers at the right time. People who came to eToro to trade crypto would be more interested in Smart Portfolios related more to the crypto world. People who came more to equities will be interested more in equities. We basically adapt the right Smart Portfolios through our discovery to the right audience based on their trading preferences.

[Daniel Amir, Head of Investor Relations at eToro]

It is on now.

[Company Representative at eToro]

It's on now?

[Daniel Amir, Head of Investor Relations at eToro]

It's on now. They can ask a question.

[Yoni Assia, CEO at eToro]

We can actually use. Yeah, we can hear them now, Daniel?

[Daniel Amir, Head of Investor Relations at eToro]

Yes.

[Yoni Assia, CEO at eToro]

Any additional questions? Sorry for that. We were interrupted by a technical issue.

[Daniel Amir, Head of Investor Relations at eToro]

Sorry. We had some technical issues. Dan Dolev, can you ask your question, please?

[Operator]

Dan Dolev from Mizuho. Your question.

[Dan Dolev, Fintech Equity Research Senior Analyst at Mizuho]

Yes. Okay. You can hear me, right?

[Yoni Assia, CEO at eToro]

Yes, Dan. Apologies for that.

[Dan Dolev, Fintech Equity Research Senior Analyst at Mizuho]

Okay, guys. Thank you for Yeah, no problem. Thank you for the opportunity. Really nice growth on the user front. Very impressive. I do have a question about IPO access. The question is, following the success of SpaceX earlier this year, there's a new big AI IPO coming. How do you It looks like you guys are doing a lot of work on distributing it in Europe and the U.K. Can you maybe, Yoni, discuss how big this trend is of giving European retail access to these mega IPOs is? Thank you, and congrats again.

[Yoni Assia, CEO at eToro]

Thank you very much. This actually has been a shift in the IPO market, where we see the large IPOs actually looking for retail distribution. So it's a significant shift that happened over the last 12 months, with, I think, SpaceX representing a significant shift there. There's also been a change in regulation that enables that, and we're seeing basically companies throughout their IPO process filing for European prospectuses.

[Yoni Assia, CEO at eToro]

So that's what enables basically IPOs to be able to distribute both Europe, U.K., and we're seeing now that expanding from basically U.S. to Europe, U.K., and now potentially Australia, Canada, and other regions as well. We see two opportunities. One is the acquisition of new customers through IPOs. We've seen that as a significant channel in the SpaceX IPO, and we believe that that will continue. The second part is those IPOs, we expect them to start trading 24/7 on derivatives on the eToro platform as well as they start trading.

[Dan Dolev, Fintech Equity Research Senior Analyst at Mizuho]

Great. Thank you, Yoni.

[Yoni Assia, CEO at eToro]

Thank you, Dan.

[Operator]

Thank you. Our next question comes from the line of Craig Siegenthaler from Bank of America. Your question, please.

[Craig Siegenthaler, Stock Analys at Bank of America]

Thanks for taking my question. Hope everyone's doing well. My question is on agentic AI and its ability to reduce the need for copy trading. Do you see agentic AI replacing copy trading over time or potentially cannibalizing some of that business?

[Yoni Assia, CEO at eToro]

I think that our experience with AI is that you always need a talent to actually steer AI and to drive AI. I think AI enables our Pro Investors, now almost 6,000, to actually become a one-person hedge fund. So we've been actually training a lot of the Pro Investors to build in their Chief Risk Officer, their Chief Investment Officer, as agents that work for them 24/7.

[Yoni Assia, CEO at eToro]

I believe over time, that actually accelerates both alpha generation of our Pro Investors and trading activity as they learn to use AI to actually create more sophisticated strategies. So, I think it actually compounds copy trading over time and creates more trading activity. At the same time, I think also customers will start using agentic trading on their own in parallel to copying the top investors. Those who will be good at that will eventually become Pro Investors on eToro.

[Yoni Assia, CEO at eToro]

I think agentic trading generally means we are going to see more talented people that, with AI, are able to generate consistent results on eToro, means we are going to have more people that are qualified to copy and generate sustainable, consistent results over time.

[Operator]

Thank you. And our next question comes from the line of Chris Allen from KBW. Your question, please.

[Chris Allen, Managing Director at KBW]

Yeah, thanks for taking the question. I wanted to, I think it was Yoni, you mentioned that November you have seen a pickup in activity on higher volatility. Just wondering your thoughts on whether that is good for your customer base, whether you are just seeing that in the equity piece, and is that concentrated in some of the stocks which have been under the most pressure?

[Yoni Assia, CEO at eToro]

First of all, I think generally volatility is good for trading and for traders. It is where they find a lot of the opportunities. And over, I would say, the last five years, we have seen in many cases retail investors that are able to capture the dip, to buy the dip. Of course, post-volatility, sometimes if customers lose money, that sort of creates a cooling-off period.

[Yoni Assia, CEO at eToro]

That is why we always see heightened volatility and then lower volatility continue to the heightened volatility. I think last week's significant shift in the markets means more trading activity and also more opportunities for customers to find stocks that were at significantly higher valuations before and enter into the market. So again, generally, I think volatility creates opportunity in the trading markets. And of course, it means some customers need to manage their risk and manage their portfolios more actively.

[Chris Allen, Managing Director at KBW]

Thank you.

[Operator]

Thank you. Our next question comes from the line of Dan Fannon from Jefferies. Your question, please.

[Dan Fannon, Managing Director And Research Analyst at Jefferies]

Thanks. I wanted to ask about expenses. You mentioned AI helping potentially marketing spend being more efficient. If you could talk a bit more specifically about Q4 expense trends, then as we think about next year, what is a reasonable kind of level of growth for overall expenses as you think about investments and priorities into next year?

[Yoni Assia, CEO at eToro]

Sure. I will touch a bit about marketing, then Meron can continue on OPEX. I think what we are seeing within the marketing landscape within channels is a shift in channels. We are seeing cost per clicks, for example, in Google Search specifically, actually becoming higher and a shift towards actually other channels in parallel to Google.

[Yoni Assia, CEO at eToro]

A lot more influencer, social media, helping our Pro Investors actually get tools to promote themselves. I believe that using AI enables both us to create significantly more content and more tailored content, both regionally and on the different product lines of eToro, and to provide tools to our Pro Investors to also tell their stories externally and actually promote their stories externally on social media. I think we are seeing both shift in channels and AI enabling us to focus on channels that require more content and more tailored content over time. With that, to the expenses side, I will move to Meron.

[Meron Shani, CFO at eToro]

Sure. Thanks for the question with regards to the OPEX side. First, on Q4, as we noted, Q4 is going to be lower compared to Q3 by 5% and plus. In general, about AI and how it is becoming effective on the cost base, a few layers on this. One, AI will certainly enable us to scale the business without growth in any cost base.

[Meron Shani, CFO at eToro]

That is on that front. It helps us really automate a lot of processes. It helps us really reduce a lot of manual work, so that is very healthy also for the organization. Second, it helps us really automate and really build on vibe coding or any of the new tools. It really helps us build a lot of systems that we had to buy from externally, so that really is getting us a very good position in the overall cost base.

[Yoni Assia, CEO at eToro]

I will add an additional point on Tori, our AI agent, and its roadmap. We are in the process of now launching a new version, which we call Tori Reloaded, which actually goes through the entire database of all of the dialogues with customer service and is able to actually capture significantly a wider range of questions.

[Yoni Assia, CEO at eToro]

Again, with the new models of Grok, plus training it on all of the questions in the dialogues, both with account managers as well with customer service, we are seeing the agent actually advancing its capabilities to basically answer all of the customer's questions. On the roadmap also, to help them on their portfolio management as well.

[Operator]

Thank you. Our next question comes from the line of James Yaro from Goldman Sachs. Your question, please.

[James Yaro, Analyst at Goldman Sachs]

Good morning, and thanks for taking the question. I was hoping you might be able to speak to the TAM for prediction markets outside of the U.S. In other words, which geographies permit that, and where you are operating in that business, and then where you think you could expand your prediction markets offering over time?

[Yoni Assia, CEO at eToro]

Sure. We have launched prediction markets on Zengo, the non-custodial wallet on DeFi, together with Polymarket earlier this year. I would say I break down prediction markets into four. There is DeFi U.S., there is DeFi globally, and then there is TradFi, or the regulated activity in the U.S. That is the CFTC, DCM, DCO. Outside the U.S., I would say it is still very much an evolving regulatory landscape.

[Yoni Assia, CEO at eToro]

We are talking to the European regulators about prediction markets, as well as starting first in Latin America and Asia in selected markets. We do believe that, again, on financials, prediction markets will fall under financial regulation. I think in countries where you have more specific regulation around sports betting, I think that probably is going to be more challenging in regions like U.K., Europe, and others. Again, our view is sort of splitting prediction markets both to DeFi, TradFi, and then sports versus financials, which have a different regulatory analysis.

[Operator]

Thank you. Our next question comes from the line of Ed Engel from Compass Point. Your question, please.

[Ed Engel, Senior Research Analyst at Compass Point]

Hi, thanks for taking my question. Are you able to provide any details regarding the size and structure of the recent LB acquisition? Then, I guess, how do you think about M&A moving forward? Are you still looking for new deals today, or could the M&A focus maybe slow down a little bit as you digest some of the recent activity? Thanks.

[Yoni Assia, CEO at eToro]

Sure. First of all, I do believe we have right now, after announcing four acquisitions this year, we are going to slow down a bit to adjust and integrate all of the different companies we've acquired. We've always looked at integrating teams. Again, we're looking at the deal in Argentina as becoming our base for Latin America.

[Yoni Assia, CEO at eToro]

We believe we can grow the Latin America to $100 million revenues within the next two to three years, together with the LB team with us. The core that we've bought is actually the licenses, the team, a certain amount of customers and revenues, but that's a relatively small amount versus the size of eToro. Do you want to add anything regarding the size of the LB?

[Meron Shani, CFO at eToro]

Yeah, it's not something that's going to be material on the balance sheet. It's going to be less than $20 million.

[Operator]

Thank you. Our next question comes from the line of Craig Maurer from FT Partners. Your question, please.

[Craig Maurer, Managing Director at FT Partners]

Yes, hi. Thanks for taking the questions. What direction did crypto invested amount per trade go in September? If you could also discuss the drivers of the higher crypto take rate. Thanks.

[Yoni Assia, CEO at eToro]

Sure. I will let Meron answer that.

[Meron Shani, CFO at eToro]

Sure. In terms of the take rate, when we see lower, I call it activities of customer, it really depends on the direction. When the direction is positive and crypto pricing is higher, we see better take rates. That is in general. Specifically, we also had the crypto nostro that provided us another almost half a percent of an increase to the overall yield.

[Craig Maurer, Managing Director at FT Partners]

Okay. The question on amount per trade in September on crypto?

[Meron Shani, CFO at eToro]

I think September, as we saw between different months, it might be impacted by the amount of copy trading that goes into each of those trades. That will probably differentiate between different periods. If there is any increased activity in copy, we will see a reduced invested amount per trade. The way that we are looking at it is, obviously, we look at the entire invested amount, that this is really what drives the business.

[Craig Maurer, Managing Director at FT Partners]

Thank you.

[Operator]

Thank you. Our next question comes from the line of Brian Bedell from Deutsche Bank. Your question, please.

[Brian Bedell, Director at Deutsche Bank]

All right, great. Thanks. Good morning, sir. Maybe just back to the, I think you mentioned, Yoni, earlier, the receipt of the RIA license, and obviously the Smart Portfolio rollout. Can you talk about how you're using that RIA license in the U.S. for copy trading? To what extent are the Pro Investors in the U.S. getting or able to get compensated? Then if you can update us on the number of Pro Investors out of that 6,000 are now U.S.-based.

[Yoni Assia, CEO at eToro]

Sure. The RIA license was used right now to launch the Smart Portfolios first. The Smart Portfolios are managed by us and by our partners. CopyTrader is still limited in the U.S. to club members. We are in dialogues with regulators to see how potentially we can either use the RIA or structure incentives to the Pro Investors in the U.S. It is still a small number versus the 6,000.

[Yoni Assia, CEO at eToro]

We are looking to actually expand some of the Pro Investors outside the U.S. to help them create Smart Portfolios in the U.S. as well using the RIA license. The RIA license enables us to actually manage investments on the platform and will enable us to actually launch also more products for managed investments using Tori, our AI agent.

[Brian Bedell, Director at Deutsche Bank]

Interesting. Great. Then maybe just run on sales and marketing spending plans. I guess as you think about the expansion in the U.S. next year with TradeZero, is there a ratio of sales and marketing to net contribution that we should be thinking? I know it spiked at the last couple quarters on the lower net contribution, but are you still trying to manage this down to 25%, or is that run rate? Should we be expecting a higher run rate in 2027 as you try to expand in the U.S.?

[Yoni Assia, CEO at eToro]

Sure. Strategically, we have looked at the band of 20%-25%, as we said earlier this year. We have actually accelerated with a very successful first half. Right now, we are adjusting it back towards the range of 25%, and strategically, next year, we will look at roughly the same area of 25% out of net contribution.

[Brian Bedell, Director at Deutsche Bank]

Thank you.

[Operator]

Thank you. Our next question comes from the line of Alex Markgraff from KBCM. Your question, please.

[Alex Markgraff, VP And Equity Research Analyst at KBCM]

Hey, guys. Thanks for taking the question. Wanted to ask about one of the four pillars as you've laid them out, neobanking. Just curious, when you look across the globe and across operating markets, would love to hear more on just why eToro wins in neobanking. I mean, I think it's a competitive product, a lot of relevant competitors across certain geos. So maybe expand on the product set and maybe what you need to build there to remain competitive, and then would be curious just to hear a bit more on the acquisition strategy with respect to neobank products. Thank you.

[Yoni Assia, CEO at eToro]

Sure. First and foremost, neobanking for us started both through an acquisition, but also to cater to the local needs of our customers in different regions. We have now over 2.5 million local currency accounts, which is basically a virtual bank account, a virtual IBAN, which enables our customers to deposit and withdraw basically with no fees in real time right now in Europe, U.K., in euro, in pounds, in Australia right now, in Denmark, and we're adding more and more currencies.

[Yoni Assia, CEO at eToro]

So first and foremost, this significantly improves the economics of customers in the deposit and withdraw process versus, for example, a credit card, debit card, or a PayPal that in many cases is used as customers open and fund their account initially. Second part is the card.

[Yoni Assia, CEO at eToro]

The card, the Visa debit card right now is offered to customers in the club of eToro that are also now launching through the paid subscription of eToro. So we do believe that the neobanking and the capabilities of neobanking increase the subscription model in eToro as well, and we're planning to expand the card.

[Yoni Assia, CEO at eToro]

Right now, it's Europe and the U.K., both to have a global offering to our global audience and also expand the card program to more of the customers in eToro. Right now, it was for the 15%-20%, which are the club member. We are planning to expand that to more customers. I'll give an example of, again, the synergies between the card and the neobanking to the trading platform.

[Yoni Assia, CEO at eToro]

Right now, we have launched buying power on both crypto and stocks in selected markets, which means you can actually move your portfolio, let's say $20,000 of Facebook and $20,000 of Bitcoin into the eToro platform. Then you can basically ask for buying power. So on those $40,000, you can actually get an additional $20,000 in cash, and then you can spend that cash directly from your debit card in store. So, that basically creates a unified approach for an investment super app.

[Yoni Assia, CEO at eToro]

We are still very focused on our core business, which is trading and investing, but we believe there are significant synergies in actually capturing the entire universe of both savings or more of the passive wealth management part, as well as the neobanking part. We are not yet looking at neobanking as a customer acquisition channel. We are looking at neobanking as a product that increases attachment rates and increases ARPU and retention of customers over time.

[Operator]

Thank you. Our final question for today comes from the line of Charles Bendit from Rothschild & Company. Your question, please.

[Charles Bendit, Equity Research Analyst at Rothschild & Company]

Thanks. Hi, Yoni and Meron, and thanks for taking my questions. I just wanted to ask about the U.S. roadmap post the TradeZero acquisition. First, could you remind us whether your double-digit U.S. share ambition refers to customers, assets, or volumes, and whether your thinking there has changed in any way? Second, just curious whether you plan to separate out any U.S.-specific KPIs going forwards? Third, it sounded like U.S. marketing spend fits within your group S&M guidance at 25% of net contribution. Does that imply a moderation in spend for the existing ex-U.S. business? Thanks.

[Yoni Assia, CEO at eToro]

Sure. Can you reiterate just the first question on the double-digit percent?

[Charles Bendit, Equity Research Analyst at Rothschild & Company]

Sure. Could you remind us whether your double-digit U.S. share ambition refers to customers, assets, or volumes, and whether your thinking there has changed in any way?

[Yoni Assia, CEO at eToro]

Sure. Again, we are looking at always all three parameters when we are looking at all of the different regions. Right now, with the TradeZero acquisition, as we complete the acquisition and integrate, we are looking at how to basically look at the combined KPIs and how to split from the U.S.

[Yoni Assia, CEO at eToro]

That is not something that we have yet published, and we will probably talk to the analyst as we are looking forward. Regarding the 25% net contribution, as we have said in the past, we are always looking at how some of the more profitable regions are financing less profitable regions, or how growth markets or more mature markets are actually financing new markets in eToro, and we will continue to do that, including looking at the U.S.

[Yoni Assia, CEO at eToro]

With, of course, the TradeZero acquisition, that means that we already are starting from a position of having a significant U.S. business focused more on the active trader segment right now. Post-integration, we plan to have both the product suites for the retail mass consumer as well as the active trader, and we believe that means basically we have a significant stepping stone on which we can continue in scaling up the U.S. business. Anything to add there, Meron?

[Meron Shani, CFO at eToro]

No, I think the question was also about the ambition. I think you noted in the past that we want to be a double digit on U.S. on number of customers as a starting point, and that's going to be the driver also for the future KPIs to follow.

[Operator]

Thank you. This does conclude the question and answer session. I'd like to hand the program back to Daniel for any further remarks.

[Yoni Assia, CEO at eToro]

Thank you very much, everyone, from Miami.

Participants

Analysts

• Daniel Amir, Head of Investor Relations at eToro
• Yoni Assia, CEO at eToro
• Meron Shani, CFO at eToro
• Bill Katz, Senior Equity Analyst at TD Cowen
• Devin Ryan, Head Of Financial Services And Financial Technology Research at Citizens JMP
• Company Representative at eToro
• Dan Dolev, Fintech Equity Research Senior Analyst at Mizuho
• Craig Siegenthaler, Stock Analys at Bank of America
• Chris Allen, Managing Director at KBW
• Dan Fannon, Managing Director And Research Analyst at Jefferies
• James Yaro, Analyst at Goldman Sachs
• Ed Engel, Senior Research Analyst at Compass Point
• Craig Maurer, Managing Director at FT Partners
• Brian Bedell, Director at Deutsche Bank
• Alex Markgraff, VP And Equity Research Analyst at KBCM
• Charles Bendit, Equity Research Analyst at Rothschild & Company