What eToro Group (ETOR) Said on Its Q3 Earnings Call

Key Points

• Q3 results weakened as lower trading activity, especially in crypto, drove net contribution down 13% year over year to $186 million and adjusted EBITDA down 56% to $34 million. Crypto net trading contribution fell 53%, partly offset by a 21% increase in equities, commodities and currencies.
• eToro announced a $250 million share repurchase program, citing its view that shares are undervalued. It ended the quarter with $1.2 billion in cash equivalents and short-term investments.
• Funded accounts grew 18% to 4.39 million, while equity assets under administration rose 24% to a record $11.5 billion. The company expects Q4 adjusted operating expenses to be at least 5% lower than Q3 and is pursuing acquisitions to expand in the U.S. and Latin America.

eToro Group NASDAQ: ETOR reported lower third-quarter 2026 net contribution and adjusted earnings as softer trading activity, particularly in crypto, weighed on results despite growth in funded accounts and capital markets revenue.

Net contribution fell 13% from a year earlier to $186 million, while adjusted EBITDA declined 56% to $34 million. CEO Yoni Assia said lower volatility across equities, commodities and crypto softened trading after a strong first half, though equity activity had picked up in November compared with October.

The company also announced a $250 million share repurchase program. Assia said eToro considers its shares undervalued and has the financial flexibility to buy back stock while pursuing strategic opportunities. The timing and amount of purchases will depend on market conditions and other factors.

Crypto Decline Weighs on Results

CFO Meron Shani said lower crypto contribution was the main driver of the decline in overall net contribution, partly offset by growth in capital markets. Net trading contribution from equities, commodities and currencies rose 21% year over year to $88 million, helped by a more favorable asset mix and better take rates.

Crypto net trading contribution fell 53% from a year earlier to $26 million, although it rose 141% from the second quarter as activity and pricing recovered in August and September. The figure included a $6 million positive valuation impact from corporate crypto holdings, leaving $20 million attributable to underlying customer activity.

Net interest income declined 19% to $50 million, primarily because of lower interest-earning assets, while eToro Money contribution slipped 5% to $20 million. Adjusted diluted earnings per share fell to $0.26 from $0.60 a year earlier.

Funded accounts increased 18% year over year to 4.39 million at quarter-end, including the impact of acquisitions. Total assets under administration were unchanged at $20.8 billion, while equity assets under administration rose 24% to a record $11.5 billion.

October Trends and Spending Outlook

Shani said October showed trends similar to the third quarter, with year-over-year declines in both the number of trades and the amount invested per trade across capital markets and crypto. Assets under administration were $19.2 billion at the end of October, down 6% from a year earlier, while funded accounts reached 4.42 million, up 18%.

Adjusted operating expenses were $152 million in the third quarter, including $68 million in adjusted sales and marketing expenses. Shani said fourth-quarter adjusted operating expenses would be at least 5% lower than in the third quarter. Assia said the company is adjusting sales and marketing spending toward roughly 25% of net contribution and expects to target a similar level strategically next year.

eToro ended the quarter with $1.2 billion in cash equivalents and short-term investments and generated $21 million in free cash flow from operations, Shani said.

Acquisitions Target U.S. and Latin America

Assia said eToro still expects its approximately $225 million acquisition of TradeZero to close in the first half of 2027, subject to regulatory approvals and other customary conditions. The deal is expected to be accretive to adjusted earnings per share in its first full year after completion, before synergies.

Following completion, eToro plans to integrate TradeZero capabilities into its core app while continuing TradeZero products for active traders. Assia said the transaction would strengthen eToro’s U.S. active trading offering and provide entry into Canada.

Separately, eToro announced an agreement to acquire Argentina-based LB Finanzas. Assia said the business would form a base for expansion in Latin America and that eToro believes it can grow regional revenue to $100 million within two to three years. Shani said the transaction would be less than $20 million and would not be material to the balance sheet. Assia added that eToro expects to slow its acquisition pace to integrate the four deals announced this year.

AI and New Product Expansion

Assia said eToro is adding AI tools and connectors to help customers manage portfolios and trade. Usage of APIs and the number of agentic trading users increased 250% quarter over quarter, he said. He also predicted that agentic trades on eToro would exceed user clicks by the end of next year.

The company recently launched 26 Smart Portfolios in the U.S. under its registered investment adviser license. Assia said U.S. copy trading remains limited to club members and that eToro is discussing potential structures for compensating U.S. Pro Investors with regulators.

Assia also said prediction markets are live for international users in selected markets. The regulatory landscape outside the U.S. remains in development, he said, with eToro discussing the product with European regulators and starting in selected Latin American and Asian markets.

About eToro Group (NASDAQ:ETOR)

eToro Group 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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.