eToro shares fall 12% despite Q2 earnings beat as crypto trading sinks

eToro shares dropped more than 12% by Tuesday midday despite the trading platform beating Wall Street earnings expectations for the second quarter, as its latest figures showed a sharp slowdown in crypto activity.

The company reported adjusted diluted earnings of $0.68 per share, above the $0.61 expected by analysts. Net contribution rose 9% from a year earlier to $229 million, while GAAP net income jumped 77% to $53 million.

Adjusted net income increased 17% to $63 million, while adjusted EBITDA rose 9% to $78 million. Funded accounts climbed 18% to 4.28 million and assets under administration increased 10% to $19.2 billion.

The stronger earnings came alongside a steep decline in crypto activity. eToro reported 1.4 million crypto trades in July, down 73% from a year earlier, while the average amount invested per crypto trade fell 50% to $182. By comparison, total trades across equities, commodities and currencies were flat from a year earlier at 48.5 million.

Cryptoasset revenue also fell to $1.35 billion in the second quarter from $1.91 billion a year earlier, while net trading income from equities, commodities and currencies increased to $141.6 million from $114 million.

eToro CEO Yoni Assia said during the quarter the company continued expanding its digital asset strategy through its self custody offering and development of onchain perpetual futures. 

The company also completed its acquisitions of Zengo and Bit2C and invested in perpetual futures platform Extended.

The company also announced Tuesday that it agreed to acquire US brokerage TradeZero in a cash and stock transaction valued at up to $231 million, with the deal expected to close in the first half of 2027.

eToro shares were trading around $29.84 at midday Tuesday, down roughly 12.2% from Monday’s close.