According to aggregated data, eToro Group Ltd. (ETOR.US) reported its second-quarter financial results, surpassing overall profit expectations. However, a significant loss in its cryptocurrency operations, combined with the announcement of acquiring TradeZero, triggered a sharp drop in the company's stock price. Compiled data reveals that the crypto business posted a loss of $7.2 million in Q2 2026, marking a 120% reversal from a profit of $37.7 million in the same period last year.
Revenue fell 29% from $1.91 billion to $1.35 billion, with costs also totaling $1.35 billion. Trading volume in July reached 1.4 million transactions, down 73% year-over-year, while the average transaction value dropped 50% to $182. The company is currently developing a blockchain-based perpetual contract product, with a cryptocurrency purchasing feature expected to launch soon.
Stock trading operations drove net income up 9% year-over-year to $229 million, and funded accounts grew 18% to 4.28 million. Adjusted diluted earnings per share came in at $0.68, exceeding analyst estimates of $0.61. Despite these figures, the stock fell 11% during regular trading, with an additional decline of over 12% in after-hours trading, bringing the price to approximately $29.80.
The company announced it would acquire U.S. brokerage TradeZero for up to $231 million in cash and stock, with the deal expected to close in the first half of 2027 after receiving regulatory approval. TradeZero offers commission-free U.S. stock and options trading services along with short-selling tools, generating approximately $80 million in revenue as of June. This marks eToro Group Ltd.'s (ETOR.US) third acquisition agreement this year.
The acquisition is primarily viewed as a consolidation move in the U.S. brokerage and distribution sector, with neither party disclosing plans related to cryptocurrency, blockchain, or tokenization. Against the backdrop of significantly cooling activity in the crypto market, eToro Group Ltd. (ETOR.US) is expanding through traditional brokerage operations to hedge against single-sector risk. Whether this integration strategy can effectively boost its valuation remains to be seen.
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