Online brokerage firm etoro's stock was falling Tuesday afternoon after the company reported second-quarter earnings growth that fell short of Wall Street expectations. Etoro said second-quarter profit jumped 77% year over year to $53 million. Analysts were expecting $55.1 million, according to estimates compiled by FactSet. For the second quarter of 2025, etoro reported $30 million in profits.
On Tuesday, it said it had agreed to acquire TradeZero, a U.S.-focused online brokerage serving active traders. The acquisition will also give etoro access to the Canadian market, the company says. Etoro said it expects the aggregate purchase price to be up to $231 million, consisting of cash and up to 2.5 million newly issued class A common shares of the company.
The company's stock was down 12.5% Tuesday afternoon while the benchmark S&P 500 index was down 0.4%.
Etoro has been striving to add customers as well as make inroads in the U.S. market, offering investors a suite of tools that it hopes will appeal to active traders. The majority of etoro's customers are outside the U.S., with 72% of funded accounts in Europe.
The TradeZero acquisition is subject to certain closing conditions and regulatory approvals. It is expected to close during the first half of 2027, according to etoro. TradeZero generated approximately $80 million in revenue in the last 12 months, etoro said.
Yoni Assia, co-founder and chief executive officer of etoro, says he was drawn to TradeZero for its technology and highly engaged customer base. "This combination gives us a faster path to launching new products for U.S. customers and strengthens our offering," Assia says in a statement. "Together, we'll innovate faster as we continue building the global financial superapp for the next generation of users."
Etoro is attracting new customers to its platform, but cryptotrading, a key source of revenue, is in a slump. Etoro said funded accounts increased 18% year over year to 4.28 million. Assets under administration grew by 10% to $19.2 billion, according to the company.
Etoro provided some business metrics for July with its earnings announcement. The total number of crypto trades for the month was 1.4 million, down 73% year over year. The invested amount per trade for July was $182, down 50% year over year, according to etoro. Prices for cryptocurrencies are down substantially over the past year. The iShares Bitcoin Trust ETF, which tracks the price of Bitcoin, is down 46% over the past 12 months.
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