eToro's crypto unit swung to a $7.2M Q2 loss as trade volume collapsed, but adjusted EPS of $0.68 topped estimates. Shares fell 11% on the mixed print.
Alpha Score of 40 reflects weak overall profile with moderate momentum, poor value, moderate quality, moderate sentiment.
eToro's crypto trading unit posted a $7.2 million loss in the second quarter, swinging from a $37.7 million profit a year earlier, the company's earnings release Tuesday showed.
The Tel Aviv-based platform reported $1.35 billion in cryptoasset revenue, down 29% from $1.91 billion a year ago. Cost of revenue on those crypto assets ran $1.35 billion, pushing the segment into the red. Crypto trade count fell 73% year over year to 1.4 million in July alone, and the average crypto trade size dropped 50% to $182.
eToro said it is building onchain perpetual futures and that crypto buying power is "coming soon." No launch date was given.
The broader business told a different story. Net contribution rose 9% year over year to $229 million, driven by equity trading. Funded accounts grew 18% to 4.28 million. Adjusted diluted earnings per share of $0.68 beat the $0.61 consensus estimate, according to the filing.
Shares still fell about 11% after the release, trading near $29.80.
eToro also announced an agreement to acquire TradeZero, a U.S. brokerage, for up to $231 million in cash and stock. The deal is expected to close in the first half of 2027, pending regulatory approvals, eToro said. TradeZero offers commission-free U.S. stock and options trading along with short-selling tools. Neither company disclosed any crypto or tokenization plans for the unit, making the acquisition a pure U.S. distribution play for now. TradeZero generated about $80 million in revenue in the 12 months through June.
It is eToro's third signed acquisition this year.
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