Detailed narrative
TradeZero Acquisition and U.S. Expansion
eToro announced the acquisition of TradeZero for up to $231 million, a move expected to significantly strengthen its U.S. presence and open access to the Canadian market. The acquisition brings a strong U.S. management team, proprietary trading platform, and robust broker-dealer infrastructure. This is anticipated to accelerate innovation, enhance client experience, and broaden product offerings, including leverage trading, margin trading, futures, and shorting capabilities in the U.S. The transaction is expected to be adjusted EPS-accretive in the first full year post-completion, with closing anticipated in the first half of 2027.
AI-Powered Platform Evolution and Superapp Strategy
The company unveiled a new AI-powered eToro app, rewritten from scratch to integrate AI, featuring 'Tori' as an AI agent for proactive insights and portfolio understanding. This initiative aims to create a financial superapp, anticipating user needs and delivering relevant information. Additionally, eToro launched Agent Portfolios and agentic investing, allowing users to connect AI agents to dedicated portfolios with full control over objectives and risk parameters. New connectors for Claude and Grok are being launched to enable autonomous trading directly from these AI models.
Diversified Business Model Resilience
eToro's diversified multi-asset platform demonstrated resilience, with users shifting activity from crypto and commodities to equities. This flexibility allowed the platform to deliver strong results despite market changes, driving higher engagement and long-term retention. Net trading contribution from capital markets, equities, commodities, and currencies grew 25% year-over-year to $142 million, supported by a 64% increase in the number of trades, while crypto trading saw a decline.
Product Innovation and Ecosystem Expansion
Beyond AI, eToro introduced several product innovations. 'eToro Edge,' a new web platform, offers professional-grade trading tools for active traders. The eToro App Store expanded to over 75 applications, enhancing market analysis and personalization. New sub-accounts allow users to organize investments by financial goals, and 'eToro Work' facilitates direct payroll investing. These initiatives reinforce the strategy of connecting traditional finance with the on-chain economy and simplifying access to digital assets.
U.S. Growth Strategy and Regulatory Milestones
The company's U.S. growth strategy is advancing with the TradeZero acquisition and the recent receipt of its RIA license. The RIA license will unlock the launch of Smart Portfolios in H2 FY26, which have shown strong momentum outside the U.S. eToro aims to bring its global product offerings, including leverage and shorting capabilities, to the U.S. market, and is working towards enabling compensation for Pro Investors within the RIA framework, building a marketplace for financial advisors.
Crypto Market Outlook and Innovation
Despite recent crypto market pressures🌐, eToro remains bullish on the long-term prospects, citing the intersection of rising retail investors and the tokenization of real-world assets as tectonic shifts. Management views current market conditions as cyclical, similar to past 'crypto winters,' which historically foster innovation. The company continues to invest in digital assets, including the acquisition of crypto wallet provider Zengo and a strategic investment in an on-chain perpetual futures platform.
SpaceX IPO and Retail Access
The SpaceX IPO was a significant event for eToro, with over 200,000 customers trading more than $1.7 billion in volumes. eToro enabled pre-IPO trading and facilitated retail distribution in the U.K., where retail clients received 60% to 80% of the demand. This event served as a significant driver for new funded accounts and highlighted the potential for increased retail participation in large IPOs, with eToro actively building infrastructure for more such offerings.