Retail investing platform beats forecasts as commodities offset weaker crypto trading
eToro Group exceeded Wall Street expectations in the first quarter as a sharp increase in commodities trading helped drive the company’s strongest quarterly performance since going public.
The trading and investing platform reported net income of $82.4 million for the quarter ended March 31, up 37% from $60.1 million a year earlier. Net contribution rose 19% to $258.2 million, while adjusted EBITDA increased 35% to $108.5 million.
Adjusted diluted earnings per share came in at $0.91, ahead of analyst estimates of $0.73, according to Reuters.
“I’m incredibly proud of the eToro team for delivering our strongest quarterly financial results as a public company, while continuing to accelerate product innovation,” said Yoni Assia, CEO and co-founder of eToro.
Commodities were the main growth driver, accounting for approximately 60% of trading commissions during the quarter, with trading volumes in the asset class nearly quadrupling from a year earlier.
The company said funded accounts climbed 12% year over year to 4.02 million, while assets under administration increased 15% to $17 billion.
Crypto trading softens
eToro’s April operating metrics pointed to softer crypto activity, with the total number of crypto trades falling 32% from a year earlier, according to Barron’s.
Although crypto trading activity has moderated, Assia said he expects the asset class to rebound later this year.
“We do expect later this year to start seeing crypto rising back to, you know, near all-time high, and that will drive crypto engagement,” Assia said in an interview with CNBC.
During the quarter, eToro introduced 24/7 trading for select commodities, equities and indices, added Japanese stocks and launched crypto trading in New York after securing the necessary regulatory approvals.
The company also rolled out AI-powered Agent Portfolios and integrated xAI technology into Tori, its artificial intelligence assistant.
In April, eToro completed its acquisition of crypto wallet provider Zengo, adding self-custody functionality to its digital asset offering.
“Our strong first quarter results demonstrate the power of our diversified multi-asset platform and our ability to scale efficiently while continuing to invest in innovation and growth,” said Meron Shani, chief financial officer of eToro.
Reuters reported that eToro shares rose 6.5% in premarket trading following the earnings release, though Barron’s later reported the stock was down about 5% in afternoon trading.
Robinhood
Robinhood Markets, one of eToro’s closest publicly traded peers, reported first-quarter results on April 28 that showed a similar pattern of strong overall growth but weaker crypto trading.
Total net revenue rose 15% to $1.07 billion, while net income increased to $346 million. Revenue from cryptocurrency trading fell 47% to $134 million, according to Robinhood.
The results underscore a broader trend among retail trading platforms: strength in products such as equities, options and subscriptions is helping offset a slowdown in digital asset activity.
