eToro Group
(NASDAQ: ETOR)
delivered what Wall Street wanted on Tuesday: a record full year, a buyback
expansion, and a confident pitch about the future. The market rewarded it with
a more than 20% surge in the stock, which closed at $33.07, the highest level
in over a month.
Look at the
headline numbers and the enthusiasm makes sense. Net contribution for the full
year rose 10% to $868 million, net income climbed 12% to $216 million, and the
company ended 2025 with $1.3 billion in cash on the balance sheet.
As FinanceMagnates.com
reported when the results landed, full-year GAAP net income rose 12% to $216 million while the share
buyback program was increased by $100 million. CEO Yoni Assia called it “a
defining year” for the company, pointing to the May
NASDAQ IPO, accelerating product launches, and expanding global reach as
evidence of durable momentum.
But strip
away the full-year framing and the picture that emerges is considerably more
complicated. And the company’s own data, including the supplemental KPI
disclosures, tells much of that story.
eToro’s Assets Hit a Wall
in the Second Half
The single
most striking data point in the entire earnings package is one eToro does not
headline. Assets Under Administration (AUA) fell from $20.8 billion at the end
of the third quarter to $18.5 billion at the close of Q4, a decline of $2.3
billion, or roughly 11%.
The
company’s press release frames that as “11% year-over-year growth,”
which is technically accurate. It does not mention that AUA was growing 76%
year-over-year just one quarter earlier, a period when, as previously
reported, eToro’s Q3 net
income rose 48% annually even as sequential momentum stalled.
The AUA
trajectory through 2025 was a clean ramp: $14.8 billion, $17.5 billion, $20.8
billion, and then a reversal. Q4 broke that trend decisively, and January has
not reversed it. Monthly KPI data released alongside Tuesday’s results showed
AUA essentially flat at $18.4 billion, up just 2% year-over-year. In October
2025, the most recent comparable data point, AUA growth was running at 73%
year-over-year.
That
deceleration from 73% to 2% in a matter of months is the number analysts
following this stock closely should be circling.
The
Numbers Behind the Headlines
Source:
eToro Group Ltd. SEC filings (Form 6-K), Q1-Q4 2025
Crypto Contribution
Collapses, Q4 Spread Turns Negative
The AUA
trend points directly at crypto. In Q4, net trading contribution from crypto
fell 72% year-over-year to $26 million, and that number requires careful
reading. Beneath the net figure, gross revenue from crypto assets in Q4 was
$3.59 billion against a cost of $3.64 billion, meaning the base spread business
generated a net loss of approximately $44 million before derivatives. A $73.8
million gain on crypto derivatives pulled the combined crypto line into
positive territory for the quarter, but the underlying spot economics were
underwater.
For the
full year, eToro processed approximately $13 billion in crypto volume and
generated a net spread of just $43 million, a margin of roughly 0.33%. The
company made more from crypto derivatives in 2025 ($124 million) than from
buying and selling crypto itself.
In 2024,
those ratios were nearly reversed. This is part of a broader trend that has
weighed on crypto-exposed platforms across the board: as FinanceMagnates.com
reported in early February, both eToro and Robinhood shares faced extended losing streaks as the
cryptocurrency downturn pressured revenue outlooks across firms that derive
significant income from digital asset trading.
January’s
numbers confirm the pressure has not eased. Crypto trades on the platform
totaled 4 million for the month, down 50% year-over-year. The average amount
invested per crypto trade fell 34% to $182.
January 2026 KPIs: Two
Very Different Stories
Source:
eToro January 2026 Monthly KPI Release
Equities and Gold Pick Up
the Slack
Meanwhile,
capital markets trades, equities, commodities, and currencies, surged to 74
million in January, up 55% year-over-year, with the average invested amount up
8%. The platform’s non-crypto business is growing fast. Its crypto business is
shrinking.
That
divergence is not lost on management, and it shapes much of how Assia talks
about the business.
“We’ve
seen people write off crypto,” he told investors on Tuesday’s earnings
call. “We’ve kept building.” His broader argument is that eToro’s
multi-asset model is precisely what allows it to absorb these cycles, and the
Q4 data gives him some evidence to work with.
Net trading
contribution from equities, commodities, and currencies rose 43% year-over-year
to $116 million in the fourth quarter, driven partly by a surge in commodities
activity.
This is
broadly consistent with a wider shift in retail investor behavior: a recent
eToro study found that nearly 8 in 10
retail investors now invest monthly, with allocations to equities and cash
declining as investors seek broader asset exposure.
On the
call, Assia described something he called a convergence among the platform’s
users: crypto-native customers rotating into commodities as volatility shifted
asset classes.
Marketing Ramp Signals a
Growth Gap
During the earnings call, eToro also revealed its plans to boost sales and marketing spending, and CFO Meron Shani explicitly said it could go higher if ROI supports it.
“We
plan to increase from 21%, scaling gradually
to 25% of net contribution,” Shani said on the call, adding the company
expects this to drive “double-digit” funded account growth through
the year.
That
announcement comes after Q4 saw the lowest marketing spend of any quarter in
2025 at $47 million, 21% below the same period a year earlier, while funded
account additions in Q4 were also the slowest of the year at just 80,000 net
new accounts.
Simultaneously,
Assia
disclosed that eToro carried out a headcount reduction roughly a month ago,
framing it as an AI-efficiency initiative. “AI means we can move 10 times
faster,” he said on the call. “We’re building the eToro super app
100% with AI.”
It seems the
company is cutting internal costs while ramping external spend to re-accelerate
user growth. It is a rational response to a slowing organic environment.
M&A Pipeline Opens Up
Responding
to a direct question from UBS analyst Alex Cra, Assia confirmed for the first
time that eToro has been in active discussions with acquisition targets since
the IPO.
“We do
expect to see several M&A deals in 2026,” he said. “We have been
in active discussions with several target companies over the last six months
since the IPO.”
He pointed
to two areas of focus: the crypto space, both in the US and globally, and the
brokerage and wealth management space. The CFO added that eToro has access to
both its cash pile and a revolving credit facility to pursue “sizable
deals.”
Similar
plans were already outlined last year in a Bloomberg interview
with Ronen Assia, one of eToro’s co-founders. The most recent acquisition
dates back to 2024, when the company expanded into Australia by taking over the
local investing app Spaceship for
$55 million.
The Market Priced the
Headline
None of
this makes Tuesday’s 20% share rally irrational. Full-year records, a strong
balance sheet, buyback expansion, a resilient equities business, and an M&A
pipeline are genuinely positive signals for a company less than a year into its
public life.
Notably,
the crypto exchange Gemini, which went public around the same time, simultaneously
began pulling back and retreating to its core business, a move eToro has now
capitalized on by
taking over a portion of its customers.
The 2024
cohort already shows a 1.88x return on marketing investment; the 2020 cohort
has returned 5.6x. These are the numbers of a business with real retention and
long-term user value.
But the
market priced the headline. The AUA trajectory, the January crypto data, the
diluted EPS decline, and the marketing ramp required to sustain growth are the
questions that the headline doesn’t answer. For investors in ETOR at $33, those are
the numbers worth watching in the quarters ahead.
A recent filing with the US Securities and Exchange
Commission shows that eToro Director Eddy Shalev plans to sell 45,000 of the
group’s common shares. The planned sale, disclosed on Wednesday, is valued at
about 1.49 million USD and equals roughly 0.05 percent of the 86.7 million
eToro shares currently outstanding, according to the document. The filing
states that these shares were acquired in a cash private placement in 2024.
This article was written by Damian Chmiel at www.financemagnates.com.
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