TLDR
- eToro Q2 2026 profit rose 77% year over year to $53 million, missing analyst estimates of $55.1 million
- Stock dropped over 11% on Tuesday following the earnings release
- eToro announced it will acquire U.S.-focused broker TradeZero for up to $231 million in cash and stock
- Funded accounts grew 18% to 4.28 million, but crypto trading volume collapsed 73% year over year in July
- The TradeZero deal is eToro’s third acquisition this year and is expected to close in H1 2027
eToro (ETOR) stock fell sharply on Tuesday after the online brokerage reported Q2 2026 earnings that missed Wall Street expectations, while also announcing a major acquisition that rattled investors.
eToro $ETOR to acquire TradeZero for up to $231M in cash and stock, expanding its U.S. brokerage business. TradeZero generated ~$80M in revenue at 81% gross margins over the past 12 months. eToro expects the deal to be accretive to adjusted EPS in the first year after closing. pic.twitter.com/Uqg4MDn26L
— Wall St Engine (@wallstengine) August 11, 2026
The stock dropped more than 11% during Tuesday trading. Before the open, it was already sliding around 4.4% in pre-market after the company posted adjusted diluted EPS of $0.68, beating the consensus of $0.61, but net profit of $53 million came in below the $55.1 million analysts had expected.
That gap between the headline EPS beat and the profit miss set an uncertain tone from the start.
For context, eToro earned $30 million in net profit in Q2 2025, so the year-over-year growth is real. But markets had priced in more, and the reaction was swift.
TradeZero Deal Adds to Pressure
Alongside earnings, eToro announced it has agreed to acquire TradeZero, a U.S.-focused brokerage aimed at active traders. The deal is valued at up to $231 million, funded through cash and up to 2.5 million newly issued Class A eToro shares.
That share issuance created an immediate dilution concern. Markets priced it in quickly, adding to the selling pressure already building from the earnings miss.
TradeZero generated around $80 million in revenue over the past 12 months and will also give eToro access to the Canadian market. The deal is expected to close in H1 2027, pending regulatory approval.
CEO Yoni Assia framed the deal as a way to speed up product launches for U.S. customers. “This combination gives us a faster path to launching new products for U.S. customers and strengthens our offering,” he said.
This is eToro’s third acquisition signed in 2026, which has raised questions among investors about how quickly the company is deploying capital.
Crypto Slump Weighs on Revenue Mix
eToro’s funded accounts rose 18% year over year to 4.28 million, and assets under administration grew 10% to $19.2 billion. Those are solid operating numbers.
But crypto trading, a key revenue driver, is hurting. In July 2026, total crypto trades came in at 1.4 million, down 73% year over year. The invested amount per trade fell 50% to $182.
The iShares Bitcoin Trust ETF has dropped 46% over the past 12 months, reflecting the broader crypto downturn hitting eToro’s business.
Net contribution grew 9% year over year to $229 million, but that represented a slowdown from Q1 momentum.
The broader market was not the issue. The S&P 500 was up 0.2% and the Nasdaq up 0.4% on Tuesday, confirming the selloff was entirely eToro-specific.
eToro said it expects the TradeZero acquisition to be accretive to adjusted EPS in the first year after closing.
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