eToro Group (NASDAQ: ETOR) shares fell over 8% on Tuesday after the company reported second-quarter earnings that beat Wall Street expectations but also revealed a sharp decline in cryptocurrency trading. The stock declined to around $31.15, continuing a year-long slump that has pushed its market value down to $2.51 billion.
For the quarter ended June 30, eToro posted adjusted diluted earnings of $0.68 per share, surpassing the $0.61 consensus and marking its fourth consecutive quarterly beat. On a GAAP basis, net income rose 77% year-over-year to $53 million from $30 million. Equities trading helped net contribution reach $229 million, up 9%, while funded accounts climbed 18% to 4.28 million and assets under administration hit $19.2 billion.
However, crypto trading activity on the platform tumbled. Total cryptocurrency trades dropped to 1.4 million in July 2026, down 73% from the prior year. The average amount invested per trade halved to $182. As a result, crypto-related revenue fell roughly 30% to $1.34 billion from $1.9 billion a year earlier. In Q1 2026, crypto profit shrank to only about 5% of net trading profit. CFO Meron Shani noted that customers are rotating across asset classes, with 60% of users expanding into equities after trading commodities earlier in the year.
Alongside the earnings, eToro announced a $231 million deal to acquire US brokerage TradeZero, which serves active traders and has operations in the US, Canada, and international markets. The acquisition will be paid in cash and up to 2.5 million newly issued Class A shares, and is expected to close in the first half of 2027 pending regulatory approvals. TradeZero generated about $80 million in revenue over the past 12 months with an 81% gross margin. eToro sees the deal as a fast track to building its US brokerage infrastructure, complementing its recent New York expansion under the BitLicense regime. CEO Yoni Assia called the move "an important step in building our US business."
