eToro Group (NASDAQ:ETOR) reported second-quarter adjusted earnings of $0.68 per share, surpassing the LSEG consensus estimate of $0.61. This marks the third consecutive quarter of beating analyst forecasts, although the margin of beat narrowed from the prior quarter's 24.7% to 11.5%.
The retail brokerage also announced a definitive agreement to acquire TradeZero, a US-focused trading platform, for up to $231 million in cash and shares. The deal values TradeZero at approximately 2.9 times its trailing twelve-month revenue of about $80 million, based on a revenue multiple rather than earnings.
The acquisition is a strategic move to bolster eToro's presence in the United States, a market where it has historically been underpenetrated compared to its strong foothold in Europe and the UK. TradeZero, founded in 2015, serves active traders across the US, Canada, and other regions, offering a platform tailored to high-frequency and professional retail trading.
Quarterly Performance Highlights
During the quarter, eToro saw a shift in trading activity from commodities to equities. Net trading income from equities, commodities, and currencies rose 24% year-over-year to $141.6 million. While commodities dominated at the start of 2026, equities took the lead in the second quarter, reflecting changing market conditions and investor sentiment.
Notably, over 60% of users who traded commodities in the first two quarters also traded equities in Q2, highlighting the platform's multi-asset appeal. However, this also exposes eToro's revenue to volatility in market activity across asset classes.
Deal Details and Strategic Rationale
The TradeZero acquisition is expected to close in the first half of 2027, subject to regulatory approvals and customary closing conditions. eToro anticipates the deal to be accretive to earnings in its first full year, though the company has not provided official guidance.
CEO Yoni Assia commented, "Today's announcement is an important step in building our US business. This combination gives us a faster path to launching new products for US customers and strengthens our offering."
Financial Position and Outlook
As of the end of June 2025, eToro held $1.2 billion in cash, cash equivalents, and short-term investments, providing ample balance-sheet capacity to fund the acquisition. The company reported 3.63 million funded accounts and $17.5 billion in assets under administration.
The acquisition brings more than just revenue; it adds an active-trader product suite and operational capabilities in a market where eToro's scale has been limited. However, risks remain, including potential deal closing delays, a decline in trading volumes if market volatility subsides, and intense competition in the US retail brokerage space.
Investors will be watching for successful integration and execution. The company must finalize the deal within the expected timeline, accelerate US product launches, and deliver the promised profit boost in the first year to justify the acquisition premium.