eToro Posts 77% GAAP Profit Jump as TradeZero Deal Deepens US Push

eToro's Q2: Profit Growth, Account Expansion and a US Brokerage Deal

eToro Group Ltd (NASDAQ: ETOR) reported second-quarter 2026 earnings on 11 August showing profitable growth, a jump in funded accounts and a bigger push into the US active-trading market.

Net contribution rose 9% year over year to $229m, from $210m in Q2 2025, driven mainly by equities trading and Copy Trading activity. GAAP net income climbed 77% to $53m, while adjusted net income rose 17% to $63m. Adjusted EBITDA increased 9% to $78m and adjusted diluted EPS was $0.68, up from $0.56.

The platform had 4.28m funded accounts at quarter-end, an 18% increase from 3.63m a year earlier. The company also launched a new mobile app built around its Tori AI agent, introduced etoro edge for active traders, and added sub-accounts and Agent Portfolios. One disclosure deserves attention: the release reported assets under administration as both $19.2bn, up 10%, and $18.5bn, down 5%, without explaining the difference.

Alongside the results, eToro announced the acquisition of TradeZero, a US online brokerage serving active traders, expected to close in the first half of 2027. That follows the Q2 completion of acquisitions Zengo and Bit2C.

Why eToro's Equities Momentum and TradeZero Acquisition Matter

Where the Profit Growth Is Coming From

The 77% jump in GAAP net income was much sharper than the 17% rise in adjusted net income. That gap indicates the reported bottom line benefited from items excluded from the non-GAAP measure, although the release does not break out the largest driver. Management attributed the underlying revenue improvement to equities trading and Copy Trading, and said users are moving across asset classes: more than 60% of commodity traders from Q4 2025 to Q1 2026 traded equities in Q2 2026, and nearly nine in ten of those also traded crypto. That cross-asset behavior supports engagement, but it does not remove exposure to a slowdown in any single asset class. The conflicting AUA numbers in the release also make the asset picture harder to read.

Why the TradeZero Acquisition Matters

TradeZero gives eToro a US-based brokerage infrastructure and a product aimed at active traders. The company expects the deal to be financially accretive and to close in 1H 2027, a long lead time that leaves room for regulatory approvals, financing changes or competitive responses. Combined with the new US RIA license, which allows Smart Portfolios in the US, eToro is building a regulatory and distribution path into the American wealth and trading market rather than relying only on its European base.

The Crypto Warning Hidden in the Data

While eToro is expanding further into digital assets and on-chain finance, the July figures show how quickly crypto activity can cool: crypto trades fell 73% year over year to 1.4m, and interest-earning assets fell 8% to $6.8bn. Total trades were flat at 48.5m, so third-quarter growth may depend on whether equities and savings products can offset crypto weakness. The push into Zengo, Bit2C, Extended and Open USD is strategic, but the adoption and regulatory path remains longer-term.

What eToro's Q2 Means for Investors and Rivals

For investors and industry participants, the Q2 release sets up several concrete checkpoints for the second half of 2026:

• Follow the TradeZero closing timetable. With completion expected in 1H 2027, any delay or change in terms would alter the US active-trader growth case and the expected accretion.
• Look for Q3 trading mix, not just headline accounts. July crypto trades were down 73% year over year and interest-earning assets were down 8%, so net contribution will show whether equities can offset that drag.
• Press for clarity on assets under administration. The release reported both $19.2bn up 10% and $18.5bn down 5%; investors need a reconciled figure to judge retention and flows.
• Watch whether new products convert to revenue. etoro edge, sub-accounts, Agent Portfolios and the expanded money card are serious launches, but they only matter to margins if they drive funded accounts and net contribution.
• For rival US brokerages, prepare for a more direct challenge. TradeZero plus eToro's US RIA license and equity buying power target active traders and managed-portfolio assets.