eToro to Acquire TradeZero as Q2 Crypto Revenue Drops 30%
Key Takeaways
- •eToro plans to acquire TradeZero to add US equities, options, and short-selling capabilities as part of its broader American expansion strategy.
- •eToro's Q2 total revenue declined to $1.59 billion from $2 billion in the comparable 2025 period, with crypto revenue falling approximately 30% year-over-year.
- •TradeZero generated approximately $80 million in revenue with 81% gross margins over the trailing twelve months ended June 30, 2026.
- •eToro expects the TradeZero transaction to be accretive to adjusted earnings per share in the first year after closing, which is anticipated in the first half of 2026.
- •Total cryptocurrency trades on eToro's platform fell 73% year-on-year to 1.4 million in July, with invested amounts down 50% over the same period.
Trading platform eToro has announced plans to acquire US-based online brokerage TradeZero, a move the company described as part of its broader US expansion strategy. The deal would bring TradeZero's US equities, options, and short-selling capabilities to eToro's platform, which has built its global user base primarily around social and copy-trading features alongside cryptocurrency investing.
The acquisition announcement coincided with eToro's second-quarter earnings report, which revealed declining revenues across the business. Total revenue for the quarter came in at $1.59 billion, down from $2 billion in the comparable 2025 period. Revenue from crypto assets accounted for $1.34 billion of that total, representing a decline of approximately 30% from the $1.9 billion recorded in Q2 2025.
Despite the lower crypto revenue, eToro reported $1.35 billion in crypto-related cost of revenue and $19.7 million in net income from crypto assets. Total net income for the quarter stood at $53.4 million. Equities and commodities-related trading generated $141 million in net income for the platform.
The company has been pursuing a multi-asset platform strategy and expanding further into digital assets. In April, eToro announced plans to acquire Zengo, a self-custodial wallet provider. The string of acquisitions comes as eToro, which went public on Nasdaq in 2025, seeks to diversify revenue streams at a time when digital asset trading volumes have moderated from prior periods.
"More than 60% of users who traded commodities during Q4 2025 to Q1 2026 subsequently traded equities in Q2 2026, and nearly nine in ten of those users have also traded crypto on eToro," said Meron Shani, Chief Financial Officer at eToro.
Total cryptocurrency trades on the platform fell to 1.4 million in July, marking a 73% decline year-on-year. The invested amount was down 50% over the same period.
TradeZero, the acquisition target, generated approximately $80 million in revenue with 81% gross margins over the trailing twelve months ended June 30, 2026. eToro said it expects the transaction to be accretive to adjusted earnings per share in the first year after closing, which is anticipated to occur in the first half of 2026.
eToro's Nasdaq-listed shares (ETOR) were down more than 5% in pre-market activity on Tuesday, according to Yahoo Finance data, poised to extend the previous session's decline.