eToro Group Ltd (Unlisted (US):ETRO) reported second quarter 2026 results that topped Wall Street expectations, but shares fell about 13% on the news of the company’s planned acquisition of US-focused online brokerage TradeZero for up to $231 million.
The trading and investing platform reported adjusted diluted earnings per share of $0.68, compared with consensus estimates ranging from $0.61 to $0.65. Net contribution rose 9% year over year to $229 million, edging above expectations of roughly $225 million.
Net income increased 77% from a year earlier to $53 million, while adjusted net income rose 17% to $63 million. Adjusted EBITDA increased 9% to $78 million.
The company said the increase in net contribution was driven primarily by higher equities trading activity, which helped offset softer cryptocurrency volumes.
GAAP diluted earnings per share rose to $0.58 from $0.31 in the second quarter of 2025, while adjusted diluted EPS increased from $0.56.
eToro also reported growth in its user base and assets. Funded accounts increased 18% year over year to 4.28 million, while assets under administration rose 10% to $19.2 billion.
The company had $1.2 billion in cash, cash equivalents and short-term investments as of June 30.
Alongside the results, eToro announced an agreement to acquire TradeZero in a cash-and-stock transaction valued at up to $231 million. The deal includes cash and up to 2.5 million newly issued Class A common shares, subject to customary purchase price adjustments.
TradeZero, founded in 2015, operates across the US, Canada and international markets and provides trading platforms, broker-dealer infrastructure and tools for active traders. eToro said the acquisition will strengthen its presence in the US and broaden the products and services available on its platform.
TradeZero generated approximately $80 million in revenue with an 81% gross margin over the last 12 months, according to eToro. The company expects the transaction to be accretive to adjusted EPS in the first year after completion.
The acquisition is expected to close in the first half of 2027.
“Today's announcement is an important step in building our US business,” eToro co-founder and CEO Yoni Assia said in a statement. “TradeZero has built a successful franchise, with differentiated technology, broker-dealer infrastructure and a highly engaged trading community.”