(Updated 11 Aug 2026 - 16:00UTC with details from the analyst call, management's crypto contribution figure and the share price reaction).
eToro (ETOR) agreed to buy TradeZero, a US-focused online brokerage serving active traders, for up to $231mn in cash and stock, the Nasdaq-listed trading and investing platform said on Tuesday alongside second-quarter results.
Under the agreement, eToro will pay cash plus up to 2.5mn newly issued Class A shares. TradeZero, founded in 2015, runs broker-dealers in the Bahamas, the US, Canada and the Netherlands, and generated about $80mn of revenue at 81% gross margins in the 12 months to 30 Jun, according to eToro. The deal is expected to close in the first half of 2027, subject to regulatory approval.
"Today's announcement is an important step in building our US business," Yoni Assia, eToro co-founder and CEO, said in a statement.
It is eToro's third acquisition agreed in 2026, after crypto wallet firm Zengo and Israeli exchange Bit2C, both completed in the second quarter.
eToro shares rose as much as 5.1% in pre-market trading in New York on Tuesday to $35.75, then fell 12% within the hour to $31.35 as investors digested the results and the July figures. The decline continued through the analyst call and after it. The stock traded at $29.99 at 15:00UTC, down 12% on Monday's close of $34.01 and 29% below its 2 Jul high. It had already fallen 3.3% on Monday.
The second-quarter earnings report disclosed that crypto accounted for 5.5% of the $229mn in net contribution, down from 14% a year earlier, according to Sandmark calculations based on the company's income statement. Net contribution, a company-defined measure of revenue after direct trading costs, grew 9% year-on-year, with equities, commodities and currencies supplying $141.6mn of the total, up 24%.
On the call, CFO Meron Shani put crypto net contribution at $11mn for the quarter, including a $2mn negative valuation on eToro's own crypto holdings, which stood at $30mn at the end of June. That figure sits slightly below Sandmark's calculation because net contribution is defined by management rather than drawn directly from the income statement. Shani attributed the decline to lower trading activity and users moving into equities.
The statutory accounts beneath that measure show eToro's spot crypto business has run a gross loss in three of its last four quarters, as set out in Sandmark's analysis of the results.
Assia told analysts TradeZero brings capabilities eToro cannot currently offer US users, naming leverage and margin trading, futures, and short selling, which he said rests on TradeZero patents. The deal also gives eToro self-clearing infrastructure and access to Canada. He said the company does not expect the acquisition to increase expenses, and that cost synergies would be explored over time while the focus was on revenue.
eToro declined to give customer numbers or assets under administration for TradeZero, telling Goldman Sachs analyst James Yaro it would provide those at or after closing.
Shani said trading had improved in the first 10 days of August and that July "might have been the bottom." KBW analyst Chris Allen opened his question by linking the morning's share price move to the July figures. The stock had already fallen 12% before the call began at 12:30UTC.
