6 days ago
Trading platform eToro beats profit estimates on retail investing boom
Stock and crypto trading platform eToro beat Wall Street views for profit in the second quarter on Tuesday, as retail investors maintained a firm risk appetite despite broader macroeconomic uncertainty due to new tariffs.
Shares of eToro rose nearly 1 per cent in premarket trading after results.
Retail trading activity has been strong this year, buoyed by gains in U.S. equity markets and renewed interest in high-risk assets such as cryptocurrencies and tech stocks.
Analysts say volatility from geopolitical tensions and shifting trade policies has done little to deter individual investors, who have been quick to capitalize on market swings and look for opportunities to "buy the dip".
Net contribution, which deducts the cost of revenue from cryptoassets and margin interest expense, jumped 26 per cent to $210 million from the year-ago quarter, driven primarily by increased trading activity.
New-age fintech platforms have chipped away at the dominance of Wall Street incumbents in recent years, luring younger and tech-savvy investors with low fees, slick mobile apps and access to a wider range of assets.
Funded accounts, referring to customers with deposited money, increased 14 per cent in the quarter to 3.63 million, eToro said.
A combination of accessible trading apps, volatile price moves and a steady flow of market news has kept retail engagement high, helping these platforms sustain growth.
The financial technology company's assets under administration grew by 54 per cent year-on-year to $17.5 billion.
The company went public in May in a bumper U.S. initial public offering, with its shares surging on debut after pricing above the marketed range. They had ended the previous session about 6.3 per cent above their IPO price.
eToro posted an adjusted profit of 56 cents per share in the three months ended June 30. Analysts, on average, had expected 50 cents, according to estimates compiled by LSEG.
