eToro Q3 profit falls 74% to $15 million as crypto trading cools

By Elena Vasquez

eToro (ETOR), the Nasdaq-listed brokerage, reported third-quarter GAAP net income of $15 million, down 74% from $57 million a year earlier, according to its earnings report released Tuesday. In that report, eToro attributed the net-contribution decline mainly to “lower crypto trading.” The brokerage offers stocks alongside crypto, so the company’s explanation concentrates the earnings risk in one product category.

What drove the 74% earnings decline?

Diluted earnings per share fell to $0.14 from $0.53 in the year-earlier quarter. Net contribution, eToro’s company-defined measure of revenue after certain trading-related costs, declined 13% to $186 million from $215 million.

Adjusted EBITDA fell 56% to $34 million, compared with $78 million a year earlier. That measure therefore contracted more sharply than net contribution, although adjusted EBITDA and the company-defined contribution metric are not interchangeable.

Neither adjusted EBITDA nor net contribution should be equated with GAAP net income. In plain terms, weaker trading activity reduced earnings even as the funded customer base expanded.

Can customer growth offset slower trading?

Funded accounts rose 18% year over year to 4.39 million, while assets under administration held steady at $20.8 billion. Those figures suggest customers were not leaving in large numbers, although balances do not measure how actively they traded.

October crypto trades on the platform fell 62% year over year to 2 million. That early fourth-quarter reading does not indicate a recovery in crypto traffic, but one month cannot establish a full-quarter trend.

The report does not provide an October comparison for equity trading or other products, so the platform-wide traffic effect cannot be isolated. Funded-account growth suggests no mass customer departure, but it did not offset the decline in reported crypto activity.

What do the buyback and AI launch actually establish?

eToro’s board authorized a share repurchase program of up to $250 million. The authorization sets a ceiling rather than a commitment, and the earnings report does not disclose any completed repurchases.

The company also launched an AI-focused trading app during the quarter. The release gives no app name, adoption figures, revenue contribution or performance results, limiting any assessment of its financial relevance.

Because eToro offers stocks alongside crypto, the company’s own explanation points to concentration risk rather than a uniform slowdown across every product. A broader customer base can coexist with weaker transaction activity. Put plainly, growth in funded accounts did not offset the revenue pressure from lower crypto trading.

What should investors watch next?

Investors should track whether funded-account growth continues, whether assets under administration remain near $20.8 billion, and whether crypto trades recover from October’s 2 million level. Actual buyback execution and AI-app adoption would add necessary context, but neither has a disclosed target or timetable in the release. The next quarterly earnings deadline should provide a clearer test of whether October’s 2 million crypto trades marked a temporary slowdown or a sustained decline in crypto trading activity.