By Arasu Kannagi Basil and Pritam Biswas Aug 11 (Reuters) – Trading platform eToro beat Wall Street estimates for second-quarter profit on Tuesday and said it would buy rival TradeZero in a cash-and-stock deal worth up to $231 million, as it looks to accelerate its expansion in the U.S. Heightened volatility during the reported quarter, due […]
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Trading platform eToro beats profit estimates, targets US growth with TradeZero buy
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By Arasu Kannagi Basil and Pritam Biswas
Aug 11 (Reuters) – Trading platform eToro beat Wall Street estimates for second-quarter profit on Tuesday and said it would buy rival TradeZero in a cash-and-stock deal worth up to $231 million, as it looks to accelerate its expansion in the U.S.
Heightened volatility during the reported quarter, due to persistent geopolitical tensions and evolving narratives surrounding AI-related disruption, boosted eToro’s results.
Trading platforms gain from such volatility as investors increasingly rejig their portfolios to hedge against risks.
EToro’s net trading income from equities, commodities and currencies jumped 24% to $141.6 million in the quarter ended June 30, driven largely by stronger equities trading.
On an adjusted basis, the company earned 68 cents per share, topping expectations of 61 cents, according to data compiled by LSEG.
Shares of eToro, however, fell more than 12% in afternoon trading as analysts flagged accelerating marketing spend and weaker trading activity in July.
BOOSTING ACTIVE TRADER GAME
The TradeZero acquisition to expand active traders on a platform known mostly for its focus on casual investors could give Israel’s eToro stronger trading infrastructure to strengthen its presence in the U.S., where it launched in 2019.
“What we’ve seen across the years is this cohort of highly creative and very valuable active traders on the eToro platform,” said CEO Yoni Assia on the acquisition.
“We’ve gradually actually been building our own product roadmap to cater to professional traders, to basically customers of eToro who feel that they are at the point where they want more and more sophisticated tools.”
Founded in 2015, TradeZero is a U.S.-focused brokerage serving active traders, with operations also across Canada and international markets. The firm generated about $80 million in revenue in the last 12 months.
The deal is expected to boost adjusted profit in the first year upon completion, which is anticipated during the first half of 2027.
(Reporting by Arasu Kannagi Basil and Pritam Biswas in Bengaluru; Editing by Shailesh Kuber and Shinjini Ganguli)