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.
Markets continued to remain volatile during the reported quarter as persistent geopolitical tensions and evolving narratives surrounding AI-related disruption unnerved investors.
Volatility tends to be a boon for trading platforms as investors increasingly rejig their portfolios to hedge against risks.
Net trading income from equities, commodities and currencies rose 24% to $141.6 million in the reported quarter from a year earlier, driven largely by stronger equities trading activity.
More than 60% of users who traded commodities during the prior two quarters subsequently traded equities in the reported quarter, eToro said.
On an adjusted basis, eToro earned 68 cents per share in the quarter ended June 30, topping expectations of 61 cents, according to estimates compiled by LSEG.
US EXPANSION
EToro expects the TradeZero acquisition to expand the company’s retail customer base and give it stronger trading infrastructure to bolster its presence in the U.S., where it launched its platform in 2019.
While Europe and the UK have been eToro’s core markets since founding, the firm has focused on growing within Asia Pacific and the Americas.
“Today’s announcement is an important step in building our US business. This combination gives us a faster path to launching new products for US customers and strengthens our offering,” eToro CEO Yoni Assia said.
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 twelve months.
The deal is expected to boost adjusted profit in the first year upon completion, which is anticipated during the first half of 2027.
Jefferies advised etoro on the deal, while J.P. Morgan Securities advised TradeZero.
(Reporting by Arasu Kannagi Basil and Pritam Biswas in Bengaluru; Editing by Shailesh Kuber)
