eToro Acquires TradeZero as Crypto Revenue Plummets 30% in Q2

Woofun AI reports that eToro has initiated the acquisition of US online brokerage TradeZero to accelerate its North American expansion, a strategic move announced Tuesday amidst significant earnings volatility. The deal aims to diversify revenue streams as the platform navigates a sharp contraction in its core cryptocurrency business.

Financial results for the quarter revealed a total revenue of $1.59 billion, a decline from the $2 billion recorded in the comparable 2025 period.

Woofun AI data shows crypto-specific revenue fell approximately 30% to $1.34 billion, down from $1.9 billion in Q2 of 2025, while crypto-related cost of revenue stood at $1.35 billion. Consequently, net income from crypto assets dropped to $19.7 million, contributing to a total net income of $53.4 million, whereas equities and commodities trading generated $141 million. The company's broader multi-asset strategy includes the planned acquisition of self-custodial wallet provider Zengo, announced in April. Meron Shani, chief financial officer, highlighted user cross-pollination, noting that more than 60% of users who traded commodities during Q4 2025 to Q1 2026 subsequently traded equities in Q2 2026, and nearly nine in ten of those users have also traded crypto on eToro.

Trading activity metrics underscore the downturn, with total cryptocurrency trades on the platform falling to 1.4 million in July, marking a 73% decline year-over-year. The invested amount also contracted by 50%. In contrast, the target company TradeZero demonstrated robust profitability, generating about $80 million of revenue with 81% gross margins in the last 12 months ended June 30, 2026.

eToro projects the acquisition will be accretive to adjusted earnings per share in the first year after closing, with the transaction expected to finalize in the first half of 2026. Market reaction was immediate, as Nasdaq-traded ETOR shares were down more than 5% in pre-market activity on Tuesday, poised to extend Monday's decline. This marks a challenging period for the platform as it attempts to stabilize growth through strategic consolidation.