eToro Group (NASDAQ: ETOR) is buying US brokerage TradeZero for up to $231 million. The move leans hard into equities as the company’s crypto business cools.
The deal, announced Monday, pairs cash with up to 2.5 million newly issued Class A shares. Closing is expected in the first half of 2027, pending regulatory approvals. TradeZero, founded in 2015, posted about $80 million in trailing-12-month revenue through June 30 and carried 81% gross margins. eToro said the transaction would be accretive to adjusted earnings per share in its first full year.
The acquisition arrives alongside second-quarter results that show the shift. Net contribution rose 9% year-over-year to $229 million in Q2, driven mainly by stronger equities trading. GAAP net income jumped 77% to $53 million. Adjusted net income climbed 17% to $63 million, and adjusted EBITDA gained 9% to $78 million. Funded accounts grew 18% to 4.28 million. Assets under administration hit $19.2 billion, up 10% from a year earlier.
Crypto told a different story. Crypto-related revenue fell roughly 30% year-over-year in Q2, Cointelegraph reported. The Block separately noted that crypto trades in July were down 73% from a year earlier, and that crypto contributions had shrunk to 5% of total net trading profit by Q1, eToro’s strongest quarter as a public company, buoyed by commodities. Q2 itself was a step down from that record. Net contribution fell from $258 million in Q1, adjusted EBITDA from $109 million, and net income from $82 million.
CEO Yoni Assia framed TradeZero as a play on the US market. “TradeZero has built a successful franchise, with differentiated technology, broker-dealer infrastructure and a highly engaged trading community,” Assia said. “This combination gives us a faster path to launching new products for U.S. customers and strengthens our offering.”
On the ground, the purchase adds a second US broker-dealer to eToro’s stack. The company has operated eToro USA Securities Inc. since 2020 and began US stock trading in 2022. TradeZero CEO Daniel Pipitone said in a statement that his firm brings its own broker-dealer license, proprietary trading tools, and an active trader base.
The deal extends a broader acquisition streak. eToro led a $12.5 million round in onchain perps exchange Extended in July. A few months earlier it bought crypto wallet provider Zengo, reportedly for about $70 million. It also acquired Israel-based crypto exchange Bit2C. The cash cushion is there: eToro reported $1.2 billion in cash, equivalents, and short-term investments.
Traders, as ever, disagreed on the read. ETOR shares closed down 7.81% to $31.35 after a pre-market pop, per Yahoo Finance.
Assia, in the Q2 statement, pointed further out. “Technology continues to reshape how people invest and manage our money,” he said. “Throughout our history, etoro has embraced these shifts, from social investing to crypto, and today AI and on-chain finance represent the next chapter in that evolution.” The exact split between cash and shares within the $231 million cap, and the specific regulatory conditions, were not disclosed.
