eToro Group Ltd. Q4 FY2025 earnings call

Jonathan Assia mentioned 2025 was a defining year for eToro as a publicly traded company on NASDAQ, with progress towards a financial super app, acceleration of AI adoption, broadened product offering, and expansion in key markets. Key operational highlights include expanding 24/5 equity trading with doubling of total stock trading volume over two years, introducing round-the-clock access to popular assets, surpassing 150 supported crypto assets with plans to expand to over 300, expanding coverage to global stock exchanges, launching new smart portfolios with Amundi, expanding pro investor community, accelerating adoption of wealth management savings solutions, and momentum building with Toro money including 29% year-over-year increase in total money transfers and 650% increase in transaction volume of debit card in Q4 2025 compared to Q4 2024. Meron Shani discussed fourth quarter financials, AUA growth, funded accounts growth, and first quarter trends showing improved KPIs in January.

For the year, net contribution increased 10% to $868 million and rose 6% sequentially in the fourth quarter to $227 million. Adjusted EBITDA grew 4% year-over-year to $370 million and 11% quarter-over-quarter to $87 million, with a 38% adjusted EBITDA margin in the quarter. Net contribution from capital markets, including equities, commodities and currencies, increased 43% year-over-year to $116 million. Net trading contribution from crypto declined 72% year-over-year to $26 million. Net interest income contributed $59 million, up 18% year-over-year. eToro money's contribution declined 6% year-over-year to $23 million. AUA for the quarter increased 11% year-over-year to $18.5 billion, and funded accounts grew 9% year-over-year to 3.81 million.

Meron Shani mentioned planning to increase sales and marketing investment from 21% to 25% of net contribution gradually throughout 2026, expecting double-digit account growth, and seeing opportunities for M&A deals in 2026 with a high appetite for selective and accretive opportunities. Also, the company announced an additional $100 million authorization under the share repurchase program, increasing total authorization to $250 million.

The discussion of risks included the forward-looking statements being subject to risks, uncertainties and assumptions, with actual results possibly differing, and the crypto market environment and regulatory uncertainties being potential risks.

Q: How has eToro managed the current volatility in commodities?

A: Jonathan Assia said they've seen high engagement and volumes in commodities, with significant activity in October and January, driven by volatility in gold and silver.

Q: Provide more context on current crypto market backdrop and how it compares to previous downturns?

A: Jonathan Assia said it's their first crypto cycle, they're bullish on crypto and tokenization, and shift focus to other assets during crypto market corrections.

Q: Talk about time period for sales and marketing going from 21% to 25%?

A: Meron Shani said it will happen gradually throughout 2026, not necessarily in Q1.

Q: On AI integration and trading outlook?

A: Jonathan Assia said AI integration will be a significant step function, with advancements leading to uplift in algorithmic trading activity.

Q: On increased marketing and account growth?

A: Jonathan Assia said [CAC] math is similar, expecting double-digit account growth.

Q: On G&A and R&D expansion?

A: Meron Shani said G&A and R&D expected to be at current levels with minor growth.

Q: On M&A appetite?

A: Jonathan Assia said high appetite for selective and accretive M&A deals in 2026.

Q: On crypto take rates?

A: Meron Shani said slight decline in Q4 was immaterial and not expected to deviate much from usual 1%.

Q: On app store and app strategy?

A: Jonathan Assia said app store launch with many apps developed by pro investors, enabling innovation and subscription models.

Q: On U.S. strategy and customer traction?

A: Jonathan Assia said active in U.S. product launches, seeing uptake in CopyTrader, planning to launch smart portfolios in H1 2026, and excited about launching global product road map in U.S.

Q: On timing of fiduciary license in U.S. and prediction markets?

A: Jonathan Assia said working on RIA license for smart portfolios in H1 2026, prediction markets likely later in year with NFA regulation.

Q: On marketing spend split and market share?

A: Jonathan Assia said U.S. is small part of marketing budget, scaling up in U.S. with higher [CAC] to LTV ratio.

Q: On revenue per trade in ECT segment?

A: Meron Shani said revenue per trade on ECC ranges from $0.60 to $0.75 per trade, impacted by commodity mix.

Q: On Board considering other value unlock ways beyond buyback?

A: Jonathan Assia said focus on product strategy, AI-first, product innovation, and marketing scaling.

Q: On M&A and expanding geographies vs deepening Europe moat?

A: Jonathan Assia said focused on deepening existing markets while looking at selective M&A opportunities.

Q: On promotional front?

A: Jonathan Assia said different regions have own incentive plans, focused on profitable product engagement incentives.

Q: On noncustodial wallet rollout and strategy?

A: Jonathan Assia said product-first approach, targeting younger crypto-native audience, unlocking new products.

Q: On ROI on cohorts?

A: Jonathan Assia and Meron Shani said marketing strategy evolving, targeting higher LTV cohorts, with volatility in markets affecting ROIs.

Q: On Copy trader landscape and staying ahead?

A: Jonathan Assia said eToro has moat with track record of popular investors, competitive landscape doesn't have same, and product category will scale.

Q: On prediction markets for non-U.S. customers?

A: Jonathan Assia said prediction markets are U.S.-led, with non-U.S. activity more crypto-native.

Q: On crypto regulation and Clarity Act?

A: Jonathan Assia said clarity in regulation helps industry mature, and more clarity will expand opportunities for new products.