eToro Group Ltd. Q4 FY2025 Earnings Call

Hi. My name is Daniel Amir, Head of Investor Relations. This webcast is being recorded and will be available for replay in the Investors section of eToro's website. Our earnings press release, investor presentation, and January monthly spreadsheet are now available on our website at investors.etoro.com. Today, I'm joined by Joni Assia, our CEO, and by Meron Shani, our CFO. Before we begin, I want to note that today's discussion contains forward-looking statements, including statements about goals, business outlook, industry trends, market opportunities, expectations for future financial performance, and similar items, all of which are subject to risks, uncertainties, and assumptions. You can find more information about these risks and uncertainties in the press release that we issued today and the Risk Factors section of our filings at sec.gov. Actual results may differ, and we take no obligation to revise or update any forward-looking statements. Finally, during today's meeting, we will discuss non-GAAP financial measures. These non-GAAP financial measures are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP. Definitions and reconciliation of GAAP to non-GAAP measures are available in our press release, investor presentation, and on the sec.gov website as applicable. With that, I will pass the call to Joni.

Thank you, Daniel, and thank you, everyone, for joining us here today. Welcome to our fourth quarter 2025 earnings call. After Meron and I finish our prepared remarks, we'll open the call for questions. 2025 was a defining year for eToro. We became a publicly traded company on NASDAQ. We accelerated innovation and AI adoption across our platform, broadened and localized our product offering, and expanded our presence in key markets such as the U.S., while continuing to strengthen our global footprint. More importantly, we made amazing progress towards the financial super app we're building, all while delivering growth across our primary KPIs. We're operating at a pivotal moment for financial services. AI is advancing at an unprecedented pace, reshaping how people access information, make decisions, and interact with markets. At the same time, financial services are continuing to move on chain, enabling a more continuous, transparent, and borderless global market infrastructure. Along these technological shifts, we're seeing a structural increase in retail participation in markets across the globe and the largest generational transfer of wealth in history. Together, these forces are driving demand for a seamless digital-first investing experience that is more personalized, more intuitive, and available at all times. At eToro, we're at the forefront of this evolving financial landscape, using technology and community to empower our users to become better, more confident, and more engaged investors. Our focus is on expanding access to global markets, moving towards 24/7 trading, bringing financial assets on chain, broadening our crypto and decentralized finance offering, while continuing to provide the full suite of investing and savings products in traditional markets, enabling partners to build and trade through our eToro APIs and interact with the eToro apps, leveraging AI to help users make smarter investment decisions. All of this is delivered through a simple and transparent investing experience in line with our mission to democratize investing and give anyone anywhere the tools they need to grow their knowledge and wealth. While we're proud of the progress we've made, we see a significant opportunity ahead. We are confident in our ability to capture this opportunity for the benefit of our shareholders, users, and partners. Turning to our results. We delivered a strong fourth quarter that reflects continued momentum and the strength of eToro's diversified offering. 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, delivering a 38% adjusted EBITDA margin in the quarter. We achieved these results despite the current crypto market environment, underscoring the strength of our multi-asset model and the benefits of our global diversification across geographies and asset classes. We first offered crypto trading on eToro in 2013, and since then, we've been through several crypto market cycles. We've seen people write off crypto, but we've kept building. Over time, we have built a truly global multi-asset platform, spanning crypto, equities, commodities, and currencies. That breadth allows us to adapt as market activity shifts and to perform in any market condition. In 2025, we continue to execute across our four product pillars: Trading, investing, wealth management, and neobanking. In trading, our focus remains on expanding product reach, flexibility, and global market coverage. Since 24/5 equity trading, we've seen very strong adoption, reinforcing our belief that investors around the world want the ability to engage with the markets on their own time and terms. We now offer 24/5 trading across all S&P 500 and NASDAQ 100 stocks, which has contributed to a doubling of our total stock trading volume over the past two years. We continue to listen closely to our active traders across 75 different markets as we accelerate toward 24/7 trading and expanded margin capabilities. This quarter, we're introducing round-the-clock access to a selection of popular assets with plans to expand 24/7 trading across additional asset classes. We're already seeing traditional capital markets begin to follow the always-on 24/7 model pioneered by crypto. In Q4, we surpassed 150 supported crypto assets with plans to expand to more than 300 in the near term. In the U.S., we significantly broadened our crypto offering in 2025 to over 100 crypto coins, adding a wide range of new assets and enhancing our staking capabilities. These milestones mark important progress in our localization strategy and broader asset expansion. By the end of 2026, we plan to support over 100,000 tradable assets across equities and crypto. In investing, we continue to broaden access to global markets. In 2025, we expanded coverage to include Hong Kong, Nordic, and Middle East stock exchanges. Today, we provide access to 25 exchanges from across the world with over 12,000 assets on the platform. It was also a year of continued innovation in smart portfolios with a focus on localization, partnerships, and alpha. This quarter, we launched two new smart portfolios in partnership with Amundi, Europe's largest wealth manager. These portfolios provide access to professionally managed strategies to combine broad market exposure with forward-looking investment themes available in local currencies. At the same time, our pro investor community continued to expand, growing from about 3,200 at the end of 2024 to over 5,000 now, reflecting strong momentum in copy trading and community-driven investing. This caps a year in which we also introduced our Alpha Portfolios, our AI-powered quantitative strategies, and established new partnerships with Franklin Templeton, BlackRock, and WisdomTree. Today, we have more than 127 smart portfolios on our platform. In Q4, we also expanded our stock lending program in the U.K. and margin trading in Europe, enabling users to earn additional buying power and yield on their equity holdings, thereby enhancing passive income opportunities. In Wealth Management, adoption of our long-term tax-advantaged savings solutions continues to accelerate, expanding our presence across trillion-dollar addressable markets in Australia, the U.K., and France. In the U.K., we strengthened our ISA proposition with assets under administration in Q4, increasing sevenfold year-over-year. In France, we launched new savings products extending our reach into another large and structurally attractive tax-advantaged investment market. Together, these markets represent a multitrillion-dollar long-term opportunity. As we look ahead, we remain focused on further localizing and scaling our wealth offering to capture that opportunity. Turning to neobanking. Momentum continues to build with eToro Money, which is now fully integrated into the core platform, delivering a seamless end-to-end money management experience. The past year was a breakthrough year for eToro Money with multiple product launches driving a 29% year-over-year increase in total money transfers. We also expanded our debit card footprint. In this past quarter, we saw a 650% increase from Q4 2024 to Q4 2025 in transaction volume. We are rolling out our noncustodial crypto wallet, which bridges traditional finance and decentralized finance, enabling users to hold, stake, and transfer crypto as well as access the centralized finance markets such as swaps of 100,000 different assets. As we discussed in our last earnings call, we see a consistent set of themes driving eToro's continued growth and supporting the democratization of investing. These themes continue to guide our strategy as we move on to 2026. Firstly, innovation. As I mentioned at the start, we had a pivotal moment for financial services with the advancement of AI and the move on chain progressing at rates we could not have anticipated a few years ago. Innovation has always been at the core of eToro. From the beginning, our goal has been to use technology to remove barriers, simplify investing, and give individuals access to opportunities that were previously reserved for institutions. That philosophy hasn't changed. What has changed is the scale of the opportunity and the power of the tools now available to us. We're committed to staying at the forefront of this revolution. We're now an AI-first company. We're embedding AI across our business to accelerate product development, improve efficiency, and enhance how we operate at scale. AI is becoming a core part of our operating model, helping our teams to move faster and focus on delivering the most impact. Processes that historically took months or even years are now achievable in a matter of days, if not hours. We're building our eToro super app 100% with AI. All of the eToro apps are developed 100% by AI. But it's not just the code; rather, the entire way we operate and plan. AI means we can move 10x faster. It is accelerating our growth, enabling us to innovate more rapidly without a corresponding increase in complexity or headcount. AI is now core to the eToro experience. It enables us to deliver smarter tools and more personalized insights at scale. TorE, our AI analyst, continues to evolve as new AI models come online, becoming an increasingly powerful companion for investors. Across the platform, AI helps users interpret market dynamics as per value performance and risk, and ultimately make better investment decisions. Through our public APIs and a suite of AI-powered tools, users and partners can build, share, and scale strategies and apps, creating a growing ecosystem. We are launching apps as part of our new upcoming launch of our app store, which will bring enforced capabilities into a retail trading experience. eToro apps will include additional AI tools like BASE-44, an open claw, and we already have nearly 1,000 apps in the pipeline. In parallel, we're actively building as finance moves increasingly on chain. With a long history in crypto tokenization, eToro is already part of this transition. Our holistic crypto offering positions us to continue bridging digital assets and traditional markets, supporting the evolution from crypto trading today to tokenized markets and new forms of fractional participation over time. To be clear, this is not about or dependent on the spot price of crypto assets at any given point in the cycle. This is about building a platform that is poised to lead the inevitable shift to on-chain market infrastructure. This will unlock for our users new types of tokenized real-world assets already in 2026, such as tokenized private markets and real estate. Our noncustodial wallet is the gateway to Web 3. Over time, the wallet will expand to support tokenized assets, swaps, lending, prediction markets, and perpetual where applicable. Throughout the year, we plan to roll out a broad range of new products across these areas. Taken together, these innovations are about empowering smarter investing. It's about leading the next evolution of investing, opening the global markets, connecting people to better tools and insights, enabling everyone anywhere to participate in a simple and transparent way. Secondly, global expansion. Our global footprint continues to be a key differentiator, and we remain focused on strengthening that advantage. We will continue to expand our product offering in existing regions while selectively entering new markets. By combining a global platform with a localized user experience, we're able to grow in markets where we're still early while deepening engagement and increasing our share of wallet in more established regions. To this point, in 2025, we saw an 80% year-over-year increase in non-U.S. stock activity. In Asia, establishing Singapore as a regional hub last year provides a strong foundation to produce more investors to eToro from the region. We expect to introduce additional products and increase targeted marketing activity as the year progresses. In Europe, where we already have meaningful scale, our focus is on deepening relationships with existing users and increasing share of wallet. We continue to enhance our localized offering, particularly in savings and long-term investing as we work to capture a greater share of wallet across our core European markets. In the U.S., the world's largest retail investing market, we are in the process of bringing the full experience to the U.S. As a global pioneer in social investing, we have spent more than a decade building community-driven tools such as CopyTrader, which enables investors to learn and invest alongside smarter investors. Furthermore, we plan to roll out additional crypto products and smart portfolios to drive engagement and momentum over the coming quarters. More broadly, we continue to evaluate new market opportunities, prioritizing regions with strong financial literacy, digital adoption, and sustained demand for trading and investing. Thirdly, macro trends. We continue to align with powerful long-term market trends that are reshaping global investing. We are at the early stages of the largest wealth transfer in history with more than $120 trillion expected to move to younger generations over the next 20 years. These investors are digital-first, more self-directed, and more engaged with equities and crypto than any generation before them. This shift aligns directly with our platform and positions eToro to support how the next generation builds and manages its wealth. At the same time, our global footprint provides meaningful exposure to structurally underpenetrated retail investing markets. In the United States, around 60% of households have some exposure to equities while in Europe, retail participation remains significantly lower, with brokerage account penetration still in the single digits in some markets. This gap highlights the long-term opportunity ahead and reinforces why we believe eToro is well positioned to lead the next phase of global retail investing growth. To summarize, we delivered resilient net contribution and strong adjusted EBITDA performance in 2025, and in the fourth quarter, we continued to see positive KPI trends in January, largely driven by strength in commodity trading activity, demonstrating the strength of our diversified multi-asset model. Looking ahead to 2026, we're confident that our strategy—continuing to leverage technology to innovate, expanding globally, and aligning with long-term macro trends—positions us to capture significant opportunities. We see 2026 as a year of accelerated momentum growth. We're uniquely positioned as both a native crypto company and a global equities trading platform and believe we're building a strong foundation for long-term sustainable value creation for our shareholders, users, and partners. With that, I'll now turn the call over to Meron to walk us through the financial results.

Thank you, Joni. Fourth quarter net contribution was $227 million, a 6% sequential increase demonstrating the continued momentum and durability of our diversified business model. Adjusted EBITDA was $87 million, an 11% improvement quarter-over-quarter, reflecting strong execution and disciplined cost management. The year-over-year adjusted EBITDA decline was impacted by the crypto tailwind and unique market conditions that followed the previous year's U.S. presidential elections. In line with our focus on diversified profitable revenue growth, our adjusted EBITDA margin was 38%. AUA for the quarter increased 11% year-over-year to $18.5 billion. The increase was driven by record net deposits and improving customer retention metrics. Our funded accounts grew 9% year-over-year to 3.81 million. This growth reflects the strength of our multi-asset business model and our disciplined, data-driven marketing approach. Let's take a closer look at the fourth quarter financials by business lines compared to a year ago. Net rating contribution from capital markets, including equities, commodities, and currencies, increased 43% year-over-year to $116 million, driven by investor rotation between crypto and traditional asset classes with particularly strong performance in commodities. This pattern is consistent with historical behavior and highlights the strength of our diversified multi-asset platform. In contrast, net trading contribution from crypto declined 72% year-over-year to $26 million due to the crypto tailwinds in the fourth quarter of 2024 that I had mentioned before. The decline was primarily driven by lower investor demand per trade and softer trading activity, particularly in November and December. As we have seen in prior crypto cycles, these periods of volatility are expected, and our diversified business model continues to demonstrate resilience across market conditions. Net interest income contributed $59 million, up 18% year-over-year, largely driven by a 29% increase in higher interest-earning assets due to an increase in customers' cash deposits, customers' margin book, staking, and corporate cash. This growth was achieved despite a moderating interest rate environment, reflecting the strength of our balanced growth. eToro money's contribution declined 6% year-over-year to $23 million, largely driven by higher year-over-year cash redemption in crypto in 2024 due to market conditions we had mentioned before. In the fourth quarter, adjusted OpEx was in line with our expectations at $140 million. Our adjusted selling and marketing expense was $46 million or 20% of net contribution. Our marketing strategy continues to generate strong and disciplined returns with shorter payback periods, delivering ROI within the same year and cohorts driving sustained commission growth over time. Notably, our 2024 cohort has already achieved a 1.8x return on investment, while our 2020 cohort has delivered a 5.6% return on investment, demonstrating the durability of our model. Importantly, we continue to see cohorts generating meaningful revenue even after eight years, underscoring the long-term lifetime value of our customers. Given the strength of our cohort returns and our objective to accelerate growth in 2026, we plan to increase our sales and marketing investment from 21% to 25% of net contribution. Importantly, this spend remains highly flexible and can be adjusted based on market conditions and performance. We are making this decision from a position of confidence as the ROI profile supports incremental investment, and we expect this increased spend to drive accelerated growth across our key KPIs in the year ahead. Adjusted R&D and G&A operating expenses were $37 million and $57 million, respectively. Our adjusted diluted EPS for the quarter was $0.71 compared to $0.79 in the fourth quarter of 2024. Moving to our balance sheet. We ended the quarter with $1.3 billion in cash, cash equivalents, and short-term investments and generated $42 million in free cash flow from operations. Furthermore, we do not have any material exposure to crypto or commodities on the balance sheet. In the fourth quarter, we repurchased 1.5 million shares with $59.5 million pursuant to our previously communicated share repurchase program. Lastly, alongside today's earnings release, we announced an additional $100 million authorization under our share repurchase program, increasing total authorization to $250 million. To date, we have deployed $100 million under the program. This reflects our confidence in the long-term outlook and our commitment to driving shareholder value. Given our strong cash generation and balance sheet, we have the flexibility to continue executing buybacks while also evaluating selective M&A opportunities to support disciplined inorganic growth. Now let me share a few comments on our first quarter trends. As part of our quarterly results today, we also released our January monthly KPIs. The month of January saw improved KPIs versus November and December. Our Capital Markets business saw significant year-over-year growth in both total number of trades and invested amount per trade. This was largely driven by equities and commodities. Both our AUA at $18.4 billion and funded accounts at $3.85 million were up year-over-year. These solid KPIs are a testament to our multi-asset strategy support of strong results despite a soft crypto pricing environment. To summarize, we are excited to start the year with solid January KPIs and are looking forward to driving meaningful profitable revenue growth in 2026.

Thank you, Meron. So the first question comes from our list of questions that we have been pre-submitted by our retail investors. This question is for Joni. Joni, how has eToro managed the current volatility in commodities?

So we're very excited to see a lot of engagement and very high volumes. The highest volumes we've seen actually were in October last year and now January as well, as gold rose to $5,500 and then seen significant volatility. We've seen significant engagement from our customers and high trading volumes in commodities both in October and in January this year.

Thank you, Joni. Operator, we'll now open the queue for questions from our institutional analysts.

Our first question comes from Dan Fannon with Jefferies.

I was hoping you could just provide a bit more context on the current crypto market backdrop, and how this compares to maybe other downturns. And then in that, how you guys are potentially operating differently this time versus previous periods?

Sure. So first, this is our first crypto cycle. We've seen these crypto cycles in the past as well. We remain extremely bullish on crypto, on Bitcoin's future, as well as other leading blockchains. What we're seeing is the friendliest administration and regulatory environment towards crypto innovation and towards tokenization and capital markets moving on chain. We have seen, in the past, the volatility or corrections happening in crypto markets. They are corrections as a volatile asset class, corrections that are more significant or have a higher amplitude usually than capital markets. In the past, what we've done, as always, is shift focus. When we see less interest in crypto, we shift the focus from a marketing perspective to equities to commodities, which we're seeing very high engagement levels on. We keep on building constantly new products in crypto. So we've actually developed a very significant crypto road map with our noncustodial wallets with new products coming into crypto, and we have no doubt that we'll see more and more engagement, especially from younger, crypto-native generations into crypto, despite the price of Bitcoin right now being lower than in Q4 2025.

Great. As a follow-up, you mentioned that sales and marketing expenses are expected to increase from 21% to 25% due to perceived opportunities. Can you provide the time frame for when you anticipate this change? Additionally, it would be helpful to discuss the overall expense outlook for 2026.

Yes, sure. So we expect to grow gradually. In Q1, you should not expect to see 25%. We are looking to grow there, looking at the right opportunities, but conceptually, as we've seen great results in the history as well, as we shared on the slides in the investor deck, we have the ability to scale up. So we're going to look into new opportunities in new markets. We've already seen some early signs in the U.S. that the marketing is working. So we're looking to expand over there. We're looking to expand in the new regions as well, whether it is Singapore that we launched last year or UAE that we launched a few years back. We're seeing some great results. So we are happy to scale there. So it will not necessarily happen in Q1, but gradually throughout the year, we will get to 25%. If we see opportunities, we have the right flexibility in the model to be able to scale even further than 25%.

Our next question comes from Devin Ryan with Citizens Bank.

Question on AI. Obviously, a lot of talk on the call here, good to hear that you guys are ahead of the curve. As we think about AI being further integrated into the model and even kind of the next iteration with genetic AI. When we think about that combined with more trading on chain, instant settlement 24/7, what does that mean for the outlook for trading at eToro over time? Should we see a step function here with kind of integration of those two themes?

Well, in the medium term, I definitely believe this is a significant step function with advancements in AI, whether it's things like open claw, the new models, our APIs, the launch now of the app store, which actually all cater to more sophisticated investors and more sophistication in automating trading strategies. I do believe over time, we'll see a significant uplift in the algorithmic or automated trading activity on eToro, moving basically from click to trade to many of our customers using automated strategies over time. That will lift significantly over time trading volumes and trading clicks.

Okay, great. And then a quick follow-up here to Dan's question. Just on the increased marketing. What does that mean for the equation for new account additions? How should we think about account growth over the next couple of years here? Should we think about the same CAC math? Or is it going towards something else?

So CAC math, I believe, is very similar. That's basically how we've always managed our increase in scale of marketing is over roughly 3.5% to 4.5% expected ROI of CAC to LTV. We are expecting double-digit account growth, and that's also where we see opportunities right now to scale up marketing activities to basically scale up account growth over time.

Our next question comes from Alex Kramm with UBS.

Also just another follow-up from Dan's question. I don't think you answered the other expense outlook. So maybe talk a little bit about the pace of G&A and R&D expansion that you're expecting for 2026.

Thank you. Yes, so while we don't publish any guidance regarding our operating expenses besides marketing, we do expect our G&A and R&D to be roughly at the levels where we are these days, maybe with a few minor percentages of growth. We don't expect any significant growth over there, and any growth over there we have the levers to generate more efficiencies also within the existing cost base.

I would just comment that in my view, what we're seeing in AI internally is significant opportunities of scaling the business without scaling expenses over time. We did do about a month ago an adjustment to headcount as well. I believe as we're using more and more AI, we will be able to scale the business significantly over time without the need to increase adjusted cost basis.

Okay, great. And then maybe just secondly, I don't think you proactively addressed M&A unless I missed it, but that was a big part of the story to go public. Obviously, your currency, meaning your stock has not been favorable. So maybe that hasn't helped. But just wondering what your appetite is. You talked about global expansion. We haven't seen much yet. So maybe talk about what we should be expecting in 2026, and what the target companies are saying in terms of purchase prices, et cetera.

Sure. So first of all, we do expect to see several M&A deals in 2026. We have been in active discussions with several target companies over the last six months since the IPO. I would say we have a high appetite for M&A, but we want to make sure we're selective and find the right accretive opportunities. Right now, we do see opportunities both in the crypto space, in the U.S., but also globally, as well as in new brokerage and wealth management. We've been in this space for a long while, for 18 years. We know a lot of great founders, great teams, and great companies, and we are looking for the right teams and the right opportunities to join eToro in scaling 10 and 20x.

You covered it.

I think, obviously, we have a significant balance sheet. We have our revolver as well. So we feel comfortable looking at sizable deals. But again, at the right price and being accretive.

Our next question comes from Dan Dolev with Mizuho.

Great results here, really, really strong across the board, congrats. I have a question and then a quick follow-up. So just really quickly, Joni and Meron, on the crypto take rates obviously down and you spoke to some of that? Like how should we think about this for the rest of the year? And then I have a follow-up.

Yes, so there was a slight decline in the take rate in Q4. We had a small exposure on the balance sheet, which is less than $20 million, but caused the take rate to decline from the usual 1% to 0.7%. So it's really immaterial going forward, and we don't expect that to deviate much from the usual 1% that we have delivered so far.

Okay, great. And then maybe as a follow-up, can you talk a little bit about your app store and app strategy? That would be really helpful.

Sure. I think we've been early to realize that our community of pro investors are people that are super passionate about capital markets and wanted more advanced tools. That coincides with the ability of AI to actually write amazing software. So we started with BASE 44, since then acquired by Wix, and basically enabled our pro investors. Now there are almost or about 1,000 apps developed by 800 of our popular investors from the pro investor program, and they're developing really amazing tools. Those tools reflect how a smart investor looks at the market. We started publishing these apps this week, and we'll be embedding them inside the app. So think about scaling up significantly eToro's ability to innovate towards the rest of the users and building a subscription model on top of that. Just as an example, we've had somebody build basically tighten invest—where you can actually talk to graded investors of all times about what's in your portfolio and what's the recommendation around your portfolio. We could actually get their views from their personalities. We’ve seen many, many amazing innovations from people building their own Chief Investment room with risk management and geopolitical risk to people who are actually building add-ons, which are quite cool, like swapping assets on the eToro platform. We expect a lot of these apps to be useful not only to the pro investors building them, but actually to the rest of the eToro community, significantly expanding or accelerating product innovation scale for our customers. I'd say that we've seen another step function just over the last two weeks with OPUS 4.6 with Open Clone. Suddenly, we've seen a lot of our customers actually using Open Clone on top of eToro's APIs and MCPs, which are the AI-based APIs. Again, unleashing another wave of creativity from our Pro investors who've been with us—65% of them, more than 5 years—all of them passionate about capital markets and building very, very cool things for themselves and then being able to share them and monetize them with the rest of the eToro customers.

Our next question comes from Brian Bedell with Deutsche Bank.

Maybe just shifting back to the U.S. strategy, if you could just update us on the customer traction. I think you were at around 300,000 customers in the U.S., and how that's going? Especially on the copy trading side, you've rolled that out. I think you said you've gotten pretty good reception so far. Any numbers you could share on that? And then related to that—both on the pro investor side and also the appetite for those in the U.S. that want a CopyTrader from investors. Any update on the plan for the U.S. pro investors to be paid? I think you have to get the fiduciary license, but I think you have a couple of different routes for that.

Sure. We've been very active since the IPO on expanding eToro's U.S. product launches and product road map. Since then, we've launched CopyTrader. We plan to launch smart portfolios, which is based on our RIA license, in H1 this year. We're looking at prediction markets as well for the U.S. We've seen a significant uptick as we started scaling some of the marketing activities from Q4 to Q1. So we are seeing significant uptick, although it's still early stages of the U.S. business. We're very excited about continuing to launch all of eToro's global product road map here in the U.S. I do believe that now, with being able to accelerate product development, we'll be able to actually launch more of our products than we expected originally in 2026 here in the U.S. We're making sure we are, I'd say, selective in how we scale our marketing budget. Here in the U.S., we want to see CAC to LTV while not at the same levels as globally, yet we want to see that ratio increase. We've seen the best ratio we've seen to date last year, especially moving into the year. That basically gives us the ability to continue to scale up marketing activity, which will then drive funded accounts as we believe product engagement will follow as well.

Okay. And then just timing of when you think you'll have the fiduciary license in the U.S. And then you mentioned prediction markets as well, just any timing on rollout of prediction markets for U.S. customers this year.

So, as everything in product, we are working on the RIA license. We hope to be able to launch the smart portfolios product, which will be based on the RIA license, in H1 this year. We are in active discussions on the launch of prediction markets, which, of course, requires an additional regulated entity here in the U.S., which is NFA regulated. We believe that will probably be later in the year towards Q3, Q4.

Our next question comes from Brett Knoblauch with Cantor Fitzgerald.

Congrats on the quarter. Just maybe on the split between kind of where you're spending marketing dollars for the year on maybe U.S. and ex-U.S.? And I know when you guys IPO’d, you disclosed some kind of market share statistics on different key countries. Do you have an update to that? Or just maybe qualitatively on kind of where share has progressed throughout 2025 and maybe expectations for 2026?

Sure. First of all, when you look at the size of the marketing budget, it's a significant marketing budget globally. The U.S. is still a small part of it. If we scale, let's say, 25% to 30% over the year roughly in 2025, we basically select where to scale more based on the CAC to LTV ratio, which we see higher right now in other markets where we have a more developed product. We have scaled the percentage higher in the U.S. in 2025 versus the rest of the world, and we expect that percentage increase in 2026 to be higher as well, but not extremely high as to bridge the entire gap from the U.S. to our more mature markets. That said, scaling up will continue to be based carefully on ROI.

No, we are looking carefully, obviously, at the ROI against each of the investments very closely, and scaling up as we scale in the market in the U.S. will continue to scale by high percentages, as you mentioned, Joni. We'll continue to do that this year and next year as we've seen some good results, but it's still not a material number to quote compared to the entire budget globally.

Our next question comes from Ed Engel with Compass Point.

It looks like there was a nice rebound in the revenue per trade within the ECT segment in the fourth quarter. Was that uptick driven just by the mix of commodities versus equities trading? Just maybe a bit more tilted to commodities? And then is it fair to assume, as I think about January, was revenue per trade likely to remain elevated just alongside the strength in commodities?

So both Q4 and January, we've seen significant commodities activity, gold and silver, very popular as we've seen unprecedented volatility and price for both gold and silver. We also now are expanding the 24/7 offer, which we believe will continue to expand activity in commodities as a very unique new product to trade alongside crypto assets on the platform, 24/7. Regarding the net contribution per trade, I don't think we can still comment on that.

I'll comment my usual comment: when you look at our revenue per trade on ECT, you should always count in the range of $0.60 to $0.75 per trade. That's how we always look into it. It is impacted by the higher commodities part of the mix. Also on the other side, we have higher contribution. We've seen tremendous volumes coming on our copy product, which is our USP. That drives the revenue per trade to be slightly lower as part of the mix. But overall, as you should look into it, it's almost the $0.60 to $0.75 per trade.

It's actually very interesting because we're seeing something we haven't seen before, which is crypto-native customers or people who came in to trade crypto and primarily traded crypto suddenly trading commodities. I do think there's somewhat of a convergence or a shift from crypto, which now has lower volatility to now basically gold, silver, and other commodities that have higher volatility. That's a unique part of eToro also because when people trade only crypto at only crypto companies versus eToro, where they can now trade equities and commodities as well, what we see over time is that customers who actually trade multiple asset classes on eToro are more active, more engaged, higher lifetime and higher lifetime value on the eToro platform.

Great. And then, I guess, just from our point of view, it seems like there's a pretty big divergence between just the underlying strength of the business and then the stock price. Has the Board considered any other ways to unlock value beyond the stock buyback? I know you've been public the last year, but I mean is there any other types of strategic alternatives that have been considered?

I think, first of all, from a corporate strategy point of view, as we discussed before, we do believe in buybacks, and we do believe we'll see M&A opportunities manifest this year. That's more on corporate strategy. I think from a business perspective and product strategy, we're focused on an AI-first approach, unleashing AI to our customers to increase product velocity and making sure that we also expand our entire product offering in crypto as well as increase margin capabilities. We've launched margin trading now in Europe alongside futures in the U.K., enabling our customers to trade also more on exchange. On-exchange leveraged products will obviously increase velocity as well. All in all, that's the strategy we believe in: providing great service, great product, accelerating our product innovation to our customers, and scaling up marketing activities to bring on new, more funded accounts that will eventually lead to a larger base of funded accounts, driving activity, increased revenues, and profitability over time, and the stock will follow.

Our next question comes from Craig Siegenthaler with BofA.

I hope everyone is doing well. So we have a follow-up on M&A on some of your previous comments. But I'm curious about your desire to expand to new geographies versus focusing on keeping your leading share in Continental Europe. So why not in Europe, deepen your moats, keep taking share versus the legacy brokers and banks, build on your first-mover advantage, and hold off on expanding in new markets where you're probably going to be subscale for some time or at least until the eToro stock valuation improves, so then the M&A math becomes more attractive?

Sure. So first of all, the M&As we're looking at to expand regionally are not, I'd say, significant in scale or we expect them to potentially impact EBITDA margin. So we're looking at this very selectively. We're very focused on, first and foremost, to deepen the existing eToro product in the existing mature markets such as Europe, the U.K., Australia, as well as new markets, which we've already unlocked, which is Singapore and Asia and, of course, the U.S. So we're not looking to dilute attention from our existing markets, but as we said, looking at selective opportunities if they arise, and create for us basically a local moat, which is a regulated activity where we believe if we bring our products to that market, we can actually scale our business relatively easily without increasing the cost base. I think that's an interesting opportunity, especially as I do believe that now AI is actually accelerating the gap between traditional banks, insurance companies, and eToro's product offering.

Great. My follow-up is just on promotions. I know you have a bunch out there, but I want to make sure I'm not missing anything. On the debit card, I believe there's a 4% bank option but not on anything. So maybe help us with that one. And then also, I think, crypto deposits in the U.S., there's like a sliding scale, but you deposit more than $5,000 of crypto you get $500 initially. In Europe and parts of Asia, you have something similar on a stock basis. But do you mind summarizing kind of what you have live out there today on the promotional front?

Sure. I won't go into all of the details because we do operate in 12 different regions. Each of these has its own incentive plans. The same way that we're looking at CAC to LTV on the acquisition front, we provide incentives to open an account and deposit. We also provide incentives on product engagement. We do an analysis, and when we find out that, as an example, a customer in the U.K. if they deposit and bring their ISA, which is the equivalent of an IRA roughly into eToro, it significantly increases over time their lifetime value. So we calculate basically the same on existing customers on what's the cost of promoting a new product, what is the LTV added to that customer if they actually use that promotion over time. Is that profitable? If it's profitable, how do we move the needle and scale up product engagement using incentives? In different markets, we have different products and different incentive strategies. Would you like to add anything from the breakdown of the financials?

No, the numbers are insignificant at this stage to quote it out and in general.

Yes, it's still a small part out of the total marketing budget. When it does become significant, we'll break it down.

Yes, it's definitely part of our strategy to make sure that we increase customer acquisition. We decreased the churn of customers by combining those acquisition campaigns and incentivized campaigns also for CRM purposes.

Our next question comes from Joseph Vafi with Canaccord.

Great results here for Q4. Just maybe we double-click on the noncustodial wallet rollout, the strategy there, and maybe intersection with some of the sales and marketing spend?

Sure. We're taking more of a product-first approach to crypto-native into the noncustodial wallet. We promote the eToro platform of equities, crypto, and commodities as the forefront and the window, including of course, CopyTrader and Smart Portfolio. We add more products, for example, the card program or now the noncustodial wallet, which we use to offer to existing customers. We don't expect our crypto wallet to increase in any way the marketing activities of eToro. I'd say also it's a bit of a different target audience. What we are seeing is that more of the crypto-native, younger audiences, actually, I'd say, Gen Z are much more active on noncustodial and in crypto wallets. The equivalent, of course, is Metamask. It means a higher-risk product because the responsibility on custody rests with the customers, but it unlocks a lot of products that are very hard to unlock and trade. So just as an example, Solana has now 1 million tokens. It's very hard to unlock 1 million tokens in trade. But looking at the noncustodial wallet, you'd be able to actually swap into hundreds of thousands of assets that are out there. We see that interest coming from a younger audience that has a higher, I'd say, risk appetite and is more SEFI on what it means to be crypto-native to move between chains, look for opportunities that are mind-boggling, like 40,000 new coins launched on Solana as well as thousands on other blockchains. These opportunities are out there, not only for the U.S. market, but outside the U.S. as well. We want to make sure that our younger audience can engage with that within the eToro framework.

No, it's part of our strategy to always look at funded accounts and see how we can grow there from acquisitions. So adding customers and on the other side making sure that our churn rates are getting lower and lower. We deploy different strategies into that. We've seen great results, supporting us in our plans for the future of growing the marketing spend into 25% gradually throughout the year, and making sure that we achieve double-digit growth of funded accounts on a constant basis.

Our next question comes from Bill Katz with TD Cowen.

This is Robin Holly on for Bill Katz. I wanted to ask a question on the ROI on the cohorts. Could you unpack what is driving the faster payback period for the newer cohorts, specifically the 2025 ones? It looks like the payback periods are accelerating. Is this more—are the customers more engaged, or is it something on the marketing side?

So we are constantly evolving our marketing strategy, being more active in identifying both opportunities and looking at the higher LTV cohorts. We've seen in 2025 a 23% year-over-year increase in what is the first-time deposit average amount of customers. Online marketing can actually target and see what campaign to which product brings better customers, the deposit more and generate revenues more. We want to balance that against market happenings. Anything to add to that?

Yes. I would say the marketing machine is flexible in identifying different trends. So when there is a trend in gold or silver, we can quickly pivot the machine into what's interesting in the market. If customers are coming with the intent because they are looking for gold, that really helps us improve the ROIs and year returns.

Basically, the direct correlation between volatility in a specific market, where gold, silver, and indices usually are impacted, does not matter where the price direction is; volatility increases significantly initial LTV and therefore payback period. The same happens in crypto, where there's a significant crypto rally. We're seeing basically customers that come into eToro much more engaged, better cohorts.

Our next question comes from James Yaro with Goldman Sachs.

Some of your competitors are building similar products to CopyTrader, which clearly reflects the success that you've had in building this product over time. What does the landscape look like today for CopyTrader in your view? What can you do to stay ahead of these competitors, some of which are quite scaled?

So first of all, we are seeing and have seen over the past 19 years, a lot of the competitive landscape talking about social trading. So far, we haven't seen anybody executing on it. That's one. Second is, we have a significant moat, which is customers that have been on eToro for the past 5 years, 10 years with a very solid track record that have their AUC already on eToro. If you look at our top two investors on eToro, the first one has more than 30,000 people copying him, more than $300 million of assets under copy. The second one has $200 million. Both, by the way, have a track record of, if I remember correctly, over 29% over a tenure of 6 years and 12 years, respectively. So that moat is a time-based mode. Nobody replaces Warren Buffett that fast, and nobody replaces 10- and 12-year experience on eToro. I do think, of course, we've innovated and created a category that will eventually change a lot of how people think of general portfolio management in the RIA industry. We will see younger audiences. There's a big app across the world that financial intermediaries are getting older and that younger audiences are not looking for their advice. I do believe that our product category as a category will significantly scale, and the moat we have is the track record of those customers. Again, bringing them new tools where they can build their apps, and they can monetize them eventually in a subscription model in eToro. We already have significant communities of customers—popular investors in France actually meeting our customers, popular investors again, Germany, Australia, and the U.K. That is something that the competitive landscape doesn't have.

Excellent. Very clear. You touched on prediction markets already. Given the vast majority of your customers are outside the U.S., could you touch on whether you see a prediction market opportunity for your non-U.S. customers?

So it does seem like prediction markets right now, at least from our analysis, are very U.S.-led business with regulated prediction markets. A lot of the activity outside the U.S. actually sits more with crypto-native customers. Those younger audiences that are crypto-native know how to move their crypto and basically trade directly on-chain. So I'd say that's roughly what we're seeing: in the U.S., with the regulated infrastructure to offer production markets, we are building that in the U.S. and globally as well, with more on-chain activities of prediction markets happening in noncustodial wallets.

And our next question comes from John Todaro with Needham & Company.

Congrats on the strong quarter. I guess first one, just as it relates to crypto regulation and in particular, the Clarity Act. Is there just kind of anything in the current iteration of the bill, where maybe you would like to see adjusted—just kind of any additional thoughts there we've been getting from some of your peers.

We usually try not to comment on sort of regulations and where they are in the process, as we are regulated in many places under different regulators across the globe. We do believe that clarity in regulation helps significantly in the industry to mature. We've seen that in Europe with Mika. We've seen it already, I'd say, in the environment right now here in the U.S. and the biggest driver, by the way, is going to drive, in our view, the shift towards new types of asset classes moving on-chain. The more clarity there is in an industry, and we’re seeing in Europe, banks, insurance companies, private equity firms are tokenizing different types of assets to distribute them into that new audience. The more clarity in regulation here in the U.S., we believe will also see more opportunities to bring in more new products to our customers. We’ve seen the largest wealth managers in the world already working today with eToro—whether it's BlackRock, Franklin Templeton, WisdomTree, now Amundi as well as ARC. We are seeing interest from large financial institutions and asset managers issuing new products. They want to deliver those products to a global audience and a younger audience. It's very early days of that, but there is no doubt that more clarity and regulation will expand that.

Great. That's very helpful. Just kind of going back to prediction markets. It sounds like from your prior comments that you guys would still look to work with a partner like Causal Market, whether in the U.S. or outside the U.S. Is there an avenue where you could kind of go at this alone though and offer something more direct?

We're currently looking at the industry. I think the industry is evolving very fast, both in predictions and different regulatory environments across both categories. We do believe that working with partners—and there's now an emerging new type of predictor aggregator—means you can use aggregators to find the best prices on predictions, for example, the same with perps. So we are looking in that space right now to partner versus to build the entire stack on our own.

And that's all the time we have for questions. I'd like to turn the call back over to Daniel Amir for closing remarks.

Yes. Thank you for attending the call today. We're looking forward to seeing you at the upcoming investor conference during the quarter. You're welcome to follow up with me directly. Thank you, and have a great day.

Thank you for your participation.