Earnings Call Transcript - ETOR Q1 2026

Daniel Amir, Head of Investor Relations

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 April monthly spreadsheet is now available on our website at investors.etoro.com. Today, I'm joined by Yoni Assia, our CEO; and by Meron Shani, our CFO. Following the prepared remarks, we will conduct a Q&A session and answer questions from both institutional research analysts and a selection of the most upvoted questions previously submitted by eToro's retail shareholders. But 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. And you can find more information about these risks and uncertainties in the press release that we issued today and in 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 is available in our press release, investor presentation and on the sec.gov website as applicable. With that, I will pass the call to Yoni.

Yoni Assia, CEO

Thank you, Daniel, and thank you to everyone joining us today. Welcome to eToro's First Quarter 2026 Earnings Call. After Meron and I conclude our prepared remarks, we will open the call for questions. This was a very strong quarter and a very strong start to 2026. Net contribution and adjusted EBITDA were both record as a public company. Net contribution increased by 19% year-over-year to $258 million, while adjusted EBITDA grew 35% to $109 million. This marks our fourth consecutive strong quarter since becoming a public listing. Just as importantly, the quarter demonstrates the durability of our model and a confirmation of our strategy as trading continued to shift from crypto to commodities and our diversified offering kept users engaged. This highlights our ability to sell across market environments and is a core structural advantage. We also saw meaningful acceleration across our key performance indicators. Funded accounts grew 12% year-over-year to over 4 million, representing our fastest organic growth in over a year, driven by increased strategic marketing investment and improved retention efforts. Momentum carried into April with funded accounts growing 13% year-over-year. Assets under administration reached $17 billion, up 15% year-over-year, driven by strong customer inflows. We are a highly diversified global financial services company. We're building a global platform for investing built around the idea that everyone should have access to the world's financial markets in a simple and transparent way. Today, users can invest across almost every major asset class from stocks, indices, commodities, currencies, crypto assets, tokenized assets and emerging market opportunities like prediction markets. Innovation remains at the core of our strategy. We continue to expand our platform with new products and technologies, including AI-powered investing experiences, 24/7 trading capabilities and on-chain financial infrastructure while continuing to strengthen our traditional investment offering. We believe these initiatives position us well to capture the long-term evolution of global investing and wealth creation. Six months ago, we made AI a company-wide mandate across every function in eToro. We didn't just adopt tools. We rethought how we operate. Today, every function inside eToro — research, engineering, product development and marketing — is supported by AI agents that operate against our infrastructure, continuously upgrade themselves as frontier models improve. The impact is significant. We're already seeing significant productivity gains in engineering with more to come and similar acceleration is extending across the rest of the organization. Work that historically took quarters now ships in a fraction of the time. Capabilities that used to require deep technical expertise have become accessible across the business. We believe 2026 is the year of agents, and eToro is among the early adopters of this shift in our industry. This is an engine behind a significantly faster product roadmap. As we deliver against our mission, we have remained focused on executing on our four strategic pillars: trading, investing, wealth management and neo banking. Allow me to share a few highlights across each of these areas. In trading, we saw incredibly strong growth in commodities, which represented 60% of trading commission in the first quarter, with volumes increasing nearly fourfold year-over-year. This reflects both market conditions as well as the strength of our multi-asset model, which continues to drive cross-asset engagement. Over the past six months, users who initially traded crypto or equities accounted for most of the commodities trading volume. That is the multi-asset model in action, and it is how we deepen user engagement over time. The strength and resilience of eToro's business model are anchored in our proven ability to sell across a diversified multi-asset platform, a pattern we've successfully executed through both crypto rallies and periods of elevated activity in traditional capital markets. Our 24/5 trading offering launched last year and is being widely used and it underscores the global nature of our user base. This year, we took the next step. We rolled out 24/7 trading across multiple asset classes; eToro users can now trade select commodities, single stocks and indices around the clock with more to come. We see this as an evolution in capital markets. Traditional markets are starting to look like crypto markets and users want to trade on their own schedule. We also continue to expand our offering. With the addition this quarter of Japanese equities, eToro users can now trade equities from 26 of the world's leading stock exchanges. In the U.S., we expanded our crypto offering with the launch of crypto trading for users in New York, the epicenter of the country's financial markets following the successful activation of our BitLicense and Money Transmitter License. Turning to investing. Copy trading remains a core differentiator for eToro as we're the only company offering automated agentic trading. This quarter, Copy trading reached an all-time high, driven by rising demand to copy and Pro Investors were actively reacting to volatile market events. Copy trading is widely used by our users, reinforcing its role as a cornerstone of our social investing model. As an AI-first company, AI-powered investing sits at the core of our innovation strategy. We're entering a new era of investing where AI is reshaping how individuals access markets, make decisions and build wealth. At eToro, we see AI as a force that levels the playing field, giving every investor access to capabilities once reserved only for institutions. Our vision is to equip each user with their own team of AI agents, tools that analyze the markets, generate insights and share personalized analysis while enabling them to build, share and scale strategies within a global collaborative investing ecosystem. We're extending the same agent architecture we have built internally directly to our users by putting institutional-grade capabilities into the hands of every retail investor on eToro, designed to similarly integrate with the community they already trust to learn from and engage with. Ultimately, AI is accelerating a long-term trend of making investing more accessible, more social and more personalized. The Internet democratized information, blockchain democratized value, AI is now democratizing financial expertise. And as finance and technology continue to converge, it is becoming the primary interface between users and the markets. AI will help millions of people participate in the markets with greater confidence, better tools and a stronger connection to both data and community. The introduction of Agent Portfolios is also a meaningful step on that journey. Agent Portfolios let users allocate capital to AI-driven strategies inside a dedicated environment in the eToro account. Through Tori, our AI investing agent and conversational interface, users define the parameters and the AI agents run the portfolio. They get exposure to intelligent portfolio management in a controlled and transparent way while keeping full control over their broader investments. As part of our AI efforts, we also recently expanded our partnership with SpaceX AI by embedding real-time X intelligence and market sentiment powered by the frontier Grok 4.2 model directly into the investment workflows of Tori. As more activity shifts toward automated AI-driven strategies, we expect increased engagement, trading activity and volume across the platform. Building on this, we have launched the eToro App Store, a marketplace for trading and analytics applications directly within the eToro ecosystem. We have also introduced a builders portal, providing partners with access to APIs, tools and development resources. Some of the apps developed include an AI trading cockpit, a trading hub, a Bloomberg-style terminal for traders, a price point turns web page into trading signals app, and POTUS which turns politicians' and influencers' comments into trading signals. Together with Agent Portfolios, the eToro App Store and our builders portal create a foundation for a new builders economy, enabling the creation and distribution of applications to millions of users, including no-code AI-powered tools. Developers, quantitative strategists and everyday users can now access, create, share and scale financial applications across our global platform. Over time, we expect a broad set of applications to be built on top of eToro, further expanding the capabilities of our ecosystem and fostering a more engaged and loyal user base. In wealth management, the continued adoption of our Club subscription gave us the runway to introduce an upgraded plan, giving users access to first-class benefits of our premium tier for a monthly or annual recurring fee. More users can now get enhanced rewards, professional tools and premium experiences, which we believe drives deeper engagement and higher user satisfaction. Our Cash ISA offering in the U.K. also had a record quarter. ISA AUA grew 15x compared to the same period last year with the underlying market opportunity exceeding $1 trillion. We're now using that playbook to push deeper into localized savings products across other key markets. In neobanking, eToro Money delivered a record quarter. We continue to invest in localization and in regional expansion, enhancing the user experience and supporting long-term growth. We've seen strong adoption to the eToro Money card available today in Europe and the U.K., and we'll continue to expand the benefits associated with that card. In the first quarter, the number of cards issued more than doubled quarter-over-quarter. Finally, last month, we announced the acquisition of Zengo, a leading self-custodial crypto wallet provider, marking an important step in advancing our long-term crypto strategy. At eToro, we have long believed that blockchain technology and digital assets will play a central role in the future of finance. Crypto is revolutionary because it reduces friction in financial services, gives individuals and companies true ownership of their assets and expands access to a more inclusive global economy. As one of the first crypto companies to offer crypto back in 2013, we've been pioneers in blockchain technology. Having experienced many crypto cycles, we believe that crypto downtimes are the time to build, and this acquisition reflects that long-term commitment and approach. Zengo combines naturally with eToro. Our global multi-asset platform and distribution together with their secure self-custodial wallet technology gives users direct control over their digital assets while staying seamlessly connected to on-chain infrastructure. This transaction enhances our digital asset capabilities and accelerates our strategy to bridge traditional investing with decentralized finance, unlocking new opportunities across tokenized assets, prediction markets and perpetual futures. Globally, we now offer over 200 crypto assets on eToro and access now to thousands more on Zengo, including tokenized stocks. Importantly, our crypto efforts are not dependent on short-term market conditions. We are seeking to position eToro to lead the transition to an on-chain financial world. To wrap up, we've delivered strong financial results, grown funded accounts ahead of the market and continue to drive product and innovation, particularly in AI. At the same time, we continue to thoughtfully pursue strategic initiatives, including expansion through acquisitions and our share repurchase program. Our focus remains firmly on creating long-term value, and we believe our strong start to the year reflects our unwavering commitment to that objective. With that, I'll hand it over to Meron.

Meron Shani, CFO

Thank you, Yoni. As Yoni mentioned, we are very pleased with our first quarter results, which demonstrate our continued momentum as well as the durability of our diversified business model. First quarter net contribution grew 19% year-over-year to $258 million, and adjusted EBITDA grew 35% year-over-year to $109 million. In line with our focus on diversified profitable revenue growth, our adjusted EBITDA margin was 42% compared to 37% a year ago. These very strong margin results were due to a higher net contribution in the quarter. Our KPIs reflect strong momentum in the first quarter with AUA increasing 15% year-over-year to $17 billion and funded accounts growing 12% year-over-year to $4.02 million. These positive trends continued into April, which I will discuss in more detail shortly. Growth was driven by strong user acquisition and retention, supported by continued investment in marketing initiatives. Now let's take a closer look at our first quarter financials by business lines compared to a year ago. Our net revenue contribution from capital markets grew 71% year-over-year to a record $166 million, supported by increased engagement of our customers and crypto traders shifting to trading capital markets, with commodities being particularly strong. As Yoni mentioned, in Q1, commodities accounted for 60% of our trading commissions. The 90% rise in the number of trades during the quarter was primarily driven by strong market activity in commodities and record inflows into copy trading as Pro Investors reacted to evolving market conditions in the first quarter. This performance reflects growing user engagement and the strength of our multi-asset business model. Additionally, the growth of our business is reflected in the steady increase in total invested amount over time. This growth has been driven by the expansion of our capital markets business and the continued shift of crypto customers towards broader investment products amid crypto market cyclicality. Net trading contribution from crypto was $13 million with a year-over-year decline driven primarily by lower trading activity and customers shifting to trade commodities. As we have seen in prior crypto cycles, these periods of volatility are expected, and our diversified business model has demonstrated resilience across market cycles. Our crypto net contribution includes a $5 million negative valuation impact of our corporate crypto holdings, resulting in a balance of $14 million at the end of the quarter. Net interest income contributed $48 million, down 5% year-over-year, largely driven by a lower interest rate environment and user deleveraging amid market volatility. The decline was partially offset by a 13% increase in higher interest-earning assets as a result of an increase in user cash deposits, staking, and corporate cash. eToro Money's contribution grew 32% year-over-year to a record $29 million, driven by a 70% year-over-year increase in total money transfers as we continue to experience increased deposits and user activity. In the first quarter, adjusted OpEx was $150 million, up 7% quarter-on-quarter, driven by a $12 million increase in customer acquisition costs. Our adjusted selling and marketing expenses for the quarter was $58 million or 22% of net contribution. As discussed last quarter, 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% last year, scaling gradually to 25% of net contribution this year. Adjusted R&D, G&A, and operating expenses for the quarter were $38 million and $54 million, respectively. Our adjusted diluted EPS for the quarter was $0.91 compared to $0.77 in the first quarter of 2025. Moving to our balance sheet. We ended the quarter with $1.3 billion in cash, cash equivalents, and short-term investments, and generated $104 million of cash from operating activities during the quarter. In the first quarter, we repurchased approximately 3.3 million shares with an aggregate of $103 million in accordance with our previously announced share repurchase program. Now, let me share a few comments on the second quarter trends. As part of our quarterly results today, we also released our April monthly KPIs. April has continued on a positive trajectory with the business momentum carrying through from Q1. Our capital markets business followed the same year-over-year pattern as Q1, with significant growth in total trades led by equities and commodities, with a higher-than-average revenue per trade. We have seen the multi-asset strength yet again when 40% of the customers who traded commodities in Q1 also traded stocks or crypto in April. In April, KPIs accelerated. AUA reached $18.7 billion, up 90% year-over-year, and funded accounts grew to $4.07 million, up 13% year-over-year. These KPIs reflect the strength of our multi-asset platform and a confirmation of our strategy, even against the backdrop of the current crypto market cycle. To summarize, we are very pleased with our strong first-quarter performance and positive momentum year-to-date. We believe we are well-positioned to capture new opportunities, drive sustainable growth, and further strengthen eToro's leadership at the forefront of trading and investing while delivering meaningful value to shareholders. With that, Daniel, let's move to Q&A.

Daniel Amir, Head of Investor Relations

Thank you, Meron. The first question comes from our list of questions that have been pre-submitted by our retail investors. This question is for Yoni. Following Zengo's acquisition, can you elaborate on eToro's crypto strategy?

Yoni Assia, CEO

We've always been very big believers in crypto and blockchain and in Bitcoin, starting with launching Bitcoin back in 2013, while actually starting the company as a TradFi company. So, we were always a regulated financial institution, starting from our regulated activities and then adding to our brokerage activities, crypto over time, where we support now more than 200 crypto assets. Over the last five years, roughly, we've seen an inflection in DeFi technologies and customers, mostly Gen Zers, so even younger audiences that are crypto native and are basically managing their entire financials on chain. Zengo accelerates our path to have a crypto native offering where our customers can hold their own crypto on-chain, transact with thousands of coins and hundreds of different blockchains, introducing products like on-chain swaps, yield, prediction markets, and perpetuals over time, and any other new innovation coming into the DeFi world. So Zengo accelerates our path into DeFi and on-chain capital.

Daniel Amir, Head of Investor Relations

Thank you, Yoni. So, we'll now open it up to questions from our institutional analysts. Operator, go ahead.

Operator, Operator

Operator instructions.

Dan Fannon, Analyst, Jefferies

So, I wanted to just follow-up on the kind of current environment. So, the April update seeing still very good activity and the mix skewed more towards commodities. So can you maybe talk about the capture rates that you're seeing as well as we start 2Q, but also just the sustainability of the move to commodities versus crypto and whether you think or any stats that you could share around number of products being traded or thinking about the structural change towards commodities that might be more sustainable versus temporary?

Yoni Assia, CEO

Sure. So, as we've always said, there's always something interesting happening in the markets. During both Q4 and Q1, that something interesting was really around first precious metals, then oil then going back to precious metals. And the strength of the eToro platform has always been the ability to offer our customers a multi-asset offering where with a click of a button, they can shift between crypto, commodities and stocks. Right now, we're seeing more volatility, all-time highs in stocks, still heightened volatility in commodities. So, as we look at the different markets, usually crypto is very directional. When crypto is going higher, especially when it reaches all-time highs, we'll see record activity in crypto, and we've seen that historically in the last four waves of crypto. For stocks, we actually see more heightened activity when the markets drop. So, when there is significant volatility downturn, we see increased customer activity and then they accumulate as markets go up and reach all-time highs. In commodities, it's really about volatility. The heightened volatility across different types of assets, including some food commodities like corn and cacao, drives increased customer activity almost directly on the same day. So, in relation to what we should expect in the rest of the quarter, it's really up to the markets. What we are seeing right now is again, increased volatility still in the commodities market and starting to see the rise of crypto, which we expect to be higher by the end of the year. In relation to some of the numbers and KPIs that we shared on April, maybe Meron can add some more.

Meron Shani, CFO

Sure. We also added some color about the fact that we expect our revenue per trade to be just slightly above the range, which is the $0.60 to $0.75 that we normally communicate to the market. So that continued the trend also from the previous quarter. In terms of the rest of the KPIs, we do see the strength. So, we do see the effectiveness of our business model where customers are trading and navigating from one asset to another. So, customers who traded commodities in Q1, we saw a lot of them already switching back to equities or to crypto as well.

Dan Fannon, Analyst, Jefferies

That's helpful. And just as a follow-up, as you think about the account growth that's picked up a bit, any shift in geography or areas of contribution that maybe is a bit more outsized more recently than previous periods?

Meron Shani, CFO

So, we haven't seen any significant growth in a specific region. We are spread all over the world, as you are aware, and our efforts are global. But into the future, we do have some markets that we expect to grow faster, being Singapore, being the U.S. and some other markets where we are trying to integrate as well.

Operator, Operator

Our next question comes from the line of Devin Ryan of Citizens Bank.

Devin Ryan, Analyst, Citizens Bank

First one, just on the agentic portfolios and kind of the opportunity there. Obviously, investors are going to have more tools and access. Do you have any early evidence about how customers' outcomes are being better using these agentic tools? Obviously, that's going to be important to adoption. And then just also the kind of the multiplier that you expect on transaction activity — clearly, would expect to be many times more than kind of the average trader. So, what do you expect on the transactions per account using those as well?

Yoni Assia, CEO

Sure. So, I'd call myself an amateur quant trader since I was about 16. I love algo trading. But historically, anything that revolves around building software to automatically trade the market has been a very complex process that required a lot of resources. When you think of the capabilities today of AI that are in the hands of hundreds of millions of people, AI really levels the playing field for people to trade algorithmically. What we're seeing right now is we have about 45 apps published to the App Store, and we see that the majority of them include agentic trading capabilities. With that, we're seeing a significant increase in the velocity of trading behavior as customers use more of these tools to manage some or their entire portfolios. I believe that over time, retail investors as a whole will use more agentic tools to optimize their portfolios. I'm a very big believer that that will significantly improve their alpha. Retail customers have historically been good at finding beta; agentic tools enable retail investors to participate and find alpha in a much more meaningful way.

Devin Ryan, Analyst, Citizens Bank

Okay. And then just a follow-up here on the balance sheet. Obviously, you continue to be in an incredibly strong position with over one-third of the market cap in cash and investments today. You just did the Zengo deal. Can you talk about just the optionality that you have right now and how you're thinking about deploying cash toward more buybacks versus what does the acquisition pipeline look like? Are there actionable things to do there that are accretive? It seems like you have a lot of optionality to drive accretion with that excess cash.

Yoni Assia, CEO

So, first of all, we announced two acquisitions over just the last two weeks. We also announced a B2C acquisition, which is one of the two regulated crypto exchanges in Israel. We have a very, very strong M&A pipeline. We've been in the business nearly 20 years. We know hundreds of companies in this space. We believe that the current crypto downturn provides us the opportunity to find significant and accretive M&A opportunities in 2026. So, we have a very good pipeline. That's why we keep the optionality. In parallel, as we said in the past, we believe in buybacks as a company, and we'll continue to explore that in relation, of course, to the company's cash flow.

Operator, Operator

Our next question comes from the line of Joseph Vafi of Canaccord Genuity.

Joseph Vafi, Analyst, Canaccord Genuity

Great results here. Congratulations. Just wanted to drill down a little more on the pivot and trading volume from crypto over to commodities and equities. Just the mechanics there. To a certain degree, if a user signs up to trade crypto, they may not be a commodity trader. They may not know much about commodities. Are they following CopyTraders? Is there incentives or education you're providing? How are these investors finding this other asset class in such a big way? And then I have a quick follow-up.

Yoni Assia, CEO

So, we're very focused on market education and retail investor education. We have the eToro Academy, which continuously adds more and more information. Now we added also the layer of shared intelligence and of Tori, the AI agent that can cover what's happening in the markets and tell you about what's happening, where there are interesting opportunities and how that relates to your portfolio. We are very focused on making sure our customers understand both the risk management and all of the options in eToro's ecosystem. We look internally at products sold per customer, and as we've seen in our IPO deck, the more products that our customers use, the more we see a significant increase both in lifetime value and in net deposits over time. As our customers educate themselves more about the markets, we see them significantly adding more funds into their accounts. For example, our long/short momentum Smart Portfolio accumulated a lot of assets during the last nine months, bringing people to learn about long/short strategies. About 60% of customers who traded commodities in Q1 originally came to eToro to trade crypto or equities. We've always seen unification between people who came to trade crypto and then learned about stocks, and vice versa. The last six months with commodities in the news enabled many customers to dive into and learn more about commodities markets. In addition, we've launched a very unique product: 24/7 trading on commodities and now selected stocks as well.

Joseph Vafi, Analyst, Canaccord Genuity

What does that mean for the business moving forward strategically and the U.S. business? Was that a key thing to acquire before a bigger push, maybe broader product set, et cetera? Just updated thoughts there.

Yoni Assia, CEO

What we're seeing internally is a much more accelerated product delivery utilizing AI across the company. For example, we have product managers launching directly to the App Store without engineering involvement, as well as internal operations teams building internal tools and launching them to an internal app store. That accelerated product roadmap enables us to bring more products to more regions faster. In the U.S., of course, futures or commodities are CFTC/NFA regulated. We are looking at enabling our customers to trade commodities in the U.S. in the next six to nine months as well. So definitely, our faster product delivery across regions will enable us to bring more products to our customers globally, which we believe will increase lifetime value and deposits of customers.

Operator, Operator

Our next question comes from the line of Edward Engel of Compass Point.

Edward Engel, Analyst, Compass Point

I want to dig a little bit more into the agentic portfolios. Have these been rolled out across most of your key markets today? And for the users that are implementing new strategies, is there any color you can give on the impact to trading volumes for these users?

Yoni Assia, CEO

Sure. It's relatively early days. I think it's been about three weeks since we launched it. We've seen north of 500,000 trades so far. So early days of Agent Portfolios: small numbers of customers with a lot of trades. If you look at the ratio of number of trades per customer per Agent Portfolio, we see a significant increase. Customers are using their agents, whether it's our internal Tori or external agents. Over time, we'll see significant adoption of Agent Portfolios, and they will significantly increase trading velocity.

Edward Engel, Analyst, Compass Point

Great. And then I recall the take rate on copy trading is often lower than stand-alone trading. I was wondering for the take rate on agentic trading, is it similar to copy trading? Or is it similar to typical trading?

Yoni Assia, CEO

It's more similar to copy trading. We see higher velocity with smaller sizes right now. A big part of the Agent Portfolio rollout was our understanding that customers don't want to connect AI or their AI agent to their entire portfolio because people still need to trust AI and their strategies. So when you create an Agent Portfolio, if you have a $50,000 account in eToro, you might tell the agent to take $5,000. It operates on the same model as CopyTrader and Smart Portfolios, which enables us to run faster. It creates a personalized Smart Portfolio for you and you connect your agent to define the strategy. That increased usage of the eToro APIs that we launched about six months ago because retail investors with AI suddenly have capabilities to run algorithms very easily, but they were still hesitant to connect that to their entire account. Using the same Smart Portfolio and CopyTrader technology to enable Agent Portfolios means trades are smaller and velocity is higher.

Operator, Operator

Our next question comes from the line of James Yaro of Goldman Sachs.

Divyam, Analyst, on behalf of James Yaro, Goldman Sachs

Divyam here on behalf of James. My first question is that you touched upon the rationale for the Zengo acquisition. I wanted to ask if having self-custodial wallet capabilities allows you to facilitate CopyTrader in the U.S.

Yoni Assia, CEO

CopyTrader in the U.S. is actually under our regulated broker-dealer in the U.S. and MSB. It operates for copy trading on the CeFi or TradFi part. On DeFi, we haven't yet gone into the details of copy trading. We are looking at agentic trading into the DeFi part of eToro and will soon launch something similar to Agent Portfolios called Agent Wallet, where we can create a DeFi wallet and use AI to algorithmically trade DeFi markets. We are exploring copy trading models in the DeFi wallet of Zengo but don't have a direct roadmap to share yet.

Divyam, Analyst, on behalf of James Yaro, Goldman Sachs

That's helpful. As a quick follow-up, could you update us on the status of CopyTrader in the U.S.? Where are you in the rollout and the regulatory considerations at this point?

Yoni Assia, CEO

We are in the process of getting the RIA license to enable Smart Portfolios in the U.S. CopyTrader is in limited rollout right now and in discussions with regulators. We expect both to be in complete rollout in the second half of the year.

Operator, Operator

Our next question comes from the line of Jamie Friedman of Susquehanna.

Jamie Friedman, Analyst, Susquehanna

Yoni, could you share your early impressions regarding 24/5 and 24/7 trading? How much can you see this adding to your volume?

Yoni Assia, CEO

24/5 added a significant amount of volume; about 30% of stock volume shifted to aftermarket hours. We haven't shared exactly how much of that was additive versus substitute. 24/7 is still relatively early days. In crypto, opening markets to weekend trading added roughly 10% to 20% of additional volume on average, and in some rallies Saturday and Sunday activity surpassed regular trading days. It all comes down to volatility. I believe over time this will add at least 10% to 20% of volumes as market formation evolves and customer expectations, especially those coming from crypto, continue to demand round-the-clock trading.

Meron Shani, CFO

No, we haven't shared the exact additive versus substitute breakdown.

Jamie Friedman, Analyst, Susquehanna

And then what's your high-level perspective on marketing? Is the 1% sequential that we had talked about last quarter still a good way to think about it?

Meron Shani, CFO

So, you referred to the margin in terms of net contribution. As we discussed last quarter, we are planning to grow marketing out of net contribution to 25% by the end of the year. We expect to do it gradually. However, we are also looking at market opportunities and taking advantage of different events that are coming. When markets are high, we consider it a more favorable environment for customer acquisition. We have the ability to scale up very quickly and scale down as well. So we expect that spend to grow gradually, and of course it will depend on market events.

Yoni Assia, CEO

And again, when we operate globally, there's always summer somewhere. So while it might be quieter in one asset class, other asset classes or regions can be very active. We track the daily activity of our customers to see what's interesting to retail investors and translate those insights with AI to our ad platforms and social channels, accelerating both market education and customer acquisition.

Operator, Operator

Our next question comes from the line of Brian Bedell of Deutsche Bank.

Brian Bedell, Analyst, Deutsche Bank

Maybe if you could just talk a little bit more about Zengo in terms of your expectations — it's early, but any expectations on revenue contribution and probably more importantly, that 2 million user base that you're acquiring — your views on converting those users to funded accounts? Any color on expectations of trading growth from that business?

Yoni Assia, CEO

It's still early days. We just closed the deal. The hypothesis is that crypto-native customers often want exposure to other assets like stocks, and eToro customers will want access to the broader set of assets available on Zengo. We are seeing convergence: you can trade tokenized stocks in Zengo now, and eToro offers 200 coins while Zengo offers thousands. There's a process of integrating the platforms. Over time, this increases our market share in crypto and expands product category coverage across DeFi and TradFi, enabling customers to stay in the eToro ecosystem and access the crypto and on-chain products they want.

Brian Bedell, Analyst, Deutsche Bank

Great. And maybe just any update on prediction markets in terms of your development of connectivity to prediction markets and how you're seeing customer demand for that at eToro.

Yoni Assia, CEO

Early days for us. With the Zengo acquisition, we plan to launch prediction markets in Zengo over time in applicable markets. We are also working on building prediction markets for our U.S. customers with the appropriate regulated intermediaries. We're evaluating TradFi and DeFi approaches for the right markets and licenses.

Operator, Operator

Our next question comes from the line of John Todaro of Needham.

John Todaro, Analyst, Needham

Congrats on the results here. There's a number of big IPOs coming up. We've seen a push from these companies to get more retail allocation. Just wondering on the overall strategy there and how you guys see that opportunity set playing out over a longer time.

Yoni Assia, CEO

We're looking at potentially launching positions on secondary markets to our customers around these IPOs. We've been talking to other companies we work with to see how we can get IPO allocation. There has also been an interesting shift in regulation in Europe and the U.K. around enabling U.S. IPOs to launch overseas, which is timely. When there's a hot IPO season we typically launch it on day one of trading, and it's popular. We are exploring ways to enable participation in IPOs; some upcoming IPOs like SpaceX AI, Anthropic and potentially OpenAI are generating interest among our customers.

John Todaro, Analyst, Needham

That's great to hear. And then turning to crypto: you talked about there needing to be directional movement to get customers more engaged. Are there other catalysts you see driving that, whether that's the Clarity Act in the U.S., adoption of tokenized real-world assets, anything that could drive momentum?

Yoni Assia, CEO

Markets have cycles in crypto. I'm personally very bullish on crypto markets, especially as capital markets move on chain. Discussions at market infrastructure players like DTCC and pushes from regulators to modernize market infrastructure and move on chain are significant catalysts. Stablecoins accelerated crypto adoption in many use cases; tokenized assets — stocks, treasuries, money market funds, private equity and private credit — moving on chain will accelerate crypto adoption broadly. We view this as a transition of perhaps $100 trillion over the next 10 to 15 years moving on chain, potentially faster if market infrastructure providers adopt on-chain solutions sooner. The Clarity Act and similar regulatory clarity efforts provide clearer frameworks for crypto and DeFi; that clarity typically increases adoption and market participation.

Operator, Operator

Our next question comes from the line of Dan Dolev of Mizuho.

Dan Dolev, Analyst, Mizuho

Great results as expected. I wanted to ask you, Yoni and Meron, the user growth has been phenomenal and continued into April. Can you maybe talk about your new strategic user acquisition strategy? To the extent that you feel comfortable talking about it. Again, congrats.

Yoni Assia, CEO

We've been utilizing AI more and more in marketing activities leading to more micro-segmentation for both retention and acquisition. What used to take four to five weeks to create a specific campaign to a target audience can now be done in much shorter time. Region teams no longer need to open tickets and wait for centralized marketing and engineering; it's a click of a button to create landing pages and campaign assets. We've moved from roughly five campaigns a month to 20 to 50, and we expect potential acceleration to hundreds. Using AI we find micro segments within the eToro ecosystem, create tailored marketing messages and deploy campaigns much faster. We're even testing giving Pro Investors the ability to create their own landing pages and ad campaigns with AI, enabling them to manage channels like Facebook, Taboola, X and LinkedIn. This capability for internal teams and partner Pro Investors to run faster, better micro-segmented campaigns should continue to accelerate funded account growth over time.

Operator, Operator

I would now like to turn the conference back to Daniel Amir for closing remarks.

Daniel Amir, Head of Investor Relations

Thank you. Thank you all for attending our earnings call today. We're looking forward to seeing you at our upcoming investor conferences during the quarter, and thanks, and have a great day.

Operator, Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.