eToro heads into its third-quarter report with a split personality. Its customer base is growing faster than at any point in the past year, yet the money those customers generate per trade, per dollar of marketing and per crypto cycle has been shrinking. Last quarter's call paired record funded-account growth and an ambitious US acquisition with a sharp slowdown in net contribution and a softer July. The November 10 release, due before the open, should show which of those threads is winning.
Wall Street is looking for earnings of $0.34 a share on revenue of about $194 million. The EPS bar is roughly half of the $0.68 reported last quarter and well below the $0.60 earned a year ago, so the Street is already bracing for a weaker quarter. The revenue comparison looks alarming at a projected 95% decline from $4.11 billion, but the shrinkage of headline revenue mostly reflects how reported revenue swings with crypto activity rather than a matching collapse in economics. Net contribution, which came in at $229 million last quarter, remains the more useful gauge. The earnings whisper of $0.40 sits meaningfully above consensus, a sign that some traders think analysts have cut too deeply.
The heart of the report is whether management's growth investments are starting to pay off. In the second quarter, sales and marketing jumped to 29% of net contribution from 22%, pushing the adjusted EBITDA margin down to 34% from 42%. Management reaffirmed a path back toward roughly 25% marketing intensity but also guided third-quarter operating expenses slightly higher. A margin that stabilizes in the mid-30s while funded accounts keep climbing at or near the 18% pace would support the argument that marketing dollars are buying durable customers. A further margin slide without matching account growth would suggest eToro is paying more to stand still.
Activity is the other swing factor. July data showed assets under administration down 5% year over year at $18.5 billion, trades flat, and customers pulling back on margin borrowing, a sharp turn from the 64% trade growth of the second quarter. Crypto net contribution had already sunk to $11 million from $56 million a year earlier, leaving equities trading and eToro Money, which grew 44%, to carry the load. Investors need evidence that the rotation into stocks held up through August and September, and that savings, money products and the newly licensed US smart portfolios are building ballast against a weak crypto tape. Any update on early engagement with the rebuilt AI app, the Edge active-trader platform and SpaceX pre-IPO trading will help gauge whether the product push is broadening revenue or just generating headlines. Commentary on TradeZero, expected to close in the first half of 2027, matters for the longer-term US story but won't move this quarter's numbers.
The market has already rendered a harsh verdict. Shares have fallen almost 27% since the last report, trailing the S&P 500 by nearly 24 points, and at $22.57 they sit about 31% below the 200-day moving average and just above the post-earnings low of $22.05. The entire trading range since August sits below the prior quarter's floor of $33.35. Sentiment is still bearish but notably less so than before the last report, suggesting some investors view the selloff as having priced in much of the bad news.
That sets up a report where clearing a reduced bar may matter less than the trajectory. If eToro can show net contribution holding steady despite the crypto slump, margins finding a floor, and October activity improving on July's weakness, the diversified-resilience pitch management leaned on last quarter will look credible. If engagement kept fading while marketing costs climbed, the record account growth will look like an expensive way to buy users who aren't trading.