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eToro Group’s stock got whacked.
Shares fell 3% by Tuesday’s close to $37.61, even after the company beat earnings by 35%. The stock actually jumped 6% to $41.20 early in the session, then gave it all back. Investors didn’t seem to care that adjusted EPS came in at $0.91 versus the $0.69 consensus. Net contribution rose 19% year-over-year to $258 million, but that’s not what traders focused on. They saw assets under management sitting $3.8 billion below peak levels. And average trade sizes? Down nearly 50% from last year.
Crypto Holdings Collapsed in Two Quarters
The AUM drop came almost entirely from crypto. eToro’s crypto assets fell from $7.8 billion at the end of Q3 2025 to just $4.1 billion by March 2026. That’s a 47% decline in six months. Equity AUM did rise from $6.5 billion to $9.3 billion over the same stretch, but it wasn’t nearly enough to make up the difference. CEO Yoni Assia called the crypto downturn an opportunity to build, echoing the company’s strategic pivot announced back in February. But the numbers tell a pretty brutal story about what happened to the platform’s crypto business.
Trade sizes kept shrinking. Average trade size for Q1 hit $197, down from $304 in Q4 2025 and $262 a year earlier. The company says this reflects more automated and copy trading, plus a shift toward leveraged commodity CFDs by retail clients. The balance sheet shows it too—counterparty balances jumped 39% to $347 million by quarter-end.
Marketing Spend Goes Up as Revenue Mix Shifts
CFO Meron Shani said eToro will push marketing expenditure from 22% to 25% of net contribution by the end of 2026. Each percentage point represents an extra $2.6 million per quarter. That’s a big bet on growth when the company’s already dealing with declining crypto activity. Net trading contribution from crypto was just $13 million in Q1, and that includes a $5 million negative valuation hit on corporate crypto holdings. Strip out that loss and the user-driven crypto business contributed $18 million—less than half what it did a year ago.
Adjusted operating expenses rose 7% sequentially, driven mostly by a $12 million increase in customer acquisition costs. The company’s clearly spending to grow its user base, but it’s unclear how fast that’ll translate into higher AUM or bigger trades.
The invested amount per trade in capital markets dropped to $197 in Q1 from $379 in April 2025. That’s a 48% year-over-year decline. eToro attributes this to a higher mix of copy and automated trading, which makes sense—those strategies tend to involve smaller position sizes and more frequent rebalancing.
Competitors didn’t have the same problems. XTB saw revenue surge 88% and added 370,000 new clients in one quarter. Plus500 adjusted its full-year outlook after pulling in $242 million in Q1 revenue alone. eToro’s focus on strategic shifts rather than immediate gains is clear, but the company hasn’t really explained how these moves will stabilize or grow AUM going forward.
The crypto trading business took multiple hits. Beyond the AUM decline, the $5 million negative valuation on corporate holdings shows how volatile the asset class remains. User-driven crypto trading contributed $18 million after adjusting for that loss, but that’s still way down from prior periods. The crypto downturn hit eToro harder than most because the platform had built a significant portion of its business around digital assets.
Smaller Trades, More Automation
The shift toward smaller trades reflects broader changes in how retail investors use the platform. Copy trading and automated strategies have grown in popularity, and those features naturally lead to smaller individual positions. Retail clients also moved into leveraged commodity CFDs, which typically involve lower notional amounts but higher turnover. The 39% jump in counterparty balances to $347 million by quarter-end suggests clients are using more leverage and trading more actively, even if individual trade sizes are smaller.
eToro’s leadership stayed optimistic about the strategic direction. The marketing push to 25% of net contribution signals a commitment to growing the user base and building brand visibility. But the company faces real questions about whether it can regain the AUM it lost during the crypto downturn. The missing disclosure on specific plans to stabilize or grow assets leaves investors guessing about the long-term trajectory.
The competitive landscape got tougher. With XTB and Plus500 reporting strong growth, eToro’s strategic investments in marketing and platform development will need to pay off fast. The company’s recent performance shows a clear pivot away from crypto dependence, with equity AUM rising even as digital assets collapsed. But the overall AUM decline and shrinking trade sizes suggest the transition isn’t going smoothly yet.
Net contribution did rise 19% year-over-year to $258 million, and the earnings beat was real. But investors clearly wanted to see better AUM trends and bigger trades. The 3% share price drop despite the earnings beat tells you everything about what the market cares about right now. It’s not about beating consensus—it’s about whether the business model can hold up when crypto goes sideways.
Frequently Asked Questions
Why did eToro’s share price fall despite beating earnings?
eToro’s shares dropped 3% because assets under management fell $3.8 billion below peak levels and average trade sizes declined nearly 50% year-over-year, overshadowing the 35% earnings beat.
How much did eToro’s crypto assets decline?
Crypto assets fell from $7.8 billion at the end of Q3 2025 to $4.1 billion by March 2026, a 47% decline in two quarters.
What is eToro’s plan to increase marketing spend?
CFO Meron Shani announced plans to increase marketing expenditure from 22% to 25% of net contribution by the end of 2026, with each percentage point representing an additional $2.6 million quarterly.
