eToro Group Ltd.

Thank you, everyone, for joining eToro's second quarter 2025 earnings call. My name is Daniel Mir, head of global investor relations. Here with me today are Yoni Asya, founder and chief executive officer, and Mehran Shani, chief financial officer. This morning at 7 a.m. Eastern Time, eToro released its second quarter 2025 results. In the Investors section of our website, you will find the earnings press release and presentation to accompany today's discussion. This webcast is being recorded and will be available for replay in the Investors section of our website. Yoni and Miron will offer opening remarks and then open the webcast to Q&A. During the Q&A portion of the webcast, we will answer live questions from publishing research analysts and we'll address a selection of the most upvoted questions previously submitted by eToro's shareholders. As a reminder, today's webcast will contain forward-looking statements, which relate to our financial outlook and market positioning, among other items. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from these expressed or implied in the forward-looking statements due to a variety of factors. These factors are discussed in more detail in the press release that we issued today and related earnings presentation and our filings with the SEC, including our prospectus dated May 13, 2025, as such factors may be updated from time to time in our filing with the SEC, which are or will be accessible on the SEC's website at www.sec.gov. We do not undertake any obligation to update forward-looking statements. Throughout this webcast, we will also present and discuss non-GAAP financial measures. Reconciliation of our non-GAAP financial measures to their most directly comparable GAAP financial measures appear in today's earnings press release and presentation, which are available in the Investors section of our website. And now I will turn the call over to Yoni, founder and CEO.

Thank you, Daniel. And thank you to everyone joining us today for your interest in eToro. And welcome to our second quarter 2025 earnings call, our first earning call as a public company. After Mehron and I conclude our prepared remarks, we'll open it up to analyst questions. Before sharing some highlights from our second quarter results, I would like to briefly introduce eToro for those of you who are new to our story. We founded eToro in 2007 with a vision of opening the global markets for everyone to trade and invest in a simple and transparent way. At that time, investing was largely the domain of traditional financial institutions catering to seasoned investors with significant capital. Retail investors face daunting barriers, complex platforms, high fees, and a lack of educational resources. Our goal was to change that by using technology to level the playing field and create a platform that could empower millions to participate in the financial markets. Today, eToro provides a gateway to the global financial markets, offering a social and investment platform that empowers our users from around the world to trade, invest, save, and spend in a way that suits their unique needs. We've built a social investment network designed to provide users with educational resources and tools they need to grow their knowledge and wealth. we provide what retail investors around the world care about the most. Simple access to the assets they want to invest in, an intuitive and user-friendly mobile app, and a trusted and transparent source for financial education and tools, including the ability to draw on the knowledge and insights of the top investors from all around the world. On eToro's platform, users can invest in stocks from more than 20 different stock exchanges and trade over 130 different crypto assets alongside indices, commodities, and currencies. We serve customers in 75 different countries and 20 different languages. Users can trade directly, invest in a portfolio, or use our patented copy trader technology to replicate the investment strategies of the top investors on our platform. eToro Money, our money management offering, enables our customers to have a virtual bank account and a debit card and manage multiple balances as they trade both global and local stocks. We also provide many valuable investment tools and services, including sophisticated charting and AI-powered tools. We've built a track record for identifying and adopting key investment and technology trends. We've been a pioneer in the crypto space since 2011 due to my own passion around blockchain technology. Crypto's underlying principles of transparency, security, and inclusivity resonate deeply with eToro's mission. As one of the first global investment platforms to embrace crypto, we've helped millions of investors access this new market in a safe way. As technology continues to evolve, so does our ability to create more inclusive financial systems. Artificial intelligence holds immense potential to revolutionize investing. At eToro, we're already using AI to provide users with personalized insights, identify trends, and optimize their strategies. But this is just the beginning. We believe that the next wave of financial innovation will be driven by collaboration between people and technology. Eddie Toro, we're committed to staying at the forefront of this transformation, using technology to enhance the investing experience while keeping the human element at its core. Our goal is to create a platform that not only meets the needs of today's investors, but also anticipates the opportunities and challenges of tomorrow. Now, let's move to the quarter results. We are very pleased with our strong second quarter results, which reflect the continued success of our goal to be the leading trading investment platform. Our net contribution for the quarter increased 26% year-over-year to $210 million and our adjusted EBITDA increased 31% year-over-year to $72 million, while improving operating margins. In terms of geographic diversification, we recently expanded our global footprint, activating our license in Singapore. This milestone positions eToro to serve Asia's growing investor base from a key financial center as we continue to grow our global presence. Over the past quarter, we also made real progress in advancing our product development across our four strategic pillars, trading, investing, wealth management, and neobanking, delivering innovative features that strengthen user engagement and expand our addressable market. In trading, we continue to enhance the trading experience by expanding access and flexibility for our users. We announced the expansion of 24-5 trading and on-exchange futures, and we intend to expand this offering to provide our users around the world with the flexibility to trade on their own time. The ongoing efforts to remove boundaries in trading and financial markets underpins our interest and focus in tokenization. Back in 2012, we wrote the Colored Coins White Paper, a method for representing and managing real-world assets on top of the Bitcoin blockchain. We first offered tokenized assets back in 2019, following our acquisition of smart contract startup Firmo. Building on this heritage, we're launching tokenized stocks. We believe that blockchain technology will facilitate the greatest ever transfer of wealth as traditional assets move on to the blockchain. As a platform that bridges between traditional trading and a blockchain-powered future, we believe we're very well positioned to participate in the transformation of financial markets and grow our business. In the U.S., recent regulatory development around crypto represents an important milestone and a great tailwind for our U.S. expansion. As a result, in recent months, we've significantly expanded our crypto offering for U.S. users and now offer the ability to trade over 100 different crypto assets. We'll continue to add more crypto assets and more features for our U.S. consumers and we'll be soon launching staking as well. Turning to investing, we continue to introduce innovative solutions that make investing simpler, smarter, and more personalized. This quarter, we rolled out a suite of our alpha portfolios as part of our smart portfolio offering. These AI-powered long-short strategies are built using advanced analysis of multiple sources of data, including eToro's proprietary retail trading data. This gives our users access to exclusive quantitative trading strategies typically used by hedge funds and institutional investors only. In addition, we also announced a partnership with Franklin Templeton to launch new portfolios focused on long-term target date investing. These efforts broaden our investment offering and personalized user experience to help our customers achieve their financial goals at each stage of their financial journey. As part of our efforts to provide a global platform with a localized experience, we've expanded our wealth management offering to provide access to long-term tax advances, savings, and investment solutions. In the second quarter, we expanded our savings from Australia and the UK to also France, launching retirement and life insurance products to give our users more ways to invest in the future. Additionally, we rolled out recurring investments and saving plans in crypto and stocks in the UK, Europe, and the UAE, enabling our users to automate their investments and making disciplined investing easier and more accessible. Moving to our neo-banking solutions, we recently launched a Toro money card across Europe. This card turns everyday spending into investing by offering a 4% stockbroke reward on every purchase alongside premium benefits. Before I conclude, I want to also address the topic of harnessing AI technology. eToro has been leveraging artificial intelligence for many years, but we believe that we are now at an inflection point. We are harnessing AI to redefine social investing. We're rolling out a suite of powerful AI-driven tools that empower our popular investors with sophisticated professional capabilities. With these tools, we're not democratizing only access to the markets and data. We're now democratizing quantitative trading and investing. Community is at the heart of everything we do. And these AI-powered tools will enable our popular investors to build apps and trading strategies that combine social trading with advanced execution capabilities. equipping them to innovate like the top hedge funds around the world and scale their impact within the eToro ecosystem. In line with this vision, we recently launched Tori, our powerful AI assistant, transforming how users interact with eToro, answering questions, surfacing personalized insights, guiding them into the platform, and helping them make better decisions, all through natural conversation. Tori helps users make smarter decisions and navigate our platform based on the advanced models out there, including recently GPT-5. We truly believe that AI tools are a game changer for investors. I suggest you all try it out. Together, these product innovations and enhancements reflect our focus on empowering our users from around the world to trade, invest, save and spend in a way that suits their needs. We feel great about our product development velocity that's been accelerated by AI and the business result it is driving. Looking ahead, I'm excited about the opportunities in front of us and we are well positioned to execute on our growth initiatives to drive sustainable long-term growth. With that, I will pass the call to Moran to discuss our financial results for the quarter.

Thank you, Yanni. Before we begin with an overview of this quarter's financial results, I would like to share some insights on Itoro's financial philosophy. Our philosophy is focused on sustainable, profitable revenue growth, which is supported by three pillars. First, diversification of revenue streams to complement transaction-based revenue with a focus on growth in asset-based revenues, expansion of our Itoro money offering, and the introduction of new revenue streams. Second, strategic investment to support growth in funded accounts and increase our share of the user's wallet as we focus on product innovation, organic and inorganic growth, and a dynamic approach to sales and marketing operations. And third, disciplined cost management with a focus on streamlining operations, optimizing costs, and improving efficiency across the organization. Using technology, including leveraging AI by automating routine tasks, optimizing resource allocation, and enabling faster data-driven decision-making. We believe this financial philosophy will deliver best-in-class financial results and an increase in shareholder value. Now turning to the quarter results. As Yoni mentioned, we are very pleased with our second quarter results, our first full quarter as a public company. Second quarter net contribution grew 26% year-over-year to $210 million, and adjusted EBITDA grew 31% year-over-year to $72 million. In line with our focus on diversified profitable revenue growth, our adjusted EBITDA margin was 34%, expanding 140 basis points from a year ago. As our first quarter momentum continued into the second quarter, AUA for the quarter increased 54% year-over-year to $7.5 billion, while our funded accounts grew 14% year-over-year to $3.63 million. The growth was driven by customer acquisition efforts supported by strong customer retention. Let's take a closer look at our second quarter financials by segment compared to a year ago. Our net trading contribution from equities, commodities, and currencies grew 37% year-over-year to $114 million, as invested amount per trade grew 54% year-over-year to due to elevated levels of trading activity in the capital markets during the quarter, especially in the month of April. Our net contribution from crypto grew 34% year-over-year to $27 million and was largely driven by higher invested amount per trade. partially offset by lower crypto activity in line with the overall market. Interest-earning assets contributed 46 million or up 1% year-over-year, largely driven by higher interest-earning assets that was partially offset by lower interest rates. Our eToro money contribution grew 17% year-over-year to $18 million, largely driven by an increase in total money transfers. In the second quarter, adjusted OPEX was $138 million. Our adjusted selling and marketing expense was $51 million, or 24% of net contribution. Our business model provides us flexibility in our selling and marketing expenses, where approximately 70% of our expense is dynamic. Our historical performance has proven that our marketing expense has consistently returned positive ROI within the first year of the investment and sustained commission growth over time. Adjusted R&D and G&A expenses were $36 million and $51 million, respectively. Our adjusted EPS for the quarter was 56 cents compared to 51 cents in the second quarter of 2024. Moving to our balance sheet, we ended the quarter with $1.2 billion in cash, cash equivalents, and short-term investment. And for the quarter, we generated $61 million in free cash flow from operations. During the quarter, we also announced a new credit facility of $250 million to increase liquidity optionality. Now, let me make some comments on the third quarter trends. Through the first month of the quarter, crypto activity has been higher than second quarter levels, while capital markets activity has returned to a more normalized level following the elevated levels of the second quarter. We are very pleased with the first quarterly financial results as a public company. This sets the foundation for future growth as we focus on increasing shareholder value. With that, Daniel, let's move to Q&A.