eToro Group Ltd.

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 July monthly spreadsheet is now available on our website at investors.etoro.com. Today, I'm joined by Yoni Asya, our CEO, and by Mehron Chani, 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 question 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 at 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.

Thank you, Daniel. And thank you to everyone joining us today. Welcome to Itoro's second quarter 2026 earnings call. After Maron and I conclude our prepared remarks, we'll open the call for your questions. We delivered another strong quarter, demonstrating the strength of our diversified business model. One of Itoro's key differentiators is our ability to perform across a wide range of market environments, and the second quarter was another example of that. As investor activity shifted from commodities to equities, our platform continued to deliver strong results, underscoring the value of offering users access to multiple asset classes through a single platform. Net contribution increased 9% year-over-year to $229 million and adjusted EBITDA grew 9% to $78 million. We also continue to see strong momentum across our key performance indicators as part of our growth strategy. Funded accounts increased 18% year-over-year to 4.28 million, driven by marketing investment and improved user retention, while assets under administration grew 10% year-over-year to more than 19 billion, reflecting continued strong user inflows. Today's announcement of our planned acquisition of TradeZero marks another important milestone for eToro. TradeZero has built a successful franchise with differentiated technology, a robust broker-dealer infrastructure and a highly engaged trading community. This combination gives us a faster path to launching new products for U.S. users and strengthens our offering. I will provide additional details on the acquisition later in my remarks. But perhaps the most important thing this quarter demonstrates is execution. Every few years, technology fundamentally changes the way people invest. Throughout our history, Itoro has embraced those shifts from social investing to crypto and now to AI and on-chain finance. Social investing made investing collaborative. Crypto introduced new financial infrastructure. Now AI is changing how people discover opportunities, analyze information and make decisions. We don't see these as separate trends. We see them as the same evolution and our edge has always been spotting these shifts early, simplifying them and making them accessible to millions of users. This quarter, we kept turning that into our products. Our new app reflects that strategy in our journey towards becoming a financial super app. This isn't simply a redesign. The app brings together AI personalization and a growing ecosystem of apps and agents. Through Tori, our AI agent, the platform delivers proactive insights, helping users better understand their portfolios, identify opportunities, and stay informed wherever they are. Rather than waiting for users to search for information, the experience increasingly anticipates what matters to them and delivers relevant insights when they need them. More broadly, we remain focused on four strategic pillars – trading, investing, wealth management and neobanking. Let me walk you through some of the highlights of the quarter. Let's start with trading. As I mentioned earlier, the second quarter once again demonstrated the strength of our diversified multi-asset platform. Over the past three quarters, we've seen our users shift their activity across asset classes, from crypto to commodities and now to equities, highlighting the resilience of our business model and the value of offering investors access to a broad range of markets through a single platform. We believe this highlights one of Itoro's greatest competitive advantages. Regardless of where market opportunities emerge, our users can seamlessly move across asset class within a single platform, driving higher engagement, long-term retention and continued business performance. We also launched Toro Edge, a new web platform designed for active traders, combining professional-grade trading tools with our intelligence of our AI ecosystem. As our users become more experienced, we continue to invest in products that support every stage of their investing journey, from first-time investors through to highly active traders. We've also recently introduced the ability for users to increase their equity and crypto buying power directly from their Etoro cash account, simplifying access to margin trading. Lastly, expanding access to differentiated investment opportunities remains a key strategic priority. During the quarter, we enabled pre-IPO trading in SpaceX price and eligible customers to participate in the SpaceX offering, an example of our broader effort to increase access to IPOs and other investment opportunities, particularly for European users. Turning to investing. Investing is becoming increasingly personalized. For many years, the industry focused on giving people access to the markets. We believe the next phase is about giving investors access to more intelligent tools, helping them combine their own judgment with AI while always remaining in control of their decisions. During the quarter, we continue to expand our investing ecosystem through the Toro App Store, which now includes more than 75 applications built by developers, partners, and pro investors. These give users new ways to discover ideas, analyze markets, and personalize how they invest on an open platform that will keep evolving. We also launched agent portfolios, letting users connect AI agents to dedicated portfolios within their eToro account while keeping full control over their objective capital allocation and risk parameters. Agent portfolios don't replace the investor. They extend what the investor can do within boundaries they define. As part of this, we introduced agentic investing, enabling users to create and manage multiple agents through Tori. Last month, we also introduced subaccounts, giving investors the ability to organize their investments around different financial goals, whether it's savings to a child's location, buying a home, or planning for retirement. Combined with agent portfolios and agent investing, these capabilities provide investors with more personalized and flexible ways to invest while remaining firmly in control of their financial decisions. Turning to wealth management. Helping people build long-term wealth remains central to our strategy. That's why we continue to expand the products that support users throughout their financial journey. Our savings offering has a real momentum. This quarter we saw 15 times year-over-year growth in AUM, which reinforces the strength of our long-term saving proposition and our strategy of building a full wealth platform alongside our trading business. Finally, in neobanking, we continue to make it easier for users to move and manage their money across traditional and digital finance. We recently launched eToro Work, making it easier for employees to invest directly from every paycheck. Investing consistently over time is one of the most powerful ways to build wealth, and eToro Work brings that right into people's everyday financial lives. Earlier this quarter, we also announced the acquisition of crypto wallet provider Zengo, strengthening our self-custody offering, making a strategic investment in extended and on-chain perpetual futures platform and become a founding partner of OpenUSD. Reducing friction between traditional finance and digital assets is an important step towards making digital assets more accessible to a much broader audience. We're also seeing strong momentum across eToro money. The number of eToro money cards issued across Europe increased by more than 30% quarter over quarter, reflecting growing engagement with their offering and increasing role eToro plays in our users' everyday financial lives. Taking together these product innovations and partnerships reinforce our long-term strategy of connecting traditional finance with the on-chain economy while making it simpler for users to access digital assets, self-custody and decentralized finance through the Toro WeCo system. Finally, let me come back to TradeZero. Today we announce our planned acquisition of TradeZero for up to $230 million in cash and stock. TradeZero is a highly complementary business that significantly strengthens our presence in the U.S., one of our most important growth markets, and opens access also to the Canadian market. It brings an experienced U.S. management team and a highly engaged active trader community. TradeZero is also expected to bring differentiated capabilities, including four proprietary trading platforms, advanced tools and features, and robust broker-dealer infrastructure that further strengthens our platform. We see real opportunities here to accelerate innovation, enhance client experience, and broaden the products and services we offer across both platforms. This is also anticipated to be a financially attractive transaction. TradeZero generated approximately $80 million in revenues in the last 12 months with more than 80% gross margins in Q2 2026. That makes it an immediately complementary addition to our financial profile while strengthening our long-term growth prospects. We look forward to welcoming the TradeZero team to Itoro following the close of the transaction in the first half of 2027. To close, we're excited by our second quarter and by the momentum across the business through the first half. We remain focused on executing our long-term strategy, investing across AI, digital assets, wealth management and financial services, while selectively expanding our footprint through initiatives like the acquisition of TradeZero. Every few years, technology changes investing. Every time, Itoro embraced it. From social investing to crypto and now to AI and on-chain finance. Our focus hasn't changed. Using technology to open the global markets and help millions of people become more confident and more successful investors. We're excited about what comes next and about turning this approach into products that create long-term value for our users and our shareholders. With that, I will hand it over to Maronda.

Thank you, Yoni. We delivered another solid quarter, demonstrating the resilience of our diversified multi-asset business model. Second quarter net contribution grew 9% year-over-year to $229 million, while adjusted EBITDA grew 9% year-over-year to $78 million. Our adjusted EBITDA margin was 34%, in line with the same period last year. Our KPIs also remained strong during the second quarter, with asset administration increasing 10% year-over-year to $19 billion and funded accounts growing 18% year-over-year to $4.28 million. This growth was driven by continued investment in user acquisition and retention. Let's take a closer look at the second quarter of financials by business line. Our net trading contribution from capital markets, equities, commodities and currencies grew 25% year-over-year to $142 million. This was driven by increased user engagement, with many users moving from crypto into commodities into equities as market conditions evolved. The number of trades increased 64% year-over-year, supported by strong activity in equities and continued engagement in copy trading. We are also encouraged by the continued high invested amounts on the platform. As users broaden their investing activity beyond crypto and commodities into equities and other asset classes, they are investing more across the platform. This is exactly what we would expect from a diversified multi-asset offering and is an important driver of the long-term growth. Net trading contribution from crypto was $11 million. The year-over-year decline primarily reflects lower trading activity and the continued shift of users towards equities. We have seen this cyclicality in the crypto market over the past 15 years. Crypto net contribution also includes a $2 million negative valuation impact relating to our corporate crypto holdings, resulting in a balance of $30 million at the end of Q2. Net interest income contributed $49 million up 7% year-over-year, which was largely driven by a 12% increase in higher interest earning assets as a result of an increase in users' cash deposits and corporate cash. Itoro Money's contribution grew 44% year-over-year to $26 million, driven by a 92% year-over-year increase in total money transfers as we continue to experience increased deposits and user activity. Turning into expenses, our adjusted OPEX for the quarter was $151 million, up 1% quarter over quarter. The results were driven by $8 million increase in sales and marketing expense, reflecting our continued investment in customer acquisition. This was largely offset by lower R&D and G&A expenses. Adjusted sales and marketing expense was $68 million, representing 29% of net contribution and in line with our strategic decision to accelerate funded accounts growth in 2026, I discussed earlier this year. Adjusted R&D expense was $33 million, while adjusted G&A and operating expenses for the quarter were $51 million. Our adjusted diluted EPS for the quarter was 68 cents compared to 56 cents in the second quarter of 2025. Moving to our balance sheet, we ended the quarter with $1.2 billion in cash, cash equivalents, and short-term investments, and generated $39 million of cash from operating activities during the quarter. In accordance with our previously announced share purchase program, in the second quarter we repurchased approximately 2.3 million shares for an aggregate amount of approximately $87 million. As Yoni mentioned, today we announced the acquisition of TradeZero for up to $231 million. In the last 12 months, TradeZero generated approximately $80 million in revenues with more than 80% gross margin. We believe that the transaction is strategically compelling, financially attractive and expected to be adjusted EPS accretive to earnings in the first full year post completion. We will provide additional details once the transaction closes as expected in the first half of 2027. Now let me share a few comments on the third quarter trends. As part of our quarterly results today, we also released our July monthly KPIs. Turning to our key metrics for July, funded accounts grew 18% year-over-year to $4.32 million. Assets under administration totaled $18.5 billion, down 5% year-over-year as a result of the decline in crypto pricing. On capital markets trading activity, the number of trades is flat year-over-year and consistent with seasonal patterns. With regards to adjusted OPEX, we expect Q3 to be slightly higher than Q2 due to continued investment in growth activities. To summarize, we are pleased with our second quarter performance and the announced acquisition of TradeZero. We continue to generate strong cash flow, invest with discipline, and allocate capital thoroughly, while maintaining flexibility to pursue strategic opportunities such as Trade Zero. We believe that we are well positioned to continue delivering sustainable, profitable growth and long-term shareholder value. With that, Daniel, let's move to Q&A.