eToro Group Ltd-A(ETOR) - 2025 Q1 - Quarterly Report

First Quarter 2025 Financial and Business Highlights eToro reported strong Q1 2025 results with an 8% increase in net contribution to $217 million, alongside significant user and AUA growth despite increased marketing investments Q1 2025 Financial Highlights (vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Contribution | $217 million | $201 million | +8% YoY | | Net Income (GAAP) | $60 million | $64 million | -6% YoY | | Adjusted EBITDA | $80 million | $87 million | -8% YoY | | Adjusted EBITDA Margin | 37% | 43% | -6 p.p. | | Funded Accounts | 3.58 million | 3.13 million | +14% YoY | | Assets under Administration | $14.8 billion | $12.2 billion | +21% YoY | | Cash & Equivalents | $736 million | - | - | - The company successfully completed its initial public listing in Q1 2025[3] - Increased investment in marketing and growth was made in response to favorable market conditions, impacting net income and Adjusted EBITDA[5][8] - eToro is focusing on AI to reshape the investing landscape and accelerate the production of educational materials, now offering over 3,000 pieces of content in 11 languages[3][11] - Key business developments in Q1 2025 include: Trading with launched futures in Europe, options in the UK, and expanded crypto offerings to over 130 tokens; Investing with added stocks from Abu Dhabi and Hong Kong exchanges and new Smart Portfolios; Wealth Management with a new self-directed UK ISA offering and recurring investments; and Regulatory achievements including a MiCA permit by CySec for crypto services across the EU and SOC 2 Type II compliance for crypto custody[9][11] Second Quarter 2025 Update Positive business momentum continued into Q2 2025, with funded accounts reaching 3.61 million and Assets under Administration increasing to $16.9 billion by May 31 Key Metrics as of May 31, 2025 | Metric | Value | | :--- | :--- | | Funded Accounts | 3.61 million | | Assets under Administration | $16.9 billion | - Performance through May 31, 2025, reflects continued interest in trading and investing from retail investors in response to market events[11] Financial Statements The financial statements for Q1 2025 reflect a solid financial position with total assets growing to $1.26 billion and net cash from operating activities at $89.7 million Condensed Consolidated Balance Sheets As of March 31, 2025, total assets reached $1.26 billion, driven by increased cash and cash equivalents, with total equity growing to $894.7 million Balance Sheet Highlights | Account | March 31, 2025 (in thousands USD) | December 31, 2024 (in thousands USD) | | :--- | :--- | :--- | | Cash and cash equivalents | $660,060 | $575,395 | | Total Assets | $1,255,724 | $1,191,362 | | Total Liabilities | $361,059 | $358,987 | | Total Equity | $894,665 | $832,375 | Condensed Consolidated Statements of Profit or Loss Q1 2025 total revenue and income increased to $3.76 billion, primarily from cryptoassets, while net income decreased to $60.0 million due to higher marketing expenses Q1 Income Statement Highlights | Account | Q1 2025 (in thousands USD) | Q1 2024 (in thousands USD) | | :--- | :--- | :--- | | Total revenue and income | $3,755,381 | $3,383,520 | | Selling and marketing | $61,222 | $37,342 | | Net income | $59,952 | $64,110 | | Diluted net income per share | $0.69 | $0.76 | Condensed Consolidated Statements of Cash Flows Q1 2025 saw net cash from operating activities increase to $89.7 million, resulting in an $84.7 million rise in cash and cash equivalents, totaling $660.1 million Q1 Cash Flow Summary | Activity | Q1 2025 (in thousands USD) | Q1 2024 (in thousands USD) | | :--- | :--- | :--- | | Net cash provided by operating activities | $89,732 | $50,883 | | Net cash used in investing activities | ($11,579) | ($1,712) | | Net cash used in financing activities | ($867) | ($698) | | Increase in cash and cash equivalents | $84,665 | $44,894 | | Cash and cash equivalents at end of period | $660,060 | $433,228 | Non-GAAP Financial Metrics and Key Performance Indicators This section reconciles GAAP net income to Adjusted EBITDA, which was $80.2 million for Q1 2025, and defines key performance indicators like AUA, Funded Accounts, and Net Contribution Reconciliation of Non-GAAP Metrics Adjusted EBITDA for Q1 2025 was $80.2 million, a decrease from Q1 2024, with reconciliation from GAAP Net Income including various non-cash and non-recurring adjustments Reconciliation of Net Income to Adjusted EBITDA | Line Item | Q1 2025 (in thousands USD) | Q1 2024 (in thousands USD) | | :--- | :--- | :--- | | Net income | $59,952 | $64,110 | | Taxes on income | $10,589 | $9,516 | | Share-base payment expense | $4,287 | $8,891 | | Depreciation, amortization, and impairment | $3,010 | $2,590 | | Other adjustments | $3,362 | $1,770 | | Adjusted EBITDA | $80,194 | $86,877 | Definitions of Key Performance Indicators This section defines key business metrics including Assets under Administration (AUA), Funded Accounts, and Net Contribution, which are used to evaluate eToro's performance - Assets under administration (AUA): The total fair value of all assets held by users in their accounts, including cash and cryptoassets held in the eToro digital wallet[25] - Funded Accounts: Users who have completed onboarding, deposited funds, executed at least one trade, and maintain a positive account balance[26] - Net Contribution: Total revenue and income, less the cost of revenue from cryptoassets and margin interest expense It is used to evaluate the net contributions of user activity[27] Cautionary Note Regarding Forward-Looking Statements This section provides legal disclaimers, cautioning that forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from expectations - Forward-looking statements are based on current expectations and are subject to risks including market volatility, competition, regulatory changes, and other factors detailed in the company's SEC filings[30] - The company warns that past performance is not indicative of future results and that these statements should not be relied upon as representing the company's views at any subsequent date[31]