(Reuters) -Stock and crypto trading platform eToro beat estimates for third-quarter profit on Monday as retail investors maintained their buying streak despite bubble worries, sending shares up 8%
eToro Surpasses Profit Expectations as Retail Investors Thrive
eToro's Strong Performance in a Booming Market
(Reuters) -Stock and crypto trading platform eToro beat estimates for third-quarter profit on Monday as retail investors maintained their buying streak despite bubble worries, sending shares up 8% before the bell.
Market Conditions and Investor Sentiment
Equities hit record highs in the quarter as steady earnings, softer inflation expectations and optimism around the AI boom encouraged investors to move back into risk assets.
Financial Highlights and Revenue Growth
The rally has stirred concerns about a bubble, some analysts warned, with valuations in high-growth names appearing stretched. Several prominent Wall Street CEOs have cautioned that the market could be nearing a correction.
Competitive Landscape in Fintech
Meanwhile, crypto markets were extremely volatile through the quarter, swinging sharply as traders reacted to shifting regulatory and macro signals.
Net contribution, which deducts the cost of revenue from crypto assets and margin interest expense, jumped 28% to $215 million from the year-ago quarter.
"Our results reflect the strength of our diversified revenue streams across segments and geographies, robust user engagement, and disciplined cost management, a trend that has continued into October," CFO Meron Shani said in a statement.
Newer fintech platforms have eroded the dominance of Wall Street incumbents in recent years, luring younger, tech-savvy investors with low fees, slick mobile apps and access to a wider asset range.
The financial technology company's assets under administration grew by 76% year-on-year to $20.8 billion.
A combination of accessible trading apps, volatile price moves and a steady flow of market news has persistently supported strong retail participation, helping these platforms maintain growth.
The company posted adjusted profit of 60 cents per share in the three months ended September 30, versus 51 cents per share a year earlier. Analysts had expected 56 cents per share, according to an average estimate compiled by LSEG.
It also announced a share repurchase program of up to $150 million.
Larger rival Robinhood Markets topped third-quarter profit estimates earlier this month as retail traders seized opportunities presented by the market momentum.
(Reporting by Manya Saini in Bengaluru; Editing by Pooja Desai)
