eToro Bets on Growth Ahead of IPO: Q1 Income Slips, but Reach Expands

After a strong 2024—where it posted $931 million in total commissions and $192 million in net profit—IPO-bound eToro now forecasts a lower Q1 net income between $56 million and $60 million compared to the same quarter last year, when it earned $64 million. Spending on Growth Hits Income The Israeli trading platform explained that the expected drop in net income was due to higher investment in marketing and growth. This was partly offset by a fall in share-based payment expenses. Adjusted EBITDA is also expected to be lower. eToro reported $87 million for the first three months of 2024, but for January to March 2025, it expects this figure to fall between $76 million and $80 million. “The expected decrease is driven by increased investment in growth in response to favourable market conditions, aiming to benefit from heightened interest and accelerate customer acquisition,” eToro noted in its latest IPO filing. Read more: eToro’s 2024 Profits Soared 13x, with Crypto Contributing 38% of Commission Income Although the company did not detail how much it spent in Q1, its marketing expenses in 2024 was at $147 million, 27 per cent higher from the previous year. However, it spent $234 million in marketing in 2022. Despite the lower Q1 income expectations, the growth push seems to be paying off. The number of funded accounts rose to 3.58 million at the end of March 2025, up from 3.13 million at the end of 2024. Net contribution also improved to between $214 million and $217 million, compared to $201 million a year earlier. eToro to “Explore Adding New Countries” eToro plans to go public soon with a valuation between $3.7 billion and $4 billion. The firm is looking to raise $500 million, with half of that going to existing shareholders . After deducting costs and commissions related to the IPO, eToro expects to retain $217.7 million—possibly up to $285.6 million if underwriters fully exercise their options. “The principal purposes of this offering are to increase our capitalisation and financial flexibility, and to create a public market,” the company stated. “We intend to use the net proceeds from this offering for general corporate purposes, including working capital, operating expenses and capital spending.” eToro also said it plans to use some of the IPO proceeds for acquisitions or other investments. You may also like: eToro’s $4B IPO - Too Pricey for Europe, a Bargain in the US? Currently, 70 per cent of eToro’s funded accounts are from Europe and the UK, followed by 16 per cent from the Asia-Pacific region, 10 per cent from the Americas, and the rest from the Middle East and Africa. Although Europe and the UK remain its key markets, eToro is actively expanding into other regions. It expects to grow its user base both in existing and new markets. The company also highlighted that acquisitions could help tailor its services to local needs and reduce the time it takes to launch in new markets. “We expect to continue to increase eToro’s expansive global footprint by entering new markets using our well-established playbook for both organic and inorganic international expansion,” the IPO prospects added. “We also see opportunities in underpenetrated markets around the world and will continue to explore adding new countries to our footprint.” After a strong 2024—where it posted $931 million in total commissions and $192 million in net profit—IPO-bound eToro now forecasts a lower Q1 net income between $56 million and $60 million compared to the same quarter last year, when it earned $64 million. Spending on Growth Hits Income The Israeli trading platform explained that the expected drop in net income was due to higher investment in marketing and growth. This was partly offset by a fall in share-based payment expenses. Adjusted EBITDA is also expected to be lower. eToro reported $87 million for the first three months of 2024, but for January to March 2025, it expects this figure to fall between $76 million and $80 million. “The expected decrease is driven by increased investment in growth in response to favourable market conditions, aiming to benefit from heightened interest and accelerate customer acquisition,” eToro noted in its latest IPO filing. Read more: eToro’s 2024 Profits Soared 13x, with Crypto Contributing 38% of Commission Income Although the company did not detail how much it spent in Q1, its marketing expenses in 2024 was at $147 million, 27 per cent higher from the previous year. However, it spent $234 million in marketing in 2022. Despite the lower Q1 income expectations, the growth push seems to be paying off. The number of funded accounts rose to 3.58 million at the end of March 2025, up from 3.13 million at the end of 2024. Net contribution also improved to between $214 million and $217 million, compared to $201 million a year earlier. eToro to “Explore Adding New Countries” eToro plans to go public soon with a valuation between $3.7 billion and $4 billion. The firm is looking to raise $500 million, with half of that going to existing shareholders . After deducting costs and commissions related to the IPO, eToro expects to retain $217.7 million—possibly up to $285.6 million if underwriters fully exercise their options. “The principal purposes of this offering are to increase our capitalisation and financial flexibility, and to create a public market,” the company stated. “We intend to use the net proceeds from this offering for general corporate purposes, including working capital, operating expenses and capital spending.” eToro also said it plans to use some of the IPO proceeds for acquisitions or other investments. You may also like: eToro’s $4B IPO - Too Pricey for Europe, a Bargain in the US? Currently, 70 per cent of eToro’s funded accounts are from Europe and the UK, followed by 16 per cent from the Asia-Pacific region, 10 per cent from the Americas, and the rest from the Middle East and Africa. Although Europe and the UK remain its key markets, eToro is actively expanding into other regions. It expects to grow its user base both in existing and new markets. The company also highlighted that acquisitions could help tailor its services to local needs and reduce the time it takes to launch in new markets. “We expect to continue to increase eToro’s expansive global footprint by entering new markets using our well-established playbook for both organic and inorganic international expansion,” the IPO prospects added. “We also see opportunities in underpenetrated markets around the world and will continue to explore adding new countries to our footprint.”