eToro Reports 85% Y/Y Rise in Total Commissions in Q4 2021

eToro Group Ltd ("eToro" or the "Company"), the leading social investing network, yesterday announced its fourth quarter 2021 and full-year financial results.

Financial highlights for the quarter ended December 31, 2021:

• Total commissions of $304 million, up 85% compared with Q4 2020;

• Net trading income of $237 million, up 50% compared with Q4 2020;

• 2.1 million new registered users, up 31% compared with Q4 2020 with 26.9 million total registered users as of December 31, 2021;

• 2.4 million funded accounts as of December 31, 2021, up 137% compared with December 31, 2020; and

• Assets under administration (AUA) of $10.7 billion at December 31, 2021.

Yoni Assia, CEO and Co-founder of eToro, commented: "eToro closed 2021 with a strong fourth quarter, generating over $300 million in total commissions. We are extremely proud of our accomplishments in 2021, some of which include growing the eToro network by more than 9 million registered users while more than doubling our funded accounts, adding over 900 Popular Investors and 10 new Smart Portfolios to our investment offering, hiring Lule Demmissie as our U.S. CEO, launching equities investing in the U.S., launching eToro Money in the U.K., and redesigning the eToro application to significantly improve the user experience. The retail investment landscape continues to evolve at a rapid pace, and we believe eToro is uniquely positioned to provide users with a simple and transparent way to access a broad array of global financial markets. We are very excited for what lies ahead for eToro and our users in the coming years."

Q4 2021 financial summary:

For the fourth quarter of 2021, total commissions were $304 million, up 85% versus Q4 2020, driven by strong commissions from trading activity, higher interest income and higher other charges. Net trading income was $237 million, up 50% versus Q4 2020, driven by strong growth in funded accounts and a rebound in trading activity in cryptoassets.

Total operating expenses excluding stock-based compensation and merger-related expenses were $263 million, up 68% year-over-year, driven by higher marketing expenses and investments to support our growth, including a significant increase in global headcount.

Total operating expenses included a non-cash charge of $63 million in stock-based compensation for eToro employees related to the business combination with FinTech Acquisition Corp. V (Nasdaq: FTCV). These expenses largely contributed to a net loss of $84 million in the quarter. Adjusted EBITDA for the fourth quarter of 2021 was negative $24 million, largely driven by the Company's significant investments in growth initiatives, including marketing.

Assets under administration were $10.7 billion as of December 31, 2021, roughly flat versus September 30, 2021, as continued net deposits were offset by broad market declines in crypto and equity markets.

Shalom Berkovitz, CFO and Deputy CEO said: "We continued to see attractive opportunities in the fourth quarter to invest in marketing and customer acquisition, resulting in the addition of nearly 300,000 net new funded accounts during the quarter. These and other investments in eToro's business were also helped by the favorable revenue environment in 2021. While our business performance is closely tied to market activity and profitability can vary from quarter-to-quarter, we are confident in our ability to execute on our growth plans by focusing on profitable customer acquisition and retention which we expect to be accretive to returns in the years ahead. Given our focus on balancing healthy growth with profitability, we generated $14 million in EBITDA for full-year 2021 despite the higher-than-expected investments."

On December 30, 2021 eToro entered into an amendment agreement with FinTech Acquisition Corp. V to, among other things, extend the termination date of the merger agreement through June 30, 2022. Additionally, eToro entered into amendments to certain subscription agreements with certain PIPE investors accounting for $443 million to, among other things, extend the termination date of the subscription agreements through June 30, 2022. We continue to work diligently with all parties to close the transaction as soon as possible and are extremely excited about the future of our business and this next phase of our company in the public markets.

Source: Business Wire