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eToro Group Ltd reported robust financial results for Q4 2021, with total commissions reaching $304 million, a significant increase of 85% from Q4 2020. Full-year 2021 commissions totaled $1.23 billion, up 105% year-over-year. The company gained 2.1 million new registered users in Q4, bringing the total to 26.9 million. Despite losses of $84 million in Q4, eToro's assets under administration were $10.7 billion. Notable business highlights include the launch of equities investing in the U.S. and the rollout of eToro Money in the U.K.
Positive
Total commissions for Q4 2021 were $304 million, up 85%.
Total commissions for full-year 2021 reached $1.23 billion, up 105%.
Gained 2.1 million new registered users in Q4, totaling 26.9 million users.
Assets under administration reached $10.7 billion.
eToro Money launched in the U.K. and equities investing introduced in the U.S.
Negative
Net loss of $84 million for Q4.
Adjusted EBITDA was negative $24 million for Q4.
Total operating expenses of $263 million in Q4, up 68% year-over-year.
Fourth quarter 2021 total commissions of $304 million, up 85% versus Q4 2020
Full-year 2021 total commissions of $1.23 billion, up 105% versus full-year 2020
NEW YORK--(BUSINESS WIRE)--
eToro Group Ltd (“eToro” or the “Company”), the leading social investing network, today announced its fourth quarter 2021 and full-year financial results1.
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 26.9milliontotal 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.
Business highlights:
Launched equities investing in the U.S.: During Q4 2021, eToro rolled out equities investing to U.S. users, and is excited to bring more of the full eToro experience into this strategically important market. The Company looks forward to rolling out additional products in the U.S. over the coming years and is excited for what lies ahead in this market. More recently, eToro began to scale marketing activities in the U.S. kicking off with a 30 second ad during the Super Bowl in February 2022 and will continue to increase marketing activity in U.S. in the near-term.
eToro Money rolled out broadly in the U.K.: eToro launched its Money program to all users in the U.K. eToro Money seamlessly connects to a user’s eToro investment account allowing the user to instantly deposit and withdraw funds and manage their crypto and funds all in one place. This product provides all users with access to a sort code and personal account number to enable them to send and receive funds to the eToro platform and any U.K. bank account. Additionally, U.K. Club members will have VISA debit cards available to them free of charge. Payments is a very important part of our roadmap as it creates less friction in the customer payment experience and is likely to improve retention rates over time. In 2022, we plan to expand eToro Money to our users throughout Europe.
eToro is a social investing network that empowers people to grow their knowledge and wealth as part of a global community of successful investors. eToro was founded in 2007 with the vision of opening up the global markets so that everyone can trade and invest in a simple and transparent way. Today, eToro is a global community of approximately 27 million registered users who share their investment strategies; and anyone can follow the approaches of those who have been the most successful. Due to the simplicity of the platform users can easily buy, hold and sell assets, monitor their portfolio in real time, and transact whenever they want. https://www.etoro.com/
About FinTech Acquisition Corp. V
FinTech Acquisition Corp. V is a special purpose acquisition company led by Betsy Z. Cohen as Chairman of the Board, Daniel G. Cohen, as Chief Executive Officer and James J. McEntee, III as President formed for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, with a focus on the financial technology industry. The company raised $250,000,000 in its initial public offering in December 2020 and is listed on the NASDAQ under the symbol “FTCV”.
This press release contains certain forward-looking statements within the meaning of the federal securities laws with respect to the proposed business combination between FinTech Acquisition Corp. V (“FinTech V”) and eToro, and the business and operations of eToro. Forward-looking statements may be identified by the use of the words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “strategy,” “future,” “opportunity,” “may,” “target,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” or similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements as to the expected timing, completion and effects of the proposed business combination, eToro’s present and future plans for its business and operations and eToro’s expectations as to market results and conditions; are based on various assumptions, whether or not identified in this press release, and on the current expectations of eToro’s and FinTech V’s management; are not predictions of actual performance; and are subject to risks and uncertainties. These forward-looking statements are subject to a number of risks and uncertainties, including but not limited to: the risk that the proposed business combination may not be completed in a timely manner or at all; the failure to satisfy the conditions to the consummation of the proposed business combination; the occurrence of any event, change or other circumstance that could give rise to the termination of the proposed merger agreement; the amount of redemption requests made by FinTech V’s public stockholders; the effect of the announcement or pendency of the proposed business combination on eToro’s business; risks that the proposed business combination disrupts current plans and operations of eToro; potential difficulties in retaining eToro customers and employees; eToro’s estimates of its financial performance; changes in general economic or political conditions; changes in the markets in which eToro competes; slowdowns in securities trading or shifting demand for security trading product; the impact of natural disasters or health epidemics, including the ongoing COVID-19 pandemic; legislative or regulatory changes; the evolving digital asset market, including the regulation thereof; competition; conditions related to eToro’s operations in Israel; risks related to data security and privacy; changes to accounting principles and guidelines; potential litigation relating to the proposed business combination; the price of eToro’s securities may be volatile; the ability to implement business plans, and other expectations after the completion of the proposed business combination; and unexpected costs or expenses. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of FinTech V’s registration statement on Form S-1 (File No. 333-249646) (the “Form S-1”), eToro’s registration statement on Form F-4 (File No. 333-259189) (the “Form F-4”) and other documents if and when filed by eToro or FinTech V from time to time with the SEC. If any of these risks materialize or our assumptions prove incorrect, actual events and results could differ materially from those contained in the forward-looking statements. There may be additional risks that neither eToro nor FinTech V presently know or that eToro and FinTech V currently believe are immaterial that could also cause actual events and results to differ. In addition, forward-looking statements reflect eToro’s and FinTech V’s expectations, plans or forecasts of future events and views as of the date of this press release. eToro and FinTech V anticipate that subsequent events and developments will cause eToro’s and FinTech V’s assessments to change. While eToro and FinTech V may elect to update these forward-looking statements at some point in the future, eToro and FinTech V specifically disclaim any obligation to do so, unless required by applicable law.
No Offer or Solicitation
This press release is not a proxy statement or solicitation or a proxy, consent or authorization with respect to any securities or in respect of the proposed business combination and shall not constitute an offer to sell or exchange, or a solicitation of an offer to buy or exchange, the securities of eToro, FinTech V or the combined company, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation, sale or exchange would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Additional Information about the Business Combination and Where to Find It
eToro submitted its Form F-4 to the SEC on August 31, 2021, and filed amendments on September 20, 2021, October 5, 2021, November 3, 2021, November 12, 2021, November 15, 2021 and February 25, 2022, which include a preliminary proxy statement/prospectus that is both the proxy statement to be distributed to FinTech V stockholders in connection with the solicitation of proxies for the vote by the stockholders on the merger and the prospectus to be delivered by FinTech V in connection with the distribution of its securities to such holders. After the registration statement has been filed and declared effective, FinTech V will mail a definitive proxy statement / prospectus to its stockholders as of the record date established for voting on the proposed business combination and the other proposals regarding the proposed business combination set forth in the proxy statement. eToro or FinTech V may also file other documents with the SEC regarding the proposed business combination. Before making any voting or investment decision, investors and security holders are urged to carefully read the entire registration statement and proxy statement / prospectus and any other relevant documents filed with the SEC, and the definitive versions thereof (when they become available and including all amendments and supplements thereto).
Investors and security holders will be able to obtain free copies of the registration statement, the proxy statement/prospectus and all other relevant documents filed or that will be filed with the SEC by eToro or FinTech V through the website maintained by the SEC at www.sec.gov.
Participants in the Solicitation
eToro and FinTech V and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from stockholders of FinTech V in connection with the proposed business combination under the rules of the SEC. FinTech V’s stockholders, eToro’s shareholders and other interested persons may obtain, without charge, more detailed information regarding the names, affiliations and interests of directors and executive officers of eToro and FinTech V in FinTech V’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 18, 2022, or eToro’s Form F-4, as applicable, as well as their other filings with the SEC. Other information regarding persons who may, under the rules of the SEC, be deemed the participants in the proxy solicitation of FinTech V’s stockholders in connection with the proposed business combination and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the preliminary proxy statement / prospectus and will be contained in other relevant materials to be filed with the SEC regarding the proposed business combination (if and when they become available). You may obtain free copies of these documents at the SEC’s website at www.sec.gov.
Trademarks and Trade Names
eToro and Fintech V own or have rights to various trademarks, service marks and trade names that they use in connection with the operation of their respective businesses. This press release also contains trademarks, service marks and trade names of third parties, which are the property of their respective owners. The use or display of third parties’ trademarks, service marks, trade names or products in this press release is not intended to, and does not imply, a relationship with eToro or Fintech V, or an endorsement or sponsorship by or of eToro or Fintech V. Solely for convenience, the trademarks, service marks and trade names referred to in this press release may appear with the ®, ™ or SM symbols, but such references are not intended to indicate, in any way, that eToro or Fintech V will not assert, to the fullest extent under applicable law, their rights or the right of the applicable licensor to these trademarks, service marks and trade names.
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1 Financial results included herein for both the fourth quarter 2021 and full-year 2021 are unaudited and subject to change
