eToro generates revenue through user’s trading activity. Trading activity on eToro comprehends trading fees such as spread mark-ups and overnight interest charges on CFD assets. The eToro trading activity accounts for 94% of the total eToro earnings, where 87% is on spread mark-ups, and 7% on overnight interest charges. The remaining 6% of eToro earnings come from non-trading activity, such as withdrawal fees, currency conversions, and account inactivity fees.
eToro earnings from trading activity come from stock trading (44%), followed by commodity trading (32%), cryptocurrencies (16%) and forex trading (8%).
eToro as a business has reported total revenue of 631 million USD, while the company valuation stands at 3.5 billion USD.
How does eToro make money?
87% of eToro’s earnings come from trading revenues, 7% from CFD interest rates, and the remaining 8% from fees such as Conversion, Withdrawals, and Inactivity.
Trading gains on eToro are defined as spread gains, which is the additional cost (mark-up) that is applied to the normal market spread of the financial instruments on the platform. Trading gains make 87% of eToro’s total revenue, and it includes gains from market making activities. For example, if at a point in time the value of an asset in the market is USD 100.00 for those who want to buy it, and USD 99.50 for those who want to sell it short, eToro could show it on the platform at a cost of USD 100.50 for those who buy, and USD 99.00 for those who sell. The additional costs of 0.50 USD for both buyers and sellers are precisely the mark-ups, and they represent the main gain not only of eToro, but of most other brokers and investment platforms in the market.
eToro’s Interest Income (rollover or overnight fee), is a small daily fee of a few cents, and is about 7% of eToro’s total revenue. Interests on eToro are charged to CFD traders who leave the trading position open after the daily market closes. For example, with 1:30 leverage and an investment of 1,000 USD, a trader can open a position with a counter value of 30,000 USD. The additional money “required” temporarily by the trader is then presented by the broker who, as happens in a normal loan, charges small interest payments for each additional day that the position is held open
Other commissions charged by eToro are conversion fees, withdrawal fees and inactivity fees. Conversion fees are commissions charged by eToro when trading in a currency other than the USD (for example, investing in UK stocks), or when depositing and withdrawing money in a currency that is not the USD. Among them we can find deposits, withdrawals and even trading of financial instruments listed in currencies other than USD. eToro charges a fixed withdrawal fee of $5 to all withdrawals, and an inactivity fee of $10/month when the user does not log into their real account for 12 months.
How does eToro make money without commissions?
eToro is able to offer commission-free trading of real stocks because of the presence of other types of revenue, such as withdrawal fees, spreads, and other costs such as rollover or conversion fees that are charged on assets other than the stock market.
Although eToro does not make money directly from buying and selling stocks, it does manage to generate revenue indirectly from other sources. eToro uses the absence of commissions as an advertising lever to attract customers and convince them to sign up.
Data show that many users, in addition to buying real stocks (thus paying no commissions in certain cases), then also use other services where commissions are present instead (CFDs on different markets, including CFD stocks, and Copy Trading).
According to the latest data published by eToro, earnings from trading volumes are broken down as follows:
What is the eToro revenue?
eToro in 2023 had revenues of 631 million USD (-0.15% compared to 2022).
The table with the eToro revenue per each year is shown below.
| Years | eToro revenue (million USD) |
|---|---|
| 2023 | 630 |
| 2022 | 631 |
| 2021 | 1234 |
| 2020 | 605 |
| 2019 | 244 |
| 2018 | 369 |
| 2017 | 263 |
| 2016 | 60 |
In 2021 eToro made a record revenue of 1.2 billion USD, but reported a net loss of $265.7 million due to the massive investments eToro made to expand the brand. In fact, eToro’s marketing expenses have almost doubled from $229 million to $524 million in 2021. The expansion has been supported mainly by an increase in staffing: in fact, eToro’s staffing costs have risen from $37 million to $238 million.
These investments have paid off: according to the latest report provided by eToro, 2.4 million trading accounts were opened in 2021.
How much is eToro worth?
eToro reported a valuation of $3.5 billion following the completion of a $250 million funding round in 2023.
eToro’s value as a company is influenced by its investments and its current value as a business. eToro has made investments such as the acquisitions of Gatsby options trading app and Bullsheet portfolio management tools to expand its product offerings and strengthen its global presence. eToro signed partnerships to include ESG scores for stocks and invested in virtual IBANs to reduce payment processing fees for its users.
eToro is a solid company with a broad user base. According to Seeking Alpha’s latest analysis, eToro earned $827 per customer on the platform in 2021. eToro had over 28.5 million registered users as of March 2022. Of these, 2.6 million made a deposit.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 61% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Trading history presented is less than 5 complete years and may not suffice as basis for investment decision. This communication is intended for information and educational purposes only and should not be considered investment advice or investment recommendation. Past performance is not an indication of future results.
Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.
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eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.