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NEW YORK – eToro reported a 74% drop in third-quarter net income Tuesday as weaker cryptocurrency trading weighed on its results, even as funded accounts grew and its board authorized a new share repurchase program of up to $250 million.
The trading and investing platform reported net income, labeled GAAP in its November 10 earnings release, of $15.030 million for the quarter ended September 30, down from $56.817 million a year earlier. Diluted GAAP earnings per share fell to $0.14 from $0.53.
Adjusted net income, a non-GAAP measure, fell 60% to $23.934 million from $60.330 million. Adjusted diluted EPS was $0.26, compared with $0.60. Adjusted EBITDA, also a non-GAAP measure, declined 56% to $34.200 million from $77.908 million.
Net contribution decreased 13% to $186 million from $215 million, primarily because of lower crypto trading activity, the company said. That measure is not total revenue: eToro defines it as total revenue and income less the cost of revenue from cryptoassets and margin interest expense.
The user base continued to expand. Funded accounts rose 18% to 4.39 million from 3.73 million, while assets under administration were flat at $20.8 billion. The company held $1.2 billion in cash, cash equivalents and short-term investments at September 30.
Chief Financial Officer Meron Shani said capital markets net contribution increased 21% year over year, while crypto activity recovered sequentially. Those gains did not prevent a year-over-year decline in overall net contribution and profit.
Buyback is an authorization, not a completed purchase
The board approved repurchases of up to $250 million through methods that may include open-market purchases, privately negotiated transactions, block trades or an accelerated repurchase program. The company said timing and amounts will depend on market prices, economic conditions, liquidity needs and other factors.
The authorization does not mean $250 million of shares have already been repurchased. eToro said the program is intended to return capital and provide flexibility for future strategic initiatives.
October figures are separate from the quarter
In a separate monthly update within the release, eToro reported October assets under administration of $19.2 billion, down 6% year over year, and 4.42 million funded accounts, up 18%. October crypto trades totaled 2.0 million, down 62% year over year, while capital markets trades were 48.2 million, down 22%.
The company scheduled its results video call for 8:30am Eastern Tuesday. The figures in this article come from the earnings release, not remarks from a completed call.
JBizNews Desk | Wall Street
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