eToro (UK) Sinks into Losses Despite Solid 2019 Revenue Jump

eToro (UK) Sinks into Losses Despite Solid 2019 Revenue Jump

December 17, 2020

eToro (UK) Limited, the British subsidiary of the Israeli multi-asset trading platform, has disclosed its business financials for the year ending on December 31, 2019. The platform has seen a massive jump in its revenue in the period with an increase in client activity.

The UK subsidiary reported net revenue of $3.1 million for the entire 2019, coming from its trading activities. This figure increased by 47.6 percent annually as, in the previous year, net revenue came in at $2.1 million.

The net inter-company revenue of the broker, which was generated from the revenue received from the parent, came down to $2.1 million from the previous year’s $5.4 million.

Despite the significant increase in the revenue, the unit turned in losses. The broker reported a net loss of $519,858 for last year, compared to the previous year’s net profit of almost $2.6 million.

These numbers are only for the UK-registered subsidiary of eToro, not for the entire business or any other unit. Notably, the brokerage has another Cyprus-based entity that handles most of its European clients.

Marketing Expenses Are Increasing

The latest Companies House filing justified the losses detailing a redistribution of the Group’s overall operating profitability. Furthermore, the company upped its marketing efforts by significantly increasing its promotional expenses. Indeed, eToro is constantly inking major sports partnership deals to promote its brand.

For the increase in revenue, the broker highlighted that it started to directly on-board clients to the UK entity from October 2018, which contributed to a significant increase in 2019 customer activity across its offered trading markets.

Meanwhile, eToro, as an overall company, is constantly expanding its market reach by introducing new trading products. Additionally, the broker reportedly tripled its secondary market valuation as a US-based institutional investor purchased eToro shares at a $2.5 billion valuation, up from the broker’s last funding round valuation of $800 million.

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