Despite posting an impressive 28% year-over-year revenue growth, eToro (NASDAQ: ETOR) reported third-quarter results that revealed a sharp sequential slowdown, with net contribution inching up just 2.4% from the previous quarter and user growth stalling at only 100,000 new funded accounts.

Shareholders, however, appear to be reacting positively to the results, and the company’s stock was up 9 percent in premarket trading.

eToro Posts Modest Q3 Growth as Revenue Levels Off

The trading platform posted net contribution of $215 million for the three months ended September 30, up from $210 million in the second quarter. The company's net income reached $57 million, a jump from $30.2 million in Q2, though the earlier period included $15 million in IPO-related costs that skewed the comparison.

CFO Meron Shani touted the results as proof of "profitable growth" and "disciplined cost management," noting that adjusted EBITDA climbed 43% year-over-year to $78 million. But the sequential quarter told a different story, with adjusted EBITDA rising just 8.3% from Q2's $72 million.

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User Growth Hits Speed Bump

The company added 100,000 funded accounts during the quarter, bringing the total to 3.73 million – a modest 2.8% increase from 3.63 million at the end of June. Assets under administration grew to $20.8 billion, up 18.9% from $17.5 billion in Q2, driven largely by market appreciation rather than new deposits.

eToro's user acquisition engine appears to be cooling after its May initial public offering. While the company blamed no specific factor, the growth rate has decelerated from earlier in the year when it absorbed customers from its 2024 acquisition of Australian app Spaceship.

"We are focused on increasing our customer base and share of wallet," Shani said, though the quarterly numbers suggest that's becoming harder to achieve.