eToro’s $13.8 billion top line was 15.9 times its Net Contribution

eToro reported $13.84 billion of total revenue and income for 2025. Taken at face value, that number would place the trading platform among financial businesses of extraordinary scale. It was also 64 times the company’s $215.7 million net income. The apparent gap is not explained mainly by salaries, marketing or technology. FXBrokers.ai’s reconstruction of eToro’s Form 20-F finds that $12.93 billion of cryptoasset cost and $37.5 million of margin-interest expense were deducted before the company reached its own measure of Net Contribution.[1]

The arithmetic is exact. Total revenue and income of $13.8379 billion, less $12.9320 billion of cost of revenue from cryptoassets and $37.5 million of margin interest, produces $868.4 million of Net Contribution. The statutory top line was therefore 15.9 times the management measure that remained after those two directly linked costs. Crypto cost and margin interest together absorbed 93.7% of total revenue and income before employee costs, advertising, payment processing, depreciation, tax and other operating items were considered.[1]

Nothing in that calculation shows that eToro misstated its accounts. The filing discloses the relevant lines and defines Net Contribution. The investigation instead establishes a comparability problem: eToro’s gross cryptoasset accounting causes the purchase cost of crypto sold to customers to pass through both revenue and cost of revenue. A broker whose principal economics are spreads, commissions or financing may report a much smaller top line even when the amount available to cover operating costs is similar.[1]

The crypto line creates the scale

Revenue from cryptoassets was $12.9751 billion, equal to 93.8% of eToro’s total revenue and income. Cost of revenue from cryptoassets was $12.9320 billion, or 99.67% of the gross crypto revenue. The difference between those two lines was $43.1 million. The company separately reported $124.0 million of net trading income from crypto derivatives. Added together, the gross crypto spread and crypto-derivative trading result were approximately $167.1 million.[1]

That $167.1 million was about 19.2% of eToro’s $868.4 million Net Contribution. The calculation does not purport to reproduce every internal product-profit measure: the company reports other trading, interest and fee lines, and costs may support more than one product. It does show why the $12.98 billion crypto-revenue figure cannot be interpreted as the economic fee pool generated by crypto customers. Most of the amount represented the value of cryptoassets passing through the principal accounting presentation.[1]

A simple illustration explains the mechanism. Suppose a platform acquires a cryptoasset for $9,970 and sells it to a customer for $10,000 while acting as principal. Gross presentation can record $10,000 of revenue and $9,970 of cost, leaving $30 before other expenses. An agency-style presentation might record only a commission or spread-like amount. The customer activity could be economically similar while the two income statements display radically different revenue. eToro’s actual figures are far larger, but the accounting geometry is the same.[1]

Principal presentation changes the denominator, not just the label

The decisive accounting question is whether the company controls the cryptoasset before transferring it to the customer, rather than merely arranging a transaction for a fee. eToro’s filing presents cryptoasset sales and the corresponding asset cost gross. That choice creates a revenue denominator dominated by the market value of assets delivered. It does not create an equivalent gross margin, because nearly the same value reappears immediately as cost of revenue.[1]

This distinction is larger than ordinary gross-versus-net commission presentation. When the underlying asset price doubles, the same number of units can produce roughly twice the gross sales value even if the percentage spread and customer relationship are unchanged. When turnover increases, both revenue and cost can expand. The statutory top line can therefore move with crypto prices and transactional throughput more strongly than the economic amount retained.[1]

That makes unit-based information particularly valuable. Gross crypto revenue divided by customers, trades or units would still be influenced by asset prices, but a reconciliation to the spread between sale proceeds and asset cost would expose monetisation. The 20-F provides enough aggregate data to calculate the annual difference, not a product-level rate by coin, customer cohort or transaction. Those missing denominators limit how precisely the crypto engine can be forecast.[1]

The same presentation can affect perceived diversification. Because cryptoasset sales represent 93.8% of total revenue and income, a casual reader might conclude that almost the entire company depends economically on crypto spreads. The reconstructed contribution shows a more mixed business containing derivative trading, leveraged-position interest, interest on user funds and other income. Crypto remains material, but its dominance of the top line overstates its dominance of retained revenue.[1]

Net Contribution is the more informative bridge—not a replacement for the accounts

eToro defines Net Contribution as total revenue and income minus cryptoasset cost of revenue and margin-interest expense. It is a management performance measure rather than the statutory revenue line. It should not be substituted uncritically for revenue, because it still precedes important operating costs and because management-defined measures can differ across companies. It is nevertheless a useful bridge from transactional gross flows to the amount that begins to resemble the revenue pools commonly reported by brokers on a net basis.[1]

The distinction changes margin analysis. Net income was only 1.6% of the $13.84 billion gross top line. Measured against Net Contribution, it was 24.8%. Neither percentage is universally “correct”; they answer different questions. The first shows profit relative to all gross revenue and income recognised under eToro’s presentation. The second shows profit relative to the amount left after the two directly identified pass-through or funding costs. Comparing eToro’s 1.6% gross margin with another broker’s net-revenue margin would be economically misleading.[1]

The same problem affects growth. If crypto prices or customer turnover increase, gross crypto sales and crypto cost may rise almost in tandem. Headline revenue can expand dramatically even when the spread between the two moves much less. Conversely, lower crypto turnover can shrink gross revenue without an equivalent fall in contribution. A serious trend analysis therefore needs at least three lines: gross crypto revenue, crypto cost of revenue and Net Contribution. Reporting only the first can mistake asset throughput for monetisation.[1]

Interest is another economic engine

The filing reported $213.4 million of net interest income from users. Of that, $130.8 million related to leveraged positions and $82.7 million to user funds. These are economically different from cryptoasset gross sales. Financing leveraged positions and earning interest on cash balances depend on rates, balance sizes, customer terms and funding arrangements, not simply the notional value of assets bought and sold.[1]

Margin-interest expense of $37.5 million is deducted in eToro’s Net Contribution definition because it is directly linked to financing the margin activity that produces income. That treatment is analytically useful, but it also means Net Contribution combines several mechanisms: net crypto economics, derivative trading, commissions, user financing, interest on balances and other income. An increase in the total could come from more customers, higher rates, greater leverage, wider monetisation or favourable trading outcomes. The measure is not a single unit price.[1]

The user-interest figure also demonstrates why a broker’s cash economics deserve separate attention. Net interest from user funds represented a meaningful earnings stream independent of customer trading spreads. A lower-rate environment, a higher share passed to customers or a change in where balances are held could reduce that income even if customer assets increase. Conversely, rising balances can offset falling yields. Those sensitivities are obscured when the income statement is dominated visually by nearly $13 billion of crypto sales and cost.[1]

What the accounting does—and does not—say

Gross presentation is not evidence that customers paid $12.98 billion in fees. It is not evidence of $12.93 billion of losses, and it does not mean eToro retained the difference between the top line and net income. The crypto cost is the recognised cost of the assets corresponding to the gross sales. A customer can buy an asset that remains in their account; the accounting line describes eToro’s transaction presentation, not the customer’s eventual investment outcome.[1]

Nor can the $43.1 million gross difference between crypto revenue and crypto cost be treated as a complete crypto profit. The filing separately includes crypto-derivative trading income, and shared technology, compliance, custody, marketing and payment costs sit elsewhere. Product profitability would require a consistent allocation of those costs. FXBrokers.ai’s $167.1 million combined calculation is therefore a reconstruction of two disclosed crypto-related income components, not a claim about final segment profit.[1]

The filing also does not establish that eToro could choose any presentation it wished merely to enlarge revenue. Revenue recognition depends on contractual control and accounting standards. The defensible conclusion is that eToro’s disclosed principal-style crypto flows create a statutory top line unlike the net trading-revenue measures used by many broker peers. Investors and journalists should normalise the figures before making scale or margin comparisons.[1]

A price-and-volume stress test

A useful stress test separates crypto price, transaction volume and retained spread. If asset prices rise 50% while units sold and percentage economics remain stable, gross crypto revenue and cost can rise substantially together, with a much smaller movement in contribution. If turnover falls but the retained spread widens, gross revenue may decline while contribution proves resilient. If both turnover and spread fall, the contraction reaches the economic core. The published accounts report the outcome, but not the full three-factor bridge.[1]

Funding adds a fourth factor. Leveraged-position interest can rise with loan balances even when crypto transaction contribution weakens; lower benchmark rates or more customer interest can move the reverse way. This means a revenue forecast built from crypto-market growth alone can miss both offsets and pressures. eToro’s business must be modelled as a portfolio of transaction, trading and balance-sheet mechanisms rather than one crypto-sales multiple.[1]

The disclosure that would remove the ambiguity

A clearer public dashboard would report crypto gross sales, crypto cost, net crypto spread, derivative trading income, units or notional transacted, and average customer balances on a consistent basis. It would also reconcile Net Contribution by product and show the operating costs directly attributable to custody, liquidity, payments and compliance. Such disclosure would not change the statutory accounts; it would allow outsiders to understand the economics without reverse-engineering a 15.9-to-one bridge.[1]

The cross-broker comparison that needs correcting

Consider two platforms that each retain $100 million before operating costs. One reports a $100 million commission line. The other sells $5 billion of assets acquired for $4.9 billion and reports both amounts gross. Calling the second platform fifty times larger by revenue would confuse merchandise value with retained economics. eToro’s 15.9-to-one ratio between total revenue and Net Contribution quantifies the scale of that risk in its 2025 accounts.[1]

That ratio is not a universal normalisation factor. It will change with crypto turnover, asset prices, product mix and funding expense. The correct method is period-specific: rebuild the bridge from gross revenue to Net Contribution each time, then examine the composition of contribution and the operating expenses below it. The same discipline should be applied to any broker that acts as principal in assets whose full value passes through the income statement.[1]

For valuation, enterprise multiples based on unadjusted revenue become especially hazardous. A price-to-sales ratio that uses $13.84 billion in the denominator will look artificially low beside a peer whose reported revenue is already net of asset purchase cost. An analyst can instead compare measures such as contribution, net operating revenue, adjusted EBITDA or earnings—but only after reconciling definitions. No non-GAAP measure solves comparability automatically.[1]

Cash flow does not follow the gross revenue headline

The gross presentation should also be kept separate from cash generation. Recognising crypto sales and matching asset cost does not mean $13.8 billion remained in eToro’s bank accounts or could be deployed as corporate liquidity. Settlement, customer assets, inventory and working-capital movements determine cash timing. Net income and operating cash flow begin from a very different economic base than the gross transaction value. A revenue ranking that ignores both the cost line and cash-flow statement can exaggerate not only scale but apparent financial capacity.[1]

Peer normalisation must be symmetrical. It would be equally misleading to compare eToro’s Net Contribution with another broker’s gross revenue if the peer still includes pass-through items. The analyst must map each company from its statutory top line to a common economic layer and document every deduction. For eToro, the disclosed bridge is unusually large; for another company, exchange fees, introducing commissions or customer interest expense may be the relevant adjustment. Comparable numbers are constructed, not selected.[1]

Why the finding matters to customers and regulators

Customers are unlikely to choose a platform by accounting presentation, but the mechanism still matters. Crypto principal activity creates inventory, execution, custody, liquidity and counterparty considerations that differ from a pure agency commission model. Interest income creates another set of dependencies around user cash, leverage and funding. A gross revenue figure tells readers that large transactional values passed through the company; it does not on its own show how much the company earned for providing the service or which risks generated that return.[1]

Regulators and auditors already receive the detailed financial statements. The public-information problem arises when a single top-line number travels into rankings, media reports and market comparisons without the corresponding cost. eToro made the bridge possible by disclosing crypto cost and defining Net Contribution. The burden then falls on analysts to use it. Repeating $13.8 billion as if it were ordinary broker revenue discards the most consequential information in the same filing.[1]

The reconstruction is possible because eToro discloses the cost line and defines Net Contribution. That transparency distinguishes an unusual presentation from an undisclosed one. The remaining reporting weakness is accessibility: the most memorable number is the $13.8 billion top line, while the economically essential deductions are several steps away. A prominent bridge in results materials would reduce the risk that investors, customers and media repeat a technically accurate but commercially misleading scale claim.[1]

The finding

FXBrokers.ai’s reconstruction establishes that 93.7% of eToro’s 2025 total revenue and income was removed by cryptoasset cost and margin-interest expense before ordinary operating costs, leaving $868.4 million of Net Contribution. Crypto gross revenue supplied 93.8% of the statutory top line, yet the reconstructed crypto spread plus derivative trading income was about $167.1 million. The accounts are not internally contradictory. They describe a business whose gross crypto accounting can make its apparent scale incomparable with most brokers unless the reader rebuilds the economics.[1]

The restrained conclusion is also the significant one. eToro did not earn $13.8 billion in the sense commonly implied by a broker-revenue headline. It recognised $13.8 billion of total revenue and income under a presentation in which almost all of the crypto flow returned as cost. The difference between those statements is not semantic. It changes revenue multiples, margins, growth analysis and the public understanding of how the platform makes money.[1]

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