eToro Group Ltd. (ETOR) Earnings Call Transcript & Summary

Hi, everyone. Welcome to our event of unveiling a huge amount of work that our team has been working on for the past 6 months. It's amazing to see so many people, so many familiar faces, etorians from across the globe, thank you, everyone, for coming here. Our pro investors that have joined us here to showcase their apps, upstairs after the speech. Our partners are here, everywhere from Space XAI to Alpine to many other partners, our investors and of course, thank you to my family joining me here as well. And also welcome to the audience on X, on YouTube, on our live stream across the globe. We've started eToro with a vision of opening the markets for everyone to trade and invest in a simple and transparent way. But always, there has been a gap between the people who really have access to everything in the markets and those who don't. Initially, at eToro, it was really about lowering the friction, fractional shares in dollar amounts, enabling commission-free, stock trading in U.S. shares, bring crypto to retail and then bringing in a lot of the knowledge that we have in eToro through social, through connecting everybody in eToro to one another. Today is really about how AI completely levels the playing field between retail investors and the most sophisticated investors across the globe. If I look at the past almost 20 years since me and my brother, founded eToro. The first 10 years was really about lowering the barriers to entry. The next 10 years about how do we take all of the knowledge of all of our investors trading in eToro, and how do we create that knowledge to become collective intelligence of our customers so they can become better investors and increase their knowledge and their wealth on the eToro platform. And now it's really becoming one with AI, which will show later on today. As we grew the company, we built more and more products across the financial super app spectrum. We have today 4 pillars of our product trading to how our customers joined eToro originally to trade the markets, to trade stocks today from 26 different capital markets now thousands of crypto assets both on Tradefi and on DeFi as well as derivatives across a variety of CFD's futures, options where you can continuously and always see what are the best investors from all over the world are doing. We've expanded and matured with our customers as, of course, we're all growing older and enable them to invest to become smarter investors to compound their wealth on eToro, with CopyTrader, looking at the top investors from all over the world to our smart portfolios, to recurring investments, and we've taken that a step forward and have seen significant growth this year in our savings products. It's always one of my proudest moments when I meet people, whether it's our pro investors who are telling me that they made their first trade on eToro. We just had a great event at Formula One with our partners here from Alpine. And I met 2 founders they have actually founded now companies that are potentially partners of eToro and they told me, Yoni, the first trade I ever did in crypto was on eToro. The other one told me, me, too, the first trade I ever did on eToro. And that makes me very proud because it means we brought them into the world of capital markets. We created that spark of passion towards capital markets. And now in savings, it's also to make sure that you'll do your last trade on eToro as well that you'll manage your savings and your pension in eToro as you'll see later on open up your kids accounts on eToro, and look at how you manage across all of your wealth and financial products. And we've expanded our partnership both in banking with creating a virtual IBAN for our customers to enable payments directly from eToro both in crypto as well as in Fiat and local currencies as well as the Visa debit card, which enables, again, our customers to keep all of their assets on eToro without the need to go back to their bank. We've built eToro in a very unique way as a regulated company across the globe. We have 12 different offices across the globe. We speak in 24 different languages. And what connects our customers across the globe is their passion to the global markets to learn more and to become better investors and we've always worked with regulators across the globe to understand how new innovations bring more value to our customers from across the globe and the really unique part in eToro, which I'm super lucky to meet hundreds of our Pro investors across the globe is that core collective, that collective intelligence of extremely smart people, actually smarter than I am about the markets in many, many cases that have expertise in the market that have grown in eToro for years. One of our top investors today was copied by about 30-plus thousand people and $250 million has a track record of 12 years in eToro. And we meet them once a year in our Pro Investor Summit. And it's really about how do we all learn from one another. And the initial part was how do we connect, how do we learn from each other. And that's when we created the first social investment platform now with 40 million registered users across the globe to enable people to connect and learn from one another. We realize we can use technology not only to connect and learn from each other, but actually, just like I have succeeded in high school, actually copied the best. So we've created and patented CopyTrader, which has become a very unique product. We're the only company in the world today that enables you to actually copy a popular investor or a smart portfolio of fractional shares across 26 different markets, do everything in real time and actually manage multiple strategies across multiple smart people across the globe as well as our Chief Investment Officer. And what we've been seeing over the past, I'd say, 2 years is now we can actually harness AI to actually become smarter as a collective. We provided about 9 months ago, our AI studio to our pro investors. They've created apps that, frankly, they were on stage presenting it, and I was with peers because I saw so much innovation that they've built that we would have never built in eToro on our own on our priorities. And that AI over time, has become smarter and smarter. It learns from every trade of every customer that trades on eToro, from the best customers in eToro to learn what success is to the worst customers of eToro to learn what failure is. And that learning now is shared through our AI tools that we provide our customers, our apps and of course, story our AI agents. The world is changing right now at the pace which I've never seen before, I'm sure everybody here is experiencing maybe almost the same. People are telling me, I'm losing a bit my communication skills because I've been talking to AI agents more than I've been talking to people in the past 6 months. But there is no doubt that the world is changing right now, enabling retail investors, enabling people from across the globe access to intelligence that we've never had before. I recently told my [indiscernible] team as they're working on models and suddenly are doing 100 times a day back test, which would have taken 6 months just 2 years ago, that -- 2 years ago, maybe there were 3 companies in the world that has that access to that amount of information, that amount of compute, that amount of intelligence. So everything is changing in a very rapid pace. And it's about AI powering our investors, powering our pro investors with tools we couldn't imagine 2 years ago. And it's the fact that finance is moving on chain and creating more opportunities, more products and actually moving the entire capital markets into 24/7 through tokenized equities and through Defi technologies. We've always looked at technology and how technology can empower our customers to become better investors. That was almost a mega -- okay, but what's really exciting, and I have to say I've been having more fun over the past years since we went public, then never before as CEO, is to see how easy it has become to build and how much faster we're building in eToro. The pace of building and the pace of innovating and the pace of creating new products that we couldn't have done just a year ago and 2 years ago. And this is really an unlock just since roughly November last year, really showed us the capabilities of us delivering more products across our entire road map in all of the regions in 75 countries where we operate. And what you'll see here today is a couple of those innovations that have been in the works. We actually rebuilt the entire eToro platform. We took 1 million lines of code of the existing eToro app and actually rewrote everything with AI, an app that has been basically built from the ground up with AI and that has been an amazing experience working with our solutions group, seeing how AI runs at such a pace that every month, everything changes, the tools change, how you write code change, how you look change. So a new app, we're going to see a pro trader app on desktop which wasn't even on the road map and looks really awesome. We're going to see the Apple Watch app and many new apps that are coming into the app store. And with all of that change that we've realized, we're running at a pace that we couldn't have imagined just a year ago with AI, we realized we wanted to also refresh the eToro brand. We wanted to make sure that through the eToro builders, our API-first approach, our technology-based approach. We're refreshing our brand, and this is the new brand of eToro. [Presentation]

And by the way, many of -- well, all the people you just saw in the video are actually pro investors here in the crowd, which, of course, you can meet and greet. Although I do admit, we just took silhouettes of them in the AI generated, the rest, but thank you all for signing the waivers to do this. And this is how we're helping eventually our customers to become better investors and helping you to know better is by finding people who are passionate about capital markets who have been doing this myself since I was 13, so now 30-plus years, but many of our customers and many of eTorians have been passionate and touching capital markets for years. from quantitative traders here in the crowd building quant apps on eToro to value investors, building research on eToro to people from across the globe from Australia to Singapore to U.K., to the European countries to the U.S. and Latin America that are bringing their knowledge into eToro for you to actually become a better investor and know better. And I'm very happy now to introduce our product team [indiscernible] will now showcase the new app, our app store and [indiscernible] feature. Thank you.

Thank you, Yoni. Everybody hearing me? Good. So hi, everybody. First of all, AI is indeed -- my name is [indiscernible]. AI is indeed reshaping the industry and specifically reshaping eToro. And we are an AI first company. And being an AI first company really means that we weave in AI in everything that we do. Specifically, we have 4 different layers where we take into account where we do -- where we kind of think about AI and the first is the user experience. And the user experience has -- the user experience has alpha portfolios. alpha portfolios, which are smart portfolios, that is -- it's the easiest way for you to tap into investments in AI. It's essentially our proprietary data that is filled into a smart portfolio, a portfolio where you can invest in. The second is Tori. And Tori is your AI financial agent, Yoni mentioned it as well. It's a very significant innovation because it's now smarter than most of the models, the frontier models today because it has a lot of context. So that's very significant. And specifically, Tori can also trade for you. And by trading, we actually go to the second layer of autonomous execution. Autonomous execution is powered by agent portfolios, which is another innovation that we recently launched and is incredibly significant. And Tori can actually use it in order to trade. Then we have the open ecosystem. And the open ecosystem specifically has the App Store, which is a great innovation as well, recent innovation with more than 60 apps and 1,500 submissions. It's a financial marketplace for you to be able to create and consume financial apps with no code, just text. It's really easy to create, and we have the builders [indiscernible] and the MCP in order to help you do that exactly and specifically to kind of continue trading. And the last is the data foundation layer, which takes in almost 20 years of proprietary data of investing habits in order to make sure that you can kind of learn the markets trade better through the APIs and so on. So I'm obviously not surprising anybody because this is why we're here. We're presenting today the new eToro app. Let's watch this video, and I'll tell you all about it. [Presentation]

Okay. Exciting stuff, right? I'm very excited for this because this is such a great innovation, and you can all, by the way, download it right now in the app store, it's called eToro AI for you to test it out and see. But today also marks a day where eToro is no longer just a broker. We're 3, 4, 5 steps into our vision of becoming an AI-powered financial super up. And it's just incredible because the new app is now built for faster execution, the insights you care about as well as the community you love all baked in. It's also built in for the new era with agentic trading as a first-class citizen. And if this is not enough, we're also rolling out sub accounts to be able to create different portfolio strategy, multiple accounts, each of which has a portfolio for you to be able to trade. You can trade yourself, you could trade via an agent or you can even open an account for your children, for your children to be able to kind of save up for a member of your family, really great stuff. Now Tori is also much, much more smarter than it was before. It has all of the context, it knows everything about you. We revamped the entire thing from the ground up, really significant. It also gets better every single day. and it can also trade for you. Let's say, dive right in into the more kind of specifics. So no two investors are alike and we understand that. And we want to make sure that you're able to customize your experience. So this is exactly what we're launching. We're launching the advanced mode for you to be able to customize your experience. So the watch is the portfolio and many places in the app will be dressed up according to how you want the app to look, feel and behave. So Tore, your financial agent, was built -- rebuilt from the ground up to feature an AI-first experience. It features stronger capabilities, faster and laser sharp answers. It runs on Grok 4.3, but also has other frontier models inside to make sure that you get the best answer possible. It has live access to X, so you can analyze the market sentiment of X as well as the market sentiment of the eToro community. It can serve as an investment opportunity. It can do so much more. It could even trade for you. You ask it to trade for you, you allocate an amount and you just go and obviously, everything is super transparent. I will say when it does what. Tori is now also proactive. Tori is now also proactive. It will go -- first of all, it has -- it's front and center in the bottom left navigation of the app. And let's just see it here. And it will glow Schimmer when it has something to say about your portfolio. So for example, here, you can see that ARM trades are now accelerating, and you can decide you'd like to sell, hold, buy more. It's up to you. This will be presented inside the app throughout the experience on an asset page, on your portfolio, on your watch list, it could do quite a lot of stuff, and you will see it as you use the app. It's really collective intelligence at its best. Tori will now extend itself also beyond eToro, beyond the app to the apps you love. It will be also available in WhatsApp and Telegram for you to be able to monitor the market for 24/7 to get the sentiment or specifically ask a question and specifically, here, you're going to even see that I ask it was the [indiscernible] for my portfolio, what's going on with SpaceX, et cetera, and it can also trade for you directly through the apps you love. Speaking of extending eToro outside of the app, we're also launching eToro on the Go, which is our new Apple Watch app. You can check your P&L, your positions. You can even speak to Tori directly through the watch. Really great stuff. Thank you. And if this is not enough, sub accounts are also being rolled out. And we understand it to you were different hats in life, but also in the [indiscernible]. And we'd like to make sure that you have that exact thing inside eToro. So we're launching out -- we're launching subaccounts, which are tied to portfolios. Each portfolio is segregated from your main account. You can test a specific trading strategy that you'd like to trade outside of your main account. You can also have an agent trade on your behalf with full transparency. We'll be rolling that out as well. And you can also open an account for your children. So to save up for a member of your family. I'm really excited about this because we will be rolling out significantly more capabilities as we go. And the entire app will be dressed up according to the specific account that you currently select and open. Okay. So now I'm going to call to colleagues of mine, Joao Carlos as well as Filipe Sommer to present even more innovations. Really great stuff, guys.

Thank you, can you all hear me? $1 million, $2 million? Great. Okay. So hi, my name is Joao. I'm Director of Product here at eToro, and I'm very happy to share the stage with Filipe, who is a principal product engineer at eToro and also Mike Hasen.