eToro (UK) Limited reported net income of $41.9 million for the year ended Dec. 31, 2020, up 717% from $5.1 million in 2019, according to filings with UK Companies House.
The social trading platform swung to a profit before tax of $2.2 million compared to a loss of $519,858 in the prior year. After-tax profit reached $1.8 million versus a loss of $519,858 in 2019.
Trading commissions, the company’s primary revenue stream, jumped to $42.5 million from $3.1 million in 2019. Other commissions contributed $5.1 million, up from $2.1 million. However, trading costs also increased substantially to $5.8 million from $78,382.
Operating expenses rose sharply to $39.8 million from $5.7 million as the company scaled operations. Staff costs increased to $4.0 million from $3.4 million, with average employee headcount rising to 29 from 26.
The FCA-regulated broker attributed the increased profitability to a significant rise in its client base, driven by promotional activity, direct client onboarding, and transfers of existing clients from other eToro Group entities to the UK operation.
Client money held at year-end totaled $107.9 million across multiple banks, up from $4.5 million in 2019. Client custody assets reached $296.2 million compared to $982,786 previously.
In January 2021, the company received a $22.8 million perpetual capital note from an affiliate to meet minimum regulatory capital requirements. The filing also noted eToro Group’s March 2021 announcement of a planned SPAC merger valued at approximately $10.4 billion.
