financemagnates.com
eToro (UK) Limited, the British arm of the larger eToro group, disclosed its financials for fiscal 2020, ending on December 31. The FCA-licensed company reported net revenue of $41.86 million, which is 717 percent higher than the previous year’s $5.1 million.
As Finance Magnates reported earlier, eToro generated total revenue of $602 million in 2020 from its global operations. That means almost 7 percent of the group’s business was generated by the UK arm.
“The increase in revenues was driven by a significant growth in our client base as a result of an influx of new UK users as well as the transfer of some existing clients from other eToro entities to our UK entity,” the latest Companies House filing of eToro UK stated.
However, the operating expense of eToro’s UK operations also jumped significantly. The company spent $39.9 million in the year to run the UK operations, up from the previous year’s $5.7 million. That was a year-over-year jump of 602 percent.
“Other increases in operating expenses include a rise in staff costs due to new hires in the growing UK team, higher professional services fees, and an increase in clearing fees as a result of increased deposit volumes,” the filing added.
A Profitable Unit
Considering all other expenses and income sources, the UK entity ended the year with a pre-tax profit of $2.16 million, compared to a loss of $519,858 in 2019. The net profit of the company for the year came in at $1.8 million.
eToro has already entered into a definitive agreement with a black check company to list itself on the American stock exchanges. Meanwhile, demand for its services skyrocketed with the Covid-induced volatility in early 2020 and then meme stock frenzy in 2020.
The global broker added over 5 million registered traders in 2020 alone, and now has a client base of more than 20 million. The company also revealed that the majority of the traders invested in commission-free stocks or cryptos last year, along with the copy trading services. And the UK clients followed a similar pattern.
This also pushed eToro to further enhance its crypto offerings by adding more and more popular digital currencies.
Earlier in August, the broker revealed that it generated a net income of $362 million in Q2 2021 from its global operations, 125 percent higher compared to the same period in 2020.