Israel-based eToro broker closed 2021 with a fourth-quarter net loss but generated 105% increase of revenue to $1.2 billion year-on-year.
Israeli broker eToro reports its Q4 and full-year financial results ending December 31, 2020. The company generated $1.2 billion in revenue during 2021, a 105% year-on-year increase from $600 million the previous year. Unfortunately, this multi-asset broker recorded a negative net profit due to a sharp increase in its operating costs.
Increase in New Clients
In addition, eToro added approximately 2.1 million registered new clients in Q4 2021. This figure is up 33% from the 1.6 million clients the company received in the third quarter. Now, eToro has a total of 27 million active users and 2.4 million funded accounts as of December 31, 2021.
The numbers above prove that eToro has been one of the biggest beneficiaries of the retail investment boom caused by the COVID-19 pandemic. eToro's investment products have also experienced a tremendous increase in demand, especially in crypto assets, since the company was founded 15 years ago. Trading commissions from digital asset investments accounted for nearly two-thirds of the total commissions that eToro earned in 2021.
Based on observations, crypto trading activity has indeed increased from lows at the beginning of the year to posting fantastic numbers. eToro reported total operating costs excluding share-based compensation and merger-related costs of $263 million, a 68% year-over-year increase. This figure was helped by higher marketing and investment costs to support the company's growth in terms of a significant increase in the number of global employees.
To summarize, eToro reported a net loss of $84 million, primarily due to a non-cash fee of $60 million in share-based compensation for its employees and $11 million in transaction fees.