On Monday, eToro announced that it is currently in discussions with leading prediction market platforms Kalshi and Polymarket as part of its exploration to broaden its offerings in event contracts. This news came alongside the company’s impressive third-quarter financial results, which included a share buyback of $150 million.

Chief Executive Jonathan Assia shared with analysts that eToro is investigating opportunities for users to trade on financial, geopolitical, and economic events, highlighting that the company’s recent venture into futures trading has set a solid foundation for facilitating prediction markets within the United States.

“We are indeed engaging with Kalshi and Polymarket, recognized leaders in the prediction market industry,” Assia stated. Furthermore, he noted that the recently introduced futures platform in Europe operates on the same infrastructure that could eventually support prediction markets in the U.S.

Assia emphasized that eToro intends to focus on financial event markets over sports-related contracts, which are currently facing regulatory challenges, particularly for companies like Kalshi. “Markets predicting financial events, geopolitical situations, and economic outcomes are immensely valuable for individuals formulating their trading strategies or hedging positions,” he explained, indicating this will be the company’s primary focus.

The CEO also mentioned the potential synergies between cryptocurrency and prediction markets, pointing out an upcoming eToro crypto wallet that will allow users to interact with “on-chain prediction markets like poly-chain and others.”

With a robust operational framework in place, eToro ended the quarter with 3.73 million funded accounts, marking a 16% increase year-on-year, and boasting $20.8 billion in assets under management, a remarkable increase of 76%. The company reported cash and equivalents amounting to $1.2 billion.

For the third quarter, eToro reported a 28% increase in net contribution, reaching $215 million. Meanwhile, net income surged by 48% to $57 million, and adjusted EBITDA rose by 43% to $78 million, aided by improved contribution margins and prudent cost management. Adjusted diluted EPS stood at $0.60, up from $0.51 from the previous year.

The board has approved a $150 million share buyback initiative, which includes plans for an accelerated repurchase of $50 million. This buyback reflects the company’s confidence in its long-term trajectory and affirms that its stock price “does not accurately capture the fundamental value of the business.”

Operational indicators for October confirm sustained momentum, as assets under administration climbed 73% year-over-year to $20.5 billion, while funded accounts grew to 3.76 million.

eToro is actively advancing its cryptocurrency strategy, expanding its U.S. digital asset portfolio from 3 to 110 tokens and making strides towards launching a crypto wallet that will support on-chain prediction markets, tokenization, and lending. The company reported robust global expansion, with activities extending to 75 countries, and U.S. funded account growth already exceeding projections for the entirety of 2024.