IG's OTC Retention Slips, Pushing Q3 Revenue Expectation at 14% Lower

IG Group Holdings expects total revenue of about £240 million for the three months ended 30 September 2026, a decline of roughly 14% from the £280.1 million reported in the same quarter a year earlier, the London-listed broker said in a trading update on Friday. Net trading revenue is guided at approximately £210 million, compared with £249.5 million in Q3 2025.

Chief Executive Breon Corcoran attributed the softer quarter to the market backdrop rather than to client demand. "Lower Q3 revenue reflected reduced OTC revenue retention in less supportive market conditions," he said, adding that he remains "confident in meeting our medium-term guidance." The board now expects full-year 2026 total revenue growth in a mid-single-digit percentage range year on year.

OTC retention below recent average

Revenue retention on over-the-counter derivatives came in at about 70% for the quarter, below the roughly 80% average the group has recorded since it introduced market-making optimisation measures in the second half of 2025. IG said the board still expects those measures to lift OTC retention structurally over the medium to long term, while warning that short-term variability should be expected to be greater.

OTC net trading revenue was around £155 million, about 18% lower year on year, even as OTC customer income rose roughly 8%. On the customer side, organic first trades climbed more than 25% and organic active customers about 17%.

Non-recurring costs linked to the group's redomicile to Jersey and the organisational restructuring announced on 8 July 2026 are expected to reach about £30 million for 2026, of which £16.4 million was booked in the first half. Stripping out those items and Underdog acquisition costs contingent on closing, IG guides to a 2026 EBITDA margin in the low-40s percentage range.

IG's prediction-markets subsidiary Underdog reported Q3 net revenue of approximately $105 million, more than doubling year on year, ahead of a seasonally critical fourth quarter that accounted for over a third of its 2025 revenue. IG agreed on 30 July to acquire Underdog for up to about $1.3 billion, with completion targeted for late 2026 or early 2027 subject to regulatory and antitrust clearance. IG serves 1.4 million customers globally, while Underdog has more than 11 million registered accounts and over 5 million depositing customers. The deal was unveiled alongside first-half results showing an 18% rise in total revenue to £642.8 million, and follows IG's 2021 US entry through the $1 billion purchase of tastytrade.