Lower retention cuts IG’s Q3 revenue estimate despite customer growth

In its 2 October 2026 trading update, IG Group said it expected third-quarter revenue of about £240 million, around 14% below the same period a year earlier, even as organic first trades rose by more than 25% and active customers increased by roughly 17%. The apparent contradiction comes from the economics of over-the-counter derivatives: customer activity grew, but the share of customer income retained as broker revenue fell.[2]

Lower retention prompted IG to cut its full-year revenue-growth outlook from an earlier 10%–15% organic target to mid-single-digit total growth. The change puts the conversion of trading activity into revenue at the centre of the next results assessment.[2]

Revenue retention links customer outcomes to broker revenue

OTC customer income measures income generated through client trading activity before the group’s hedging and market-making outcome. Revenue retention is the ratio of that customer income becoming net trading revenue. Deposits and customer counts describe separate parts of the account relationship.[2]

A simplified example starts with £100 of customer income and 80% retention, producing £80 of revenue. Raising customer income by 8% to £108 while reducing retention to 70% produces £75.60 of revenue, a 5.5% decline despite higher activity. The £100 base is hypothetical and the 80% rate is a recent-average benchmark; this illustrates the mechanism rather than reconstructing IG’s actual prior-year revenue bridge.[2]

The guidance change is the more consequential result

IG now expects full-year 2026 total revenue growth in the mid-single-digit percentage range. It also expects about £30 million of non-recurring costs related to its Jersey redomicile and organisational restructuring, of which £16.4 million was reported in the first half. Excluding those items and contingent Underdog acquisition costs, the company expects an EBITDA margin in the low-40s percentage range.[2]

Underdog, the US fantasy-sports and prediction-markets business IG is acquiring, reported company-supplied Q3 net revenue of about US$105 million, more than double the prior-year level. That figure describes the acquisition target separately from IG’s approximately £240 million group estimate, with consolidation dependent on the transaction and its accounting treatment.[2]

The 22 October update is the next scheduled opportunity to assess customer growth alongside revenue retention and the reduced annual outlook. Durable customer activity and the proportion converted into revenue will both matter to the earnings effect of IG’s investment in products and its brand.[2]

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