IG Group Forecasts 14% Q3 Revenue Drop as OTC Retention Falters

Online trading platform IG Group announced it expects third-quarter revenue of approximately £240 million, a 14% decrease from the same period last year. The company attributed the decline to weaker performance in its over-the-counter (OTC) derivatives business, leading it to lower its full-year 2026 revenue growth outlook.

OTC Performance Drives Decline

The primary factor behind the expected revenue drop was a lower OTC revenue retention rate, which the company reported was about 70% for the quarter. This figure, which represents the portion of client trading losses retained by the firm, is below the roughly 80% average IG has seen since implementing changes to its market-making operations in the second half of 2025.

According to the trading update:

• Third-quarter net trading revenue is expected to be about £210 million, down from £249.5 million a year earlier.
• OTC net trading revenue is projected to fall by approximately 18% to £155 million.

"Lower Q3 revenue reflected reduced OTC revenue retention in less supportive market conditions," Chief Executive Breon Corcoran said in a statement. The company noted that while its operational changes are designed to improve retention over the long term, they may lead to greater quarterly fluctuations in the near term.

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Customer Growth a Bright Spot

Despite the weaker revenue figures, IG reported strong underlying customer activity. Organic first trades increased by more than 25% year-over-year, and the number of active customers grew by about 17%. While OTC customer income rose about 8%, it was not enough to offset the lower retention rate.

The company's Underdog business was a notable outperformer, with its third-quarter net revenue more than doubling to approximately $105 million. IG also updated its full-year 2026 guidance, cutting its revenue growth forecast to a mid-single-digit percentage range.

Updated Outlook and Costs

Excluding non-recurring costs, IG expects its 2026 EBITDA margin to be in the low-40% range. The company anticipates about £30 million of non-recurring costs in 2026, primarily related to its corporate restructuring and the move of its domicile to Jersey. It had already recorded £16.4 million of these costs in the first half of the year.