Story
IG Group Shares Plunge 21% on Q3 Revenue Miss and Slashed Outlook
Summary
The online trading provider's stock fell sharply after reporting a 14% drop in quarterly revenue and lowering its full-year growth forecast, citing weaker client trading activity in its core over-the-counter business.
Shares in IG Group plunged as much as 21% after the online trading company announced a significant drop in third-quarter revenue and cut its full-year forecast, citing a deterioration in its over-the-counter (OTC) business.
Revenue Miss and Guidance Cut
In a Q3 2026 trading update, IG Group reported that it expects total revenue for the quarter to be approximately £240 million, a decline of roughly 14% year-over-year. Net trading revenue is anticipated to be around £210 million, down from £249.5 million in the same period a year earlier.
The company attributed the shortfall to a "meaningful deterioration in OTC revenue retention," a key metric measuring how much client trading translates into revenue. This figure slipped to approximately 70% in the quarter, compared to an average of about 80% maintained since the second half of 2025. Consequently, IG revised its full-year 2026 total revenue growth guidance down to a mid-single-digit percentage range, a significant downgrade from previous expectations.
Management Commentary and U.S. Performance
AdCEO Breon Corcoran acknowledged the difficult period, stating that "lower Q3 revenue reflected reduced OTC revenue retention in less supportive market conditions." Despite the near-term challenges, he expressed confidence in the company’s medium-term targets.
In a positive contrast, IG's U.S. prediction markets business, Underdog, showed strong growth. The unit delivered Q3 net revenue of approximately $105 million, more than doubling year-on-year. Key client metrics also improved, with organic first trades rising over 25% and active customers up around 17%, indicating continued underlying growth in its U.S. customer base.
Market Reaction
The sharp sell-off sent IG's stock to a multi-month low of 930.5p, its lowest level since April 2025. The decline erased a substantial portion of the gains accumulated over the past year. The stock-specific news was amplified by a challenging backdrop for UK equities, as rising global bond yields weighed on the broader FTSE 100 index and the financial services sector.
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