{"id":141275,"title":"IG Group Shares Plunge c25% After De Facto Profit Warning","publisher":"Share Talk","author":"sharetalk","published":"2026-10-02T10:00:55+00:00","modified":"2026-10-02T10:00:55+00:00","canonical_url":"https://www.share-talk.com/ig-group-shares-plunge-c25-after-de-facto-profit-warning/","markdown_url":"https://www.share-talk.com/ig-group-shares-plunge-c25-after-de-facto-profit-warning.md","json_url":"https://www.share-talk.com/ig-group-shares-plunge-c25-after-de-facto-profit-warning.json","category":"Technology","categories":["Technology","Technology, Media & Telecoms"],"tags":["Breon Corcoran","IG Group Holdings Plc","IGG"],"featured_image":"https://i0.wp.com/www.share-talk.com/wp-content/uploads/2026/10/2dd8f6e1-44ba-434e-967e-e54a178dee3d.png?fit=1727%2C911&ssl=1","format":"news","language":"en-GB","content":"[IG Group Holdings Plc (LON: IGG)](https://www.investegate.co.uk/announcement/rns/ig-group-holdings--igg/q3-trading-update-/9803001)** shares plunged nearly 25% to around 962p on Friday after the online trading group materially reduced its outlook for 2026.**\n\nIG now expects **2026 Group total revenue growth in the mid-single digits**, following weaker-than-expected revenue retention within its over-the-counter derivatives business.\n\nBroker **Peel Hunt**, which has a Hold recommendation a 1,100p target price, said the revised outlook was substantially below previous guidance of **10% to 15% growth** and market expectations of around 12%.\n\nThe company also lowered its profitability expectations, forecasting a **2026 EBITDA margin in the low-40% range**, excluding £30 million of non-recurring restructuring and Jersey redomicile costs and acquisition-related expenses contingent on the Underdog transaction completing.\n\nThat compares with consensus expectations of  **45.5%**, according to Peel Hunt. The broker said the combination of lower revenue and weaker margins could result in a **high-teens reduction to consensus EBITDA forecasts for 2026**.\n\nWhile IG did not use the term “profit warning” in its announcement, the reduction in both revenue and margin expectations means the update represents a **material downgrade to anticipated 2026 earnings**.\n\nThird-quarter Group revenue is expected to be approximately **£240 million**, down around 14% from £280.1 million a year earlier.\n\nNet trading revenue is expected to fall to approximately **£210 million from £249.5 million**. The main weakness came from IG’s OTC derivatives operation.\n\nOTC revenue retention fell to approximately **70% during Q3**, compared with an average of around 80% since the introduction of market-making optimisation measures in the second half of 2025.\n\nIG said greater short-term volatility in revenue retention should be expected, while maintaining that the optimisation measures should structurally improve retention over the medium to long term.\n\nThe distinction between **customer activity** and **reported revenue** is important.\n\nAlthough **OTC net trading revenue fell approximately 18% year-on-year to £155 million**, OTC customer income actually increased by around **8%**.\n\nCustomer acquisition indicators were also strong, with **organic first trades increasing more than 25% year-on-year** and organic active customers rising approximately 17%.\n\nThat suggests the Q3 revenue deterioration was driven more by **how much customer income IG retained as trading revenue** than by a collapse in customer activity.\n\nIG’s US sports and prediction-market business **Underdog** was another area of strength, with Q3 net revenue more than doubling year-on-year to approximately **$105 million**.\n\nThe fourth quarter is seasonally important for Underdog, having accounted for more than one-third of its 2025 revenue.\n\nChief executive **Breon Corcoran** said first trades and active customer growth remained strong and attributed the weaker Q3 revenue to lower OTC revenue retention under less supportive market conditions.\n\nHe also reiterated confidence in IG meeting its **medium-term guidance beyond 2026**.\n\nThat distinction is important for investors: management continues to support its longer-term strategy, but its **near-term 2026 financial outlook has clearly weakened**.\n\nIG expects around **£30 million of non-recurring costs during 2026** relating to its Jersey redomicile and restructuring programme, of which £16.4 million was already recognised during the first half.\n\nThe company will provide further detail on third-quarter trading on **22 October 2026**, alongside a strategy update, while an institutional investor seminar on Underdog is scheduled for 8 October.\n\nFor investors, the central question is now whether the Q3 deterioration in **OTC revenue retention is genuinely temporary**.\n\nCustomer growth remains encouraging and Underdog is expanding rapidly, but those positives have been overshadowed by the immediate earnings impact of weaker retention and lower margins."}