IG Group Holdings Plc (LON: IGG) shares plunged nearly 25% to around 962p on Friday after the online trading group materially reduced its outlook for 2026.
IG 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.
Broker 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%.
The 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.
That 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.
While 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.
Third-quarter Group revenue is expected to be approximately £240 million, down around 14% from £280.1 million a year earlier.
Net trading revenue is expected to fall to approximately £210 million from £249.5 million. The main weakness came from IG’s OTC derivatives operation.
OTC 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.
IG 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.
The distinction between customer activity and reported revenue is important.
Although OTC net trading revenue fell approximately 18% year-on-year to £155 million, OTC customer income actually increased by around 8%.
Customer acquisition indicators were also strong, with organic first trades increasing more than 25% year-on-year and organic active customers rising approximately 17%.
That 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.
IG’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.
The fourth quarter is seasonally important for Underdog, having accounted for more than one-third of its 2025 revenue.
Chief 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.
He also reiterated confidence in IG meeting its medium-term guidance beyond 2026.
That distinction is important for investors: management continues to support its longer-term strategy, but its near-term 2026 financial outlook has clearly weakened.
IG 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.
The 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.
For investors, the central question is now whether the Q3 deterioration in OTC revenue retention is genuinely temporary.
Customer 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.
