London Stock Exchange Group plc (OTC:LSEGY) on Thursday provided its third-quarter 2026 trading update and raised its outlook for fiscal 2026.
Separately, the company announced it will acquire Octus, a provider of credit solutions, for a cash consideration of $3.535 billion, from funds advised by Permira and Octus’ management.
LSEG’s stock is up 0.18% at $29.05 during premarket trading on Thursday.
Results Highlights
Total Income (excluding recoveries) increased by 8.8% on an organic basis to reach 2.41 billion Pounds ($3.22 billion).
The subscription businesses grew 6.6% on an organic basis to reach 1.45 billion Pounds.
The subscription growth was led by Data & Analytics (up by 5.2%), FTSE Russell (up by 10.2%) and Risk Intelligence (up by 9.8%).
Markets division’s organic income grew 12.5%, driven by a 16.7% increase in OTC derivatives and a 14.4% increase in Fixed Income, Derivatives & Other.
Average daily trading volumes at Tradeweb rose 22.4% to $3.2 trillion. Equities were up 9.4%, reflecting higher trading activity across its trading venues and continued growth in data revenues.
Gross Profit increased by 9.9% organically to reach 2.21 billion Pounds.
The company recorded strong customer adoption of its AI solutions, with 95% of its top 200 customers using its AI products and more than two-thirds of its top 50 customers using MCP connection.
AI Search in its Workspace platform reached 47,000 users, up 30,000 from the half-year results in mid-July.
LSEG repurchased 500 million Pounds of shares in the third quarter, taking its cumulative buybacks in the year to 2.6 billion Pounds.
The company expects to repurchase a further 0.8 billion Pounds in the fourth quarter and the first quarter of 2027, with capacity for a further 1.0-1.5 billion pounds in 2027.
Raises Outlook for 2026
LSEG raised its full-year 2026 guidance for revenue, EBITDA margin and free cash flow.
The company expects organic constant currency growth in total income excluding recoveries to be at least 8.0%.
Expects EBITDA margin expansion of 100-120 basis points and equity free cash flow of at least 2.8 billion Pounds.
CEO David Schwimmer said the company is on track to deliver its strongest annual growth since 2018, with acceleration in its subscription businesses’ organic growth and continued strong growth in its Markets division.
Acquisitions in Credit Space
In conjunction with the results update, LSEG announced it would acquire Octus, a provider of credit solutions, from funds advised by Permira and Octus’ management, including its founder, Kent Collier.
The cash consideration of $3.535 billion implies an EV-sales multiple of approximately 11.8 times, based on Octus’ 2026 expected revenue of $300 million.
The complementary portfolio of Octus, with specialization in illiquid and private credit, will help create a single source of fixed income data and analytics and workflow spanning the entire credit spectrum.
LSEG estimates that the private credit industry market is valued at $3.5 trillion. In contrast, the addressable private markets data, workflow and access solutions segment represents a $7 billion to $9 billion opportunity, with double-digit growth expected.
The transaction is expected to be immediately accretive to LSEG’s Data & Analytics organic revenue growth, and additive to its guidance for organic subscription revenue growth of around 7% in 2027.
The transaction is expected to close in H1 2027, subject to regulatory approval.
Earlier this week, on Oct. 19, Tradeweb announced it would acquire Trumid, an electronic credit trading marketplace, for $1.75 billion.
The acquisitions of these two highly complementary businesses will accelerate LSEG’s strategy in fixed income, building a global leader in intelligence, data, workflows and trading across the entire credit liquidity spectrum.
LSEGY Price Action: London Stock Exchange ADR was up 0.18% at $29.05 during premarket trading on Thursday, according to Benzinga Pro data.
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