IG Group hails “outstanding” Q3 as revenue rises 13.5%

Revenue from continuing operations for the three months to 28 February amounted to £257.2m (€305.9m/$335.4m), up from £226.7m in the corresponding period in its 2021 financial year, IG Group revealed in a trading update.

This total did not include revenue from the North American Derivatives Exchange (Nadex), which was sold to Foris DAX Markets, part of the group of companies trading as Crypto.com, in March for $216.0m.

IG Group said the increase was primarily due to a rise in client activity, with the number of active clients reaching a record 292,200 in the quarter, up 32.3% year-on-year.

Breaking down its performance, revenue from over-the-counter (OTC) leveraged derivatives reached £219.3m, up 4.2% on the previous year. 

Exchange-traded derivatives revenue rocketed 1,547.4% to £31.3m following the purchase of brokerage and investor education platform Tastytrade in June last year. However, stock trading and investment revenue slumped 53.9% to £6.6m despite record active client levels.

In terms of market performance, IG Group said revenue from its core markets amounted to £222.0m, up marginally from £221.7m in 2021, while high-potential markets revenue hiked 604.0% to £35.2m due to the addition of Tastytrade.

Looking at the year to date, total revenue for the nine months to 28 February was 13.9% higher than the year before at £723.3m, excluding a foreign exchange hedging gain in Q1 associated with the financing of the Tastytrade acquisition.

OTC leveraged derivatives revenue edged up by 2.0% to £611.9m, while exchange-traded derivative revenue jumped 1,432.8% to £88.9m. Stock trading and investment revenue was 24.2% lower at £22.5m.

Core markets revenue improved from £621.1m to £623.1m, while high potential markets revenue increased 605.6% to £100.2m.

“I’m delighted to be reporting another quarter of outstanding performance driven by a record number of clients trading in the period,” IG Group chief executive June Felix said.

“Today, we have more clients and a broader range of products to trade than ever before in our history. But we aren’t stopping here – a new IG is emerging, and we’re excited by the opportunities ahead of us, building on our strengths and track record of delivery.”

Looking to full year forecasts, IG Group said it expects group revenue to “moderately exceed current market expectations”.

The business said its core markets segment is strongly positioned following consecutive quarters of revenue growth and continues to benefit from their largest ever active client base.

In terms of Tastytrade, given the slower growth in US options trading volumes in Q3, which has continued into the start of Q4, IG Group said revenue growth may remain below the previously guided 25% to 30% range for FY22, depending on market activity through the remainder of the period. 

However, IG Group also said it remained confident about the opportunities that Tastytrade brings to the wider group, due to the large total addressable market in the US and further international expansion.

“The success of our group is underpinned by the fantastic contribution of our staff globally,” Felix added. “At present, the thoughts of everyone at IG are with those impacted by the conflict in Ukraine. 

“We will continue to provide support for our people, particularly our staff and their families in Poland, and to contribute to charities responding to the humanitarian crisis.

“I look forward to providing a further update with our full-year results in July.”