LSEG Q1 income up 8.7% as markets division beats expectations

Investing.com -- London Stock Exchange Group (LON:LSEG) on Thursday reported an 8.7% year-on-year increase in total income excluding recoveries, reaching £2.26 billion in the first quarter of 2025. 

The figure landed broadly in line with consensus expectations, as the company delivered a stable performance across its core divisions. Including recoveries, total income rose 7.9% to £2.35 billion. 

Gross profit increased by 8.1% to £2.05 billion, while cost of sales grew at a slower pace, up 6.6% to £308 million.

Performance in the Markets division stood out, with revenue rising 13.3% to £834 million, about 1% ahead of expectations, driven by strong trading volumes in fixed income, derivatives, and FX. 

Tradeweb in particular contributed meaningfully to the 23.9% growth in Fixed Income, Derivatives and Other revenue, while OTC Derivatives advanced 16.7% and FX gained 13.1%. 

Equities grew 3.3%, supported by stronger secondary trading activity, though primary issuance remained subdued. 

However, Securities and Reporting revenue declined 9.7% and Net Treasury Income dipped 5.8%, partially offsetting the segment’s broader strength. The company noted that market volatility, which fueled trading activity in Q1, has continued into April.

Data & Analytics revenue grew 5.1% to £1.043 billion, slightly below the consensus estimate of £1.052 billion, but marked a sequential acceleration from the 4.8% growth recorded in Q4. 

Sub-segment growth was relatively balanced, with Workflows up 3.4%, Data & Feeds climbing 6.6%, and Analytics advancing 7.4%, supported by rising demand for Yield Book and Lipper services as well as expanded Microsoft-integrated tools. 

While modestly below expectations, Jefferies characterized the division’s performance as stable and improving.

FTSE Russell posted a 9.6% increase in revenue to £239 million, buoyed by strong demand for its indices and favorable market levels. 

Risk Intelligence revenue also expanded at a double-digit rate, up 10.7% to £143 million, underpinned by continued momentum in World-Check and fraud analytics.

Both divisions reported results approximately 1% below consensus estimates, though the underlying growth trends remained solid.

Annual Subscription Value (ASV) grew 6.4%, slightly ahead of Q4’s 6.3%, reflecting strong client retention and healthy new sales activity. 

Jefferies noted that the result was in line with investor expectations of approximately 6.5%, and highlighted the absence of any material impact from Credit Suisse-related factors.

Capital return remained a key theme. By the end of April, LSEG had completed £245 million of its £500 million share buyback program. 

Additionally, in March, the group repurchased $250 million of its dollar-denominated bonds, taking advantage of favorable interest rate conditions.

The financial company maintained its full-year 2025 guidance. The company continues to target organic constant-currency revenue growth (excluding recoveries) of 6.5% to 7.5%, with a 50 to 100 basis point improvement in EBITDA margins. 

Capital expenditure is expected to remain around 10% of income excluding recoveries, with equity-free cash flow of at least £2.4 billion and a tax rate between 24% and 25%.

Jefferies described the Q1 results as “good enough,” with no major surprises across segments and balanced performance overall. 

Although minor FX-related pressures could lead to about 2% EBITDA downgrades, they are not expected to materially affect investor sentiment.