IG Group Q1 revenue drops 7% despite surge in customers and Freetrade boost

Investing.com -- IG Group (LON:IGG)’s first-quarter revenue fell 7% year-on-year to £259.9 million on Thursday, as lower trading activity and reduced interest rates weighed on earnings despite a surge in new customers.

The London-based trading platform reported net trading revenue of £231.9 million, down 4% on an organic basis, while net interest income dropped 24% to £28 million. 

The decline reflected subdued market conditions and the impact of lower interest rates passed on to customers.

Customer activity, however, continued to grow. Average monthly active customers rose 3% on an organic basis to 278,900, while first trades jumped 42% to 23,900. 

Including Freetrade, which was consolidated in April, group active customers stood at 739,100, nearly triple the figure a year earlier. Funded customers more than doubled to 1.3 million, with Freetrade accounting for over half of the total.

Revenue from stock trading and investments more than doubled to £18.5 million from £8.7 million, including £6.5 million contributed by Freetrade. 

On a pro forma basis, Freetrade reported a 27% increase in total revenue to £8.0 million, supported by new product rollouts such as a mutual fund offering.

IG’s U.S. subsidiary, tastytrade, delivered a 16% rise in net trading revenue year-on-year and a 5% increase quarter-on-quarter to $54.7 million (£40.7 million).

In contrast, revenues in the Asia-Pacific and Middle East regions slipped, with OTC derivatives income falling to £60.2 million from £74.1 million a year earlier.

The company also made progress on acquisitions and shareholder returns. IG agreed to acquire Independent Reserve, an Australian cryptocurrency exchange, to expand its presence in Asia-Pacific digital assets, pending regulatory approvals. 

Separately, IG launched a £125 million share buyback program in September, of which £16.8 million had been completed by 23 September.

Net interest income is expected to be around £100 million in fiscal 2026, according to the group’s full-year guidance.