London Stock Exchange Group LON: LSEG reported stronger first-half growth, margin expansion and cash generation, while raising its full-year revenue and EBITDA margin outlook. The company also emphasized its expanding role as a data and technology partner for financial-services customers adopting artificial intelligence.
Organic revenue rose 8.4% in the first half, while reported revenue increased 6.9% after a 1.5% foreign-exchange headwind. Adjusted EBITDA increased 14%, adjusted earnings per share rose 17%, and free cash flow per share climbed 37%, according to CFO Michel-Alain Proch.
CEO David Schwimmer said subscription growth accelerated to 6.3%, while all of the company’s market venues delivered a strong performance. The Markets division, which accounts for about 40% of LSEG revenue, grew 12% in the period.
Markets and subscription businesses drive growth
LSEG said its performance was broad-based across its divisions. Data & Analytics, or D&A, grew 5.1%, while FTSE Russell and Risk Intelligence each expanded between 9% and 10%. The three subscription businesses combined posted 6.3% growth, keeping the group on track for its 2026 target of roughly 6.5% subscription growth.
Within D&A, Workflows revenue grew 2.8%, Data & Feeds rose 7.5%, and Analytics increased 6%. Proch said demand for Workspace’s AI tools was increasing user engagement, while the company continued to integrate FXall functionality and prepare more seamless Tradeweb interoperability.
Enterprise-wide LSEG Data Access Agreements, or LDAs, accounted for 18% of D&A revenue, up from 16% at the end of last year. Proch said the agreements provide major customers with access to LSEG’s offerings at scale while creating multiyear revenue visibility for the company.
In Data & Feeds, LSEG reported a 70% year-over-year increase in data volume on its real-time platform in June. Usage of Tick History, its historical pricing-data product, grew at a 39% annual rate over the past two years.
FTSE Russell subscription revenue rose 6.2%, and the company expects high-single-digit subscription growth in the second half. Asset-based revenue increased 15%, supported by higher asset prices and inflows. LSEG launched 52 new ETFs during the half, a 24% increase from the first half of 2025, and introduced the Russell 9000 index series.
Risk Intelligence grew 10%, led by demand for its World-Check offerings. Digital identity and fraud volumes increased more than 20% during the half.
- Customer retention rose slightly to nearly 93%.
- Gross sales reached £482 million, up 11% from June last year.
- The company’s New Product Vitality Index was 25%.
- Annual subscription value growth exited the second quarter at 6.1%, up from 5.9% at year-end.
Markets growth included double-digit expansion at Tradeweb and in over-the-counter derivatives, while the FX business grew 8%. LSEG’s equities business grew 12%, supported by secondary-market activity. Total interest-rate swap notional cleared rose 29% in the first half, while London Stock Exchange average daily equities volume increased 34%.
Margins, cash flow and shareholder returns
LSEG’s adjusted EBITDA margin increased by 260 basis points on a constant-currency basis to 52.4%. The company said 140 basis points of that expansion reflected a revised SwapClear revenue-sharing agreement, while underlying margin expansion was 120 basis points.
Operating expenses rose 4.6%, below revenue growth. Labor costs fell to 28.1% of total income from 30%, supported by workforce and sourcing initiatives. The company said 77% of its headcount is now internal.
Free cash flow rose 29% to £1.2 billion, driven principally by higher EBITDA. LSEG returned £2.6 billion to shareholders in the first half, including £2.1 billion in buybacks and £500 million in dividends. It announced a 17% increase in its interim dividend to 55 pence per share and began a new buyback tranche on the day of the results.
The company expects to execute a further £1.4 billion of share buybacks by the time of its full-year results in February 2027. It ended June with net debt to EBITDA of 2.1 times. LSEG also agreed after the period ended to acquire an additional roughly 1% stake in LCH Group from minority shareholders for €70 million.
Outlook raised
Proch raised LSEG’s 2026 organic revenue-growth outlook to a range of 7% to 7.5%, from its previous 6.5% to 7.5% range. The company also raised its constant-currency EBITDA margin expansion outlook to around 100 basis points, at the top of its earlier 80- to 100-basis-point range.
LSEG expects full-year capital intensity of around 9.5% of total income and equity free cash flow of at least £2.7 billion. It expects adjusted net finance expense of around £300 million for the full year and maintained guidance for a 24% to 25% tax rate.
While the first-half margin result was strong, Proch said the company expects a roughly 50-basis-point year-over-year margin decline in the second half due largely to the timing of the SwapClear agreement change. LSEG also budgeted about £25 million of one-off costs in the second half to accelerate its transformation efforts.
AI strategy centers on trusted data and customer implementation
Schwimmer said AI is increasing the value of LSEG’s proprietary, auditable and regulated data rather than displacing the company’s services. He said 90% of LSEG data revenue comes from real-time or proprietary data, and that customers need help managing regulatory, cybersecurity, intellectual-property and data-sovereignty concerns as they deploy AI.
The company said it has engaged with more than 200 customers on its Model Context Protocol, or MCP, offering since its launch late last year. Tool calls increased nearly fivefold from May to June. LSEG said MCP represents about one-third of its current AI-related commercial discussions, with customers also accessing its data through APIs and other environments.
Proch said MCP revenue would not materially affect 2026 results, as the current focus remains customer usage and adoption. The company is already invoicing some customers under its pricing framework and expects MCP to become an additional contributor to subscription-business acceleration over time.
LSEG’s AI search tool became generally available to Workspace customers during July and had already reached 17,000 active users, despite limited marketing, the company said. Deep Research users quadrupled from the first quarter, while Workspace users generated roughly 3,000 detailed Company Intelligence reports per week.
Schwimmer said LSEG is working with customers on AI applications that combine the company’s data with clients’ internal information, including tools for relationship managers, banking teams, wealth advisers, risk managers and corporate treasury users. He said the company’s longstanding LDA relationships can speed customer engagement because LSEG is often positioned as a default data provider for those clients.
About London Stock Exchange Group (LON:LSEG)
LSEG is a leading global financial markets infrastructure and data provider that operates connected businesses to serve customers across the entire financial markets value chain.
With capabilities in data, indices and analytics, capital formation, trade execution, clearing and risk management, we operate at the heart of the world's financial ecosystem and enable the sustainable growth and stability of our customers and their communities.
Together, our five business divisions – Data and Analytics, FTSE Russell, Risk Intelligence, Capital Markets and Post Trade – offer customers seamless access to global financial markets, across the trading lifecycle.
LSEG is headquartered in London and has a major presence throughout Europe, the Americas, Asia Pacific and emerging markets.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
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