IG Group Holdings expects total revenue of roughly £240 million for the three months ended 30 September 2026, down about 14% from £280.1 million in the same quarter last year, according to a trading update issued Friday.

Net trading revenue is expected at approximately £210 million, against £249.5 million in Q3 2025. The board now guides to 2026 total revenue growth in a mid-single-digit percentage range year-on-year.

The driver sits inside IG's OTC derivatives book. Revenue retention for the quarter came in at roughly 70%, below the approximately 80% the group has averaged since it introduced market-making optimisation measures in the second half of 2025. IG frames the shortfall as timing and variance rather than structural failure, and says it remains confident the measures will raise OTC revenue retention over the medium to long term — with greater short-term variability built into that expectation.

"Lower Q3 revenue reflected reduced OTC revenue retention in less supportive market conditions," CEO Breon Corcoran said in the update. "I remain confident in meeting our medium-term guidance."

The OTC detail carries the real signal for anyone modelling the business. OTC net trading revenue was about £155 million, down around 18% year-on-year. Yet the underlying franchise expanded: OTC customer income rose approximately 8%, organic first trades gained more than 25%, and organic active customers grew about 17%. The revenue miss therefore reflects the retention mechanics of the optimised market-making model — how much spread the firm keeps versus rebates back to clients — rather than client attrition or slowing acquisition.

On costs, IG expects about £30 million of non-recurring charges for 2026 tied to two items: the redomicile to Jersey and the restructuring of the organisational model announced on 8 July 2026. Of that total, £16.4 million was booked in the first half. Excluding those costs and the acquisition expenses contingent on the Underdog deal closing, IG guides to a 2026 EBITDA margin in the low-40s percentage range.

Underdog, IG's prediction markets acquisition target, posted its own quarter. Net revenue rose more than 100% year-on-year to approximately $105 million. The seasonally important fourth quarter accounted for over a third of Underdog's revenue in 2025, which sets the near-term test for that growth rate.

IG agreed to acquire Underdog for up to about $1.3 billion on 30 July, with closing expected in late 2026 or early 2027, pending regulatory and antitrust approvals. The strategic logic is scale and funnel: IG has 1.4 million customers globally, while Underdog brings more than 11 million registered accounts and over 5 million depositing customers. IG says it wants to "create a coherent customer funnel" from prediction markets into mainstream financial markets — a wager that sports-style engagement converts to trading accounts.

The deal was announced alongside first-half results showing total revenue up 18% to £642.8 million. It follows IG's US entry in 2021 via the $1 billion tastytrade acquisition. Corcoran told analysts in July that "the biggest unlock this year is our unified proposition."

The immediate read-through for the desk: a £40 million year-on-year revenue gap in a single quarter, driven by a retention assumption that has so far oscillated between 70% and 80% under the new market-making regime. With Underdog closing expected between late 2026 and early 2027 and the seasonally heavy Q4 ahead, the next two updates will show whether the 80% retention average holds as a floor or a midpoint.