London Stock Exchange Group raised its fiscal 2026 outlook alongside its third-quarter trading update on Thursday. LSEG separately announced plans to buy credit solutions provider Octus for $3.535 billion in cash. The sellers are funds advised by Permira and Octus management, including founder Kent Collier. The acquisition is expected to close in the first half of 2027, subject to regulatory approval.
LSEG reported third-quarter total income excluding recoveries of 2.41 billion pounds ($3.22 billion), an organic increase of 8.8%. Subscription businesses generated 1.45 billion pounds, representing organic growth of 6.6%. Data & Analytics recorded growth of 5.2%. FTSE Russell recorded growth of 10.2%. Risk Intelligence recorded growth of 9.8%.
The Markets division recorded organic income growth of 12.5%. OTC derivatives increased 16.7%, contributing to the division's growth. Fixed Income, Derivatives & Other increased 14.4%, also contributing to the division's growth. Tradeweb's average daily trading volumes increased 22.4% to $3.2 trillion. Equities increased 9.4%, reflecting greater trading activity across LSEG's venues and continued growth in data revenue. Gross profit reached 2.21 billion pounds, an organic increase of 9.9%.
LSEG reported that 95% of its top 200 customers used LSEG's AI products. More than two-thirds of LSEG's top 50 customers used an MCP connection. AI Search on the Workspace platform reached 47,000 users, an increase of 30,000 since the half-year results in mid-July.
LSEG repurchased 500 million pounds of shares during the third quarter, bringing cumulative repurchases this year to 2.6 billion pounds. LSEG expects another 0.8 billion pounds of repurchases during the fourth quarter and the first quarter of 2027. LSEG has capacity for an additional 1.0 billion to 1.5 billion pounds of repurchases in 2027.
LSEG increased its full-year 2026 guidance for revenue, EBITDA margin and free cash flow. LSEG expects organic constant-currency growth of at least 8.0% in total income excluding recoveries. LSEG expects EBITDA margin expansion of 100 to 120 basis points. LSEG expects equity free cash flow of at least 2.8 billion pounds. CEO David Schwimmer said LSEG remains on course for its strongest annual growth since 2018. Schwimmer said organic growth in the subscription businesses was accelerating and the Markets division continued to grow strongly.
The Octus purchase price implies an enterprise-value-to-sales multiple of approximately 11.8 times, based on expected 2026 revenue of $300 million. Octus specializes in illiquid and private credit, and its complementary portfolio will help establish an integrated source of fixed income data, analytics and workflows covering the full credit spectrum. LSEG estimates the private credit industry market at $3.5 trillion. The addressable market for private markets data, workflow and access solutions represents a $7 billion to $9 billion opportunity, with double-digit growth expected. The Octus transaction is expected to increase LSEG's Data & Analytics organic revenue growth immediately. The transaction is also expected to supplement LSEG's guidance for approximately 7% organic subscription revenue growth in 2027.
Tradeweb announced earlier this week, on October 19, that Tradeweb would acquire electronic credit trading marketplace Trumid for $1.75 billion. The Octus and Trumid acquisitions will accelerate LSEG's fixed income strategy toward global leadership in intelligence, data, workflows and trading across the full credit liquidity spectrum.
Benzinga Pro data showed LSEG's American depositary receipt, LSEGY, trading 0.18% higher at $29.05 in Thursday's premarket session.
LSEG Raises 2026 Outlook, Acquires Octus for $3.54 Billion to Expand Private Credit
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Summary
LSEG raises 2026 outlook, acquires Octus for $3.54 billion to expand private credit. The deal, set to close in early 2027, supports ecosystem growth in financial services. Q3 total income hit £2.41 billion, up 8.8% organically. Subscription businesses rose 6.6%, and Markets division growth hit 12.5%. LSEG targets at least 8% organic income growth in 2026 and 100-120 bps EBITDA margin expansion.
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