IG Group Holdings Aktie

Good morning, and welcome to the Investor and Analyst Call for IG Group's Half Year 2026 Results Presentation. [Operator Instructions] I would like to remind all participants that this call is being recorded. I will now hand over to Breon Corcoran, CEO, to begin the presentation. Please go ahead.

Good morning, and thank you for joining us. I'm here with Clifford Abrahams, our CFO. You'll see the agenda we have on the screen. We will take questions at the end. This has been a strong first half, broad-based growth and clear evidence that the strategy we set out in July 2024 is working. Starting with customer acquisition. We delivered the sixth consecutive quarter of sequential growth in active customers, the single best indicator of the health of the business.

Organic active customers up 13%. Organic first trades up 74%. Second, growth was broad-based across every product. Faster product velocity, disciplined marketing and supportive market conditions resulted in organic total revenue up 17% and 20% organic net trading revenue growth. As set out in May, our upgraded outlook targets organic total revenue growth of at least 10% a year beyond 2026. Third, we sustained strong margins. The first half EBITDA margin was 44% with continued investment in our propositions, higher marketing spend and costs associated with the strategic review, partly offset by a lower cost to serve.

Fourth, Underdog transforms our future growth. The acquisition opens up the large, fast-growing U.S. daily fantasy sports and prediction markets. It transforms our U.S. footprint and accelerates stand-alone revenue and EPS growth. Fifth, the strategic review we announced in March is now substantially complete. This month, we set out plans to Redomicile to Jersey and a refreshed organizational model.

We've also announced the acquisition of Underdog. Our listing venue will remain unchanged as a result of the strategic review. We continue to explore future growth and efficiency initiatives, and we'll present a refreshed strategy and a strategy update on the 22nd of October. Let me hand over to Clifford for the financials.

Thank you, Breon, and good morning. You've seen the headline numbers, growth across our key measures. The first half confirms that our investment in product, marketing and people is translating into stronger financial performance. Growth was broad-based. Marketing generated attractive returns and margins remained strong as we invested for growth and absorbed the cost of the strategic review.

Starting with the headlines. Total revenue was GBP 643 million, up 18% and up 17% on an organic continuing operations basis. The EBITDA margin was 43.9% against 49.6% in the first half of '25, reflecting consolidation effects, strategic review costs and a deliberate choice to keep investing behind growth. I'll come back to costs shortly. Adjusted EPS was up 21% and 22% organically, supported by share buybacks.

In line with our progressive dividend policy, the Board has proposed an interim dividend of 14.46p per share, 30% of the prior year full year dividend on the group's old 31st of May year-end basis. Turning now to customer metrics. Growth accelerated through the half. Organic first trades, our lead indicator of future growth, were up 74%. Active customers were up 13%, accelerating to 15% in the second quarter, the sixth consecutive quarter of sequential growth that Breon mentioned.

On a reported basis, growth is higher again, reflecting Freetrade and Independent Reserve. Next, on to platform assets under administration and flows, an increasingly important driver for the business. We're pleased to see that assets under administration on the IG platform reached GBP 21.5 billion, up 34%, driven by sustained net inflows across our stock trading and investments proposition, including Freetrade. The standout is our U.K. direct-to-consumer platform. First half net flows were equivalent to around half of our opening assets under administration, roughly 6x the pace of the market, with IG now capturing an estimated 8% of U.K. market net inflows.

We're building a genuine challenger position in U.K. investments. We've broadened the proposition. Customers are looking for better value than the incumbents offer, and we'll keep investing behind it. Turning to the P&L. Net trading revenue was GBP 589 million, up 21% with growth across every product line, reflecting both higher revenue per customer and a larger active customer base. This reflects the hard work of our teams delivering more product to more customers much faster.

Net interest income was down 10% as higher customer cash balances were more than offset by lower rates and greater pass-through to customers. Total revenue was GBP 643 million, up 18%. Operating costs before depreciation and amortization were GBP 362 million, up 30% reported and around 25% organically, reflecting higher marketing, continued investment in product technology and nonrecurring strategic review costs.

EBITDA was GBP 282 million, up 4% and up 7% on an organic continuing operations basis. Below EBITDA, other net losses reflect 2 key items: first, a GBP 19 million revaluation of the Payward stock received as part of the Small Exchange disposal last year. Second, an impairment relating to Independent Reserve, partially offset by a release of deferred consideration given more challenging cyclical conditions in digital asset markets.

Adjusted EPS, which strips out nonrecurring and nonunderlying items was up 21% to 68.9p. Next, performance by product in the first half of 2026. Growth was broad-based across every product. That breadth matters. It shows our growth isn't reliant on any single product, and it reflects the work we've done to broaden our propositions, widen our appeal and deliver more consistent sustainable growth.

It's the same picture by division. Organic revenue growth everywhere, which is really encouraging. U.K. and Ireland net trading revenue was up 22% organically. APAC and Middle East up 27%. The U.S. was up 18% and Europe up 10%, a broad base of growth, not reliant on any single market. Moving now to costs. Total operating costs increased 26% or 19% organically. Marketing was up 51% to GBP 75 million, driving a 107% increase in first trades with paybacks under 6 months and lifetime value around 4x acquisition costs.

Fixed remuneration was up 15%, driven by the consolidation of Freetrade and Independent Reserve and including GBP 6 million of restructuring under our refreshed operating model alongside inflationary salary increases. On an organic basis, headcount was down 10% even as revenue grew 17%, reflecting our focus on a lower fixed cost to serve and on automation.

Legal and professional costs increased, reflecting the nonrecurring costs of the redomicile, restructuring associated with our refreshed organizational model, together with the strategic review and technology consulting to build our product engineering capability. This slide breaks out the cost movements in more detail. Strip out acquisitions and nonrecurring items and underlying costs were up 12%, well behind our revenue and active customer growth.

The larger driver was marketing. We increased spend as planned, and we're seeing strong returns. The rest of our organic business as usual cost base grew 6%, mainly reflecting inflationary salary increases, continued investment in technology and higher market data and revenue-related costs. Beyond that, the remaining movement is acquisitions and strategic review costs, a full 6 months of Freetrade this year against 3 last year, Independent Reserve from the end of January and nonrecurring costs, which I mentioned earlier.

On capital, our position remains strong. Solvency sinks comfortably above the top end of our long-term target range, and we expect to return within it by the end of 2026 pro forma for the Underdog acquisition. As Breon mentioned, on July 8, we announced plans to set up a new Jersey Incorporated holding company. Around 2/3 of group revenue is now generated outside the U.K. So a Jersey holding company better reflects our international footprint and gives us a simpler, more efficient structure with greater strategic and financial flexibility. Following completion, we keep our London listing, our eligibility for the FTSE U.K. indices and our U.K. tax residency.

There's no change for customers or employees and no change to our operations from the redomicile. The redomicile will be implemented by a scheme of arrangement subject to shareholder and regulatory approvals with completion targeted for the fourth quarter. The shareholder circular was published on the 16 of July and the EGM takes place on the 3 of September. With that, let me hand back to Breon to cover our strategic progress.

Thank you. Back in July 2024, we set out what we believed was needed to fix across product, culture and efficiency. This is where we are now 2 years later. On product, we've closed the priority gaps across our markets, including stock trading and crypto and our unified proposition is on track to launch early in half 2, starting in the U.K. market. On culture, our refreshed organizational model reduces complexity and sharpens focus, and it's already delivered a step change in product velocity.

On efficiency, we've lowered our fixed cost to serve through digital servicing and lifted customer income retention. The outcome is in the metrics. Organic active customers up, revenue per customer up sharply and cost to serve down materially versus 2 years ago. Now to product velocity, which is critical in this industry. We've made good progress on competitiveness. In the first half alone, we brought almost as many new products and features to market as we did in the whole of 2025.

Here's what this looks like. I'm encouraged by the wide range of product enhancements delivered in the first half. In the U.K., we materially upgraded our investing proposition, a much broader range of global stocks, ETFs, mutual funds, fixed income, tax wrappers plus fractional shares. In crypto, spot trading is now live on our FCA-license platform with over 150 coins alongside perpetual futures, crypto swaps, transfers and advanced charting.

We also rolled out spot crypto trading in France and completed the acquisition of Independent Reserve in Asia Pacific. In the U.S., tastytrade recently launched prediction markets. Following the removal of the Pattern Day Trading Rule (sic) [ Pattern Day Trader Rule ] in June, it also saw an encouraging pickup in options activity from customers previously constrained by that rule.

Staying with product, the biggest unlock this year is our unified proposition, launching initially in the U.K. in the coming weeks. It brings trading, investing and crypto together on a single platform and is built to allow the addition of new products quickly. It expands our addressable market, improves acquisition effectiveness and speeds up product delivery. Multiproduct adoption in the U.K. is already up strongly year-on-year and the unified proposition will put more of our products in front of more of our customers.

Turning next to culture. We streamlined from 5 divisions to 3, IG Consumer, IG Securities, our platform Technology institutional business and IG North America, including tastytrade. Dedicated commercial, product and compliance teams stay embedded in each division, so we keep our customer focus while taking out a layer of complexity that was slowing us down.

Turning now to efficiency. I'm pleased that we've made further progress on cost to serve with organic fixed cost to serve per funded account down a further 15% in the half. That's funded higher marketing spend at attractive returns. There's more to do, but these returns support continued investment. This brings me to the strategic review we launched in March. It's now substantively complete and has delivered 3 key outcomes: the proposed redomicile, a refreshed organizational model and the acquisition of Underdog.

Together, these set the group's direction for the next phase of growth. We continue to explore incremental growth and efficiency initiatives, and we'll set out our refreshed strategy, guidance and capital allocation framework at the strategic review on the 22nd of October. Let me turn to Underdog. We launched our strategic review in March, which prioritized acquisitions aligned with our M&A framework. We've looked at very many opportunities, prioritizing growth and innovation and Underdog stood out.

We're clear-eyed about the risks, including the fast-moving regulatory environment. And Underdog's product and leadership team are well placed to win, and we've structured the transaction around performance. Underdog is a leading U.S. prediction markets operator, spanning both daily fantasy sports and prediction markets. This is a landmark deal for IG. It establishes us as a leader in U.S. prediction markets, one of the most significant opportunities across trading, investing and entertainment.

It gives us entry into a high-growth adjacent category initially in sports and then later into financial markets, culture and politics. Underdog brings nearly 1 million mobile-first monthly active users. It has strong brand equity in sport and a fully integrated license stack spanning brokerage, exchange, clearing and market making. This gives it full control over product economics and risk. Underdog is growing rapidly with significant potential in a large and fast-growing market.

Net revenues for the 12 months to June 2026 was $466 million, up 21%. That continues a strong trajectory from $9 million in 2021 to $40 million -- $441 million in 2025, growth of 63% in that final year. Monthly active users reached nearly 1 million, up 39%. Daily fantasy sports has been the engine of Underdog's growth, but as a game of skill, it's limited to around 1/3 of what customers want. Prediction markets change that, simple addressable format for customers used to sports gaming.

Prediction markets have grown very quickly with sports by far the largest and fastest-growing part with more than 50 million U.S. sports betters and daily fantasy players already comfortable with this [ style ] of risk taking. It's a pre-converted pool Underdog is well placed to capture. Turning now to how Underdog fits with IG's strategy. This deal is firmly aligned with IG's strategic focus on product, culture and efficiency. On product, it closes a gap in a high-growth category and broadens our appeal to a younger demographic.

On culture, it brings a share obsession with customers and product velocity and a strong culture of ownership. On efficiency, it's a vertically integrated scalable platform with attractive marketing payback. Together, we unlock a large mobile-first user base. We can scale Underdog's product through tastytrade in the U.S. and over time through IG's unified proposition globally. As one business, we can grow it faster and generate more value than either of us could alone. With that, I'll hand over to Clifford.

Thanks, Breon. The acquisition of Underdog doubles IG's U.S. revenue and increases our U.S. active customers more than tenfold. On a pro forma basis in 2025, the U.S. would have accounted for around 40% of group revenue against around 22% stand-alone. The acquisition diversifies our growth drivers by product. Prediction Markets and DFS would have represented around 25% of combined group revenue.

It also transforms our demographic profile. Over 60% of Underdog customers are under 30 and over 80% are under the age of 40, lowering IG's average customer age from around 42 to 34 on a pro forma basis. Strategically, Underdog delivers the vision from our strategic review, positioning IG at the center of the convergence across trading, investing and entertainment with a category leadership position in a structural growth market.

Financially, our stand-alone revenue guidance, which we upgraded in May, is unchanged, at least 10% organic total revenue growth a year and Underdog growing faster is expected to lift the combined group above that level. The deal is broadly neutral to adjusted EPS in year 1 and double-digit accretive by year 3 with return on invested capital exceeding our cost of capital by year 3. We're maintaining our progressive dividend policy, and we intend to pause our current share buyback.

We expect to be in a position to consider resuming this in 2027 following completion of the redomicile and subject to share price performance and other demands on capital. The consideration aligns a meaningful share of value with future performance through the earn-out and the management incentive plan and Underdog will continue to operate as a commercially stand-alone business, mitigating integration risk. With that, back to Breon for some concluding remarks.

Thank you, Clifford. We delivered strong first half results with growth across every key metric, revenue, customers and returns and momentum building through the period. The strategy we set out in July 2024 has delivered a step change in performance, including stronger customer acquisition, broad-based revenue growth and sustained margins as we invest. And with Underdog, we've announced a transformational acquisition that will drive our revenue and earnings growth in the future.

The strategic review we announced in March is now substantially complete. We continue to explore incremental growth and efficiency initiatives across the group, and we look forward to presenting our refreshed strategy, capital allocation framework and guidance and a strategic review on the 22nd of October. Thank you. We'll now take your questions.

[Operator Instructions]

Our first question is from Ben Bathurst from RBC.

Hopefully you can hear me okay. Question in a couple of areas, if I may. Just starting on costs. I just wondered, do you have any visibility on the nonrecurring costs that you expect to incur in the second half of 2026? And if so, could you give a guide on what level that might be?

And then secondly, just moving on to Underdog. On the call last night, Breon, I think again earlier, you mentioned that you entered into the deal clear-eyed as to the regulatory risk. Can you just share briefly what you see the key risks as being there and how you've gotten comfortable over those risks in doing the deal? And then also on Underdog, you referenced 1 million Underdog users. I just wondered what proportion are currently using the prediction market product versus the daily fantasy sports product of that 1 million users? And what do you see as being the more important lever for growth in the short term? Is it increasing the prediction market penetration of that 1 million customers? Or is it about adding new customers altogether?

So thanks, Ben. We highlighted the nonrecurring costs on Page 13 for the first half. I'm not going to guide the nonrecurring costs for the second half. But as you know, today, we reconfirmed our guidance that we set out in early July in terms of growth, we're comfortable with consensus, and we've stuck with our guidance of mid-40s EBITDA margins.

Thanks, Clifford, and thank you, Ben. clear-eyed might be one of those phrases that I'll have to listen to for a while. If I point you to Page 31 of the appendix on the Underdog deck, it kind of goes to some of the regulatory matters. But there's a shift from state-by-state licensing of daily fantasy, sports betting, gaming towards the federal CFTC licensing structure. That shift is well underway and the CFTC has a clear mandate to regulate event contracts, prediction markets in particular.

Some of the states are defensive about their heritage in licensing and one might opine that, that could be about tax protection or that could be something as philosophical as a states' right matter in the United States. So there is regulatory uncertainty here. And with uncertainty, I guess, comes some risk. When we say that we went into this clear-eyed or open-eyed about the outcomes, I think I'd ask investors to focus on the fact that today, we're buying 100% of a business that is a market-beating team.

It's a product-led company. It has quickly and in a capital-efficient way, built a brand that resonates and is relevant to several million customers in a competitive market in the United States. And these customers on a daily basis, express opinions around sports and increasingly do that through CFTC prediction market rails. Much of that is synergistic, strategically synergistic and capability synergistic to what we do at tastytrade, where we have a deep expertise-led business that in truth has slightly struggled with relevance for a broader customer base.

So I think in the medium term, as we see more convergence of trading and betting or more convergence of people expressing opinions in high engagement markets, I think a team that's product-led that has built a contemporary dynamic brand fits very well with the expertise and competency and compliance capability that we have in Chicago at tasty. And that's kind of why we're excited about this deal irrespective of the regulatory end state. To your question about the mix on prediction markets, and I think we talked a little bit about this on the call last night. We're expecting over time that what Underdog have done is they pivoted from the daily fantasy model, they skipped online sports betting and are now moving to prediction market rails.

They did that first with Kalshi with Crypto.com, but they're now moving to their own fully owned licensing stack. I'm sure we'll come into some of the detail on that later over the coming days. But on Slide 30 of the Underdog deck from last night, there's an indication of the handle, so the volume going -- the notional volume going through the different models. And whilst it's only a tiny amount now on their own prediction rails, I mean, that literally is -- now is the point of explosion and that is literally a traffic that has started to move through their rails in the last 2 weeks, and we're very, very excited about how that growth will explode from here on out.

But we're not giving guidance on customer numbers. We don't have that visibility as yet. But what I think we have here is a monetization mechanic for people who currently express opinions on sports. And I think in due course, will allow us to monetize how people express opinions on financial markets as well.

Our next question is from Hal Potter from Bank of America.

Just 3 from me. One of them is on marketing efficiency. So you mentioned the 6-month payback and LTV to CAC ratio at 4:1. That's the same as we had at 2025. I think they rounded figures. Can you give us any comfort around your marketing becoming more or less difficult in the face of heightened competition?

And then on capital allocation, what can we read into your shift from what I suppose is a dependable buyback into M&A in a relatively volatile space with that regulatory overhang? How are we supposed to think about capital allocation going forward? And then a little bit on capital allocation even further. Regarding the redomicile, are we expecting a bit of excess capital to be unlocked? And how would that feed into your policy going forward?

If you don't mind, take the redom and the capital questions. On the marketing efficiency, I don't love these numbers in that they're rounded and very summary in nature. And at any point in time, we're using different levers, and we're using different levers in different geographies with different competitive dynamics. So there are times when product does more of the work, product releases does more of the work. And you've seen the progress we've made on that and just even in the U.K. over the last couple of years. But there are other times when marketing does more of the work.

And even within that, there's a mix between brand spend out of home, for example, and performance marketing online. So the number is there to give investors comfort that we're still in the same ballpark. Sometimes it feels a bit better, sometimes it feels a bit worse. But it is a very aggregate number. And I think in truth, going into much more detail and would not be helpful. And we call out -- and I think we stressed it appropriately. We call out the 6 sequential quarters of actives growth in actives.

And I think that's the number that one should look at. And in the round, we will spend -- we will increase marketing as we run the business more efficiently. We've said that we think we're underspending relative to a lot of the competition. We've increased marketing spend dramatically, but I think there's opportunity to spend more and to fund more spending from the business growth and from continuing to run the business more efficiently. But I think directionally, that numbers give investors comfort that the story is largely intact rather than to encourage much more specificity around either geographies or a short sample of time. I can't remember the question.

Yes.

I can't remember the question.

Capital allocation. I'll pick that up.

No, sorry, it was about the buyback. Just on the buyback, look, some customers -- some shareholders have talked about the importance of the buyback in the investment model, and we understand that. And I think we bought back since the beginning of calendar '24, some GBP 550 million worth of stock. So we and the Board have shown evidence commitment to buying back when the time is right. But as stewards of this business in the long term, the relevance of this business and these brands for our customers in the long term matters as well.

And the history of IG in recent years has been, as you know, to lose market share in a number of our territories. And the purpose behind this acquisition is to back a team that have grown their customer base in a capital-efficient way, largely through product-led growth. And I think as we can bring that DNA into more of the IG businesses, I hope that, that will be transformational in the years to come.

Yes. So to build on that, in July last year, we set out our capital allocation framework. And M&A, inorganic was very clearly part of that. We talked about regulatory capital requirements. We have our target range, regular distributions, inorganic and then after that, additional distributions. We also set out our M&A framework and Underdog is very consistent within our capital allocation framework in terms of disciplined deployment of capital inorganically.

And it fits our M&A criteria. We set out in the pack, but in particular, we expect the acquisition to deliver the returns that are comfortably in our M&A criteria. So expect inorganic to be a continuing feature of how we grow the business. And as you know, we announced in March our strategic review and acquisitions was very much part of that. We're mindful of returns and buybacks, and we said today that we would expect to resume buybacks next year, subject to all the usual caveats.

We announced the proposed redomiciliation to Jersey, and we talked about capital flexibility. There are a number of other financials listed here and elsewhere that have such sort of topco structures. So by all means look at that. We have our strategic review update after the summer in October, and I'll be happy to give an update at that point.

Our next question is from Ian White from Autonomous Research.

Three from my side, please. Firstly, how would you compare and contrast the Underdog acquisition with IG's previous acquisition of tastytrade. I'm wondering if there are perhaps some similarities in that you bought a, I guess, what I'd describe as a scale challenger in a fast-growing market, where I think the main part of the sort of value proposition here is access to an attractive market where organic entry would have taken too long or been too risky. But maybe you can just help us to think about how this deal is kind of similar and also different, please?

Secondly, what assumptions underpin your conviction in ROIC exceeding WACC by year 3? I'm thinking revenues will probably need to double from 2025 levels at Underdog -- and I'm wondering if you see that being market growth, market share, cross-selling or greater wallet share with the group's existing client base. Can you just help us with some of the thinking around that, please? That's question 2.

And just finally, what sort of investment might be needed to achieve your goals with Underdog over the coming years? Is there anything on technology that needs to be revised? And on marketing, how would you assess Underdog's capabilities? Can you just scale up marketing spend, for example? Or is there a period of kind of recalibration as you've had with IG? That's my final question.

Do you want to take another one? I guess there are some similarities to the tasty deal. It's a fast-growing U.S.-based asset. I think we're -- I wasn't around at the time of the tasty deal. I think we're particularly excited here by the quality of the team, the evidence of progress they've made and the opportunity -- the nascent opportunity in the prediction market space in particular. And I think as people have a chance to read more into Underdog, the fact that they're monetizing a few million customers already as effectively as they are already in a short period of time and by some definitions, third in the market after Kalshi and Robinhood is quite encouraging. The tasty business is one that I have a lot of time for, but is, unfortunately, a little bit more niche than we would like. And as we focus our attention on growth and sustainability for this business in the medium term, I think backing a team, investing in a business that has more mass market appeal is mobile first, is a younger customer base with high engagement is -- that's an attractive place to deploy capital.

I'll pass over to Clifford on the second question. But on your third question, Ian, the business has been capital -- the Underdog business has been capital efficient to date. I would expect that to continue to be the case. We're excited by the deal structure because effectively, aside from the relatively small earn-out on the -- at the end of this financial year, this calendar year, the team is very motivated to hit EBITDA targets in '28 and '29.

And they will do that through marketing spend. I would expect marketing spend to increase from where it is currently, but they will do that through product-led growth primarily, which is how they've grown this business so far. And when -- it's not just that we've seen what they plan to do over -- it's not just that over the last few months, we've seen what they plan to do and their ambitions in product. This is a business I've known well for quite a while and that we've been talking about IG for probably over a year now.

So seeing how they've grown their business and how efficiently and quickly their product -- how impressive their product velocity is, I think that will continue to drive a lot of growth in the coming years as they attempt to maximize the value of that incentive plan.

Thanks, Ian, for your question, which is really around sort of how we expect to deliver that guidance in terms of delivery of returns in excess of ROIC (sic) [ WACC ]. I think there's a bunch of backup in the presentation of yesterday at the appendix, which will give you some of those drivers. We're not giving a guidance on revenue beyond saying sort of strong double digits. I think there are a few things that give us confidence about revenue and that revenue dropping to the bottom line. So if you look historically, the business has delivered revenue through its position as #2 in the daily fantasy sports business.

So that's GBP 0.5 billion of revenue, if you like, from the heritage business. As Breon said, the business has transitioned to prediction rails over the past year, but only just recently has been able to drive that volume through its own predictions exchange. And that will very much assist in monetization in terms of our ability to deliver gross margins from that flow. We also see as the transition of the business model takes place from DFS to prediction models, there's a liberation for some number of the restrictions in terms of the format of propositions that Underdog offers its customers. And so that we believe will drive the handle or the sort of the dollars wagered significantly up for Underdog closer to some of the existing players in the market.

So all of that gives us confidence in revenue growth in the predictions market itself growing strongly, but broadening the proposition and that dropping through in terms of gross margin monetization. And then finally, you've got the operating leverage of a scale business that has the infrastructure in place that's already spending quite a bit on marketing. But as the business grows strongly, we expect EBITDA margins to match that and pick up from here, and that will drop to the bottom line and give us that healthy ROIC that we've guided to.

[Operator Instructions]

Our next question comes from Alex Bowers from KBW.

Just 3 from me, if I may. Just firstly, on the finance costs from the GBP 950 million bridging facility. Can you just confirm how much that would be and also whether that will be included in your adjusted EPS metric? Secondly, just on the buyback, I know a question has already been asked on this, but just in terms of being in a position to resume in 2027, can you just give a bit more clarity on that? Are you like intending to potentially reinstate a buyback at the '26 results for '27?

Or is this something that will come later on in '27 once you've kind of been through the redomiciling process, et cetera? And then thirdly, just on -- I'm actually you kind of mentioned in previous results, the OTC customer revenue retention metric, which I think was like 83% at FY '25. Has there been any improvement on this in H1 '26? And is there any guidance you can give in terms of further revenue growth from this metric in H2 and in FY '27?

Yes. So I'll pick up those questions. Look, we're not going to guide to finance costs in particular. What I'd note is that some, that GBP 950 million you referred to is essentially a committed facility. So we wanted to announce the transaction with a facility to draw on to execute the transaction. We have other opportunities to deliver that cash over time to refinance that bridge facility to move cash around the group. So we'll obviously seek to optimize that. The adjusted EPS would be after the cost of funding, which itself would depend on how much we needed for, for example, the earn-out.

So we've got flexibility and our guidance that we've talked about reflects all of that. In terms of buybacks, look, we're not going to give a commitment, as you'd expect, on timing of buybacks. We will update our thinking around capital at the October strategic review update and obviously, at the full year and ongoing as we do at every reported period. What I'd note is we do expect the [ redomiciling ] to Jersey to take place around the end of the year, hopefully, during this calendar year, subject to regulatory approval, and we've guided to when we expect this transaction closing.

So some of those elements will have been much clearer by the end of the calendar year. I think around retention, look, we're comfortable with retention. It's volatile. So it's -- the team is delivering as expected, but we don't report quarter-on-quarter. I think in terms of the expectations for steady improvement there, we're encouraged by, in particular, our new Head of IG Securities, Andy Biggs, and he's building his team. He arrived during the period, and that itself sort of underpins our long-term confidence in this area.

Our next question comes from Julian Roberts from Jefferies.

I've got a couple on the regulatory front. First, are you able to tell us what proportion of Underdog's customers or handle come from American states where sports betting is presently not allowed? And given that some states are challenging the rules around prediction markets, what do you think is the level of risk of that being referred to the Supreme Court and there being a negative outcome from Underdog's point of view?

So the inference behind the first question is correctly that there is specificity on a state basis. And some of the states where prediction markets have grown have not had a history of legalized sports betting or daily fantasy. We're not going to be drawn on individual state mix at this stage, partly because it changes. The point behind the second question, I think it's largely expected that there will be -- there's a growing expectation that this will go to the Supreme Court in the United States.

And commentators, there's quite a broad variance in when that might happen. But -- so I'm not going to -- I mean, my guess is no better than anyone else's actually less well informed than many. But I think this ultimately will go -- this may ultimately go to the Supreme Court in the United States for resolution. And for those that aren't as close to the detail, the decision will be whether this should be regulated, whether sports, in particular, should be regulated by individual states or whether the CFTC has the right on a federal basis to regulate contracts, event contracts, which currently are seen to include sports.

So I think in the long term, we will get clarity around that, possibly even in the medium term, we'll get clarity around that. And then at the end of this transaction, we will own a brand and a product that allows young -- a younger demographic of customers to express opinions on sports. That's kind of the core legacy of the Underdog brand, as Clifford mentioned earlier, some $400 million or $500 million in revenues a year.

We also own a full -- a relatively rare full stack, an FCM, a DCM and a DCO, which allows us to take regulated event contract bets through the CFTC rules on sports and other things. And we kind of have a bet now on prediction markets in sports and ultimately on prediction markets on other types of events as well. So the backstop here is the brand and the product and the team and the demand across all of the United States from customers to express opinions on sports.

The upside is the extreme upside is the CFTC federal regulation for all of these contracts that liberates customers from some of the limitations that previous state licensing held. That will play out over the coming years. I'm very confident that we have had a thoughtful investment in that space and that our deal structure protects our shareholders, rewards our colleagues very generously if they deliver the heroic growth expectations they've signed up to in '28 and '29, but protects our shareholders in the event of -- protect our shareholders given the regulatory uncertainty over the coming years.

There are no further questions. I will now hand back to Breon for closing remarks.

Thank you all for joining us this morning. We've delivered a strong first half, and we look forward to updating you on the next phase of growth at our strategy update in October. Martin, Clifford and I and the rest of the team are available to take questions over the coming days, and we look forward to chatting with many of you. Thank you again.

Hello, and thank you for joining at such short notice. We launched our strategic review in March, which prioritized acquisitions aligned with our M&A framework. We looked at very many opportunities, prioritizing growth and innovation, and Underdog stood out. We're clear-eyed about the risks, including the fast-moving regulatory environment, and Underdog's product and leadership team are well placed to win, and we structured the transaction around performance.

Today, we're pleased to announce the acquisition of Underdog, a leading U.S. prediction markets operator. It's a landmark deal that establishes IG as a leader in one of the most significant opportunities across trading, investing and entertainment and accelerates our growth in one of the world's largest and fastest-growing consumer finance markets. I'll take you through why we're doing this, and then we'll take your questions.

Underdog gives us an entry into a high-growth adjacent category, spanning both daily fantasy sports and prediction markets, initially in sport and then in time to come across financial markets, culture and politics. Prediction markets are growing fast. Notional volume traded in 2026 is expected to nearly triple on the prior year, with around 85% currently in sport.

Underdog is one of only three fully vertically integrated providers competing meaningfully in sport, and it brings nearly 1 million mobile-first monthly active users with strong brand equity. What's particularly valuable is the license stack. Underdog owns a fully integrated set of licenses and market infrastructure spanning brokerage, exchange, clearing and market making. This gives it full control over product, economics and risk across daily fantasy sports and prediction markets.

The transaction structure aligns a substantial share of value with delivery, split between an upfront payout and earn-out and a management incentive plan. We expect the acquisition to be broadly neutral to adjusted EPS in year 1, double-digit percent accretive by year 3 and to deliver return on invested capital in excess of IG's weighted average cost of capital in year 3.

Together with the proposed redomicile of IG's parent company to Jersey and our refreshed organizational model, the strategic review the Board launched in March is now substantially complete. We continue to work through incremental growth and efficiency initiatives, and we'll present IG's refreshed strategy, guidance and capital allocation framework at a strategy update on the 22nd of October.

Underdog is growing rapidly with significant potential in a large and fast-growing market. Net revenues for the 12 months to June 2026 was $466 million, up 21%. That continues a strong trajectory from $9 million in 2021 revenues to $441 million in 2025, growth of 63% in that final year. Monthly active users reached nearly 1 million, up 39%.

Underdog is the second largest operator by revenue in its heritage product, daily fantasy sports. And since launching prediction markets in September 2025, it has traded the third highest U.S. regulated notional flow in the U.S., including prediction and DFS combination trades behind only Kalshi and Robinhood. This shows how quickly its daily fantasy sports heritage and installed user base are moving on to prediction market rails.

Let's now look at the customer base. Underdog's strong revenue growth reflects a large and rapidly expanding customer base. Cumulative depositing customers have grown from just over 14,000 in 2021 to just under 5 million at the end of last year and active customers, those trading at least once in the year from 14,000 to 3.2 million.

This base has been built efficiently through a differentiated product-first proposition and a strong brand. And it's a young audience delivering that growth, with over 60% of monthly active users under 30 and over 80% are under 40 years of age. A mobile-first community comfortable with fast duration -- short duration risk taking and complementary to IG's existing customer base.

Daily fantasy sports or DFS, has been the engine of Underdog's growth, so let me start there. DFS is a skill-based contest format built on athlete statistics. In the U.S., it has long been treated as a game of skill, a status that predates and is distinct from state-regulated sports betting. But that format is also a constraint. It limits Underdog to around 1/3 of what its customers want. Prediction markets change that.

Underdog now owns the full license stack across three critical functions, giving end-to-end control of product, economics and risk across both DFS and prediction markets. It owns the FCM or the brokerage, which takes customer orders and the DCM, which is the CFTC licensed exchange that lists and trades event contracts.

It also owns the DCO, which is the clearinghouse, which holds collateral and settles trades. Vertical integration across these three pieces of market infrastructure unlocks a complete sports offering delivered through event contracts in around 50 states under a single federal regulatory regime.

Turning next to what Underdog has achieved to date and how that's translating into a step change in growth. Underdog launched prediction markets in limited form in September 2025 and expanded to 30 states, including prediction market parlays in November. In April, it integrated Kalshi into its FCM brokerage, giving customers access to a broader range of contracts. Uptake has been rapid.

The next leg is Underdog's own exchange, which launched this month. As Underdog has given customers more, they've engaged more. In Q2 2026, average monthly handle per active customer was up over 50% year-on-year and monthly active users was up over 60%. This early progress is very encouraging.

Prediction markets offer a simple, intuitive format, highly accessible to novice and experienced traders and to customers used to sports gaming. Prediction markets are growing fast, and sports is the largest and fastest-growing part of this market. With more than 50 million U.S. sports bettors and DFS players already comfortable with the style of risk taking, there's a huge pre-converted pool that Underdog is well placed to capture.

We recognize this is a competitive landscape, and we admire the companies on this slide. But Underdog has a clear right to win. It is built for sports. It has a large sports-first customer base. We're used to fast real-time risk taking. The wallets, the KYC, the brand are already in place. So moving into prediction markets is close to friction-free. That's what sets it apart from competitors, which are built for more sophisticated traders than for sports fans.

One of the keys to Underdog's success is its product engineering capability and product velocity. Its founder-led product-first culture has delivered a differentiated proposition in sport, driving exceptional growth and strong brand equity. And that's what we're acquiring here, not just the license stack and market infrastructure, but an exceptional team that ships category-leading product fast.

If sport is where Underdog has won, it's not where the opportunity ends. The infrastructure is category agnostic. The same licensing stack, exchange and clearing capability, the same intuitive product, none of this is specific to sport. A single outcome event contract works just as well on an economic data print, election or cultural moment as on an NFL game.

So the platform Underdog built for sport is a platform for trading events of any kind, and this is where IG comes in. Financial markets are our home turf, decades of expertise in pricing, risk and regulated trading. Underdog brings industry-leading product velocity and an engaged audience. We bring deep markets capability.

Together, there's a genuine right to win as prediction markets expand into crypto, financial markets, politics and culture. Sports is the beachhead, but the prize is far bigger.

Turning now to Underdog's leadership team who are critical to drive the growth of the business. Underdog is a founder-led product-first franchise. Jeremy Levine, Co-Founder and CEO, previously founded DRAFT. That was a business I brought to Paddy Power Betfair as CEO in 2017. Jeremy also founded StarStreet, which was acquired by DraftKings.

Underdog's Co-Founder and Chief Product Officer, Brandon Stakenborg, was part of the early team at DRAFT. They're backed by a strong leadership team. I've known this business for many years and invested in Underdog as an early-stage investor well before I joined IG. I retain a small holding in the business, which I disclosed to the Board when this transaction began. That long association gives me strong conviction in the team and the opportunity ahead. I'm particularly looking forward to welcoming the Underdog leadership team to IG.

This deal is firmly aligned with IG's strategic focus on product, culture and efficiency. On product, Underdog closes the gap in the high-growth category and broadens our appeal to a younger demographic. On culture, it brings an unrelenting focus on customers and product velocity. On efficiency, Underdog is a highly scalable platform and attractive marketing paybacks.

Together, we unlock a large mobile-first user base, and we can scale Underdog's product through tastytrade in the United States. IG's compliance capability will help underdog move faster. As one business, we can grow faster and generate more value than either of us could alone.

You've seen a version of this slide before. Underdog materially broadens IG's addressable market alongside our existing exposure in OTC derivatives, futures and options, stock trading and crypto, prediction markets add a fast-growing and new fast-growing category. It meaningfully increases our combined TAM and our ability to accelerate top line growth further into double-digit territory.

With that, I'll hand over to Clifford to take you through the financial highlights.

Thanks, Breon. Underdog more than doubles IG's U.S. revenue and increases our U.S. active customers more than tenfold. On a pro forma basis in 2025, the U.S. would have accounted for around 40% of total group revenue against around 22% stand-alone. It also diversifies our revenue by product.

Combining Underdog's 2025 results with IG's, prediction markets and DFS would represent 25% of combined group revenue, reducing reliance on any single product line. It also transforms our demographic profile, lowering IG's average customer age from around 42 to 34 on a pro forma basis.

Let me walk you through the structure. The $1.1 billion upfront is fixed. The enterprise value for 100% of Underdog at closing are 2.4x net revenue for the 12 months to 30th of June 2026. On top of that, an earn-out contingent on 2026 revenue and positive EBITDA and capped.

Separately, a management incentive plan that sits outside the purchase price, rewarding eligible employees for 2028 and 2029 EBITDA delivery and self-funded by Underdog's earnings. On funding new IG equity alongside new debt, a bridge initially, then longer-term financing to pay the cash to sellers and refinance Underdog's existing borrowings. We remain committed to our investment-grade rating throughout. We expect pro forma gross leverage to be under 2x EBITDA at the end of 2026, deleveraging from there with our solvency ratio within the 160% to 200% target range.

Next, lock-ups. The consideration structure is designed to retain and incentivize management. Underdog's founders receive around 2% of IG's enlarged share capital on completion under the longest lock-ups. Five institutional shareholders receive around 3% in aggregate released on a faster schedule. Smaller holders are largely unrestricted. The management incentive plan, or MIP, adds a further layer of alignment. Closing is expected in late 2026 or early 2027, subject to regulatory and antitrust clearance.

Now to how this deal meets our M&A criteria. Strategically, Underdog delivers the vision set out in our strategic review. Financially, the deal meets our M&A criteria on EPS accretion and returns. Finally, the transaction structure aligns a meaningful share of value with future performance and Underdog will operate as a commercially stand-alone business, mitigating execution risk.

Let me turn to what this means for our financials. Starting with revenue. Our stand-alone guidance is unchanged and Underdog adds to it. It's growing at a stronger double-digit rate. So once the deal completes, we expect the combined group to grow above our organic stand-alone level of 10%. On earnings, as Breon set out, the deal is broadly neutral to adjusted EPS in year 1 and double-digit accretive by year 3, with return on invested capital exceeding our cost of capital by that same point, fully in line with our M&A criteria.

On the balance sheet, we stay disciplined and remain committed to our investment-grade credit rating. On capital returns, our dividend policy is unchanged. We intend to pause the current buyback, expecting to consider resuming it in 2027 following completion of the redomicile and subject to share price performance and other demands on capital.

With that, I'll hand back to Breon.

Thank you. To conclude with this slide, which you've seen before, Underdog gives IG entry into a high-growth adjacent and prediction markets and diversifies our revenue growth drivers. It brings a complementary customer base and one already comfortable with short duration risk. And it comes with a valuable integrated license stack, which gives us full control of our product, economics and risk across DFS and prediction markets.

And as Clifford has set out, the return profile is attractive. Before we wrap up, a brief word on our H1 results, which we've also announced today. We'll cover these in full on another call, so I'll keep it to the headlines. It's been a strong first half. Our strategy has delivered a step change in growth, and Underdog will take that further.

Starting with customer acquisition, we delivered a sixth consecutive quarter of sequential growth in active customers, the best single indicator of the health of the business. Organic active customers is up 13%, organic first trades up 74%.

Second, growth was broad-based across every product. Faster product velocity, disciplined marketing spend and supportive market conditions resulted in organic total revenue up 17% and 20% organic net revenue -- net trading revenue growth. As we upgraded in May, our outlook targets organic total revenue growth of at least 10% a year beyond 2026 from our 2025 base of around $1.1 billion.

Third, we sustained strong margins. The first half EBITDA margin was 44%, with combined -- with continued investment in growth, higher marketing spend and costs associated with the strategic review, partly offset by a lower cost to serve.

Fourth, Underdog transforms our future growth. As we set out, the acquisition opens up a large, fast-growing U.S. daily fantasy sports and prediction markets. The acquisition transforms our U.S. footprint and accelerates stand-alone revenues and EPS growth. Finally, this month, we set out plans to redomicile and a refreshed organizational model.

Together with the acquisition of Underdog, the strategic review we launched in March is now substantially complete. We continue to explore further growth and efficiency initiatives, and we'll present our refreshed strategy and a strategy update on the 22nd of October.

In summary, these are a strong set of results and a strong platform from which to acquire Underdog. Thank you for listening. We'll now take your questions.

Good morning, and welcome to the investor and analyst call for IG Group 2025 Results Presentation. [Operator Instructions] I would like to remind all participants that this call is being recorded.

I will now hand over to Breon Corcoran, CEO, to begin the presentation. Please go ahead.

Good morning, and thank you for joining us. I'm joined by Clifford Abrahams, our CFO. I'll begin with the highlights and update on our strategic delivery. Clifford will then take you through the financials. I'll return later to cover our 2026 priorities and the strategic review we're announcing today before we open it up to questions.

Here, you can see that 2025 was a year of strong execution. I'm pleased that our strategy is gaining traction. New customer acquisition was up 54% on an organic basis. Active customers were up 6%, and that growth is accelerating into double digits in 2026. We delivered organic revenue growth in line with our medium-term guidance ahead of schedule and did so while continuing to invest for growth and maintaining strong margins. That accelerating commercial momentum gives us the confidence to upgrade our guidance to the top end of the mid- to high single-digit target range.

We returned GBP 321 million to shareholders in the year and are today announcing a further GBP 125 million buyback. Cash generation is strong, and we entered 2026 with a healthy surplus capital position. The markets we operate in are large, fast-growing and being reshaped by structural drivers, and IG is well positioned to capitalize. Our progress gives us confidence to set bolder ambitions. And today, we're launching a strategic review to ensure IG maximizes shareholder value. More on this later.

Let me now take you through how we're delivering against the priorities I set out in July 2024. This slide shows the journey. On the left are the foundations we've built over the past 19 months, investing in our product to close gaps in our offerings and user experience, embedding a high-performance culture and increasing efficiency. Execution against these priorities is now translating into the record results you've just seen.

On the right, our next phase. The Board's objective is to maximize long-term shareholder value. We'll explore all routes to achieve this through the strategic review this summer. This will look beyond the current plan to identify the best routes to maximize long-term shareholder value. I look forward to sharing the outcomes of this in the autumn. In the meantime, we're focused on maintaining the strong commercial momentum we've built.

This slide puts the detail behind the headline numbers I shared earlier. The standout is the trajectory in customer acquisition. First trades, our lead indicator for future growth, went up 54% organically. That's a step change from the flat or declining trend we started with and as a result of closing product gaps, broadening IG's appeal and deploying marketing investment at strong returns.

Net trading revenue crossed GBP 1 billion for the first time. Funded accounts increased to over 1.3 million. These are respectable milestones, but what matters more is the momentum behind them and the scale of the opportunity still ahead.

Let me now take you through how we're building on this, starting with product. This chart tells an important story. Between 2022 and 2024, IG shipped fewer than 20 new products or features across 3 years, and we were losing market share. In 2025, we delivered 37 with fewer people. That's a reflection of the cultural transformation underway, stronger talent, clear ownership and fewer barriers to getting things done. Product velocity is critical in this fast-moving industry. I'm pleased that our offering has come a long way in under 2 years, and there's more to do.

When I joined, I saw missed potential in the business. IG stock trading was limited and uncompetitively priced. Spot crypto was absent outside the U.S. We needed to broaden our offering, make it more accessible and move quickly. It's imperative that we keep doing this. In stock trading, our zero commission offering is now live in the U.K., in Ireland, in Singapore and in France. We acquired Freetrade, and we're investing to take it to the next level, launching Zero Commission mutual funds and SIPs and capturing strong transfer demand as we disrupt the U.K. self-directed investment market.

In crypto, we became the first U.K. listed company to receive a full FCA crypto asset license, and we also secured a European license under MiCA. In January, we completed the acquisition of Independent Reserve. We launched spot crypto trading in Australia earlier this month, powered by Independent Reserve, and we'll expand to Singapore and the UAE in the second half of 2026.

In over-the-counter, we added 24/5 trading, a much broader range of weekend and pre IPO markets and an enhanced offering for professional customers. Early traction in newer markets is encouraging. In Singapore, stock trading has attracted well over 2,000 active customers in a few months, growing at double-digit week-on-week -- double-digit percentage week-on-week and with significant multiproduct take-up. In France, our stock trading offering has exceeded 2,400 active customers with the base doubling every 3 weeks.

Underpinning all of this is a unified platform launching in the coming months. One app, bringing together all our products for the first time, a step change in our proposition that will significantly broaden our addressable market. Good progress and more to do.

Let me now turn to culture. You've seen the impact of our cultural transformation in the product and customer numbers. This slide provides further evidence. Net Promoter Scores are much improved. Customer satisfaction is up. We're generating more revenue and profit per colleague than before. This all gives us confidence that our decentralized operating model is working. Divisional leaders have the autonomy to compete and win locally, and this is now being evidenced in our results.

Since June, we've hired over 300 people from leading organizations and sharpened how we link pay to performance. As momentum builds, we create more opportunities for our people and continue to reward high performance.

Now to efficiency. The savings we're generating are funding our investment in growth. They don't show up as margin expansion in the P&L. We've reinvested them in marketing, product and technology while maintaining strong margins. Organic cost to serve per customer is down 13% since 2023. Good progress, but still significantly above industry norms, so more to come here. Automated account opening and KYC times are much improved, and this matters commercially. Customers who are automatically activated are roughly 3x more likely to trade.

IG had virtually no digital servicing capability when I joined. Today, our subservice rate is over 70%. We've broken the link between customer growth and headcount. That provides scope for operating leverage as we scale. AI is also contributing beyond cost reduction, helping customers identify trading opportunities, prescreening marketing assets for compliance and clearing PEP and sanction screening in seconds rather than in days.

We've also focused on converting more OTC customer income into net trading revenue using better data and analytics to take more market risk where appropriate within Board-approved limits. This means net trading revenue will be more volatile from quarter-to-quarter, but structurally higher over time. We're pleased with our progress here and convinced that there's more upside ahead.

Let me hand over to Clifford for the financials.

Thank you, Breon. Good morning. You've seen the results, record revenue, organic growth hitting our medium-term guidance ahead of schedule and strong margins. Adjusted EPS is up, supported by buybacks, which have reduced our share count by over 16% since May 2022. Looking ahead, we're investing more because the returns justify it.

Payback periods are short and will increase investment this year while sustaining EBITDA margins in a mid-40s percentage range. Before the P&L, I want to start with how our revenue model is evolving. Assets under administration on the IG platform reached GBP 18.2 billion at year-end and hit just under GBP 20 billion at the end of last month. AuA generates recurring revenue, subscriptions, interest and the trading activity from engaged customers with assets on our platform. As our stock trading and investments business scales, AuA becomes an increasingly important driver.

Turning to our revenue mix on the right-hand side of this slide. All our products are growing. We've returned OTC derivatives to faster growth. It's 74% of net trading revenue today, and we expect growth momentum to continue. The bigger long-term opportunity lies in futures and options, stock trading and investments currently 7% and crypto at 4% pro forma, all addressing larger, faster-growing markets.

In the U.K., our combined OTC and spot crypto revenue is growing 30% to 40% year-on-year, and we estimate around 5% share of U.K. direct-to-consumer crypto trading revenue. As we scale these propositions globally, their share of revenue will increase, making IG's earnings more diversified. We're confident that our investments will structurally improve the quality of the business.

Turning to the P&L. Record total revenue of over GBP 1.1 billion with net trading revenue passing GBP 1 billion, up 10% organically, more than offsetting lower net interest income. Costs up 13% reported, reflecting increased investment in technology, propositions and marketing. We plan to invest further in 2026 to support product launches and further accelerate customer growth. EBITDA margins of over 47% reflect that choice.

As we've said consistently, we launched our strategy, we're prioritizing revenue growth, and we're confident of sustaining margins in a mid-40s percentage range. Below EBITDA, the small exchange disposal contributed a GBP 76 million gain. Stripping that out, profit after tax was broadly stable, reflecting the benefit of revenue growth, offset by lower finance income due to lower rates on our own cash and title transfer balances and the interest cost on the GBP 250 million bond issued last May. Adjusting EPS excludes the small exchange gain and grew 5%, driven by buybacks. In summary, record revenue and maintaining strong margins while investing in stronger future growth.

Next, performance by product in 2025. Growth across every category. OTC Derivatives net trading revenue was up 8%. For context, this business was declining at a 3% compound annual rate between 2021 and 2024. We've returned it to growth and intend to build on that. Exchange-traded derivative revenue up 3% reported. That reflects our exit from Spectrum at the end of 2024, which contributed approximately GBP 15 million of revenue at broadly breakeven margins.

Stripping that out, organic growth from continuing operations was 15%, driven by tastytrade, where U.S. active customers grew 12%. Stock trading and investments nearly doubled to over GBP 68 million, including 41% organic growth. These growth rates give us confidence to invest more this year. It's clear that our proposition is resonating with customers who want better product and better value for money. We'll continue to compete hard and take share.

Crypto revenue remains early stage. We launched our U.K. proposition midway through last year. On a pro forma basis, including Independent Reserve, crypto trading revenue represented around 4% of group net trading revenue in 2025. We now have the licenses and capability to scale this meaningfully. First trades were the strongest in many years, giving us a strong base as we deliver our multi-asset unified platform and ramp up marketing.

Turning now to divisional performance. It was good to see growth everywhere. U.K. first trades more than doubled organically and multiproduct adoption is outpacing acquisition, which highlights that we are deepening engagement on our platform. U.S. net trading revenue grew 18%. Tastytrade has significant runway in a large, fast-growing market. APAC was steady on revenue, but first trades grew 54%, a strong indicator as we launched crypto and expand stock trading across the region this year. Europe delivered 23% organic OTC growth and further upside as we roll out new propositions. Every division has room to grow, and we intend to back them with investment this year.

Next, I want to recap on tastytrade's recent performance because it highlights the quality of the assets within our portfolio. Trading revenue last year grew 23% with second half growth accelerating to 32% in local currency. Customer assets reached over $7 billion, up 23%. Active customers grew 13%. This is a business with distinctive competitive position, a recognized brand, proprietary technology, a differentiated content-led acquisition model that delivers high retention customers at low costs and a growing asset base generating increasingly diversified revenue.

The U.S. retail trading market is one of the largest and fastest evolving in the world, and tastytrade is well positioned to capture a larger share of it. We're pleased to have new divisional leadership in place and the priority is clear, simplify the proposition, broaden the appeal and accelerate growth.

Next, our recent acquisitions, a proof point for how we allocate capital. Freetrade is scaling rapidly with total revenue compounding at 25% and AuA up over 34% on the prior year on a pro forma basis. The commission-free mutual fund proposition is gaining real traction since we launched it in October. We now offer over 760 funds across 40 managers, including strong coverage of the best buy lists that drive flows in the U.K. market.

Fund assets are compounding at a strong double-digit rate month-on-month. The launch of SIPs in January triggered a significant acceleration in pension transfers with over GBP 0.25 billion in the pipeline and net funding on track for a record month in March. Independent Reserve delivered revenue growth of over 45% in 2025 and is on track against our acquisition case.

Digital asset markets have softened entering 2026, and we structured the deal accordingly. Cyclicality is reflected in the purchase price and deferred consideration. Our conviction in the long-term opportunity is unchanged and the acquisition brings crypto-native expertise and license capability across Asia Pacific that would have taken years to build organically. These are well-executed transactions at sensible prices directed at our most promising growth markets.

Both closed priority product and geographic gaps, both are on track to deliver returns above cost of capital within 3 to 5 years, and both are integrating well. We're putting our M&A framework into practice, and we'll maintain this discipline in the future. Costs are up 13% reported, reflecting 3 key drivers. First and most significantly, marketing, up 31% across the group, contributing to 54% growth in first trade on an organic continuing operations basis. Returns are strong, payback is short, and we plan to spend more this year.

Second, Freetrade. We're scaling a disruptive proposition into a U.K. market where incumbents are cutting fees to defend their positions. This is exactly the right time to be investing and the growth confirms it. Third, legal and professional costs up to GBP 62 million. Roughly half of this is ongoing. The rest covers M&A-related costs, technology consulting and early work on evaluating the group's domicile and legal entity structure. We think that work can free up capital and give us more capital flexibility for the future. No decisions yet, but we see enough potential to justify it. We've maintained strong margins whilst delivering an extensive product pipeline and investing behind the momentum we've built, all while continuing to return capital to shareholders.

Now to capital. The key message here is that we have the firepower to invest in growth, pursue M&A and return capital to shareholders. Our pro forma solvency ratio of 197% is comfortably at the upper end of our 160% to 200% target range, which is stated after our new GBP 125 million share buyback announced today. We've proposed a 7-month dividend of 28p, equivalent to 7/12 of the dividend that would have been paid for the 12 months ending the 31st of May 2026. But capital returns are only part of the story. Our strong balance sheet gives us optionality to invest organically behind our fast-growing propositions and to act on M&A where we see the right opportunities.

Turning to trading for the 3 months to the end of February. Conditions varied across the quarter with elevated volatility in oil and bullion markets, gold and silver, making conditions harder to monetize relative to prior quarters. Despite that, momentum continued to build. Net trading revenue was up 5% on the prior year or 4% organically. Customer growth accelerated further with organic first trades up 57%, building on the strong second half of 2025 and active customers up 10%. March has been stronger still. Recent geopolitical developments, particularly in the Middle East, have contributed to elevated volatility across a range of markets, driving strong engagement on IG's platforms.

Our platforms have performed strongly throughout, available 100% of the time and giving customers deep liquidity when they need it most to access markets and manage their portfolios. To give you a sense of momentum, we expect total reported revenue for the first quarter of the 2026 calendar year to be approximately GBP 300 million, close to a record for the group with organic active customer growth accelerating beyond 10%, a strong start to the year and clear evidence that our strategy is working.

Turning to the outlook. We entered 2026 with strong momentum. Organic revenue in 2025 was approximately GBP 1.1 billion, ahead of prior guidance, reflecting stronger trading at the second half of December. From that higher base, we now expect 2026 organic growth towards the top end of our mid- to high single-digit range. On a reported basis, revenue will also reflect a full year of Freetrade and 11 months of Independent Reserve.

We expect net interest income to be approximately GBP 110 million in 2026 based on current interest rate expectations and anticipate EBITDA and adjusted EPS to be in line with current market expectations, which are available on our Investor Relations website. Beyond 2026, strong commercial momentum gives us confidence to upgrade our medium-term total revenue guidance forward towards the top end of our range. We expect EBITDA margins to be sustained in mid-40s percentage range with investment in growth offset by structurally declining cost to serve, enabled by AI, digital servicing and automation.

With that, back to Breon.

Thank you, Clifford. Let me address what comes next, our priorities for 2026 and the strategic review we're announcing today. You've seen this slide before. Our addressable markets are large, growing rapidly, and our penetration remains low across every category. What's changed is the pace of convergence and the rate of change in adjacencies, including prediction markets. The structural tailwinds are strengthening and the opportunity is getting bigger.

This slide shows the journey from the gaps we identified in July 2024 to where we expect to be by year-end. The progress has been significant. And by December, the core gaps will be largely closed. The biggest unlock this year is our unified multi-asset platform launching first in the U.K.

Next, I'll cover our 2026 priorities and then the strategic review. Our focus remains on the 3 pillars we presented 19 months ago, product, culture and efficiency. On product, as I mentioned, we're launching our unified platform in the U.K. in the middle of this year. This follows our rebrand, which positions IG as the investors champion. We'll continue scaling stock trading and crypto into new markets and spend more on marketing to drive growth where the returns justify that.

On culture, we're moving faster, and we're closer to what customers want. The priority now is product engineering capability. We've established dedicated AI squads across onboarding, servicing, compliance and trading to accelerate delivery. We'll continue targeted hiring and building on our high-performance culture. On efficiency, we've made good progress on our cost to serve, but it's still above best-in-class. There's more to do. In 2026, we'll go further on AI and digital servicing to narrow that gap.

Initiatives designed to further enhance revenue retention continue, and we remain focused on directing capital towards our highest returning opportunities. Let me spend a moment on our unified platform because it's an important product launch coming later this year. From a customer perspective, this means one app to trade leveraged products, invest in stocks and ETFs and access crypto with a single wallet and seamless movement between products. New features and asset classes roll out in the same app, meaning faster uptake and better marketing payback.

Multiproduct adoption in the U.K. is already up 138% ahead of new customer growth. We're confident that our unified platform will accelerate that further, deepening engagement and extending customer lifetime value. We've been clear that we're spending more on marketing, and I want to explain why we're confident in that decision.

Marketing payback is around 6 months. Lifetime value to acquisition cost is about 4:1. As a percentage of revenue, marketing rose from 8% to 10% in 2025, and we expect it to increase again this year. Our peer group averages around 16%, not our target, but it demonstrates that we have plenty of scope to do more. We've also transformed our marketing capability. We're using AI for creative testing and life cycle management. We're spending more, but we're spending smarter and the results are showing in first trades and active customer growth.

Let me now focus on where AI takes us next. In 2025, we built the infrastructure, agentic screening in onboarding, AI-powered servicing across digital channels, compliance automation. In 2026, the focus shifts to extracting commercial value, churn prediction, next best action models and ultimately, a fully agentic onboarding and servicing platform. The goal is a customer experience function that generates revenue, not just savings. In Australia, we've launched DiscoverAI, a large language model powered tool that lets traders search for opportunities across stocks, ForEx and commodities using natural language, scanning global news in real time.

Every improvement here frees up capacity for marketing, supporting customer acquisition while protecting margins. This slide shows how our revenue growth is accelerating. Our organic revenue CAGR has moved from 3% to 6% and industry tailwinds continue to strengthen. A generational wealth transfer is driving a shift to self-directed investing. Trading, investing and gaming adjacent experiences are converging. AI is lowering barriers and reshaping how people engage with financial markets. And a more supportive regulatory backdrop is emerging in some jurisdictions. There are structural trends, which will endure for decades and benefit businesses with the right products, technology, scale and regulatory credentials. The question is how we capture more of it, and that's the purpose of the strategic review.

We operate in large and fast-growing markets, shaped by the structural trends I've just described. And as I said at the outset, we're well positioned to capture this opportunity. We delivered against the priorities we set out in July 2024, stronger customer acquisition, and growing active customer base, organic revenue growth in line with our medium-term guidance, strong cash generation and surplus capital. That track record gives us the confidence and the platform to set bolder ambitions.

So today, we're launching a strategic review to ensure IG captures the full long-term opportunity ahead of us. This review will evaluate routes to maximize shareholder value. That includes acquisitions to accelerate growth. It covers our domicile legal entity structure and listing venues to unlock capital and enhance strategic flexibility. And it will consider whether combining parts of the group with other industry participants could create additional value.

Our execution path through 2026 is clear. The strategic review looks beyond that horizon. Strong near-term delivery gives us a platform from which to pursue greater long-term ambition. The foundations are in place, and we have strong momentum behind us. This review will ensure we find the best path to realize IG's full potential. I look forward to updating you on the outcomes in the autumn.

Finally, to summarize, we've delivered record financial results. We've moved faster on product. We're reshaping our culture. We're driving efficiency gains. We've delivered a step change in customer growth. The new year has started strongly. Active customer growth has accelerated further into double-digit territory this month, giving the confidence to upgrade our revenue guidance. Our strategic review will ensure we maximize long-term value for our shareholders.

Thank you. We'll now take your questions.

[Operator Instructions] The first question is from Ian White at Autonomous Research.

Maybe I can start with 3, please. First of all, can you maybe just say a little bit about the indicators you have of the quality of the new clients that have come in and the conviction that you have that those are similar to those you onboarded previously with respect to lifetime value. That's question one, please.

On the strategic review, can you just set out for us what is it here that really marks a departure from your previous thinking? I'd understood openness to inorganic opportunities, you had the acquisition of Independent Reserve. That was already part of your thinking. And should we anticipate any new targets being announced as part of that review?

And just finally, could I ask for maybe a few more details or thoughts on AI-related opportunities and maybe specific cost-saving opportunities there. Is it right, for example, that IG should serve significantly fewer clients per employee than some of your other peers, for example, or are there opportunities to really close that gap?

Ian, thank you for the questions. Clifford, I'm going to ask you to take the second one. I'll take the first and the third. And perhaps we might just ask other analysts to -- maybe let's do the questions around the numbers first or current trading first, and then we do the strategic review ones at the end. It might just flow better for everybody.

On the specific issue of customer value, we have high confidence and improving confidence that marketing spend is being properly used. We have very good visibility internally, obviously, on expected lifetime customer value for the retail cohort and the professional cohort. And we can track from early indicators of behavior, we could forecast with some certainty as to the future value of customers.

We are quite disciplined and somewhat self-critical when we see pops in customer -- new customer activity. And sometimes, we do trigger customers that are less value to us. So sometimes we do some marketing stuff that is quite effective, but the customer value is not what we would hope. So all of that in the round, that is an increasingly well-oiled machine, both through the marketing functions and with a feedback loop through finance. So increasingly, that gives us confidence that the marketing money has been better deployed and that these customers will be valuable to the business in the medium to long term. All of that feeds into the guidance, and I don't really think we should go to much more detail than that now.

Do you want to take the strategy question and then we come -- sorry, let me talk about AI for a second. So I think it's fair to say -- I think it's fair to say that the last couple of years have kind of been a cultural journey as much as a commercial journey. And we needed to reimpose kind of commercial discipline on the business and a customer centricity, which was a slight change from maybe where the business had been before that.

2 years ago, 12 months ago, we were still very disciplined about customer centricity and not getting distracted by bright, shiny objects. So therefore, we weren't solving for -- 2 years ago, there was much talk about R&D and projects and AI trials, and we basically shut a lot of that down to get back to doing the basics properly. And we're quite disciplined about a mentality of, first, you must crawl, then you can walk and then you can run.

As we're evidencing more momentum and as the team is coalescing around kind of commercial targets, we're now using AI across the whole pitch. We're using it in marketing. We're using it in compliance. And increasingly, we're using it in product and engineering. So it's too early to say what that might lead to in terms of efficiency gain or productivity gain. But in the round, the guidance we give today and the confidence we have in upgrading the guidance today is the sum of where we see the momentum in the business and where we see the opportunities for future deployment of resource either into product or into marketing or indeed into talent.

So the guidance, I don't want to get more specific on the guidance. I think that would be unwise and unnecessary. But in the round, we're happy with the marketing spend. We think we can get better. We're beginning to use AI across the business, and we think we can get better. Do you want to take the strategy?

Yes. Ian's question was what's different about the strategy review relative to what we've said in the past. But we set out our strategy in July 2024, and we're delivering well against that. And you're seeing the results come through in the numbers and also in our product velocity and our propositions. So that really gives us the confidence to be more ambitious. So expect greater ambition and materiality.

In our RNS, we talk about some of the things we're considering. It's really quite broad. We've got an open mind about some of those things that we've set out. But the North Star very much is maximizing shareholder value.

Operator?

The next question is from Haley Tam at UBS.

Can I ask a couple, please. Firstly, just in terms of the convergence of the trading, investing and gaming industries now that you've mentioned the new part, if you like, of the backdrop. Are there particular key opportunities you'd highlight for us here? And any thoughts on how we should think about your timing or regions this might apply to? That was the first question.

And then the second question, if I can, just on the strategic review. We understand the outcomes won't come until the autumn. But I think could you maybe just give me some color on the reason why capital flexibility perhaps from a change in domicile or legal entity structure is important now, perhaps where it wasn't 2 years ago?

I'll let Clifford take the second question. But to be fair, Clifford has only been on the team 15 months. So it's kind of unfair to ask him or indeed me to opine on capital structure from a number of years ago. On the convergence thing, this is most clearly evidenced in the United States, where with the new -- with the still relatively new administration and the kind of shift to being more crypto and the very -- the way that prediction markets, in particular, seem to have captured or seem to be perfectly aligned with some kind of zeitgeist, we see this convergence.

We see similar trends in other geographies, but not as pronounced. The business -- the IG business is a healthy, growing, very profitable business. I think we have the right -- I think increasingly, we have the right -- the necessity and indeed the right to try and be more ambitious. And to go back to Ian's question, by being a little bit more overt about this, we will be able to get access to opportunities that we haven't previously seen. We're still below the radar in conversations, and there are still things happening in the world that we don't know about as early as we would like.

So I can't really say what the end state is yet. We will do -- we have been working on this. We will do considerable more work over the next few months. And hopefully, we will have a more coherent view of the end state to share with you by the autumn.

I pick up the capital side. Haley, thanks for the question. We refreshed our capital allocation framework last year. We think it's working well. And you can see we've now announced a buyback that brings us into our announced range. So we're looking really -- we're doing more work to explore our thinking, what can we do now to further strengthen our capital flexibility. We've seen what some of our peers have done, some of the financials have done here in the U.K., and we think it's something we should look at.

Now no decisions have been taken. So no commitments there, but we gave it as an example of the things we're looking at. So we're looking at matters affecting the business and the portfolio, but we're also looking at ways of how we can drive the balance sheet harder to deliver on our goal to maximize shareholder value.

The next question is from Hal Potter at Bank of America.

Just 2 from me. So first of all, you mentioned strong performance so far this quarter. Could you just give us a sense on which divisions, products and assets you're seeing particular strength in? And then as well, a little bit strategic review related. You've mentioned prediction markets as an interesting adjacency before, and you've again reiterated it today. How are you progressing in your ambitions? Is it going to form part of the strategic review? Or could something happen sooner there?

Thank you for the questions. The business is in about 15 geographies. And within each of those geographies, we're increasingly multiproduct. I really don't think it's hugely helpful to go into too much detail on that. But across divisions, we're growing. I said there's a slide in there somewhere that talks about this and largely across products we're growing. Obviously, crypto has been a bit soft since the start of the calendar year. But the upgrade is off the back of growing confidence in the underlying momentum of the business, evidenced by the leading indicator of new customers, evidenced by the growth in active customers and increasingly the confidence we have in the monetization of that customer flow as well.

So it really is -- I can go to the individual products in the equities product launch in France, the equities product launch in Singapore, where admittedly from small bases, we're seeing very positive trends. So in the round, we're very happy with the growth, and that is more broadly evidenced rather than just in 1 or 2 places.

On prediction markets, we have talked about that in the past. We have done work on that. By most estimates, there's now about 20 operators offering some kind of prediction markets in the U.S. in particular. Many of you will know that prediction markets are just a different title for what used to be binaries in Europe or indeed what used to be probably some betting exchanges in Europe as well. So we have capability in the space. We have some capability with some IP, and we have not yet launched a product. We continue to work on that, as and when we have more to say about that, we will share that with customers first and the market second.

The next question is from Ben Bathurst at RBC Capital Markets.

Two questions from me, if I may, starting on the financials. Looking at customer income retention. I just wondered to what extent does the guidance for growth that you've given prospectively for FY '26 incorporate an assumption of further improvements in that metric. I think it was 83% for calendar year '25. Or is that a good rate to expect moving forward?

And then moving on to the strategic review. You've obviously given some color of the types of routes that, that review might take. You haven't referenced disposals or separate listings parts of the group. Are those actions off the table? Or will all possible actions be considered?

Would you take the first question?

Yes.

On the -- all is a very small but enormously powerful word. So I don't want to say all actions are on the table, but we want to be comprehensive in how we think about this business. We continue to believe that this business has very encouraging underlying momentum is in fast-growing and very dynamic markets. But we're not seen as -- we're not as -- we want to -- we have ambition to play a bigger role here. And the reason for breaking cover and saying this that we want to have this strategic review over the next number of months is to focus minds, competitors, shareholders, regulators, employees, even customers to focus minds on the fact that we have ambition for this business, and we believe it can deliver more than incremental growth.

And accordingly, there are conversations that we would expect to have over the next few months of the type you mentioned and others. And there are other conversations that we hope to have that we don't yet -- that we're not yet party to over the next few months. And we will announce back. We will come back to the market and talk about progress as is appropriate. Do you want to take the first question?

Yes. So that guidance does reflect a modest further pickup in we call RTV. And the teams have been doing a lot of work in that area. We have a pipeline of ideas and initiatives that are well underway. We talked about it last July, which is why we reconfirm that now.

I think it's important, though, to see the group as one that can deliver growth in all market conditions and across propositions. So beyond that RTV retention benefit, we do see further growth from a client income perspective. We talk about some of the customer proposition initiatives. I think in market conditions such as we're seeing now, our platform is really engaging well. So we give our customers and traders lots of opportunity to trade, including over the weekend. So there's some top line benefit there.

And we have delivered and are delivering further growth in the U.S. exchange traded derivatives, and it's really pleasing to see really meaningful millions of pound growth coming through stock trading now. So really quite a breadth of growth drivers. Obviously, interest income is not an area where we're looking for further growth. While we're seeing cash balances come through, we're passing more of that on to our customers. So you can see our guide there for no growth coming through that line item.

[Operator Instructions] The next question is from Zach Wirtz at Autonomous Research.

Just 2 more from my side, please. The first is on the zero commission stock trading offering. You've obviously seen very good traction in the U.K. and Ireland post launch. Can you give us any similar detail around what you've seen in Singapore and France? And are there rollouts planned in any other markets at this stage? And finally, just if so, is there any reason you wouldn't expect to see a similar uptick in activity in those markets?

The second question is on potential M&A. Can you just give us your current thoughts on what sort of capabilities or geographies you might be interested in adding inorganically?

Let me try the first one and then you might get us both chip in on the second. I don't want to go to -- Zach, thank you for the questions. And I understand they're legitimate. The problem I have is that our market position in France and our market position in Singapore are both very different from each other and indeed very, very different from the U.K. And in the old days, maybe 2 years ago, we used to break out customer numbers by geography. And you'll know from that, that the actual -- the underlying customer bases in some of those geographies, France and Singapore, in particular, are not very high numbers.

So while the traction is very encouraging, there was a question about the long-term materiality of that. I think we've shown a few things. I think we've shown this company can actually ship product. There's a slide in there that's a tiny bit self-congratulatory, but really is a credit to the team, the engineers and the product and the commercial teams that are actually shipping product at velocity we haven't in years.

I think we've shown that the brand stretches away from the very sophisticated customers that we were associated with in the past. And I think Slide 27 is the slide which talks about -- we don't normally talk about what we will do next. We don't normally casually give hostages to fortune. But Slide 27 is about the growth we've shown so far is basically off the back of a somewhat dated technology stack where for the purpose of speed to market, we built new stuff out on top of that.

We're now getting to the stage where we can start to integrate technologies with greater ease than in the past and get to a unified proposition. I think that will lead to future growth as well. So all of those things in the round give us confidence in the guidance and the upgrade that we've given this morning. But I think in the context of a strategic review, I think it would be -- I think we have to look at this as a group rather than on an individual or geography-by-geography basis, which kind of gets to the second question. I don't want to be drawn on product.

We're attracted to product capability, that kind of product and capability where we can get that through acquisition. That was behind the Freetrade acquisition, which has traded well and the IR acquisition, where they brought crypto and geographical mouse to us in a way that was helpful. But I think our primary 2 geographies are the United States and the United Kingdom and M&A that will allow us to either go faster there or have more scale there. It's hard to pass by opportunities there to pursue ambitions further afield.

Yes. On M&A, Zach, I'd highlight Page 40, actually in the back of the presentation, we've repeated our M&A criteria. So whatever the commercial case, we're very focused on a consistency regarding our M&A criteria. It needs to have a good -- any acquisition would need to have a good strategic fit, which Breon has talked about, but also the return profile and the delivery criteria that we've set out.

We're pleased with the progress of Freetrade and Independent Reserve. You've seen the figures in the pack growth coming through. So that won't change in terms of our criteria and our discipline regarding any M&A.

There are no further questions. I will now hand back to management for closing remarks.

Well, firstly, thank you for the questions and your presence on the call this morning. In summary, we're very happy with the momentum of the business. We're very appreciative of the efforts our -- appreciative for our customers. We're also appreciative of the efforts our colleagues are making to turn this business around. But we think this is a unique time in a large, fast-growing and very dynamic market, and we want to be more ambitious than kind of incremental year-on-year growth would suggest.

So we look forward to having those conversations with you over the coming weeks. And if there's any particular technical questions you have, please send an e-mail to Martin or Clifford to myself this morning. Thank you all.

Thank you for joining today's call. We are no longer live. Have a nice day.