AI demand for data, not disruption, is driving record growth at the exchanges and data group.
London Stock Exchange Group (LSE: LSEG) has raised its full-year guidance after reporting organic income growth of 8.8% in the third quarter, with the exchanges and data giant now targeting at least 8% revenue growth for the year, wider margins and stronger free cash flow.
The upgrade comes on the back of double-digit growth in its markets division and accelerating subscription revenues in data and analytics, putting the group on course for its strongest annual growth since 2018 - a sharp rebuttal to fears that artificial intelligence would erode demand for its data and infrastructure rather than boost it.
Chief executive David Schwimmer said 95% of LSEG's top 200 customers are now using its AI products, with most AI-related deals involving clients buying additional datasets rather than cutting spend. The group struck a new partnership with Nvidia and extended an existing tie-up with OpenAI during the quarter, underlining how financial institutions are leaning on its data to build and scale their own AI tools.
Alongside the trading update, LSEG unveiled two acquisitions aimed at cementing its position in fixed income: a $3.5bn purchase of credit data provider Octus, and a roughly $1.75bn deal for its Tradeweb arm to acquire credit trading platform Trumid. Together, the group said, the deals would make it a global leader in fixed income data and trading.
LSEG has also returned £2.6bn to shareholders via buybacks so far this year, underscoring confidence in cash generation even as it funds the two acquisitions. Investors will now watch for integration progress on Octus and Trumid, and whether subscription growth in data and analytics can keep accelerating into the final quarter.
This report is based on London Stock Exchange Group's announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full markets calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: Benjamin Davies on Unsplash.