IG Group Holdings Stock

Good morning, and welcome to the Underdog Shareholder seminar for IG Group. [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.

Thank you. Good afternoon, folks, and thank you for joining us. Jeremy Levine here on my left, Co-Founder and CEO of Underdog and Clifford Abrahams, IG Group CFO on my right, to join me today. We announced the Underdog acquisition at the end of July, and I recognize that it's incumbent on me to explain clearly the conviction I have and that we have that the Underdog acquisition will create real value for you, my fellow shareholders.

In a few minutes, we'll take you inside the business and later take questions. But before we do that, I'd like to briefly comment on IG's Q3 trading statement issued last week. I'm more convinced than ever of the business that we're building. As I said in July 2024, we needed to close product gaps and simplify our propositions to grow active customers sustainably. In Q3, organic active customer growth was 17% year-on-year.

In July 2025, we announced measures to increase revenue retention in our over-the-counter business. Since implementation, over-the-counter revenue retention has averaged 80% through the end of Q3 2026. We're pleased with this, and we see the potential to increase it further over time. Q3 results themselves were disappointing, reflecting customer positioning in the period, although consistent with our modeling of possible outcomes. Our model is working as expected, and I remain convinced it will deliver better returns over the long term.

This slide, which you've seen before, summarizes why we're doing this transaction. Underdog gets us into a high-growth adjacent category spanning daily fantasy sports, prediction markets and more. Prediction markets are growing quickly, led by sport and Underdog is built and designed for sport.

Underdog performed well in Q3, heading into its busiest quarter of the year, which includes more of the NFL season and the start of the NBA season. The business has strong momentum, and I remain convinced that Underdog will accelerate IG's scale and growth profile. With that, let's start with a short video introducing the company. And after that, Jeremy will take you inside the business that he has built.

[Presentation]

I'm really excited to be doing this, my first one of these public market events. So I'm looking forward to see you back after. Hopefully, I can help answer your questions and give you some context on Underdog and why we're so excited about our performance and the opportunity ahead.

I'm going to take you through a bit of our history, how we win with product, and our results year-to-date. And I'll make sure to answer the questions we've heard most since announcing our deal. How do we succeed in a competitive environment, how we capture margin and how we're well set up for the regulatory developments to come. One thing to keep in mind as we go, at its core, Underdog has been built for fans to express their opinions on sports. We've always had the view that it's our job to handle the underlying regulatory complexity gracefully so that the customers can express the opinions they want.

Today, I'm excited to show you how we've done that. First, our team. There's 2 things I talk about every company in all hands, people and product to the point where the company is definitely sick of hearing me say it. I'm very proud of the team we have at Underdog. My background quickly, I sold my first company, StarStreet to DraftKings in 2014, my second DRAFT to Flutter in 2017, and that's where I met Breon. At StarStreet, we had built the first Pick'em fantasy game. At DRAFT, we built the first mobile draft game, both games we now offer at Underdog.

At Underdog, we were the first to offer peer-to-peer Pick'em and later the first sports operator to put prediction markets in our app. A few key folks to highlight on the team. Nick Lundgren, our Chief Legal Officer, led the first self-certification of sports event contracts while at crypto.com. His doing so largely created the sports prediction markets category. Will Twinn led risk and trading for FanDuel and now runs our market maker. And my co-founder, Brandon, is the best product mind I've ever worked with.

We've got an amazing team of innovators, domain experts, and we've leaned aggressively into AI across the business, especially in how we develop software, and we've seen our velocity improve massively as a result. Through our first 6 years, we were the fastest-growing sports gaming company in U.S. history. Net revenue grew from $9 million in 2021 to $441 million in 2025. We grew fast even though we were limited in what we could offer by the regulatory frameworks we operated under.

Our core product was a fantasy game called Pick'em. In Pick'em, customers pick how players will perform for set stats. They must always pick multiple players from multiple teams. That's what makes it fit under the Fantasy Sports regulatory framework. There are no game outcomes or team options at all, and they have no ability to make just a single selection. They had no ability. With Pick'em, we were able to offer about 1/3 of the experience sports fans want in about 2/3 of the states. It was enough for us to grow extremely fast, especially in the states without legal sports betting, but there was more our customers wanted.

You can see on this slide some examples of what our customers could do in the fantasy regulatory framework versus what is available via online sports betting. In sports betting, customers can pick a team, a single player, players and teams together, players all from the same team, all things we couldn't offer. That is, until prediction markets. Once sports event contracts became possible, it was clear we could offer a better product to our customers, especially in the key states like California, Texas and Georgia. So we ran at it.

In 10 months, we've moved to 3 structures: a technology partnership with Crypto.com, our FCM connected to Kalshi and our own full stack exchange UDX, which we launched in July. Each step improved the product for our customers and improved our economics. We've now got the full stack of necessary pieces, all 3 of the critical U.S. derivative licenses, an FCM, DCM and a DCO. We're the only sports-first operator live with all 3.

Owning the full stack allows us to offer the best customer experience and capture structurally higher margins. A key piece of our offering is our proprietary orchestration layer. Via the orchestration layer, we're able to route customer orders depending on where the order is and where it's made, depending on what the order is, where it's made, all in service, we're providing the best experience to our customers. You can see here how owning the full stack and having the orchestration layer shows up for our customers. All those entry types from a few slides up that our customers couldn't do earlier with us, now they can.

Singles, combos of any kind, players are from the same team, a single player, really any opinion they want to express, now they can. The orchestration layer is the plumbing. It handles the regulatory complexity, so the customer never has to think about it. And it all sits in a seamless single app with one account and one wallet. A customer in California used to have player picks only. Now they have players, teams, singles, combos and everything just works, the full offering in almost every state.

Now that we have the core experience nailed, we get to focus more on net new innovation. Since we announced the deal just over 2 months ago on July 30, we've launched 2 new games, Crash and Rips. And this month, we're launching Supercharge, a new market type we think our customers will love. Games are driving more and more of our activity, and they're a great example of our product velocity and how it's a key driver of our success. And just like the core experience, everything we offer is seamless in the same app.

Hopefully, you can see we've consistently innovated across regulatory frameworks. We started offering single-player fantasy. We then built Champions, the first peer-to-peer Pick'em game to help satisfy some regulator concerns. We launched sports betting under the state regulatory framework. But then when prediction markets came, we quickly sprinted towards the opportunity, operating as a technology service provider and FCM and now a full stack exchange, leveraging our DCM and DCO.

Our product ability and velocity is a massive advantage in our ability to navigate uncertain regulatory environments. And there is, of course, uncertainty with prediction markets. We believe the uncertainty is likely to be largely resolved by the U.S. Supreme Court, and we think the final resolution is quite likely to come next year. There are 2 directions of travel, and we're well prepared no matter the direction. If federal oversight holds as is, you've seen how we're set up in that direction. If the Supreme Court defers authority to the states, there's different variations to what could happen, but would largely go back to the setup that made us the fastest-growing revenue company in the category through our first 6 years.

Because of the way we've built our product, any change in the regulatory environment will be seamless for our customers. They'll be in the same app, same account and wallet, same core experience. And in our key states, it's just a question of which markets are available to them. Do they have team markets or if there are no sports prediction markets, only player markets. We look forward to the clarity the sooner, the better. 2026 has been a year of transformation for us. Last NFL season, prediction markets reset what could be offered to sports fans across the U.S. We put our heads down the offseason and spent the first part of the year rebuilding our product, as you've seen.

Given the product transition we had to make, we deliberately slowed investment, taking marketing spend down over 30% year-to-date. We wanted to make sure we are back to having what we believe is the best product for our customers before spending more aggressively on marketing. The signals from month 1 of NFL season are very strong, and we're confident that, again, we have the best product for our core customers. Customers are engaging more, handle per customer is up 165% year-over-year in Q3. Average deposits per customer up 109% in that same period.

Net revenue in our slowest quarter of the year, Q3, was $105 million, up 118% year-on-year. Handle grew even faster and monthly actives grew 13%. I do just want to caveat the year-over-year revenue growth in Q3 benefited in part by the sporting calendar as we had some World Cup in Q3 and by us lapping an unusually bad margin period at the end of last Q3. Also worth pointing out, our business does have variance and volatility tied to sports results.

Our results are impacted by the outcomes of games and player performance. So when there are unusually high scoring games or favorites consistently win, we'll see it in our results. But over time, we have a lot of confidence in our trading ability and our structural edge. Given the product transition we just made and the KPIs we're seeing, we're feeling great about accelerating customer growth as we head into the most exciting sports calendar of the year with NBA season starting in just a few weeks and NFL a month into its season.

To close, Underdog is the fastest-growing sports gaming company through our first 6 years with over 5.5 million deposit customers. We're the only sports operator -- sports-first operator live with an active FCM, DCM and DCO. We offer nearly 100% of the sports experience in almost every state in one seamless app. Our revenue is well diversified, and we're well set up to succeed under any likely regulatory outcome. And we now head into our biggest quarter of the year with the best product we've ever had.

And with that, I'll hand it over to Clifford.

Thanks, Jeremy. Let me remind you of the financial highlights. We're comfortable the acquisition will deliver strong returns for IG in line with our M&A framework. The TAM is large and growing. You've seen how Underdog has delivered very strong revenue growth. We believe that Underdog can succeed in different regulatory scenarios. We're excited about the prospects for the business.

Finally, the transaction is structured to incentivize the team to deliver. Underdog more than doubles IG's U.S. revenue and increases U.S. monthly active customers more than tenfold. On a combined basis, the U.S. contributes 41% of revenue, up from 19% now. Underdog also diversifies IG's revenues by product, which we expect to reduce short-term variability as underdog's revenue streams are largely uncorrelated with IGs.

Following the transaction, Prediction Markets and DFS would represent 27% of combined group revenues. So IG relies less on any one single product. In summary, the transaction brings strong strategic and financial benefits. It accelerates IG's growth, diversifies our products and meets our return targets. Next, a reminder on structure. The $1.1 billion upfront reflects the enterprise value for 100% of Underdog at closing or 2.4x net revenue for the 12 months to June 2026.

IG will settle the equity value in 2 parts, 60% through the issue of 24.1 million new IG shares, a number fixed on 30th of July 2026. To be clear, the number of shares we're issuing does not change with the IG share price. The remaining 40% will be paid in cash funded initially through a bridge facility. On top of that, an earn-out tied to 2026 revenue achieved of up to $200 million.

Separately, there's a management incentive plan, which sits outside the purchase price. It rewards eligible employees when underdog delivers 2028 and 2029 EBITDA targets and Underdog's own earnings will fund it. The earn-out and the management incentive plan pay out only as Underdog delivers. We'll now have plenty of time to answer your questions. Just a reminder that IG has another Capital Markets event on October 22, focused on IG's existing businesses. So the 3 of us are available now to answer all your questions regarding Underdog.

With that, I'll ask the operator to open us up to questions.

[Operator Instructions] Our first question comes from Ian White from Autonomous Research.

Slight confusion because my name is not Ian. It's Haley Tam from UBS. Could I ask a couple, please? Firstly, thank you very much for laying out. Let me understand regardless of whether this is a UDX or crypto or Kalshi ultimate venue for trading, the user doesn't see any difference in the app. If I can confirm that's true.

And I guess the second question is, when we look at the data you published, we can see that the UDX portion has grown from, say, around 50% of your volumes 2 weeks ago to now over 75%. I just wondered what your vision is, Jeremy, for where the percentage should land. And when you say structurally higher margins from owning the whole stack, could you give us any more color on that, please?

Yes, of course. Thank you for the question, Heidi (sic) [ Haley ]. So your first question was, does the customer see any difference? They do know what venue their trade is executed on, but the core UX, the core flow is the same no matter the venue. And that's a really important part of the orchestration layer and the product we've built is it's totally seamless for the customer to express their opinions. It's something we're really proud of.

I think your second question was the comment on UDX's growth, and we have seen UDX scaling up nicely since we have launched it. So we're really excited about that. But no specific guidance on the right mix. The mix is ultimately around what provides the best experience to the customers and ultimately the best economics. So we're going to let the data continue to drive us in real time on that.

And is there any comment on the structurally higher margins you get from owning the whole stack?

Yes. I mean if you think about a broker trade versus a trade that executes across every lever, there's ability for economics at every lever. So because we have every single lever there, there's the ability to capture more economics. We're not giving specific guidance or details on the margin at each level.

And Haley, if I may add to that, because the technology is in-house and the licenses are in-house, we have greater flexibility and critically also the ability to change things more quickly than we might in a slightly different world. And we believe that the economics -- the net customer economics will benefit from some of the ancillary products we offer around this, which is the point Jeremy was making about diversification.

So to your first question, customer behavior will determine the end mix of prediction versus DFS. But we will -- we are almost agnostic to that over time. And as we broaden the product range around the core stack, we believe we will evidence better retention and better economics per customer.

Our next question is from Ian White from Autonomous Research.

Hopefully, you can hear me okay. It is actually Ian White this time. Three questions, please, if I can. So Jeremy, please. Simply, what most excites you about the combination with IG Group? What does IG bring that improves Underdog, in your opinion, please?

Secondly, can you talk a bit about your experience running a commercial sportsbook, which I think underdog did for a little while. How much cross-selling did you sort of see at that time during the period you ran that offering. Obviously, you would have had a broader suite of products, at least for some customers. Did they start doing more with you and move away from other sportsbook providers? That's question two.

And lastly, can you help me understand what makes you confident you can sort of sustainably internalize volumes onto your own exchange when there are established sort of liquid markets to some of the products that you might want to offer. Can you just help me understand that, please? I'm thinking around basically best execution on the last point. Interesting thoughts there. Thank you.

Yes, for sure. Thank you, Ian. Glad we finally got you. So let me start with your first question, just what makes me most excited about IG. And I think it's a few -- there's kind of some gating factors when we decided this -- we wanted to team up and then there's a few key pieces. So the gating factors obviously are the belief in the team, Breon and Clifford. The business led by Michael Healy, Andy Biggs, Sarah, on the compliance and legal side has been a great partner already for us. So just seeing the caliber of the people, the culture the team there is building gave us a lot of belief in IG and the business, which obviously, if we're going to be part of the business, we want to really believe in it.

So that's a big part of it. But that's kind of the gating factor. Really, a big part of what drives, I think, the reason this makes a lot of sense is -- we believe in this coming convergence. Actually, it was Breon, who kind of first shared the vision with me a while ago of the convergence of the different ways a customer can express opinions, not just in sports, but we've got kind of sports as our DNA on one side. And obviously, IG's business is another DNA kind of in the financial markets almost on the other side. And it's very clear there's this coming convergence that I think we, as a combined company, are really well positioned for, and it's going to be a really big opportunity we talk more about over the next couple of years. So that was a big driver.

The question you asked about when we operated in a licensed sportsbook in America. So I think it's worth sharing a bit of what our strategy was when we operated mostly under the state regulatory framework. Our strategy largely was use our product, use the Pick'em product, to acquire customers, of course, across the country, but really focused on the states without sports betting. About 40% of the country doesn't have legal online sports betting. That's big states like California, Texas, Georgia. In those states, we were the best legal way for a customer to express their opinions on sports. And as a result, we had tremendous growth in those states.

There was always the belief that over time, states that didn't have legal sports betting would legalize sports betting. And our strategy always was to then offer that in a seamless experience, all in the same app, where the customer effectively, not much changes for them, except they now have more markets. They now have teams and some of the restrictions that they had to do or they had to kind of stay within the fantasy regulatory framework, those restrictions are all gone, right? So now they can do anything they want.

So that was the strategy. When we launched Sportsbook in the one state we did in North Carolina, we obviously saw a ton of cross-sell because we didn't have to move a customer from one app to another, from one account or one wallet to another. We didn't have to move them at all. We just were able to put more markets there and take away restrictions. So customers kept on doing largely the same things with more options and a lot of them cross-sold into what was then OSB because in that case, we turned off fantasy and it all became OSB.

We had -- if you think about our customer history, there -- what they do in fantasy, it always has to be multiple players. So it's very similar to what a sports betting is considered a parlay. We had in sports betting, I believe, the highest parlay mix across the category because that's what our customers were used to doing in our app, and that's really what our interface was built for. We've seen a very similar thing if you kind of think about the same strategy. We've now got to deploy that with prediction markets.

So in our app, in California, customers went from before last September, it was only players now to having players and teams. All the restrictions that were there in fantasy sports removed from them, and now they can express whatever opinions they want. And we're seeing that show up, obviously, in our data. I think your third question was around how are we confident in our ability to have volume on the exchange and execute trades on the exchange. And look, it's about the customers and what the customers want to do. What is offered across prediction markets, the currently, the markets themselves are largely commodities, a big part of the markets, our singles certainly are.

And then you can think about combos as more bespoke. But really, again, it's about the customer, owning the relationship with the customer and what that customer wants to do, which is express an opinion on sports, right? It's not for them about what venue do they execute on, what regulatory framework is that under? It's about, "Hey, are the Patriots?" I mean, Patriots, I'm going to use them as my references all the time. Are the Patriots going to win today and how are the players going to do?

So just to build on that, Ian, as you know, some of us have experience from the Betfair Exchange days and whilst it's important, liquidity is very important, liquidity doesn't predetermine -- doesn't necessarily predetermine success. So we think there will be multiple exchanges. And to the specific question about best execution, without -- just going back to what Jeremy said, we obviously have considerable experience of operating in regulated financial markets where things like best execution are core to the product offer.

So I think as this market evolves over the coming months and years, we will bring some capabilities to the table to bolster the incredible customer centricity and product velocity that Underdog brings.

Can I follow up just briefly on the final point? Is it -- just is it about what customers want to do? Or is it about sort of what is required by regulation basically? Can customers say, look, I want to execute on underdog or do they just sort of hand you a position and say, I want the best price for that. And you have to kind of work out the answer to that, whether it's internal or third party.

And then just on the point that you made, Breon, am I sort of hearing correctly that you're really talking about -- here about offering proprietary liquidity, your own market making basically to boost on -- own venue. Is that where this is likely to go?

Yes. So the customer -- to be clear, the customer does know it's there in the text, what venue their trade is ultimately going to execute on. But a customer is not coming into underdog saying, "I want to execute on UDX. I want this to be fantasy. I want this to be on a different platform. They're coming in and saying, "I want this combination I want or I want this single, the Patriots to win that I want.

And of course, they're going to want the best price at the amount they want for that. And so that's what our orchestration layer does seamlessly behind the scenes, so they don't have to think about it. Again, it's about the opinion the customer wants to express. We handle everything gracefully behind the scenes, and it's a huge part of the value stack for us and the value we built in the product. And on the liquidity part, I mean, as we bring on more and more market makers, obviously, there's growing liquidity. And we've got a lot of customers that as well provide the liquidity into the platform.

It can be dangerous to be seduced by all the similarities. But I think there's a probable end state here where customers express, to use Jeremy's words, customers express opinions and they get filled through a selection of exchanges, where there are varying mix of market makers depending on what customers are expressing an opinion on. And that resonates a bit with putting the Sportsbook on top of the exchange at Betfair, where we were able to offer different product to differentiate ourselves from Sportsbooks and to differentiate ourselves from exchanges because we had product flexibility and promotional flexibility that people who just operate in one reg stack or one tech stack don't have.

In terms of the opportunity for IG, whilst these are enormous markets, we can transform the prospects for IG shareholders by just being an active growing profitable part of them. And I do think this is not going to be a winner take all. I think there will be multiple winners in the coming years.

Our next question is from Jordan Bender from Citizens.

I maybe want to start on the customer acquisition. You guys sort of talked on it, Jeremy. But with the products that you're now adding to the platform, we think the Crash product, Pack Rips, are you seeing customers that you're acquiring from those specific categories maybe less sports-minded customers coming on to the platform? Or is it still the main funnel here coming from what was legacy DFS going into PM and then into those smaller product offerings?

And then on the second one, I think you guys just kind of touched on it a little bit if we can elaborate a little bit more around the promos or the financial incentives. You own the whole stack in theory, that could allow you to freely give more money or customer incentives towards your customers or retain more of the economics in the long run. Jeremy, can you just kind of talk about the strategy there and maybe the advantage that gives you versus your peers?

Yes, absolutely. Thank you for the question. Thank you for tuning in Jordan. So first question was on what we're seeing in the early data for customer acquisition for kind of our new games products. And Look, we've only had a month with the games for the most part. So not ready to share a lot of data yet, but you asked about cross-sell specifically, and we are seeing really nice signs of cross-sell both ways, but we've got a lot to develop, a lot to learn on that.

Your second question, I think, was just about the optionality and the opportunity kind of we have by owning the full stack, and it's obviously a really key part of what our strategy has been and what sets us up for success is the full stack and the seamless integration of payment methods, promo mechanics, again, the ability for the customer to simply want to express an opinion and have that executed best for them.

And then obviously, in owning each of the vertical pieces of it, we've got so much flexibility to be able to provide the best customer experience and as I obviously talked about in the presentation, our North Star always is how can we offer the best experience possible to the most customers. And we think as long as we follow that North Star, it will continue to drive us obviously, to the economic rewards as a result.

Just to build on that, Jordan, we expect customers to come in through all of these different top-of-funnel devices. We see customers come in through the Rips Pack, which you'll probably know is a very fast-growing adjacent category in the United States. We also see customers migrate and change their behaviors who started in a daily fantasy background.

We also see customers coming from states where daily fantasy previously wasn't a thing. And I think the trick to maximize value creation in the coming years will be to really understand the unit economics for customers coming in through different parts of the funnel who then will cross-sell to varying degrees to other parts of the business. And you referenced promos in particular, doing that properly, cognizant of regulatory constraints as and when they evolve, I think will be part of the way we'll capture value for shareholders and maximize the experience for customers in the coming years.

Our next question is from Ben Bathurst from RBC Capital Markets.

Hopefully you can hear me okay. Great. So I was wondering if you could just talk a bit more about your vision for the business in the sort of more adverse scenario for prediction markets, so scenario B. Am I right in saying that you envisage opening back up into DFS products in those states where you've recently surrendered licenses?

And also, if the Supreme Court does ultimately rule against sports prediction markets, might you consider moving into regulated gambling to sort of broaden your target market? And just if not, why not?

So I'll take the second one. Jeremy, you take the first one. It's too early to say what will happen at the Supreme Court. And since we announced the deal on, I think, the night of July 30, there's been an awful lot of news, legal and political. We were expecting a lot of noise. There's been plenty. Probably one of the things that has changed since July 30 is the split court decision looks like that will be an accelerant to getting to a Supreme Court judgment.

So probably end state certainty is coming sooner rather than -- sooner than probably we had -- we might have anticipated. I think that's a good thing. But Jeremy, I think, is now going to talk to the flexibility of the product and the team. I think it's too early to judge it. I think irrespective of the Supreme Court outcome, we will have a customer base. He's referenced 5 million depositing customers already of young typically 20 to 40, typically male people that are interested in sport that we know are also trading on other asset classes.

But guessing what will happen at the Supreme Court and what we will do thereafter other than hoping to remind people that we have considerable optionality, I think it's just too early to say what the end state will be. But do you want to take the first question about DFS?

Yes, for sure, Ben. I'll take your question kind of as what do you do if the Supreme Court does defer authority back to the states. And your question and kind of answered it, yes, we'll shift more of our flow or predominantly all of our sports flow back to the fantasy sports, the DFS regulatory framework. You asked about the states that we recently surrendered licenses in.

So let me just explain that. We surrendered licenses in 7 states recently. We did that because in conversation with those regulators, those regulators are not fans of prediction markets. And if we wanted to offer prediction markets, they would have preferred or kind of we would have preferred given the relationship that we're not also offering fantasy in those states. 6 of those 7 states, we did not offer the core Pick'em game that I've taken you through in this presentation. We only offered our DRAFT game.

And while we love the DRAFT product and the community that comes with it, it is a very, very low immaterial piece of our revenue mix. So in surrendering 6 of those states, it was essentially no revenue surrendered if we have to go back to fantasy if prediction markets go away. And then there's one other state where we have a lot of confidence that if prediction markets go away and we want to reenter that state, there is a fast path to doing so. So that's on the fantasy side.

As Breon kind of articulated, we've built a new capability recently, obviously, with our exchange, and there is a lot that can be offered on that exchange via prediction markets and other asset classes if and when or even without sports prediction markets going away in either outcome. And that is something over time, we obviously will develop. We're also, as shared in the presentation, now able to spend a lot more of our time and energy on new games and experiences as we really feel good about our core product offering. So that will continue, and we'll continue to develop more resident games there that give us more ways to acquire customers, retain customers, engage customers, monetize those customers and obviously help diversify our revenue.

And then you asked, would we go into regulated OSB? And that's absolutely a question that we'll answer and evaluate, and we certainly have the capabilities to do so if that's what's best for our business. So again, we feel really well set up for any outcome, and we certainly kind of like the uncertainty or the limbo to get answered sooner than later because we feel really good about either path for ourselves.

Our next question is from David McCann from Deutsche Bank.

A few questions from my side. A couple on the numbers, if that's okay. So the first one, we add up the Q1 and Q3 revenues you've given us $355 million, and you said that Q4 is typically 1/3 of the revenues historically. And that implies you'll get to maybe $533 million for the full year, which puts you right on the cutoff of the earn-out. I mean, is that how you see things? How likely is an acceleration in Q4 in order that you achieve the earnout? That's the first question.

Then thinking about the $400 million and $700 million EBITDA implied by the management incentive plan payout, what kind of revenue growth do you need from this year to actually get to those points? And I guess what gives you the confidence that you might be able to do that? I appreciate that's the very upper end, but what kind of revenues the business actually need to deliver to get there?

And then final one really for me on this. How much of the growth to get there comes from new products to the existing customer base versus customer growth? Where is that growth really going to come from?

Jeremy, I'm going to try and take those, Clifford, I'm going to let you take the middle one, I think. The third one, I appreciate people would like to model the business. But this business is young and rapidly changing in a rapidly changing legal and political world as well. So without oversimplifying, I think Jeremy's job and what Jeremy's success and his team's success to date is to navigate customer demand by building great product. And that gives us confidence that almost irrespective of the product mix, to your third question, that we can build a business together that delights customers and retains them in the medium term.

To go back to the first question, which I think was about the likelihood of hitting the earn-out, we use this -- we correctly used the phrase that Q4 last year was more than 1/3 of revenues. I actually think -- and I actually think it was closer to 40% of revenues last year, but last year was also a high growth year, and we thought it might be sensible to call out that tempering that optimism about Q4 seems wise. We've looked at other public companies as you can to see their sports mix and Q4 is the most important quarter for most of these American sports-focused businesses.

The NFL is 3 weeks old at the end of September. The NBA starts, I think, on October 20. So this is the critical time in the year and the seasonality, even speaking as a former bookmaker, the season -- the seasonality of the sporting calendar in the United States is something to behold.

Your middle question, which I'm going to pass to Clifford was about, in some ways, the likelihood of addressing the earnout. You can get there many ways. And Jeremy and indeed his colleagues have got there in one way. We think about it in similar but different ways. Clifford will frame it in a way that perhaps is tidiest for you. But I look at the TAM of the listed U.S. Sportsbook businesses, FanDuel and DraftKings, let's call that $7.5 billion. They're the vast majority of the market, probably 80%, but they're only in 30 states. And then you layer on top of that daily fantasy, prediction markets and some of the other ancillary products.

So you've obviously got an enormous TAM and are growing quickly. This team year-to-date, despite extraordinary change in the business, have grown at 30% year-on-year. So I think they should have confidence to back themselves to grow at a similar kind of rate to that, which should get them deep into the money. Do you want to be a bit more specific? Or would you rather...

Well, I think we've -- we know -- we've guided somewhat around what we think revenue growth can be. So we said that it would accelerate IG's growth and that we expect at least double-digit medium term from IG. So we're looking to -- Underdog to accelerate IG's growth. I think in terms of the modeling, we felt that we collectively felt that an earn-out in this year made sense as the business is building its revenue and customer base, that next year is an opportunity for the business to really scale and accelerate. And then having alignment around EBITDA kind of makes sense.

It gives the business enough time and the team enough time to deliver good margins and profitability and it aligns, let's say, the underdog team with IG more broadly and shareholders in particular. If you look at some of the consensus and some of the models out there, I'm sure you've done your own model, you can see that some of the sell side have modeled 20% plus revenue. That's a bit lower than what the team have delivered over the last few years and margins in the sort of high teens. I guess those sell-side analysts have looked at other comparables and peers.

So I'm not -- and I think when you model that out, actually, that gets you okay returns, maybe not quite double digits and a little bit south of the EBITDA numbers that we've targeted the team to deliver. So that gives you a bit of a framing. I'm highly confident you can run your own models to do the sort of revenue growth versus margin optimization to see where that gets you. But it's really impressive how aligned and motivated the team have been. We've got to know the team well through the transaction in the last few months, and we're looking forward to delivering.

Our next question is from Alex Bowers from KBW.

So 2 questions, if I may. Can you hear me?

Yes.

Two questions. Just firstly, can you talk a bit about the marketing strategy for the business and in terms of how you think about customer acquisition costs and kind of the marketing ramp-up over the next few quarters?

And then just sort of secondly, kind of the point that was made around IG Group's overall double-digit growth aspirations, which includes, I guess, includes Underdog. Could you just kind of confirm whether kind of the revenue retention point for IG Group, like how material that is to that aspiration? Or was that kind of excluded from that kind of double-digit aspiration?

Thanks, Alex.

I'll take the marketing one, second. Do you want to take the retention one first?

Yes. I mean you saw our trading statement last week. I mean we were disappointed with Q3 retention at around 70%, but we also reconfirmed our medium-term guidance because we feel that we know that retention can be volatile within any particular quarter, but we're comfortable in our risk management approach. We're looking to improve it over time, of course, but we don't think they're necessarily related. So we reconfirmed our medium-term guidance reflective of that risk management approach.

I think it's important that we understand our medium-term guidance is just that, not a commitment or a guidance in any 1 year. It's subject to market conditions and will move higher and lower accordingly. And clearly, we expect more volatility around retention in any one quarter than in any one year. So we maintain that guidance, and we'll clearly -- that's one thing that we'll talk about at our event on October 22, where we'll talk about the future prospects of the business, including Underdog. But we do feel, as we indicated at the end of July, that Underdog's growth rate will accelerate the overall growth of the group.

Thanks, Clifford. Alex, you asked about marketing and our marketing strategy. And I think obviously, a handful of pieces to this. So we very much view Underdog as I think you can tell from the presentation as a product-led company, and we view marketing very much through the lens of product-led growth.

Historically, over 1/3 of our customers have come from directly attributed referrals from other customers playing on Underdog. So we do a lot to build an experience that people want to play with their friends, share with their friends and do so. And that's always a focus. Also an experience that people enjoy, have fun with leads to that virality. We have a real philosophy in marketing of our job is to show and make sports more fun. It's to be part of the sports moments in a way that enhances the experience for our customers. And our marketing, as you can imagine, is very seasonal, right? It's very based around the sports calendar, the key sporting events, the key sporting moments.

And so you'll see that in the summer. It's at a lot lower when football season pick up, start to picks up when NBA season adds in is when it really accelerates. We're now obviously heading into the most important and biggest piece of the year by far. So you'll see hopefully more and more, especially if you're in the U.S., you'll see more and more of Underdog, our brand, our campaigns, some of the really fun creative things we do.

We've got a team we call the Rascals that kind of does guerrilla marketing. And the key there is to really know sports. We always say we know ball is kind of a principle of our marketing to know sports and make sure we show up in the sports moments in a way that make it more fun for our customers. We've done that in a bunch of ways to date. I'm sure you can see or hopefully have seen some of the ways that we've kind of cut through with marketing messages that often don't cost much money at all, but make us really part of a key moment. And there's hopefully a lot more of that to come as well.

And just to -- if I may, just to build on that, I think one of the places -- it's a crowded market in the United States. You've got some of the prediction market businesses that are about everything rather than sports. You've got some of the legacy online sports brands that customer research suggests have become a little dated. There's Underdog, maybe there's PrizePicks. But one of the areas where Jeremy's colleagues have been most keen to get support from us is just on how you scale marketing through the year and in a somewhat crowded market.

And one of the things we're very proud of -- I'm very proud of at IG over the last couple of years is as we've run the business more efficiently to fund marketing, the returns on that have been very encouraging as well. So I think that's one of the IP synergies that we hope to be able to mutually support each other over the coming years.

[Operator Instructions] Our next question comes from Haley Tam from UBS.

Sorry for coming back for a second pass. Can I just follow-up on some of the questions you've already had. In terms of the different regulatory scenarios that you highlighted, I guess the simple question is how quickly do you think you could pivot from prediction markets back to, say, daily fantasy sports?

Then there's a second question actually more about Q3 that you've just done, the $110 million of revenue. Can you give us any more color on how much of that came from daily fantasy sports versus prediction markets? And perhaps within prediction markets, how important to your revenue line, the different types of trades are, so parlays versus single game or player contracts, that would be interesting.

Thanks, Haley. And apologies, I think I called you Heidi earlier. So on the Q3 revenue mix, I don't think we're going to disclose the specific revenue mix. On the regulatory, how quickly could we pivot if something changed. If that change happened right now, I'd make a phone call and probably within -- certainly within 30 minutes, our app would be working under that new regulatory framework.

We built the app seamlessly for that with the orchestration layer. And it's something as we navigated different kind of state environments, we often had to have different configurations in different states. So it's something our product back end and as a result, obviously, the front end is well built for. So it's a real kind of key of the orchestration layer, the seamless single app and the whole strategy is how quickly we can pivot to any effective outcome.

Just to -- Haley, to add to that, I think mix questions, I understand the rationale behind them, but they're going to change enormously over the coming few months. I think that's probable based on Jeremy and I sat down and looked at the product pipeline for the next 3 months a few times over the last few days, and that's going to change things plus how effective we are at spending marketing dollars even on a geographical basis will change mix as well.

So I really think that level of granularity is unhelpful and that the big picture is just a little bit more helpful for right now. Whilst he says he can change things in 30 minutes, that is true. We were astonished at how quickly they could launch the exchange. And the fact that I think in the end, you were 4 days late, the fact that anything could be 4 days late and that they would feel slightly aggrieved about that when I'm more accustomed to things being slower and later. But part of the complexity here is we don't know the end state. We think the end state will be some kind of hybrid. We think there will probably be some kind of local taxation.

But we have as many of the tools as we can envisage built in-house, controllable by us with the ability to flex, not in the way that kids use the word flex, but with the ability to pivot probably more quickly than any of the large legacy orgs and with that -- but also as a regulated OSB admittedly in only one state. And we think that we're uniquely qualified. We feel that we should take a certain amount of comfort from that and that we're close to uniquely qualified to compete irrespective of the regulatory end state. So maybe it's not 30 minutes, but it should be as fast as anyone out there. And maybe it is 30 minutes.

I really appreciate the full answer to that question. If I can be cheeky and just ask one more. You said you expect the end state to be some kind of hybrid. Can I just confirm that, that was absolutely the case when the deal was originally struck?

I mean this -- we have been talking for a very long time. I think it's improbable. This is a personal view, but I think it's improbable that -- I think it's highly improbable that someone can put lightning back into a bottle, having spent -- spending a lot of time in the United States, the prediction market has caught a Zeitgeist in maybe the way that crypto did a number of years ago.

I don't see how this goes away. But equally, as ever, one should follow the money. And I think that will lead to some kind of taxation somewhere. I think that's the highly likely end state. But that's a personal view. I can't read the minds of the Supreme Court judges, and they will ultimately determine.

Our final question is from David McCann from Deutsche Bank.

So a couple more, if that's okay. Just wanted to follow up actually on Haley's question around the mix, but I appreciate you've kind of given an answer to this. But I think where perhaps some of us are a bit nervous, you did articulated this when you announced the deal that the revenue margins that you get from some of the new products like Prediction are lower than what you get from the legacy book.

So as the business does continue to transition, which you obviously hope for, what are the risks that particularly, as you know, you have on the public markets, people are going to look at the quarterly numbers rightly or wrongly, that we do see some revenue headwinds quarter-on-quarter or even year-on-year as that transition goes through. So how are you thinking about managing that messaging risk? That's the first question.

On the deal more broadly, I mean, to what extent, Breon, is this a defensive deal because of concerns you might have about the long-term growth of the existing group businesses and the risk of prediction markets increasingly become ways for your existing customers to express their opinions on financial markets versus some of the other reasons you've articulated well for doing this deal. So how much of that played into your mind when you're doing the deal? And then I guess, finally, probably again, one for Breon. How are you going to keep Jeremy and his team at IG beyond 2029 given, let's say, the history of moving on?

Do you want me to start with the mix and then you take the final...

No, you do the final one. So you do the final one. Why might you stay? Jeremy is a lot younger than he looks. And he's got lots and lots of runway ahead of him. And actually, he successfully built 3 start-ups -- and I think you meet the caliber of his team, and I really mean it that they are -- I'm very proud of the caliber of the team we're building in IG, but the caliber of the people at Underdog is enormously exciting.

And I think if we can find a way, and I believe we can, if we can find a way for Jeremy to deliver on his customers' desires and his ambitions within IG, first and foremost, in sports, I'd hope that there is -- I don't think we're in any way opportunity constrained by the group, and I think there'll be more than enough opportunity for Jeremy and Brandon and the rest of his team over time. But maybe he should address that at the end.

To go back to the first question was margin, yes.

Yes.

So guidance, maybe I was a little casual, a number of our shareholders were shareholders in Betfair, Paddy Power or Flutter or indeed, some of them are still shareholders in Flutter. We felt that there was a reasonably good read-across the FanDuel business from U.K. shareholders. And perhaps then -- and there was some debate about this internally, so kudos to Martin for trying to make me do more of this.

Perhaps I could have focused more on the seasonality and just helping people build the sports model so they would understand the Underdog revenue mix over time. I think -- so that's a gap that perhaps I could have done a better job on back in July. I think the margin issue is interesting, but not as defining of the outcome as people might think. The prediction markets, specifically Polymarket and Kalshi, both private companies. They are talking up their notional traded volume with great gusto and great effect.

And if one goes even superficially into kind of the Twittersphere about how people are talking about this, it's hard to substantiate exactly what the economic value of some of that notional is. Closer to public company terminology is handle, which we've used in the slide to reflect the actual dollars that customers are staking. And then ultimately, we get to a revenue or net gaming revenue. I think the key metric here is NGR, is net gaming revenue. And handle will go up over time and indeed, notional on prediction market exchanges, if people have 100-leg parlay, a $1 bet can have a notional into the thousands or even tens of thousands. So we think you have to look at revenue.

Now frustratingly, right now, we're the only real public company -- we're the only public company that's talking about revenue currently. I think Robinhood will have done in the past and will talk about revenue from prediction markets over time. But reconciling the difference between notional, handle and revenue is tricky, and we will work with shareholders and sell side to best understand that as time passes.

And those conversations are already underway. We've got work to do, but I think shareholders will understand the complexity of modeling this and giving the right guidance on this because of where you anchor in terms of what stage of the revenue line or the notional handle revenue line.

To your second question, which is kind of the strategically interesting one, was this defensive? If you go back 2.5 years at IG, we were effectively seen as a bet on a mono product, an old U.K. legacy product, over-the-counter CFDs and largely we're a U.K. play. That was very much the case before tasty. This puts us -- and there was considerable -- there was some concern with shareholders about the concentration associated with being as U.K.-centric and as CFD or spread betting centric.

And you might remember the budget last year, the kind of relief rally after the budget showed just -- I think there was a 10% rally in the share price, which showed just how concerned shareholders were about our exposure to regulatory or political events in the U.K. And since the summer of '24, so just after I joined, we talked about filling out product gaps. And then by the summer of '25, we were talking about adjacencies. We have wanted to diversify this business for the good of our shareholders. We wanted to get into a brand and product suite and a regulatory suite that resonates with a younger customer base. And I think prediction markets in the United States fits very well there.

I think Michael Healy will do -- I'm very excited about the job Michael Healy will do on the 22nd of talking people through the growing momentum in the core IG business and how that's also led by product and marketing and the cultural change that he's orchestrating. But I think even in addition to the progress we're making at IG, the opportunity on a sensible deal structure and what we think is a sensible price to get our shareholders' exposure -- to give our shareholders exposure to as faster-growing customer base and revenue and profit stream as prediction markets in the United States, we think that's something we're very excited about. And we think in time, our shareholders will be increasingly excited about as well. Do you want to build on that or we good.

I think it was good. One comment I'll make, I mean, we are -- we have the discussion, obviously, in the process through the announcement of the transaction. And we've engaged with the team around trading since then. I'm really satisfied, frankly, with the shareholder value orientation, the discipline around marketing that the team shows that we have the same conversations around CACs and LTVs and so on.

And ultimately, we'll need to deliver revenue and we'll need to deliver EBITDA. And then that's how we've incentivized the team, and we'll be pleased to pay out as and when the team deliver on those stretching targets.

Yes. David, just to build on the first part you asked around just the mix. I mean, we very much view it as our job to continue to offer more and more to our customers so that they can engage more. And that's something we obviously focus a lot on. And as Breon mentioned and rightfully so, the focus on handle and obviously, the focus on net revenue that comes from that. We're really excited about the handle growth we're seeing as our customers are able to engage more and more. Now of course, the margin is not always going to go up as handle growth is going through the roof. But if you ask us, hey, can we have -- do we want 3x the handle at half the margin?

Of course, we do, right? And that's a trade we'll take every day. So there's obviously a balance in what we offer and how we offer it. It's something we're really thoughtful about. But we're really keen to just keep on offering more and more we can to our customers. And I think you can track that in handle over time. And then you asked what keeps us here in the long term. And obviously, the deal structure has plenty of incentive for us to really drive this business and drive growth over the next few years. But look, I think the important part always is that the team we have -- that we're having fun, and we have an uncapped opportunity to do this.

And I can say that I'm having some of the most fun I've ever had as there's so much in front of us, so much to build such an amazing time and kind of the sizzle reel at the very jump of this, hopefully captured that, but that's what it feels like at our company, and we're all having a really, really good time doing this. And so long as that's the case, I want to be doing this forever.

Thanks, Jeremy. I think we're going to wrap up. Nothing like the enthusiasm of founder in his 30s to make me feel like an old man. So Jeremy, thank you for that, and thank you to our shareholders on the sell side for joining us. The business gives us access to a large, fast-growing TAM. The team are executing well, and they're heading into their busiest quarter with real momentum.

I'm very, very excited about what comes next. For our IG business, we will do a strategy update on the 22nd of October. We'll talk about the progress we're making in the core business. We'll address some of the other questions that have come up in recent months. We appreciate your time today. We look forward to talking to you some more on the 22nd. Thank you all.

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.