ii view: London Stock Exchange bounces on share buyback boost

Full-year results to 31 December

• Total currency adjusted income up 7.1% to £8.98 billion
• Currency adjusted (EBITDA) profit up 10.6% to £4.37 billion
• Final dividend of 103p per share
• Total 2025 dividend up 15% to 150p per share
• Completed share buybacks of £2.1 billion in 2025

Guidance:

• Now expects full year 2026 income to grow by between 6.5% and 7.5%
• Now expects an increase in full year 2026 adjusted profit margin (EBITDA) of around 0.9%
• Planning share buybacks of £3 billion in 2026

Chief executive David Schwimmer said:

"We have achieved another year of very strong financial performance, driving continued top line momentum through significant investment in our product right across the business, bold strategic choices and an enduring focus on partnership with our customers. 

"We are very excited about the opportunities ahead of us: with our leading, trusted data, ongoing investment in product innovation and the depth and breadth of our customer relationships, we are very well positioned for continued growth."  

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ii round-up:

The London Stock Exchange Group (LSE:LSEG) today unveiled income and profit estimates for 2026  that beat City forecasts, with management detailing a new £3 billion share buyback, up from £2.1 billion in 2025.

Currency adjusted income for 2025 rose 7.1% to £8.98 billion, with an adjusted (EBITDA) profit margin of 50.3% driving currency adjusted profit up 10.6% to £4.37 billion. The LSE, which recently saw activist investor Elliot take a major share stake, expects income growth of up to 7.5% in 2026, with the profit margin growing around 0.9%. Analysts had forecast income growth of 6.7% with a 0.7% margin expansion.  

Shares in the FTSE 100 company rose 4% in UK trading having come into these latest results down 13% so far this year. That’s largely due to concerns for the possible impact of AI. The FTSE 100 index is up almost 9% year-to-date, while fellow financial data provider Thomson Reuters Corp (TSE:TRI) has plummeted by a quarter.

As well as operating the infrastructure of the London Stock Exchange, the company also owns financial data provider Refinitiv, compiling indices such as the FTSE Russell series.

LSE management signed long-term contracts with major financial institutions worth £1.9 billion in the fourth quarter alone, underpinned by its unmatched combination of trusted data and infrastructure. 

Income growth proved broad-based in 2025, with markets growing 8.9%, Data & Analytics up 5% and FTSE Russell index sales growing 7.3%. 

A final dividend of 103p per share, payable to eligible shareholders on 20 May, takes the total 2025 payment up 15% to 150p per share. 

Broker Morgan Stanley reiterated its ‘buy’ stance on LSE shares post the news, flagging the company as a ‘top pick.’

A first-quarter trading update is scheduled for 23 April.

ii view:

Headquartered in the City of London, the FTSE 100 company employs around 26,000 people across 65 countries. Its products and services are sold to more than 44,000 customers in over 170 countries. Data and Analytics generated most revenues during 2025 at 44%. That was followed by Markets at 39%, the FTSE Russell business at 11%, and risk management or Risk Intelligence the balance of 6%. 

For investors, the exact impact of AI on data driven businesses remains hard to predict. Cyclicality in certain operations such as company admissions and IPOs warrant consideration. The uncertain economic outlook and its potential impact on markets should not be ignored, while elevated inflation has pushed wages higher across both computing and financial services industries.  

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More favourably, the company has established partnerships with IT companies such as Microsoft and Databricks to parcel and use its data for AI purposes. Pressure on management to accelerate growth or extract shareholder value via business sales, for example, now comes from activist investor Elliot and its share stake. High levels of subscription-based revenues offer some protection against cyclical economic ups and downs, while a previous takeover attempt via the Hong Kong Exchange arguably underlines the company’s unique position.

For now, and while some caution looks sensible given the recent AI turmoil, a consensus analyst fair value estimate above £120 per share will likely retain investor interest.

Positives: 

• Product and geographical diversity
• Activist investor share stake 

Negatives:

• Subject to regulation
• Macroeconomic uncertainty can hinder performance

The average rating of stock market analysts:

Buy