LSEG reports in line with first quarter as collaboration with Microsoft progresses

The London Stock Exchange Group said on Thursday that first-quarter growth was in line with plans, as products from the partnership with Microsoft will be rolled out in the first half of 2024 as expected.

LSEG said total revenues, excluding recoveries, were 2.089 billion pounds ($2.61 billion) in the first quarter, with gross profit of 1.893 billion pounds, in line with LSEG’s calculated analyst consensus.

LSEG was “confident in continued growth and improving profitability,” adding that it was on track to meet all financial guidance issued at Capital Markets Day in November 2023.

LSEG, which provides financial market data and analysis to banks and other financial institutions, said organic growth in annual subscription value (ASV), a measure of recurring revenue closely watched by analysts, was 6% in the first quarter .

Good underlying growth driven by strong retention, robust sales and pricing was, as expected, partly offset by the widening impact of Credit Suisse losses, the company said, a reference to the forced takeover of the Swiss bank by its domestic rival UBS.

Organic ASV growth is expected to remain around these levels through 2024, despite further Credit Suisse impact, LSEG said.

“We started the year well, with another quarter of solid growth in line with our plans,” David Schwimmer, CEO of LSEG, said in a trading statement.

“We continue to make strong progress in our partnership with Microsoft, with a number of products expected to enter external pilot or general release this six months.”

LSEG is looking ahead to developing its partnership with Microsoft as it completes the integration of data and analytics company Refinitiv, which it acquired in 2021. The deal turned the 300-year-old exchange into a company where data and analytics make up about 70% of the business.

LSEG said a targeted procurement of £500 million was completed in the first quarter, and it is targeting £1 billion in total procurement by 2024.

Thomson Reuters, owner of Reuters News, has a minority stake in LSEG, which pays Reuters for news. ($1 = 0.8018 pounds) (Reporting by Huw Jones, Editing by Sinead Cruise and Tomasz Janowski)