First-half revenue came in at £5.0bn, as expected, reflecting underlying growth of 8.3%. Performance reflected broad-based growth across all business units. Recurring revenue momentum improved, with annual subscription value growth accelerating to 6.1%.
Underlying operating profit rose 16.6% to £2.0bn, as expected, driven by top-line growth, good cost control and improving margins.
Free cash flow rose 29% to £1.2bn over the year, and net debt rose 23% to £9.3bn since year-end. A dividend of 55.0p was announced, up 17%. The group completed £2.1bn of share buybacks in the first half and plans to complete a further £1.4bn by February 2027.
Full-year revenue growth guidance was raised to 7.0-7.5% (7.8% expected), from 6.5-7.5%, while margins are expected to improve.
The shares fell 3.0% in early trading.
Our view
LSEG delivered a record first half, with broad-based revenue growth, faster subscription momentum and another step up in profitability. The headline guidance increase was less generous than markets hoped but largely reflects expectations already sitting above the new range. More importantly for the longer-term story, margins, cash flow and recurring revenue metrics are moving in the right direction.
The central debate remains AI. Management is positioning LSEG as an enabler rather than a casualty, and the commercial model is becoming clearer. Customers will pay to license data for AI models, access its connectivity tools and consume premium AI features. Details around timing and customer adoption still need proving, but moving from experimentation to action is encouraging.
The AI enabler framing makes sense to us. LSEG owns scarce, trusted datasets and critical market infrastructure that models need but cannot easily replicate. AI agents also consume far more data than human users, potentially turning greater adoption into a volume opportunity rather than simply a disruption risk. Making its data available across models and cloud platforms also broadens distribution beyond its traditional desktop products.
After buying Refinitiv in 2021, LSEG now earns most of its revenue from tools and services that financial professionals rely on daily. Annual subscription value growth accelerated, and retention improved. That recurring base provides useful visibility and reduces the business's dependence on short-term market conditions. Data & Analytics growth remains more measured than the wider group, so pricing, adoption and competitive responses remain key areas to monitor.
Diversification remains a strength. Markets delivered double-digit growth in the first half, helping balance steadier progress in Data & Analytics. Trading activity will fluctuate, but LSEG's mix of subscriptions, indices, risk tools, trading and clearing makes earnings more resilient across market conditions. Continued product development across private markets, digital assets and post-trade services adds further avenues for growth.
The push to improve profitability is bearing fruit. Margins expanded materially, while record cash generation supports continued investment and shareholder returns. There should be further scope for revenue growth to outpace costs as integration and efficiency benefits come through. Net debt has risen alongside the accelerated buyback, but the balance sheet remains in decent shape, and earnings are backed by strong cash flows. No returns are guaranteed.
LSEG looks well-positioned to benefit if AI increases demand for trusted financial data. Disruption fears have left the stock trading on an attractive earnings multiple, with scope for recovery if subscription growth strengthens and AI monetisation becomes visible. We don’t think that a re-rating is needed to support the investment case, but questions around disruption could continue for some time.
Environmental, social and governance (ESG) risk
The commercial services industry is low/medium risk in terms of ESG. Social and governance risks are the most acute - like product governance, data privacy & security, and labour relations - as exposure to environmental risks is minimal. Companies operating within facilities maintenance are also exposed to community relations and emissions risks.
According to Sustainalytics, LSEG’s overall management of material ESG issues is strong.
LSEG has no significant ongoing risk events and has board-level responsibility over sustainability issues. Data privacy is supported through regular risk assessments and employee training. It offers sustainable solutions, such as ESG data, and holds UN PRI signatory status but does not provide specifics about its responsible products programme.
LSEG key facts
All ratios are sourced from LSEG Datastream, based on previous day’s closing values. Please remember that yields are variable and not a reliable indicator of future income. Keep in mind that key figures shouldn’t be looked at on their own – it’s important to understand the big picture.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.