Electronic trading major IG Group Holdings plc (LON:IGG) today issued its trading update for the three months to 28 February 2022 (“Q3 FY22”).

Q3 FY22 was another consecutive quarter of revenue growth for the Group, with net trading revenue from continuing operations of £257.2 million (Q3 FY21: £226.7 million) up 13%, or 1% on a pro forma basis, against a very challenging comparative period which included the extraordinary ‘meme stock’ related volatility.

This reflects an all-time high in the number of active clients of 292,200 (Q3 FY21: 220,900).

As anticipated, first trades in Q3 FY22 of 25,600 were down 32% on the prior year (Q3 FY21: 37,600) but continued to be significantly higher than the pre-pandemic quarterly average (Q1-Q2 FY20: 13,200).

Within OTC leveraged derivatives, performance was excellent across all regions reflecting increased trading in commodities and indices in particular. The UK and EU reported their highest quarterly revenue since Q4 FY20, which represented the peak of the pandemic-related trading activity. IG’s success in Japan continued, delivering another consecutive quarter of growth with record levels of revenue and active clients.

Within exchange traded derivatives, on a pro forma basis, tastytrade revenue for the quarter of £28.4 million was up 5%, or 3% in USD. Stock trading and investments revenue decreased year-on-year by 54%, although active clients reached record levels. The prior year comparative was especially challenging for both businesses due to the extraordinary ‘meme stock’ volatility.

Q3 FY22 revenue in the Core Markets+ segment was £222.0 million (Q3 FY21: £221.7 million); revenue increased 6% on the prior quarter (Q2 FY22: £209.0 million), reflecting the growing client base, which reached a record high in Q3.

Q3 FY22 revenue in the High Potential Markets segment was £35.2 million, up 9% on a pro forma basis (Q3 FY21: £32.1 million). Alongside continued growth in tastytrade, Spectrum revenue grew 89% on the prior year period as volumes on the exchange increased. Spectrum continues to make good progress on adding additional brokers and issuers.

Year to date Group revenue from continuing operations was £729.1 million. Excluding the foreign exchange hedging gain in Q1 associated with the financing of the tastytrade acquisition, adjusted net trading revenue from continuing operations of £723.3 million was 14% higher than the prior year period, (Q3 FY21 YTD: £635.3 million) with active clients up 33% to 354,400. On a pro forma basis, Q3 YTD adjusted net trading revenue was up 3%, with active clients up 1%, demonstrating further growth in the post-pandemic period.

In terms of outlook at a Group level, IG anticipates FY22 revenue to moderately exceed current market expectations.

The Core Markets+ segment remains strongly positioned following consecutive quarters of revenue growth and continues to benefit from IG’s large active client base.

For tastytrade, given the slower growth in US options trading volumes in Q3, which have persisted into the start of Q4, revenue growth may remain below the previously guided 25 – 30% range for FY22, depending on market activity through the remainder of the period. IG says it remains confident about the opportunities that tastytrade brings to the wider Group, due to the large total addressable market in the US, and also further international expansion.

Overall, the Group remains well positioned for the future and its medium-term revenue guidance remains unchanged.