Good morning. Welcome to the Investor and Analyst Call for LSEG's 2025 full year results. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session through the phone lines. Instructions will follow at that time. I would like to remind all participants that this call is being recorded. I will now hand over to David Schwimmer, Chief Executive Officer, to open the presentation. Please go ahead.
Good morning, Welcome to our 2025 full year results. I'm joined by our Chief Financial Officer, Marc, and our Head of IR, Peregrine Rivière. We have delivered another year of strong performance and rapid strategic transformation for the group. Revenues grew 7.6%, with all businesses contributing positively and data and analytics accelerating. Our focus on driving efficient and scalable growth delivered 210 basis points of margin expansion, a little over half of that organic, taking full-year EBITDA margins north of 50% for the first time. Adjusted EPS grew 16%, reflecting our disciplined execution throughout the P&L. We continued to invest in future growth with the Post Trade Solutions transaction in Q4. We continued to deliver strong cash conversion, with GBP 2.8 billion of dividends and buybacks in the year.
Today, we've announced our plan to execute a further GBP 3 billion of buybacks over the next 12 months. We see a great opportunity to invest in our own shares during this market dislocation. This strong performance is a direct result of the strong execution of our long-term strategy and the rapid transformation we're driving across our business. November's Innovation Forum provided insight into how we are innovating across LSEG as we deliver on our AI strategy. We are already seeing the fruits of that innovation. Our LSEG Everywhere AI data strategy is embedding our trusted data into the AI tooling of financial services. It's only been a few months since we launched our MCP server, but early demand has been very strong. I'll give you some numbers on that later.
We're also innovating to capitalize on the accelerating pace of change in capital markets, building new platforms for growth in digital assets. We launched our digital markets platform last year, and at the start of this year, successfully piloted tokenized cash settlement via our new Digital Settlement House. The strategic partnership with 11 leading banks we announced at our Q3 results is accelerating growth and helping us unlock the multi-year opportunity in Post Trade Solutions, a great example of our strong customer relationships and partnership-led approach, creating unique opportunities for growth. Let's take a step back and look at our 2025 performance in the context of the multi-year delivery of our strategy. We have achieved a lot over the last five- years. Financial performance has been very strong, with organic growth and improving significantly. As you can see from the left-hand side of the slide.
In the process, we've all of our businesses. Across the whole group, we've driven significant revenue and cost synergies, built better products and better infrastructure, integrated the operations, and unified the brand and culture. This is all still work in progress, and every day we discover new ways to transform our business. Right now, I can see more growth opportunity in front of us, unmatched trust. While the world is working on BI, the digital trading, settlement, and depository have huge potential for future growth. Let me take a step back. Right now, the market seems to be taking a view on the impact of AI on our business. We do not agree with it, and all fact-based evidence would indicate the negative market narrative is wrong. We feel as confident today about our product, our partnerships, and our prospects as we ever have.
Entering into enterprise agreements, run some of the most rigorous procurement, risk, and technology processes in any industry. They understand exactly what our products do, they know how their own workflow needs are evolving with AI, and they know the role of our data, analytics, and infrastructure in their operations. Their needs are you. Organizations that know best are voted with their super value in a world. If you're really worried, heavily regulated and risk-averse customers are going to rely on outputs compiled from the public internet, that is how much you should be worried about. More importantly, let's look at the 98% of group revenues that are not from public data. I'll cover the rest of DNA in detail later, but in a nutshell, these revenues are derived from data. That are either proprietary, used in regulated environments, risk intelligence.
Intelligence, and particularly World-Check, is an industry leader. Two things that are not well understood about this business. First, its value goes far beyond the thousands of official sources. Our customers make 200 billion checks a year across 700 million of their own end customers. Once anonymized and aggregated, we can use the decision data to improve our own detection and matching capabilities in a huge and constantly evolving content set. World-Check is the leading product in this space, and we are able to continue to improve the product to extend that lead through what is, in effect, a massive and constant flow of customer contributions. Second, history is important. Customers need to justify decisions they made about counterparties going back decades, for example, in high-profile tax or fraud cases. We have all that history with the information that was available at the time.
AI cannot create that past record for customers. Moving to markets, 40% of our business. AI is a tailwind here, too, as more data consumption drives more insights, leading to more trading volumes and ever-growing demand for risk management. Our positioning is strong and our strategy is working. I'll say more in a moment about our strong commercial and strategic progress and the opportunities we're seeing with AI. First, I'll hand over to Marc to discuss our financial performance in more detail.
Thank you, David. Good morning, everyone. It has been a very strong year of financial execution for LSEG. First, some headlines. Then I will unpack this all in more detail. Organic growth was 7.1%, slightly above the midpoint of our guidance. Another year of organic growth above 7%. EBITDA margin improved by 110 basis points underlying, plus another 100 from the Post Trade Solutions transaction. We delivered this performance through a significant improvement in our labor cost ratio. This strong growth, combined with operational leverage, translated into EPS growth of over 15%. That was a P&L. Now, moving on to cash and capital allocation headlines. Capital intensity continues to trend down as guided. Do note that we are still investing in our business at least twice the rate of our peers.
The dividend is increasing by 15%, in line with EPS, and we double the rate of share buybacks in 2025. With the growth in cash flow and the reduction in share count, this translates into 14% growth in free cash flow per share, which is actually 60% over the last two- years. In summary, we are growing our business strongly. We are investing in our future growth, we are generating significant free cash flow, and we are being very decisive and agile in our capital allocation. Let's cover revenue over the next few slides. On this slide, you can see that our growth is very broad-based, with risk intelligence continuing its double-digit momentum and markets growing high single digits against a huge year in 2024. FTSE Russell continues its revenue trajectory, DNA accelerated on 2024.
As you know, I like to look at our subscription businesses as a whole. Here we have achieved 6% of growth for the year as we guided to. We will start with DNA in more detail on the next slide. We achieved good growth across all lines in DNA. In workflows, we completed the migration from Eikon, the largest ever of its kind in financial markets. As a result, clients are using the platform more frequently, and we continue to innovate and improve it. In data and feeds, we maintain our strong momentum. We are adding significant new datasets, particularly in private markets, and we have launched our LSEG Everywhere strategy for AI-ready data. As David will cover, the initial uptake here is very strong. Our analytics business is well advanced on its acceleration journey.
In partnership with Microsoft, we have driven a strong acceleration through the analytics API, and have just launched a Model-as-a-Service platform with our first partner bank, Société Générale, onboarding its own models. Overall, DNA is posting a 5% organic growth, accelerating versus 2024, as communicated during our half-year results. Turning to the other subscription businesses, we continue to see strong momentum and healthy demand. In FTSE Russell, we have seen balanced growth between subscription and asset base fees, and we expect the growth rate to improve again in 2026. Risk intelligence had another very strong year. World-Check, which represents the bulk of its revenue, continues to innovate from its position as market leader, launching World-Check On Demand for real-time updates. This platform is increasingly deeply embedded in customers' regulated workflow.
Our digital identity and fraud business accelerated in 2025, with transaction volumes up 16%, and the launch of our global account verification platform. I will spend a little longer on this slide to talk about some new KPIs we are introducing. For 2026, there will be in addition to ASV, and from 2027, we will report only these new KPIs, and we will be retiring ASV. We are doing this to give investors more insight into our commercial progress, and with measures that are less volatile than ASV. Let's come back to ASV. As you remember, I previously guided to 5.8% growth at the end of Q4, and we achieve a bit better than this at 5.9%. This reflects a very strong end to the year, which set up well for 2026.
Now on the new measures. Before beginning, I shall tell you that they cover exclusively our three subscription businesses, DNA, FTSE, and Risk Intelligence. We have given you the baseline here. Gross sales represent the annualized total amount of new business over the last 12 months, so not contract value, but more annual recurring revenue across our subscription businesses. We performed strongly in H2 2025, with the rolling figure increasing around 11% over H1. On revenue retention, we already mentioned that this typically sits in the low to mid-90s, depending on the product. We are formalizing that today at 92.4% on a consolidated basis. You can see that it's pretty much stable on H1.
Finally, we are introducing a KPI that measures the level of innovation or newness in our product set, the new product vitality index or NPVI. This measures the proportion of revenue from products that are new or enhanced in the last five- years, giving you insight into how our investment into product is translating into revenues. Taken across our subscription businesses, this figure sits at a very healthy 24%, growing strongly against 2024 and H1 2025. A significant proportion of this relates to Workspace, as you would expect, and reflects the substantial enhancement to the customer experience that the new product give to customer. In other business lines, this index sits more in the mid to high single-digit range, which we expect to increase over time.
We plan to give these KPIs, including ASV for 2026, twice a year, as we see little benefit in reporting them quarter to quarter. Turning now to our markets businesses. These are incredible, strong franchise, which I believe do not get the attention they deserve, and they continue to deliver exceptional performance year in, year out. In fixed income, as I have already reported, Tradeweb had another very strong year, with continued high levels of activity across all main asset classes, backed up by great execution. In foreign exchange, we recorded our best performance in recent years, with 7.5% growth. In OTC derivative, our post-trade businesses went from strength to strength, and David will detail them in a few minutes. For ease of presentation, we have shown equities on this slide with some other lines from post-trade.
Our equities business had a solid year, with revenue up 5.1%. We launched our Private Securities Market, with the first transaction taking place right now, and we also went live with our digital market infrastructure, built in partnership with Microsoft. Now, on to EBITDA and the rest of the income statement. We translated the 7.1% organic top-line growth into 11.8% growth in adjusted EBITDA, 14.3% growth in AOP, and finally, 15.7% growth in EPS. As you can see from the main table, EPS growth was 19.4% on a constant currency basis. This is truly operating leverage at work, plus very good control in financing, tax, and our share count. Let's take each of those levers to improve earnings in turn. Number one is cost control.
With total OpEx up only 3.5%, half the rate of revenue growth. Within this, you can see that we have really managed third-party services very effectively, down 11.6% year-on-year. This is a core part of our labor strategy. Total headcount is roughly stable, a small decrease of 700, with ratio of internal employees rising to 75%, driven mostly by engineering. Previously mentioned, this is not just about cost. We have seen significant upskilling and improvements to productivity as we build a true engineering culture. Usually, we show the margin improvement graphically on this slide. Once you adjust for effects at either end, the improvement year-on-year is 210 basis points. 100 of this relates to the SwapClear revenue surplus agreement, that leaves 110 basis points of underlying.
Actually, the real underlying improvement was 140 basis points, taking into account the -30 basis points of the disposal of our Euroclear stake and its related dividend income stream that ceased. On net financial expense, we saw a slight reduction year-on-year. The underlying position was broadly similar, but as reported at H1, the numbers include a GBP 23 million credit from the bond tender offer we completed in March, and a one-off gain of GBP 12 million following the discontinuance of a US dollar net investment edge. We currently expect net financial expense to be in the GBP 260 million-GBP 270 million range for 2026, reflecting the effect of refinancing existing low coupon debt in 2025 by higher rates in 2026, and obviously, the new buybacks announced today.
On the next slide, our tax rate came in at the lower end of our guidance range, and we expect the same range for 2026. If you take all of those lines together, this is giving 15.7% growth in APS for the year, more than double the rate of organic revenue growth. Over the last four- years, which smooths out some effects impacts along the way, that's a steady compound growth rate of 11.5%. As I said, last year, we expected non-underlying costs to come down in 2025, and they did. Integration costs fell by 41% as we came to the end of the formal Refinitiv process, and we expect them to come down again in 2026 as the other areas of restructuring continue to reduce. Turning to cash flow.
This continues to be another highlight of the business model. We posted a record free cash flow of GBP 2.45 billion. As I'm sure you remember, we guided at least GBP 2.4 billion at constant rates, and we beat that at current rates, absorbing the current weakness of the dollar. We are posting this very strong result despite a negative variation of working capital of GBP 400 million. There are three main reasons for that. First, a reduction of around GBP 90 million of the pay accrual for our SwapClear partners following the reduction of the revenue share. Second, an GBP 80 million reduction in creditors related to the net treasury income, reflecting lower balances and interest rates.
Third, we triggered around GBP 150 million of payments that we've made earlier than usual to suppliers to crystallize better procurement conditions before year-end. Anyhow, going forward, typically, a working capital outflow of GBP 100 million-GBP 150 million is a safe assumption to model. Given the ongoing buybacks, this 12% growth in free cash flow translates into 13.6% growth in free cash flow per share. Turning now to capital allocation on the next slide. Against the GBP 2.4 billion of free cash flow, we deployed GBP 3.5 billion across shareholder returns and M&A activity. Total dividends were just over GBP 700 million, and we are proposing a final dividend of GBP 1.03 today, up 15.7%, in line with our EPS growth.
We have deployed a net GBP 700 million on the Post Trade Solutions transaction that I already mentioned. Finally, we have had a record year for share buybacks, with GBP 2.1 billion completed in a year. This demonstrates our very active approach to capital allocation and reflects our strong view of the deep value inherent in our own shares. Even with this very active year, we ended 2025 with leverage at 1.8 times net debt to EBITDA, still slightly below the midpoint of our target range. Now let's look forward to 2026 and beyond. We are very well positioned as we enter 2026, with a record fourth quarter for gross sales in our subscription businesses, and very healthy volume growth already at Tradeweb and in our post-trade businesses.
We are guiding to organic revenue growth of 6.5%-7.5%, the same as in 2025. Importantly, with a steady acceleration in our subscription businesses, as I have mentioned before. Within this, we also expect our DNA business to accelerate. On margin, we expect 80-100 basis points of improvement on a constant currency basis. If you take the midpoint, 90 basis points, you will find 60 basis points to complete the 250 basis points improvement that we committed to for 2024, 2025, 2026, and an extra 30 basis points, which comes from the further decrease in revenue surplus share terms at SwapClear. For CapEx, the steady downward trajectory in intensity will continue, and we are targeting around 9.5% for 2026.
Finally, we see this all translating into at least GBP 2.7 billion of free cash flow. As I mentioned earlier, the tax guidance remains unchanged at 24%-25%. On this slide, I want to take a slightly longer-term view on how our cash generation and capital allocation has developed over the last four- years into 2026. The most important message here is how purposeful and consistent we have been in deploying capital to build a better business. We have maintained high levels of capital intensity to invest organically in the business. We have grown the dividend strongly. We have done regular bolt-on M&A to strengthen our offering to customer, and then, when appropriate, we have returned surplus capital through share buybacks. This approach has supported strong top-line growth, more innovation, improving margin, and strong shareholder returns.
Our plan for 2026 continue that consistency. CapEx will be pretty consistent as an amount, but reducing to around 9.5% of revenue in term of intensity. Free cash flow will grow strongly to at least GBP 2.7 billion. Dividends will continue to go up in line with earnings, and we remain active in our search for good M&A targets, depending on fit and value. Today, we announce a further GBP 3 billion buyback over the next 12 months. You can assume, given we have already done over GBP 400 million this year, that there will be a total of around GBP 3 billion in 2026, and then we will complete the new commitment in early 2027. Finally, we are updating our medium-term guidance today.
I mean, from 2027 to 2029, after several years of strong growth and margin delivery. On revenue, we are confident of mid to high single-digit growth, including acceleration in our subscription businesses. After the 6% reported in 2025, you can think of it at around 6.5% for 2026, heading to 7% for 2027, as I mentioned last year. On EBITDA margin, we will carry on improving our productivity, and we are now guiding to a cumulative improvement of circa 150 basis points over the period 2027 to 2029. We will drive this through continued strong revenue growth, investment in technology, and other ongoing operational efficiencies. While allowing room to reinvest in future sustained growth. On CapEx, we expect intensity to come down to circa 8% in 2029.
Think of that as the absolute CapEx figure staying relatively steady at GBP 900 million-GBP 950 million, while revenue continues to grow. Finally, on cash flow, we are moving to a free cash flow per share metric, and we are guiding to double-digit compound annual growth in this important figure for the years to come. Now I will hand over to David to take you through our strong strategic progress.
Thank you, Marc. Let's start with the obvious topic, AI. As we discussed at the Q3 results and the Innovation Forum, we're benefiting from our unique position at the forefront of AI-driven change, and we are excited about what that means for our customers, our people, and our future growth. You've seen these three pillars before: trusted data, transformative products, and intelligent enterprise. Over the next few slides, I'll update you on how we're bringing this to life today for our customers and our organization. We have a great starting point, and everything we are doing is only making us stronger. As a reminder, roughly 90% of our data and feeds revenues come from proprietary data and solutions. Our customers are using this data to power business-critical activities in highly regulated environments, where accurate, timely, trusted data is non-negotiable. It is often deeply embedded in transactional workflows.
Our breadth and depth are unmatched. Alongside proprietary data sources and exclusive licenses, we also have a network of more than 40,000 contributors proactively contributing data, continuing to enhance the value of our products through strong network effects. The result is comprehensive industry-standard data that we are constantly updating. That puts us in pole position to take share and drive growth as customers are able to interrogate and analyze more data at speed using AI. As I said at the beginning of the call, our customers can see that our solutions are more valuable in an AI world. In the fourth quarter of last year, global investment banks and asset managers, all highly sophisticated institutions like Citi, Bank of America, and Standard Chartered, signed GBP 1.9 billion of long-term data agreements with LSEG.
These organizations are securing their access to our data for up to seven- years, invariably in contracts that step up in value over time. They span a range of different segments: global investment banks, commercial banks, alternative investment firms. We meet their needs, and they are confident we will continue to do so across workflows, data and feeds, risk intelligence, and FTSE Russell. Only LSEG has this breadth of offering. It is a perfect demonstration of why these businesses are so valuable together. The demand for and consumption of data is accelerating, and we are facilitating that growth. The history of data consumption growth is the history of technological advancement: the internet, fiber networks, mobile, the cloud, and now AI.
The chart on the left-hand side shows how the amount of data or messages coming through our real-time data feed continues to grow at pace, exceeding 15 million new data points a second in December. This represents a four times increase in real-time data over our network in the past 10 years, a trend that we expect to continue. With our direct connection to nearly 600 exchanges and venues and our ongoing investment in technology and capacity, we are strengthening our market leadership. I often call this business the market infrastructure for all market infrastructure. It is live data delivered over our own infrastructure. AI does not and cannot replicate or replace this. If anything, it creates more demand for this data. On the right, you can see the demand for our Tick History data, an evolving data set currently spanning 100 million instruments over 30 years.
It's proprietary data that links today's price moves with those of the past. This is a critical point that people often don't get. This data is valuable because it ties 30 years of market moves to the present day, and with hundreds of billions of new data points added each day, without constant updating, this Tick History becomes less and less useful. We have the past, and we have the present. That is what creates the value. No one else has the past like us, and we are the leading provider of the present. Customers find this combination highly valuable, with over 5 million customer requests a month. I'll say it again: AI does not and cannot replicate or replace this. It will just drive more demand. Customer demand for data that is accurate, up-to-date and comprehensive, verified, and auditable is significant.
That is where LSEG sets the standard. By making it easier for customers to access and consume this data through new cloud distribution channels or AI partnerships, we're likely to sell much more of it. We are only at the beginning of that journey. Increasingly, customers want to use our data in AI applications, opening up a new distribution channel. We're embracing that through our LSEG Everywhere strategy, delivering AI-ready data to any environment in which our customers want to work. Since we last showed you this slide, we've added a new partnership with OpenAI, becoming the first financial data provider to enable customers to access their data through ChatGPT. You should expect us to enter into further partnerships in 2026 and beyond, where there is customer demand and strategic logic.
These channels have only recently become available. We are seeing very strong customer interest and engagement. Over 60 financial institutions have connected to our MCP servers directly or via one of our AI partners, connecting hundreds of users, and we have a strong pipeline of customers awaiting connection. Many of these users are new users at existing customers, by which I mean the bank or asset manager already had an LSEG data license, but these particular teams or individuals were not users of our data. Proof that our AI partnerships are increasing reach within existing customers. Our AI partnerships are also expanding our distribution footprint, attracting new customers through the accessibility and ease of natural language. Already hundreds of prospective customers have attempted to access our data via our AI partners. Since no one can access our data without an LSEG license, this is creating valuable sales leads.
Once connected, customers are engaging with our data and content on an ongoing basis, driving rapid growth in data consumption through our AI partnerships. This is a great start to what we expect to be an important distribution channel for our data, and also a natural mechanism for cross-selling. As we make more of our data available via MCP, the user, whether that is a human, a model, or an agent, will naturally discover the full breadth and depth of our data across data and analytics, markets, FTSE Russell, and risk intelligence. We're moving quickly down this path, investing in our AI-ready data and making more of it available through MCP connectors and multi-cloud environments. We have a large pipeline of data coming to MCP, as you can see on the left.
We're also supporting customers in their migration to cloud-based alternatives. That is driving meaningful new sales and displacements. Platforms like Databricks and Snowflake are helping us close big new contracts and drive increased sales of some of our most popular products, like DataScope. We keep investing in expanding the data we offer, whether that's in low-latency feeds, ETF data, or private markets. Turning to the second pillar of our AI strategy: transformative products. The success of the migration to Workspace means our customers are now on a modern, modular, customizable platform, where we enhance functionality week in and week out. That gives us a strong foundation from which to launch transformative AI-enabled products that bring speed, accuracy, and conviction to customers' workflows. As a reminder, 70% of Workspace's revenue comes from trader licenses and activity.
These users, humans today, maybe agents tomorrow, need real-time data, a network community, and integration with a range of pre- and post-trade tools. This is regulated workflow with transactional features embedded. To address a question that comes up from time to time: What if the number of human traders is significantly reduced by AI? Could that hurt our Workflows business? We don't see that happening, but also remember that over many years, our Workflows business has been moving away from a per-seat model towards one focused more on data consumption or enterprise agreements. Also, if the scenario is that human traders are replaced by AI agents, then each agent will effectively be a licensed LSEG customer. In an AI world of agent-driven workflow, we will have more users consuming more data. Workspace is getting better and better, with hundreds of updates every year.
To name a few recent enhancements, we extended trading capabilities through the expansion of Advanced Dealing, we streamlined banker workflows with the integration of DealWatch, we enhanced our leadership in news with a dedicated app for Wall Street Journal and Dow Jones news. This is driving real, measurable improvements in engagement. As you can see on the right-hand side, investment management and trading users are accessing roughly 25% more applications than a year ago. Let's turn now to the Microsoft partnership. We made a lot of progress in 2025, that pace of delivery continues to accelerate. On Workflows, to continue from the previous slide, our teams-based collaboration tool, Open Directory, is live with accounts across three customer communities: FX, commodities, and execution, we have more than 50 accounts in our onboarding pipeline.
We're also piloting natural language functionality in Workspace, interoperable with Teams and other Microsoft products. Workspace Deep Research provides extensive AI-driven research and analysis, leveraging the full power of Workspace data. We expect to roll out both AI tools in the first half. In analytics, we've seen great traction and revenue growth since launching the API, with over 50 customers adopting the platform. Just a few days ago, we launched Model-as-a-Service, with Société Générale as the launch partner, distributing its own models through our API. We're seeing great progress in Data as a Service, or DaaS. We are accelerating the migration of data into the new integrated architecture and expect to have almost all datasets onboarded by the end of the year.
This is increasing our speed to market for new products and driving significant customer demand to access these datasets, whether via Fabric or other platforms like Snowflake and Databricks. Last point, we have launched our digital markets infrastructure, powered by Microsoft Azure, another growth opportunity as tokenization takes off. Turning now to the final pillar of our AI strategy, deploying AI across our own business, accelerating innovation and improving customer outcomes. I've mentioned before that we are resolving customer queries much more quickly and efficiently through our adoption of an AI-powered question-and-answer application. In December, we made that tool available directly to customers, and it's had significant traction already, and it will only get better. Adoption of AI-powered workflows is also driving improvements in efficiency, quality, and timeliness of data ingestion.
We spoke about this at November's Innovation Forum: nine times faster content extraction, 52% reduction in data quality issues, and 11% increase in productivity of our engineering teams. This all contributes to the ongoing margin expansion that Marc highlighted earlier. I'm gonna turn now to our markets businesses. You've heard me say this before, the whole premise of LSEG is this: in financial markets. Data has become infrastructure. Access to data is just as essential as access to trading infrastructure. That's why these businesses belong together. Electronification of markets, growth in data-driven decision-making, and more sophisticated risk management are all blurring the lines between markets and data activities, deepening their interdependency. This is driving multi-year structural growth in our transactional businesses, delivering a five-year CAGR of over 13%.
The markets business delivered further strong growth in 2025, with double-digit growth in clearing revenues across interest rate swaps, FX, CDS, and repos. Tradeweb also extended its leadership in trading of interest rate swaps, increasing its share by 180 basis points. Our FX venues saw their strongest volumes ever. There's sometimes a misconception that growth across our markets platforms just happens. Nothing could be further from the truth. The growth we're delivering today is the result of innovation and customer partnership going back years, often decades. We build solutions that solve customer pain points and meet their critical needs, and we become deeply embedded in their core businesses. In that vein of innovation and customer partnership, we're innovating rapidly in digital markets, building the transaction and settlement infrastructure our customers will need as they increasingly adopt digital assets and tokenize traditional asset classes.
As you can see in the lower right quadrant of the slide, we are doing a lot in this space, but it is a big topic, so we will tell you more about it later in the year. Another good example of our innovation and partnership in markets is our success in the clearing of OTC products. The growth in this business over the last 15 years is extraordinary. A threefold increase in member banks, a 200-fold increase in clients, and tenfold growth in notional value cleared each year to roughly GBP 2,000 trillion. We have become the global clearing destination of choice for interest rate swaps, FX, and CDS. In partnership with 11 global banks, we're going after the opportunity in uncleared derivatives, which is roughly the same size as the cleared space.
Our members and clients want to manage their whole book in one place, bringing efficiency to their capital and margin requirements, and materially simplifying and standardizing processes. We are uniquely placed to do that, given the assets we have built and brought together under one roof, and we're entering 2026 with really good momentum. Revenue and Post Trade Solutions is growing double digits, we're adding new customers, and the network is expanding. We're driving strong growth and building platforms for the future across our business. We've also integrated our products and platforms for our customers' benefit. This dynamic exists clearly in our data flywheel. The data we generate from our own markets infrastructure feeds into our DNA business, helping customers make better-informed decisions when they trade, therefore, creating more data.
Second, Workspace is becoming the fully integrated workflow through which customers can access many of our services, not only for all DNA data, but now also for FTSE Russell tools, FX trading, LCH data, and in the next few months, Tradeweb. We've established a powerful end-to-end ecosystem in FX, providing a front end in Workspace, linking to the execution venues, and straight through to our clearing business, with FX hedging capability for Tradeweb, and our data and benchmarking content adding incremental value along that trade life cycle. We have similar connectivity in swaps, given the customer trust in the Tradeweb and SwapClear franchises. I spoke earlier about the strong demand we've seen for our multi-year data access arrangements. Those integrate services from across our business, from data and feeds, workflows, FTSE Russell, risk intelligence, and analytics, and they demonstrate the competitive advantage provided by our full-service business model.
As we've said before, big, sophisticated institutions want to do more with fewer partners. You can see that in the success of our LDA agreements. Through our unique model, we've positioned our business to have deep moats and highly recurring revenues in areas of growth. Our diversification across products, customers, and geographies gives our business model an attractive combination of growth and stability that performs well in environments like this. Despite big swings in capital markets and the global economy in 2025, we continued to deliver strong and consistent growth. We expect more of the same in 2026. To wrap up, we have achieved another year of very strong financial performance, driving continued top-line growth through significant investment in our products and a consistent focus on partnership with our customers.
LSEG Everywhere and other innovations like Open Directory, Post Trade Solutions, and our Digital Settlement House are establishing platforms for future growth. Through the transformation of our systems and the use of AI and other technologies across LSEG, we continue to deliver material operating leverage, and we are allocating capital in a thoughtful way to grow the business, drive innovation, and return surplus capital to shareholders. We're very excited about the opportunities ahead of us with our leading trusted data, ongoing investment in product and the strength of our customer relationships, we are very well positioned for continued growth. With that, I'll pass to Peregrine for Q&A.
Thank you, David. Before we start the Q&A, can I please ask you to restrict yourself to one question? We plan to wrap up at about 11:30 A.M. Hopefully, we'll get through them all, but if we don't, please follow up directly with me or Chris later today. Thanks.
If you would like to ask a question, please signal by pressing star one on the telephone keypad to raise your hand and join the queue. To withdraw your question, press the star one again. When called upon to ask your question, you will be announced by name and company. Please ensure you unmute your device and use your handset for optimal sound quality. Again, that's star one to join the queue. Your first question comes from the line of Tom Mills from Jefferies. Please go ahead.
Good morning, guys. Thanks for the helpful new disclosures, and my question. At a recent conference, the Chief Executive Officer of S&P, said of the AI LLM platform, "I'd say that our clients are getting additional value by being able to use our data in more ways. The more ways they use it, the more value it creates and the better opportunity for a value-based conversation at renewal when we talk to those customers." Also seen really nice uptick in demand for add-ons, and that's something that's helped with net new revenue.
I think that ties in well with the content you provided on slides 31, 32. I'd be curious to hear how you touch on the points about improving the opportunity for value-based discussions at a renewal, and any uptick in demand for add-ons that you're seeing via the partnership so far.
Sure, Tom. Thanks. For now, as you would expect, we are focused on adoption, and just seeing the customers sign up and get access to this and seeing the usage grow. That, as we mentioned on that page 31, is growing very quickly, and we're really seeing, you know, pretty significant and intense engagement there, and frankly, kind of day by day. I think over time, the really significant opportunity here is in the context of consumption-based pricing and really charging the customers over time for usage. And for now, we're continuing to focus on our, I'll say, traditional subscription model.
As we move over the course of the next year plus to more of a hybrid model, which is keeping the subscription, we think the subscription model is very attractive and very important, but incorporating into that, the consumption-based pricing as well, that will be a very attractive way of capturing that kind of dynamic. I mentioned this earlier in my prepared remarks, but the fact that you have a combination of humans, models, and agents consuming this data, you know, it's, I think, pretty intuitive for you all to recognize that when an agent or a model is consuming the data, they tend to consume a lot more of that data than a human might. We've said in the past that humans barely scratch the surface of the amount of data that we have.
That's another angle here, just in terms of as usage shifts to more AI-driven consumption, as we shift our model to more, consumption-based pricing, we see that as a very, very attractive trajectory.
Thanks, David.
Maybe actually just, Sorry, one.
Next question from the line.
Sorry, Pody, sorry. Hold on a second.
Just one other point I want to add, and I touched on this earlier, but I think it also answers your question and kind of captures this dynamic, which is, you know, I've described the AI models combined with the MCP server as a very effective cross-selling machine. The model is not asking for data from a particular data set. The model is asking for answers to a question, and if that question can be answered by extracting data from multiple different data sets that we are making available through the MCP server, that is a great angle as well, just for additional access, additional sales of additional data sets that the customer might not have originally known that we even had. That's another aspect of this. On to the next question. Thank you.
Apologies. Thank you. Your next question comes from the line of Hubert Lam of Bank of America. Your line is open.
Hi, good morning. Thanks for taking my questions. Just got one of them. How should we think about pricing and ability to keep your customers, where we expect more competition in the future from MCP? I assume MCP makes it easier for users to switch between different data providers. It would be harder to raise pricing in the future, and would there be more risk of unbundling data contracts now that users have more choice, more flexibility as to who they want to consume with? Thank you.
Morning, Hubert. We see a very consistent pricing environment this year relative to last year, and I think it's about the quality of the data. If you think about the new AI channels and MCP as just another way of accessing the data, that's great for us. That doesn't mean that it is an environment where we're seeing incremental pressure on the pricing. The quality of the data remains the same. The in some cases, proprietary nature of the data means that no one else has access to it. We see this as a way of accessing more users within existing customers and accessing new customers as well. As I mentioned, from a pricing perspective, we're seeing very consistent dynamic this year as we have seen last year and the year before.
Great. Thank you.
Your next question comes from the line of Arnaud Giblat of BNP Paribas. Please go ahead.
Good morning. My question is on capital return. You've announced a GBP 3 billion buyback that pushes up your leverage ratio perhaps towards the end of the year, towards 2.0 times-2.1 times net debt to EBITDA. How should we read into this? I suppose you are leaving yourself the opportunity to step in and do further bolt-on acquisitions. My question is just how are you seeing any potential dislocation in valuations in private markets? We've seen some significant shifts in public markets with data and software companies coming off quite a lot.
Are we seeing the same thing in private markets where, and perhaps does this create opportunities for you to step in the near term and add some more content inorganically to your platform? Thank you.
Thanks, Arnaud. Maybe, Marc will touch on the first part of your question, and I'm happy to take the second part.
Sure. On the buyback, you're absolutely right. We have coined a GBP 3 billion in order to do two things. First, having a true increase into the return to our shareholders on the basis of the inherent value that we see in our share. Remember, two- years ago, we did GBP 1 billion; GBP 2.1 billion, here we're talking about GBP 3 billion. By doing the GBP 3 billion, and you've made the calculation right, taking into account the dividend and the second part of the Post Trade Solutions, okay? All together, this will bring us to two times net debt to EBITDA by the end of 2026.
Which will allow us to keep firepower for M&A that fit, in term, of strategic alignment, obviously, and, value.
Arnaud, to your question about sort of the state of the markets, yes, there's obviously been some dislocation. There's clearly some stress amongst some of the private equity holders out there, and you should expect us to always be evaluating opportunities. you know, nothing to talk about near term, but as Marc mentioned, we are always evaluating opportunities that could make sense in terms of our both strategic fit and then attractive financial returns. I think the buyback balances that appropriately in terms of an appropriate return to our shareholders, while landing at that two times net debt to EBITDA and maintaining the right kind of flexibility going forward.
Before we continue on to the next question, a reminder, if you would like to join the queue, to please press star one. Your next question comes from the line of Enrico Bolzoni of J.P. Morgan. Please go ahead.
Good morning. Thanks for taking my question and for the comprehensive presentation. I had one on EBITDA margin, please. It looks like you're clearly doing more than what you initially thought. I remember from calls, one- year ago or so, saying that at some point, maybe the margin would reach a ceiling, because clearly there's a need to invest in the business, and here we are with a new set of targets that actually guides us towards a further improvement. I was keen to hear your thoughts on whether you think this is just driven by the operating leverages and revenue accelerating, or you found more ways to cut costs? Perhaps, does this new target include any meaningful benefit from the deployment of AI within the organization? Thank you.
Thanks, Enrico. I don't think we've ever said that we were planning to hit a ceiling, but I'll let Marc address that.
I understand what Enrico is saying. Just a reminder for everybody, we committed ourself in November 2023, of an increase of margin of 250 basis points. 2026 is the third year of this plan. We are delivering the 250 basis points, on top of that, we have 130 coming from our Post Trade Solutions. 380 that we that we will have deliver for the period 2024 to 2026. What we've said is we going forward, because there were some question about what about after 2026?
That going forward, due to the operating leverage that the group has, I mean, building once and distributing many, obviously, this operating leverage, we can crystallize it into the margin or having a balance between the margin and reinvesting into future growth. What you see, Enrico, is the 150 basis points by 2029, is exactly that. It's a balance between operational efficiencies that we are harvesting, our natural operating leverage, so plus, okay? The investment we make into talent and technology for future growth. To answer the second part of your question, the answer is yes, you're right. We will crystallize in this 150 basis points.
You have indeed, the financial consequences of what we do with AI within the company, particularly on our backbone and the ingestion of data.
Thank you.
Your next question comes from the line of Andrew Coombs of Citi. Your line is open.
Hi, and thanks for taking the question. I have one on Tradeweb, please. Would you be willing to give an indication of how much the Tradeweb-generated datasets account for your data and feeds revenues? Then whether any of those datasets are exclusively distributed by LSE?
Hi, Andrew. I don't think we have broken out, and I don't think we intend to break out the amount of the data and feeds revenue that comes from Tradeweb. I can tell you that some of it is exclusive and some of it is non-exclusive. I would also mention that that is one of several different areas across the group where we have very strong linkages between Tradeweb and the rest of LSEG. We've talked in the past about the benefits both to Tradeweb and to FTSE Russell from the usage in FTSE Russell indices of Tradeweb pricing, and that flows both ways. I'm not sure we've talked about this in the past, but Tradeweb has benefited from some of our middle and back office functionality in India and in other places.
We, of course, have the straight-through processing, if you will, from the Tradeweb swap execution facility into SwapClear. We've got the FX execution into Tradeweb. A number of different areas. Maybe the last point I should just touch on is that over the course of the next few months, we will be plugging Tradeweb access into Workspace, which is yet another significant opportunity that should be particularly attractive for Tradeweb users.
Great. Thanks, that's very helpful.
Your next question comes from the line of Ben Bathurst of RBC Capital Markets. Please go ahead.
Good morning. My question's on the new medium-term guidance, where you're pointing to subscription business acceleration, which I think is like perimeter change versus the DNA revenue growth acceleration you've previously called out and are, in fact, restating again for FY 2026. I just wondered, could you elaborate a bit on the decision to make that change, and perhaps make a comment on expectations for DNA growth contribution to that total subscription business acceleration you're talking about? Thank you.
Sure. I mean, the reason why we're looking at the subscription business altogether is mainly for two main reason. The first one is, it's the same subscription model, okay? Which are governing the three division. The second, as it was presented in the slide, they are more and more intertwined. We have two synergies in between the three. LSEGA, that David was mentioning at the beginning of the call, is the obvious example. Now on the medium-term guidance and for this subscription business, I hope you got it from my remarks.
What we expecting there is, we posted 6% in 2025, circa 6.5 in 2026, going to 7 in 2027. On this, obviously, DNA will be accelerating too. I mean, just to be clear, it's due to the size of it's the main lever for this acceleration for sure. If I may just add one more thing, which is you see this slide, I don't remember it was 31 or 32, with this adoption of MCP. You see that it's extremely strong, and we are concentrating of usage. For sure, AI can be an accelerator of this trajectory that I just mentioned. You see what I mean?
I mean, it is still the early days. We just switch on the MCP just before Christmas, so you see it's not a long time ago. It's a bit early to size it, but for sure, it's in the plus category, if you want.
Oh, that's very clear for that. Thank you very much.
Your next question comes from the line of Johannes Dobrovsky of ABN AMRO. Your line is open.
Hello, good morning, and thanks for taking my question. You've mentioned that a large portion of your datasets are already available now via the LLM, such as Anthropic, Databricks, and OpenAI, and a bunch of others. I was just curious to know what % of LSEG's total data universe will ultimately be available through the AI-native channels, and if there is a view to keep some of this fully in-house for various reasons?
I would expect that we are going to be making. We've got a slide in here that touches on this. I would expect that we're going to be making as much of our data as possible available.
... these distribution channels and through MCP. Just to be really clear, you know, the implication of your question is that we might keep some away to somehow protect it. Again, to be really clear, providing access to a model through MCP does not mean that the model then can get that data and never need it again. So we can provide access through MCP to a model and continue to protect and maintain the value and the integrity and the proprietary nature of that data. This seems to be kind of a common misunderstanding that people have. So we view this as a great channel to distribute our data, whether that's proprietary data, whether that's, you know, a linkage of multiple different data sets.
The fact that we are making it available through MCP is think of it as a very structured, disciplined gateway. We can actually put our usage meter on top of that as well. Again, I understand your question, but I just want to make sure that I'm clarifying that there's, there should be no misinterpretation of making data available to a model through MCP as somehow vitiating the value of that data or the proprietary nature of that data.
Great. Thank you.
Your next question comes from the line of Benjamin Goy of Deutsche Bank. Please go ahead.
Yes. Hi, good morning. One question, please, on your LSEG data access agreement. You mentioned almost GBP 2 billion signed in Q4. Can you give a bit more qualitative color on these agreements, whether it was Q4 or more recently signed? Do you see any change in customer dynamics? Do you see put options or breakup clauses in those contracts now, or basically same contracts as you had a year or two- years ago? Thank you.
Yeah, no sort of structural changes in these. We've talked in the past about how they can take a couple of years to put in place because of the way that we and our customers set them up. It takes some real top-down focus, and organization, and coordination, and planning. No, we view this as an increasing recognition by our big, important customers of the value of the integrated offering that we are providing. They do have a line of sight, not only into what we are providing today, but what we are building for them, you know, in the next couple of months and in the next couple of years. They are multi-year in nature, and I believe the ones that we have announced most recently tend to be out to seven- years.
Yes.
They all have extensions built into them as well. I think it's just, you know, what you see is what you're getting here in terms of our customers really understanding the quality of our offering and wanting to commit to that for many, many years to come. I think just it's worth reiterating this. I understand some people might have had a little trouble hearing at the very beginning of the call. You know, we have the most sophisticated financial institutions on the planet who have very rigorous risk management processes, very rigorous analysis of what their technology needs are, very clear understanding of their requirements. They, after extensive work, and I said, in some cases, these take up to two- years. After extensive work, they are making decisions to.
I used this phrase earlier, they're voting with their wallets, to commit to consuming our data through our channels, for the next, in many cases, up to seven- years. We think that is a pretty clear indication that these highly sophisticated institutions recognize the value of the content, the data, the workflow that we provide, and recognize that that is increasing in an AI world as opposed to decreasing.
Thank you.
Your next question is from the line of Oliver Carruthers of Goldman Sachs. Please go ahead.
Hi there, Oliver Carruthers from Goldman Sachs. Thanks for the very detailed presentation and the incremental disclosure, very helpful. I think slide 31 is really interesting around the growth in customers you're highlighting in terms of those customers connecting to your MCP server. That 67 number, I appreciate it's moving a lot, but can you give us a flavor of the types of institutions, you know, investment banks, hedge funds, asset managers, who's using this? Any steer on the use cases would be really helpful. Thank you.
Sure. It's lots of different kinds of institutions. Typically, we see smaller institutions moving more quickly, but in this case, we're seeing smaller institutions and large institutions. I'll give you one example. There's one very large institution that is using this service to evaluate. I'm not going to go into specific names, but to evaluate one AI functionality against another AI functionality. The constant they are using is our data, because they know the quality of our data, and they know what to expect from us. They are using, us as the baseline, and they are using that to make a decision as to which of the AI distribution channels they want to actually use. That's just one example. Oliver, as you mentioned, this is changing literally day by day, and we're kind of getting.
Commentary from the team on, you know, how this is growing and how we're seeing increasing and expanding, desire to access through this, as well as, incremental sales leads.
Thanks. As a very quick follow-up, you still own these customer relationships, even when it's the third party. They This is a query tool they come to you with, but you still own these customer relationships. Is that the correct way to think about this?
Yes, it is. Thank you for asking that question. Let me be really, really clear about this. The way this works is that if you have a license with LSEG, you can then turn on access to LSEG via, for example, Claude, or via ChatGPT. There's a little connector button when you pull up a certain window in these, and you have to flick that on to get access to LSEG data. You can only do that if you have a license with LSEG directly, and therefore, we maintain the ownership of the customer relationship. We're contracting with the customers. Now, when we talk on that page 31 about over 300 prospective users, what we mean by that is that there are a number of prospective users who are using these channels to try to get access to our data.
They're effectively knocking on our door through MCP, and they don't have an existing license, but the way this is designed is that we are informed of their interest. It's a great origination channel. It's a great sales channel for us. We then take those leads, our sales team directly receives those leads, and we follow up with those customers. Does that help?
Thank you. Yeah, very helpful. Thank you.
Great. Good.
Your next question is from the line of Marina Massuti of Morgan Stanley. Please go ahead.
Hi, good morning. Thank you for the presentation. I have a question on the AI adoption, given some of your peers have given numbers around the efficiency opportunity from internal AI implementation. Can you also provide a bit more color or be a bit more specific on how much of the current and future AI deployments contributes towards the 150 basis points margin expansion targeted in the medium-term guidance? Thank you.
Yeah. Thanks, Marina. We haven't put any specific guidance out there in terms of the efficiencies that we're seeing from AI. I did mention in my remarks, and on page 36, you can see some of the stats. We are seeing meaningful improvement in productivity, in efficiency. We're seeing this in customer service, and we are also seeing improved efficiency in terms of our engineers and our software development. We've seen up to this point, and this number is going up pretty regularly, but we've seen at this point, I think I can comfortably say 11% efficiency in our engineers. You know, I would bake that into the numbers that Marc was referring to earlier in terms of continuing margin improvement in the business, but we haven't given anything specific around that.
Thanks.
The next question is from the line of Michael Werner of UBS. Please go ahead.
Thank you very much, and thank you for the long-term targets in particular. A question on LDAs. I was just wondering, with regards to, A, the step-ups that you mentioned in terms of pricing, are they contingent upon certain deliverables? Ultimately, are these step-ups typically higher than what you see in kind of the base rate? Also, how does MCP servers fit into those enterprise agreements? Is that already included, or is that potential upside from a revenue generation or a client wallet share perspective going forward? Thank you.
Thanks, Michael. Every LDA is a little bit different, and some of the step-ups are a little bit higher than what the regular price rises would be. Some of the step-ups might be a little bit lower. They're all typically in the same general range, unless there are, for example, commitments that we have made to add a specific new product or new capability, or sometimes, in these LDAs, the customer may be locked into another competitor product for a year or two, and it takes them a year or two to get out of those and migrate onto ours, and there may be a step-up associated with that kind of migration. Everyone's a little bit different, but that gives you a sense of some of the different variables.
To your second question, there is a defined perimeter around the LDA agreements, in terms of effectively focusing on existing product, and it's a well-defined perimeter. In the context of these MCP capabilities and this distribution and AI model consumption, that is, I think I can say, with certainty not included in the data access agreements.
It's not, no.
Yeah, that we have struck at this point.
Yeah, yeah.
So that-
For none of them.
Yeah. That is all incremental usage that's coming through these channels, that is upside.
Thank you. Very helpful.
Yep.
This concludes questions on the conference line. I will now hand the presentation back to David Schwimmer, Chief Executive Officer, for closing remarks.
Well, thank you all for your questions. Thanks for spending time with us this morning. I know it's a little bit longer than usual in terms of the presentation. We did feel there was a lot to get through, and to the extent you have any additional questions, please do not hesitate to get in touch with Peregrine or Chris. Thanks again.