London Stock Exchange Group PLC (LSE:LSEG) touted the benefits of the group’s partnership with Microsoft in a first-quarter trading update.
Chief executive David Schwimmer, whose pay deal will be in focus at today's annual shareholder meeting, noted “strong progress in our Microsoft partnership, with a number of products expected to be in external pilot or general release this half”.
“We are now picking up the pace of migrating our datasets onto the Microsoft platform, which will transform access to our data for customers. We look forward to further progress in the rest of the year," he added.
Under the 10-year strategic partnership, LSEG and Microsoft will launch next-generation data and analytics and cloud infrastructure solutions.
Microsoft took a 4% stake in LSEG shares in 2022 to support the venture.
Overall group income in the first quarter grew 6.4% on an organic basis, or 7.3% when including the effects of M&A.
Net revenues were mostly in-line with the City consensus, but the key Data & Analytics business grew less than expected.
LSEG completed £500 million in share buybacks in the first quarter and is targeting a full £1 billion for the whole year.
The Equities business returned to growth in the quarter, up 1.6%, with gains in secondary trading partly offset by lower market activity.
Firm-wide gross profit was up 6.9%.
LSEG shares fell 1.7% in early trading but by late morning were above the flat-line.
Analysts at UBS said the most noteworthy items in the results were that growth in annual subscription value of 6.0% was below expectations and down from 6.7% in the fourth quarter of last year, while the recurring revenue sources all were shy of City estimates, with Data & Analytics a 0.7% miss, FTSE Russell a 1.8% miss and Risk Intelligence a 0.8% miss.
"The revenue miss in Data & Analytics was driven by all 3 sub-segments (Workflows, Data & Feeds and Analytics). The FTSE Russell revenue miss was driven by Subscriptions (-3% vs. cons)," they added.