Thomson Reuters Reports Mixed Q3 Results, With Strong Performance In 'Big 3' Segments And Growing Confidence In AI Opportunities

Thomson Reuters Corp (NYSE: TRI) reported third-quarter FY23 revenue growth of 1% year-on-year to $1.59 billion, missing the consensus of $1.61 billion. 

The business information services provider's adjusted EPS of $0.82 beat the consensus of $0.71.

Organic revenues increased by 6%, driven by recurring revenues. 

The "Big 3" segments (Legal Professionals, Corporates, and Tax & Accounting Professionals) collectively comprised 80% of total revenues and reported organic revenue growth of 7%. 

Legal Professionals' revenue declined by 2% Y/Y to $688 million, Corporates' revenue rose 5% Y/Y to $391 million, and Tax & Accounting Professionals' revenue increased by 7% Y/Y to $203 million.

Reuters News revenue grew 6% Y/Y to $180 million, and the Global Print revenue fell 6% Y/Y to $137 million.

Adjusted EBITDA margin expanded to 39.6% from 34.4% Y/Y due to higher revenue. 

Thomson Reuters generated $529 million in free cash flow and held $2.5 billion in cash and equivalents. 

CEO Steve Hasker said, "Importantly, our confidence around the generative AI opportunity continues to strengthen. We made good progress against our 'build, partner, buy' approach in the quarter, advancing our product roadmaps, pursuing strategic partnerships and completing our acquisition of Casetext." 

Outlook: Thomson Reuters reiterated FY23 organic revenue growth of 5.5% - 6.0% and revenue growth of 3.0% - 3.5% (consensus $6.83 billion).

Price Action: TRI shares were trading higher by 3.41% to $124.01 on the last check Wednesday.