Thomson Reuters Q3 Earnings: Legal, Corporate Segments Enjoy Revenue Boost As CEO Highlights AI Investment

Thomson Reuters Corp (NYSE: TRI) reported fiscal third-quarter 2024 revenue growth of 8% year-on-year to $1.72 billion, beating the analyst consensus estimate of $1.71 billion. 

The business information services provider’s adjusted EPS of 80 cents beat the analyst consensus estimate of 77 cents. The stock price climbed after the print.

Organic revenues increased by 7%, driven by 8% growth in recurring revenues (84% of total revenues). 

The “Big 3” segments (Legal Professionals, Corporates, and Tax & Accounting Professionals) collectively comprised 81% of total revenues and reported organic revenue growth of 9%. Here’s a breakdown:

• Legal Professionals’ revenue grew by 8% Y/Y to $745 million
• Corporates’ revenue rose 12% Y/Y to $437 million
• Tax & Accounting Professionals’ revenue increased by 9% Y/Y to $221 million.
• Reuters News revenue grew 10% Y/Y to $199 million
• Global Print revenue fell 7% Y/Y to $128 million.
• Adjusted EBITDA margin declined 430 bps to 35.3%. 
• Free cash flow was at $591 million during the quarter with $1.73 billion in cash and equivalents as of September.

CEO Steve Hasker highlighted the company’s commitment to innovation, pointing to increased AI investment in 2024, surpassing $200 million.

He also emphasized progress in the “Build, Partner, Buy” strategy, with recent AI product launches, updates to the CoCounsel GenAI assistant, and strategic acquisitions of Safe Sign Technologies and Materia, which enhance the company’s GenAI solutions for professional clients.

FY24 Outlook: Thomson Reuters reiterated revenue of $7.27 billion against a consensus of $7.28 billion.

The company expects its fourth-quarter 2024 organic revenue growth to be approximately 5% (prior approximately 6%) and its adjusted EBITDA margin to be approximately 37% (prior approximately 34%).

Thomson Reuters stock gained 15% year-to-date.

Price Action: TRI stock is up 4.84% to $173.01 premarket at last check Tuesday.

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