Thomson Reuters Corporation Q4 FY2025 earnings call

• Segment name changes: Tax and accounting professionals rebranded to tax audit and accounting professionals; Reuters News rebranded to Reuters. - AI initiatives: Confidence in AI value, launch of Westlaw Advantage, co-counsel legal Unified Solution, and CoCounsel for Tax and Audit; internal AI platform OpenArena, over 300 AI use cases in development. - Financial results: Fourth quarter organic revenues grew 7%, adjusted EBITDA increased 8% to $777 million; full-year organic revenue grew 7%, adjusted EBITDA margin 39.2%. - M&A and capital allocation: $850 million invested in M&A in 2025, $1 billion share repurchase, 10% dividend increase announced.

The Big Three segments delivered 9% revenue growth in Q4. Legal organic revenue grew 9% despite softer government growth, driven by Westlaw, CoCounsel, and practical law. Corporates' organic revenue grew 9%, driven by offerings in legal, tax and risk portfolios and international businesses. Tax audit and accounting organic revenues grew 11% driven by Ultratax in Latin America, CoCouncil, and SafeSend. Reuters' organic revenues rose 5% driven by growth in the agency business and a news agreement with LSIG. Global Print organic revenues declined 6% year on year. In terms of revenue contribution, the Big Three segments are key drivers, with tax, audit, and accounting and Reuters also contributing significantly.

Reaffirms 2026 organic revenue growth of 7.5 to 8%, including approximately 9.5% for the Big Three. Expects healthy margin expansion and strong free cash flow. Forecasts adjusted EBITDA margin to rise 100 basis points in 2026, 2027, and 2028. Anticipates 2026 free cash flow to be approximately $2.1 billion.

• AI competition concerns leading to share price volatility. - Government headwinds impacting growth in the legal segment. - Uncertainties in AI adoption and pricing affecting monetization of AI products.

Q: Comment on legal recurring growth and government headwinds in 2026.

A: Mike Eastwood states legal professionals excluding government have momentum from AI-driven innovation, but government cancellations will slow Q1 growth, confident in 8-9% full-year growth for legal professionals in 2026.

Q: What is the moat around Westlaw and practical law?

A: Stephen Hasker explains unique content, deep domain expertise, and agentic AI tools as differentiators, with general-purpose models unable to meet professional-grade standards.

Q: How does Thomson Reuters plan to monetize AI product innovations further?

A: Stephen Hasker mentions pricing to value, with confidence in being a beneficiary of AI-driven efficiency improvements rather than a victim, and monitoring EBITDA margin expansion as an indicator of return.