Thomson Reuters Corporation Q1 FY2026 earnings call

2026 started strong with revenue growth ahead of expectations. Reaffirmed full year 2026 organic growth outlook of 7.5%-8% with big three segments at ~9.5% and margins to rise 100 basis points. Key products like CoCouncil, Peguero, etc. had double-digit growth. Discussed fiduciary-grade AI, with Westlaw Advantage having key assets like authoritative content, deep domain expertise, data privacy, etc. Leadership transition with Mike Eastwood retiring and Gary Bishoping joining. Heavy investment in innovation and focus on product roadmaps. Capital allocation with dividend increase, share repurchases, and return of capital.

First quarter organic revenues grew 8%. Organic recurring and transactional revenue grew 8% and 10% respectively, while print revenues declined 5%. The big three segments delivered 9% organic revenue growth. Legal organic revenue grew 9% despite softer government growth, with legal excluding government accelerating to 11% in Q1 from 9% last quarter. Corporate's organic revenue grew 9% driven by offerings in legal, tax, and risk portfolios and international businesses. Tax, audit, and accounting organic revenues grew 10% driven by Co-Counsel for Tax and Audit, Latin American business, and SafeSend. Reuters' organic revenues rose 6% driven by growth in agency business and contract with LSEG. Global print organic revenues declined 5% year on year.

Reaffirm full year 2026 organic growth in range of 7.5%-8%, big three segments ~9.5%. Adjusted EBITDA margins to rise 100 basis points to ~40%. Second quarter organic revenue expected in range of 7%-8%, adjusted EBITDA margin ~38%. Raised interest expense outlook to 180-190 million. Plan to pay down $500 million bond with cash and commercial paper borrowings.

Q: Drew McReynolds asked about Thompson model and fiduciary grade AI TAM.

A: Steve Hasker discussed Thompson model's development and optionality, and fiduciary grade AI TAM expansion.

Q: Stephanie Price asked about 2026 revenue guide cadence and Anthropic.

A: Mike Eastwood and Steve Hasker discussed revenue guide factors and model agnostic AI.

Q: Vince Valentine asked about worrying areas and stats.

A: Steve Hasker and Mike Eastwood addressed retention and explained stats.

Q: Kevin McVeigh asked about AI-related ACV and mid-down market.

A: Mike Eastwood and Steve Hasker discussed ACV growth and mid-down market opportunities.

Q: Tim Casey asked about EBITDA margins and transactional revenues.

A: Mike Eastwood addressed margin expectations and transactional revenue margins.

Q: Andrew Steinerman asked about legal professionals government practice and co-counsel legal next.

A: Mike Eastwood addressed government growth and co-counsel legal next.

Q: Gallup Haptici asked about capital allocation and Westlaw Advantage.

A: Mike Eastwood addressed capital allocation and Westlaw Advantage adoption.

Q: Jason Haas asked about Middle East conflict impact and tax audit accounting.

A: Mike Eastwood addressed conflict impact and tax audit accounting growth.

Q: Doug Arthur asked about tax accounting costs.

A: Mike Eastwood explained cost factors.

Q: Mayor Yagi asked about AI KPIs and margin expansion.

A: Mike Eastwood discussed KPIs and margin expansion.

Q: Toni Kaplan asked about co-counsel next.

A: Steve Hasker explained co-counsel next development.

Q: Curtis Nagel asked about co-counsel next feedback.

A: Steve Hasker discussed co-counsel next feedback.

Q: George Tong asked about legal ex-government growth breakdown and legal government.

A: Mike Eastwood addressed growth breakdown and legal government performance.