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Thomson Reuters Corp. Reports Strong Q4 Fiscal 2025 Results

Overview of Financial Performance

On Thursday, Thomson Reuters Corp. (NASDAQ: TRI) unveiled its impressive financial results for the fourth quarter of fiscal year 2025. The company reported a revenue of $2.009 billion, marking a 5% increase compared to the same period in the previous year. This performance also surpassed the analysts’ consensus estimate of $2.001 billion, showcasing the company’s strong market position.

Organic Revenue Growth

A remarkable aspect of the revenue growth was the 7% rise in organic revenue, primarily driven by significant gains in its three major segments: legal Professionals, Corporates, and Tax and Accounting Professionals, each contributing to the overall success. Notably, the "Big 3" segments reported a 9% growth, underscoring the diverse strengths of Thomason Reuters in various industries.

Earnings Performance

When examining earnings, it’s noteworthy that GAAP diluted earnings per share (EPS) reported a decline of 43%, falling to 74 cents from $1.30. Conversely, the adjusted EPS witnessed a 6% increase, rising to $1.07 and exceeding the expected $1.06 estimate. This discrepancy reflects underlying operational shifts and influences on profitability.

Additionally, operating profit saw a decline of 25%, amounting to $540 million. This decrease is largely attributed to one-time operational gains from the previous year, notably linked to the wind-down of the FindLaw business segment.

Recurring Revenue Insights

Diving deeper into revenue sources, the report highlighted a 6% increase in recurring revenue, which constituted 84% of the overall revenue. There was also an 11% rise in transaction revenue, although this growth was overshadowed by a 6% decrease in the Global Print segment. Nevertheless, these trends indicate a robust shift towards sustainable and scalable revenue models.

Adjusted EBITDA and Operational Cash Flow

Moving on to operational efficiency, adjusted EBITDA grew 8% to reach $777 million, improving the margin to 38.7%, an increase from the previous year’s 37.6%. Furthermore, net cash from operations surged by 35%, reaching $756 million, and free cash flow grew by 38% to $581 million, again indicating a healthy liquidity position.

Segment-Wise Revenue Analysis

legal Professionals Unit

Within the legal Professionals unit, revenue posted a slight growth of 1% to $738 million, despite the previous year’s sale of FindLaw, which had a dampening effect on revenue growth for recurring and transactional categories. However, organic growth surged to 9%, driven by the strong performance of products such as Westlaw, CoCounsel, and Practical Law. The adjusted EBITDA for this segment increased by 9% to $327 million, resulting in an impressive margin of 44.3%.

Corporates Segment

In the Corporates segment, revenue rose by 7% to $496 million, despite experiencing some negative effects from the sale of non-core businesses, and an adjusted EBITDA margin of 32.2% reflects operational efficiency. The organic revenue growth in this segment also reached 9%, indicating resilience in core operations.

Tax & Accounting Professionals Growth

The Tax & Accounting Professionals segment witnessed an outstanding 13% revenue growth, amounting to $414 million, boosted by the recent SafeSend acquisition. Organic revenue growth reached 11%, with adjusted EBITDA jumping 14% to $222 million while enhancing its margin to 53.6%.

Reuters News Revenue

The Reuters News division also reported a 6% increase in revenue (with 5% organic growth), totaling $232 million. This growth is largely driven by enhanced opportunities in generative AI-related transactional content licensing, alongside contractual price increases from agreements with the London Stock Exchange Group (LSEG).

Additional Financial Insights

Despite these bright spots, it was noted that revenue in the Global Print segment declined by 6% to $136 million, and adjusted EBITDA slipped 2% to $54 million, indicating challenges in traditional print media. Corporate costs have also risen, increasing to $34 million from $30 million, which may require closer financial monitoring.

CEO’s Comments and Future Outlook

CEO Steve Hasker emphasized the substantial benefits derived from ongoing investments in AI, which are accelerating product innovation and fundamentally transforming operational methodologies. Hasker articulated the vision for 2026, promising to expand agentic capabilities to aid customers in achieving enhanced efficiency, clarity, and confidence, while reinforcing the value of high-quality tools built upon expert knowledge.

Looking ahead, Thomson Reuters projects 2026 sales to range between $8.037 billion and $8.074 billion, compared to an estimated $8.051 billion. The company anticipates total revenue growth of 7.5% to 8.0%, with expected organic growth mirroring those figures. The adjusted EBITDA margin is projected to be around 40.2%, with a free cash flow forecast of approximately $2.1 billion.

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Conclusion

In summary, Thomson Reuters Corp. is positioned strongly with consistent growth across various segments, despite facing challenges in certain areas. The firm’s strategic focus on AI and commitment to innovation signal a forward-thinking approach that promises to yield rewards in future quarters. The continued partnership with technologies like the AI legalese decoder will aid both the company and its clients in navigating the complexities of the legal landscape efficiently.

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