Thomson Reuters Delivers Solid Q3 On AI Momentum, Raises 2026 Margin Expansion Target

Core Insights - Thomson Reuters Corp reported third-quarter 2025 revenue of $1.78 billion, a 3% increase year-over-year, surpassing estimates [1] - Organic revenue grew by 7%, driven by a 9% increase in its three main segments: Legal Professionals, Corporates, and Tax and Accounting Professionals [1] Financial Performance - GAAP diluted earnings per share rose 40% to 94 cents, while adjusted EPS increased 6% to 85 cents, exceeding the estimate of 83 cents [2] - Operating profit surged 43% to $593 million, aided by the sale of its remaining minority stake in Elite [2] - Adjusted EBITDA increased 10% to $672 million, with the margin improving to 37.7% from 35.3% [3] Segment Performance - Legal Professionals revenue decreased 2% to $728 million, but organic growth was 9% due to strong performance in Westlaw, CoCounsel, and Practical Law [3] - Corporates revenue grew 9% to $478 million, supported by Indirect Tax, Pagero, and Global Trade [4] - Tax & Accounting Professionals revenue climbed 15% to $251 million, bolstered by the SafeSend acquisition and 10% organic growth [4] Additional Revenue Insights - Reuters News revenue increased 4% to $207 million, primarily from higher agency revenue and a price increase under its London Stock Exchange Group contract [5] - Global Print revenue fell 4% to $124 million, while adjusted EBITDA rose 8% to $46 million due to reduced expenses [5] Year-to-Date Performance - For the first nine months of 2025, total revenue rose 2% to $5.47 billion, and adjusted EBITDA grew 5% to $2.16 billion, with a margin of 39.3% [6] - Adjusted EPS increased to $2.85 from $2.7 [6] Strategic Moves - The company acquired Additive AI, Inc., specializing in AI-powered tax document processing, and completed a $1 billion share buyback [6] - Thomson Reuters reaffirmed its 2025 sales guidance of $7.475 billion to $7.512 billion, expecting total revenue growth of 3% to 3.5% [7] Future Outlook - For 2026, the company raised its projected margin expansion to approximately 100 basis points and expects free cash flow of around $2.1 billion [8] - Thomson Reuters shares were trading 5.69% lower at $146.87 at the time of publication [8]