Financial Data and Key Metrics Changes - Full-year organic revenue grew by 7%, driven by a 9% growth for the big three segments [9][12] - Adjusted EBITDA margin expanded by 100 basis points to 39.2%, meeting the company's outlook [9][14] - Free cash flow for 2025 was $1.95 billion, slightly ahead of expectations [9][24] - Adjusted earnings per share for the year was $3.92, compared to $3.77 per share in the prior year [14] Business Line Data and Key Metrics Changes - Legal organic revenue grew by 9%, driven by Westlaw and CoCounsel [12][21] - Corporate segment's organic revenue also grew by 9%, supported by legal, tax, and risk portfolios [12][21] - Tax, audit, and accounting organic revenues increased by 11%, driven by UltraTax and CoCounsel [12][13] - Reuters' organic revenues rose by 5%, primarily due to growth in the agency business [12][14] Market Data and Key Metrics Changes - The percentage of annualized contract value (ACV) from GenAI-enabled products increased to 28%, up from 24% in the previous quarter [22] - Global print organic revenues declined by 6% year-on-year, in line with expectations [12][14] Company Strategy and Development Direction - The company aims to leverage proprietary content and deep domain expertise alongside AI capabilities to deliver specialized workflows [8][10] - The strategy includes aggressive innovation and a focus on AI-driven solutions, particularly in legal workflows [8][10] - The company plans to continue its balanced capital allocation approach, including annual dividend growth and strategic M&A [11][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the medium-term growth potential, reaffirming a 2026 outlook for organic revenue growth of 7.5%-8% [11][27] - The company anticipates healthy margin expansion and strong free cash flow while continuing to invest in innovation [11][27] - Management noted that AI-driven workflows present a significant opportunity, particularly in legal services [8][10] Other Important Information - The company executed a $1 billion share repurchase program and announced a 10% increase in its annual common stock dividend [11][25] - The company invested $850 million in M&A, completing four strategic acquisitions [10][26] Q&A Session Summary Question: What drove the slowdown in legal recurring growth from Q3 to Q4? - Management indicated that the slowdown was associated with the government business, which is expected to slow further in Q1 due to cancellations [34][36] Question: What is the moat around Westlaw and Practical Law? - Management highlighted the unique content sets and deep domain expertise as key differentiators that are difficult for competitors to replicate [39][41] Question: How are share buybacks prioritized in the current environment? - Management acknowledged that share repurchases are attractive at current levels and will continue discussions with the board regarding this [45][46] Question: What is the size and adoption progress of CoCounsel? - Management noted that while specific dollar figures are not provided, the reception of CoCounsel has been encouraging across various law firm sizes [51][53] Question: How does the company plan to monetize AI product innovations? - Management stated that they do not price based on headcount and aim to price based on value, benefiting from increased efficiency in legal and tax departments [66][67]

Financial Data and Key Metrics Changes - Full-year organic revenue grew 7%, driven by 9% growth for the big three segments [9][12] - Adjusted EBITDA margin expanded by 100 basis points to 39.2% [9][13] - Free cash flow for 2025 was $1.95 billion, slightly ahead of expectations [9][24] - Adjusted earnings per share for the year was $3.92, compared to $3.77 per share in the prior year [13] Business Line Data and Key Metrics Changes - Legal organic revenue grew 9%, driven by Westlaw and CoCounsel [12][21] - Corporate organic revenue also grew 9%, supported by legal, tax, and risk portfolios [12][21] - Tax, audit, and accounting organic revenues increased by 11%, driven by UltraTax and CoCounsel [12][21] - Reuters' organic revenues rose 5%, primarily from the agency business and a contract with LSEG [12][21] Market Data and Key Metrics Changes - The percentage of annualized contract value (ACV) from GenAI-enabled products increased to 28%, up from 24% [22] - Global print organic revenues declined 6% year-on-year [12][21] Company Strategy and Development Direction - The company is focused on leveraging proprietary content and deep domain expertise to deliver specialized AI workflows [7][8] - Continued innovation is emphasized, with several foundational product launches planned for 2026 [9][10] - The strategy includes a balanced capital allocation approach, with a commitment to annual dividend growth and strategic M&A [11][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the value of their content and expertise for delivering professional-grade AI solutions [5][6] - The outlook for 2026 includes organic revenue growth of 7.5%-8%, with approximately 9.5% for the big three segments [11][27] - Expected margin expansion and strong free cash flow are anticipated, even with continued investment in innovation [11][28] Other Important Information - The company executed a $1 billion share repurchase program and announced a 10% increase in the annual common stock dividend [11][26] - The company has an estimated $11 billion of capital capacity through 2028, positioning it for aggressive and opportunistic investments [11][25] Q&A Session Questions and Answers Question: What drove the slowdown in legal recurring growth from Q3 to Q4? - The slowdown is associated with the government business, which is expected to slow in Q1 due to cancellations [34][35] Question: What is the moat around Westlaw and Practical Law? - The moat is based on unique content sets created by skilled lawyers and deep domain expertise, making it difficult for competitors to replicate [38][40] Question: How are share buybacks prioritized in the current environment? - Share repurchases are considered attractive at current levels, and the company plans to return 75% of free cash flow to investors in 2026 [46][47] Question: What is the size and adoption progress of CoCounsel? - The reception of CoCounsel Legal has been encouraging among various law firms, and the company is optimistic about its growth [51][53] Question: How does the company plan to monetize AI product innovations? - The company does not price based on headcount and aims to price based on the value delivered by AI tools [67][68]

REUTERS/Michaela Rehle Thomson Reuters 2025 Fourth -Quarter Results February 5, 2026 Agenda • Welcome / Introduction Gary Bisbee • Fourth -Quarter & Full -Year 2025 Highlights Steve Hasker Reimagining How We Work: Leveraging AI Internally • Q & A 2 Special Note Special Note Regarding Forward - Looking Statements, Material Assumptions and Material Risks This presentation consists of these slides and the associated remarks and comments, which are related and intended to be pres ented and understood together. ...

Core Insights - Thomson Reuters Corporation (NASDAQ:TRI) is considered one of the best stocks in the QQQ index according to Wall Street analysts, despite a recent price target cut by JPMorgan from $178 to $160 with a Neutral rating following the Q3 2025 earnings report [1][3] Financial Performance - In Q3 2025, Thomson Reuters reported quarterly revenue of $1.78 billion, reflecting a year-over-year increase of 3.36% and exceeding guidance by $2.80 million [2] - The company earned $0.85 per share, which was $0.02 higher than analysts' estimates, contributing to an adjusted EBITDA of $672 million, marking a 10% increase [2] Strategic Focus - The company is prioritizing advancements in AI, with new offerings like Westlaw Advantage and CoCounsel receiving positive customer feedback, indicating a strong market position despite rising competition in the AI assistant sector [3] - Thomson Reuters operates across various regions including the Americas, Europe, the Middle East, Africa, and the Asia Pacific, and functions through five segments: Legal Professionals, Corporates, Tax & Accounting Professionals, Reuters News, and Global Print [4]

Core Insights - The legal technology sector is experiencing a shift as generative AI begins to dominate software, with Thomson Reuters leveraging its extensive legal data to develop new AI-driven products like Westlaw Advantage and CoCounsel [1][2] Company Performance - Thomson Reuters reported a 9% organic revenue growth in its legal unit, reaching $700 million, an increase from 8% growth in the first half of the year, driven by AI features in CoCounsel products [3] - Despite the positive growth, the company's stock fell over 6% following the quarterly results announcement, marking a decline of more than 30% since mid-July [2] Competitive Landscape - The rise of generative AI has led to increased competition, with new entrants like RELX's LexisNexis forming alliances with AI startups and Clio acquiring vLex for $1 billion [7][8][9] - Thomson Reuters' CEO Steve Hasker expressed skepticism about the inflated valuations of AI startups and claimed that CoCounsel's adoption is outpacing that of its rivals [9] Strategic Positioning - The company emphasizes its competitive advantage through a combination of its Westlaw legal data and human editorial oversight, which is crucial in an industry where accuracy is vital [10] - Westlaw processes over 300 million documents annually, with 85% of primary documents enhanced by editorial upgrades, providing court-safe guidance [11] Future Directions - Thomson Reuters aims to expand its services beyond basic retrieval and summarization to include more generative AI capabilities that assist lawyers with complex tasks [12] - The potential entry of OpenAI into the legal tech space raises concerns, as it could disrupt existing customer relationships and market dynamics [13][14] Market Dynamics - The competitive landscape is influenced by the capabilities of general-purpose AI models, with Thomson Reuters arguing that specialized legal AI tools can outperform broader applications [15] - Customers are beginning to recognize the differences between specialized legal AI solutions and general-purpose models, indicating a shift in market understanding [16]

Financial Data and Key Metrics Changes - Total company organic revenues rose by 7%, with the big three segments growing by 9% [4][10] - Adjusted EBITDA increased by 10% to $672 million, reflecting a margin increase to 37.7% [10][26] - Adjusted EPS was $0.85 for the quarter, compared to $0.80 in the prior year [26] Business Line Data and Key Metrics Changes - Legal Professionals segment saw organic revenue growth of 9%, up from 8% in the first half of 2025 [6][11] - Corporates segment organic revenues grew by 7%, driven by offerings in Legal, Tax, and Risk portfolios [11][23] - Tax and Accounting organic revenues grew by 10%, supported by strong performance in Latin America and the U.S. [11][24] - Reuters News organic revenues rose by 3%, primarily due to growth in the agency business [12][25] - Global Print organic revenues declined by 4% year on year [12][25] Market Data and Key Metrics Changes - The percentage of annualized contract value from GenAI-enabled products increased to 24%, up from 22% in the previous quarter [25] - The company expects organic revenue growth of approximately 7% in Q4, including about 9% for the big three segments [31] Company Strategy and Development Direction - The company is focused on leveraging AI innovations to enhance product offerings, particularly in the Legal Professionals and Tax and Accounting segments [5][21] - A balanced capital allocation approach is maintained, with a commitment to assess additional inorganic opportunities [8][9] - The company completed a $1 billion share repurchase program and remains well-capitalized with a net leverage of only 0.6 times [8][9] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed the full-year 2025 revenue and profit outlook, expecting approximately 9% organic revenue growth for the big three segments [4][29] - Temporary factors affecting growth include slower commercial print volumes, U.S. Federal government cancellations, and softer bookings trends in Corporates [5][29] - The company is optimistic about the long-term value proposition in government despite recent downgrades and cancellations [44][45] Other Important Information - The company is updating its 2026 financial framework, expecting organic revenue growth of 7.5% to 8% and margin expansion [32] - Free cash flow outlook for 2026 is raised to approximately $2.1 billion, reflecting confidence in operational efficiency [33] Q&A Session Summary Question: What are the recurring impacts of government and corporate headwinds? - Management remains confident in the corporate segment's growth potential despite temporary sales softness, expecting 9% to 11% organic growth next year [40][43] Question: How is customer reaction to AgenTik AI? - Customer feedback has been very positive, with significant changes in behavior noted among users, indicating strong adoption of the new tools [45][46] Question: What is the impact of the government shutdown on contracts? - Cancellations occurred prior to the shutdown, which has minimal impact on current revenue [52] Question: How does the company view competition in the AI assistant space? - New players have entered the AI assistant space, but the company is confident in its position and product development plans [68] Question: What is the pricing strategy in light of AI product value? - The company follows a price-to-value principle, ensuring pricing aligns with the efficiencies provided by AI products [93][94] Question: How does the company see AI affecting the tax business? - The tax business is expected to benefit from AI advancements, enabling more efficient processes and advisory services [114][115]