Thomson Reuters(US:TRI)2025-11-04 15:00Financial 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]