RELX(RELX) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported an underlying revenue growth of 7%, with underlying adjusted operating profit growth at 9% and adjusted earnings per share growth at 10% at constant currency [1][7] - The adjusted operating margin improved by just under one percentage point to 34.8% [7][10] - Cash conversion remained strong at 99%, with net profit increasing by 8% at constant currency and 5% in sterling to over GBP 2.3 billion [11][12] Business Line Data and Key Metrics Changes - In the Risk segment, underlying revenue growth was 8%, and underlying adjusted operating profit growth was 10% [1][2] - Business Services, representing over 40% of divisional revenue, saw strong growth driven by financial crime compliance and digital fraud solutions [2] - In STM, underlying revenue growth was 5%, with underlying adjusted operating profit growth of 7% [3] - Legal segment reported an underlying revenue growth of 9% and adjusted operating profit growth of 12%, driven by the adoption of AI-enabled Legal platforms [4][5] - Exhibitions delivered an underlying revenue growth of 8% and adjusted operating profit growth of 9% [5] Market Data and Key Metrics Changes - The number of articles submitted grew by over 20% in 2025, with published articles increasing by 10% [4] - The company continues to see strong demand for primary research publishing, with a global increase in scientific researchers [25] Company Strategy and Development Direction - The company aims to sustain strong long-term growth across all business areas, focusing on higher growth analytics and decision tools [6][14] - The strategic direction remains unchanged, with an emphasis on continuous product innovation and managing cost growth below revenue growth [6][10] - The company is committed to organic development while remaining open to strategic acquisitions that align with its goals [12][54] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong underlying revenue growth and adjusted operating profit growth exceeding revenue growth [1][14] - The company is well-positioned to leverage evolving AI technologies to enhance customer value and operational efficiency [6][50] - Management acknowledged potential competition in the Legal segment but emphasized the unique value of their comprehensive content and analytics [20][21] Other Important Information - The company completed GBP 270 million in acquisitions and a GBP 1.5 billion share buyback, with net debt at GBP 7.2 billion [12][13] - The company proposed a 7% increase in the full-year dividend to 67.5 pence per share [7] Q&A Session Questions and Answers Question: Concerns about competition in the Legal segment - Management noted that the adoption of AI tools has doubled the enterprise-wide subscription customer base for Lexis+ AI, indicating strong demand and usage growth [20][21] Question: Outlook for STM and potential growth considerations - Management highlighted continued strong demand for primary research publishing, with no signs of slowing down in submissions and publications [25] Question: Differentiation of Protégé AI workflows from competitors - Management emphasized that their workflow tools are content-enabled, providing a significant competitive advantage due to the trusted, curated content behind them [31][32] Question: Exposure to autonomous driving in the auto insurance market - Management stated that the evolving auto insurance market presents opportunities for sophisticated risk analysis, with the value at stake increasing despite fewer accidents [36][37] Question: Impact of strong new sales on future growth - Management clarified that while strong new sales are a good indicator of momentum, they will have a modest effect on current year revenues but support long-term growth [38] Question: Addressable market for Scopus AI and pricing strategy - Management indicated that the addressable market includes all institutions using their platforms, with plans for individual researcher subscription options in the future [42][43]