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Thomson Reuters(TRI) - 2024 Q1 - Earnings Call Transcript
Thomson ReutersThomson Reuters(US:TRI)2024-05-02 19:28

Financial Data and Key Metrics Changes - Total company organic revenues rose 9% with the Big 3 segments growing by 10% [5] - Adjusted EBITDA increased 19% to $806 million, reflecting a margin improvement to 42.7% [17] - Adjusted earnings per share grew 30% from the prior year period to $1.11 [17] - Reported free cash flow was $271 million, up 101% from $133 million in the prior year period [50] Business Line Data and Key Metrics Changes - Legal organic revenue grew 7%, driven by AI momentum in Westlaw Precision and CoCounsel [8] - Tax & Accounting organic revenues grew 14%, with recurring and transactional growth of 14% and 15% respectively [9] - Corporate segment organic revenues grew 12%, up from 7% in the fourth quarter [18] - Reuters News organic revenue increased 17%, primarily driven by transactional revenue from generative AI content licensing agreements [22] Market Data and Key Metrics Changes - The company sold approximately 11.7 million shares of the London Stock Exchange Group, generating gross proceeds of $1.4 billion [7] - The company raised its 2024 annual dividend by 10% to $2.16 [7] - The company expects total revenue growth of 6.5% to 7% and organic revenue growth of 6% to 6.5% for 2024 [26] Company Strategy and Development Direction - The company is focused on innovation and expects long-term demand tailwinds for its business [6] - The company is committed to a balanced capital allocation approach and is assessing additional inorganic opportunities [7] - The company aims to expand its international footprint, currently at approximately 20% of revenue [42] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the strong start to the year but noted that revenue upside was driven largely by transactional revenue and seasonal offerings [15] - Management highlighted the importance of retention, M&A, and pricing as key factors for sustained revenue performance [32] - Management indicated that while Q1 was strong, they expect growth rates to return to more typical levels in Q2 [21] Other Important Information - The company expects technology, product, and acquisition integration spending to increase in the second quarter [23] - The company is optimistic about the performance of its Corporate segment, noting improvements in the sales pipeline [89] Q&A Session Summary Question: Outlook for the remainder of the year - Management highlighted four items necessary for continued strong revenue performance, including generative AI acceleration and retention rates [31][32] Question: Focus on new product development - Management discussed an ambitious product development roadmap, particularly in Legal with AI enhancements [60] Question: M&A capacity and strategy - Management confirmed they have the financial capacity for M&A and are focused on identifying strategic opportunities [40][65] Question: Seasonal nonrecurring boosts and their impact - Management acknowledged that some revenue boosts in Q1 were nonrecurring and expected margins to return to typical levels [49][68] Question: Competitive landscape regarding generative AI - Management noted a balanced mix of incumbents and startups in the competitive landscape for generative AI [111][113] Question: Changes in the Corporate segment - Management observed improvements in the Corporate segment's sales pipeline but emphasized the need for continued performance to build confidence [114][140]