Thomson Reuters Q3 2025 Earnings Call Summary

1Key Financial Results and Metrics

Total Organic Revenue Growth: 7%, in line with expectations; Big 3 segments grew by 9%.

Adjusted EBITDA: Increased by 10% to $672 million, with a margin improvement of 240 basis points to 37.7%.

Adjusted EPS: $0.85, up from $0.80 year-over-year.

Free Cash Flow: Approximately $1.4 billion for the first nine months of 2025, down 3% due to timing-related changes in working capital.

Capital Allocation: Completed a $1 billion share repurchase program, with a net leverage of 0.6x.

2Strategic Updates and Business Highlights

Segment Performance:

Legal Professionals: 9% organic revenue growth, driven by Westlaw and CoCounsel.

Corporate Segment: Grew by 7%, with expectations for moderation due to softer bookings.

Tax & Accounting: 10% organic growth, supported by strong performance in Latin America and new product launches.

Reuters News: 3% organic growth, bolstered by agency business and partnerships.

Global Print: Declined by 4% organically.

AI Innovation: Positive customer feedback on new AI products (Agentic AI, CoCounsel) and strong early sales trends.

Market Position: Confidence in Westlaw's differentiation amidst competitive pressures, particularly in the AI assistant space.

3Forward Guidance and Outlook

2025 Outlook: Reaffirmed total revenue growth of approximately 3% and organic growth of 7%. Big 3 segments expected to grow around 9%.

2026 Financial Framework: Projecting organic revenue growth of 7.5% to 8%, with Big 3 segments expected to grow by approximately 9.5%. Anticipating 100 basis points of adjusted EBITDA margin expansion and free cash flow of around $2.1 billion.

4Bad News, Challenges, or Points of Concern

Headwinds:

Slower ramp-up in commercial print volumes and recent U.S. federal government cancellations impacting revenue growth.

Softer bookings trends in the Corporate segment due to internal sales organizational changes aimed at improving cross-selling.

Government Segment: Experienced downgrades and cancellations unrelated to the ongoing government shutdown, indicating potential volatility in federal spending.

Competitive Pressures: Incremental competition in the AI assistant space, although core franchises remain stable.

5Notable Q&A Insights

Corporate Segment Confidence: Management remains confident in achieving 9% to 11% organic growth despite recent sales softness, attributing it to temporary disorganization in the sales force.

AI Product Reception: Customers are responding positively to new AI offerings, with significant changes in how legal professionals engage with tools like Westlaw Advantage.

Government Contracts: Cancellations were driven by reduced spending levels in certain departments, but management believes their tools will remain essential for efficiency and law enforcement.

M&A Strategy: Focus on tuck-in acquisitions with potential for larger deals in high-potential areas like risk and compliance, contingent on market valuations. This summary encapsulates the key financial metrics, strategic initiatives, forward guidance, challenges, and insights from the Q&A session, providing a comprehensive overview of Thomson Reuters' performance and outlook for Q3 2025.