Thomson Reuters Corp. (NYSE:TRI) reported second-quarter results that topped Wall Street estimates on Wednesday, driven by continued demand for its legal, tax and corporate software products, while raising its full-year revenue outlook.
Following the results, the stock edged higher in premarket trading after closing up 7.42% in the previous session.
Second-Quarter Financial Results
Adjusted earnings rose to 99 cents per share from 87 cents a year earlier, beating the analyst consensus estimate of 96 cents. Revenue increased 9% year over year to $1.954 billion, ahead of the Street estimate of $1.913 billion. Diluted earnings per share climbed to $1.02 from 69 cents.
Recurring revenue, which accounted for 82% of total revenue, increased 9%, while transaction revenue rose 16%. Organic revenue grew 8%, led by 10% organic growth across the company’s Legal Professionals, Corporates, and Tax, Audit & Accounting Professionals businesses, which together represented 83% of total revenue.
Operating profit increased 28% to $558 million, while adjusted EBITDA rose 10% to $745 million. Adjusted EBITDA margin expanded to 38.1% from 37.8% a year earlier. Free cash flow increased 29% to $727 million.
Business Segment Performance
By segment, Legal Professionals revenue increased 10% to $772 million, Corporates revenue rose 12% to $537 million and Tax, Audit & Accounting Professionals revenue climbed 14% to $311 million. Reuters revenue increased 5% to $229 million, while Global Print revenue declined 3% to $111 million.
AI Strategy And Management Commentary
CEO Steve Hasker said the company maintained strong momentum during the quarter, highlighting continued adoption of its AI offerings, including CoCounsel Legal and its proprietary Thomson large language model.
He also said the recently announced Global Print joint venture with KKR would allow the company to sharpen its focus on AI-powered professional solutions.
2026 Outlook
For fiscal 2026, Thomson Reuters raised its outlook for total revenue growth to approximately 8%, up from its previous guidance of 7.5% to 8%.
Based on that forecast, the company now expects fiscal 2026 revenue of approximately $8.074 billion, compared with its prior guidance range of $8.037 billion to $8.074 billion.
The updated outlook compares with the analyst consensus estimate of $8.101 billion.
Capital Allocation And Balance Sheet
Thomson Reuters continued to return cash to shareholders and strengthen its balance sheet during the quarter. The company completed a $605 million return of capital transaction in May, reducing its share count by about 6.5 million shares through a share consolidation.
It also completed its previously announced $600 million share repurchase program in July and repaid $500 million of 3.35% notes that matured in May.
The company ended the second quarter with $577 million in cash and cash equivalents and total assets of $18.08 billion. As of Aug. 3, Thomson Reuters had about 433.2 million common shares outstanding.
It also maintained its quarterly dividend of 65.5 cents per share, payable Sept. 10 to shareholders of record on Aug. 19, marking its 33rd consecutive year of dividend increases.
TRI Price Action: Thomson Reuters shares were up 0.32% at $109.50 during premarket trading on Wednesday, according to Benzinga Pro data.
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