Thomson Reuters Q1 Earnings Call Highlights

Key Points

• Q1 results: Thomson Reuters reported 8% organic revenue growth, adjusted EBITDA up 9% to $881 million and adjusted EPS up 10% to $1.23, and management reaffirmed full-year organic revenue guidance of 7.5%–8% with expected margin expansion of ~100 bps.
• Growth was led by the "Big Three" (Legal Professionals, Corporates, Tax/Audit & Accounting) fueled by adoption of AI-enabled products—CoCounsel and Westlaw Advantage—pushing GenAI-enabled ACV to 30%, and the company says its proprietary legal LLM, "Thompson," outperforms frontier models for certain legal tasks.
• Capital and leadership updates: the company raised its dividend 10% (fifth consecutive year), repurchased $262 million of shares in Q1 and completed a $605 million return of capital/share consolidation (reducing shares ~2%), plans to finish the remaining $338 million NCIB in Q2, and named Gary Bischoping as incoming CFO following Mike Eastwood's retirement.

Thomson Reuters NASDAQ: TRI reported what CEO Steve Hasker called a “strong start to 2026,” with first-quarter organic revenue growth of 8%—up from 7% throughout 2025—and adjusted EBITDA margin in line with expectations. Management reaffirmed its full-year outlook for organic revenue growth of 7.5% to 8% and adjusted EBITDA margin expansion of 100 basis points year-over-year to approximately 40%.

First-quarter growth led by the “Big Three” segments

Hasker said the company’s “Big Three” segments—Legal Professionals, Corporates, and Tax, Audit & Accounting—delivered 9% organic revenue growth in the quarter, helping drive the company-wide 8% increase. He also noted double-digit growth in products including CoCounsel, Pagero, SafeSend, SurePrep, and international businesses, while print revenue declined as expected.

CFO Mike Eastwood said first-quarter organic recurring revenue grew 8% and transactional revenue grew 10%, while print revenue declined 5% organically. Adjusted EBITDA increased 9% to $881 million, with total company adjusted EBITDA margin of 42.2%. Adjusted EPS rose 10% to $1.23 from $1.12 a year earlier, and free cash flow increased 19% to $332 million.

Segment performance: Legal accelerates ex-government; tax impacted by timing

Legal Professionals organic revenue increased 9%, though Eastwood noted that government growth slowed. “Government slowed to 1% year-over-year growth,” he said, but Legal Professionals excluding government accelerated to 11% in the quarter from 9% in the fourth quarter. Eastwood attributed strength to broad-based demand across large, mid, and small law firms and continued momentum from Westlaw and CoCounsel.

In the Corporates segment, organic revenue grew 9%, driven by 8% recurring growth and 12% transactional growth. Eastwood cited Pagero, Confirmation, Westlaw, CoCounsel, and international businesses as key contributors, and said the quarter included a “few million dollars” of transactional revenue that shifted from Q2 into Q1.

Tax, Audit & Accounting organic revenue increased 10%. Eastwood said CoCounsel for Tax and Audit, the company’s Latin America business, SafeSend, and SurePrep were key drivers, but he noted the quarter’s growth rate was affected by two product updates that shifted revenue recognition toward the second half of the year. For the full year, management maintained confidence in an 11% to 13% organic growth outlook for the segment, with Eastwood citing contributions from newer AI-driven offerings in the U.S., a product line extension at Domínio in Brazil, and the normalization of revenue timing shifts.

Reuters organic revenue rose 6%, driven by growth from the company’s news agreement with the data and analytics business of LSEG and the agency business. Eastwood added that Reuters’ agency results included $3 million of intercompany transactional licensing revenue. Global Print organic revenue declined 5%.

AI strategy: “fiduciary-grade AI,” adoption metrics, and the Thompson legal LLM

Hasker devoted a substantial portion of prepared remarks to what he called “fiduciary-grade AI,” arguing that legal, tax, and audit professionals require AI outputs that can be verified due to regulatory and professional standards. He said Thomson Reuters is positioned to deliver that through four core assets: proprietary authoritative content, deep domain expertise, data privacy and governance, and customer support infrastructure.

On adoption, Hasker said customer uptake of Westlaw Advantage is outpacing the prior two Westlaw upgrade cycles and contributed to law firm revenue growth accelerating to 11% in the quarter. He also provided several usage indicators:

• Monthly CoCounsel skill users in legal have “quadrupled year-over-year,” with growth in the U.S. and international markets.
• Since the Westlaw Advantage launch, the number of Advantage users and deep research searches are each “up more than 7x in the last six months.”
• CoCounsel Tax and Audit weekly conversation volume has grown “approximately 5x since September.”

Eastwood added that, as of the end of Q1, 30% of annualized contract value (ACV) came from products that are GenAI-enabled, up from 28% last quarter. He noted the metric was 15% five quarters earlier and said management expects it to continue increasing.

In Q&A, Hasker elaborated on “Thompson,” the company’s proprietary legal-focused large language model. He said the effort stemmed from a small acquisition of “SafeSign,” a group of scientists led by Jonathan Swartz, a Google DeepMind researcher. Hasker said Thompson is “outperforming the frontier, the very latest frontier models for certain legal tasks,” and emphasized that it provides “optionality” because products like CoCounsel and Westlaw Advantage are model-agnostic. He also said Thomson Reuters is seeing interest from large customers in accessing models alongside their own information, and that the company expects to decide later in the year how to exercise the options around Thompson.

Hasker also discussed the company’s reliance on third-party model vendors, telling analysts the company continually evaluates frontier model releases and currently believes Anthropic’s Claude models are best suited for certain products. He said Thomson Reuters can swap models and has “a level of independence” as it goes forward.

Outlook, margin cadence, and capital allocation updates

Management reaffirmed full-year 2026 organic revenue growth guidance of 7.5% to 8%, with the Big Three segments expected to grow approximately 9.5%. Eastwood said the company now expects Legal Professionals to grow approximately 9%, or at the upper end of the prior 8% to 9% framework. The company also reiterated expected free cash flow of approximately $2.1 billion for the year and a full-year tax rate of approximately 19%.

For Q2, Eastwood guided to organic revenue growth of 7% to 8% and an adjusted EBITDA margin of approximately 38%, citing typical seasonality in Tax, Audit & Accounting Professionals. He also outlined factors influencing margin cadence, including increased LLM costs, modest M&A dilution that begins to lap in the second half, and productivity benefits from the company’s “Reimagine How We Work” initiatives.

On capital allocation, Hasker said the company increased its annual dividend by 10% for the fifth consecutive year and repurchased $262 million of shares in Q1. The company also completed a previously announced $605 million return of capital and share consolidation, which management said reduced share count by roughly 2%. Eastwood said the company intends to complete the remaining $338 million of repurchases under its NCIB in Q2. He also raised the interest expense outlook by $30 million to $180 million to $190 million to incorporate the $1.2 billion share repurchase and return of capital announced Feb. 25, while stating the transactions are expected to be accretive to per-share earnings and cash flow.

Leadership transition was another focus. Hasker said CFO Mike Eastwood will retire at the end of the week after 26 years at the company, and introduced Gary Bischoping as incoming CFO. Bischoping told investors he was drawn to Thomson Reuters’ position “at the intersection of innovation, transformational growth, and value creation,” adding he looks forward to helping lead the company’s next chapter.

About Thomson Reuters NASDAQ: TRI

Thomson Reuters is a global provider of information and technology solutions for professional markets, including financial services, legal, tax and accounting, and media industries. The company delivers a range of data, analytics and software tools designed to help customers make informed decisions, manage risk and stay compliant with evolving regulations. Its key offerings include the Eikon financial data platform, Westlaw legal research service, Checkpoint tax and accounting solution, and Reuters News, which supplies real‐time journalism to media organizations worldwide.

Formed in 2008 through the merger of Canada's Thomson Corporation (founded in 1934) and the UK's Reuters Group (established in 1851), Thomson Reuters has built on a legacy of journalistic integrity and information innovation.

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