Thomson Reuters (NYSE:TRI) executives used the company’s fourth-quarter earnings call to emphasize confidence in its ability to compete in professional-grade artificial intelligence, while also outlining continued organic growth, margin expansion, and an active capital-return program.
Management addresses AI competition concerns
CEO Steve Hasker opened by responding to what he described as AI-related competition concerns that have contributed to share price volatility. He said the company has “growing confidence” in the value of its proprietary content and domain expertise for delivering “professional-grade” AI solutions, particularly as “agentic” capabilities expand.
He said the launch of Westlaw Advantage has “gone extremely well,” with early sales and customer feedback indicating the product has set a new standard in legal research. Hasker added that the company plans to bring agentic “deep research” capabilities and the power of Westlaw and Practical Law to CoCounsel Legal by mid-year, with similar capabilities intended to expand across other legal, tax, and risk offerings over time. He characterized legal AI workflows as a significant “white space” opportunity that is largely incremental to traditional research and know-how businesses.
Fourth-quarter and full-year results
For the fourth quarter, management reported organic revenue growth of 7%. Organic recurring and transactional revenue grew 9% and 8%, respectively, while print revenue declined 6%, which executives said was in line with expectations. Adjusted EBITDA rose 8% to $777 million, and the adjusted EBITDA margin increased 110 basis points to 38.7%, driven by operating leverage and cost discipline.
For the full year 2025, Hasker said Thomson Reuters met key targets, including 7% organic revenue growth and 9% growth across the “Big 3” segments. Adjusted EBITDA increased 6% to $2.9 billion, and the adjusted EBITDA margin expanded 100 basis points to 39.2%. Free cash flow was $1.95 billion, slightly above the company’s roughly $1.9 billion outlook. Adjusted EPS was $3.92 for the year, up from $3.77 in the prior year.
Hasker noted that the company met or exceeded all 2025 guidance metrics except interest expense, which was higher than forecast due to the pace of share repurchases and lower market interest rates that reduced interest income.
Segment performance and product momentum
In the fourth quarter, the Big 3 segments grew 9% organically. Management highlighted the following segment results:
- Legal Professionals: 9% organic revenue growth, despite softer government growth; momentum driven by Westlaw, CoCounsel, and Practical Law.
- Corporates: 9% organic revenue growth, led by legal, tax, and risk offerings and international businesses; recurring growth of 9% and transactional growth of 7% were cited.
- Tax, Audit & Accounting Professionals: 11% organic revenue growth, driven by UltraTax, Latin America, CoCounsel for Tax and Audit, and SafeSend; recurring and transactional growth of 12% and 3% were cited.
- Reuters: 5% organic revenue growth, driven by the company’s agreement with LSEG’s data and analytics business and agency growth, including $5 million in generative AI-related transactional content licensing revenue in the quarter.
- Global Print: 6% organic revenue decline.
During Q&A, management said a slowdown in Legal recurring growth from the third quarter to the fourth quarter was associated with the government business. Executives said government grew 5% in Q4, but they expect it to slow in Q1 2026 based on cancellations discussed previously. They also noted that strong transactional growth in Legal during the quarter was driven in large part by government, reflecting a shift in mix between recurring and transactional revenue within that area.
CFO Mike Eastwood added that by the end of Q4, products that are GenAI-enabled represented 28% of annualized contract value (ACV), up from 24% the prior quarter. Later in the call, he said he expects the GenAI-enabled share of ACV to continue rising through 2026 and 2027, with potential “spikes” as more existing products become AI-enabled.
Internal AI initiatives and restructuring costs
Hasker also detailed efforts to apply AI internally to improve productivity and speed. He said more than 85% of employees are active users of the company’s internal AI platform, Open Arena, and that more than 300 AI use cases are in development across the organization.
He shared examples of measurable impacts, including AI adoption across software engineering and customer support, where the company reduced average handle time by 15% and increased first call resolution by 10%. In content operations, he said specialized AI tools have accelerated U.S. content delivery to Westlaw by 25%.
Eastwood said the Q4 results included $19 million of severance expense tied to initiatives to “reimagine how we work,” and he expects an additional $10 million in severance in Q1. He later estimated another roughly $10 million across Q2 through Q4. He said these costs are spread across segments and functions.
Eastwood also said the company expects to deliver 100 basis points of annual EBITDA margin expansion not only in 2026, but also in 2027 and 2028, citing operating leverage and expected productivity gains, even while continuing to invest in innovation.
Capital allocation, liquidity, and 2026 outlook
Management highlighted what it characterized as strong liquidity and low leverage. Eastwood said the company ended the year with about $500 million of cash on hand, an undrawn $2 billion revolving credit facility, and $1.7 billion available under its commercial paper program. The leverage ratio was 0.6x at December 31, below the company’s 2.5x internal target. The company forecast $11 billion of capital capacity through 2028.
Thomson Reuters announced a 10% increase in its annual dividend for 2026 to $2.62 per share, up $0.24 from $2.38 in 2025. Eastwood said this marks the 33rd consecutive year of annual dividend increases and the fifth consecutive 10% increase.
In 2025, the company completed four acquisitions totaling about $850 million, including SafeSend and Additive for the tax and accounting segment, plus smaller legal bolt-ons TimeBase and Imagen. It also completed a $1 billion share repurchase program announced in August, retiring 6 million shares. Eastwood said the company returned slightly more than 100% of 2025 free cash flow through dividends and buybacks, above its stated 75% commitment.
On buybacks, Hasker said repurchases were “definitely attractive” at current levels and that the company would continue discussions with its board. Eastwood said that to meet the 75% free-cash-flow return commitment in 2026, the company would need about $500 million of share repurchases in addition to dividends.
Looking ahead, executives reiterated the company’s 2026 framework. Eastwood guided to total and organic revenue growth of 7.5% to 8%, driven by approximately 9.5% growth for the Big 3. Segment organic growth targets were reiterated as 8% to 9% for Legal Professionals, 9% to 11% for Corporates, and 11% to 13% for Tax, Audit & Accounting Professionals. The company expects adjusted EBITDA margin expansion of 100 basis points from 39.2% in 2025, an effective tax rate of about 19%, accrued capex at about 8% of revenue, and free cash flow of approximately $2.1 billion, up from $1.95 billion in 2025.
For the first quarter, Eastwood said the company expects organic revenue growth of about 7% and an adjusted EBITDA margin of approximately 42%, adding that revenue growth is expected to strengthen beyond Q1 as AI-enabled products build momentum.
About Thomson Reuters (NYSE:TRI)
Thomson Reuters (NYSE: TRI) is a multinational information and media company that provides content, technology and services to professionals in the legal, tax & accounting, compliance, risk, corporate and media sectors. Headquartered in Toronto, Canada, the company combines news and editorial content from the Reuters news agency with specialist workflow platforms and databases designed to support decision-making and regulatory compliance across industries worldwide.
The company’s product portfolio spans legal research and workflow tools, tax and accounting software, regulatory and risk management solutions, and real-time news and data services.
