Thomson Reuters’ adjusted earnings per share beats expectations; AI boosts results

NEW YORK - Thomson Reuters has reported higher-than-expected quarterly profit, helped by lower costs and demand for artificial intelligence (AI)-enhanced products for legal and other professional clients.

It also said it struck deals to license its news content to help train large AI language models.

The Toronto-based news and information provider on Feb 8 reported adjusted fourth-quarter earnings of 98 US cents per share. Wall Street expected 90 US cents per share, according to LSEG data, and a year ago, the comparable figure was 75 US cents a share.

Revenue rose 3 per cent to US$1.8 billion (S$2.42 billion), largely in line with analyst estimates, according to LSEG data.

“We’re in growth and investment mode. 2024 is an investment year for us,” said Thomson Reuters chief executive Steve Hasker in an interview on Feb 8, highlighting higher capital expenditure in 2024. “We see growth opportunities in 2025, 26 and beyond around generative AI, but not exclusively generative AI.”

Generative AI, deployed across Thomson Reuters’ product portfolio, is expected to play a bigger role in results this and upcoming years, executives said.

Mr Hasker added: “It is not a cost-cutting year.”

The company expects to end its US$1 billion share buyback by the end of the second quarter and will increase its annualised dividend by 10 per cent to US$2.16 per share.

Thomson Reuters anticipates 2024 organic revenue, excluding gains from acquisitions, to rise by about 6 per cent, or slightly ahead of estimates of 5.7 per cent, LSEG data shows. Organic revenue could rise 6.5 per cent to 8 per cent in the 2025 and 2026 period. Organic operating profit, excluding one-time gains, rose 12 per cent from higher revenue and lower costs.

Revenue at three of the five divisions of Thomson Reuters rose in the quarter, with a decline in the legal segment, hit by the sale of business management software company Elite in 2023.

Reuters News revenue rose 11 per cent and adjusted earnings before tax, depreciation and amortisation rose 56 per cent, in part from generative AI-related content licensing revenue, the company said.

Thomson Reuters did not specify the companies it has licensed its content to, nor the financial details of the deals.

Licensing news archive

Mr Hasker said deals to license the Reuters News archive reflect “the need for large language models to learn from accurate and unbiased information that’s been produced by the world’s best newsrooms and in accordance with the Trust Principles”.

The Reuters Trust Principles is a set of obligations on Reuters and its employees to act at all times with integrity, independence and freedom from bias.

News organisations have demanded payment from tech companies over the use of copyrighted content to train AI models. The New York Times has sued OpenAI and Microsoft, accusing the them of the unauthorised use of copyrighted works to train chatbots.

Thomson Reuters, which also owns the Westlaw legal database and the Checkpoint tax and accounting service, has earmarked US$10 billion for acquisitions and about US$100 million annually to invest further in AI.

In January 2024, Thomson Reuters acquired a majority stake in Pagero Group, an e-invoicing tax company and also announced the purchase of World Business Media, a subscription-based provider of news and analyses on the insurance and reinsurance market.

In 2023, it purchased legal AI firm Casetext for US$650 million.

Executives said the company has spent about US$2.1 billion to acquire companies and now has about another US$8 billion to spend over the next three years. REUTERS