Thomson Reuters has delivered an adjusted earnings per share of US$0.87, beating analyst estimates of US$0.83, even as net earnings took a proper hammering - down 63% to US$313 million from last year's US$841 million.
The information giant's "Big Three" segments - Legal, Tax & Accounting, and Corporates - managed 9% organic revenue growth, which isn't too shabby considering they represent 82% of total revenues.
But here's the thing - total revenues only crept up 3% to US$1.79 billion, just meeting Wall Street's expectations.
AI investments driving growth
Thomson Reuters is going all-in on AI, throwing over US$200 million at GenAI initiatives this year and launching CoCounsel Legal with Deep Research capabilities.
So far, the bet seems to be working - 7% organic revenue growth company-wide, and adjusted EBITDA margins expanded to 37.8% from 37.1%.
Yet the stock price has dropped 8.99% to US$199.82 despite the solid earnings beat, suggesting investors are still waiting to see if all this AI spending will actually pay off.
Management is keeping the faith though, maintaining their full-year outlook with organic revenue growth of 7% to 7.5% and adjusted EBITDA margin around 39%.
Free cash flow bumped up 4% to US$566 million, which gives them plenty of firepower for more AI development.
