Thomson Reuters Reports First-Quarter 2025 Results

Associated Press

01-05-2025

TORONTO, May 1, 2025 /CNW/ -- Thomson Reuters (TSX/Nasdaq: TRI) today reported results for the first quarter ended March 31, 2025:
'We have delivered an encouraging start to 2025, underscored by a good financial performance and reaffirmed outlook, building on the momentum of the past year,' said Steve Hasker, President and CEO of Thomson Reuters. 'We continue to invest heavily in innovation, and believe we are well positioned to help our customers harness the potential of content-driven technology and AI to navigate an increasingly complex and changing world.'
Mr. Hasker added, 'As we look ahead, we remain committed to taking a balanced capital allocation approach, focusing on delivering sustained value creation through a long-term investment strategy.'
Consolidated Financial Highlights - Three Months Ended March 31
Revenues increased 1% due to 2% growth in recurring revenues (76% of total revenues) partly offset by a 1% decline in transactions revenues and a 6% decline in Global Print. Total company revenue growth was negatively impacted by net acquisitions and disposals of 4% and foreign currency of 1%.
Operating profit increased 1% compared to the prior-year period.
Diluted EPS decreased to $0.96 compared to $1.06 in the prior-year period due to higher tax expense and because the prior-year period included currency benefits reflected in other finance income or costs.
Net cash provided by operating activities increased by $13 million.
Highlights by Customer Segment – Three Months Ended March 31
Unless otherwise noted, all revenue growth comparisons by customer segment in this news release are at constant currency (which excludes the impact of foreign currency) as Thomson Reuters believes this provides the best basis to measure performance.
Legal Professionals
Revenues decreased 3% due to the impact from the divestiture of FindLaw, which negatively impacted recurring and transactions revenues. Organic revenue growth was 8%.
Adjusted EBITDA decreased 2% to $336 million.
Corporates
Revenues increased 7% and organic revenue growth was 9%.
Adjusted EBITDA increased 10% to $213 million.
Tax & Accounting Professionals
Revenues increased 12%, including the acquisition impact of SafeSend which was reflected in transactions revenues. Organic revenue growth was 11%.
Adjusted EBITDA increased 17% to $210 million.
The Tax & Accounting Professionals segment is the company's most seasonal business with approximately 60% of full-year revenues typically generated in the first and fourth quarters. As a result, the margin performance of this segment has been generally higher in the first and fourth quarters as costs are typically incurred in a more linear fashion throughout the year.
Reuters News
Revenues decreased 7%, all organic. The organic revenue decline primarily reflected generative AI related content licensing revenue included in the prior-year period that was largely transactional in nature, partially offset by higher agency revenues and a contractual price increase from our news agreement with the Data & Analytics business of LSEG.
Adjusted EBITDA decreased 34% to $39 million.
Global Print
Revenues decreased 5%, all organic, driven by lower shipment volumes and the migration of customers from Global Print to Westlaw.
Adjusted EBITDA decreased 7% to $44 million.
Corporate Costs
Corporate costs were $33 million compared to $17 million in the prior-year period. The increase primarily reflected a corporate charge that is not expected to repeat.
2025 Outlook
The company reaffirmed all the metrics within its 2025 outlook it announced on February 6, 2025.
The company's outlook for 2025 in the table below assumes constant currency rates and incorporates the recent SafeSend acquisition and the divestitures of FindLaw and other non-core businesses, but excludes the impact of any future acquisitions or dispositions that may occur during the remainder of the year. Thomson Reuters believes that this type of guidance provides useful insight into the anticipated performance of its businesses.
The company expects its second-quarter 2025 organic revenue growth to be approximately 7% and its adjusted EBITDA margin to be approximately 36%.
The company's 2025 outlook is forward-looking information that is subject to risks and uncertainties (see 'Special Note Regarding Forward-Looking Statements, Material Risks and Material Assumptions'). In particular, the company continues to operate in an uncertain macroeconomic environment, reflecting ongoing geopolitical risk, uneven economic growth and an evolving interest rate and inflationary backdrop. Any worsening of the global economic or business environment, among other factors, could impact the company's ability to achieve its outlook.
Reported Full-Year 2024 Results and Full-Year 2025 Outlook
The information in this section is forward-looking. Actual results, which will include the impact of currency and future acquisitions and dispositions completed during 2025, may differ materially from the company's 2025 outlook. The information in this section should also be read in conjunction with the section below entitled 'Special Note Regarding Forward-Looking Statements, Material Risks and Material Assumptions.'
Acquisition
In January 2025, the company acquired cPaperless, LLC (SafeSend) for approximately $600 million. SafeSend is a U.S. based cloud-native provider of technology for tax and accounting professionals. SafeSend automates the 'last-mile' of the tax return, including assembly, review, taxpayer e-signature, and delivery. This business is reported in the Tax & Accounting Professionals segment.
Dividends and common shares outstanding
In February 2025, the company announced a 10% or $0.22 per share annualized increase in the dividend to $2.38 per common share, representing the 32nd consecutive year of dividend increases and the fourth consecutive 10% increase. A quarterly dividend of $0.595 per share is payable on June 10, 2025 to common shareholders of record as of May 15, 2025.
As of April 29, 2025, Thomson Reuters had approximately 450.5 million common shares outstanding.
Thomson Reuters
Thomson Reuters (TSX/Nasdaq: TRI) informs the way forward by bringing together the trusted content and technology that people and organizations need to make the right decisions. The company serves professionals across legal, tax, audit, accounting, compliance, government, and media. Its products combine highly specialized software and insights to empower professionals with the data, intelligence, and solutions needed to make informed decisions, and to help institutions in their pursuit of justice, truth and transparency. Reuters, part of Thomson Reuters, is a world leading provider of trusted journalism and news. For more information, visit tr.com.
NON-IFRS FINANCIAL MEASURES
Thomson Reuters prepares its financial statements in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB).
This news release includes certain non-IFRS financial measures, which include ratios that incorporate one or more non-IFRS financial measures, such as adjusted EBITDA (other than at the customer segment level) and the related margin, free cash flow, adjusted earnings and the effective tax rate on adjusted earnings, adjusted EPS, accrued capital expenditures expressed as a percentage of revenues, net debt and leverage ratio of net debt to adjusted EBITDA, selected measures excluding the impact of foreign currency, changes in revenues computed on an organic basis as well as all financial measures for the 'Big 3" segments.
Thomson Reuters uses these non-IFRS financial measures as supplemental indicators of its operating performance and financial position as well as for internal planning purposes and the company's business outlook. Additionally, Thomson Reuters uses non-IFRS measures as the basis for management incentive programs. These measures do not have any standardized meanings prescribed by IFRS and therefore are unlikely to be comparable to the calculation of similar measures used by other companies and should not be viewed as alternatives to measures of financial performance calculated in accordance with IFRS. Non-IFRS financial measures are defined and reconciled to the most directly comparable IFRS measures in the appended tables.
The company's outlook contains various non-IFRS financial measures. The company believes that providing reconciliations of forward-looking non-IFRS financial measures in its outlook would be potentially misleading and not practical due to the difficulty of projecting items that are not reflective of ongoing operations in any future period. The magnitude of these items may be significant. Consequently, for purposes of its outlook only, the company is unable to reconcile these non-IFRS measures to the most directly comparable IFRS measures because it cannot predict, with reasonable certainty, the impacts of changes in foreign exchange rates which impact (i) the translation of its results reported at average foreign currency rates for the year, and (ii) other finance income or expense related to intercompany financing arrangements. Additionally, the company cannot reasonably predict the occurrence or amount of other operating gains and losses that generally arise from business transactions that the company does not currently anticipate.
ROUNDING
Other than EPS, the company reports its results in millions of U.S. dollars, but computes percentage changes and margins using whole dollars to be more precise. As a result, percentages and margins calculated from reported amounts may differ from those presented, and growth components may not total due to rounding.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS, MATERIAL RISKS AND MATERIAL ASSUMPTIONS
Certain statements in this news release, including, but not limited to, statements in Mr. Hasker's comments, the '2025 Outlook' section and the company's expectations regarding the impact of its recent acquisition of SafeSend, are forward-looking. The words 'will', 'expect', 'believe', 'target', 'estimate', 'could', 'should', 'intend', 'predict', 'project' and similar expressions identify forward-looking statements. While the company believes that it has a reasonable basis for making forward-looking statements in this news release, they are not a guarantee of future performance or outcomes and there is no assurance that any of the other events described in any forward-looking statement will materialize. Forward-looking statements are subject to a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from current expectations. Many of these risks, uncertainties and assumptions are beyond the company's control and the effects of them can be difficult to predict.
Some of the material risk factors that could cause actual results or events to differ materially from those expressed in or implied by forward-looking statements in this news release include, but are not limited to, those discussed on pages 16-27 in the 'Risk Factors' section of the company's 2024 annual report. These and other risk factors are discussed in materials that Thomson Reuters from time-to-time files with, or furnishes to, the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission (SEC). Thomson Reuters' annual and quarterly reports are also available in the 'Investor Relations' section of tr.com.
The company's business outlook is based on information currently available to the company and is based on various external and internal assumptions made by the company in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that the company believes are appropriate under the circumstances. Material assumptions and material risks may cause actual performance to differ from the company's expectations underlying its business outlook. In particular, the global economy has experienced substantial disruption due to concerns regarding economic effects associated with the macroeconomic backdrop and ongoing geopolitical risks. The company's business outlook assumes that uncertain macroeconomic and geopolitical conditions will continue to disrupt the economy and cause periods of volatility, however, these conditions may last substantially longer than expected and any worsening of the global economic or business environment could impact the company's ability to achieve its outlook and affect its results and other expectations. For a discussion of material assumptions and material risks related to the company's 2025 outlook see pages 54-55 of the company's 2024 annual report. The company's annual report was filed with, or furnished to, the Canadian securities regulatory authorities and the U.S. SEC and are also available in the 'Investor Relations' section of tr.com.
The company has provided an outlook for the purpose of presenting information about current expectations for the period presented. This information may not be appropriate for other purposes. You are cautioned not to place undue reliance on forward-looking statements which reflect expectations only as of the date of this news release.
Except as may be required by applicable law, Thomson Reuters disclaims any obligation to update or revise any forward-looking statements.
CONTACTS
Thomson Reuters will webcast a discussion of its first-quarter 2025 results and its 2025 business outlook today beginning at 8:30 a.m. Eastern Daylight Time (EDT). You can access the webcast by visiting ir.tr.com. An archive of the webcast will be available following the presentation.
Reconciliation of adjusted EBITDA margin(1)
To compute segment and consolidated adjusted EBITDA margin, the company excludes fair value adjustments related to acquired deferred revenue from its IFRS revenues. The charts below reconcile IFRS revenues to revenues used in the calculation of adjusted EBITDA margin, which excludes fair value adjustments related to acquired deferred revenue.
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SOURCE Thomson Reuters