Thomson Reuters’ adjusted EPS beats expectations, AI boosts results By Reuters

By Kenneth Li

NEW YORK (Reuters) -Thomson Reuters Corp on Thursday reported higher-than-expected quarterly profit, and said it struck deals to license its content to help train large AI language models.

The Toronto-based news and information provider reported a fourth-quarter revenue rise of 3% to $1.8 billion, largely in line with analyst estimates, according to LSEG data. It reported adjusted fourth-quarter earnings of 98 cents per share. Wall Street expected 90 cents per share, according to LSEG data. 

“We’re in growth and investment mode. 2024 is an investment year for us,” Steve Hasker, CEO of Thomson Reuters (NYSE:) said in an interview on Thursday, highlighting increases in capital expenditure this year. “We see growth opportunities in 2025, 26 and beyond around generative AI, but not exclusively generative AI.”

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

The company said it expected to end its $1 billion share buyback by the end of the second quarter and will increase its annualized dividend by 10%. 

Thomson Reuters anticipates 2024 revenue to rise by about 6%, or slightly ahead of estimates of 5.7%, according to LSEG data. 

Operating profit fell 11% to $558 million, factoring in gains from divestitures last year, but rose 12% excluding one-time gains 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, impacted by the sale of business management software company Elite in 2023. 

Reuters News revenue rose 11% and adjusted earnings before tax, depreciation and amortization rose 56% from generative AI-related content licensing revenue, the company said.

Hasker said deals to license the Reuters News archive with large language model AI companies reflects “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.

The company did not specify the company it has licensed its content to nor the financial details of the deal. 

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

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

Last year, it purchased legal AI firm Casetext for $650 million. 

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