Thomson Reuters (TRI) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenues grew 8% year-over-year, with organic growth of 7% and the Big Three segments up 9%, both ahead of expectations.

• Full-year 2024 organic revenue growth outlook raised to ~7%, with Big Three at ~8.5%.

• Continued strong momentum in key products and international businesses, with significant AI-enabled product launches and enhancements, including CoCounsel 2.0.

• Over $200 million annualized investment in AI, supported by acquisitions of SafeSign Technologies and Materia.

• Announced sale of FindLaw business to Internet Brands for up to $410 million, expected to close in Q4 2024.

Financial highlights

• Q3 2024 revenues were $1.724 billion, up 8% year-over-year; organic recurring revenue grew 8%, transactional revenue up 12%, print revenue declined 6%.

• Adjusted EBITDA fell 4% to $609 million, with a 430 bps margin decline to 35.3%.

• Adjusted EPS was $0.80, down from $0.82 year-over-year; diluted EPS dropped 16% to $0.67.

• Free cash flow for Q3 was $591 million, up 12% year-over-year; nine-month free cash flow was $1.40 billion.

• Net leverage at 0.5x as of September 30, 2024.

Outlook and guidance

• 2024 organic revenue growth outlook raised to ~7% (from 6.5%), Big Three to ~8.5% (from 8%).

• Q4 organic revenue growth expected at ~5%, with adjusted EBITDA margin at ~37%.

• Adjusted EBITDA margin for 2024 expected at ~38%; free cash flow guidance unchanged at ~$1.8 billion.

• Effective tax rate on adjusted earnings expected at ~18% for 2024, rising to 19%-19.5% in 2025.

• 2025 and 2026 financial framework reaffirmed, with more detailed guidance to come.