Thomson Reuters Corp
(HAM:TOC0)
€
93.85
+6.25 (+7.13%)
Market Cap: 37.00 Bil
Enterprise Value: 38.95 Bil
PE Ratio: 28.94
PB Ratio: 3.70
GF Score: 66/100 
Q2 2026 Thomson Reuters Corp Earnings Call Transcript
Aug 05, 2026 / 12:30PM GMT
Release Date Price:
€93.85
(+7.13%)
Key Points
Positve
- Thomson Reuters Corp (TRI) delivered strong Q2 2026 results with total company organic revenue growth of 8%, ahead of expectations, and the Big 3 segments accelerating to 10% organic growth.
- The company raised its full-year 2026 outlook for total and organic revenue growth to approximately 8%, at the high end of its prior guidance range, and raised Big 3 revenue growth outlook to 9.5%-10%.
- The proprietary large language model, Thomson, has shown promising results, performing on par with leading frontier models on general tasks and strongly on legal tasks, at a significantly lower cost and reduced latency.
- The next-generation CoCounsel Legal beta was completed ahead of schedule, with strong customer feedback and ramping usage, and the company launched its largest brand campaign, 'The CoCo', to drive awareness and demand.
- The company announced a definitive agreement with KKR to sell a 51% stake in its Global Print business for approximately $500 million, which is expected to be accretive to organic revenue growth and improve the overall portfolio quality.
- Strong capital returns were executed, including a $605 million return of capital and completion of a $600 million share repurchase program, reducing share count by approximately 3%.
- Corporate segment organic revenue accelerated to 10%, driven by strong performance from Pagero, which secured a significant win with Google, and other AI-driven offerings.
- Adjusted EPS grew 14% year-over-year to $0.99, and free cash flow increased 29% to $727 million in the quarter.
- The company continues to see strong growth in AI-enabled offerings, with 32% of annualized contract value (ACV) now from Gen AI-enabled products, up from 30% last quarter.
- Legal professionals segment ex-government grew 11%, with broad-based strength across large, mid, small law, and international subsegments, driven by Westlaw and CoCounsel Legal.
Negative
- Tax, audit and accounting (TAA) segment transactional revenue growth fell short of expectations due to go-to-market execution challenges, including confusion around the future product vision, which impacted sales momentum.
- The company expects a softer growth rate in the government business in Q3 due to certain transactional revenue not expected to recur at the same level as in Q2.
- Q3 2026 adjusted EBITDA margin is expected to be approximately 36%, down year-over-year, due to continued investments, severance expenses, and M&A dilution.
- The company faces ongoing costs related to severance and restructuring initiatives, with $19 million of severance expected in Q3 and $8 million incurred in Q2.
- Global Print organic revenues declined 3% year-over-year, continuing its structural decline, although this is in line with expectations.
- The TAA segment's Q2 growth was impacted by product updates that shifted revenue recognition to the second half of the year, creating an approximate 1% drag on growth.
- The company noted that while it has significant capital capacity, it does not have an approved share repurchase program in place currently, leaving uncertainty on future capital returns.
- The transition to the new 'Ready-to-Review' and 'Ready-to-Advise' product vision in the tax space caused some customer confusion, impacting near-term sales in products like SurePrep.
- While Thomson LLM shows promise, it is still early stage, with only a modest investment of $40 million and trained on less than 10% of legal content, and monetization paths are still being explored.
- The company faces a competitive and fluid market for AI legal tools, with law firms experimenting with multiple offerings, though Thomson Reuters believes it is well-positioned.
Operator
Good day, everyone, and welcome to the Thomson Reuters second-quarter earnings call. Today's conference is being recorded.
At this time, I'd like to turn the conference over to Mr. Gary Bisby, Head of Investor Relations. Please go ahead.
Gary Bisbee
Thomson Reuters Corp - Head of Investor Relations
Thanks, Jennifer. Good morning, and thanks, everybody, for joining us today for our second-quarter 2026 earnings call.
I'm joined by our CEO, Steve Hasker, and our CFO, Gary Bischoping. Steve and Gary will discuss our results, and then we'll take your questions following their remarks. To enable us to get to as many questions as possible, we would appreciate if you'd limit yourself to one question and one follow-up each when we open the phone line.
Throughout today's presentation, when we compare performance period on period, we discuss revenue growth before currency as well as on an organic basis. We believe this provides the best basis to measure the underlying performance of the business.
Today's presentation contains
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