Thomson Reuters Corporation

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 call over to Gary Bisbee, head of investor relations. Please go ahead.

Thank you, Melinda. Good morning. Thank you, everybody, for joining us today for our second quarter 2024 earnings call. I'm joined today by our CEO, Steve Hasker, and our CFO, Mike Eastwood, each of whom will discuss our results, take your questions following their remarks. To enable us to get to as many questions as possible, we would appreciate it if you'd limit yourself to one question and one follow-up each when we open the phone lines. 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 our business. Today's presentation contains forward-looking statements and non-IFRS financial measures. Actual results may differ materially due to a number of risks and uncertainties discussed in reports and filings that we provide to regulatory agencies. You may access these documents on our website or by contacting our investor relations department. Let me now turn it over to Steve Hasker.

Thank you, Gary, and thanks to all of you for joining us today. Good momentum continued in the second quarter with revenue in line and margins modestly ahead of our expectations. Total company organic revenues rose 6%, with the big three segments growing by 8%. As we predicted, the pace of organic and inorganic investments picked up in the second quarter as we worked to position the company for faster revenue growth in 2025 and beyond. To incorporate a strong first half, we are raising our full year 2024 revenue outlook to the high end of the prior ranges, and now see organic growth of approximately 6.5%, including approximately 8% for the big three segments. We continue to see growing momentum from many areas in our portfolio. This includes double-digit growth from key products, including Practical Law, Confirmation, SurePrep, Figueroa, Indirect Tax, and our international businesses. Interest in our generative AI offerings remains strong, with Westlaw precision and co-counsel momentum continuing. Our second annual Future of Professionals report supports this narrative, as it indicates that knowledge workers are optimistic about significant boost to productivity, with AI poised to redefine workflows, drive innovation, and unlock new opportunities for growth. Our 2024 investment plans are on track as we execute against the ambitious product roadmap we discussed at our March Investor Day. To this point, we recently launched two additional GenAI capabilities. The first is co-counsel drafting, a new legal drafting solution that works in Microsoft Word and leverages practical law content as well as a customer's own documents. The second is Check Point Edge with Co-Counsel, which brings better, faster answers to complex tax research questions through a chat-based search experience. This is the first launch of GenAI capabilities into our tax and accounting portfolio. Customer feedback on both of these offerings has been strong, and we continue to work towards delivering additional enhancements and launches over the next few quarters. Our capital capacity and liquidity remain a key asset that we are focused on deploying to create shareholder value, and we made good progress on this during the second quarter. We completed the monetization of our stake in London Stock Exchange Group, bringing gross proceeds to date to $8.3 billion. We also completed the $1 billion share repurchase program launched last November. On the M&A front, Figueroa integration efforts are underway and we continue to assess additional inorganic opportunities. As a reminder, we estimate $8 billion of capital capacity through 2026. Now to the results for the quarter. Second quarter organic revenues grew 6% in line with our expectations. Organic recurring and transactional revenue grew 8% and 5% respectively, while print revenue declined 7%. Reported revenue grew 6%. Adjusted EBITDA fell 2% to $646 million, reflecting a 300 basis point margin decline to 37.1%. This lower profitability was expected. and results from organic and inorganic investments we are making in 2024 to position the company for accelerating profitable revenue growth. Turning to the second quarter results by segment. The big three businesses delivered 8% organic revenue growth. Legal organic revenue grew 7%, driven by continued momentum from Westlaw Precision and Co-Counsel. Demand for our key offerings remains healthy, led by Westlaw, Practical Law Co-Counsel, and strong performance in our international businesses. FindLaw remains a headwind to the segment growth rate. Corporate's organic revenue grew 8%. Practical Law, Indirect Tax, Clear, Peguero, and our international businesses were key growth drivers in the second quarter. Tax and accounting organic revenues grew 10%. Our Latin American business, Shore Prep and Audit, were all key contributors. Reuters News organic revenues rose 4%, driven by our agency business and the news agreement with the data and analytics business of LSEG. And lastly, global print organic revenues met our expectations, declining 7% year on year, impacted by the migration of customers from a global print product to Westlaw, which we discussed on our Q4 earnings call. In summary, we're pleased with our results. Let me close my prepared remarks with a few thoughts on Thomson Reuters Ventures, our in-house venture fund. As background, in October of 2021, we announced the creation of a $100 million venture fund to support and accelerate our innovation efforts. We subsequently hired a team led by Tamara Steffens, an experienced corporate venture investor. The team is tasked with understanding and investing in emerging companies that are building differentiated technologies in the end markets we serve, while also bringing important insight and intelligence to Thomson Reuters. The fund invests in early-stage companies with a focus on Series A fundraising. and has a global mandate. AI and emerging technologies are a focus, as are workflow automation and other themes that align with the strategic priorities of our big three segments. Since the inception of the fund, the team has invested approximately $50 million in 18 companies. While we expect the team to deliver attractive financial returns, there are greater benefits to Thomson Reuters from the Ventures team and fund. First, they bring significant insight and understanding about our markets, emerging technologies and startup players and activity. This knowledge has been built up through meetings with more than 1,500 startups since the fund's inception. The team facilitates introductions and product demonstrations for TR leaders and leverages TR's broader product and engineering talent to help vet potential investments. In addition to insight, the Ventures team contributes to our growth strategy by surfacing opportunities for select product integrations and go-to-market partnerships. To date, this has yielded several agreements with many others in development. We also see the Ventures portfolio as a pipeline for potential future M&A candidates. We highlight on the slide the fund's investments by end market and capability. I'll quickly mention two investments to illustrate some of the opportunities that the portfolio brings to Thomson Reuters. First, I'll highlight NeoTax, which uses generative AI to automate research and development tax credit preparation. Their product is highly complementary to our direct tax offering, and we have a commercial partnership where our sales force can sell NeoTax offerings with one source direct tax. I'd also note that our internal tax team is adopting NeoTax's solution after being introduced to the company by our ventures team. And second, I'll mention FieldGuide, which provides next-generation AI-based audit workflow technology. We are working to formalize a partnership, and we see its offerings as complementary to our audit methodology content. With that, I'll now turn it over to Mike to review our financial performance.