Thomson Reuters Corporation

Welcome to the Thomson Reuters Third Quarter Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Gary Bisbee, Head of Investor Relations. Please go ahead, sir.

Thanks, Ruth. Good morning, and thank you all for joining us today for our Third Quarter 2024 Earnings Call. I'm joined by Steve Hasker, our CEO, and our CFO, Mike Eastwood, each of whom will discuss our results and take your questions following the 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 rates 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 forward-looking statements and non-IFRS and other supplementary financial measures, which are discussed on this special note slide. 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. Let me now turn it over to Steve Asker.

Steve Asker Thank you, Gary, and thanks to all of you for joining us today. Good momentum continued in the third quarter. with revenue and margins modestly ahead of our expectations. Total company organic revenues rose 7% and the big three segments growing by 9%. As expected, the pace of organic and inorganic investments picked up in the third quarter as we worked to position the company for faster revenue growth in 2025 and beyond. To incorporate the strong year-to-date, we are modestly increasing our full year 2024 organic revenue growth outlook to approximately 7%, including approximately 8.5% for the big three segments. We continue to see healthy momentum from many areas in our portfolio. This includes double-digit growth from key products including practical law, confirmation, Pagaro, indirect tax, and our international businesses. Interest in our generative AI offerings remains strong, with Westlaw Precision and Co-Counsel momentum continuing. Our 2024 investment plans are on track as we execute against the ambitious product roadmap we discussed at our March Investor Day. We made important progress against our roadmap in the third quarter, including the launch of Co-Counsel 2.0, which I will discuss in a few minutes. We remain focused on driving innovation across our portfolio and markets, particularly as it relates to AI. To this end, our investments in AI are now running at more than $200 million annualized, which is a pace we expect to continue over the next few years and is incorporated within our 2024 to 2026 financial framework. In addition to our organic efforts, we have made two small but strategically important inorganic investments that reflect our continued confidence in the generative AI opportunity. The acquisitions of safe sign technologies and materia bring key talent and accelerate our generative AI roadmap. We also recently announced the signing of a definitive agreement to sell our FindLaw business to internet brands. While FindLaw is a premier provider of customer acquisition and marketing services for small law firms, its offerings differ from our primary focus within legal professionals of helping lawyers practice more effectively and efficiently through the use of content-enabled technology. This has led in recent times to outsized management focus on the business relative to its scale. The transaction will allow both Thomson Reuters and internet brands to concentrate on their respective strategic priorities, ensuring customers continue to receive top-tier service and support from FindLaw. We remain extremely well capitalized and focused on shareholder value creation. We currently estimate $10 billion of capital capacity through 2027, up from our previously discussed $8 billion through 2026. We continue to assess additional inorganic opportunities. Now to the results for the quarter. Third quarter organic revenues grew 7%, modestly ahead of our expectations. Organic recurring and transactional revenue grew 8% and 12% respectively, while print revenues declined 6% in line with expectations. Adjusted EBITDA fell 4% to $609 million. reflecting a 430 basis point margin decline to 35.3%. This lower profitability was expected and results from organic and inorganic investments that we are making in 2024 to position the company for accelerating profitable revenue growth. Turning to the third quarter results by segment, the big three segments delivered 9% organic revenue growth. This is the fourth consecutive quarter of 8% or better growth for the big three. Legal organic revenue grew 7%, driven by continued momentum from Westlaw Precision and Co-Counsel. Corporates organic revenue grew 10%, driven by offerings from our legal, tax and risk portfolios. Tax and accounting organic revenues grew 10%. Now Latin American business and tax compliance offerings were key contributors. Reuters news organic revenues rose 8% driven by additional generative AI related transactional content licensing revenue and growth from the news agreement with the data and analytics business of the London Stock Exchange Group. While we have called out the transactional benefits for Reuters from generative AI related licensing revenue, it is worth noting that there is also a growing recurring revenue component to these contracts for the use of our Reuters news content in AI applications beyond model training. These contracts with both transactional and recurring revenue highlight the value of our Reuters news content. And lastly, global print organic revenues met our expectations, declining 6% year on year. And in summary, we're pleased with our results. Let me close my prepared remarks with updates on our product portfolio and innovation efforts. At our March Investor Day, we discussed a robust product roadmap that, if executed well, should deliver strong value for our customers and improving growth prospects for Thomson Reuters. The third quarter featured important progress against this roadmap, including a number of new capability launches. In August, we introduced CoCouncil 2.0, a major upgrade to the CoCouncil AI Assistant. The new version delivers results three times faster, brings important connectivity to customer documents, and includes a highly requested document comparison tool, along with several other user experience enhancements. During the quarter, we also launched co-counsel drafting, Checkpoint Edge with co-counsel, and the Claims Explorer tool in Westlaw Precision. Customer feedback on these offerings has been positive, and we continue to work toward delivering additional enhancements and launches over the next few quarters. As we've discussed in the past, our organic innovation efforts are supplemented with partnerships and strategic M&A through our build, partner, buy strategy. We made two small but strategically significant acquisitions in recent months. In August, we acquired SafeSign Technologies, which brings a strong team affiliated with Cambridge and Harvard universities that is developing legal specific language models. In addition to its unique talent, our testing of safe science models in development has shown potential to enhance outcomes and improve accuracy of our generative AI offerings in the future. In October, we acquired Materia, which has developed and recently launched an agentic generative AI assistant for accounting, tax, and audit professionals. We believe Materia will meaningfully accelerate our AI roadmap in the tax and accounting and audit spaces. Thomson Reuters ventures an early investor in Materia and led a proof of concept that allowed certain checkpoint users to leverage its content through Materia's AI assistant. The promising initial results from this work provides confidence in our joint potential to deliver significant value for tax, accounting, and audit professionals. I'll now turn it over to Mike to review our financial performance.