Thomson Reuters Corp. (NASDAQ:TRI) stock rose in premarket trading Tuesday after the company reported third-quarter earnings and revenue below Wall Street estimates and updated its full-year outlook.
Adjusted earnings per share (EPS) rose 14% to 81 cents from 71 cents a year earlier, missing estimates of 89 cents.
Revenue increased 10% year over year to $1.833 billion, below the $1.874 billion estimate. Organic revenue also grew 10%, driven by stronger recurring and transaction revenue.
Thomson Reuters Updates 2026 Outlook
Thomson Reuters raised its fiscal 2026 sales guidance from $8.074 billion to $8.186 billion, above the $8.007 billion analyst estimate, according to Benzinga Pro.
The company completed the sale of a 51% stake in its Global Print business to KKR-advised accounts on Oct. 1 for approximately $500 million in gross proceeds.
The updated outlook excludes Global Print and reflects continuing operations.
Thomson Reuters now expects total revenue growth of approximately 9.5%, organic revenue growth of 8.5% to 9% and an adjusted EBITDA margin of about 39%.
Its August outlook, which included Global Print, projected approximately 8% growth in both total and organic revenue. Guidance for its three largest segments remains unchanged.
For the fourth quarter, the company expects organic revenue growth of approximately 8% and an adjusted EBITDA margin of about 42%.
AI Momentum Builds
Thomson Reuters’ AI push is gaining traction, with strong customer interest in its next-generation CoCounsel Legal platform and the recent launch of CoCounsel Tax, Audit & Accounting.
CEO Steve Hasker also expressed optimism about commercial opportunities for Thomson LLM, while higher generative AI content licensing revenue helped drive growth at Reuters.
Hasker said third-quarter revenue growth and margins exceeded the company’s earlier expectations.
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Margins and Cash Flow
Adjusted EBITDA rose 10% to $651 million from $593 million a year earlier. However, the adjusted EBITDA margin narrowed to 35.5% from 35.8%.
Operating profit fell 22% to $402 million, mainly reflecting a gain from the sale of the company’s remaining stake in Elite during the year-earlier period.
Free cash flow declined to $408 million from $526 million, while operating cash flow fell 15% to $599 million.
Cash and cash equivalents totaled $1.394 billion at the end of September.
The company also issued approximately $2 billion in debt during September and completed its $600 million share repurchase program.
Dividend Update
Thomson Reuters will pay a quarterly dividend of 65.5 cents per common share on Dec. 10 to shareholders of record as of Nov. 18.
In February, the company increased its annualized dividend by 10%, or 24 cents, to $2.62 per common share. The increase marked its 33rd consecutive year of dividend growth.
Segment Performance
Legal Professionals revenue rose 9% to $788 million, supported by demand for Westlaw and CoCounsel Legal.
Corporates revenue increased 11% to $544 million, while Tax, Audit & Accounting Professionals revenue climbed 11% to $276 million.
Reuters revenue jumped 12% to $232 million, supported by AI licensing and other revenue streams.
TRI Price Action: Thomson Reuters shares were up 0.20% at $122.49 during premarket trading on Tuesday, according to Benzinga Pro data.
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