Thomson Reuters (TRI) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenues grew 8% year-over-year to $1.724 billion, with organic revenue up 7% and the Big Three segments delivering 9% organic growth, both ahead of expectations.

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

• Strong momentum in AI-enabled products, including launches like CoCounsel 2.0, and continued execution of "Build, Partner, Buy" strategy with over $200 million annualized AI investment.

• Announced sale of FindLaw business to Internet Brands for up to $410 million, expected to close in Q4 2024, and completed acquisitions of SafeSign Technologies and Materia to accelerate AI roadmap.

• Robust liquidity and capital capacity, with net leverage at 0.5x and estimated ~$10 billion capital capacity by 2027.

Financial highlights

• Q3 organic recurring revenue grew 8%, transactional revenue up 12%, and print revenue declined 6%.

• Adjusted EBITDA fell 4% to $609 million, with margin down to 35.3% from 39.6% year-over-year.

• Adjusted EPS was $0.80, down from $0.82 year-over-year; diluted EPS dropped to $0.67, mainly due to higher tax expense.

• Free cash flow for Q3 2024 was $591 million, up 12% year-over-year; for the first nine months, free cash flow was $1.40 billion, up 12%.

• For the nine months ended September 30, 2024, total revenues were $5.349 billion, up 7% year-over-year.

Outlook and guidance

• 2024 organic revenue growth outlook raised to ~7% (from 6.5%), with Big Three at ~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 due to OECD Global Minimum Tax.

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