Thomson Reuters (TRI) Q4 2023 earnings summary

Executive summary

• FY 2023 organic revenue grew 6%, adjusted EBITDA rose 15% and free cash flow increased 40%, meeting or exceeding full-year outlook for organic growth, adjusted EBITDA margin and free cash flow.

• Big 3 organic revenue grew 7% for FY and 8% in Q4; the segments represented 81% of FY revenue and 80% of Q4 revenue.

• Generative AI launches expanded the product portfolio, with a robust 2024 roadmap and incremental investment planned to support growth.

Financial highlights

• FY revenue was $6.794B, up 3% reported and 6% organically; operating profit rose 27% to $2.332B.

• FY adjusted EBITDA rose 15% to $2.678B, with a 39.3% margin, up 420 bps; adjusted EPS increased 34% to $3.51.

• FY free cash flow rose 40% to $1.871B; cash flow from operations increased 22% to $2.341B.

• Q4 revenue was $1.815B, up 3% reported and 7% organically; recurring revenue grew 7% and transactions revenue 16%.

• Q4 adjusted EBITDA rose 12% to $707M, with a 38.9% margin; adjusted EPS was $0.98. Operating profit fell 11% to $558M, reflecting prior-year gains on non-core business sales.

Outlook and guidance

• FY 2024 outlook: organic revenue growth ~6%, total revenue growth ~6.5%, adjusted EBITDA margin ~38% and free cash flow ~$1.8B; assumes constant currency and includes Pagero and World Business Media.

• Big 3 FY 2024 outlook: organic revenue growth ~7.5% and adjusted EBITDA margin ~43%; corporate costs $120M-$130M.

• Q1 2024 outlook: organic revenue growth ~8% and adjusted EBITDA margin ~40%, supported by Reuters AI licensing and seasonal strength, partly offset by M&A dilution and growth investment.

• 2025–2026 framework targets 6.5%–8% organic growth overall and 8%–9% for the Big 3; margin expansion of ~75 bps in 2025 and at least 50 bps in 2026.

• 2026 free cash flow target is $2.0B–$2.1B; accrued capex targets are 8.5% of revenue in 2024 and 8.0% in 2026.