Thomson Reuters Corp Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Scott Fletcher - CIBC World Markets Inc. - Analyst : Hi, good morning. Wanted to ask a question on the demand environment. And if you've seen any changes to buying patterns or willingness to spend or close deals since, obviously, the trade war heated up over the course of this year.

Question: Scott Fletcher - CIBC World Markets Inc. - Analyst : Okay. That's good to hear. And then if I think about -- if you think about historically, are there -- any of the segments, be it Legal, Tax or Corporate, that you think would be more impacted in a scenario where buying does slow down?

Question: Scott Fletcher - CIBC World Markets Inc. - Analyst : Okay, that's really helpful. Thank you.

Question: Manav Patnaik - Barclays - Analyst : Thank you. Good morning. The first question, just to focus on that growth slide. The 68% the other products, I was just hoping you could help us with kind of the average growth there and the opportunity to accelerate those into that high-growth bucket?

Question: Manav Patnaik - Barclays - Analyst : Got it. Thank you. And Mike, I think your comments around Government. I'm just curious, like any updates you can give us on the exposure there, to those websites? Obviously, there's lots of contracts here and there, that would be helpful. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 01, 2025 / 12:30PM, TRI.TO - Q1 2025 Thomson Reuters Corp Earnings Call

Question: Manav Patnaik - Barclays - Analyst : Got it. Thank you. Helpful.

Question: Aravinda Galappatthige - Canaccord Genuity LLC - Analyst : Good morning. Thanks for taking my question. I was wondering whether you could maybe just revisit the drafting side of the opportunity. I know that you launched sort of the CoCounsel Drafting product last year. Maybe just remind us of sort of the TAM there and the progress you've been able to make, and sort of the outlook that you see in the near term?

Question: Aravinda Galappatthige - Canaccord Genuity LLC - Analyst : Thank you, and just a quick follow-up. I think on the last call, you mentioned that the AI-related investments sort of at the $200 million level through 2024. I was wondering, has there been an uptick as we look at '25? Or is it pretty much the same run rate? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 01, 2025 / 12:30PM, TRI.TO - Q1 2025 Thomson Reuters Corp Earnings Call

Question: Aravinda Galappatthige - Canaccord Genuity LLC - Analyst : Thank you.

Question: Vince Valentini - TD Cowen - Analyst : Hey, thanks very much. Two questions I'll throw at you and you can take whatever word you want. The margin impact from foreign currency, you mentioned that was a tailwind in Q1. Can you just remind us what the main drivers of that are? Is it simply that you have less of your cost in US dollars versus the percentage of revenue? Are there any key currency exposures we should keep our eye on for Q2 and Q3 margin impacts? Second question, going back to your good slide number 9, that's already been referenced here, that 25% bucket that's growing 10% or more, can you identify what percentage of that 25% bucket are businesses that you did not own in 2019, so you've been able to augment the growth through acquisition? And I'm thinking of that as with -- you have a huge amount of cash you can use for acquisitions, perhaps things are going to get cheaper if the macro environment is choppy. Can we think about that 25% bucket getting to 50% in the next five years and partially by using your acquisition funds in a savvy way? Thanks.

Question: Toni Kaplan - Morgan Stanley & Co. LLC - Analyst : Thanks so much. I was hoping to ask a broad question on your investment spend strategy. So if you did start to see a slowdown, which it sounds like you have not so far, but if you saw a slowdown in the -- in demand and the pipeline, would you pull back on investment? Or because of the resiliency of your business and focus on future growth, does it make sense to sort of spend through that? So just wanted to get sort of your head on where you are with regard to that strategy.

Question: Toni Kaplan - Morgan Stanley & Co. LLC - Analyst : Yep. Wanted to ask my follow-on Pagero. I wanted to -- it sounds like that is in your higher growth bucket and wanted to just get a sense on the additional demand that you're seeing there and the integration. And if, I guess, all the uncertainty and things that are going on are actually a big help in that area, just what's the opportunity you're seeing there? Thanks.

Question: Toni Kaplan - Morgan Stanley & Co. LLC - Analyst : Yeah, thanks very much.

Question: Drew McReynolds - RBC Capital Markets - Analyst : Good morning. Vince stole my question on the now famous slide 9, which is great. Another question on that slide, just -- and Mike, you may have addressed this, I may have missed it, but the 68%, I guess, slice of the play, are there products in there that are underperforming from your perspective in the lens you put on these businesses? And then just with respect to kind of lower growth businesses, what's the latest and greatest thoughts on just the strategic importance of Print Global & Reuters News? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 01, 2025 / 12:30PM, TRI.TO - Q1 2025 Thomson Reuters Corp Earnings Call And then a second question, Steve, just for you on your comments on a slowdown and the importance of efficiency for your customers. Just taking one step further with respect to AI and agentic AI and GenAI, do you see the scenario -- and I'm not saying we're going down this path, but a scenario of a recession that does lead to more structural change in your customers? Is that potentially an accelerant to get them to change and shift more quickly to kind of automation and burn kind of driving more of your advanced products and services? Thank you.

Question: Drew McReynolds - RBC Capital Markets - Analyst : Okay, thank you.

Question: Andrew Steinerman - JPMorgan - Analyst : Hi, it's Andrew. A couple of questions. First, Mike, you talked about expense timing, maybe lower expenses in the first quarter getting shifted. So if you could tell us how much expenses shifted from the first quarter? And is that what's going to land in the second quarter? Any other comments around the second quarter guided margin? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 01, 2025 / 12:30PM, TRI.TO - Q1 2025 Thomson Reuters Corp Earnings Call And then, Steve, one for you. When you look at law firms and in-house legal clients that are already paying for Thomson Reuters AI products, so that's legal products, how is end user adoption been so far?

Question: Andrew Steinerman - JPMorgan - Analyst : Makes sense. Thank you.

Question: Jason Haas - Wells Fargo Securities, LLC - Analyst : Hi, good morning, and thanks for taking my questions. I'm curious if you could talk about what drives the implied acceleration in organic growth through the remainder of the year? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 01, 2025 / 12:30PM, TRI.TO - Q1 2025 Thomson Reuters Corp Earnings Call

Question: Jason Haas - Wells Fargo Securities, LLC - Analyst : Got it. Thank you. And then as a follow-up, can you talk us about if there's any more opportunity for GenAI licensing revenue in the Reuters News segment?

Question: Jason Haas - Wells Fargo Securities, LLC - Analyst : Great, thank you.

Question: Doug Arthur - Huber Research Partners - Analyst : Yes. Mike, can you take me -- take us through the organic dynamics of Legal in the first quarter. And not so much organic because that obviously was very strong, but the divestiture looks to be about 11% impact. Is that likely to linger for a couple of quarters until you annualize? It was a little larger than I expected.

Question: Doug Arthur - Huber Research Partners - Analyst : And in terms of the impact of FindLaw, is that likely to linger in the magnitude it was in Q1 for the rest -- for the next couple of quarters?

Question: Doug Arthur - Huber Research Partners - Analyst : Okay, helpful. Thank you.

Question: George Tong - Goldman Sachs & Company, Inc. - Analyst : Thanks, good morning. You're seeing good adoption of GenAI product across the business. Can you broadly talk about your strategy of GenAI monetization, if you're deploying different strategies across different segments or experimenting with different monetization strategies?

Question: George Tong - Goldman Sachs & Company, Inc. - Analyst : Makes sense. And then for my follow-up, I wanted to focus on the Tax & Accounting business. That segment grew the fastest this quarter for the 2026 framework. It's also guided to grow the fastest. Can you talk about what secular trends you're seeing that's fueling that kind of growth that allows Tax & Accounting to surpass all the other segments in growth?

Question: George Tong - Goldman Sachs & Company, Inc. - Analyst : Thank you.

Question: Joshua Dennerlein - BofA Global Research - Analyst : Yeah, hey guys. Thanks for the time. I just wanted to go back to slide 9. That product growing 10% or more segment, is there -- do you have any color on how long -- like once product starts growing 10%, how long it typically stays in there? I'm very focused on like duration of growth.

Question: Joshua Dennerlein - BofA Global Research - Analyst : Okay. Appreciate that color.

Question: Joshua Dennerlein - BofA Global Research - Analyst : Awesome. I'll leave it there. Thanks, guys.