Thomson Reuters’ organic revenue growth accelerates to 10%, lifts annual outlook to 9.5%
Key Facts
Thomson Reuters raised its 2026 total revenue growth outlook to about 9.5% after posting 10% organic growth in the third quarter, according to results published on November 3. Chief Executive Steve Hasker said revenue and margin growth came in "above our prior expectations." Organic recurring revenue rose 8%, while transaction revenue jumped 23%. The company’s three largest segments posted 10% organic growth and accounted for 88% of total revenue. But free cash flow fell 23%, and diluted earnings per share declined 17%, combining faster activity with pressure on cash and reported profitability.
Growth was spread across the company’s core segments: organic revenue rose 9% in Legal Professionals and 10% each in the Corporates and Tax, Audit & Accounting Professionals segments. Reuters organic revenue increased 12%, exceeding growth in the three largest segments. In the second quarter, the company reported 9% growth in total revenue and 8% organic revenue growth, compared with 10% for its three largest segments. In the third quarter, recurring revenue growth was slower than transaction growth, which reached 23%. Broad growth across the main business units supports the company’s reading of demand during the period, while recurring revenue remains a significant contributor.
Adjusted EBITDA rose 10% to $651 million, compared with $593 million a year earlier. Its margin, however, fell to 35.5% from 35.8%, a decline of 30 basis points. Operating profit fell 22% to $402 million from $517 million. The company attributed the decline mainly to an operating gain in the year-earlier period from the sale of its remaining minority stake in the Elite business, and to a lesser extent to higher software amortization in the current period. Adjusted earnings per share, meanwhile, rose 14% to $0.81 from $0.71, while diluted earnings per share fell to $0.78 from $0.94, a decline of 17%. These measures show a divergence between growth in adjusted earnings and declines in operating profit and reported earnings per share.
Net cash generated from operating activities fell 15% to $599 million, compared with $704 million in the third quarter of the previous year. Free cash flow declined 23% to $408 million from $526 million. The company said the $118 million drop in free cash flow was mainly related to lower cash generated from operations and higher capital expenditures. On products, the company said customer engagement with the next generation of CoCounsel Legal had been encouraging, and announced the launch of the next generation of CoCounsel Tax, Audit & Accounting. Hasker presented these developments as part of his quarterly update, without the statement specifying a separate financial impact from the launches. The quarterly cash decline contrasts with revenue and adjusted earnings growth, completing the company’s account of operating performance.
The company raised its 2026 total revenue growth outlook to about 9.5%, and expects organic growth of 8.5% to 9.0% and an adjusted EBITDA margin of about 39%. The guidance follows the removal of Global Print from continuing operations. In its August guidance, the company expected total and organic growth of about 8% for the company as a whole, while the expected range for the three largest segments was 9.5% to 10.0%. Third-quarter guidance published in the second quarter had pointed to organic growth of about 8% and an adjusted margin of about 36%. Actual organic growth in the third quarter therefore exceeded the prior expectation, while the change to the full-year outlook also reflects the revised business scope following the print transaction.
Thomson Reuters completed the sale of 51% of its Global Print business on October 1, receiving about $500 million in gross proceeds at closing while retaining a 49% stake. The joint venture operates as Westbridge Print. Thomson Reuters retains the intellectual property rights and full editorial control over its content portfolio. Starting in the fourth quarter, the joint venture will pay a royalty equal to 20% of its professional revenues, which the company estimates account for 85% to 90% of its total revenue. Thomson Reuters expects the transaction to add 60 to 70 basis points to its annual organic growth rate and to be approximately neutral to its adjusted EBITDA margin.
The company expects organic revenue growth of about 8% and an adjusted EBITDA margin of about 42% in the fourth quarter of 2026. The margin estimate for the final period of the year is above the full-year outlook of about 39%. The company announced a quarterly dividend of $0.655 per share, payable on December 10 to shareholders of record through November 18. In September, it issued U.S. and Canadian dollar-denominated notes with gross proceeds of about $2.0 billion, using the proceeds for general purposes, including repayment of commercial paper borrowings. The company’s outlook for the rest of the year focuses on organic revenue growth and margin, alongside the effect of transferring the print business to the joint venture.