Thomson Reuters reports fourth-quarter revenue rise, shares slip

By Kenneth Li

NEW YORK, Feb 5 (Reuters) – Thomson Reuters reported higher fourth-quarter revenue on Thursday, boosted by its legal, tax and accounting and corporates businesses, as investors assess the impact of artificial intelligence companies moving into its key markets.

The Toronto-based content and technology company also forecast its full-year 2026 revenue would rise by between 7.5% and 8%. Wall Street is forecasting revenue growth of 7.7% for the year, LSEG data shows.

“We are seeing tangible benefits from our continued investments in AI,” said Thomson Reuters CEO Steve Hasker.

“We will continue to scale our agentic capabilities to deliver greater speed, clarity, and confidence for our customers – further demonstrating the value of professional‑grade tools built on quality content and deep subject‑matter expertise,” Hasker added in the results statement.

Shares in Thomson Reuters opened as much as 7% higher before later falling around 5% on Nasdaq, continuing a decline from this week’s wider software and services selloff. The stock is down nearly 30% so far this year, underperforming the S&P 500, which was up 0.54% by Wednesday.

Adam Sarhan, chief executive of 50 Park Investments in New York said: “The quarter shows a resilient franchise, but the market is clearly telling Thomson Reuters that the old playbook is not enough in an AI-first world. The numbers buy them time; what they do with that time is critical.”

Thomson Reuters raised its annualized dividend by 10% to $2.62 per common share and said fourth-quarter revenue rose 5% to $2 billion, matching expectations in LSEG estimates.

Share prices have been hit by fears over the challenge that AI newcomers, including Anthropic, present to companies like Thomson Reuters, which tumbled nearly 18% on Tuesday amid a broad software, data and professional services sector selloff.

Anthropic, maker of the Claude chatbot, launched a legal plug-in for its Claude Cowork coding tool on January 30 that helps carry out tasks including reviewing legal documents and generating briefings.

Hasker said in an interview after the results that recent market reaction reflected “anxiety and not fundamentals”.

“The medium-to-long term winners in legal AI will be those that have trusted content domain expertise and the infrastructure to support verifiable, accountable, professional-grade work,” Hasker added.

HUNDREDS OF YEARS OF LEGAL PAPERS

Anthropic’s new legal product represents a challenge in what is still a fairly new market for Thomson Reuters, company executives said. As a result, the potential threat it poses is to a relatively small part of the overall business, they added.

In addition, the Thomson Reuters executives told Reuters that what distinguished its legal offerings from general purpose AI startups is the company’s proprietary intellectual property, such as hundreds of years of legal papers from Britain and more than a century of archives from the U.S., much of it undigitized, unpublished and unavailable publicly.

The products are backed by the creation, curation and analysis undertaken by some 2,700 trained legal professionals employed by Thomson Reuters. They have also helped train Westlaw Advantage, an agentic AI product launched last year that automates legal research, document analysis and prediction of litigation outcomes.

“We’re serving professionals, and professionals require professional-grade AI,” Hasker said, adding: “They cannot afford to be wrong.”

Chief Financial Officer Michael Eastwood said in an interview that generative AI was responsible for about 28% of Thomson Reuters’ underlying contract value, which breaks down a contract’s total value, in the fourth quarter compared with 24% in the third.

$11 BILLION OF CAPITAL CAPACITY EARMARKED FOR DEALS

Earnings per share were $1.07, slightly ahead of Wall Street expectations of $1.06 per share excluding items, while revenue in the “Big 3” Thomson Reuters segments of legal, tax and accounting and corporates rose 9% on an organic basis.

The Reuters news division’s organic revenue increased by 5%, boosted by content licensing revenue deals.

Over the next three years to 2028, Thomson Reuters has earmarked $11 billion of capital capacity for deals, focused mainly on its Big 3 segments, executives said.

(Reporting by Kenneth Li in New York, additional reporting by Anhata Rooprai; Editing by Alexander Smith)