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Thomson Reuters Corp. (NYSE: TRI) is having a good week. On Tuesday, shares jumped 7.42%. On Wednesday, the company reported second-quarter results that beat Wall Street estimates, and it raised its full-year revenue outlook. The stock edged higher in premarket trading following the news.
The company's legal, tax, and corporate software products continue to be in demand, and its AI push is starting to pay off. Here's a closer look at the numbers and what they mean for investors.
Adjusted earnings came in at 99 cents per share, up from 87 cents a year earlier and ahead of the analyst consensus of 96 cents. Revenue rose 9% year over year to $1.954 billion, beating the Street estimate of $1.913 billion. On a diluted basis, earnings per share climbed to $1.02 from 69 cents.
Recurring revenue, which makes up 82% of total revenue, grew 9%, while transaction revenue jumped 16%. Organic revenue rose 8%, led by 10% organic growth in the company's Legal Professionals, Corporates, and Tax, Audit & Accounting Professionals businesses. Those three segments together represent 83% of total revenue.
Operating profit increased 28% to $558 million, and adjusted EBITDA rose 10% to $745 million. The adjusted EBITDA margin expanded to 38.1% from 37.8% a year earlier. Free cash flow increased 29% to $727 million.
Breaking it down by segment, Legal Professionals revenue grew 10% to $772 million, Corporates revenue rose 12% to $537 million, and Tax, Audit & Accounting Professionals revenue climbed 14% to $311 million. Reuters revenue increased 5% to $229 million, while Global Print revenue declined 3% to $111 million.
CEO Steve Hasker said the company maintained strong momentum during the quarter, highlighting continued adoption of its AI offerings, including CoCounsel Legal and its proprietary Thomson large language model.
He also noted that the recently announced Global Print joint venture with KKR would allow the company to sharpen its focus on AI-powered professional solutions. In other words, Thomson Reuters is doubling down on the future and letting go of the past.
For fiscal 2026, Thomson Reuters raised its outlook for total revenue growth to approximately 8%, up from its previous guidance of 7.5% to 8%. Based on that forecast, the company now expects fiscal 2026 revenue of approximately $8.074 billion, compared with its prior guidance range of $8.037 billion to $8.074 billion.
The updated outlook is slightly below the analyst consensus estimate of $8.101 billion, but the company's confidence is clear.
Thomson Reuters continued to return cash to shareholders and strengthen its balance sheet during the quarter. In May, the company completed a $605 million return of capital transaction, reducing its share count by about 6.5 million shares through a share consolidation. It also completed its previously announced $600 million share repurchase program in July and repaid $500 million of 3.35% notes that matured in May.
The company ended the second quarter with $577 million in cash and cash equivalents and total assets of $18.08 billion. As of Aug. 3, Thomson Reuters had about 433.2 million common shares outstanding.
It also maintained its quarterly dividend of 65.5 cents per share, payable Sept. 10 to shareholders of record on Aug. 19, marking its 33rd consecutive year of dividend increases.
TRI Price Action: Thomson Reuters shares were up 0.32% at $109.50 during premarket trading on Wednesday.
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