Thomson Reuters beats revenue forecasts as fiduciary-grade AI demand surges among professionals

Thomson Reuters reaffirms forecasts, highlights 'fiduciary-grade AI' demand

NEW YORK, May 5 (Reuters) - Thomson Reuters (TRI.TO), opens new tab reported a double-digit first-quarter revenue rise on Tuesday, boosted by gains in its "Big 3" business segments of legal professionals, corporates and tax, and audit and accounting, lifting its shares 6.8% on Nasdaq. The Toronto-based content and technology company also reaffirmed its full-year 2026 revenue forecast of a rise of between 7.5% and 8% as it said customers were choosing its rigorously developed artificial intelligence products, which Thomson Reuters CEO Steve Hasker called "fiduciary-grade AI". "Across law, tax, audit and compliance, professionals accountable for high‑stakes outcomes are choosing our AI products, built to the standards their work demands - grounded in authoritative content, designed and tested by our domain experts, and created to produce results that can be verified and audited under real‑world scrutiny," Hasker said in a ⁠statement. Shares in Thomson Reuters have been hit by fears this year over the challenges that AI newcomers, including Anthropic, pose to established companies. These concerns triggered a selloff in software, data and professional services stocks, with Thomson Reuters shares falling by nearly 30% so far this year, underperforming a rise of 5.2% in the S&P 500 index. Hasker highlighted the role of Thomson Reuters in delivering AI to professionals such as lawyers, tax preparers or court officials in an interview following the results. "The consequences of error and hallucination are too much to bear," Hasker said, adding that to get something wrong would result in fines imposed by regulators, among other consequences. "They result in loss of reputation, loss of license to practice, loss of clients and client relationships. And that's where fiduciary-grade AI kicks in," he said. Hasker cited 2,700 experts on staff creating legal content and hundreds of accountants ready to answer questions and proprietary data as major ⁠reasons for clients to rely on Thomson Reuters services over those of so-called frontier AI models. FIRST QUARTER REVENUE, EPS EXCEED FORECASTS "Thomson Reuters has done enough to calm the immediate AI concerns," PP Foresight analyst Paolo Pescatore said, adding: "The company appears well placed for the AI era, but the focus remains on execution." "If it can embed trusted, auditable AI deeper into daily workflows, it strengthens customer loyalty, protects pricing power and builds a more defensible long-term position," he said. Thomson Reuters Chief Financial Officer Michael Eastwood said in ⁠an interview that about 30% of the company's underlying contract value, which breaks down a contract's total value, relied on generative AI in the first quarter, which compared with 28% in the fourth quarter. The company said in February that its AI-powered legal assistant CoCounsel has reached one million users and that it works with leading AI labs including ⁠Anthropic to pair their models with its proprietary data and system-level oversight. Thomson Reuters said its first-quarter revenue rose 10% to $2.09 billion, surpassing estimates of $2.04 billion. It said earnings per share excluding items rose to $1.23. Wall Street had forecast earnings per share of $1.20. Revenue at news division Reuters rose 7% as a result of ⁠higher agency revenue and a price increase from its business with the London Stock Exchange Group (LSEG.L), opens new tab. Thomson Reuters also said it completed a $605 million return of capital to shareholders, reducing outstanding common shares by about 6.5 million. It also repurchased 2.5 million of common shares for about $262 million. Eastwood said the company had about $9 billion of capital to spend on deals through 2028. Reporting by Kenneth Li in New York; Editing by Alexander Smith Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Business Kenneth Li Thomson Reuters Ken oversees global coverage of technology and media at Reuters. Based in New York, he steers Reuters coverage of companies that drive the global economy, entertainment and culture. As a reporter, he has covered the intersection of media and technology since 1996. His previous roles at Reuters include global media correspondent, U.S. tech, media and telecoms editor and editor of Reuters.com. Ken also previously worked at the Financial Times, helped found Recode and helped run Newsweek.

Investor Outlook: Thomson Reuters beats Q1 revenue as AI grows

Thomson Reuters shares climbed after the company reported first-quarter revenue that exceeded expectations and maintained its full-year outlook. Growth was supported by increasing adoption of its AI-driven tools and steady performance across key business segments. BNN Bloomberg spoke with Doug Arthur, managing director at Huber Research Partners, who said the company's AI-integrated data offerings are gaining traction with professional clients, helping support organic growth despite ongoing market concerns about competition. Read the full transcript below: ROGER: Shares of Thomson Reuters are up about four per cent after it reported a beat in revenue last night. The Toronto-based company also maintained guidance for the year. Its CEO says the company saw sustained demand for its AI products. Joining us now to talk about its latest earnings results and more is Douglas Arthur, managing director and researcher in media and information services at Huber Research Partners. Doug, thanks very much for joining us. A beat for Reuters in revenue, at least. It's been a struggle for them the last little while, hasn't it? DOUGLAS: Well, it's been more a struggle for the stock than it has been for the numbers. I mean, the stock is obviously way off its high and was trading like they were going to lower guidance for 2026 and miss earnings. And in fact, they beat earnings and maintained guidance, if not suggesting that guidance would come in at the higher end of their previous expectations. So I think it's a push-pull between perception and reality. ROGER: And the reality to you, when you see it, does it look like they have things solid and under control? DOUGLAS: Well, if you look at their contract value, which sort of tracks customer activity, the AI-based solution set for Thomson has gone from 15 per cent of contract value to 30 per cent in the last, I don't know, six or seven quarters. So the market is saying the Anthropics of the world are going to disintermediate the professional-grade data companies, and the numbers that Thomson are showing say the opposite. ROGER: I guess, can they both be right, or can only one of them be right on that? DOUGLAS: Well, I think that, you know, listen, a year ago, July of 2025, Thomson stock was soaring and peaked, I think, at a little over $218 a share. Then the AI focus shifted from a positive for Thomson to a concern, and Thomson was not alone. Virtually every big information service stock had incurred the same problem, as did a lot of the software names. So if you sit back and kind of look at it on a longer-term basis, in essence, we've had a major valuation correction in the sector. It's gone from overheated to now undervalued, and the truth is somewhere in between. ROGER: And is AI really -- is everything resting on AI for a company like Thomson Reuters? DOUGLAS: No. I mean, I think that's the perception. I think this is a differentiation CEO Hasker was trying to make. They're selling into the professional market, so they're selling to the top law firms generally. They do a lot of mid-market and small business as well, but they're selling to the top tax, accounting and law firms. They need professional-grade data, and they're integrating their AI solutions with that data. Very few companies can bring the breadth of that offering that Thomson can. So it's a combination of the software and the data behind it, and they're kind of unmatched in that regard. ROGER: But how protected is that data? Is there a chance it could get out somehow, with AI able to scrape everywhere? Could they lose that position? DOUGLAS: Well, that's a great question. That's a central debate. What they would argue on the legal side is that Westlaw has data going back several hundred years of legal cases. So it's very hard data to replicate in the digital world. You can scrape judgments and written summaries of a case, but you can't scrape all the data and rulings and sub-rulings behind it. So I think that's going to be a push-pull for these data companies -- how much is replicable in the general-purpose world of AI, and how much is proprietary. But it's the integrated solution that I think is going to keep their clients very sticky going forward. And if the numbers continue to show strong growth -- they're talking nine to 10 per cent organic, higher margins -- the stock will find its own level. ROGER: And what kind of potential headwinds are there for them? I mean, obviously AI, but what kind of impact could that have? DOUGLAS: Well, the way I sort of framed it is if you say the general-purpose AI products don't have the data rigour behind them, and don't necessarily have the security apparatus behind them, what's vulnerable? Small- and medium-sized law firms and accounting firms could be open to those sorts of general-purpose solutions. And if you take out Reuters News and print, I categorize it as about 19 per cent vulnerability of Thomson's big three segments over time. I mean, worst-case scenario, but it's still a scenario. ROGER: Expand that out a little bit -- the number and how you came up with it. DOUGLAS: Well, I broke down all three segments in terms of what they're offering and what end markets they serve -- international, corporate, U.S., Latin America, small- to medium-sized firms versus large firms. So I segmented all three of their segments to see if general-purpose AI products from companies like Anthropic are very appealing at a lower cost to small firms that aren't necessarily trying cases in front of the Supreme Court, for instance. That's how I came up with that number. ROGER: All right, we have to wrap it up there, Doug. But thank you very much for joining us. DOUGLAS: My pleasure. ROGER: Douglas Arthur, managing director and researcher in media and information services at Huber Research Partners. ---