By Kenneth Li
NEW YORK (Reuters) -Thomson Reuters reported higher revenue for the second quarter, during which it launched new AI features in its tax and accounting and legal divisions.
The Toronto-based content and technology company reaffirmed its full year 2025 guidance of a 7% rise in organic revenue, which tracks income from existing businesses on a constant currency basis.
"We saw good momentum continue in the second quarter, with revenue in-line and margins modestly ahead of our expectations,"
Steve Hasker, Chief Executive Officer of Thomson Reuters, said in a statement on Wednesday after the results were released.
The owner of Westlaw legal database, Reuters news agency and the Checkpoint tax and accounting service reported second-quarter adjusted earnings per share of 87 cents, beating Wall Street expectations of 82 cents per share.
The shares were down 8% on the Toronto Stock Exchange by late morning, however, with some analysts disappointed the company did not raise its financial guidance.
Up to Tuesday's close, Thomson Reuters shares have risen 19% this year, outpacing a 7% rise in the S&P 500.
Edward Jones analyst Faisal Hersi, who has a "hold" rating on the stock, said in a research note after the results that the stock is trading on a multiple of 46-times estimated 2026 earnings, above a five-year average of 39 and fully pricing in the current positive outlook.
He said the company's investments in AI-related products could limit "operating profitability expansion" but will support longer-term sales growth.
Thomson Reuters continues to expect 2026 organic revenue to rise by 7% to 7.5%, executives said in an interview following the release of the financial report.
Quarterly revenue rose 3% to $1.78 billion for the period ending June 30, against $1.74 billion a year ago and analyst expectations of $1.79 billion according to LSEG data. Organic revenue rose 7%.
Organic revenue in the "big three" segments of legal, corporates and tax and accounting professionals rose 9%, contributing about 82% of the company's total revenue.
The Reuters News division's organic revenue rose 5% from higher revenue at its agency and professionals business and a contractual price increase from the London Stock Exchange.
Thomson Reuters has launched new AI features, known as agentic AI, for its tax and accounting and legal businesses which employ AI to take actions without users having to prompt systems with specific instructions.
"With these advanced agentic AI offerings, we continue to leverage our authoritative content and deep expertise to bring transformative professional-grade AI solutions to our markets," Hasker said.
Michael Eastwood, Thomson Reuters Chief Financial Officer, said the contribution of generative AI-enhanced products has continued to rise since the company began tracking it late last year.
As of the second quarter, generative AI's contribution to the group's underlying contract value has risen to 22% from about 15% late last year.
"That's a pretty strong signal that generative AI enabled products are continuing to be a strong growth tailwind for us," Eastwood said.
The company has earmarked about $10 billion for potential acquisitions, executives said.
(Reporting by Kenneth Li in New York; Editing by Elaine Hardcastle)
