Thomson Reuters (TRI) | Evaluating the Premium — October 2026
All the numbers presented in the article are taken directly from our dashboards.
Thomson Reuters Corporation—majority owned by The Woodbridge Company Ltd.—is a Canadian multinational conglomerate situated mostly in the Mass Media sector, delivering essential business information services worldwide. Its operations span the Americas, Europe, the Middle East, Africa, and the Asia Pacific region.
The company is structured into five distinct divisions: Legal Professionals, Corporates, Tax & Accounting Professionals, Global Print, and Reuters News.
For legal professionals, including law firms and governmental bodies, the Legal Professionals segment furnishes offers a comprehensive blend of specialized content, sophisticated tools, and powerful analytics to enhance legal research and operational efficiency. Likewise, the Global Print segment continues to offer legal and tax information, predominantly in print format, to its clientele, which includes legal and tax professionals, government entities, law schools, and corporations.
The Corporates segment provides a robust suite of technology solutions infused with critical content tailored for professionals navigating corporate legal, tax, regulatory, compliance, and IT landscapes.
Serving tax, accounting, and audit specialists primarily within accounting firms, the Tax & Accounting Professionals division focuses on research and workflow products that streamline tax processes and automate related tasks.
Finally, as its most famous segment, Reuters News operates as a global news agency, supplying vital business, financial, and international news to media organizations, industry professionals, and the general public, also through industry events.
Operations
Full-Year 2025
Revenues +3% in total, meeting the targets set out in their full-year 2025 outlook, last updated in August.
Revenues for their so-called “Big 3 segments” (Legal Professionals, Corporates and Tax, Audit & Accounting Professionals) increased 4%.
Operating profit +1%, primarily driven by the net impact of higher revenues and operating expenses, partly offset by higher amortization of software.
Adjusted EBITDA +6%.
Generated net cash from operating activities at $2.6B and achieved their updated 2025 outlook with over $1.9B of free cash flow.
Updated their go-to-market model, focusing on retention and value realization.
Thomson Reuters Labs—the company’s R&D segment—saw its capabilities expanded to accelerate the delivery and integration of AI-powered solutions across Westlaw, Practical Law, CoCounsel for Legal, CoCounsel for Tax, CLEAR, ONESOURCE+ and Reuters, enabling legal professionals to analyze large volumes of litigation documents in a fraction of the time previously required.
For tax and accounting, Labs developed solutions that automate return preparation and help firms surface and deliver personalized advisory strategies at scale.
Broadened the adoption of the CoCounsel AI assistant across their global customer base in legal and tax.
Acquired SafeSend in January, a US-based cloud-native provider of technology for tax and accounting professionals.
Acquired TimeBase in July, a leading provider of Australian legislative information, offering a platform for legal professionals to find, search, track and understand legislation.
Acquired the commercial and licensing operations of Imagn Images in August, a US-based sports photography agency.
Acquired Additive AI in September, a San Francisco‑based startup that uses AI to automate tax document processing for tax and accounting professionals.
Sold their remaining minority equity interest in the legal software provider Elite.
Committed $150M to a second Thomson Reuters Ventures fund.
Repurchased $1B of their shares through normal course issuer bid buyback programs.
Q1 2026
Revenues +10% in total.
The "Big 3 segments” comprised 85% of total revenues, increased 9% on an organic basis driven by 9% growth in recurring revenues and 11% growth in transactions revenues.
Operating profit +14%
Adjusted EBITDA +9%.
The company announced in May that it maintained their 2026 full-year outlook for organic revenue growth, adjusted EBITDA margin, free cash flow and most other metrics, and updated the outlook for net interest expense which is expected to be in the $180M-$190M range, higher than the previous guidance range of $150M-$160M. The increase reflects the impact of the share repurchase program and return of capital and share consolidation transactions on their net debt position.
Generated net cash flows from operating activities of $505M and free cash flow of $332M.
Repurchased 2.5 million of their common shares for $262M under the February 2026 plan to repurchase up to $600M of their common shares and returned $280M in dividends to shareholders.
Reduced common shares outstanding by approximately 6.5 million in the concurrent share consolidation.
Acquired Noetica, Inc. in February, a New York-based AI-native start-up that transforms transaction-deal data into structured market intelligence for deal professionals.
Q2 2026
Revenues +9% in total.
"Big 3" segments comprised 83% of total revenues.
Operating profit +28%.
Adjusted EBITDA +10%.
Raised their 2026 full-year outlook for total and organic revenue growth to approximately 8%, and to a range of 9.5% to 10% for the "Big 3 segments” in August.
For now, all other metrics in their 2026 full-year outlook are unchanged from the previous one.
The company experienced a ~65% drop in its publicly traded stock from the July 2025-June 2026 period, mainly attributed to a combination of broader market disruptions.
Broader anxieties over the premiums assigned to Thomson Reuters and other companies related to the AI boom led to loss of optimism and doubts over their profitability, and was thus reflected in their subsequent valuation. Despite this, the company’s earnings over the mentioned period were still deemed quite favorable.
Moreover, Anthropic’s introduction of an open-sourced specialized legal plug-in for their Claude AI assistant dealt a serious blow to Thomson Reuters and their seat-based SaaS enterprise licenses that led to a 16-18% in a single day for its stock.
But Anthropic’s legal plug-in lacked access to the proprietary, 150-year-old legal data fortresses required to make fiduciary-grade legal decisions. Thus, they aggressively expanded their partnership soon after, launching a bidirectional integration where Thomson Reuters rebuilt the next generation of its CoCounsel Legal platform directly on Anthropic’s Claude agent—and allowed Claude to call upon Thomson Reuters legal data. The company also launched their own in-house agent, the Thomson-1, in August of this year.
Valuation
Key Takeaways
Elevated earnings and operating cash flow per share growth over the projected period. ✔️
Solid growth metrics. ✔️
The shares currently trade at a 35.43% premium to our proprietary fair value estimate.
Risks
Negative five-year average price change. ❌
Sensitivity of the valuation to sustained high growth assumptions. ❌
Sustained Performance & Conclusion
Variables include:
Realization and resilience of the growth trajectory against potential multiple compression. ⚠️
Ability to support the current valuation through consistencies in per-share expansion. ⚠️
Thomson Reuters has provably delivered steady operational progress and expanded its AI capabilities even as the market reassessed the valuation of AI-exposed information businesses.
Defending the quality of its underlying franchise and its ability to monetize its proprietary data assets will determine its trajectory in the future, as well as the company’s capacity to manage competitive and technological disruption without eroding margins or free cash flow.
Ironically, the downturn in its stock turned out to be an effective deflationary measure with regards to the company’s overall valuation.
Best regards,
- The Intrival Team
