Thomson Reuters Corporation Common Shares 2026 Q2 Earnings Call

Good morning, thanks everybody for joining us today for our second quarter 2026 earnings call. I'm joined by our CEO, Steve Hasker, and our CFO, Gary Bischoping. Steve and Gary will discuss our results, then we'll take your questions following the prepared remarks. To enable us to get to as many questions as possible, we would appreciate if you'd limit yourself to one question and one follow-up each when we open the phone line. Throughout today's presentation, when we compare performance period on period, we discuss revenue growth before currency as well as on an organic basis. We believe this provides the best basis to measure the underlying performance of the business. Today's presentation contains forward-looking statements and non-IFRS and other supplementary financial measures, which are discussed on this special note slide.

Actual results may differ materially due to a number of risks and uncertainties discussed in reports and filings that we provide to regulatory agencies. You may access these documents on our website or by contacting our investor relations department. Let me now turn it over to Steve Hasker.

Thank you, Gary, thanks to all of you for joining us today. Our strong start to 2026 continued in the second quarter, with revenue growth ahead of our prior expectations and margins in line. Total company organic revenues rose 8%, with the Big Three accelerating to 10% organic growth, up from 9% in recent quarters. The acceleration was driven by legal professionals and corporates, which both also accelerated to 10%, up from 9% last quarter. We are raising our full-year 2026 outlook for total and organic revenue growth to approximately 8%, or the high end of the prior 7.5%-8% range. We're also raising our Big Three total and organic revenue outlooks to a range of 9.5%-10%, up from the prior approximately 9.5%. We continue to forecast margins rising year-over-year to approximately 40%.

On July 14th, we were pleased to announce the signing of a definitive agreement with KKR to form a joint venture to operate the Global Print business, where we will sell a 51% stake for approximately $500 million. We're excited about this transaction, which will sharpen our focus on content-powered AI solutions serving fiduciaries while setting up an independent business to serve our customers' print needs. The transaction provides attractive proceeds to TR and will be modestly accretive to organic revenue growth. Gary will provide additional details in a few minutes. We continue to invest heavily and remain encouraged by the growing success of our innovation engines. Commercial momentum across our AI-enabled offerings continues to build, and our pipeline of features and offerings in development continues to grow.

In a moment, I'll provide an update on Thomson, our proprietary large language model, which we see as an increasingly important tool to deliver accurate and cost-effective AI solutions. In addition, I'll highlight the successful completion of the next-generation CoCounsel Legal beta, the introduction of AI-driven capabilities into ONESOURCE, and our excitement about a next-generation version of CoCounsel for Tax & Audit currently in development. To support our product investments, last month, we launched "The CoCo", our largest brand campaign in more than a decade, to accelerate awareness and demand for CoCounsel. The campaign reinforces our differentiated position in professional AI by highlighting what our customers value most: trusted, fiduciary-grade AI grounded in authoritative content, domain expertise, and the accountability required in professional workflows. Our capital capacity and liquidity remain a key asset that we are focused on deploying to create shareholder value.

We made solid progress on this during the quarter. In May, we executed a $605 million return of capital, and on July 21st, we completed the $600 million share repurchase program announced in February. Together, these transactions have reduced our share count by approximately 3%. We remain committed to a balanced capital allocation approach, and we continue to assess a number of inorganic opportunities. With approximately $9 billion of estimated capital capacity through 2028, we are positioned to be both aggressive and opportunistic. Turning to the second quarter results by segment. The Big Three segments accelerated to 10% organic revenue growth, up from 9% in recent quarters. Legal organic revenue accelerated to 10%, driven by continued strong law firms' momentum and improved government growth. Legal, excluding government, continued to grow at the 11% pace we saw in Q1, driven by momentum from Westlaw and CoCounsel Legal.

Corporates' organic revenue accelerated sequentially to 10%, driven by offerings in our legal, tax, and risk portfolios and the segment's international businesses. Pagero was particularly strong and continues to drive market share gains for Thomson Reuters in the transactional compliance space. A recent significant Pagero win with Google is one example. Tax, Audit & Accounting organic revenues grew 8%, driven by CoCounsel for Tax & Audit, our Latin American business, and SafeSend. Reuters' organic revenues rose 4%, driven by growth in the agency business and our contract with LSEG. Lastly, Global Print organic revenues declined 3% year-on-year, in line with our expectations. In summary, we're pleased with the building revenue momentum we've delivered in the first half of 2026. I'll now discuss our continued portfolio evolution and provide several product innovation updates. The Global Print transaction I mentioned earlier continues the positive evolution of our portfolio.

As you know, we have invested heavily in innovation in recent years, both organic and through strategic M&A. We've also pursued targeted divestitures, including Elite, FindLaw, and now a majority stake in Global Print. These efforts leave us with a stronger, more focused, and more strategically aligned portfolio with improved growth prospects versus the TR of just a few years ago. Adjusting our last 12 months' performance for the Global Print transaction, the Big Three segments would contribute 87% of our revenue, up from 81% in 2023. Our Big Three revenue growth has accelerated from 7% in 2023 to 9% on a last 12 months basis, and we remain focused on building upon the 10% growth this quarter. Total TR improved from 6% in 2023 to 8% on a last 12 months basis.

The quality of our revenue mix has also improved, with recurring revenue rising to 86% of total on an as-adjusted basis, up six percentage points from 2023. When including repeat transactional revenue, we have good visibility into over 90% of our annual revenue. Looking forward, our focus remains on driving an accelerating pace of innovation as we deliver authoritative content-powered AI solutions that provide producer-grade outcomes for our professional customers and markets. Let me close with a few thoughts on our innovation roadmap. If this chart looks familiar, it is an updated version of one we shared a year ago. Like last year, we are delivering a significant portfolio of innovation in 2026, including new offerings, additional capabilities, and geographic expansion. Let me share a few highlights.

In June, due to the strength of customer feedback, we completed the beta for the new generation version of CoCounsel Legal ahead of schedule and began providing early access to all existing CoCounsel Legal customers. Customer usage is ramping, and we remain on track for the broader launch by the end of this month. Outside of Legal, we have added several AI features into our ONESOURCE portfolio, including touchless compliance, which automates the creation of U.S. sales and use tax returns, and AI research for global trade, which leverages our authoritative content to simplify trade research. Pagero has continued its geographic coverage expansion with the addition of five more countries, including France, Poland, and Belgium, building on its market leadership position. We are working on an agentic next-generation version of CoCounsel for Tax & Audit, expected this fall. Let me now provide an exciting update on Thomson.

As a reminder, in mid-2024, we made a modest but highly strategic acquisition of SafeSign Technologies, a startup that was developing legal-specific large language models. Over the last two years, highly talented teams from SafeSign and TR Labs have continued the development of these models, leveraging TR content and expertise along the way. They recently completed development of the first production-ready version of the model, which we call Thomson. Joel Hron, our Chief Technology Officer, recently issued a blog post discussing the results of a detailed benchmarking study of Thomson. Despite relatively modest investment of approximately $40 million and training Thomson on less than 10% of our legal content to date, the benchmarking study indicates that Thomson delivers results on par with the latest versions of the leading frontier models on a broad range of general domain tasks.

As expected, Thomson performs strongly for legal tasks, with further improvement potential as we add more TR legal content. This best-in-class performance is delivered at a meaningfully lower cost and in many cases, at significantly reduced latency versus third-party models. One might ask how we can deliver results on par with frontier models at a fraction of the cost. The answer lies with our content and our expertise. When building on leading open-source models, the quality and sophistication of training data matters far more than the volume of data used. Our deep repositories of expert-curated or authoritative content across Westlaw, Practical Law, and Reuters are a key advantage, as are our attorney editors and practice experts. The benchmarking results embolden our strategy for Thomson and provide growing confidence in its potential.

We are on track to power tabular analysis, a bulk document review tool in CoCounsel Legal with Thomson later this month. We see an opportunity to port over a broader range of capabilities in the future to leverage Thomson's cost and speed advantages. In addition, initial conversations with our largest and most sophisticated customers indicate potential for additional commercialization opportunities. The success to date with Thomson demonstrates the value of our content, expertise, and talent in this AI environment. It also provides important optionality for TR as we work to deliver market-leading and cost-effective AI solutions for our professional markets. I'll now turn it over to Gary for a review of our financial results.