Thomson Reuters Corp has reported higher-than-expected quarterly profit, driven by strong performance in its AI-related content licensing and boosted by generative AI technology. The Toronto-based company saw a 3% increase in fourth-quarter revenue to $1.8 billion, in line with analyst estimates. Adjusted earnings per share came in at 98 cents, surpassing Wall Street expectations of 90 cents per share.
Thomson Reuters CEO, Steve Hasker, emphasized the company’s growth and investment plans, stating that 2024 will be an investment year for them. He also highlighted the potential growth opportunities in generative AI beyond 2024.
The company anticipates a 6% rise in revenue for 2024, slightly ahead of analyst estimates. Operating profit, however, fell by 11% to $558 million, considering gains from divestitures in the previous year. Excluding these one-time gains, operating profit rose by 12% due to higher revenue and lower costs.
While three of Thomson Reuters’ divisions experienced revenue growth in the quarter, the legal segment saw a decline, impacted by the sale of business management software company Elite in 2023.
Reuters News revenue increased by 11%, driven by generative AI-related content licensing revenue. Thomson Reuters struck deals to license its content to large AI language model companies, recognizing the need for accurate and unbiased information in training these models. The company did not disclose the details of the specific licensing arrangements.
Thomson Reuters plans to end its $1 billion share buyback by the end of the second quarter and will increase its annualized dividend by 10%. The company has allocated $10 billion for acquisitions and an additional $100 million annually to invest in AI.
In recent acquisitions, Thomson Reuters acquired a majority stake in Pagero Group AB, an e-invoicing tax company, and purchased World Business Media. Additionally, last year, the company acquired legal AI firm Casetext for $650 million. The company has already spent approximately $2.1 billion on acquisitions and intends to invest about $8 billion over the next three years.
Overall, Thomson Reuters’ strong financial results, driven by AI-related revenue and strategic investments, showcase its commitment to growth and innovation in the evolving information industry. The company remains focused on expanding its offerings and capitalizing on emerging opportunities.
