Thomson Reuters’ Consistent Professional Services Growth Driven by Crucial Solutions and AI Enhancements

Thomson Reuters Corp. remains a top buy thanks to an AI transformation and improving profitability.

Thomson Reuters serves legal, tax, accounting, and corporate professionals with indispensable tools that have become deeply embedded in their daily workflows. This has created formidable switching costs and exceptional 87% customer retention.

The company’s competitive moat is built on several interconnected advantages. First, it controls proprietary content assets accumulated over decades that cannot be easily replicated. Second, its subscription-based model generates more than 90% of revenues from recurring sources. Third, the company holds an estimated 25% market share in professional information services, substantially above the 18% industry average. And fourth, multi-year contracts and deep workflow integration create substantial customer lock-in, as professionals build their practices around its platforms.

All these factors together justify our strong buy recommendation.

THOMSON REUTERS CORP. (Toronto symbol TRI; www.thomsonreuters.com) sells specialized information and software to the legal, tax and accounting fields. It also owns the Reuters news service.

Thomson remains a #1 Conservative Buy for 2025 (and beyond).

Thomson continues to benefit from the 2018 sale of its financial data business (now called Refinitiv) to private equity firm Blackstone Group. In 2021, the partners merged that business with the London Stock Exchange (LSE). The company has since sold all its LSE shares for $7.3 billion and used some of that cash to buy back its own shares (all amounts except share price and market cap in U.S. dollars).

Thomson now has five main businesses: Legal Professionals (37% of revenue in the latest quarter, 40% of earnings) sells information to law firms, including the Westlaw legal database; Corporate Clients (28%, 25%) sells information products to multinational firms that require a mix of legal, tax and other products; Tax and Accounting Professionals (19%, 25%) sells information products to accounting and auditing firms; Reuters News (10%, 5%) provides general and financial news and information to a wide variety of global media firms; and Global Print (6%, 5%) provides printed legal and tax information.

Overall, the Americas supply 80% of Thomson’s revenue, followed by Europe (17%) and Asia (3%).

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In the quarter ended September 30, 2025, revenue rose 4.3%, to $1.78 billion from $1.72 billion a year earlier (all amounts except share price in U.S. dollars). That topped the consensus forecast of $1.77 billion.

If you factor out businesses that Thomson bought and sold, as well as currency rates, organic revenue improved 7% in the latest quarter.

The company is also doing a good job signing up more subscribers and deepening its relationship with existing ones. In the quarter, recurring revenue from its three main businesses—legal information, data for corporate clients, and tax and accounting information—rose 9%. Recurring revenue now accounts for 82% of total revenue.

Earnings before unusual items rose 6.3%, to $0.85 a share (or a total of $383 million) from $0.80 a share (or $359 million). That beat the $0.82-a-share consensus estimate.

Thomson Reuters’ AI transformation creating further substantial competitive advantages

Thomson’s outlook remains bright. As a provider of electronic information services, the company has little exposure to tariffs. In fact, the new tariffs will likely increase demand for its products as companies strive to comply with the new regulations.

The company is also adding artificial intelligence tools that make it easier for clients to search its databases and analyze documents. That should spur its long-term revenue growth.

Thomson also editorially enhances 85% of the legal documents content it collects and analyzes. That gives it a big advantage over competitors that rely on AI for research, particularly as bad or inaccurate information can cause clients to lose lawsuits and pay out large settlements.

The stock is down from the all-time high it hit in July 2025. That’s largely due to concerns over slowing revenue growth after the U.S. federal government cancelled some contracts as part of its plan to improve efficiency. The company is also seeing lower demand for printed products.

However, we feel the stock remains an attractive buy, particularly as adding artificial intelligence (AI) tools to its products will help drive its earnings over the next few years.

Recommendation in The Successful Investor: Thomson Reuters Corp. is a buy.

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Jim Bates

Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.

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