THOMSON Reuters beat first quarter revenue forecasts, lifted its financial outlook for 2024 and raised its annual dividend by 10 per cent to US$2.16 on Thursday (May 2) as it continued to invest heavily in artificial intelligence.

The Toronto-based news and information provider reported an 8 per cent rise in first quarter revenue to US$1.88 billion, from US$1.74 billion a year earlier. Wall Street expected US$1.85 billion in the quarter, LSEG data showed.

Shares in Thomson Reuters were up 4 per cent on the Toronto Stock Exchange after Thursday’s earnings announcement.

Thomson Reuters said its operating profit rose 10 per cent to US$557 million, just short of expectations of US$559 million, while its adjusted earnings per share, excluding one-time items were US$1.11 per share. Wall Street had expected 95 cents per share.

Thomson Reuters CEO Steve Hasker said in an interview after the company reported its quarterly results that he was optimistic AI investments would pay off over time, but added it was early days and “too early to declare victory.”

Hasker cited good take-up of new AI-powered products including CoCounsel, an AI-assistant initially targeted at legal professionals. It is now being rolled out to other customers in the media, tax, risk and fraud businesses.

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Thomson Reuters, which said it now has an US$8 billion budget to acquire companies primarily, but not exclusively focused on AI, has closed two deals in the quarter. They are Sweden-based business automation company Pagero and World Business Media Unit, an insurance industry media company.

The company raised its annual total revenue forecast as a result of its first quarter performance and now expects it to rise by between 6.5 per cent and 7 per cent, up from 6.5 per cent.

It forecast total revenue from its big three business segments of legal, tax and accounting and corporates, to rise by between 8 per cent and 8.5 per cent, up from 8 per cent.

Thomson Reuters legal division revenue growth of 1 per cent was hit by lower transaction revenue due to the sales of some divisions.

It said its corporates division’s revenue rose 16 per cent, which included the impact of the Pagero purchase.

The tax and accounting division’s revenue rose 17 per cent as it benefited from seasonal strengths, where 60 per cent of revenues are in the fourth and first quarters.

Reuters News revenue rose 21 per cent to US$210 million, from the non-recurring transactions from content licensing deals related to generative AI. The company did not disclose the partners. Organic revenue in the news division rose by 17 per cent.

Thomson Reuters said it had sold 10.1 million shares of London Stock Exchange Group during the quarter for US$1.2 billion. It said it had sold 1.6 million LSEG shares on May one and after completion of that sale it would own 4.3 million shares in LSEG.

It said it had also repurchased US$350 million of Thomson Reuters common shares as part of a US$1 billion buyback program which ends in the second quarter of this year. REUTERS