Thomson Reuters combines an 81%-84% recurring-revenue moat with accelerating AI-led growth, disciplined capital allocation, and substantial five-year upside despite near-term investment-driven margin pressure.
Overview
Thomson Reuters provides specialized information, proprietary databases, and workflow software to professionals operating in regulated markets. Its strongest businesses are Legal, Corporates, and Tax, Audit & Accounting, which generate 83% of revenue, while recurring SaaS and data subscriptions account for approximately 81%-84% of sales. The moat combines high switching costs, 92% customer retention, more than 650 attorney-editors, and fiduciary-grade legal and tax content. **Q2 2026 demonstrated accelerating momentum:** revenue rose 9% to $1,954 million, organic growth was 8%, adjusted EBITDA increased 10% to $745 million, the margin expanded to 38.1%, and free cash flow rose 29% to $727 million. Big Three organic growth reached 10%, led by Legal at 10%, Corporates at 10%, and Tax, Audit & Accounting at 8%. Management raised 2026 company organic-growth guidance to approximately 8.0% and Big Three guidance to 9.5%-10.0%. The $500 million KKR Global Print transaction should further focus capital on SaaS and AI. At $105.53, valuation is 6.3x EV/revenue, 21.6x EV/EBITDA, and 26.9x P/E versus a 35.9x five-year P/E average. Near-term catalysts are CoCounsel Legal Next Generation’s second-half 2026 launch and continued pricing and upselling, although Q3 margin guidance of approximately 36% reflects AI investment and severance.