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The call presents a constructive picture: strong organic revenue growth (8% overall, 9% for the Big 3), accelerating AI adoption and clear product momentum (1M AI users, rapid adoption metrics), margin targets and EPS/Cash Flow improvements were reaffirmed, and active capital returns were executed. Offsetting items include secular print decline, subdued government growth, rising LLM and integration costs, severance charges and some near-term revenue timing shifts in Tax/Audit & Accounting. Overall, positive operational and financial momentum outweighs the manageable near-term headwinds, and management reiterated confidence in full-year guidance, margin expansion and cash generation.
Management reaffirmed 2026 guidance for organic revenue growth of 7.5%–8% (Big‑3 segments ~9.5%), with Legal Professionals about 9% (legal ex‑government ran 11% in Q1), Corporate guidance ~9%–11% and Tax/Audit/Accounting 11%–13%; they see adjusted EBITDA margins rising ~100 bps to ~40% for the year (Q1 adjusted EBITDA was $881M, +9%, margin 42.2%), Q2 organic growth of 7%–8% with an expected Q2 EBITDA margin of ~38%, and full‑year free cash flow of ≈$2.1B. Other metrics disclosed: ACV from Gen‑AI‑enabled products at 30% (up from 28%); Q1 adjusted EPS $1.23 (+10%); Q1 free cash flow $332M (+19%); $262M of buybacks in Q1 plus a $605M return of capital (share count down ~9M shares, ~2%); dividend raised 10%; interest expense outlook increased $30M to $180–190M; and a planned $500M bond paydown.
Total company organic revenue grew 8% in Q1 2026 (up from 7% through 2025). The Big 3 segments delivered 9% organic growth, and management reaffirmed full-year organic growth guidance of 7.5%–8% with the Big 3 targeted at ~9.5%.
1 million users achieved for advanced AI features (through CoCounsel). Monthly CoCounsel SKUs quadrupled year-over-year; Westlaw Advantage users and deep research searches increased over 7x in the last 6 months; CoCounsel for tax and audit weekly conversations grew ~5x since September. Management highlighted progress on agentic products (Westlaw Advantage, CoCounsel Next) and proprietary Thomson LLM outperforming frontier models on legal tasks.
Adjusted EBITDA increased 9% to $881 million with a margin of 42.2% in Q1. Big 3 adjusted EBITDA was $829 million (up 9%) with a 46.7% margin. Company reiterated full-year adjusted EBITDA margin expansion of ~100 basis points to ~40%.
Adjusted EPS was $1.23, up 10% from $1.12 a year ago. Free cash flow improved 19% to $332 million (from $277 million) in Q1, and management expects full-year free cash flow of approximately $2.1 billion.
Company raised the annual dividend by 10% (fifth consecutive year) and repurchased $262 million of shares in Q1. Completed a $605 million return of capital and share consolidation, reducing share count by ~9 million shares (approximately 2%). Management reiterates balanced allocation with >$9 billion estimated capital capacity through 2028.
Legal professionals (excluding government) accelerated to 11% organic growth in Q1 (from 9% in Q4); Corporate grew 9% organically (driven by Pagero, Confirmation, Westlaw, CoCounsel and international businesses); Tax, Audit & Accounting grew 10% organically driven by CoCounsel for tax/audit, Latin America, SafeSend and SurePrep.
Organic orders (ACV) rose 6% in the quarter, supported by LSEG data agreement and agency business. Percentage of annualized contract value from Gen AI-enabled products reached 30% (up from 28% last quarter).
Good day, everyone, and welcome to the Thomson Reuters' First Quarter Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the call over to Gary Bisbee, Head of Investor Relations. Please go ahead, sir.
Thanks, Margo. Good morning, and thank you all for joining us today for our first quarter 2026 earnings call. I'm joined today by our CEO, Steve Hasker; our CFO, Mike Eastwood; and our incoming CFO, Gary Bischoping. Steve and Mike will discuss our results, and then we'll take your questions following our prepared remarks. [Operator Instructions] Throughout today's presentation, when we compare performance period-on-period, we discuss revenue growth rates before currency as well as on an organic basis. We believe this provides the best basis to measure 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 can access these reports on our website or by contacting our Investor Relations department. Let me now turn it over to Steve Hasker.
Thank you, Gary, and thanks to all of you for joining us today. Before I begin our prepared remarks, I'd like to recognize our colleagues at Reuters, who learned yesterday that they have won 2 2026 pullet surprises for journalism, bringing the total pullet surprises to 15 since 2008. So congratulations to Alexander ...