TRI:CC - Thomson Reuters reports mixed Q2 earnings; maintains FY23 and initiates outlook

2023-08-02 06:42:39 ET

• Thomson Reuters press release ( NYSE: TRI ): Q2 Non-GAAP EPS of $0.84 beats by $0.06 .
• Revenue of $1.65B (+2.5% Y/Y) misses by $10M, organic revenue up 5%.
• The company's "Big 3" segments reported organic revenue growth of 7% and collectively comprised 81% of total revenues.
• Adjusted EBITDA, which excludes the gain on sale of Elite, as well as other adjustments, increased 18% due to higher revenues and lower costs.
• The company is maintaining its 2023 outlook except for updates to its tax rate, interest expense, and accrued capital expenditures as a percentage of revenues as follows:
• The outlook for the 2023 effective tax rate has been reduced to approximately 17% from the prior forecast of approximately 18%, reflecting a second quarter benefit from the settlement of a prior year tax audit.
• Interest expense is now expected to be approximately $190 million, which is the low end of the previously communicated range of $190 to $210 million, reflecting the accelerated pace of LSEG monetization and the benefit from higher interest rates on our cash balances.
• Lastly, the outlook for accrued capital expenditures as a percent of revenues has been increased to approximately 8%, from the prior forecast of approximately 7% plus $30 million non-recurring real estate spend. The updated outlook includes the previously forecasted real estate optimization spend and additional investments to accelerate Thomson Reuters AI focused growth strategies.
• The company expects its third-quarter 2023 organic revenue growth rate to be at the high end of the full year 5.5% - 6.0% range, and its adjusted EBITDA margin to be approximately 36%, reflecting typical margin seasonality, the normalization of cost timing that benefited Q2 margins, and also higher SurePrep integration expenses.

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