TORONTO - Thomson Reuters (NYSE:TRI) Corporation (TSX/NYSE: TRI), a leading provider of business information services, announced today the acquisition of Materia, a U.S. startup specializing in agentic AI for tax, audit, and accounting professionals. This move is set to enhance Thomson Reuters' portfolio of generative AI tools and streamline customer experience across its services.
Materia, founded in 2022, has developed an AI assistant that automates research and workflows, aiming to increase the efficiency and effectiveness of accounting teams. The integration of Materia's technologies will allow Thomson Reuters to offer a Gen AI assistant to professionals, furthering its commitment to innovation in the sector.
David Wong, Chief Product Officer at Thomson Reuters, expressed enthusiasm for the acquisition, stating that the combined capabilities of both companies will transform work and unify customer experience. Kevin Merlini, CEO of Materia, echoed this sentiment, highlighting the potential for their AI to eliminate tedious tasks and elevate the quality of work by enabling accountants to focus on higher-value advisory services.
The acquisition follows a successful proof-of-concept initiative where Thomson Reuters Ventures, an early investor in Materia, allowed users of Checkpoint Edge to interact with Checkpoint content via Materia's AI assistant. The promising results from this collaboration underpin confidence in the strategic benefits of the acquisition.
Thomson Reuters serves professionals across various sectors, including tax, accounting, compliance, government, and media, with specialized software and insights. Materia's platform, designed for public accounting firms, combines authoritative accounting content with firm knowledge and industry software to improve workflow efficiency and quality while maintaining security and accuracy.
The press release includes forward-looking statements regarding the expected strategic benefits of the transaction. However, it caresses that such statements are not guarantees of future performance and are subject to risks, uncertainties, and assumptions.
This acquisition aligns with Thomson Reuters' vision to empower professionals with advanced tools and solutions, signaling a significant step in the evolution of generative AI applications within the tax, audit, and accounting industry. The information for this article is based on a press release statement from Thomson Reuters.
In other recent news, Thomson Reuters has entered a definitive agreement to sell its legal assistance platform FindLaw to Internet Brands. The transaction is expected to be finalized in the fourth quarter of 2024, subject to regulatory approvals. In other developments, Thomson Reuters is set to introduce a digital subscription service for a fee of $1 per week. The company's stock rating was also upgraded by Scotiabank from Sector Perform to Sector Outperform, indicating potential revenue growth from the company's investments in GenAI capabilities.
Additionally, Thomson Reuters introduced CoCounsel 2.0, a next-generation artificial intelligence assistant designed to enhance productivity across various industries. This tool is expected to deliver answers three times faster than its predecessor.
On the financial front, Thomson Reuters reported strong second-quarter results, leading to an increase in its full-year 2024 revenue outlook. The company's organic revenues grew by 6%, with products such as Practical Law and Confirmation showing double-digit growth. These are the recent developments in Thomson Reuters.
InvestingPro Insights
Thomson Reuters' acquisition of Materia aligns with its strong market position and financial performance. According to InvestingPro data, the company boasts a substantial market capitalization of $75.51 billion, reflecting investor confidence in its growth strategy and market leadership.
The company's focus on innovation and AI integration is supported by its solid financial metrics. Thomson Reuters has demonstrated consistent revenue growth, with a 4.61% increase over the last twelve months and a 5.65% growth in the most recent quarter. This growth trajectory suggests that strategic acquisitions like Materia could further enhance the company's market position and financial performance.
InvestingPro Tips highlight Thomson Reuters' commitment to shareholder value. The company has raised its dividend for 4 consecutive years and has maintained dividend payments for an impressive 36 consecutive years. This track record of consistent dividend growth, coupled with a current dividend yield of 1.29%, makes Thomson Reuters an attractive option for income-focused investors.
The company's strong financial health is further evidenced by its profitability. Thomson Reuters has been profitable over the last twelve months, with analysts predicting continued profitability this year. The company's operating income margin stands at a robust 27.47%, indicating efficient management and strong pricing power in its markets.
While Thomson Reuters trades at a high P/E ratio of 32.12, which might seem expensive at first glance, it's important to consider the company's long-term performance and growth prospects. InvestingPro Tips reveal that Thomson Reuters has delivered high returns over the last decade and strong returns over the past five years, suggesting that the premium valuation may be justified by the company's consistent performance and market leadership.
For investors seeking more comprehensive analysis, InvestingPro offers 15 additional tips for Thomson Reuters, providing a deeper understanding of the company's financial health and market position.
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