By Kenneth Li
(Reuters) -Thomson Reuters reported higher than expected third-quarter revenue of $1.72 billion on Tuesday, as it continued to invest in generative AI.
The Toronto-based content and technology company said it was spending more than $200 million on AI investments in 2024. This was up from more than $100 million in 2023, executives said.
Thomson Reuters (NYSE:TRI) also said it now has about $10 billion to spend on potential acquisitions through 2027.
Shares of Thomson Reuters were up 4.6% to C$239.99 on the Toronto Stock Exchange and up 5% to $173.33 on the New York Stock Exchange in midday trading.
"We remain focused on driving innovation across our portfolio and markets to best serve our customers, demonstrated by our investment in AI now increasing to more than $200 million in 2024," Thomson Reuters CEO Steve Hasker said in a statement.
Thomson Reuters products already include Westlaw AI and CoCounsel, which is a chat-based generative AI (GenAI) assistant that can help legal professionals draft documents, sift through research and locate information scattered across sources.
In August, Thomson Reuters announced the acquisition of Safe Sign Technologies, a British-based company developing large language models for the legal industry.
In October, it announced the purchase of Materia, which makes so-called agentic AI assistants, which can perform tasks and solve complex problems on their own, for the tax and accounting industries.
In an interview, Michael Eastwood, Thomson Reuters chief financial officer said about 15% of Thomson Reuters' underlying annual contract value, which breaks down a contract's total value by year, of about $6 billion now comes from generative AI.
Thomson Reuters reported an 8% rise in quarterly revenue to $1.72 billion, which LSEG data showed was just ahead of analyst expectations. Adjusted earnings per share for the period were 80 cents. Wall Street had expected a profit per share of 76 cents.
The company said it now expected full-year organic revenue to rise by about 7%, up from an earlier expectation of about 6.5%. Organic revenue is reported on a constant currency basis and excludes the impact of acquisitions and asset sales.
Acquisitions helped drive revenue rises at some of the "Big 3" Thomson Reuters businesses, with revenue at its legal, corporates, and tax and accounting businesses up by 9%.
Reuters News revenue, which rose 10%, benefited from acquisitions and generative AI-related licensing revenue. A company spokesperson said the terms of the AI deals were confidential and did not name them.
Facebook-owner Meta Platforms (NASDAQ:META) last month announced a deal to use Reuters content to answer user questions in real time in its AI chatbot.