(Corrects to attribute quote in paragraph 15 to Adam Sarhan not Rob Hales) By Kenneth Li Feb 5 (Reuters) – Thomson Reuters reported higher fourth quarter revenue on Thursday, boosted by its legal, tax and accounting and corporates businesses, as investors assess the impact of artificial intelligence companies moving into its key markets. The Toronto-based content and technology company also forecast its full-year 2026 revenue would rise by between 7.5% and 8%. Wall Street is forecasting revenue growth of 7.7% for the year, LSEG data shows. Thomson Reuters raised its annualized dividend by 10% to $2.62 per common share and said fourth quarter revenue rose 5% to $2 billion, matching expectations in LSEG estimates. Shares in Thomson Reuters opened 7% higher on Nasdaq, paring some losses from this week's wider software and services selloff. The stock is down nearly 30% so far this year, underperforming the S&P 500, which was up 0.54% by Wednesday. "We are seeing tangible benefits from our continued investments in AI," said Thomson Reuters CEO Steve Hasker. "We will continue to scale our agentic capabilities to deliver greater speed, clarity, and confidence for our customers – further demonstrating the value of professional‑grade tools built on quality content and deep subject‑matter expertise," Hasker added in the results statement. Share prices have been hit by fears over the challenge that AI newcomers, including Anthropic, present to companies like Thomson Reuters, which fell nearly 18% on Tuesday amid a broad selloff in the software, data and professional services sector. Anthropic, maker of the Claude chatbot, launched a legal plug-in for its Claude Cowork coding tool on January 30 that helps execute tasks including reviewing legal documents, generating briefings and tracking compliance. Hasker said in an interview after the results report that recent market reaction reflected "anxiety and not fundamentals". "The medium to long term winners in legal AI will be those that have trusted content domain expertise and the infrastructure to support verifiable, accountable, professional-grade work," Hasker added. GENERATIVE AI RESPONSIBLE FOR ABOUT 28% OF CONTRACT VALUE Earnings per share were $1.07, slightly ahead of Wall Street expectations of $1.06 per share excluding items. Revenue in the "Big 3" Thomson Reuters segments of legal, tax and accounting and corporates rose 9% on an organic basis. The Reuters news division's organic revenue increased by 5%, boosted by content licensing revenue deals. "Results look broadly in-line. However, without a solid beat, the market will likely remain anxious given the current environment," said Rob Hales, an analyst at Morningstar. Adam Sarhan, chief executive of 50 Park Investments in New York said: "The customer relationships, data assets, and balance sheet are there – now it's about execution and how fast they adapt." Chief Financial Officer Michael Eastwood said that the contribution of generative AI-enhanced products has continued to rise since Thomson Reuters began tracking it in 2024. Generative AI is now responsible for about 28% of the 1qgroup's underlying contract value, which breaks down a contract's total value, compared with 24% in the last quarter, Eastwood said in an interview. Over the next three years to 2028, Thomson Reuters has earmarked $11 billion of capital capacity for deals, focused mainly on its big 3 segments, executives said. (Reporting by Kenneth Li in New York, additional reporting by Anhata Rooprai; Editing by Alexander Smith)
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