Thomson Reuters 2025 Q2 Earnings Sharp Drop in Net Income Despite Revenue Growth

Thomson Reuters reported its fiscal 2025 Q2 earnings on Aug 6, 2025, with revenue up 2.6% year-over-year. However, the company missed expectations with a significant 62.9% decline in EPS and a 62.8% drop in net income. The firm maintained its full-year guidance and emphasized innovation and capital discipline.

Revenue
Thomson Reuters posted total revenue of $1.78 billion in the second quarter of 2025, a 2.6% increase from $1.74 billion during the same period in 2024. The modest gain reflects stable performance across its core business lines, with no significant shifts in revenue composition reported.

Earnings/Net Income
The company's earnings per share dropped sharply to $0.69 in Q2 2025, a decline of 62.9% compared to $1.86 in the prior year period. Net income also fell significantly, to $313 million, down 62.8% from $841 million in Q2 2024. The sharp drop in profitability highlights a concerning trend in earnings performance.

Price Action
Thomson Reuters' stock has seen declining performance recently, with a 11.53% drop in a single trading day, 9.91% over the most recent full trading week, and 10.53% month-to-date. These figures point to ongoing investor uncertainty in the near term.

Post Earnings Price Action Review
A backtested strategy of buying TRI following earnings beats and holding for 30 days has historically shown an average annual return of 9.8%, outperforming the buy-and-hold approach of 7.2%. This method also exhibited a lower maximum drawdown of 30%, compared to 55% for buy-and-hold. However, the 30-day holding period may limit long-term gains, emphasizing the trade-off between risk mitigation and extended growth opportunities.

CEO Commentary
Steve Hasker, President and CEO of Thomson Reuters, highlighted strong momentum in the second quarter, with revenue in-line and margins modestly ahead of expectations. He emphasized innovation, including the launch of CoCounsel Legal and CoCounsel for tax, audit, and accounting. Hasker reiterated a balanced capital allocation approach and a focus on long-term strategies for sustained value creation.

Guidance
Thomson Reuters reaffirmed its full-year 2025 outlook, maintaining expectations for organic revenue growth, adjusted EBITDA margin, and free cash flow. The company projected 7% organic revenue growth in Q3 2025 and a 36% adjusted EBITDA margin. Depreciation and amortization guidance was updated to $825 million to $835 million for the year, with $625 million to $635 million attributed to internally developed software. Net interest expense is now projected at approximately $130 million, slightly below previous guidance due to higher-than-expected interest income.

Additional News
In the three weeks following its Q2 earnings report, Thomson Reuters announced a strategic partnership with a leading AI platform to integrate advanced agentic AI tools into its legal and tax offerings, signaling a key innovation initiative. The company also announced the appointment of a new Chief Product Officer, bringing extensive experience in digital transformation to further enhance product development. Additionally, Thomson Reuters announced a $200 million share repurchase program, underscoring its commitment to capital allocation and shareholder returns.