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Thomson Reuters Corp. TRI-T reported higher third-quarter revenue and kept its key financial targets for the year steady as the information and software provider prepares to roll out new artificial-intelligence tools in key products.

Revenue of US$1.59-billion increased 1 per cent in the quarter that ended Sept. 30, compared with a year earlier.

After accounting for lost revenue from several smaller asset sales over the past year, revenue was up 6 per cent, which was roughly in line with analysts’ expectations.

Major investments that Thomson Reuters are making to add new generative artificial-intelligence (AI) technology to its flagship products for clients are on the cusp of coming to market. An AI-powered research assistant will launch in the company’s Westlaw Precision product on Nov. 15, with further additions to other products expected in the coming months.

Chief executive officer Steve Hasker said generative AI will bring “seismic industry changes” to the sectors Thomson Reuters serves, and that the benefits to its customers from new tools based on the technology “really starts this quarter.” Thomson Reuters has said it will invest more than US$100-million annually in generative AI, but chief financial officer Mike Eastwood described that number as “the starting point,” and said the company is ready to increase it as necessary.

“We’re proceeding at breakneck speed in terms of integrating generative AI into our products,” Mr. Hasker said in an interview on Wednesday. Thomson Reuters expects to reap some new revenue in 2024, and predicts that will ramp up over a few years starting in 2025 as products are updated and contracts with clients renew.

The company’s overall revenue has been resilient in a fraught economic environment, bolstered by multiyear contracts that help guard against sudden fluctuations. Some corporate clients have seen discretionary spending budgets tighten and have been slower to sign up, while the Reuters Events business and digital advertising revenue from Reuters News have come under pressure.

The company’s largest division, which serves legal professionals, has seen some slowdown in work on capital markets transactions, offset by an uptick in litigation. Revenue from legal clients rose 2 per cent to US$688-million in the quarter, and was up 6 per cent excluding the impact of asset sales.

“Our legal business is continuing to power through,” Mr. Hasker said.

Revenue from corporate clients rose 4 per cent to US$391-million, while tax and accounting revenue increased 8 per cent to US$203-million.

Thomson Reuters is expecting a similar business environment marked by continued economic uncertainty next year, against the likely backdrop of two wars – Russia’s invasion of Ukraine, and Israel’s war with Hamas – as well as stubbornly high interest rates and a U.S. presidential election campaign.

“I think it would be foolhardy for us or anyone else to bank on a quick rebound,” Mr. Hasker told analysts on a conference call.

In the third quarter, Thomson Reuters reported profit of US$367-million or 80 US cents a share compared with US$228-million or 47 US cents in the same quarter last year.

After adjusting for one-time items, Thomson Reuters earned 82 US cents a share, well ahead of analysts’ expectations.

Woodbridge Co. Ltd., the Thomson family holding company and controlling shareholder of Thomson Reuters, also owns The Globe and Mail.

After Thomson Reuters sold US$1.5-billion of its stake in the London Stock Exchange Group in September, the company continues to have robust cash reserves, and announced a plan to buy back up to US$1-billion of its shares over the coming year. Thomson Reuters will also use some of its cash to pay off a maturing US$600-million bond.

Thomson Reuters also has capital available to make acquisitions and is looking primarily for smaller deals to bolster its existing business lines. “We don’t need or particularly want larger deals,” Mr. Hasker told analysts.

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