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Thomson Reuters Corp. TRI-T reported higher second-quarter revenue and is sticking to its key financial targets for the year despite a slowing economy that has started to put modest pressure on the pace of sales to corporate clients.

Revenue at the news and information provider was up 2 per cent year-over-year, to US$1.65-billion, for the quarter ended July 31 – roughly in line with analysts’ estimates. After adjusting for the sale of a majority stake in software company Elite to private equity buyer TPG Inc., revenue was up 5 per cent.

The second quarter was busy for Thomson Reuters, as it pushed forward its adoption of generative artificial intelligence tools, striking a partnership with Microsoft Corp. and acquiring Casetext, a legal startup that built an AI-powered assistant for legal professionals, for US$650-million. Thomson Reuters also sold part of its stake in the London Stock Exchange Group (LSEG) and returned about US$2-billion in proceeds to shareholders.

A tougher economic environment brought about by interest-rate increases to combat inflation has not dented sales and renewals in the company’s largest business lines serving legal, tax and accounting professionals, chief executive officer Steve Hasker said in an interview. Revenue from its legal arm was up 1 per cent to US$705-million, while tax and accounting revenue rose 7 per cent to US$229-million – though, after excluding a drag from divestitures, the units’ revenues were up 6 per cent and 10 per cent respectively.

But sales to some corporate clients, which tend to have more sophisticated procurement departments, and demand for the Reuters Events business both softened a little. Corporate revenue increased 5 per cent to US$392-million.

Because Thomson Reuters gets about 80 per cent of its revenue from multiyear contracts, Mr. Hasker said, “we’re largely but not entirely immune” to the more challenging environment.

“Despite some macroeconomic headwinds, I think we’re pleased with the performance and we view it as a solid quarter,” he added.

Thomson Reuters earned US$894-million, or US$1.90 per share, in the quarter. That compared with a loss of US$115-million, or 24 U.S. cents per share, in the same quarter last year, which was driven by the changing value of the company’s stake in LSEG.

Adjusting to exclude those changing values and the effect of divestitures and other items, the company earned 84 U.S. cents per share in the quarter. That beat analysts’ consensus estimate of 78 U.S. cents per share, according to Refinitiv.

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

In recent months, Thomson Reuters has been working to show investors that it is on the front foot in adopting generative AI tools that could have a significant effect on legal and financial professions. In addition to acquiring Casetext, which adds 104 employees to Thomson Reuters’s existing AI-focused staff, the company has pledged to spend US$100-million annually on AI capabilities as part of a strategy that will build some of that new technology in-house.

After it acquired Casetext, Scotia Capital analyst Maher Yaghi said the deal “looks like a defensive and an offensive move at the same time,” protecting Thomson Reuters against the disruptive potential of AI tools but also allowing it to improve its own products.

“I view it as more offensive,” Mr. Hasker said. He told analysts on a conference call Wednesday that he has come to understand that companies with proprietary data sets such as Thomson Reuters could have a competitive advantage in making the most of AI models.

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