Thomson Reuters (TSX: TRI)(NYSE:TRI) is a leading provider of business information services. The company’s products include highly specialized information-enabled software and tools for legal, tax, accounting, and compliance professionals combined with the world’s most global news service called Reuters. The company is organized in five reportable segments supported by a corporate center.
Full suite of content-enabled technology solutions
The company’s legal professionals division serves law firms and governments with research and workflow products, focusing on intuitive legal research powered by emerging technologies and integrated legal workflow solutions that combine content, tools, and analytics.
The company’s corporate division serves corporate customers from small businesses to multinational organizations, including the seven largest global accounting firms. Thomson Reuters provides a full suite of content-enabled technology solutions for in-house legal, tax, regulatory, compliance, and information technology (IT) professionals.
Intuitive tax offerings
Further, the company’s tax and accounting division serve tax, accounting, and audit professionals in accounting firms with research and workflow products, focusing on intuitive tax offerings and automating tax workflows.
Reuters News supplies business, financial, national, and international news to professionals via desktop terminals, including through Refinitiv, the world’s media organizations, industry events, and directly to consumers.
Digital customer experience
In addition, the company’s global print division provides legal and tax information primarily in print format to customers around the world. Thomson Reuters’ corporate center centrally manages commercial and technology operations, including those around the company’s sales capabilities, digital customer experience, and product and content development. The centre also centrally manages functions such as finance, legal and human resources.
Deep domain knowledge
Thomson Reuters derive most of the company’s revenues from selling information and software solutions, primarily electronically and on a recurring subscription basis. The company’s solutions blend deep domain knowledge with software and automation tools. Thomson Reuters’ workflow solutions make the company’s customers more productive by streamlining operations, enabling clients to focus on higher-value activities.
Strong customer retention
Many of the company’s customers use Thomson Reuters’ solutions as part of the workflow, which has led to strong customer retention. Customers appear to trust it because of the company’s history and dependability and the company’s deep understanding of businesses and industries.
Hence, clients rely on the company’s services for navigating a rapidly changing and increasingly complex digital world.
Leading and scalable position
Over the years, Thomson Reuters’ business model has proven to be capital efficient and cash flow generative, and this has enabled it to maintain a leading and scalable position in the company’s chosen market segments. The company has several key businesses and operating characteristics.
Attractive industry
Currently, the company operates in an estimated $28 billion market segment expected to grow between 6% and 8% over the next 5 years. The legal, tax and government market segments appear prime for content-driven innovation which positions the company very well.
Also, the company operates in a resilient business which has been historically stable, affirmed by the company’s superior performance during the COVID-19 pandemic. Overall, Thomson Reuters has approximately 500,000 customers and the largest customer is approximately 2% of revenues.
