Last Friday, Thomson Reuters released its third quarter financial results. For TR Legal
- Revenues increased 1%. Excluding US print, revenues grew 3%.
- Solutions businesses (46% of the segment’s revenues) grew 4%, slightly lower than the first half of the year due to timing factors. Revenue growth was driven by Elite, Serengeti, Pangea3 legal managed services, and the Investigations and Public Records business. Solutions businesses represent all of Legal’s revenues excluding US print and US online legal information.
- US online legal information (40% of the segment’s revenues) grew 2%, reflecting growth for the third consecutive quarter.
- US print (14% of the segment’s revenues) declined 8%, as expected.
- EBITDA was unchanged and the margin increased 90 basis points to 38.8% compared to 37.9% in the prior-year period. Excluding the benefit of currency, the margin increased 30 basis points.
- Operating profit increased 4% and the margin increased 200 basis points to 31.7% compared to 29.7% in the prior-year period. Excluding the benefit of currency, the margin increased 130 basis points due to lower depreciation and amortization expense.
As one can see from the above, US Print and US Online Legal only represents 54% of the revenue generated by TR Legal during Q3. Solutions is the revenue growth driver and likely will surpass 50% of TR Legal’s total revenue in a couple of years as US Print continues its death spiral.
Do note TR Legal’s profit margin for the nine months ended Sept. 30th. At 29.3%, it is substantially higher than all of TR’s other divisions: Financial & Risk (17%), Tax & Accounting (21%), and Intellectual Property & Science (20.4%).