Thomson Reuters reports 5% organic revenue growth in Legal. Lexis does better Combining Thomson Reuters Legal Professionals and Global Print, we estimate that Thomson Reuters reported 5% organic revenue growth in Q2 23. Relx Legal - a comparable division - reported 6% organic revenue growth and performed ahead of Thomson Reuters for the first time in several years. Thomson Reuters commented that it expects Q3 orgrev growth to come at the higher end of its FY guidance range. Law firm spending shifting from real estate to technology vendors On its earnings call, Thomson Reuters management pointed that law firms were increasingly reallocating spending away from real estate towards technology: a trend that has recently accelerated and serves both TRI and REL. Gen AI drive customer retention rates and new market opportunities Thomson Reuters management argued that Gen AI would be a positive driver of customer retention rates as well as a driver of new addressable market opportunities. While management wants to build on the 6% top-line growth reported in H1 23 and expects margin expansion in the long term, it indicated that its short-term margin performance could be tempered by AI investments and related acquisitions. Over the medium term, TRI guided that capex to sales would revert to the 9% reported in FY22 vs. 8% in FY23 (and initial guidance last February of 7%) partly on increased AI investments. We note that Wolters Kluwer today suggested that its capex to sales would normalise down from the upper end of the 5-6% range it is guiding for in FY23. Relx: a Gen AI winner REL, TRI and WKL Q2 reports has us reaffirm our view that professional information services vendors are likely to be Gen AI winners. We believe Relx in particular has a strong position and is likely to see top- and bottom-line benefits.