Thomson Reuters just posted a stellar first quarter in 2024, blowing past expectations and leading to a raise in the full-year revenue outlook. The headlines focused on the 9% organic revenue growth, the record-breaking 10% growth in the Big 3 segments, and the exciting advancements in generative AI. But buried within the transcript lies a subtle shift in strategy, one that hints at a potentially explosive growth vector that few analysts seem to have noticed: an aggressive push into international markets.

While international operations have always contributed to Thomson Reuters' bottom line, they've historically been treated as a steady, albeit modest, growth engine. The focus has primarily been on serving multinational corporations as they expand globally. However, the recent acquisition of <a href="https://www.pagero.com/" alt="Pagero">Pagero</a>, a global e-invoicing leader, coupled with the geographically agnostic nature of their newly acquired CoCounsel AI assistant (from <a href="https://casetext.com/" alt="Casetext">Casetext</a>), suggests a more ambitious international game plan is unfolding.

This shift is evident in the language used by CEO Steve Hasker during the <a href="#" alt="earnings call">earnings call</a>. He specifically calls out the international opportunity as "a pretty big opportunity" and highlights Brazil, Australia and New Zealand, parts of Europe, Japan, Mexico, and Southeast Asia as areas of particular focus. This is a marked departure from previous calls, where international expansion was mentioned almost as an afterthought.

Further solidifying this hypothesis is the emphasis on e-invoicing as a key driver of international growth. E-invoicing mandates are rolling out in over 80 countries, presenting a wave of regulatory-driven demand that Thomson Reuters is uniquely positioned to capitalize on thanks to Pagero's single global platform. This platform, unlike its cobbled-together competitors, provides a unified solution across various geographies, making it a compelling choice for businesses navigating complex international compliance landscapes.

The numbers paint a compelling picture as well. Currently, international markets contribute just under 20% of Thomson Reuters' revenue. Assuming they maintain their historical mid-teen growth rate, international operations could contribute an additional $100 million in revenue in 2024 alone, significantly bolstering the company's overall growth trajectory. However, the potential for even more explosive growth exists.

Imagine this: Thomson Reuters successfully leverages its strong brand, vast distribution network, and proven acquisition playbook to push Pagero's e-invoicing platform into new markets with breakneck speed. Simultaneously, they capitalize on the global applicability of CoCounsel to penetrate legal markets previously untouched by their traditional research products.

Under this scenario, international operations could easily contribute 30% or more of Thomson Reuters' revenue within the next few years, driving the company's overall growth rate well beyond the 6.5% to 8% range currently projected for 2025 and 2026. This, of course, is a hypothesis, but one supported by the subtle shifts in language and strategic emphasis observed in the recent earnings call.

Projected International Revenue Growth

The following chart illustrates a hypothetical scenario of Thomson Reuters' potential international revenue growth, comparing a conservative growth rate with a more aggressive one.

While the world obsesses over generative AI, Thomson Reuters may be quietly positioning itself for a global takeover, one e-invoice and AI-powered legal brief at a time. And that's a story worth watching closely.

"Hypothesis: * Current International Revenue Contribution: Just under 20% * Projected International Growth Rate (conservative): 15% * Potential International Growth Rate (aggressive): 25%+ * Potential International Revenue Contribution by 2026 (aggressive): 30%+"

"Fun Fact: Thomson Reuters' roots go back to 1851, when Paul Julius Reuter started a news agency using carrier pigeons to transmit stock prices between Aachen and Brussels. Talk about early adoption of cutting-edge technology!"