Thomson Reuters, the information giant known for its iconic Westlaw legal research platform and Reuters News Agency, has been on a quiet tear. After successfully pivoting to a content-driven technology company and navigating the turbulent waters of the last few years, they've emerged stronger, leaner, and with a surprising ace up their sleeve. While many analysts are understandably focused on the company's aggressive push into generative AI, a deeper dive into their recent <a href="https://seekingalpha.com/symbol/TRI/earnings/transcript" alt="Thomson Reuters Q1 2024 Earnings Transcript">earnings transcript</a> reveals a hidden driver of growth: the often-overlooked <strong>e-invoicing market</strong>.

Yes, e-invoicing. Not as flashy as AI chatbots writing legal briefs, but potentially a gold mine for Thomson Reuters. The company's acquisition of Pagero, a leading e-invoicing platform, may be the key to unlocking explosive growth in the coming years. While dismissed by many as a mere "tuck-in" acquisition, Pagero's unique position in the rapidly expanding global e-invoicing market suggests a far more impactful role.

Here's why: e-invoicing isn't a niche product; it's a regulatory tidal wave sweeping the globe. Over 80 countries are in various stages of implementing digital tax regulations, essentially mandating e-invoicing for businesses. This isn't a technological shift driven by early adopters; it's a government-mandated sea change, creating an immense market practically overnight.

And Pagero, unlike its competitors, is uniquely positioned to ride this wave. They've built a single global platform, a rarity in the fragmented e-invoicing landscape. Their rivals offer a patchwork of solutions, cobbled together across different geographies, while Pagero offers a seamless, unified experience. Add to this their modern technology and robust compliance capabilities, and it's clear why Thomson Reuters snagged them.

But the real magic happens when you consider the synergy between Pagero and Thomson Reuters' existing ONESOURCE Indirect Tax solutions. This powerful combination offers a compelling proposition for corporations: enhanced compliance capabilities, streamlined workflow automation, and global scale—all through a single trusted vendor. It's a one-stop shop for navigating the complex world of international tax regulations.

This strategic alignment becomes even more significant when you consider Thomson Reuters' stated aspirations for international growth. With international markets currently representing just 20% of their revenue, the company sees immense potential in serving global customers. Pagero, with its strong European footprint, provides the perfect springboard for expansion into Latin America and Southeast Asia, where e-invoicing mandates are rapidly rolling out.

Projected Growth: Organic vs. Acquisition Driven

While Thomson Reuters hasn't broken down Pagero's specific contribution, the CEO highlighted a notable uptick in the Corporate segment's performance, exceeding expectations. Let's examine the company's projected growth, comparing the overall organic growth with the specific contribution expected from acquisitions.

So, what does this mean in numbers? While the company has not explicitly broken down Pagero's contribution to their projected growth, we can make some educated estimations.

Hypothesis:

Pagero's contribution to organic growth will be significantly greater than the stated 50 basis point contribution from all acquisitions in 2024.

Reasoning:

Market Size and Growth: The global e-invoicing market is expected to reach $20.5 billion by 2027, growing at a CAGR of over 20%. This far outpaces the overall growth of Thomson Reuters' existing portfolio. [Source](https://www.globenewswire.com/news-release/2023/06/08/2684403/0/en/Global-E-Invoicing-Market-Size-to-Hit-USD-20-5-Billion-by-2027-Driven-by-Government-Mandates-and-Increasing-Adoption-of-Cloud-Based-Solutions-at-20-3-CAGR-Fortune-Business-Insights.html)

Pagero's Market Leadership: Pagero is a leader in the European market, the most mature e-invoicing landscape globally. Their single global platform positions them to capture a significant share of emerging markets.

Synergy with Existing Products: The integration of Pagero with ONESOURCE Indirect Tax creates a powerful end-to-end solution, driving increased adoption and potentially higher pricing.

Potential Impact:

Accelerated Organic Growth: If Pagero can capture even a modest share of the rapidly expanding global market, their contribution to Thomson Reuters' organic growth could easily exceed 100 basis points in 2024 and beyond, accelerating the company's overall growth trajectory.

Margin Expansion: As Pagero scales in emerging markets, their profitability is expected to increase significantly, contributing to margin expansion for Thomson Reuters in the medium term.

This potential for "boring" e-invoicing to fuel explosive growth shouldn't be underestimated. While generative AI undoubtedly holds tremendous potential, Thomson Reuters' strategic play in the e-invoicing market may be the secret weapon that propels them to even greater heights in the years to come.

"Fun Fact: Thomson Reuters traces its roots back to 1851, when Paul Julius Reuter began transmitting stock market quotations between London and Paris using carrier pigeons! From pigeons to e-invoicing, the company has certainly come a long way."