Thomson Reuters Corp (TMSOF) Q3 2026 Earnings Call

2:15 Standby. Good day, everyone, and welcome to the Thomson Reuters third quarter earnings call.

2:23 Today's conference is being recorded. At this time, I would like to turn the call over to Gary Bisbee,

2:29 Head of Investor Relations. Please go ahead. Thanks, Ruth. Good morning, and thank you all for

2:37 joining us today for our third quarter 2026 earnings call. I'm joined by our CEO, Steve Hasker,

2:42 and our CFO, Gary Bisbee. Steve and Gary will discuss our results, and then we'll take your

2:46 questions following our prepared remarks. To enable us to get to as many questions as possible,

2:51 we would appreciate it if you'd limit yourself to one question and one follow-up each

2:55 when we open the phone lines. Throughout today's presentation,

2:59 when we compare performance period on period, we discuss revenue growth before currency, as well as on an organic basis. We believe this provides the best basis to measure the underlying performance of the business. I'd also note that our third quarter results reflect our former global print business reported as discontinued operations. Prior period financials have been revised to this basis. Today's presentation contains forward-looking statements and non-IFRS and

3:28 and other supplementary financial measures, which are discussed on this special note slide.

3:33 Actual results may differ materially due to a number of risks and uncertainties discussed in

3:38 reports and filings that we provide to regulatory agencies. You may access these documents on our

3:44 website or by contacting our Investor Relations Department. Let me now turn it over to Steve

3:49 Hasker. Thank you, Gary, and thanks to all of you for joining us today. Momentum continued in the

3:56 third quarter, with revenue growth and margins ahead of our prior expectations. Total company

4:02 organic revenues improved to 10%, while the big three grew by 10% for a second consecutive

4:10 quarter. We're updating our full year 2026 outlook to incorporate the global print transaction and now see total and organic revenue growth of approximately 9.5 and 8.5 to 9% respectively versus 8% previously. Our big three total and organic revenue outlooks remain unchanged at 9.5 to 10%. We forecast margins

4:40 We've got margins of approximately 39%, which includes the impact of reflecting global print as discontinued operations. Excluding this impact, our margin outlook is unchanged. Good momentum continues from many areas across the portfolio, with double-digit growth from key products, including CoCouncil Legal, Peguero, CoCouncil for Tax and Audit, SafeSend, Global Trade, and our international businesses.

5:09 We continue to invest heavily and remain encouraged by the growing traction of our innovation engine. Commercial momentum across our AI-enabled offerings continues to build, and our pipeline of features and offerings in development continues to expand.

5:26 As it relates to the next-generation version of co-council legal, we are very encouraged by the initial customer engagement. We're also excited about the recent launch of the next-generation version of co-council tax audit and accounting, and about the continued e-invoicing growth opportunity through Paguero. I will expand on these topics in a moment. As an update to our discussion last quarter on Thompson, our family of proprietary large language models,

5:55 we're working with Scadden Arps on a strategic AI design partnership that brings together Thompson,

6:03 our authoritative legal content, and Scadden's extraordinary institutional expertise.

6:10 As these discussions progress, we believe this has the potential to shape the legal AI industry

6:15 and validate the role purpose-built AI will play in professional work, particularly as firms look to

6:23 protect their data and demand a higher standard of trust, accuracy, and accountability. We look forward

6:30 to sharing more on this topic in the future. Our capital capacity and liquidity remain a key asset

6:36 that we are focused on deploying to create shareholder value. We remain committed to a

6:41 balanced capital allocation approach, and we continue to assess a number of inorganic

6:47 opportunities. Our capitalization remains robust, positioning the company to be both aggressive

6:52 and opportunistic going forward. Turning to the third quarter results by segment, the big three

6:59 segments delivered 10% organic revenue growth for a second consecutive quarter, up from 9% in prior

7:05 periods. Legal organic revenue grew 9%, driven by continued momentum with law firms and slightly

7:13 lower government growth than in Q2. Westlaw and co-council legal were key drivers. Corporates'

7:20 Organic revenue grew 10%, driven by offerings in our legal, tax, and risk portfolios, and the

7:28 segment's international businesses. Peguero remains a key driver. Tax, audit, and accounting

7:34 organic revenues grew 10%, driven by co-counsel for tax and audit, our Latin American business,

7:41 and SafeSend. And Reuters' organic revenues rose a strong 12%, with healthy underlying trends boosted

7:49 by AI-related transactional content licensing revenue. In summary, we're pleased with the

7:55 continued good momentum in the third quarter. I'll now provide a few updates on our product

8:01 innovation progress. We remain excited about the accelerating pace of innovation across our

8:07 businesses, which is contributing to an expanding market opportunity and stronger growth for our company.

8:14 Let me provide a few recent updates. I'll start with legal. The next generation version of co-council

8:20 legal is off to a very encouraging start. In September, the first full month after the general

8:27 availability launch, co-council NextGen has surpassed the prior version's best month to date

8:33 on every engagement and retention measure that we track. It now carries the majority of the user base

8:41 for the co-council legal AI bundle, and its active user base up more than 60% in September from August.

8:50 co-council legal NextGen users are completing 2.4 times the work versus the peak for the prior version, and are active 44% more days per month, and they're also retaining at higher levels.

9:05 While it's early, product NPS scores are also more than twice the best month on record for the prior version.

9:13 As we have delivered the rebuild of co-council, we have sharply accelerated our pace of feature development, with the number of new releases into co-council up by nearly 50% in Q3 from the pace in Q1.

9:28 I'll briefly mention a few of the recent advancements.

9:31 In August, we introduced Westlaw BriefBuilder into co-council to support the highly complex and time-consuming work of drafting litigation briefs. BriefBuilder, grounded in Westlaw and practical law, enables lawyers to work iteratively with AI to draft compelling, authoritative, and correctly formatted briefs in their own style in far less time.

9:59 Like with the introduction of Westlaw Advantage, we believe BriefBuilder is a major step forward in capability that TR is uniquely positioned to deliver. It currently supports five litigation brief types, including motion to dismiss and motion to compel, and tomorrow we'll expand coverage to 24 brief types, including motion for summary judgment.

10:24 In mid-October, we announced the new multinational profile in co-council legal, which brings legal content from more than 100 countries into co-council workflows. Legal teams can now research cross-border questions, compare requirements across jurisdictions, flag issues that need local counsel, and trace every finding back to its source, all without leaving the platform.

10:52 It's grounded in Thomson Reuters' trusted legal content and official legal and regulatory resources.

10:59 In October, we brought next-generation agentic versions of co-counsel legal to the UK, Canada, and Australia, following the US general release by only two to three months.

11:12 This is meaningful acceleration from our history, where overseas capability launches have frequently trailed the US by as much as 12 months.

11:21 Two weeks ago, we launched the next generation of co-counsel tax audit and accounting, a fully agentic AI platform built specifically for tax audit and accounting professionals.

11:32 This next-generation product takes professionals from source documents and client data to finished, defensible work product in a single workflow.

11:41 The prior-generation offering could plan work and answer questions. With this latest release, co-counsel agents expand deeper into actually doing the work. Tax and audit work turns on judgment, not just math. So, co-counsel grounds every calculation in the correct authority, runs verified calculations, and delivers outputs including multi-tab Excel workbooks and memos that follow a firm's own templates through clear audit trail.

12:10 Professionals can see how co-council reached each answer and validate outputs themselves.

12:17 That's where our foundation matters.

12:20 Co-council draws on Checkpoint with more than 12 million primary source and analytical documents

12:26 maintained by hundreds of experts to deliver to our fiduciary-grade AI standard. It connects through MCP

12:34 and integrates with tools like Ultratax, so it fits the way our customers already work. The result is

12:41 faster execution without sacrificing quality, freeing up our customers to work on higher value

12:47 tasks. Lastly, let me comment on Peguero, which has been a strong performer since our acquisition in

12:54 January 2024. We continue to invest in Peguero to expand its geographic coverage, adding eight more

13:01 countries year to date. We now support our customers' growing e-invoicing compliance needs

13:08 in more than 90 jurisdictions. The e-invoicing industry is benefiting from a wave of new

13:15 government regulations as tax authorities increasingly move from periodic backward-looking

13:21 to real-time and continuous reporting regimes. We see this regulatory demand-driven growth

13:27 opportunity continuing as an additional 50 mandates are expected to go live in the next three years.

13:34 Our broader transactional compliance footprint, which in addition to e-invoicing includes our one-source

13:40 indirect tax and global trade offerings, is growing well into the teens and is gaining market share

13:47 versus our competition. We believe the breadth of our offerings and quality of our solutions are unique differentiators in the market, a view that has been consistently endorsed by third parties. For example, our invoicing solution was recently named as a leader in the IDC Marketscape 2026 worldwide compliant e-invoicing vendor assessment. Our one-source solutions have previously been named a leader in four IDC Marketscape reports for value-added tax,

14:16 Sales and use tax, and global trade, which makes Thomson Reuters the only provider named a leader across all four transactional compliance categories.

14:26 I'll now turn it over to Gary for a review of our financial result.

14:30 Thanks, Steve.

14:32 As a reminder, throughout my remarks, I will talk to revenue growth before currency and on an organic basis.

14:40 Third quarter, organic revenues grew 10%.

14:43 Organic recurring and transactional revenue grew 8% and 23%, respectively. Adjusted EBITDA increased 10% to $651 million, with a margin of 35.5%.

14:58 One other item to note, the year-over-year decline in our IFRS profitability measures reflects the impact of a gain on the sale of our remaining minority equity interest in the elite business in the third quarter of 2025.

15:15 Continuing on the growth theme, Big 3 organic revenue again grew 10% in the quarter, continuing the improved pace achieved in the second quarter.

15:27 Legal professionals' organic revenue grew 9% as underlying law firm momentum continued, driven by Westlaw and co-counsel legal.

15:37 Our U.S. large, mid, and small law subsegments all remained at or near record growth rates. Government growth slowed slightly to 4%. Legal professionals excluding government rounded down to 10% in the quarter, though the growth rate was only 20 basis points below that of last quarter.

16:00 International growth slowed slightly, but we are confident that it will improve in coming quarters following the Q4 launch of the next-generation version of Co-Council Legal in the UK, Canada, and Australia.

16:15 Our corporate segments grew 10% organically in line with last quarter. Recurring revenue rose 8%, and transactions revenue grew by an impressive 23%.

16:29 Pagaro, Clear, Consul Legal, Indirect Tax, and our international businesses were key contributors.

16:39 The transaction strength over the last two quarters was boosted by Pagaro implementation revenue, particularly around the large and complex e-invoicing mandate in France that went live on September 1st.

16:51 We expect transactions revenue to moderate in the fourth quarter, but to remain healthy by historical standards. Tax, audit, and accounting organic revenue growth improved sequentially to 10%. Recurring and transactional revenues grew 10% and 11% respectively. Our Latin America business, Co-Counsel for Tax and Audit, SafeSend, and SurePrep were key contributors.

17:17 We continue to progress with efforts we mentioned last quarter to sharpen our go-to-market execution and drive customer migrations to our latest products.

17:29 The improved revenue growth in the quarter is encouraging, though we have more work to do to deliver our aspirations for stronger future growth for our business.

19:07 Reuters adjusted EBITDA was $56 million, with a margin of 24.3%. In aggregate, total company adjusted EBITDA was $651 million, a 10% increase versus Q3 of 2025, reflecting a 30 basis point year-over-year margin decline to 35.5%.

19:30 Our Q3 results included $22 million of severance expense related to our initiatives to reimagine

19:39 how we work, which is a 120 basis points drag on our adjusted EBITDA margin.

19:45 I'll comment at a moment on the impact of reporting our former global print segment as discontinued

19:52 operations.

19:55 If we had included print results, our margins were nearly 100 basis points ahead of the initial

20:01 outlook for Q3 we provided on August 5th. Adjusted EPS was 81 cents, up 14% from 71 cents the prior year period. Currency added one penny of adjusted EPS in the quarter. For the third quarter, our free cash flow was $408 million versus $526 million in the prior year period. Working capital changes plus higher cash taxes drove the decline.

20:34 I'll also provide a quick update on several capital allocation items.

20:38 In July, we repurchased $238 million of our shares, completing the $600 million NCIB announced in February.

20:47 In September, we issued just over $2 billion of new senior notes, and through early October, we have repaid the $1.6 billion of commercial paper borrowings we had on June 30th.

21:00 Our balance sheet remains robust, with leverage of one times as of September 30th.

21:07 The $500 million of proceeds received from the sale of a 51% stake in our global print business to KKR on October 1st further strengthened our financial position.

21:20 Now let me share a few thoughts to help with your modeling on the global print transaction.

21:24 On October 19th, we issued a schedule providing revised historical financial information, treating global print as discontinued operations, which is the basis on which we have reported our third quarter results. I'd like to clarify one point about the discontinued operations reporting. Prior to the transaction close on October 1st, two key arrangements between TR and Westbridge Print are not included in results.

21:53 First, Westbridge Print will pay a royalty to Thomson Reuters for the exclusive license

22:00 to distribute the company's intellectual property in print form and on ProView, its e-book platform.

22:08 Royalty is equal to 20% of Westbridge Print's professional revenue, which is 85% to 90% of its total.

25:14 Our outlook for free cash flow continues to be approximately $2.1 billion, and that's despite the loss of one-quarter of global print cash flow.

25:23 Slightly improved cash taxes and working capital provide the positive offset.

25:30 We now see our capital expenditures being 8.5% to 9% of revenue, as there was minimal incremental capital investment in the global print business.

25:39 We are fine-tuning our depreciation and amortization forecasts and raising net interest expense to the upper end of the prior range, as we incorporate proceeds from the print transaction and the recent debt issuance into our forecasts. Our outlook for the effective tax rate remains unchanged.

26:02 Turning to the fourth quarter, we expect organic revenue growth of approximately 8% in our adjusted EBITDA margin to be approximately 42%.

26:11 Note that Reuters' contribution to year-over-year revenue growth in Q4 will be approximately 1.5 percentage points less than in Q3.

26:21 Looking forward, we are currently in our annual planning cycle and will provide more detailed

26:28 2027 guidance on our Q4 conference call in February. But I want to share our early thinking.

26:37 Given the significant opportunities to expand our medium- to longer-term growth profile

26:41 through AI-driven investments, we currently anticipate reinvesting a portion of our

26:47 Underlying operating leverage during 2027. We remain confident in our ability to continue to expand margins given our business model's operating leverage and our ongoing automation efforts. We have conviction that any incremental investments we choose to make will pay off over the next few years through accelerated revenue growth. We will continue to provide more detail on our Q4 call.

27:16 Now, I'll turn it to Gary Bisbee for Q&A.

27:20 Thank you, Ruth. We're ready for the Q&A.

27:23 Thank you. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad.

27:29 If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment.

27:34 Again, please press star 1 to ask a question.

27:38 We'll pause for just a moment to allow everyone an opportunity to signal for questions.

27:42 We'll go first to Drew McReynolds with RBC Capital Markets.

27:50 Yes, good morning. Two for me. First, with respect to Q4 organic revenue growth, 8%, I think in the prepared remarks, the sequential kind of downtick when you just strip out some of the licensing revenue in Reuters of Q3 is really related to a deceleration of transaction revenues and then a lower contribution from Reuters to Revere.

28:20 Just wondering if that's the right take here. If there's other puts and takes, if you could just comment on those, that would be great. And then second question with respect to co-council legal, great to see all of the traction and momentum there just as you head into I think what is still a seasonally high order for renewal activity.

28:45 Just, you know, what are you seeing with respect to kind of uplift, with respect to co-counsel legal, including just customer reaction and maybe pricing dynamics to the extent you can comment on those. Thank you.

28:58 Drew, you really got the key factors related to that 8% revenue growth in Q4. You know, as we mentioned, the slower growth in the fourth quarter, our expectations are for flattish, you know, Reuters growth, some moderation in transactional revenue growth, as we talked about, given the rise we saw in the prior quarter from the France implementations.

29:23 On Reuters, I would just add that, you know, in the fourth quarter, we'll lap a $5 million in transactional AI licensing revenue from the prior period. And they also are facing, like I said, you know, kind of tougher comps in the agency and professional business. The last piece I would add is this includes a decision that we made from a Reuters event to cancel it in the Middle East due to security concerns. Steve, do you want to talk about the co-counsel opportunity in the fourth quarter?

29:51 Yeah, sure. So, Drew, as you know, co-counsel for us attacks a white space opportunity. So, if you think about sort of law firm and general counsel spend beyond legal research, beyond sort of know-how, practical law, and so forth, co-counsel is in that legal AI assistance space, and it's white space growth.

30:14 What we see is a five to ten-year TAM expansion, and I think we're just at the start of that, and I've talked about that on these calls before.

30:22 But essentially what law firms and general counsels will do, law firms as a portion of revenues, they are starting to retool so that they're spending more on technology and for a dollar of revenue, less on people and less on real estate.

30:40 And we think that that's a five to ten-year journey of TAM expansion. Co-council legal in its rebuilt form gives us a great deal of confidence that we're going to win our fair share of that white space.

30:51 And the reason for that is that this new version for the first time has native access to Westlaw and practical law. And it's an agent that's trained and built by 2,700 practice experts. And so it can do things that others can't do. And certainly the customers who have been using it are telling us that, providing that feedback in spades, firstly.

31:18 And secondly, as we look forward to building out our brief builder set of capabilities that are outlined, we think that's going to further differentiate us. So in terms of its pricing, we're obviously in a competitive market here. We're priced competitively.

31:34 What I would say, though, is that over the last month or so, we've ported a heavy token usage function in the form of bulk document review and tabular analysis across to the Thompson model, and that's given us an uptick in speed, an uptick in accuracy, and we think a cost advantage that we plan to take advantage of over the next year or so.

31:59 So, I think relative to August 5th, we've got, the summary is, we've got more excitement and more optimism about co-counsel legal than we did at that point.

32:14 Thank you both.

32:17 We'll go next to George Tong with Goldman Sachs.

32:25 All right, thanks. Good morning.

32:26 You attributed the 4Q organic growth moderation largely to lower Reuters' contribution to moderating corporate transactional revenue.

32:36 Does the outlook assume legal and tax and accounting organic growth remains near 3Q levels, or is there any underlying moderation embedded in either segment?

32:47 Yeah, look, we sustained our outlook for the full year for the big three. So, you know, I think we'll continue to see the growth that we want in the legal professionals business, in particular, ex-government. You know, on the TAP side, you know, we saw an acceleration from Q2 to Q3. You know, that team is still, you know, kind of making some of the changes in leadership and go-to-market activities we've talked about.

33:17 And, you know, we'll look for them to, you know, continue to find that growth trajectory we think they'll sustain here in the long run. So, you know, kind of no material change, I would say, as we think about Q4.

33:32 Got it. That's helpful. And then with respect to margins, big three EBITDA margins fell year over year, even though you had very strong organic growth. Beyond the severance impact, can you talk a little bit more about what drove the underlying margin performance and how you're thinking about

33:47 reinvesting operating leverage into product and market share gains and how that's going to translate into margin performance into next year?

34:02 Yeah, look, there's, I think, one or two other things I would add to, you know, kind of the margin number in Q3. First, we are driving investments in automation and innovation, so we are reinvesting, certainly, in those areas. You know, again, I think if you kind of go up Periscope a little bit here and think about what we've done over the last couple of years, right?

34:25 We've rebuilt co-council, we've, you know, built Thompson, and then we've accelerated what we're doing organically with regard to co-council tax audit and accounting, and done all that while still delivering that margin accretion we talked about. So there's plenty of productivity we're seeing in drop rate through the business model.

34:48 The other thing that you would see is just modest dilution from bolt-on M&A in the period.

34:57 Got it. Very helpful. Thank you.

35:01 We'll go next to Aravinda Galapetigae with KenneCore Genuity.

35:07 Morning. Thanks for taking my questions.

35:08 Steve, thanks for sort of the update on the innovation side of things. I wanted to switch gears to TNA. Obviously, you're deploying core counsel more meaningfully there. I feel like we have a better sense of where you stand versus the competition on the legal side in terms of your innovation and deployment of AI.

35:31 Anything you can share, any sort of thoughts around where your TNA product stands versus sort of the broader space with respect to sort of the deployment of AI and some of the innovation that you're talking about?

35:45 I know it's early days, but some initial thoughts would help. Thank you.

35:49 Yeah, thanks. Thanks, Haribinder. We think there's a similar but different dynamic in taxed accounting and audit as there is in legal, insofar as the professional services firms in those areas will undertake a multi-year process of increased automation, and a large portion of that will be AI-driven.

36:17 So we think there's a wide space opportunity, tax accounting and audit, similar to the one in legal. If anything, in tax accounting and audit, the sort of transformation process might be a little bit smoother because of the talent shortage.

36:36 So in legal, you know, there's a question of sort of how many lawyers will there be going forward.

36:41 In tax and accounting, there's a different question, which is when will the technology enable the tax and accounting profession to overcome talent shortages?

36:48 The number of tax returns goes up, the complexity of those returns goes up, the number of audits goes up, and the complexity of those audits goes up. So there's a need for technology to fill that gap. So that's sort of the backdrop here.

37:02 The starting point for us is we're one of the two largest players in terms of provision of tax calculation engines.

37:10 So we've got three marquee tax calculation engines that span everything from a sole practitioner providing completing tax returns all the way up to the big four and the heads of tax and the Fortune 500 companies.

37:28 So that's ultra tax, it's go system tax, and it's one source.

37:33 Those products are high-functioning. They're efficient to run. They're very, very accurate, and they're constantly updated for federal, state, and local tax changes. So the switching costs away from those tend to be high because tax season rolls around regularly, and the products are, as I said, very high-functioning.

37:56 What we have done to date is introduce co-counsel tax accounting and orders, and we've put a new version of that in the marketplace in the last couple of weeks to significant positive reaction from our customers because it's fully agentic. It actually delegates the tasks, and it has native access to applications like Excel. So that's the basis that our AI played to date.

38:23 Going forward, we plan to integrate many of what I would call the shoulder activities around that tax calculation engine. So I'm talking about things like document ingestion, the patent recognition, e-filing, follow-up, and so forth. And that's where our ready-to-review and ready-to-advise propositions we think will be market-leading. And they'll be market-leading for two reasons.

38:48 One, they'll be seamlessly integrated into our tax calculation engines, so where our customers are already working.

38:58 And secondly, as a result of the talent and the capabilities that we have acquired and built through acquisitions like ShorePrep and SafeSend, Materia and Additive.

39:10 So we're positioned, we think, to pretty rapidly accelerate our rate of product innovation in tax accounting and audit and introduce that as seamlessly as we can into our customer base over the next year or so and optimistic about both the growth and profitability characteristics of those entries building on the tax calculation engines and co-council.

39:39 Thanks, Steve. That's helpful. I'll pass the line.

39:42 We'll go next to Manav Patnick with Barclays.

39:50 Thank you. Good morning. My first question, Steve, was just around, you know, the white space you referred to, the workflow opportunity.

39:57 I was hoping you could give us, you know, some quantification or anecdotal color on, you know, kind of the size and growth that you're seeing there today, because, you know, obviously from all your legal tech competitors, you see the updated ARR and growth almost, you know, every week on some kind of a social media post. I'm just curious if you could help us frame where you guys are at.

40:19 I think, Manav, thanks for the question. My take is it's still fairly early innings. I think what we've seen to date is most law firms of varying sizes and many general counsel's offices experimenting with multiple AI legal assistants.

40:43 And, you know, those assistants have, I think, by and large, received positive feedback from the associates who were using them. But the underlying change management required to sort of drive wide-scale productivity or wide-scale increased in capacity for revenue growth and, therefore, ROI, I think a lot of that work is still to come.

42:39 And the kind of legal results in the quarter from a profitability perspective, first, you know, we do push that severance down into the segment level, and so the severance impact in the quarter caused a decline.

42:52 You know, there's an impact from the Noetica transaction and a drag in margins there.

43:00 We are seeing an increase in LLM costs.

43:03 That being said, like in my prior remarks, we're more than getting paid for that with the premium tier pricing that we're offering for co-council and the demand uptick that we're seeing from that, as well as our ability to optimize the engineering, you know, kind of choices around which model is chosen to solve which prompt and optimizing that for, you know, kind of speed, accuracy, and cost.

43:29 And then, you know, as we think about all that, you know, going forward, we'll see those margin rates kind of get back to the level we've observed in the legal business here as we exit the year.

43:39 Can I add to that, Gary, Manav? So the first thing is I'd push back on the idea that it was soft in the third quarter.

43:47 I think the combination of severance of the investments in our own internal automation and some minor dilution from M&A contributed to the numbers you see, but they were ahead of where we suggested they'd be on August 5th.

44:04 The second thing is going forward, that the fundamental...

44:08 characteristics of our business is such that, you know, we think that the operating leverage is very, very attractive. And as we grow faster, that operating leverage expands. We don't see any change to that or impairment to that as a result of dynamics that are going on in the marketplace.

44:26 But we have, as Gary said earlier, just this year, as an example, we rebuilt co-council legal. We have launched a new version of co-council tax and order. We've put eight new countries in the marketplace for Peguero, and we built and launched and marketed the Thomson model. All of that within the sort of financial envelope that Mike provided a few years ago.

44:49 So I think the question for us going to 2027 is, over and above that leverage, do we see opportunities for additional growth? And to the extent we see them, we're going to invest in them. And we'll be transparent with you and everybody else as to what we think the impact of those investments will be.

45:06 But I wouldn't like to sort of leave you with a view that there's softness here or that there's sort of, you know, investments required to hold ground. We see this as the fundamental strength of the business and a question of what we invest in and what the timing of those investments are.

45:28 I would appreciate that. Thank you.

45:30 Our next question comes from the line of Tim Casey with BMO Capital Markets.

45:39 Thanks. Steve, can you talk a little bit about how your thinking is evolving with respect to Thompson LLM?

45:47 I mean, you mentioned that you have offloaded some token work there, so that's helping margins.

45:57 But the SCAD and ARBs discussion is quite interesting. So how should we think about that in terms of a revenue generator versus a cost mitigator? Thanks.

46:10 Yeah, thanks, Tim. Thanks for the question. So as you point out, there are sort of two vectors here, you know, based on what we've seen in the first couple of months of conversations with our customers.

46:25 The first is we have taken a particularly token heavy set of tasks around bulk document review and tabular analysis and ported them away from the frontier models to Thompson.

46:37 And that gives us a speed, an accuracy, and maybe most importantly, a cost advantage.

46:43 Because if we can get the capacity utilization of that model up to near 100%, then there's a cost advantage there.

46:51 And what that enables us to do is, in many cases, stick with all-you-can-eat pricing for co-counsel legal. And we think that that's a compelling, particularly compelling offer for private partnerships. So that's the first one. Now, we're in early days, but certainly the reaction of our heaviest users to tabular analysis has been very strong.

47:15 So they like the speed, they like the accuracy, and we're confident in the sort of cost associated there.

47:24 The second is the idea that for the world's most sophisticated and largest firms, Scadden being the first, that we can support them to create sovereign AI solutions.

47:41 So, in other words, to have a version of the Thompson model family behind their firewall, to run our applications on top of that, and to enable them to create their own applications, which protects their IP, gives them greater control over the application of AI within their firms internally, and maybe most importantly, enables them to build specific applications by practice and by jurisdiction.

48:09 that they view as competitive advantages. So we're very excited to be working with Scadden. It's one of the world's preeminent firms. And we think we're going to learn a lot. We think that they'll learn a lot and that this will lead to an attractive revenue stream. We have not quantified it yet, Tim. I think it's too early to do so. But as soon as we start to get more visibility into the depth and breadth of that opportunity, we'll come back to you.

48:39 Thank you.

48:41 We'll go next to Kevin McVeigh with UBS.

48:46 Great. Thanks so much. And then, I guess, just to follow up on that, you know, is that a template used for the other large law firms as well, or would this be unique to Scadden in terms of, you know, that type of alliance or partnership?

49:04 Kevin, the opportunity exists to license in various forms the Thompson model family to

49:15 many of the world's most sophisticated firms. Scadden are first and have some particularly

49:22 unique and in-depth concepts and ideas that we're working with them on. And so I think

49:29 the opportunity is scalable, but I would put Scadden at this point in a category of one.

49:36 It's helpful. And then just with the $2 billion of...

49:39 You know, Canadian NOCHA issued the $500 million from the print proceeds. Any thoughts as to capital allocation relative to inorganic opportunities? And obviously, you exhausted the buyback already, but just any thoughts? Obviously, there's a lot of excess capital building on the balance sheet.

49:58 Yeah, thanks, Roy. At the highest level, we're very confident in a balanced capital allocation approach that we've been pursuing, and we'll continue down that path around investing organically. And those organic investments that Steve just mentioned are driving that top-line growth that we've talked about, right? Investments in Westlaw, investments in co-counsel. You're seeing the acceleration in the legal professionals' growth rate from that. And so we like the

50:28 organic investments that we see on the horizon, and we'll continue to put efforts behind those.

50:34 The second priority is what you just alluded to, which is inorganic growth. In that context,

50:40 we have a nice pipeline of opportunities that we see across multiple platforms in our business to

50:47 provide either bolt-on or material, I would say, improvement in the scale of some of our platforms,

50:55 as well as, you know, the ability to get talent through those acquisitions.

51:00 So, inorganically, we like the pipeline, and that's part of the reason why, you know,

51:06 we've got this pristine balance sheet. We'll go put that to work.

51:08 The third point is returns of capital, and we've done that in the form of NCIB and other returns of capital over time. We'll consistently deliver that balanced approach, and we remain committed to delivering 75% of our free cash flow back to shareholders via returns of capital. So, a balanced approach is the answer, but we quite like where assets are sitting right now in our space and see a nice pipeline in the inorganic side. Steve, what would you add?

51:36 Well covered, Gary. Thank you all.

51:40 We'll go next to Stephanie Price with CIBC. Good morning. Congratulations on the 34% of ACV being Gen AI enabled. I think it's up about 40 basis points sequentially. Just curious if you could dig into that a little bit more around where you're seeing the strongest uptake and how you think about AI pricing here and evolving over time.

52:08 And then my second question is just on Gen AI co-counsel feedback from customers. Can you talk a little bit about what clients are viewing as the biggest strengths of the next-gen product and where you see some opportunities for further enhancements?

52:20 The 34% in the quarter was encouraging in ACV. I would just clarify there that's up from 32% in the prior quarter and up from 24% just one year ago. I would say Westlaw Advantage continues to be part of that story. Co-counsel legal and the GA of that here in the U.S. and now the GA of that in Canada, Australia, and the U.K., we are very excited about that.

52:52 Our international teams have a great pipeline building there. They're excited to have that out

52:57 and available to their customers. We're getting good uptake from demos and seeing good client

53:04 interaction and engagement with that. We are bullish on that being a continuous driver here

53:11 as we get this out into our customers' hands outside the U.S., which, again, I would reiterate

53:16 The fastest transition we've made going from USGA to global GA in two to three months.

53:22 So that's just another proof point around the innovation acceleration we've seen.

53:28 That's going to continue with what we just saw in co-counsel tax accounting and audit.

53:32 That is a unique product, and that product now delivers outcomes as well as the research capabilities it previously had.

53:39 So we see that story continuing. I'll turn it over to Steve for the second part of your question.

53:43 Yeah, Stephanie, with regard to co-counsel, I'll give you a couple of anecdotes. I think there are at least two themes that are coming back from customers and users of co-counsel legal in its latest form. The first is appreciation of its accuracy and of its depth.

54:03 And I'll give you one example. We had a head of AI innovation and technology at a major firm do a bake-off between co-counsel and a couple of the frontier models and a couple of the startup applications.

54:19 And what she did was she asked the same very, very in-depth question of each of the five or six applications.

54:27 She then compared the answers by running each of those answers through all of those applications and asked them to rank them. And all of them ranked co-councils answer as the best. And so it's tests like that that it takes a while for those to sort of permeate through the firms and through the industry.

54:48 But it's that the first thing I'd say is the accuracy and the depth. And that shouldn't come as a surprise, given that we have more reference attorneys and attorney editors, and we have Westlaw and practical law, and we've got native access to those things. And we're using co-council bench to constantly and iteratively improve the product and the underlying data sets. So that's the first one.

55:14 I think the second one, which cannot be underestimated, is we have rebuilt co-council to be the opposite of a black box.

55:22 And so one of the principal concerns of managing partners and firm chairs is if indeed there are fewer lawyers coming in, which is not the case yet, but if three and a half years from now there are fewer lawyers in intake years at firms of various sizes, how are they going to train young lawyers? What is going to be the apprenticeship model?

55:43 And if instead of sitting around a conference table or in the office of a senior partner and gaining their apprenticeship through that direct feedback and learning that a lot of the work is automated and done using these tools, how is that going to happen?

56:00 Now, if you use co-council legal, what you'll see, it is the opposite of a black box. So the agent spells out in great detail the 10 or 20 or 30 steps that it's undertaking in order to answer a question. And equally importantly, at each and every step, it describes the authoritative citational source material that it used to reach a conclusion to that step before moving to another one and why it went to one step versus another.

56:29 And so we think, and more importantly, our customers think that this is going to be a very, very important training and learning tool for young attorneys and that it will, in large part, overcome this concern around the next generation of the apprenticeship model within the firms. So those are really the two things we're hearing. It's deeper and it's more accurate. And the second is it's more transparent, more edit, more auditable, more verifiable.

56:58 Thank you for the color.

57:03 Our next question goes from the line of Vince Valentini with TD Cowan.

57:09 Hey, thanks very much. First, I hope I get a clarification and a question. The clarification will be the royalty revenue in the print segment that will start to show up in the fourth quarter, do you include that in consolidated organic revenue?

57:22 Revenue, I would assume not, given there was no royalty revenue in Q4 last year, so it's not part of your 8% guidance for Q4. It would be just the clarification. The broader question would be on your sort of margin commentary for next year, Gary.

57:39 I mean, correct me if I'm wrong, but it certainly clearly sounds like you're not saying 41% is possible anymore. You're going to reinvest more into good sort of product development and driving this healthy revenue growth momentum that you have. Remember, you did 30, prior to the print, it was 39, supposed to be up 100 this year, supposed to be up another 100 next year. So, I mean, it was supposed to be 41, and you say print is neutral once you get the KKR revenue streams flowing in.

58:08 So it would have been 41, but it now sounds like you're not at 41 anymore. I just want to understand, is that because you're investing to drive faster growth and harvest from these things you've already launched? There's been a lot of launches and a lot of product innovation this year. Is the margin sort of slow down next year because you're going to see even better revenue growth from things like the Thompson LLM or the Brief Builder or just the new version of Co-Council you've just been talking about?

58:37 Or is this you saying, we are going to go into the next wave of product development and be watching just as many, if not more, new products next year, which won't actually contribute to revenue immediately?

58:49 So there's a bit of a drag on margins, but you'll see that revenue in 2028 and beyond.

58:54 I'm just trying to unpack the margin not being quite as high as before. Is it a problem or is it something we should actually be happy about given you're leaning in?

59:05 Yeah, Vince, great questions. Let me ask Gary Bisbee to cover the first one in terms of the royalty

59:12 treatment, and then Gary Bishoping to talk about how we're looking at investing in 2027.

59:20 Yeah. Hey, Vince. In our organic growth calculation going forward, we will pro forma in royalty in both

59:28 periods. And so as you know, the royalty declines modestly over time as print revenue declines. So

59:35 it is a drag relative to if you didn't include that. So I'd argue it's the more conservative

59:42 way to calculate that organic revenue growth. I can take any follow-ups on that offline if that

59:49 doesn't make sense. Gary? The short answer here is we have still great productivity that's coming

59:56 through this business model, both in operating leverage as well as the continuous improvement

1:00:02 we've seen in productivity. This is a choice based on the organic options that we see in front of us in

1:00:09 those investments, just like we demonstrated with West Law Advantage and Co-Council Legal.

1:00:14 We make an investment, and we see a subsequent increase in growth from that investment, and that's

1:00:21 what we're working our way through for 2027. We're working our way through, given the productivity we're seeing, given the operating leverage we see, but more importantly, the investments we have on the horizon to accelerate those investments. So to your question, it's an acceleration of the investments into new products and solutions to continue to accelerate the innovation engine, delivering more value to the customer.

1:00:47 And what we're working our way through then is, therefore, the timing of that revenue is probably, like you said, maybe not in the period of the investment, but we have strong conviction that we'll deliver incremental increases in the growth rate over the medium to longer term.

1:01:04 So, we could deliver, if we chose to, 41 next year, to your question, on a pre-print basis, apples to apples basis. We could choose to do that. We're choosing to make investments in those ongoing incremental AI accelerators and increase that to drive an increase in the revenue growth over time. Steve, what would you add?

1:01:26 No, I think that's the point. I mean, the fundamental business is robust and as growth increases, that operating leverage increases bids. And the question that we're going through now as a team is, okay, of that operating leverage, are there additional growth options that we see, whether that is in and around our Dominio franchise, expansion internationally, expanding out the brief builder within co-council legal,

1:01:55 Further developing ready-to-review and ready-to-advise, you know, the launch of more countries

1:02:00 within Peguero, we have, I suppose, the great luxury, and we don't take it for granted,

1:02:06 that we have a lot of growth opportunities, and we're rigorous and disciplined about assessing those and stack ranking them. And then where we invest, we want to see a return, and we want to see that, if not in period, to Gary's point, soon after. So please rely on us to be very, very rigorous about going through that. And to the extent that any of that sort of expanded leverage is being reinvested, it'll be for good reason.

1:02:31 The only thing I would add, Vince, is there's some things that happen in the short run, too, around sales hires that have a more near-term return perspective and some other things that take a little bit longer given the development cycle. So we'll balance both the timing and the quantum investments as we think about 2027, but more to come in the Q4 call, Vince. Perfect. Thanks.

1:02:55 We'll go next to Mayor Yagi with Scotiabank.

1:03:02 Great. Thank you for taking my question. I just wanted to go back on the sustainability of the legal revenue growth. In the past, you've highlighted that Westlaw Advantage was one of the primary growth drivers for your growth in that business, and that you still had a good runway to grow.

1:03:30 that part of the portfolio. I wanted to ask you, as we head into 2027, do you still have enough runway for growth in Westlaw Advantage to continue to support the growth rate, the organic growth rate in your legal business, or do we need co-counsel to take, you know, the baton here and grow in order to

1:03:59 Continue that performance that you've had in legal.

1:04:06 Yeah, so thanks, Maya.

1:04:08 Look, I think the answer is yes, we do.

1:04:09 We continue to be very excited about what Mike Dane and the Westlaw team and Emily Colbert's leadership and with a very, very talented set of labs and engineering executives are doing.

1:04:25 And I think the latest example of that is Brief Builder, where, as I said, we've put five motions in the market initially. We've got, we'll expand to 24 tomorrow. As you probably know, there's 350 in total. And so whether we get all the way to 350, but it sort of speaks to the runway in and around the legal research and litigation space specifically for Westlaw, Westlaw Advantage and co-counsel.

1:04:54 And so that's the first part. I think the second one is we've talked for many quarters about co-counsel sitting in white space opportunity. So as we look at both of those and we look back, our growth rate in legal has gone from seven to eight to nine, ex-government, sort of 10 and 11 and hovering in that space. We think we can maintain and enhance that over the time period.

1:05:21 The most important thing for us is to continue to innovate and delight our customers.

1:05:27 As long as we continue to do that, we'll be in, I think, good shape, both in the research space, but also in the broader legal AI assistance space.

1:05:39 Okay. Thank you for that. And just to follow up on the question on the margins, I know this is not a 2027 guidance call. I just wanted to get maybe just one clarification.

1:05:51 And are we talking about holding margins steady, or there could be even more investments than 100 basis points that Gary was talking about earlier?

1:06:07 Yeah. Let me just reiterate, again, the business model produces that operating leverage. It produces ongoing productivity.

1:06:17 And we'll make decisions around, you know, investment levels and share more of that when we talk to you in the fourth quarter.

1:06:25 But the margin profile is important to us and will expand over time.

1:06:30 And that level of productivity and what we see in the operating leverage will expand over time. At any given point in time, we face the choice of how much to invest. And we're not going to kind of talk today into the details of what that means for 27. But we will update everybody with clarity when we do that in our Q4 call. Thank you.

1:06:53 Our next question comes from the line of Tony Kaplan with Morgan Stanley.

1:07:01 Thanks very much for fitting me in. I wanted to ask a little bit of a broader question.

1:07:07 Steve, looking out, say, the next five years, what do you see as the biggest changes in terms of product innovation, distribution, the way that customers are using your products? Just wanted to understand, you know, how you're thinking about how this all evolves in the sort of medium term. Thanks.

1:07:30 Thanks. Yeah, thanks, Tony. I think there's a couple of forces at work. The first is, you know, something I've talked about for a while, which just continues to, in my view, strengthen, which is the increasing complexity associated with compliance, whether that's legal compliance, whether that's a tax, accounting, audit, risk-related.

1:07:51 And the idea that corporations and their advisors just can't add headcount to meet the needs of that increasing complexity and ensure that they remain compliant.

1:08:02 They need software and automation tools to do so. And that's the space in which we're operating. That's where our big three sit, and we're maniacally focused on meeting and exceeding that demand, firstly.

1:08:15 Secondly, AI expands our TAMs. Put simply, it expands the role in which we can play in the success of our customers. So instead of being a sort of primary, you know, the Westlaw being the best and most efficient way to get a list of relevant precedent cases, Westlaw will now draft the brief.

1:08:40 Westlaw will increasingly perform the advanced analytics required to win a case. And the same goes with transactions activity. The same goes with in-house activity. So this expands our TAM. And we don't think anyone else brings the same assets and advantages to that white space and to that expanding TAM that we do.

1:09:04 And I would humbly suggest that our step ups in growth over the last few years suggest that we're on the right track and we've got to keep going. So I think that's sort of, there are two dynamics. The first is this ongoing trend to greater complexity and the need for software to...

1:09:21 to meet that complexity and ensure compliance. And I think the second is AI as a means to expand TAM.

1:09:29 The third I think we're seeing is the development of headless solutions. Thompson model is interesting.

1:09:40 So the idea of sort of putting the model and harness and a set of applications that firms can then build on

1:09:47 instead of a fully integrated software stack. I think we're just at the start of that, Tony.

1:09:53 It's hard for me to sit here and tell you exactly how that's going to play out, but what I will tell you is that the Thompson model, starting in legal, to be extended into tax accounting and audit, gives us, I think, a really interesting play in that space as it develops amongst the world's most sophisticated professional services firms.

1:10:16 Thank you.

1:10:17 We will go to Jason Haas with Wells Fargo next.

1:10:26 Hey, good morning, and thanks for taking my questions. I'm curious if you do decide to

1:10:30 bring up the investment levels in 2027. What are the products or areas of the business that you're

1:10:35 most interested in investing in? Thanks. Yeah, Jason, thanks. We've mentioned a few of them. I think,

1:10:42 you know, ongoing investment in co-council legal and ensuring that we've got the right forward

1:10:51 deployed teams and the right sales resources to support that. That's one. I think co-council tax and audit and the development and introduction of ready-to-review and ready-to-advise in the tax accounting space. Next is transactional compliance, so that's e-invoicing global trade and direct tax. We've got, I think, some very exciting plans in terms of adding agentic capabilities

1:11:20 and leveraging co-council into those franchises, in addition to further expanding our market coverage to ensure that we're ready to meet the demands of customers as 50 countries or more roll through e-invoicing mandates.

1:11:36 You know, what Marcondes and Adrian and the team are doing, Fernando and others down in Brazil with Diminio and embedded finance propositions there, I think is starting to look interesting to us. So assuming that stays on track, we'll keep investing.

1:11:53 So, you know, I know it's a long list, but I think it speaks to the point I made in response to Tony's question, which is we're uniquely positioned to meet a growing and long-lived market demand around compliance and the complexity of compliance, and AI is a means for us to expand our role in meeting or exceeding our customers' needs around that.

1:12:19 Steve, the only one I would add to that is the general counsel's office. We've been very focused on co-counsel for legal professionals. It's a great opportunity in the general counsel's office with our relationships that we have with our large corporate customers to bring the differentiated elements of co-counsel legal to the office of the general counsel. We're excited about that opportunity here as we add in the 2027 as well.

1:12:42 Got it. That's very helpful. Thank you. And then just as a follow-up, I'm curious if you

1:12:49 expect to see any impact from the closure of a wild godshell on your business? Thanks.

1:12:55 Not a material impact, no. Okay, great. Thank you. We'll go next to Doug Arthur with Huber Research. Yeah, great. I'm covered. Thanks. We'll go next to Curtis Nagel with Bank of America. Great. So, just two quick ones for me. So, Steve, I think you noted 60% of the COCO base is now on the next current model, which is great to hear.

1:13:29 I guess, any sizing in terms of how much contribution you're seeing from new users versus upgrading the existing base?

1:13:40 We haven't published that, Curtis. We'll go back and review that. Suffice to say, though, we're very focused on gaining more than our fair share of the market over the next 12 months. So we'll come back to you as we achieve that.

1:14:04 Okay, fair enough. Then maybe just another one, just, you know, on legal 4Q. So I think you noted 20, you know, margin difference in the growth rates from, you know, 2Q to 3Q, like 20 bps. Do you think you're going to accelerate that, you know, in 4Q? Just, you know, again, Westlaw is still doing great. You've got COCO coming in. Comps are easier, right? I think you've, you know, previously alluded to, you know, maybe seeing better growth in 4Q. So just, yeah,

1:14:34 Help us sort of size that and, you know, sort of what's the opportunity near a term in legal?

1:14:40 Yeah, I mean, Q4 is an important quarter for us across the big three.

1:14:46 So we're always, at this time of year, cautiously optimistic, but we've got to deliver it.

1:14:52 We certainly see great traction from our various product franchises, and it's early days for Thompson.

1:15:02 So I think I'm going to remain optimistic that there's upside there.

1:15:08 The question is, sort of, what's the timing of that, you know, and when do we deliver it?

1:15:14 Okay, thank you. We'll go next to Surrender Send with Jeffries. Thank you. Hi, Steve. As I think about the need for your commentary around more technology at law firms, corporations, and especially that I think we think about more agendic capabilities that get deployed.

1:15:45 So whether you're taking on a lot more responsibility, maybe displacing individuals, how should we think about the potential change or impact to your pricing power? Meaning that I think as you maybe provide more value, as you do more of the work inside the organizations, should you be able to take a bigger part of the economics, if that makes sense?

1:16:12 When I think about the promise of cloud and the reliance on technology and everybody was offered all of these amazing savings, but ultimately, a large portion of the economics accrued to the hyperscalers.

1:16:30 How does that really embedding yourself in these organizations maybe change the equation or the partnership profile?

1:16:36 Yeah, no, it's a great question. So we, as a philosophy, do our best to price to value. And if you look across the portfolio, there are examples where we do that very well. And I would argue there's some examples where we don't do it as well.

1:16:51 But certainly, we are optimistic about exactly the sort of arc that you describe in terms of embedding the tools within the firms and the general counsel's office, within the judiciary and the court systems and so forth, and then ensuring that we're then able to support our customers in the underlying change management to ensure they get the requisite ROI, and that's an attractive,

1:17:20 proposition first and foremost for them, and then in doing so, price to value. So that's the journey we're on.

1:17:27 I think, as I said in answer to an earlier question, it's still early days. I think we're in the first,

1:17:32 second or third chapter here of a five to 10-year journey, and so I think it's too early to sort of

1:17:40 describe a price to value journey around co-council legal as an example, but we are very focused on

1:17:48 We're getting there, for sure. Gary, what would you add?

1:17:49 We have already seen demonstrated value in customers willing to pay for that value with, you know, achieving the price increases we've seen in the last two years relative to Westlaw Advantage and co-council. And we expect that price-to-value equation to continue as we continue to accelerate the innovation engine.

1:18:10 The last clarifying point is we don't have a seat-based kind of approach to pricing.

1:18:15 It's enterprise license agreements for the most part, and that adds value and enables our customers to have certainty over cost over time, which they also value.

1:18:25 So we like the pricing proposition and the ongoing benefits from that model.

1:18:31 That's helpful. And then as a follow-up on the commentary, writing kind of the all-you-can-eat, how does that impact kind of the token costs and contractually where the client's line? Is those costs treated separately or accounted for separately? Or how should we think about that as growing agentic use? And, you know, does that also boost the top line here as well?

1:19:02 That they show up in the revenue line.

1:19:07 Yeah. So we have enterprise-wide pricing.

1:19:12 So we're not priced on a per seat basis or a per token.

1:19:15 This is within legal or a per token usage. And so far, that's enabled us to maintain attractive margin profile for co-counsel legal, and we'll continue on that path. We want to keep it as simple as we possibly can.

1:19:30 I think the reference I made before was to, you know, in moving tabular analysis across, so a high token usage application across, where we've got a speed, an accuracy, and a cost advantage, that means we can stick with, in many cases, all you can need pricing, which is a very attractive proposition relative to some of the competitors.

1:19:54 As to whether there's upside for power and super users, we have not yet explored that, but certainly aligned with your earlier question around price to value, that's certainly something we're exploring.

1:20:12 Thank you. I think that gets us to the end of the queue. Thanks, everybody. We're around if you have any follow-ups. We'll end it there, Ruth. Thanks. Thank you. This concludes the questions and answers. I would like to turn the call back over to Gary for any closing remarks. That's it. Have a nice day. Thanks, Ruth. Bye-bye. Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.