RELX PLC (RELX) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary highlights strong product development, strategic market positioning, and positive financial outlooks, such as expanding profit margins and increased buybacks. The Q&A section reveals optimism about new sales and market opportunities, despite some vague responses. Overall, the company's strategic initiatives and financial health suggest a positive sentiment, likely leading to a stock price increase.
Key Financial Performance
Underlying revenue growth 7%, with reasons including strong performance across all business areas and strategic focus on higher growth analytics and decision tools.
Underlying adjusted operating profit growth 9%, exceeding revenue growth due to cost management and operational efficiencies.
Adjusted earnings per share growth 10% at constant currency, driven by strong operating results and cost management.
Risk - Underlying revenue growth 8%, driven by AI-enabled analytics and decision tools, with 90% of revenue from machine-to-machine interactions.
Risk - Underlying adjusted operating profit growth 10%, exceeding revenue growth due to operational efficiencies and product innovation.
STM - Underlying revenue growth 5%, supported by higher growth analytics, new product introductions, and strong sales.
STM - Underlying adjusted operating profit growth 7%, exceeding revenue growth due to business mix evolution and operational efficiencies.
Legal - Underlying revenue growth 9%, driven by adoption of AI-enabled legal platforms and tools.
Legal - Underlying adjusted operating profit growth 12%, exceeding revenue growth due to product innovation and deeper integration of legal content.
Exhibitions - Underlying revenue growth 8%, reflecting improved event portfolio growth and digital initiatives.
Exhibitions - Underlying adjusted operating profit growth 9%, exceeding revenue growth with significant margin improvements.
Adjusted operating margin Improved by 0.9 percentage points to 34.8%, driven by profit growth ahead of revenue growth.
Cash conversion 99%, indicating strong cash flow management.
Acquisition spend GBP 270 million, including the acquisition of IDVerse for business services in Risk.
Share buyback GBP 1.5 billion completed, contributing to a lower share count and higher earnings per share.
Dividend increase 7% to 67.5p per share, reflecting strong financial performance.
Net debt to EBITDA ratio 2.0x, at the lower end of the typical range, indicating strong financial health.
Total revenue growth at constant currency 4%, impacted by portfolio effects and reduction in print-related activities.
Total adjusted operating profit growth at constant currency 7%, driven by operational efficiencies and cost management.
Free cash flow Over GBP 2.3 billion, supported by strong EBITDA and disciplined capital expenditure.
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Operating Highlights
AI-enabled analytics and decision tools: Strong growth driven by development and rollout, with over 90% of divisional revenue from machine-to-machine interactions.
Advanced authentication and behavioral intelligence: Expansion in Business Services with strong new sales and integration of advanced solutions.
Contributory databases and market-specific solutions: Innovation and adoption in Insurance driving strong growth.
Higher value analytics and decision tools: Momentum in STM driven by new product introductions and strong new sales.
AI-enabled legal platform and tools: Double-digit growth in Legal driven by adoption of Lexis+ AI and Protege, with ongoing releases of new functionality.
Global fraud infrastructure: Expansion in Business Services to enhance digital fraud and identity solutions.
Insurance continuum and lines: Product expansion across insurance sectors with added data sources and analytics.
Event portfolio and digital initiatives: Improved growth profile in Exhibitions with value-enhancing digital initiatives.
Cost management: Cost growth managed below revenue growth in all business areas, leading to margin improvements.
Cash conversion: Strong at 99%, supporting acquisitions and share buybacks.
Reduction in print-related activities: Proactive steps leading to over 20% reduction in associated revenue.
Shift towards analytics and decision tools: Ongoing strategic focus on higher growth areas supported by AI evolution.
Selective acquisitions: Acquisition of IDVerse to enhance ID document verification in Risk.
Capital allocation priorities: Focus on organic development, selective acquisitions, dividends, and share buybacks.
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Risk or Challenges
Print and Print-Related Activities: The company is proactively reducing its involvement in print-related activities, resulting in a revenue decline of over 20% in this segment. This ongoing reduction could continue to impact overall revenue and profit from print-related activities, which are expected to decline in the high single digits annually.
Currency Exchange Impact: The relative strength of the pound against the dollar negatively impacted total revenue growth, which was 2% in sterling compared to 4% at constant currency.
Portfolio Effects and Cycling in Exhibitions: Portfolio effects and cycling in Exhibitions created a slight drag on total adjusted operating profit growth, with 2025 being a cycling out year.
Decline in Print Profit Contribution: The profit contribution from print and print-related activities is declining, albeit at a slower rate than revenue, and is expected to continue declining in the high single digits annually.
Leverage and Debt Management: Year-end net debt was GBP 7.2 billion, with leverage at 2.0x. While this is at the lower end of the typical range, it still represents a significant financial obligation.
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Guidance & Outlook
Risk Division: Continued strong underlying revenue growth with underlying adjusted operating profit growth exceeding underlying revenue growth.
Business Services: Expansion of differentiated data set, global fraud infrastructure, and deeper integration of advanced authentication and behavioral intelligence.
Insurance: Continued strong growth driven by innovation, adoption of contributory databases, and market-specific solutions. Expansion of products across the insurance continuum and lines, with added data sources and analytics.
STM Division: Good to strong underlying revenue growth with underlying adjusted operating profit growth exceeding underlying revenue growth. Growth driven by higher value analytics, tools, and new product introductions.
Legal Division: Continued strong underlying revenue growth with underlying adjusted operating profit growth exceeding underlying revenue growth. Growth driven by adoption of AI-enabled legal platforms and integrated tools like Lexis+ AI and Protege.
Exhibitions: Continued strong underlying revenue growth with improvement in adjusted operating margin over the prior full year.
Overall Strategic Direction: Focus on higher growth analytics and decision tools, supported by advancements in artificial intelligence. Faster product development and launches. Revenue growth objectives include sustaining strong long-term growth in Risk and Exhibitions, and improving growth trajectories in STM and Legal.
Print and Print-Related Activities: Profit from print and print-related activities expected to decline in high single digits annually, in line with historical trends.
Capital Deployment: GBP 2.25 billion share buyback announced for 2026, with GBP 250 million already deployed. Organic development remains the top priority, with CapEx consistently around 5% of revenues.
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Shareholder Return Plan
Dividend increase: Proposing an increase in the full year dividend of 7% to 67.5p per share.
Dividend payout policy: Pay out around half of adjusted earnings in dividends and have increased the dividend every year for well over a decade.
Share buyback completion: Completed GBP 1.5 billion of share buybacks in 2025.
Share buyback plan for 2026: Announced GBP 2.25 billion of share buybacks for 2026, with GBP 250 million already deployed.
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Key Q&A
Q:What is the impact of AI-enabled workflow tools on the Legal segment, and are there any concerns about potential deceleration in the Legal business?
A:Management sees AI-enabled tools as adding value and enabling growth. The adoption and usage of Lexis+ AI have increased significantly, with the enterprise-wide subscription customer base more than doubling in the past year and usage growing even faster. Management emphasized their strategy of combining trusted, curated content with advanced AI tools to deliver value. They also highlighted their partnerships with large language model providers and their ability to integrate or remain interoperable with other workflow tools.
Q:What are the growth considerations for STM in 2026, given the U.S. funding environment and open access growth?
A:Management noted strong growth in submissions (over 20%) and published articles (over 10%) last year, with continued momentum this year. They emphasized the global nature of science, increasing numbers of researchers, and the growing information intensity of science as drivers of demand for primary research publishing.
Q:What differentiates Protege AI workflows from competitors in the AI workflow market?
A:Protege AI workflows are content-enabled, leveraging trusted, curated content as a key differentiator. Management highlighted their scale, customer understanding, and ability to update and improve answers based on usage data. They also noted the development of nearly 300 specific workflow tools, with the capability to launch 2-3 new workflows daily.
Q:What is the company's exposure to the auto insurance market as it shifts towards autonomous driving?
A:Management sees the evolution of the auto insurance market, including trends like autonomous driving, as an opportunity. They highlighted the increasing complexity and value at stake in the industry, which benefits from their sophisticated risk analysis combining data about drivers, vehicles, and driving behavior. They believe their capabilities position them well to add value in this evolving market.
Q:What is the impact of strong new sales in 2025 on growth in 2026 and beyond?
A:Strong new sales in 2025 are expected to have a modest effect on 2026 growth but are seen as an indicator of long-term growth momentum, supporting growth through 2027, 2028, and beyond.
Q:What is the addressable market for tools like LeapSpace in STM, and how is pricing structured?
A:The addressable market includes 10,000-15,000 institutions and over 10 million researchers globally. Pricing is based on the scale and research intensity of institutions, with plans to introduce individual researcher subscriptions. Management noted strong customer feedback on the value of LeapSpace but acknowledged that adoption in STM is gradual due to funding and decision cycles.
Q:How does the company plan to manage cost growth and margin expansion while delivering more compute-intensive AI capabilities?
A:Management plans to leverage new technologies to improve internal processes and maintain cost growth below revenue growth. They emphasized their ability to use these tools to enhance efficiency and deliver sophisticated capabilities while expanding profit margins.
Q:How does the company balance capital returns via buybacks with potential strategic acquisitions?
A:The company prioritizes organic development but remains open to acquisitions that enhance or accelerate their strategy. They have increased their buyback program to GBP 2.25 billion, reflecting their current low leverage, but are prepared to invest in larger acquisitions if opportunities arise.
Q:What is the mix of publicly available and proprietary data in the Legal segment, and how does it contribute to the competitive moat?
A:The Legal segment combines public records, licensed data, contributory databases, and proprietary content created internally. This comprehensive and continually updated content base, combined with proprietary algorithms and customer insights, creates a strong competitive advantage that is difficult to replicate.
Q:What are the dynamics behind the growth split in the Risk segment between base market growth and new product innovation?
A:The contribution from new products increased to 6% in 2025, compared to 5% in previous years, reflecting an accelerated pace of innovation. Management attributed this to the introduction of new functionality and data sources, which complement rather than replace existing products.
Q:What is the corporate opportunity in STM, and how does the company plan to address it?
A:The corporate market in STM is a small but growing segment. Management sees potential for growth as new tools add value and are tailored for corporate use. They noted faster uptake in the corporate market compared to academic markets for some tools, but overall growth is expected to be gradual.
Q:How does the company view the structural uplift in tech investment by law firms and the potential for product consolidation?
A:Management acknowledged the ongoing experimentation with new tools by law firms but emphasized their strong position in the consolidated legal research market. They see opportunities to expand into the broader legal tech market while maintaining their competitive advantage in content-enabled tools.
Q:What is driving strong new sales in the insurance segment of the Risk business?
A:Strong new sales are driven by innovation and the introduction of new data sources, such as electronic health records for life insurance and aerial imagery for property insurance. These new products add functionality and analytics that were not previously available, creating additional value for customers.
Q:Review of Unclear Management Responses
A:Management avoided directly addressing the specific growth rate for STM in 2026, providing only qualitative statements about improving momentum and positive outlook. They also did not provide detailed metrics on the impact of new sales in 2025 on future growth, instead offering general statements about long-term momentum.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Cash conversion
GBP share
Legal Exhibitions
Risk Legal
acquisition spend
adoption
analytics tool
basis point
cash flow
content
currency sterling
cycling
debt
detail
digit
disposal
dividend
dollar
evolution
fraud
improvement
insurance
intelligence
interest
leverage end
line
machine
margin
mix value
number article
percentage point
print activity
priority
product
share buyback
step
tax
use
RELX Transcript
RELX PLC (RELX) Q4 2025 Earnings Call Transcript
Positive2-12
The earnings call summary highlights strong product development, strategic market positioning, and positive financial outlooks, such as expanding profit margins and increased buybacks. The Q&A section reveals optimism about new sales and market opportunities, despite some vague responses. Overall, the company's strategic initiatives and financial health suggest a positive sentiment, likely leading to a stock price increase.
RELX PLC (RELX) Q2 2025 Earnings Call Transcript
Positive7-24
The earnings call reveals strong financial performance with 8% net profit growth, improved operating margins, and 100% cash conversion. The partnership with Harvey is strategically aligned, and AI product uptake is promising. The exhibitions segment shows sustained growth, and the company's leverage is well-managed. While guidance for some areas is conservative, overall sentiment is positive, supported by strategic initiatives and financial health.
RELX Plc (NYSE:RELX) Q4 2024 Earnings Call Transcript
Positive2-17
The earnings call summary indicates strong financial performance with 7% revenue growth and 10% operating profit growth. The company has improved its operating margin and reduced leverage, signaling financial health. The shareholder return plan is positive with increased buybacks and dividends. The Q&A highlights potential risks but shows management's confidence in growth areas like Exhibitions and new product launches. Despite some uncertainties in print and government funding, the overall sentiment remains positive, suggesting a stock price increase of 2% to 8%.
RELX PLC (RELX) Q3 2024 Sales/Trading Statement Call Transcript
Neutral10-24
RELX Slides
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Frequently Asked Questions
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Why do some answers appear as “Unclear” or “Inaudible”?
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They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
