Relx H1 Earnings Call Highlights
Key Points
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- Relx delivered a strong first half, with underlying revenue up 7%, adjusted operating profit up 9%, and adjusted EPS rising 11% at constant currency. The company also raised its interim dividend 7% and completed most of its planned share buyback.
- AI-enabled products were a major growth driver across Risk, STM, and Legal, with management highlighting rising adoption of tools like LeapSpace and Lexis+ with Protégé. Relx said these platforms are helping shift the business toward higher-value analytics and decision tools.
- Full-year guidance remains positive, with the company expecting continued strong underlying revenue growth in Risk, STM and Legal, and strong growth in Exhibitions aside from uncertainty tied to Middle East events. Management also said profit growth should continue to outpace revenue growth in several divisions.
Relx (NYSE:Relx) reported stronger first-half results, with management pointing to broad-based growth across its four divisions and continued momentum from AI-enabled analytics and decision tools.
Chief Executive Erik Engstrom said underlying revenue grew 7% in the first half, while underlying adjusted operating profit rose 9%. Adjusted earnings per share increased 11% at constant currency. Engstrom said all four business areas “continued to perform well,” with Risk maintaining strong growth, STM stepping up to strong growth, Legal posting a further acceleration, and Exhibitions continuing to grow despite some event-related disruption.
Chief Financial Officer Nick Luff said the group’s adjusted operating margin improved by 70 basis points to 35.5%. Cash conversion was 98%, and leverage stood at 2.3 times net debt to EBITDA at the end of June. Relx increased its interim dividend by 7% to GBP 0.209 per share.
Luff said the company spent GBP 103 million on two acquisitions in the first half and completed GBP 1.75 billion of its planned GBP 2.25 billion share buyback program for the year. Total free cash flow was more than GBP 1.1 billion, while net debt stood at GBP 8.7 billion at the end of June.
Risk, STM and Legal Drive Profit Growth Ahead of Revenue
Engstrom said the Risk division delivered 8% underlying revenue growth and 10% underlying adjusted operating profit growth. He attributed the performance to “deeply embedded AI-enabled analytics and decision tools,” supported by contributory and proprietary data sets. More than 90% of Risk revenue comes from machine-to-machine interactions, he said.
Within Risk, Business Services, which accounts for more than 40% of divisional revenue, continued to benefit from demand for financial crime compliance and digital fraud and identity solutions. Insurance, also around 40% of divisional revenue, saw growth from broader adoption of contributory databases and market-specific solutions.
STM revenue rose 6% on an underlying basis, while underlying adjusted operating profit increased 8%. Engstrom said growth was supported by a shift toward higher-growth, higher-value analytics and decision tools, as well as new product introductions. He cited continued rollout and usage growth of AI-enabled tools, including LeapSpace, which he described as a “research-grade AI workspace” that has been positively received by customers.
In primary research, Relx said article submissions grew more than 20% in the first half, while the number of articles published increased 7%, in line with the company’s long-term average. In response to an analyst question, Engstrom said submissions may moderate over time to low double-digit growth, but he expects strong volume growth to continue for years. He said Relx is becoming “more selective” in what it publishes as part of its quality positioning.
Legal posted 10% underlying revenue growth and 13% underlying adjusted operating profit growth. Engstrom said double-digit growth in law firms and corporate legal, which represent about 70% of divisional revenue, was driven by adoption of Lexis+ with Protégé, the company’s AI-enabled legal platform with an integrated agentic assistant.
AI Tools Remain Central to Strategy
Management repeatedly pointed to AI-enabled products as a key driver of Relx’s improving growth profile. Engstrom said the company’s strategic direction is unchanged, with long-term growth supported by a business mix shift toward analytics and decision tools. He said the evolution of artificial intelligence is enabling Relx to add more value for customers and launch products faster.
On LeapSpace, Engstrom said it should be viewed both as an evolution of ScienceDirect AI and as a product with substantial new functionality. He said customer feedback has been “very, very positive,” with users citing time savings and support for critical thinking. Active users nearly doubled over a 90-day period from March to June, he said, while usage grew faster than the user base.
In Legal, Engstrom said new sales are now “pretty much” 90% from the AI-enabled platform, while roughly three-quarters of renewal value is coming from Lexis+ with Protégé. He said the initial move to the AI-enabled platform is a starting point for future growth rather than the endpoint. Luff cited the integration of Lex Machina into Lexis+ Protégé as an example of additional functionality being added to the platform.
Luff said token costs associated with AI usage remain less than 1% of the company’s overall cost base. He said Relx sees managing token costs effectively for customers as a competitive advantage, supported by how the company configures its technology and pre-processes underlying content.
Exhibitions Growth Moderated by Timing and Travel Disruption
Exhibitions delivered 6% underlying revenue growth, while underlying adjusted operating profit increased 2%. Engstrom said the division’s performance reflected strong ongoing growth in the event portfolio, partly offset by travel disruption, event cycling, timing and the rescheduling of some events to the second half.
Luff said events still to run in the Middle East represent about 3% of divisional revenue, or less than 0.5% of group revenue. He said Relx is still planning to run most of those events but acknowledged uncertainty around their performance. He also said travel disruption affected participation from or through the Middle East at events outside the region.
Management Reiterates Full-Year Growth Expectations
For the full year, Relx said it expects continued strong underlying revenue growth in Risk, STM and Legal, with underlying adjusted operating profit growth exceeding underlying revenue growth in each of those divisions. For Exhibitions, excluding uncertainty around remaining Middle East events, the company continues to expect strong underlying revenue growth and an improvement in adjusted operating margin over the prior full year.
Luff said Relx continues to target cost growth below revenue growth across its businesses. He said the gap between revenue growth and profit growth has widened in recent years, helped by revenue acceleration and internal use of generative AI to improve efficiency.
Engstrom said Relx’s objectives remain to sustain strong long-term growth in Risk, continue improving growth trajectories in STM and Legal, and sustain strong long-term growth in Exhibitions. He said the combination of business mix changes and process innovation should support strong earnings growth and improving returns.
About Relx (NYSE:Relx)
RELX plc is a global provider of information, analytics and decision tools for professional and business customers. The company supplies content, data and analytical services that support decision-making across scientific, technical and medical research, legal and regulatory practice, and risk and business analytics. RELX's offerings are largely delivered via digital platforms and subscription services designed for institutions, corporations and professionals who require specialized, high-value information and workflow solutions.
RELX operates through distinct business lines that include Elsevier, which provides scientific, technical and medical journals, books and online platforms such as research and discovery tools; Legal and Professional services, which deliver legal, regulatory and compliance content and workflow solutions; Risk Business Analytics, which offers data, analytics and decision tools for insurance, banking, corporate and government risk assessment; and Exhibitions, which organizes industry trade shows and events.
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