Operator: Good morning, and welcome to the RELX trading update. I will now hand over to CFO, Nick Luff. Please go ahead.
Nick Luff: Morning, everyone. Thanks for joining us today. As you may have seen from our press release this morning, we delivered strong underlying revenue growth of 7% in the first 9 months, and we continue to see positive momentum across the group. Our improving long-term growth trajectory continues to be driven by the ongoing shift in business mix towards higher growth analytics and decision tools that deliver enhanced value to our customers. Turning to the performance of each business area. In Risk, which contributes about 40% of the group's profit, underlying revenue growth was 8% in line with the H1. Growth continues to be driven by our deeply embedded AI-enabled analytics and decision tools, with over 90% of revenue derived from machine-to-machine interactions. Business Services continues to be driven by financial crime compliance and digital fraud and identity solutions, and strong new sales.
Nick Luff: Insurance continues to be driven by the further innovation and adoption of contributor databases and market-specific solutions, and strong new sales. In STM, which contributes about a third of the group's profit, underlying revenue growth was 6%, in line with the H1 and a step-up from last year as we continue on the improving long-term growth trajectory. Databases, tools, and electronic reference continues to be driven by the rollout and adoption of our AI-enabled solutions, built on industry-leading trusted content. LeapSpace, our recently launched research-grade AI workspace, is receiving very positive customer feedback and is seeing rapid usage growth. Primary research continues to be driven by volume growth, with article submissions continuing to grow very strongly by over 20% year-to-date. You will hear more about the growth opportunity at STM at our investor seminar on 03 November.
Nick Luff: In Legal, which contributes up to 11% of the group's profit, underlying revenue growth was 10%, in line with the H1 and a step-up from last year. Law firms and corporate legal, with double-digit growth, continues to be driven by the adoption of our integrated AI-enabled legal research and analytics platform, with its comprehensive, verified trusted content and continuously expanding agentic capabilities. In Exhibitions, which also contributes up to 11% of the group's profit, underlying revenue growth was 4%. Strong ongoing growth was moderated by the impact of Middle East disruption of around 3 percentage points. We continue to make good progress on value-enhancing digital initiatives for our customers. To summarize, we delivered strong underlying revenue growth in the first 9 months. The full-year outlook is unchanged.
Nick Luff: We expect another year of strong underlying growth in revenue and adjusted operating profit, as well as strong growth in adjusted earnings per share on a constant currency basis. With that, we are ready for questions.
Operator: Thank you. We will now begin the question-and-answer session. To ask a question, please press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. Your first question comes from George Webb with Morgan Stanley. Please go ahead.
George Webb: Yeah. Hi, Nick. Morning. Just a few from my side.
Nick Luff: Morning.
George Webb: Firstly, just on STM. Just with STM, with LeapSpace maybe to start with. You kind of highlight the rapid usage growth in today's statement. How should we be thinking about the kind of usage versus monetization at this stage, just in terms of how you are going to market? I guess you are trying to put these tools into as many people's hands as you can to a certain extent. Just talking about those two things would be great as the first question.
Nick Luff: Sure.
George Webb: Second question is just confirmation. Can you just confirm that the law firms and corporate legal segment of Legal continues to run at a double-digit growth rate at the 9-month stage year-over-year? The third one, just on Exhibitions. When we think about the Q4 and the full year in particular, what are the different factors in there? Maybe just also confirm that the rest of the portfolio is running maybe at the 7% to 8%-ish levels that you have previously discussed. Thank you.
Nick Luff: Yeah. Just take those in order, George. LeapSpace, yeah, as you say, I think it has been going very well. The product has been very well received. The feedback we are getting from customers has been very good, getting very high satisfaction. The researchers like the outcomes they are getting. It is giving them good efficiency, saving time. I think they really value the trust that they can place in what they get from the platform. So that is terrific. I think on usage growth at the H1, we talked about the number of users doubling in the 90-day period from March to June. If anything, we are going a little bit faster than that since then. So that is why we talk about the rapid usage growth. To your question, obviously at this stage, our focus is primarily on user growth and usage adoption, usage growth, adoption, et cetera.
Nick Luff: As a result of that, the impact on revenue is not material at this stage, but I think we are pretty excited about the longer-term opportunity. I am sure you will be at the STM seminar in a couple of weeks' time, and we will tell you more about LeapSpace at that event. Your second question was on law firms and corporate legal, and I did, I think, include in my opening remarks, but just to reiterate it is continuing to grow at double digits. It is 70% of the division. It is growing a little bit faster than the division and the division as a whole, of course, is at double digits. So yeah, continuing double digits. Exhibitions. Yeah, look, Exhibitions has just established itself as a high-growth business in the last few years, with ongoing revenue growth in the sort of 7% to 8% range.
Nick Luff: If you look at the portfolio, excluding the impact of the Middle East, that very much continues to be the case. Obviously, there has been that impact both from events in the region and a little bit of effect on, and we talked about this in the H1 a little bit, from the travel disruption, including Middle East exhibitors coming to travel, particularly travel sector-related events, right through to the Q4. So I think the impact we expect for the full year will be similar to what we have seen for the year to date. But underlying it, as you say, I think your question goes to the rest of the portfolio, continuing to show good ongoing growth.
George Webb: Yeah, that is great. Thank you. Thank you, Nick. Maybe just one last one just on Exhibitions. Arabian Travel Market being one of those ones which I guess is quite important in the mix that maybe weighed down on that Q3 result. It looks like that is set to return next May. On one hand, I am kind of thinking that the base comp, so to speak, as long as it can run, is potentially soft. But wondering how you are kind of thinking about rebooking rates or anything like that.
Nick Luff: I think there is two elements going on there. Look, the key point is the one you asked about. It is the strong ongoing growth in the portfolio is what matters, and one individual event tends not to be that material. But the key is the strong ongoing growth of the portfolio as a whole.
George Webb: Got it. Cool. Thank you, Nick.
Operator: Thank you. Your next question comes from Nick Dempsey with Barclays. Please go ahead.
Nick Dempsey: Yeah, good morning, Nick. I have got a bit of a dodgy voice. I apologize if it is slightly harder to hear me than normal. But just three from me.
Nick Luff: It is all right. It is that time of year.
Nick Dempsey: First of all, in terms of the shift of Legal customers to Lexis+ with Protégé from the Lexis+ platform, can you maybe give us an update on how far through that transition is and whether that continues to run a bit faster than you saw with previous platform upgrades? I guess what I am getting at is when we kind of run out of that upgrade movement. Second question, as you look at the STM renewal environment into next year for journal subscriptions, is there anything unusual that you are seeing or should we expect a pretty typical year there? And then last question, there has been an allegation of bribery from a Chinese academic against one of your Cell editors-in-chief at Cell Cancer editor-in-chief. I do not know if there is anything you can say about the investigation there and what you are doing to kind of look into any corruption allegations.
Nick Luff: Yeah, let me take each. The first one on Lexis+ with Protégé and adoption, it has very much continued on the same trend, the same curve that we talked about earlier in the year. I think we have gone over 50% adoption in the US market and a little bit less than that in the rest of the world with later launches. But that trend has very much continued, and continues to be the case that the vast majority of new sales and the big majority of renewals are onto the Lexis+ with Protégé platform. That, of course, is just a starting point. The people adopting the analytics, using them, gives us the opportunity to keep adding more value, and the functionality and capabilities of the platform keep improving. I think your second question was on STM, and I think you were simply asking about the outlook for next year.
Nick Luff: The trends in science are very strong, and you could see it in the submissions volumes that we are receiving, which obviously is the key growth driver for the primary research side of STM. We are, I think, seeing AI accelerate the pace of scientific discovery. It is accelerating the speed at which people are able to submit. And those strong trends mean that that is coming through in the volumes of submissions we are getting. We, of course, are becoming increasingly selective, and the rate at which we are publishing is not going up as fast as the submissions, and that is a deliberate choice as we maintain and enhance the quality of our journal portfolio. But the underlying drivers, the amount of research going on in the world, the amount of speed of submission, et cetera, are very strong and I do not see anything that looks like it will change that.
Nick Luff: Your last question was about publishing ethics and research integrity. Obviously, that is absolutely crucial to the whole scientific publication process, and Elsevier's quality and reputation, and the reputation of its journal is absolutely key. We are committed to the highest standards of publishing ethics, and we have got well-established procedures to make sure we maintain the quality and the integrity. And of course, concerns around research integrity is one of the reasons authors can choose established, trusted brands that have got the track record, which of course, are the ones that we have. And of course, no process is perfect. If there are concerns raised, we will investigate them. I will not comment on any individual case, of course, but we would investigate anything. And I would just reiterate that our retraction rate is incredibly low, a fraction of 1%.
Nick Luff: The process is robust, and I think people have confidence in the quality of what we publish.
Nick Dempsey: Thanks, Nick.
Nick Luff: Okay. Thanks, Nick.
Operator: Thank you. Your next question comes from Steve Liechti with Deutsche Numis. Please go ahead.
Steve Liechti: Yeah. Morning. I've got a few. On academic, just taking a very strategic non-specific view, do you see any merit in adding to or doing M&A in your primary research side? Your M&A historically has been much more skewed towards technology and tools. Is there a scale argument? That's the first question. Second question is, can you just a couple of numbers on submissions? Are you able to give us an OA submissions number on the 9 months? Also just confirm, I think you were articles published 7% for the H1. Is that a similar figure for the 9 months? Then the final one, just a general one actually, just on virtual AI assistants, Muse and stuff like that. I'm trying to figure out what that means for you.
Steve Liechti: I can see a positive argument in that more AI-led virtual assistants, more activity in digital, more need for verification. On the other hand, would an AI virtual assistant be verified and therefore less work for you to do? Any color there. Thanks.
Nick Luff: Yeah. I'll take those in order, Steve. The first one was the M&A in STM. As with all our business, of course, our focus primarily is on organic development. You've seen the volume growth that we're getting, so there's plenty of drivers of the growth organically. That includes, of course, launching new journals. We launch dozens of new journals every year, as we filling gaps in the portfolio, expanding to new disciplines and expanding disciplines. Launched a few OA journals in particular. Of course, we've already got the scale, the number one scientific publisher in the world has already got the scale, which gives us the resources to put behind that business, invest in the technology, make sure we've got the scale to the tools using AI, of course, to support the whole publication process.
Nick Luff: We'll tell you more about that at the STM seminar in a couple of weeks' time. As elsewhere in the group, we'd always look at acquisitions as a way of enhancing, accelerating what we do. We do occasionally buy specific journals or small groups of journals that fit into the portfolio. But the primary focus is on the organic development. Your second question's about open access submissions and so on. They are open access volumes, on an author-paid basis. Those are both submissions and publication volumes are higher than the overall average. That continues to be the case. There's been no change in that trend. Both are growing, both pay to read and pay to publish, just pay to publish growing faster, which is what's shifting the mix. The overall published volumes, as you mentioned, I think we said 7% growth at the H1.
Nick Luff: There's been no change in that sort of pace. Maybe a point either way, but no significant change in the pace at which we're publishing. Your third question was on agents and the like by consumers. I think it's fair to say that we're still at the early stages of our customers, the banks and the retailers and other customers of ours. I think early stages of them interacting with agents that are acting on behalf of consumers. We're already helping them detect agentic activity and helping them adjust their risk controls so we can help our customer identify when an AI agent is involved, how it's behaving, how it relates to the consumer that's behind the agent, and incorporate those insights into the risk decisions. Effectively whether to trust the transaction, or whether to require more authentication.
Nick Luff: But I think it's fair to say that it's still pretty early days. What I would say is that agents, of course, the use of agents just creates more complexity. Potentially higher interaction volumes. We'll see. But that overall complexity and potentially higher volumes does give us the opportunity to find new ways to add value for the customers.
Steve Liechti: Great. Thank you.
Nick Luff: Thanks, Steve.
Operator: Thank you. Next question comes from Kieran Dunleavy with Citi. Please go ahead.
Kieran Dunleavy: Yeah, thanks, Nick. One last from me, just on Legal and the competitive space. One of your peers has been increasingly talking about developing capabilities in the legal research space. I think, one, could you just outline whether you have seen any change in competitive dynamics within that market? And two, just remind us about the difficulty of replicability of the Lexis solution database. Thanks.
Nick Luff: Well, clearly, as you know, our whole strategy across the group, including Legal, does start with our differentiated comprehensive content. It is verified, trusted, continuously updated. Then how we leverage the domain expertise we have to combine that content with the analytics and the functionality and the tools. The content set in Legal consists of billions of documents. We have shown you some of this in some of our seminars, but billions of documents which we have collected and curated over decades. It is continuously updated from over 3,000 courts and tens of thousands of other sources. Within the content set, there is something like 170 billion linkages and connections that are obviously critical to be able to utilize it in the whole content set in an effective way.
Nick Luff: We enrich through editorial metadata enhancements, use of technology, use of the over 5,000 leading practitioners and subject matter experts in the law. That is what makes the content set so powerful and so important in the legal research space. Of course, it is possible for others to access specific content sets. For example, US case law that is currently available publicly. Several players have had that and been collecting that for many years. That is only a small part of what we do, and for high-value legal research where you need to be very confident that you are making the right arguments, the best arguments, that everything you are citing is up to date, has not been overturned, and you are going into the high value, high stakes, going into court tomorrow, you need that vast, trusted, curated content set that we have.
Kieran Dunleavy: On any change in competitive dynamics in that space specifically?
Nick Luff: All I can comment on is how our business is doing. You have seen the continued growth rate in our Legal business with its overall double-digit growth. Customers overwhelmingly continue to choose our integrated AI platform. You can see that in the new sales, which I mentioned earlier, in the renewals. That is where they are seeing value. That is what we see in the marketplace.
Kieran Dunleavy: Great. Thanks.
Operator: Thank you. Your next question comes from Will Packer with BNP Paribas. Please go ahead.
Will Packer: Hi there.
Nick Luff: Morning, Will.
Will Packer: Thanks for taking my question. Morning. We are seeing a rapidly evolving legal workflow market with Astra for Law from OpenAI, Gemini for Legal from Google, Claude Legal, et cetera, as well as the developments at Harvey and Legora. We are seeing quite different strategies from the Clio, the Westlaw, the LexisNexises, in terms of integrating their research content into that orchestration layer. Lexis from the outside appears to be most cautious on integration in those third-party workflows. Could you help us think through the key strategic considerations as you develop your strategy on integrating with those new workflows, which one would imagine are getting more and more important? On first principles, it would feel that maximum integration would be the client's preference, but perhaps that is wrong. Any color there would be very helpful. Thank you.
Nick Luff: Yeah. Just to reiterate, obviously, our starting point in this is, as I just mentioned, and where our strategy is based in, is that trusted, differentiated, comprehensive content set that we were just talking about, and adding the functionality, the capabilities, and the tools, et cetera, around that. We do that on our own platform. We also do that through partnerships and integrations that we have with others. We have talked about this in the past with something like 25 different partnerships and integrations. They include things like Microsoft, of course, where a lot of lawyers work in Microsoft. We have announced new ones in there just in the last quarter. Of course, we utilize, as you know from previous presentations, how we utilize all the different large language models. I have a deliberate technology agnostic multi-model approach to make sure we are using the right ones.
Nick Luff: Our objective is to provide the functionality and interoperability that our customers find valuable. We always evaluate every new tool that comes out, every new piece of functionality, and assess whether the best thing and the best way to utilize that and provide value to customers in the context of what we do for them, whether it is to replicate that functionality, whether it is to build it in, into our platform or whether to enable that interoperability between products. Our focus tends to be on the substance, on exactly that. What value can we add to the customers, taking feedback from the customers? We will continue to take that approach and building the interoperability and the integrations that we think our customers will find most valuable.
Will Packer: So it sounds like your approach is more pragmatic and agile. Would be a fair characterization?
Nick Luff: Yeah. You might have seen just this quarter we announced the setting up of our innovation lab, which is an environment where we are bringing legal professionals from law firms, from corporate to work directly with LexisNexis product developers, LexisNexis engineers, taking their feedback real time and working on things that they, problem areas or opportunities for efficiency that they are feeding back to us and looking at how they work, in practice. So it is not about press releases and announcements, it is about real practical tools and functionality, and that interoperability that the actual end users find valuable.
Will Packer: Thanks for the color.
Operator: Thank you. Your next question comes from Natal Puchia with TD Cowen. Please go ahead.
Natal Puchia: Hi there. Good morning. Thanks for taking my question.
Natal Puchia: Legal has continued to grow well above its historical rate as AI-enabled products have scaled. Maybe could you just help us understand qualitatively how much of the incremental growth today is being driven by AI-enabled products and higher customer value versus the underlying core research business? Perhaps, briefly on STM. I do not want to steal any of your thunder from the upcoming seminar, but
Natal Puchia: I know monetization perhaps is a bit of a longer path, but do the value from these AI tools, you believe they will show up principally through higher ARPU within existing customers or, I suppose through the expansion of the addressable market? Thank you.
Nick Luff: Yeah. On your first question about the revenue and how much from AI enabled. I mean, of course, it is very hard to separate it because this is absolutely integrated into the platform, the core flagship platform in Legal. Lexis+ with Protégé, of course, is fundamentally built on the legal research platform and then adding the agentic capabilities and the functionality on top of that. I think, as I mentioned earlier, the vast majority of new sales and comfortable majority of renewals are onto that platform. As we have discussed in the past, there is an uplift in spend when someone moves to that platform compared to the older platform. So obviously that is an important component of the overall growth and the acceleration of the growth we have seen in recent years. But I cannot separate it out in the sense of perhaps that you are looking for.
Nick Luff: It is just overall value and overall revenue growth being driven by the provision of that value. Your other question about STM, as you say, I will not steal Kunal’s thunder for 2 weeks. It is less than 2 weeks away till the STM seminar. I should talk a bit more about this there. I think it is true that with STM having a more diverse product suite with a broader range of use cases, a broader range of customers, some of those customers do have a longer decision-making cycle. Obviously it is a large subscription-based business too. Changes and the benefits of adoption of new tools comes through gradually into growth rates over time. That is fine. We do see significant opportunity of the application of generative AI and other new technologies in the scientific and healthcare space.
Nick Luff: And specifically in relation to what we do, we think that creates more value, significantly more value for customers who utilize our products as we build that functionality and capability in. And, overall over time, that value is reflected in our revenues. That is what is the key growth driver. As you say, we will talk about that more at the seminar.
Natal Puchia: That is great. Thank you.
Operator: Thank you. Your next question. Pardon me. If you wish to ask a question, please press star then one on your telephone keypad. We will now pause for a moment to allow for any further questions to register. Once again, that is star one. Your next question comes from Adam Berlin with Goldman Sachs. Please go ahead.
Adam Berlin: Hi. Good morning, Nick.
Nick Luff: Hi.
Adam Berlin: Two from me, please.
Nick Luff: Adam. Yeah.
Adam Berlin: The first question. Can you hear me, Nick? The first question, following up.
Nick Luff: Yeah.
Adam Berlin: On what was the discussion around Muse earlier. You said it was a bit early, but one obvious application would be people using Muse to search car insurance quotes to see if they can search maybe 20, 30 car insurers rather than just one or two online. Have you seen any impact there from people using that application yet? Because that might be something you have seen in the couple of months since Muse has gone live. That is the first question. The second question is, when you say that Protégé platform has got over 50% penetration, do you mean that the number of law firms is more than 50%, or the number of users is more than 50%? Thanks.
Nick Luff: Yeah. On your first question about insurance volumes, I think it is fair to say as of yet, there is no noticeable. Bear in mind, the numbers are vast. We are potential all US consumers, all US car owners and drivers. The number who might be using an agent to do shopping for them does remain a small fraction of that. So at this stage, as you rightly say, Adam, clearly there is potential for higher volumes of activity. The overall insurance market activity hasn't particularly changed. It remains elevated as the market, we have seen higher volumes in the last couple of years. It continues at higher levels. We will see where it goes from here. Just to reiterate, of course, the key driver for us is the innovation.
Nick Luff: Not necessarily the volumes themselves will vary over time, but it is actually for us, it is about the innovation, new functionality, new products, potentially based around and related to the use of agentic consumers using agents. We will see how that evolves. Your second question was about Lexis+ with Protégé. When we talk about the base and being over half now in the US on the new platform, Lexis+ Protégé, we are just weighting that by revenue, the revenue mix of the overall business.
Adam Berlin: Okay. Thanks, Nick.
Operator: Thank you. Your next question comes from Henry Hayden with Rothschild & Co. Please go ahead.
Henry Hayden: Yeah. Morning, Nick. Thanks for taking our questions. There is some new language in the release around LeapSpace, which seems from our end to be a very positive development. We were wondering if you could share some thoughts around the risk of that solution cannibalizing Scopus AI and ScienceDirect AI, given the overlaps in functionality. Secondly, strong new sales in fraud ID, again. We were hoping you could give us an update on the state of under-penetration in that market, given that this has been a recurring piece of language, particularly against the accelerating backdrop of agentic fraud. In other words, is the market growing faster than it can be sold into? Then finally, we were hoping for an update on the difficult comps in all those transactional volumes.
Henry Hayden: Are you seeing those already come through against that 8% growth figure, and how should we think about that trajectory into next year? Thank you.
Nick Luff: Yes. Sorry, Henry, I did not quite catch your second question. What was the topic?
Henry Hayden: On the state of under-penetration.
Nick Luff: Oh, the second question.
Henry Hayden: in fraud ID. Is the market growing faster than you can some of the new solutions into it?
Nick Luff: Yeah. Got you. Your first question about LeapSpace and Scopus and ScienceDirect AI. I will slightly defer to the STM seminar in a couple of weeks' time. Scopus serves a different use case, and it does slightly different things, and we can talk a bit more about that at the seminar. That continues to go well as a product. It is on similar trends to what we saw earlier in the year. On ScienceDirect AI, that product has effectively been wrapped up into LeapSpace. LeapSpace is a successor product to ScienceDirect AI. So users and customers who had bought ScienceDirect AI have been migrated to LeapSpace. That is the next generation with all the additional functionality and things that come with that. Again, we will talk about that at the seminar.
Nick Luff: On fraud and identity, obviously, that is the Business Services of which the fraud and identity is just over a third of that in terms of that segment within Risk. Alongside financial crime compliance being the other big part of it, of that particular segment. It has been an important growth area for a number of years, continues to be. It is where we are seeing lots of opportunity to continue to innovate, continue to bring new features, new functionality. It is where we have moved from identity being about the person and the individual to still being about that, of course, but also being about the device that they are using.
Nick Luff: Also about how they use that device, so-called behavioral biometrics, document authentication, which is related to that. We talked in the seminar on Business Services back in May about IDVerse, which was a functionality that we got through an acquisition that we have integrated into the platform. So continuing to see lots of opportunity, of course, with gen AI being used by the bad guys, as it were, that does create new challenges for our customers, when you get synthetic IDs and deepfakes and so on. Therefore, the importance of what we do becomes all the greater. We continue to see strong demand for the FNI products, Fraud and Identity products, with expanding use cases and us adding new functionality as we help customers combat those emerging threats. Your last question was on auto insurance volumes.
Nick Luff: I think, again, I would reiterate that the key growth driver in Risk as a whole and insurance is the innovation. It is coming from the introduction and rollout of new products and new features. That continues at pace, and that is what is really driving the consistent high single-digit growth that you are seeing in Risk. Of course, we do have some volumetric pricing, particularly in insurance. So the volumes that go to the platform are relevant to us. But they tend to even out across the different segments. Insurance volumes do remain high. Shopping and switching activity, they grew quite strongly over the last couple of years. So we are not seeing quite the same growth that we had seen, but they do remain high.
Nick Luff: But if you combine that with what we are seeing in the Business Services and look at Risk as a whole, the different range of factors that influence the transaction volumes, they do typically balance out over time, and that is why you have seen the consistency in the overall growth rate, driven primarily by that innovation.
Henry Hayden: Very helpful. Thank you.
Operator: Thank you. This concludes our question and answer session. I would now like to turn the conference back over to Nick Luff for any closing remarks.
Nick Luff: Okay. Thank you everyone for joining today, and thank you for your questions. If I haven't mentioned it enough times already, we have a seminar on STM in a couple of weeks' time, which we'll see you at that. Thank you.
