Over the first nine months, underlying revenue rose 7%, with all business segments delivering growth. Legal and Risk led the way, up 10% and 8%, respectively.
Full-year guidance was re-affirmed, with the group continuing to expect another year of “strong” underlying growth in revenue and operating profit.
The shares were broadly flat in early trading.
Our view
RELX’s latest update offered more reassurance than surprises. Underlying revenue growth held at 7% over the first nine months, with Legal and scientific publishing maintaining their momentum and full-year guidance unchanged. AI-enabled products continue to support demand, adding weight to the argument that the technology is strengthening rather than undermining the business.
RELX provides mission-critical analytics to insurers, law firms and academic institutions. Its competitive advantage isn’t simply having information, but owning or controlling access to data that rivals cannot easily obtain. In Risk, customers contribute insurance claims and fraud information in exchange for insights from the wider network. An AI newcomer needs those contributors before it can offer a comparable service. Better technology alone doesn’t solve that problem.
Decades of collecting and linking records add another barrier. Even where information is public, recreating its historical depth and connections would be costly and time-consuming. That makes us less convinced by the prospect of wholesale disruption, although the protection varies across the group.
Legal remains central to the AI debate, making underlying growth of around 10% particularly encouraging. Adoption of its integrated AI research platform and strong new sales suggest customers continue to see value in the offering. RELX has spent years embedding AI into professional workflows, where trusted data and accuracy matter, giving it a stronger position than disruption fears might suggest.
Scientific, Technical & Medical maintained underlying growth of 6%. Its new AI research workspace is seeing rapid growth, while article submissions remain strong. Investors will still want evidence that new AI tools support sustainable revenue growth, but the direction of travel is encouraging.
The wider business remains relatively defensive. Much of RELX’s offering is essential rather than discretionary, while subscription-based revenue provides good visibility and stability. The Risk division continues to benefit from deeply embedded analytics and decision tools. Exhibitions add diversification, although disruption in the Middle East is holding back performance.
Cash generation remains a key strength, with a long history of generating high-quality profit. Margins are also improving, helping earnings grow faster than revenue. This allows RELX to balance ongoing investment with shareholder returns, including this year’s £2.25bn buyback programme. But debt has risen, so maintaining that cash discipline matters and returns aren’t guaranteed.
In our view, RELX appears far more like an AI winner than a casualty. We still see scope for the valuation to better reflect the fundamental strengths if execution remains on track. But new AI-first competitors present a genuine challenge, and investors will need patience while confidence rebuilds.
Environmental, social and governance (ESG) risk
The commercial services industry is low/medium risk in terms of ESG. Social and governance risks are the most acute - like product governance, data privacy & security, and labour relations - as exposure to environmental risks is minimal. Companies operating within facilities maintenance are also exposed to community relations and emissions risks.
According to Sustainalytics, RELX’s overall management of material ESG issues is strong.
In 2022, RELX’s board reviewed the company’s progress on sustainability and social responsibility goals, with regular updates from the global head of ESG. The CEO and CFO’s annual incentives are now tied to non-financial targets like carbon reduction and responsible sourcing. Employees receive training on data privacy, security, and business ethics, with a global mentorship programme and regular employee surveys to support human capital management.
RELX key facts
All ratios are sourced from LSEG Datastream, based on previous day’s closing values. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn’t be looked at on their own – it’s important to understand the big picture.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.