Heather Balsky: I was hoping to hone in on the legal business and expectations for the fourth quarter, but also just how things shaped up versus your 3Q expectations. You exited Elite. You kind of had [hostile] Government business getting better in the back half. There’s supposed to be some acceleration. I’m curious about the puts and takes in the quarter and then how you think about the fourth quarter from here.
Steve Hasker: Yes, Heather, I’ll — it’s Steve. Thanks for the question. I’ll start, and then I’m sure Michael will add. As a general point, we see growing strength in our legal business. Paul Fischer and his team, particularly Neil Sternthal and Liz Zimick, Mark Haddad supported by our product and engineering folks have done a very good job of strengthening our core products and talked quite a lot about Westlaw and Practical Law and HighQ. And certainly, those are increasing in their sort of health and their growth prospects. So as a general point in the fourth quarter, we expect to see that growing strength and having it carrying into the next year and beyond. And the integration of generative AI really builds upon that. We’re injecting generative AI into very healthy products, healthy franchises, and we think that’s a good starting point. Mike, what would you add?
Mike Eastwood: It is a good summary, Heather. I would just, as always, emphasize Practical Law, led by Emily Colbert, continues to perform really well for us, and HighQ that we acquired back in July of 2019 continues to be one of our strongest growth assets. We talked a lot about Westlaw Precision and gen AI as we should. But if you think about the full breadth and depth of assets that Paul Fischer has within Legal, Practical Law and HighQ continued very strong growth trajectories. You asked about Government there, continuing to monitor that pipeline very closely. And we have a strong pipeline in Q4, Q1, and it’s a matter of timing, closing those deals, Heather.
Heather Balsky: Follow up, was Government the reason that you didn’t see the acceleration in the third quarter? Or was it something else?
Mike Eastwood: Really just timing. Any time we deal with government agencies, the level of precision in regards to the timing of those closures is a little less precise than what we see with the nongovernment customers there. But based on our pipeline view, we’re optimistic of a strong Q4 and Q1.
Operator: Next question will come from Scott Fletcher with CIBC. Please go ahead.
Scott Fletcher: I want to ask a question on the organic growth and maybe a little longer term. So when you look out to 2025, when you start to really feel the impact of the gen AI initiatives, do you have a sense of internally how much hoping that will impact the organic growth rate? I’m sort of trying to get an idea of, is this a significant step change? Or is it more of an incremental increase in growth rate when you look at 2025?
Steve Hasker: Scott, it’s Steve. Thanks for the question. I’ll start. Michael will add. Look, I think we’ll say more about that in February, and we’ll say more at an Investor Day in March. I think we’re still in the process of sort of learning and quantifying. As I said a couple of times, the most important sort of yardstick for us is the customer reaction to the product investments that we’re making. And that has been better than — certainly better than I expected, more forceful, more trust, more confidence, more exciting from our customers than perhaps I’d even hoped for. As to sort of what that results, as I say, we’ll come back in February in Investor Day and be more specific. But we see meaningful revenue acceleration particularly sort of through the ’25, ’26, ’27 as a result of these investments.
And as I said before, we’re going to apply the same rigor as we did in the Change Program so that — to every dollar of the investment that we make, both in terms of OpEx and CapEx. And we’ll be very rigorous about ensuring that, that flows through. Mike, what would you add?
Mike Eastwood: I would say, Scott, during the March Investor Day, each of our segment presidents will dig deeper and to your specific question on the organic growth for Tax & Accounting professionals, it’s legal, international, et cetera. So I think that will be quite helpful for you, Scott.
Scott Fletcher: And then maybe just a quick follow-up, like in terms of the — do you see most of the future growth coming from the expanding functionality of the current product set or on the new opportunities you talked about sort of the TAM expansion?
Steve Hasker: Scott, we think it’s probably too early to quantify to give you a percentage, but we think it will be pretty balanced. We see at least sort of 3 different cases. The first is pretty significant value from our core existing products. And that’s going to result in, we think, a little bit more price and a meaningful uptick in retention, which is something we’ve been focused on for a period of time, but we’re yet really to see the results of that. The second is in these new skills, particularly that which builds upon the Casetext, CoCounsel skill set and extending that into legal workflows and ultimately taking the same kind of capabilities into Tax & Accounting and risk workflows. And the third is we’ve got our eyes on some new addressable markets, some of those domestically in the United States and North America and some of those are in international markets.
So I won’t give you the sort of proportionality between the 3 of those. But again, when we come back at Investor Day, we’ll be able to be much more specific about this.
Operator: Next question will come from Manav Patnaik with Barclays. Please go ahead.
