RELX Plc (RELX)

Executive Summary / Key Takeaways

• RELX is solidifying its position as a leader in information-based analytics and decision tools, driven by a strategic, multi-decade shift towards AI-enabled solutions across its diverse segments.
• The company delivered strong financial results in the first half of 2025, with underlying revenue growth of 7%, underlying adjusted operating profit growth of 9%, and adjusted earnings per share growth of 10% at constant currency.
• Technological differentiation, particularly in generative AI, is a core competitive advantage, fueling double-digit spend uplifts in Legal and enhancing deeply embedded tools in Risk and STM.
• Disciplined cost management, robust cash flow generation (100% cash conversion in H1 2025), and a balanced capital allocation strategy, including significant share buybacks, underpin shareholder returns.
• Despite competitive pressures and market shifts, RELX's diversified portfolio and continuous innovation position it for sustained long-term growth, with management reaffirming a positive full-year outlook.

The Data-Driven Evolution of RELX

RELX PLC, incorporated in 1903, has transformed from a traditional publisher into a global powerhouse of information-based analytics and decision tools. Headquartered in London, the company's enduring strength lies in its ability to leverage deep customer understanding, proprietary content, and advanced technology to deliver enhanced value across professional and business markets. This strategic evolution, spanning over two decades, has been marked by a profound shift from print to electronic formats, a transition now largely complete with print revenue shrinking from 64% to a mere 4% of the total. This foundational change has paved the way for RELX's current focus on high-growth, AI-enabled analytics, which is the central pillar of its investment thesis.

The competitive landscape for RELX is dynamic, with rivals such as Thomson Reuters in legal and risk, Wolters Kluwer in legal and scientific information, S&P Global (SPGI) in risk analytics, and Informa (IFJPY) in exhibitions and business intelligence. However, RELX differentiates itself through its integrated data ecosystems, proprietary content, and a relentless focus on combining these with powerful AI technologies. While competitors like Thomson Reuters are also investing heavily in AI, RELX's approach emphasizes deeply embedded, specialized solutions that often lead to superior operational efficiency and customer loyalty. This strategic positioning allows RELX to maintain a prominent market standing, often outpacing some competitors in adaptability and the depth of its analytical offerings.

Technological Leadership: The AI-Powered Moat

At the heart of RELX's strategic advantage is its technological leadership, particularly in the realm of artificial intelligence. The company has embraced AI for well over a decade, developing and deploying increasingly sophisticated analytics and decision tools that are deeply embedded in customer workflows. This isn't merely about adopting new tech; it's about leveraging AI to create tangible, quantifiable benefits for its customers and, by extension, for its financial performance.

In the Risk segment, over 90% of divisional revenues now originate from machine-to-machine interactions, a testament to the deep integration and automated nature of its AI-enabled analytics and decision tools. These tools assist clients in evaluating and predicting risk, with recent innovations like the Home Claims Insights dashboard and Location Intelligence for Commercial offering enhanced market visibility and predictive modeling power for the U.S. property insurance sector. For instance, the Home Claims Insights dashboard provides data-driven analyses up to 60-80% faster than industry standards, helping insurers benchmark claims performance against industry trends, especially as claim severities were up 33% between 2021 and year-end 2024.

The Legal segment showcases the direct financial impact of AI innovation. Lexis+ AI, an integrated platform leveraging generative AI, launched commercially in October 2023, has seen rapid adoption. The vast majority of new sales revenue and a majority of renewal revenue are now coming from Lexis+ AI sales. Customers upgrading to this platform are experiencing a "meaningful" and "double-digit" spend uplift, reflecting the enhanced value and functionality it provides. Furthermore, Protégé, a next-generation AI legal assistant launched in 2024 and expanded across products and geographies in early 2025, is progressing well, with RELX exploring pilot co-development solutions with partners like Harvey to further extend its reach and value.

In the Scientific, Technical & Medical (STM) segment, generative AI capability is being extended across the majority of the revenue base. Key launches include Scopus AI (late 2023) and ScienceDirect AI (first half of 2025), adding generative AI to its primary research platform. While the sales cycles in STM are longer and the market more fragmented than in Legal, these AI tools also demonstrate comparable double-digit spend uplifts. RELX is strategically aligning its STM development processes with those in Legal, aiming for greater similarities in tool development and rollout over the next 2-3 years.

For investors, this technological differentiation translates into a robust competitive moat. RELX's ability to combine its extensive, trusted content and data sets with cutting-edge AI creates solutions that are hard to replicate, driving higher average selling prices (ASPs) through value-based pricing, lower operational costs through efficiency gains, and ultimately, better margins and sustained growth. This continuous innovation ensures RELX remains at the forefront of its markets, enhancing its market positioning and long-term growth strategy.

Segmental Performance: A Story of Strategic Momentum

RELX's strong financial performance in the first half of 2025 underscores the success of its strategic pivot towards higher-growth analytics and decision tools across all its business segments. The group reported a 7% underlying revenue growth and a 9% underlying adjusted operating profit growth, with adjusted earnings per share increasing by 10% at constant currency. This growth was accompanied by an improvement in the adjusted operating margin to 34.8%.

The Risk segment continues to be a powerhouse, delivering 8% underlying revenue growth and 9% underlying adjusted operating profit growth in H1 2025. This strong performance is driven by its deeply embedded AI-enabled analytics, particularly in financial crime compliance and digital fraud and identity solutions. The acquisition of IDVerse, an ID document verification platform, completed in Q1 2025, further strengthens its offerings in Business Services. While the Insurance segment is now lapping a very strong prior year, leading to a moderation towards historical growth averages, the Business Services segment is seeing strengthening new sales and activity levels, ensuring continued strong underlying revenue growth for the division.

In Scientific, Technical & Medical (STM), underlying revenue growth (excluding print) was 5% in H1 2025, with underlying adjusted operating profit growth of 7%. This developing momentum is supported by an increasing pace of new product introductions and strong volume growth in primary research, with article submissions growing over 20% and articles published by 10%. The strategic decision to manage and report print separately, which saw print revenue shrinking roughly twice as fast as usual in H1 2024, is a proactive step to accelerate the business mix shift, ultimately reducing the "print drag" on overall growth.

The Legal segment demonstrated a significant step-up, with underlying revenue growth improving further to 9% (excluding print) and underlying adjusted operating profit growth ahead of revenue at 11% in H1 2025. This acceleration is a direct result of the continued shift towards higher-value legal analytics and the successful rollout of Lexis+ AI and Protégé. While the division aims for continued improvement in its growth trajectory, management cautions that a rapid acceleration to 10% this year is unlikely, given that over 80% of the business is subscription-based with an average contract length of three years, implying a gradual, sustained upward trend.

Exhibitions delivered 8% underlying revenue growth and 9% underlying adjusted operating profit growth in H1 2025. The segment's margins reached 40.3%, significantly above pre-pandemic levels, reflecting both strong activity and a structurally lower cost base. This segment has now established a strong ongoing growth level of approximately 7% to 8%, higher than its pre-pandemic performance, driven by value-enhancing digital tools and an improved event portfolio.

Financial Strength and Disciplined Capital Allocation

RELX's financial health is robust, characterized by consistent profitability and strong cash generation. In the first half of 2025, the adjusted operating margin improved to 34.8%, reflecting the company's ability to manage cost growth below revenue growth across all business areas.

Cash conversion remained exceptionally strong at 100%, contributing over GBP 1.1 billion in free cash flow for the period. Capital expenditure was maintained at approximately 5% of revenue, supporting organic development.

The company maintains a disciplined approach to capital allocation. Net debt to EBITDA stood at 2.2x at June 30, 2025, comfortably within its typical target range of 2.0x to 2.5x. This leverage profile provides flexibility for strategic initiatives. RELX continues to return surplus capital to shareholders through both dividends and share buybacks. The interim dividend was increased by 7% to 19.5p per share. Furthermore, GBP 1 billion of the planned GBP 1.5 billion share buyback program for 2025 was completed in the first half, with an additional GBP 75 million deployed in July. Acquisitions remain selective and "bolt-on" in nature, focused on enhancing and accelerating organic growth, with GBP 262 million spent on three small acquisitions in H1 2025.

Competitive Landscape and Strategic Differentiation

RELX operates in highly competitive markets, but its strategic differentiation provides a durable advantage. In the legal information market, where LexisNexis (RELX) and Westlaw (Thomson Reuters ) are dominant players, RELX's focus on integrating generative AI through Lexis+ AI and Protégé aims to enhance its value proposition and drive customer spend uplift. While Thomson Reuters (TRI) is also investing in AI, RELX's deep integration of its "true and trusted and verified content" with these new tools is a key differentiator.

In the STM segment, RELX's long history, high-quality journal portfolio, and rigorous review processes have provided a competitive edge, particularly in an industry that has seen increased scrutiny over research integrity. This has resulted in a higher increase in article submissions to RELX compared to some competitors. The Risk segment's deeply embedded, AI-enabled analytics, with over 90% machine-to-machine interactions, positions it strongly against broader data providers by offering specialized, high-value decision tools.

Recent analyst commentary highlights that RELX's recent share price weakness, attributed to "disruption fears" from AI, is "unjustified" and presents an "attractive entry point". Analysts differentiate RELX from companies like Gartner (IT) and Wolters Kluwer (WTKWY), citing LexisNexis's "unique, hard-to-replicate legal analytics solutions". This suggests that while AI is a broad industry trend, RELX's specific implementation and integration within its proprietary data and content sets create a more defensible position.

Risks and Outlook

While RELX's strategic direction is clear and its performance strong, investors should consider potential risks. The pace of AI adoption, particularly in the more fragmented STM segment, could be slower than anticipated. Competitive pressures from both established players and emerging AI startups remain a factor, necessitating continuous innovation. Macroeconomic shifts, such as potential changes in U.S. federal spending or university budget pressures, could impact demand, though RELX has historically demonstrated resilience to such fluctuations. The ongoing, strategic decline of print revenue, while beneficial long-term, may lead to larger short-term revenue step-downs in certain periods.

Despite these considerations, RELX maintains a positive outlook. The company expects 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. Long-term objectives include sustaining strong growth in Risk, continuing the improving growth trajectories in STM and Legal, and maintaining strong growth at the newly established levels in Exhibitions. Management's commitment to managing cost growth below revenue growth across all segments further supports the outlook for improving returns.

Conclusion

RELX PLC stands as a compelling investment case, fundamentally reshaped by its strategic commitment to AI-driven analytics and decision tools. The company's consistent financial performance, marked by robust revenue and profit growth in the first half of 2025, is a direct reflection of its successful business mix shift towards higher-value, technology-enabled solutions. Its deep integration of AI across Risk, Legal, and STM segments not only creates a formidable competitive moat but also drives tangible customer value and spend uplift. With a disciplined approach to capital allocation, strong cash flow generation, and a clear strategic roadmap for continued innovation, RELX is well-positioned for sustained long-term growth. While competitive dynamics and market shifts require ongoing vigilance, RELX's technological leadership and diversified, resilient business model underscore its capacity to deliver continued shareholder value.