- Strong Revenue & Profit Growth: 2025 revenues hit EUR 6.125B (+7% constant currencies), adjusted operating profit rose to EUR 1.687B (+9%), and free cash flow reached EUR 1.348B (+10%).
- Recurring Revenue Dominance: 83% of total revenues (recurring) grew 7% organically, driven by Health (5%), Tax & Accounting (7%), and Corporate Performance & ESG (7%).
- Dividend & Share Buyback Plan: Proposed 8% dividend increase to EUR 2.52 and a EUR 500M share repurchase in 2026, with guidance for high single-digit EPS growth and margin expansion.
- AI-Driven Innovation: 12-13% revenue allocated to product development, with AI solutions like CCH Axcess and UpToDate Expert AI enhancing customer value and driving 75% enterprise adoption in Health.
- Margin Expansion Strategy: FRR unit exit (EUR 100M revenue, mid-single-digit margins) and strategic focus on AI/SaaS mix to boost margins, despite some growth moderation in Financial & Corporate Compliance (3%).
Segmental Performance
The company delivered organic growth across all divisions, with Health growing 5%, Tax & Accounting 7%, Financial & Corporate Compliance 3%, Legal & Regulatory 5%, and Corporate Performance & ESG 7%. The Tax & Accounting business saw an operating leverage drop of above 60% in 2025, driven by 7% revenue growth and a mix shift towards software and SaaS.
Guidance and Outlook
Wolters Kluwer expects good organic growth, a further margin increase, and high single-digit growth in diluted adjusted EPS in constant currencies for 2026. The company guides for organic growth in 2026, with Health and Tax & Accounting expected to deliver growth in line with 2025, and Financial & Corporate Compliance, Legal & Regulatory, and Corporate Performance & ESG expected to deliver growth ahead of 2025 levels. Analysts estimate next year's revenue growth at 5.8%.
AI-Powered Solutions and Innovation
The company is investing in AI-powered solutions, with CCH Axcess and UpToDate Expert AI receiving positive feedback from customers. New CEO Stacey Caywood plans to accelerate the company's strategic plan, investing 12-13% of revenues in product development, focusing on AI-powered solutions, strategic partnerships, and data-driven sales and marketing processes.
Valuation and Dividend
With a P/E Ratio of 13.24 and an EV/EBITDA of 9.3, the company's valuation appears reasonable. The Dividend Yield is 3.81%, and the company proposes an 8% increase in the total 2025 dividend per share to EUR 2.52. A €500 million share buyback is announced for 2026, which is expected to be EPS accretive.
Capital Allocation
The company considers investing in the business, paying down debt, and rewarding shareholders with a progressive dividend and share buyback program when making capital allocation decisions. Wolters Kluwer expects to maintain a robust balance sheet while allocating capital, considering equity and other priorities.