REG - Pearson PLC - Pearson 2025 Trading Update: January 2026

PearsonAnnouncement

14/01/2026 07:00

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RNS Number : 7773O  Pearson PLC  14 January 2026

Pearson 2025 Trading Update (Unaudited)

 14(th) January 2026  Strong execution delivers 2025 financial performance in line with guidance,
                      with all business units contributing to growth. Good strategic progress
                      underpins our confidence for 2026 and beyond.

Highlights

 ·             Underlying Group sales growth of 4% for the full year, with Q4 accelerating to
               8%.
 ·             Group adjusted operating profit of £610-615m at £:$ of 1.32 for the full
               year, up c.6% on an underlying basis.
 ·             Strong cash generation with free cash flow conversion of more than 95%(1) plus
               £0.1bn State Aid repayment.
 ·             Delivered against our 2025 strategic priorities, with Q4 highlights including:
               o                                         Leading on the application of innovative technologies with the launch of
                                                         Communication Coach - an AI-powered learning solution integrated into
                                                         Microsoft 365, enabling professionals to enhance communication skills
                                                         seamlessly within the flow of work, marking our first go-to-market
                                                         collaboration with Microsoft (link here
                                                         (https://plc.pearson.com/en-GB/news-and-insights/news/pearson-launches-ai-powered-communication-coach-transform-everyday-work)
                                                         ).
               o                                         Ongoing Enterprise momentum, including a new strategic partnership with IBM
                                                         (link here
                                                         (https://plc.pearson.com/en-GB/news-and-insights/news/ibm-and-pearson-collaborate-build-new-ai-powered-learning-tools)
                                                         ) and winning a strategic vocational skilling contract for the construction
                                                         sector in Saudi Arabia. Pearson Professional Assessments (formerly known as
                                                         Pearson VUE) selected to be the test delivery provider for Google Cloud
                                                         certifications.

Omar Abbosh, Pearson's Chief Executive, said:

"In 2025 we successfully delivered against our financial and strategic
priorities by expanding our partnerships, growing our Enterprise reach, and
advancing the use of AI to improve learning and upskilling. All of this was
achieved thanks to the strong delivery of our people, who have been focused on
executing for our customers. We enter 2026 with momentum, are excited about
the opportunities that lie ahead, and remain well positioned to deliver value
to our stakeholders."

Underlying Group sales growth of 4% for the full year, with Q4 accelerating to
8%

 ·             Assessment & Qualifications sales grew 4% for the full year with all
               sub-business units contributing to growth. Pearson Professional
               Assessments secured several new contracts, with continued strong customer
               retention supporting future growth. US Student Assessment renewed and extended
               several key contracts in the year, although lost the contract with New Jersey,
               which will be a headwind in H1 2026. In Clinical Assessment, sales grew due to
               the continued traction of our products in the market, pricing and digital
               product growth. UK & International Qualifications benefited from volume,
               pricing, and International growth. Sales growth accelerated in Q4, with sales
               up 8%, driven by new contract launches in Pearson Professional Assessments
               and the return to growth in US Student Assessment as phasing normalised.
 ·             Virtual Learning sales increased 8% for the full year with strong performance
               in H2. Sales increased 20% in Q4, driven by a 13% increase in 2025/26 academic
               year enrolments in the Fall semester, favourable mix and funding.
 ·             Higher Education sales were up 2% for the full year and flat in Q4. US Higher
               Education sales grew 3% for the full year, driven by enrolments and pricing in
               our core Courseware business, partly offset by K-12 declines given the
               transitionary period, with adoption share maintained. In the year, there was
               growth of 1% in US digital subscriptions and 19% in Inclusive Access.
               International Higher Education faced ongoing challenging trading conditions in
               mature markets, declining 7% for the full year.
 ·             English Language Learning sales grew 1% for the full year driven by
               Institutional. Pearson Test of English (PTE) sales were flat, performing well
               against a tough market backdrop. Sales growth accelerated in Q4 to 8%, driven
               by a strong performance in Institutional, particularly in key Latin American
               markets and Asia, partially offset by expected declines in PTE following
               volume strength ahead of test enhancements in Q3.
 ·             Enterprise Learning & Skills sales grew 6% for the full year and 13% in
               Q4, with a solid performance in Vocational Qualifications and continued
               quarter-on-quarter improvement in Enterprise Solutions, driven by the recently
               announced partnerships.

Strong financial position

 ·             Pearson's financial position remains robust, with a strong balance sheet, net
               debt of c.£1.1bn and a 2025 free cash flow conversion of more than 95%(1)
               plus recovery of the £0.1bn in relation to State Aid taxes.

Medium Term Outlook unchanged

 ·             Beyond 2025, Pearson is positioned to deliver a mid-single digit underlying
               sales growth CAGR, sustained margin improvement that will equate to an average
               increase of 40 basis points per annum and strong free cash conversion(1), in
               the region of 90% to 100%, on average, across the period.

Financial calendar

 ·             Full year results will be announced on 27 February 2026. We will hold an
               in-person presentation and Q&A session, during which we will outline the
               2026 outlook.

Financial summary

Underlying growth for the fourth quarter and financial year ended 31 December
2025 compared to the equivalent period in 2024.

 

 Sales                             Q4   Full Year
 Assessment & Qualifications       8%   4%
 Virtual Learning                  20%  8%
 Higher Education                  0%   2%
 English Language Learning         8%   1%
 Enterprise Learning & Skills      13%  6%
 Total                             8%   4%

Throughout this announcement: a) growth rates are stated on an underlying
basis unless otherwise stated. Underlying growth rates exclude currency
movements and portfolio changes. b) The 'business performance' measures are
non-GAAP measures. Please refer to full year and half-year results for further
detail and reconciliations to the equivalent statutory heading under IFRS.

(1)Free cash flow conversion calculated as free cash flow divided by adjusted
earnings.

 

Contacts

 Investor Relations  Alex Shore                               +44 (0) 7720 947 853

                     Steph Crinnegan                          +44 (0) 7780 555 351
                     Gemma Terry                              +44 (0) 7841 363 216

                     Brennan Matthews                         +1 (332) 238-8785
                     ir@pearson.com (mailto:ir@pearson.com)  https://plc.pearson.com/en-GB/investors
                                                             (https://plc.pearson.com/en-GB/investors)
 Media

 Teneo               Ed Cropley                               +44 (0) 7492 949 346

 Pearson             Laura Ewart                              +44 (0) 7798 846 805

 

About Pearson

At Pearson, our purpose is simple: to help people realise the life they
imagine through learning. We believe that every learning opportunity is a
chance for a personal breakthrough. That's why our Pearson employees are
committed to creating vibrant and enriching learning experiences designed for
real-life impact. We are the world's lifelong learning company, serving
customers with digital content, assessments, qualifications, and data. For us,
learning isn't just what we do. It's who we are. Visit us at pearsonplc.com.

 

Notes

Forward looking statements: Except for the historical information contained
herein, the matters discussed in this statement include forward-looking
statements. In particular, all statements that express forecasts, expectations
and projections with respect to future matters, including trends in results of
operations, margins, growth rates, overall market trends, the impact of
interest or exchange rates, the availability of financing, anticipated cost
savings and synergies and the execution of Pearson's strategy, are
forward-looking statements. By their nature, forward-looking statements
involve risks and uncertainties because they relate to events and depend on
circumstances that will occur in future. They are based on numerous
assumptions regarding Pearson's present and future business strategies and the
environment in which it will operate in the future. There are a number of
factors which could cause actual results and developments to differ materially
from those expressed or implied by these forward-looking statements, including
a number of factors outside Pearson's control. These include international,
national and local conditions, as well as competition. They also include other
risks detailed from time to time in Pearson's publicly-filed documents and you
are advised to read, in particular, the risk factors set out in Pearson's
latest annual report and accounts, which can be found on its website
(www.pearsonplc.com). Any forward-looking statements speak only as of the date
they are made, and Pearson gives no undertaking to update forward-looking
statements to reflect any changes in its expectations with regard thereto or
any changes to events, conditions or circumstances on which any such statement
is based. Readers are cautioned not to place undue reliance on such
forward-looking statements.

 

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