Pearson plc (LON:PSON) has announced its interim results for the six months to 30th June 2026 (Unaudited).
Good H1 performance and reiterating 2026 guidance. Uniquely positioned to benefit from accelerating demand for reskilling in an AI-driven world.
Financial Highlights
| £m | H12026 | vs H12025 | £m | H12026 | H12025 | |
| Business performance | Statutory results | |||||
| Revenue | 1,779 | +4% 1 | Revenue | 1,779 | 1,722 | |
| Adjusted operating profit | 276 | +14% 1 | Operating profit | 252 | 240 | |
| Operating cash flow | 337 | +167% 2 | Profit for the period | 149 | 166 | |
| Free cash flow | 259 | +66% 2 | Net cash generated from operations | 427 | 188 | |
| Adjusted earnings per share | 28.9p | +18%2 | Basic earnings per share | 24.0p | 24.8p | |
Highlights
| · | Underlying Group revenue growth of 4%, in line with expectations, supported by continued strong performance in Virtual Learning and Assessment & Qualifications returning to growth in Q2. |
| · | Group adjusted operating profit of £276m, up 14% underlying with 140bps margin expansion to 15.5%, driven by trading performance, the impact of the 2025 product development impairment3 and investment phasing. |
| · | Strong free cash performance up £103m to £259m. |
| · | Adjusted earnings per share increased 19% at constant exchange rates4 and 18% on a headline basis. |
| · | Interim dividend up 5% and £350m share buyback completed, with continued balance sheet strength. |
| · | Reiterating 2026 guidance: mid-single digit underlying revenue growth, adjusted operating profit of £640m-£685m at FX rates as at the end of 2025 (£:$ 1.35), and free cash flow conversion5 of 90%-100%. |
| · | Continued momentum in Enterprise, including a new agreement with a leading AI lab to deliver their global certification programme, and strategic account growth with a new partnership with Adobe. |
Omar Abbosh, Pearson’s Chief Executive, said:
“We have delivered a good first-half performance and executed well against our strategy, with a focus on driving operational improvements while innovating to build learning and assessment experiences that help our customers progress in their lives. We are reiterating our full year guidance and remain confident in Pearson’s long-term growth opportunities. We are excited about the future and believe Pearson is uniquely placed to meet the growing customer demand for reskilling in an AI driven world.”
Underlying Group revenue growth of 4% in H1 2026
| · | Assessment & Qualifications returned to growth in Q2 as expected, with H1 revenue up 2%, driven by a strong performance in Clinical Assessment and growth in Pearson Professional Assessments and UK & International Qualifications, partially offset by a decline in US Student Assessment impacted by the previously disclosed loss of the New Jersey contract. |
| · | Virtual Learning revenue grew 19%, reflecting strong enrolment momentum in the 2025/2026 academic year, with enrolment growth accelerating to 15% in the Spring semester, alongside funding growth and favourable mix. |
| · | Higher Education revenue grew 2%, driven by a solid performance in core US Courseware and a return to growth in K12. This was partially offset by a decline in International Higher Education due to challenging trading conditions in mature markets. Inclusive Access growth increased to 20% and now represents 50% of the core US Courseware business. |
| · | English Language Learning revenue declined 3%, with growth in Institutional more than offset by Pearson Test of English (PTE), where market conditions have become more difficult. Despite these conditions, we outperformed the market and remain confident in the long-term attractiveness of the business, although we expect market headwinds to persist in the near term. |
| · | Enterprise Learning & Skills revenue grew 7%, with another solid performance in Vocational Qualifications and strong growth in Enterprise Solutions driven by the monetisation of our strategic partnerships. |
Group adjusted operating profit up 14% on an underlying basis to £276m
| · | Underlying performance up 14% driven by operating leverage and continued cost efficiencies, partially offset by investment and inflation. This result was impacted by the 2025 product development impairment, alongside investment phasing. |
| · | On a headline basis, profit also increased 14%, reflecting underlying performance, with the contribution from the acquisition of eDynamic Learning offset by adverse currency movements. First half adjusted profit margin increased 140bps to 15.5% (H1 2025: 14.1%). |
| · | Adjusted net finance costs increased to £35m (H1 2025: £24m). The effective tax rate on adjusted profit before tax increased to 25.8% (H1 2025: 24.5%) due to a one-off tax charge arising on the settlement of a US insurance policy in the period ended 30 June 2026. As this was a non-recurring item, we expect the full-year effective tax rate to normalise. |
| · | Adjusted earnings per share increased 18% to 28.9p (H1 2025: 24.5p) reflecting adjusted operating profit growth and the reduction in issued shares due to the share buyback programme, partially offset by increased interest costs and higher tax charge. Adjusted earnings per share increased 19% at constant exchange rates. |
Strong cash performance
| · | Operating cash flow increased £211m to £337m (H1 2025: £126m), driven by movements in working capital, including payment timing benefits expected to reverse in H2, and the one-off proceeds from the settlement of a US insurance policy. |
| · | Free cash flow remained strong, increasing by £103m to £259m (H1 2025: £156m), driven by the strong operating cash performance. This was partially offset by the normalisation of cash interest and tax payments following the one off state aid refund received in the prior period. |
Strong balance sheet supporting continued investment and shareholder returns
| · | Net debt increased £0.3bn to £1.3bn at 30th June 2026 (H1 2025: £1.0bn) as strong free cash flow generation was more than offset by share buybacks, acquisition spend and dividends. |
| · | Proposed interim dividend of 8.2p (H1 2025: 7.8p), represents an increase of 5%. |
| · | During the first half of 2026, we repurchased £350m of shares at an average purchase price of 998p. |
| · | We successfully issued a £350m 10-year bond under our Euro Medium Term Note (EMTN) programme. |
Statutory results
| · | Revenue increased 3% on a headline basis to £1,779m (H1 2025: £1,722m) with positive underlying business performance partially offset by currency movements. |
| · | Statutory operating profit increased 5% on a headline basis to £252m (H1 2025: £240m) driven by underlying operating profit growth partially offset by movements in property charges and other net gains and losses. |
| · | Net cash generated from operations of £427m (H1 2025: £188m). |
| · | Statutory earnings per share of 24.0p (H1 2025: 24.8p). |
Outlook
Reiterating 2026 guidance
| · | For 2026, we expect to deliver mid-single digit underlying revenue growth, adjusted operating profit of £640m-£685m at FX rates as at the end of 2025 (£:$ 1.35), including the impact of the 2025 product development impairment, and free cash flow conversion of 90%-100%. |
Medium term outlook
| · | Over the medium term, Pearson continues to be positioned to deliver a mid-single digit underlying revenue growth CAGR, sustained margin improvement that will equate to an average increase of 40 basis points per annum and strong free cash conversion, in the region of 90% to 100%, on average, across the period. |
Financial Calendar
| · | 2026 Nine Month Trading Update will be announced on 22 October 2026. |
