Highlights

  • Pearson reports 4% underlying FY25 sales growth, with Q4 growth accelerating to 8%.
  • Adjusted operating profit reached GBP 610–615m alongside high cash conversion levels.
  • Enterprise and Virtual Learning segments recorded double-digit growth during Q4.

Pearson PLC (LSE:PSON) released its unaudited trading update for the year ended 31 December 2025, reporting financial performance in line with previously stated guidance. Underlying Group sales increased 4% for the full year, with growth accelerating to 8% during the fourth quarter. All five business segments contributed to annual growth, reflecting broad-based performance across the portfolio.

Group adjusted operating profit for FY25 is expected to be in the range of GBP 610–615m at an average GBP:USD rate of 1.32, representing an underlying increase of approximately 6% year-on-year. Free cash flow conversion exceeded 95% for the year, alongside recovery of GBP 0.1bn related to State Aid taxes.

Assessment and Qualifications See Broad Contribution
Assessment & Qualifications posted underlying sales growth of 4% for FY25, with Q4 growth accelerating to 8%. Pearson Professional Assessments secured multiple new contracts and maintained customer retention levels. US Student Assessment renewed and extended several contracts during the year, although the loss of the New Jersey contract is expected to impact H1 FY26. Clinical Assessment benefited from pricing actions, digital product growth, and continued market adoption, while UK & International Qualifications recorded growth driven by volume, pricing, and international markets.

Virtual Learning Gains Momentum In Second Half
Virtual Learning sales increased 8% for the full year, supported by a second-half performance. Q4 sales rose 20%, reflecting a 13% increase in enrolments for the 2025/26 academic year Fall semester, favourable programme mix, and funding dynamics.

Mixed Trends Across Higher Education and English Learning
Higher Education sales rose 2% for FY25 and were flat in Q4. US Higher Education grew 3% for the year, driven by enrolments and pricing in Courseware, partially offset by declines in K-12. International Higher Education declined 7% amid challenging conditions in mature markets.

English Language Learning sales increased 1% for the year, led by Institutional channels. Pearson Test of English sales remained flat overall, while Q4 growth of 8% was supported by Institutional demand in Latin America and Asia, partially offset by expected PTE volume declines following earlier test enhancements.

Enterprise Segment Shows Late-Year Acceleration
Enterprise Learning & Skills reported 6% underlying growth for FY25, with Q4 sales increasing 13%. Growth was supported by Vocational Qualifications and quarter-on-quarter improvement in Enterprise Solutions, following recently announced partnerships.

Balance Sheet and Outlook
Pearson ended FY25 with net debt of approximately GBP 1.1bn. The company reiterated its medium-term outlook, targeting mid-single-digit underlying sales growth, average annual margin improvement of 40 basis points, and free cash flow conversion between 90% and 100%.

Share Perfromance
PSON shares trade at 997.00 GBX, down 7.30% today at the time of writing.