Pearson reports 2025 underlying sales jumps 4% to £3.58B

Pearson (NYSE:PSO) reported a robust set of full-year 2025 results on Friday, characterized by steady organic growth and an aggressive return of capital to shareholders.

The London-based education and publishing group posted underlying sales of £3,577 million, a 4% increase compared to the previous year.

Adjusted operating profit rose 6% on an underlying basis to £614 million, pushing the company’s operating margin to 17.2%.

The performance was underpinned by strong cash generation, with free cash flow rising 8% to reflect a cash conversion rate of 125%.

Buoyed by this liquidity, Pearson completed a £350 million share buyback in 2025 and immediately initiated a subsequent £350 million program in January 2026, demonstrating management's confidence in the company’s digital transformation.

While adjusted metrics showed growth, statutory operating profit fell to £507 million.

This decline was primarily attributed to a £87 million non-cash impairment charge related to product development as the company accelerates its move away from legacy offerings toward AI-enhanced learning tools.

Pearson has been a frontrunner in integrating generative AI into its higher education and workforce products, aiming to provide personalized tutoring and automated assessment features.

The "English Language Learning" and "Workforce Skills" divisions remained key growth engines, offsetting more stagnant trends in the traditional US Higher Education Courseware market.

Looking ahead, management confirmed its outlook for 2026, anticipating a continuation of current momentum.

While sales growth is expected to remain in the mid-single-digit range, adjusted operating profit is forecasted between £640 million and £685 million.