Pearson (PSO) Q2 2026 Earnings Report

The call presented a broadly positive operational and financial picture: group revenue, profit, EPS and free cash flow showed clear improvement, Virtual Learning and Enterprise businesses are delivering strong growth, and management reiterated full-year guidance and medium-term margin targets. Key strategic developments—AI certification contract, product innovation and digital/operational simplification—support growth prospects. Offsetting these positives are headwinds in English Language Learning, delivery issues in the U.K. SATs cycle that incurred one-time costs, some margin pressure in Assessment & Qualifications due to contract mix, and increased net debt partly driven by buybacks and acquisitions. On balance, the positive financial performance, cash generation and strategic momentum outweigh the challenges.

Pearson said it is on track to deliver 2026 guidance after a solid H1: group underlying revenue +4%, adjusted operating profit +14% to GBP 226m, margin +140bps to 15.5%, adjusted EPS +19% at constant currency (headline +18%) to 28.9p, free cash flow GBP 259m (up GBP 103m), net debt GBP 1.3bn (up GBP 0.3bn), an accelerated GBP 350m share buyback completed and a 5% higher interim dividend to 8.2p. Management reiterated full‑year targets of mid‑single‑digit underlying revenue growth, group adjusted operating profit of GBP 640–685m (at prior‑year FX), free cash conversion of 90–100% and ~40bps of medium‑term margin expansion. Business‑level performance/guidance includes Assessment & Qualifications H1 +2% and expected low‑to‑mid single‑digit growth for the year; Virtual Learning H1 +19% (spring enrolment +15%) and expected to grow faster than 2025 with margin ~18%; Higher Education H1 +2% and expected to grow versus 2025 (margin ~6%); Inclusive Access Q2 +23% and now 50% of US core courseware; English Language Learning H1 -3% with updated uncertainty; and Enterprise Learning & Skills H1 +7% with margin ~28%; group growth is expected to be weighted to Q3.