Pearson (PSON) H1 2026 earnings summary

Executive summary

• Delivered strong H1 2026 results with 4% underlying revenue growth and 14% increase in adjusted operating profit year-over-year, supported by Virtual Learning and Assessment & Qualifications.

• Adjusted EPS increased 19% year-over-year, and free cash flow rose to £259m, with robust cash flow and margin expansion.

• Interim dividend increased by 5% to 8.2p and £350m share buyback completed, maintaining balance sheet strength.

• On track to meet full-year guidance, with confidence in mid-single digit top-line growth and margin expansion over the medium term.

• Strategic partnerships, notably with a leading AI lab, Adobe, and Salesforce, are enhancing capabilities and market reach.

Financial highlights

• H1 2026 revenue: £1,779m (+4% underlying); adjusted operating profit: £276m (+14% underlying); margin expanded by 140bps to 15.5%.

• Adjusted EPS: 28.9p (+19% at constant FX); statutory EPS: 24.0p (down from 24.8p in H1 2025).

• Free cash flow: £259m (up £103m year-over-year); free cash flow conversion reached 90–100%.

• Interim dividend increased to 8.2p from 7.8p.

• Net debt increased to £1.3bn at June 2026, reflecting investments, share buybacks, and dividends.

Outlook and guidance

• Full-year guidance reaffirmed: mid-single digit underlying revenue growth, adjusted operating profit £640m–£685m, free cash flow conversion 90–100%.

• Growth expected to improve in H2, with Q3 weighted due to seasonality and business unit dynamics.

• Medium-term: mid-single digit revenue CAGR, average margin improvement of 40bps per annum, strong free cash conversion.

• Segment outlook: Virtual Learning and Higher Education expected to outpace 2025 growth; English Language Learning to return to growth in Q4.