Pearson PLC Half Year 2025 Earnings Call Transcript: Emphasizing the Vitality of Learning

Pearson PLC's interim results for H1 2025 will be presented, followed by a Q&A session. The company will share key points about their financial performance and discuss future strategies. The presentation will be available in two formats: in-person and through the questions tab at the top of the screen. Questions can also be submitted via phone lines.

Pearson PLC (NYSE: PSO) presented its interim results for the first half of 2025, highlighting both positive and negative factors that will influence its financial performance and strategic direction. The company reported a 2% increase in sales and adjusted operating profit, aligning with its February guidance [1]. This growth was driven by strategic partnerships with major tech companies such as Google Cloud, Microsoft, and AWS, as well as new contract wins from HCL Tech and Google Cloud [1].

Pearson's expansion into enterprise learning and skills, bolstered by the acquisition of e-dynamic Learning, is expected to support medium-term growth. The acquisition of e-dynamic Learning, a leader in career and technical education, is anticipated to provide strong margins and cash flow, contributing to Pearson's growth strategy [1]. AI-driven innovations are enhancing Pearson's product offerings, improving learning outcomes, and generating cost efficiencies across the business [1].

However, Pearson faces near-term pressures, including hiring freezes in its PDRI segment and a 3% decline in its English language learning segment, particularly with the Pearson Test of English expected to decline in the second half of the year [1]. Higher education enrollments are expected to remain flat, requiring growth from other factors such as inclusive access and pricing [1]. Additionally, the company is experiencing FX headwinds, which have impacted adjusted earnings per share, despite positive underlying trading performance [1]. The integration of e-dynamic Learning may incur near-term costs and deferred revenue impacts, potentially affecting 2025 group guidance [1].

During the Q&A session, the CEO, Omar Abbosh, and CFO, Sally Kate Johnson, provided insights into the company's performance and future strategies. Abbosh noted that contracts with ServiceNow and Salesforce are performing as expected, with growth outlook for 2026 remaining positive. Johnson highlighted that AI is driving cost efficiencies through content generation, translation, and improved customer experience [1].

The company is optimistic about revenue growth in the second half of 2025, driven by new and renewed contracts in assessments and qualifications, enrollment growth in virtual schools, and a strong performance in English language learning [1]. Sharon, Head of English Language Learning, expects growth driven by institutional business, particularly in Latin America, with a focus on government deals and share gains [1].

Pearson PLC's interim results and strategic outlook indicate a mixed bag of performance and challenges. The company is leveraging strategic partnerships and AI innovations to drive growth while addressing near-term pressures and FX headwinds. Investors and financial professionals should closely monitor Pearson's progress in integrating e-dynamic Learning and its ability to navigate the challenges outlined during the earnings call.

References:
[1] https://finance.yahoo.com/news/pearson-plc-pso-h1-2025-190050935.html