Jul 31, 2026 earnings call — H1 results and AI skills agreement
Pearson reported H1 results: revenue up 4%, profit up 14%, and EPS up 19%, and said it remains on track for full-year guidance.
Revenue $2.4B (est $2.3B) · EPS $0.39 (est $0.36)
Key quotes
"First, we have delivered a good H1 financial result with revenue up 4%, profit up 14% and EPS up 19%, alongside continued strong cash flow strength, strong cash flow."
"Our agreement with a leading AI Lab to deliver their global certification program reinforces our leadership in skills verification and our conviction that AI adoption increases demand for trusted, validated new skills."
"For example, included in customer services, where AI self-service is now in -- is handling 40% of customer interactions across voice, chat and e-mail in our initial rollout phases."
Analyst Q&A 4
other divisions and A&Q margin
Q (Ciaran Donnelly · Citi): Analyst asked whether any other divisions are doing better than expected, and asked how A&Q margins will recover in H2 and compare to last year.
A: Management said the institutional part of ELL is performing really well, and Enterprise Solutions and Higher Ed are on stronger tracks with Virtual Schools growing faster than last year. For A&Q, management said Q1 margins were weighed down by sales mix and one-time SATs delivery costs, and those effects should normalize so margins improve into H2 and support the full-year guidance.
"So that's what's weighing down and gives us growth in the margin going into H2 and obviously contributes to my confidence in the full year guidance for the GBP 640 million to GBP 685 million overall group profit." — Simon Robson (CFO)
AI contract details, A&Q, buyback
Q (James Tate · Goldman Sachs): Analyst asked for more detail on the new AI lab certification contract (scale, timing, rollout), whether A&Q growth around 5% is sustainable into H2, and why the buyback was not expanded and whether M&A will be pursued.
A: Management said the AI lab work is assessments and certification for a leading company, moved from start to launch in a few single-digit months, and it is already live with the first tens of thousands of people taking the exam. On A&Q, they list drivers for H2 including contracts launched last year, Google Cloud and AI lab launches, SATs revenue and a strong clinical portfolio, and they expect good performance. On capital allocation, they said the approach is unchanged: they invested in a GBP 350 million buyback earlier this year, will keep investing in the business, will be disciplined on M&A, raised the dividend 5%, and will distribute excess capital beyond that.
"The first tens of thousands of people have come through the doors." — Omar Abbosh
ACT contract, enrollments, Q3 seasonality
Q (Nick Dempsey · Barclays): Analyst asked whether ACT is part of U.S. Student Assessment and whether Pearson has a contract to keep that business, asked for an update on college enrollments for fall 2026, and asked why group growth is weighted to Q3.
A: Management said Pearson provides paper preparation and delivery services for ACT, the relationship continues through this year and they expect it to continue beyond that, and discussions are ongoing with ACT management. On enrollments, they see slight headwinds but remain confident in a strong H2, citing inclusive access work, K-12 sales improvements, and an international Higher Ed turnaround. On the Q3 weighting, they said seasonality and the main back-to-school period for Higher Ed drives Q3 strength, though the back-weighting this year is less than in past years and Q4 last year was a strong comparator.
"We will continue to be providing those services to ACT, and that is reflected in the guidance that we're sharing today." — Arthur Valentine
margin outlook and virtual learning
Q (David Nolan · Morgan Stanley): Analyst asked how to reconcile apparent strong tailwinds in divisions with medium-term guidance of about 40 bps annual margin expansion, and asked for more color on Virtual Learning same-school momentum, market share and the role of career learning.
A: Management said they are running Pearson as a more unified operating company to win productivity and efficiency, and they will reinvest savings to drive growth while targeting about 40 bps of margin expansion on average over the medium term. On virtual learning, they said the market remains strong driven by U.S. school choice, they see the market growing high single digits in '25 and '26 on enrollment and Pearson is gaining share by improving marketing funnel and operations; career pathways help engagement and retention and create value for students and parents.
"We see that market growing high single digits on an enrollment basis in '25, '26, and we see that we're doing better from a share perspective there." — Tom Simon