Pearson 2024 Nine Month Trading Update (Unaudited)
Pearson reported positive Q3 2024 performance with 5% underlying sales growth, resulting in 3% growth for the nine-month period. All divisions delivered growth in Q3, including Higher Education up 4%, Assessment & Qualifications up 6%, Virtual Learning up 4%, English Language Learning up 2%, and Workforce Skills up 6%. The company signed a new multi-year enterprise deal with ServiceNow and expanded partnership with Degreed. AI initiatives showed progress with double-digit year-over-year billings growth in Higher Education products featuring AI study tools. The company completed its £500m share buyback, issued a £350m Educational Bond, and maintains a strong financial position with Moody's upgrading its rating to Baa2.
Pearson ha riportato una performance positiva nel terzo trimestre del 2024 con una crescita delle vendite sottostante del 5%, portando a una crescita del 3% nel periodo di nove mesi. Tutte le divisioni hanno registrato una crescita nel terzo trimestre, inclusa l'istruzione superiore in aumento del 4%, valutazione e qualificazioni in crescita del 6%, apprendimento virtuale in aumento del 4%, apprendimento della lingua inglese in aumento del 2% e competenze professionali in crescita del 6%. L'azienda ha firmato un nuovo contratto aziendale pluriennale con ServiceNow ed ha ampliato la partnership con Degreed. Le iniziative AI hanno mostrato progressi con una crescita a doppia cifra anno su anno delle fatturazioni nei prodotti per l'istruzione superiore che includono strumenti di studio basati sull'AI. L'azienda ha completato il riacquisto di azioni da 500 milioni di sterline, ha emesso un'obbligazione educativa da 350 milioni di sterline e mantiene una solida posizione finanziaria con il rating di Moody's che è stato aggiornato a Baa2.
Pearson reportó un rendimiento positivo en el tercer trimestre de 2024 con un crecimiento de ventas subyacente del 5%, lo que resultó en un crecimiento del 3% en el período de nueve meses. Todas las divisiones mostraron crecimiento en el tercer trimestre, incluyendo Educación Superior con un aumento del 4%, Evaluación y Calificaciones con un aumento del 6%, Aprendizaje Virtual con un aumento del 4%, Aprendizaje del Idioma Inglés con un aumento del 2%, y Habilidades para el Trabajo con un aumento del 6%. La compañía firmó un nuevo acuerdo empresarial de varios años con ServiceNow y amplió la asociación con Degreed. Las iniciativas de IA mostraron avances con un crecimiento de facturación de dos dígitos interanual en los productos de Educación Superior que presentan herramientas de estudio basadas en IA. La compañía completó su programa de recompra de acciones de 500 millones de libras, emitió un Bono Educativo de 350 millones de libras y mantiene una sólida posición financiera, ya que Moody's mejoró su calificación a Baa2.
Pearson는 2024년 3분기 긍정적인 성과를 보고했으며, 기초 매출이 5% 성장하여 9개월 동안 3% 성장하게 되었습니다. 모든 부문이 3분기 동안 성장했으며, 고등 교육이 4%, 평가 및 자격이 6%, 가상 학습이 4%, 영어 학습이 2%, 직무 기술이 6% 증가했습니다. 회사는 ServiceNow와 새로운 다년 계약을 체결하고 Degreed와의 파트너십을 확장했습니다. AI 이니셔티브는 AI 학습 도구를 포함한 고등 교육 제품에서 전년 대비 두 자릿수 성장의 청구액 증가로 발전을 보였습니다. 회사는 5억 파운드의 자사주 매입을 완료하고, 3억 5천만 파운드의 교육 채권을 발행했으며, Moody's의 등급이 Baa2로 상향 조정되어 강력한 재무 상태를 유지하고 있습니다.
Pearson a rapporté une performance positive au troisième trimestre de 2024 avec une croissance des ventes sous-jacentes de 5%, ce qui a entraîné une croissance de 3% sur la période de neuf mois. Tous les départements ont affiché une croissance au troisième trimestre, y compris l'enseignement supérieur en hausse de 4%, l'évaluation et les qualifications en hausse de 6%, l'apprentissage virtuel en hausse de 4%, l'apprentissage de l'anglais en hausse de 2% et les compétences professionnelles en hausse de 6%. L'entreprise a signé un nouvel accord d'entreprise pluriannuel avec ServiceNow et a élargi son partenariat avec Degreed. Les initiatives de l'IA ont montré des progrès avec une croissance à deux chiffres des recettes par rapport à l'année précédente dans les produits d'enseignement supérieur intégrant des outils d'étude basés sur l'IA. L'entreprise a complété son programme de rachat d'actions de 500 millions de livres, a émis une obligation éducative de 350 millions de livres, et maintient une forte position financière avec Moody's améliorant sa note à Baa2.
Pearson berichtete über eine positive Leistung im 3. Quartal 2024 mit einem Umsatzwachstum von 5%, was zu einem Wachstum von 3% im Neunmonatszeitraum führte. Alle Bereiche verzeichneten im 3. Quartal ein Wachstum, darunter Hochschulbildung mit 4%, Bewertung und Qualifikationen mit 6%, virtuelles Lernen mit 4%, Englisch lernen mit 2% und berufliche Fähigkeiten mit 6%. Das Unternehmen unterzeichnete einen neuen mehrjährigen Unternehmensvertrag mit ServiceNow und erweiterte die Partnerschaft mit Degreed. Die KI-Initiativen zeigten Fortschritte mit zweistelligen Wachstumsraten bei Rechnungen für Produkte der Hochschulbildung, die KI-Studienwerkzeuge enthalten. Das Unternehmen schloss ein Aktienrückkaufprogramm über 500 Mio. Pfund ab, emittierte eine Bildungsanleihe über 350 Mio. Pfund und hält eine starke Finanzposition, da Moodys ihre Bewertung auf Baa2 angehoben hat.
- All divisions reported positive growth in Q3 2024
- 5% underlying sales growth in Q3, 3% for nine-month period
- Higher Education returned to growth with 4% increase in Q3
- Completed £500m share buyback program, buying back 7% of shares
- Expected recovery of £105m from UK government related to State Aid appeal
- Double-digit billings growth in Higher Education products with AI tools
- Moody's upgraded company's rating to Baa2 with stable outlook
- Virtual Learning sales declined 4% for the nine-month period
- Higher Education sales flat for nine-month period despite Q3 growth
Insights
The Q3 results demonstrate solid operational execution with 5% underlying sales growth and all divisions showing positive momentum. Key highlights include Higher Education returning to growth at 4% in Q3, Assessment & Qualifications accelerating to 6% and continued strength in Workforce Skills at 6%. The company's financial position has strengthened, evidenced by Moody's upgrade to Baa2 rating. The completion of
Pearson's AI integration strategy is showing early commercial success, with double-digit billings growth in Higher Education products featuring AI study tools. Notable developments include:
- Over 5 million student interactions with AI study tools
- Expansion to 90+ titles for Fall Back to School
- Development of Teaching Pal for English Language Learning
- New Generative AI Foundations certification launch
Continued progress on 2024 priorities with good financial and operational performance; all divisions delivered underlying sales growth in Q3; on track to meet full year expectations.
-
Advancing our 2024 strategic priorities:
- Progressing in Enterprise: signed a new meaningful multi-year enterprise deal with ServiceNow and expanded our partnership with Degreed.
- Scaling AI across our products and services: double-digit year-over-year billings growth in Higher Education products with AI study tools, and developing English Language Learning Teaching Pal to create customised lesson content and activities.
-
Underlying Group sales growth1: up
5% in Q3, resulting in3% growth for the nine-month period, excluding OPM2 and Strategic Review3 businesses. - Delivered a comprehensive performance: all divisions grew in Q3, including Higher Education.
- On track to meet full-year expectations.
Omar Abbosh, Pearson’s Chief Executive, said:
“Pearson is delivering on the three priorities for 2024 that I identified at the start of the year. First, our focus on operational and financial performance has driven growth across all divisions this quarter and we are on track to meet full-year expectations. Second, we are accelerating our AI capabilities across the business and starting to see the commercial benefit. Third, expanded enterprise relationships with companies such as ServiceNow demonstrate progress on our intention to expand in workforce learning.”
Underlying sales growth1 of
-
Assessment & Qualifications sales were up
3% for the nine-month period, with growth accelerating in Q3, as expected, and all businesses contributing to growth. -
Virtual Learning sales were up
4% for Q3 due to4% growth in Virtual Schools, with 2024/25 academic enrolments up4% on a same school basis. Virtual Learning sales declined4% for the nine-month period attributable to the final portion of the OPM ASU contract in the first half of 2023. -
Higher Education returned to growth in Q3 with sales up
4% and is on track to grow for the full year, driven by the operational and business changes implemented over the past 18 months. Higher Education sales were flat for the nine-month period. -
English Language Learning sales were up
7% for the nine-month period driven by a strong performance in Institutional. In Q3, sales were up2% with some Institutional sales moving to Q4. -
Workforce Skills sales were up
6% for the nine-month period and also for Q3, with solid performances in both Vocational Qualifications and Workforce Solutions.
Strong financial position
- Pearson’s financial position remains robust, with a strong balance sheet.
- Moody’s recently upgraded Pearson’s long-term issuer rating to Baa2 and moved the outlook to stable
-
We completed our
£500m share buyback with7% of shares bought back. -
We issued a
£350m Educational Bond. -
The
UK government and other parties have successfully appealed against the 2019 European Commission decision that theUK controlled foreign company group financing partial exemption partially constitutes State Aid. This means that the£105m previously paid in relation to this will be recovered at some point in the future and we will release the related£63m tax provision in 2024, with the impact of the provision release captured outside of adjusted earnings.
2024 outlook – full year guidance reaffirmed
-
Group underlying sales growth, adjusted operating profit, interest and tax outlook for 2024 remain in line with market expectations4. As guided, free cash flow conversion is expected to be 95
-100% . -
We expect interest to be in line with guidance of c.
£45m with recovery of interest on the State Aid payment offset by increased interest given our recent bond issue.
Financial summary
Underlying growth for the third quarter and nine months ended 30th September 2024 compared to the equivalent period in 2023.
Sales |
Q3 |
Nine months |
||
Assessment & Qualifications |
|
|
||
Virtual Learning |
|
(4)% |
||
Higher Education |
|
|
||
English Language Learning |
|
|
||
Workforce Skills |
|
|
||
Strategic Review |
(100)% |
(100)% |
||
Total |
|
|
||
Total, excluding OPM2 and Strategic Review3 |
|
|
1Throughout this announcement growth rates are stated on an underlying basis unless otherwise stated. Underlying growth rates exclude currency movements, and portfolio changes. |
2We completed the sale of the Pearson Online Learning Services (POLS) business in June 2023 and as such have removed it from underlying measures throughout. Within this specific measure we exclude our entire OPM business (POLS and ASU) to aid comparison to guidance. |
3Strategic Review is sales in international courseware local publishing businesses which have been wound down. As expected, there are no sales in these businesses in 2024. |
42024 consensus on the Pearson website dated 30th August 2024; adjusted operating profit of |
Assessment & Qualifications
In Assessment & Qualifications, sales growth accelerated in Q3 to
Pearson VUE sales were up
In US Student Assessment, sales were up
In Clinical Assessment, sales were up
In
We continue to expect low to mid-single digit sales growth for the full year.
Virtual Learning
In Virtual Learning, sales were up
In Virtual Schools, we previously announced the opening of 3 new schools this year and a further 19 career programmes. This brings our total number of schools to 40, with 24 career programmes, across 30 states for the 2024/25 academic year. Students now have access to expanded college and early career readiness offerings, including through credentials via Credly, and college cost savings via new partnerships with institutions like
We have also embedded AI study tools into our Virtual Schools content so that when high school students struggle with quizzes and practice tests, they can receive step-by-step help to walk them through tough material.
Full year expectations for Virtual Schools remain unchanged with sales expected to be down a similar rate to 2023 reflecting the previously announced school losses. As a reminder, Q4 performance will be impacted by the catch up in funding that we saw in Q4 last year.
Higher Education
In Higher Education, sales grew
In US Higher Education, Q3 sales growth was driven by gains in adoption share, enrolments and pricing partially offset by mix impacts and revenue deferral. In the nine-month period, there was
We continue to see good engagement with our AI study tools with over 5 million student interactions in the nine-month period to September following the roll out of our AI study tools. We extended the AI study tools to more than 90 titles for Fall Back to School. This has helped to drive double-digit billings growth year-over-year in products with AI study tools.
On 1st October 2024, Pearson began to directly distribute our proprietary Advanced Placement (AP®), Dual Enrollment, and Career and Technical Education (CTE) materials into states and school districts, which were previously distributed by a third party. The dedicated sales team that Pearson has invested in will enable us to expand and strengthen customer relationships with US school administrators as the demand for college and career readiness programmes grows.
We continue to expect sales growth for the full year.
English Language Learning
In English Language Learning, sales increased
Institutional performance continued to be strong for the nine-month period, with particularly good growth in LATAM and
We are infusing AI into our English Language Learning division with the development of Teaching Pal, an AI-powered tool designed to simplify educators' work by creating customised lesson content and activities, leveraging our trusted IP.
We continue to expect high-single digit sales growth for the full year.
Workforce Skills
In Workforce Skills, sales increased
There was solid performance in both the Vocational Qualifications and Workforce Solutions businesses.
Pearson has many of the assets that enterprises need to address their problems in talent planning, talent sourcing and talent development, and through bundling our existing products we can unlock synergies across the company. We have recently signed a meaningful multi-year deal with ServiceNow. The first phase is aimed at reshaping how their employees and professional communities develop and verify critical skills and drive productivity in the era of AI, using Pearson’s research, insights and Credly capabilities.
We are also expanding our partnership with Degreed through integrating Faethm data sets into Degreed’s platform, offering real-time insights into the most relevant skills across industries, allowing companies to benchmark skills, identify gaps, and prioritise key areas for upskilling.
Contacts
Investor Relations |
Jo Russell |
+44 (0) 7785 451 266 |
||
Alex Shore |
+44 (0) 7720 947 853 | |||
Gemma Terry |
+44 (0) 7841 363 216 | |||
|
Brennan Matthews |
+1 (332) 238 8785 |
||
Media |
||||
Teneo |
Ed Cropley |
+44 (0) 7492 949 346 | ||
Pearson |
Laura Ewart |
+44 (0) 7798 846 805 | ||
Virtual event |
Pearson’s 2024 nine month trading update is taking place today at 08:30 (GMT). Register to receive log in details: https://pearson.connectid.cloud/register |
|
About Pearson
At Pearson, our purpose is simple: to help people realise the life they imagine through learning. We believe that every learning opportunity is a chance for a personal breakthrough. That’s why our Pearson employees are committed to creating vibrant and enriching learning experiences designed for real-life impact. We are the world’s lifelong learning company, serving customers with digital content, assessments, qualifications, and data. For us, learning isn’t just what we do. It’s who we are. Visit us at pearsonplc.com.
Notes
Forward looking statements: Except for the historical information contained herein, the matters discussed in this statement include forward-looking statements. In particular, all statements that express forecasts, expectations and projections with respect to future matters, including trends in results of operations, margins, growth rates, overall market trends, the impact of interest or exchange rates, the availability of financing, anticipated cost savings and synergies and the execution of Pearson’s strategy, are forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will occur in future. They are based on numerous assumptions regarding Pearson’s present and future business strategies and the environment in which it will operate in the future. There are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including a number of factors outside Pearson’s control. These include international, national and local conditions, as well as competition. They also include other risks detailed from time to time in Pearson’s publicly-filed documents and you are advised to read, in particular, the risk factors set out in Pearson’s latest annual report and accounts, which can be found on its website (www.pearsonplc.com). Any forward-looking statements speak only as of the date they are made, and Pearson gives no undertaking to update forward-looking statements to reflect any changes in its expectations with regard thereto or any changes to events, conditions or circumstances on which any such statement is based. Readers are cautioned not to place undue reliance on such forward-looking statements.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241029832586/en/
Investor Relations
Jo Russell +44 (0) 7785 451 266
Alex Shore +44 (0) 7720 947 853
Gemma Terry +44 (0) 7841 363 216
Brennan Matthews +1 (332) 238 8785
Media
Teneo
Ed Cropley +44 (0) 7492 949 346
Pearson
Laura Ewart +44 (0) 7798 846 805
Source: Pearson
FAQ
What was Pearson's (PSO) sales growth in Q3 2024?
How much was Pearson's (PSO) share buyback program in 2024?
What was Pearson's (PSO) Higher Education performance in Q3 2024?