Pearson Stock Price, News & Analysis

Pearson (PSO) and Amazon Web Services (AWS) have announced an expanded collaboration to deliver AI-powered learning solutions globally. The partnership aims to enhance learning experiences through cloud and AI tools, addressing the $1.1 trillion annual cost of inefficient career transitions and learning gaps in the U.S. economy.

Building on their 13-year relationship, AWS will serve as Pearson's strategic AI and cloud provider, focusing on improving higher education products. The collaboration includes:

• Increased use of AWS cloud infrastructure and Amazon Bedrock for enhanced learning experiences
• AI-powered lesson generation and assessments
• Expansion of AWS certification delivery through Pearson VUE
• Development of transformative learning solutions in clinical assessments, enterprise learning, and English Language Learning

The partnership leverages AWS's global scale and AI capabilities to create personalized, accessible learning experiences, supporting Pearson's commitment to accelerate AI integration across its products and strengthen its enterprise learning market presence.

Pearson (PSO) reported strong 2024 financial results with 3% underlying group sales growth and adjusted operating profit of £600m, up 10% with margin expansion to 16.9%. The company achieved free cash flow of £490m with 117% conversion rate.

Key highlights include a 6% increase in full-year dividend to 24.0p and announcement of a new £350m share buyback program. The company formed a strategic partnership with AWS to enhance learning products with cloud infrastructure and AI capabilities.

Business segment performance showed varied results: Assessment & Qualifications up 3%, English Language Learning up 8%, Workforce Skills up 6%, Higher Education up 1%, while Virtual Schools decreased 1%. The company maintains its medium-term guidance for mid-single digit underlying sales growth CAGR and sustained margin improvement averaging 40 basis points annually.

Pearson (FTSE: PSON.L) has appointed Naseem Tuffaha as Chief Business Officer, reporting to CEO Omar Abbosh. In his new role, Tuffaha will align software scaling, business plans, and customer strategies with the company's long-term objectives, particularly focusing on enhancing learning effectiveness and building skilling pathways in the AI era.

Tuffaha brings over 30 years of experience in market development, strategic planning, and organizational leadership. He previously served as Chief Growth Officer at The Trade Desk and held various leadership positions during a 24-year career at Microsoft. He also served as CEO and Chief Revenue Officer of Fidesic , a venture-backed startup.

With a bachelor's degree in economics from Harvard College, Tuffaha will be based in Seattle, Washington.

Pearson (PSON.L) released a report titled 'Lost in Transition: Fixing the Skills Gap' at the World Economic Forum Annual Meeting, revealing that inefficient career transitions and learning gaps cost the U.S. economy $1.1 trillion annually (5% of GDP). The research warns of a potential global 'skills chasm' between employer needs and employee capabilities.

The report emphasizes two critical actions: prioritizing 'learning to learn' and developing modern skilling pathways. The first focuses on metacognitive skills that can accelerate yearly learning progress by seven months. The second promotes work-based learning and estimates the U.S. could gain $40 billion annually by reducing transition time from education to work by six weeks.

The research, based on Pearson's Faethm data, explores solutions including virtual reality for career exploration, lifelong learning financing, digital wallets for skills tracking, and AI-powered career mapping.

Pearson (PSO) reported 3% underlying Group sales growth for 2024 (excluding OPM and Strategic Review businesses), with adjusted operating profit of £595-600m at £:$ of 1.28, representing a ~10% increase from 2023. The company achieved a margin of ~16.8% (up from 15.6% in 2023) and free cash flow conversion exceeded 100%.

Key performance highlights include: Assessment & Qualifications up 3%, Higher Education grew 1%, English Language Learning increased 8%, and Workforce Skills rose 6%. Virtual Learning declined 4% due to OPM ASU contract completion. The company announced a new strategic AI partnership with Microsoft and is evolving its Workforce Skills unit to become Enterprise Learning and Skills, focusing on enterprise customers.

The company maintains a strong financial position with net debt under £0.9bn and appointed Naseem Tuffaha as Chief Business Officer.

Pearson (PSO) and Microsoft (MSFT) announced a strategic partnership to address AI skilling challenges in the workforce. The collaboration combines Pearson's learning expertise with Microsoft's cloud and AI technologies to develop new AI-powered products and services.

Key aspects of the partnership include: Pearson leveraging Microsoft Azure Cloud and AI infrastructure to scale personalized learning services; development of new AI credentials and certifications; extension of Pearson VUE's Microsoft certification partnership through 2029; and Pearson's deployment of Microsoft 365 Copilot across its workforce.

The partnership addresses critical market needs, as IDC research shows lack of skilled workers is the biggest challenge for AI implementation, with 66% of leaders unwilling to hire candidates without AI skills. Pearson's research indicates generative AI could save U.S. workers 78 million hours weekly on routine tasks.

Pearson (PSON.L) and the Centre for Economics and Business Research (Cebr) released a report showing that a £130 million annual investment in school technology over the next decade could generate up to £8.7 billion in economic benefits for the UK, with a return of £7.90 for every £1 invested.

The analysis focuses on three key areas: device provision, broadband improvement, and teacher training. Key benefits include:

• £900 million in teacher time savings in the first year
• £200 million in additional earning potential by year 10
• £180 million in economic productivity benefits by year 10
• Two million kg of CO2E savings by year 10

Current challenges include insufficient device provision in schools (only 34% of secondary and 31% of primary schools have adequate devices), slow internet speeds, and teacher training in digital skills. Pearson plans to launch a Digital in Schools project in 2025 to help unlock EdTech benefits.

Pearson (PSON.L) released new insights showing increased AI adoption in higher education. Students using Pearson's AI tools are 4x more likely to engage in active studying, with an 11-percentage-point increase in students reporting better grades and study efficiency. Usage data reveals that students using AI-generated flashcards were nearly 3x more likely to return and practice.

The analysis shows 38% of student inputs demonstrate higher cognitive complexity, while 25% involved critical thinking skills. AI sessions in MyLab and Mastering increased 95% from fall 2023 to 2024. Faculty adoption is also growing, with 77% of surveyed educators envisioning AI integration in teaching methods, particularly for generating examples, providing tutoring services, and developing instructional content.

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.