Pearson plc (PSO) 10-Year Financial Performance & Capital Metrics

PSO • • Industrial / General

Communication ServicesPublishingEducational PublishingHigher Education & Professional Learning

AboutPearson plc provides educational courseware, assessments, and services in the United Kingdom, the United States, Canada, the Asia Pacific, other European countries, and internationally. It operates through five segments: Assessment & Qualifications, Virtual Learning, English Language Learning, Higher Education, and Workforce Skills. The Assessment & Qualifications segment offers Pearson VUE, US student assessment, clinical assessment, UK GCSE, and A levels and international academic qualifications. The Virtual Learning segment provides virtual schools and online program management services. The English Language Learning segment offers Pearson test of English, institutional courseware, and English online solutions. The Higher Education segment provides the US, Canadian, and international higher education courseware businesses. The Workforce Skills offers BTEC, GED, TalentLens, Faethm, Pearson college, and apprenticeships. Pearson plc was founded in 1844 and is headquartered in London, the United Kingdom.Show more

Revenue $3.55B -3.3%
EBITDA $1.07B +2.5%
Net Income $434M +14.8%
EPS (Diluted) 0.63 +18.9%
Gross Margin 50.99% +2.1%
EBITDA Margin 30.04% +6.0%
Operating Margin 15.23% +12.4%
Net Margin 12.22% +18.8%
ROE 10.79% +20.0%
ROIC 8.26% +9.9%
Debt/Equity 0.36 +24.8%
Interest Coverage 6.85 -16.1%

Technical Analysis

Key Insights

Based on financial data analysis

✓Strengths

✓Strong Piotroski F-Score: 7/9
✓High quality earnings: Operating CF exceeds net income
✓Share count reduced 4.6% through buybacks

✗Weaknesses

No significant weaknesses identified

Price & Volume

Loading chart...

Growth Metrics

Revenue CAGR

10Y-3.11%

5Y-1.7%

3Y1.19%

TTM-6.38%

Profit (Net Income) CAGR

10Y-0.81%

5Y10.45%

3Y34.85%

TTM38.6%

EPS CAGR

10Y0.83%

5Y13.13%

3Y39.92%

TTM49.35%

ROCE

10Y Avg2.23%

5Y Avg6.74%

3Y Avg7.89%

Latest10.08%

Peer Comparison

Higher Education & Professional Learning

Name	Market Cap	Current Price	P/E Ratio	Revenue Growth 1Y	Net Margin	ROE	FCF Yield	Debt/Equity
PSOPearson plc	8.2B	12.91	20.49	-3.32%	11.18%	21.91%	6.13%	0.36

Profit & Loss

	Dec 2015	Dec 2016	Dec 2017	Dec 2018	Dec 2019	Dec 2020	Dec 2021	Dec 2022	Dec 2023	Dec 2024
Sales/Revenue+	4.47B	4.55B	4.51B	4.13B	3.87B	3.4B	3.43B	3.84B	3.67B	3.55B
Revenue Growth %	-0.08%	0.02%	-0.01%	-0.09%	-0.06%	-0.12%	0.01%	0.12%	-0.04%	-0.03%
Cost of Goods Sold+	1.98B	2.09B	2.07B	1.94B	1.86B	1.77B	1.75B	2.05B	1.84B	1.74B
COGS % of Revenue	0.44%	0.46%	0.46%	0.47%	0.48%	0.52%	0.51%	0.53%	0.5%	0.49%
Gross Profit+	2.49B	2.46B	2.45B	2.19B	2.01B	1.63B	1.68B	1.79B	1.83B	1.81B
Gross Margin %	0.56%	0.54%	0.54%	0.53%	0.52%	0.48%	0.49%	0.47%	0.5%	0.51%
Gross Profit Growth %	-0.07%	-0.01%	-0%	-0.11%	-0.08%	-0.19%	0.03%	0.07%	0.02%	-0.01%
Operating Expenses+	2.09B	2.5B	2.2B	1.91B	1.81B	1.22B	1.5B	1.52B	1.34B	1.27B
OpEx % of Revenue	0.47%	0.55%	0.49%	0.46%	0.47%	0.36%	0.44%	0.4%	0.36%	0.36%
Selling, General & Admin	2.17B	2.24B	2.17B	1.87B	1.69B	1.45B	1.39B	1.45B	1.36B	1.31B
SG&A % of Revenue	0.49%	0.49%	0.48%	0.45%	0.44%	0.43%	0.4%	0.38%	0.37%	0.37%
Research & Development	0	0	14M	14M	13M	280M	279M	303M	0	0
R&D % of Revenue	-	-	0%	0%	0%	0.08%	0.08%	0.08%	-	-
Other Operating Expenses	-111M	-60M	0	21M	103M	-508M	-166M	-227M	-26M	-37M
Operating Income+	-404M	-2.5B	451M	553M	275M	411M	183M	271M	498M	541M
Operating Margin %	-0.09%	-0.55%	0.1%	0.13%	0.07%	0.12%	0.05%	0.07%	0.14%	0.15%
Operating Income Growth %	-2.02%	-5.18%	1.18%	0.23%	-0.5%	0.49%	-0.55%	0.48%	0.84%	0.09%
EBITDA+	796M	-1.78B	1.1B	1.14B	870M	996M	701M	822M	1.04B	1.07B
EBITDA Margin %	0.18%	-0.39%	0.24%	0.28%	0.22%	0.29%	0.2%	0.21%	0.28%	0.3%
EBITDA Growth %	-0%	-3.24%	1.62%	0.04%	-0.24%	0.14%	-0.3%	0.17%	0.27%	0.02%
D&A (Non-Cash Add-back)	1.2B	714M	651M	591M	595M	585M	518M	551M	543M	526M
EBIT	-372M	-2.58B	442M	496M	245M	232M	233M	379M	549M	589M
Net Interest Income+	-42M	-48M	-82M	-14M	-28M	-55M	-53M	-2M	-11M	-24M
Interest Income	19M	26M	23M	36M	41M	24M	15M	67M	50M	55M
Interest Expense	46M	59M	79M	91M	84M	79M	68M	69M	61M	79M
Other Income/Expense	-29M	-60M	-30M	-55M	-43M	-31M	-6M	51M	-5M	-31M
Pretax Income+	-433M	-2.56B	421M	498M	232M	380M	177M	322M	493M	510M
Pretax Margin %	-0.1%	-0.56%	0.09%	0.12%	0.06%	0.11%	0.05%	0.08%	0.13%	0.14%
Income Tax+	-81M	-222M	13M	-92M	-34M	50M	-1M	79M	113M	75M
Effective Tax Rate %	-1.9%	0.91%	0.96%	1.18%	1.14%	0.87%	1%	0.75%	0.77%	0.85%
Net Income+	823M	-2.34B	406M	588M	264M	330M	177M	242M	378M	434M
Net Margin %	0.18%	-0.51%	0.09%	0.14%	0.07%	0.1%	0.05%	0.06%	0.1%	0.12%
Net Income Growth %	0.75%	-3.84%	1.17%	0.45%	-0.55%	0.25%	-0.46%	0.37%	0.56%	0.15%
Net Income (Continuing)	-352M	-2.33B	330M	590M	266M	330M	178M	243M	380M	435M
Discontinued Operations	1.18B	0	0	0	0	0	0	0	0	0
Minority Interest	4M	4M	8M	9M	10M	9M	10M	13M	14M	15M
EPS (Diluted)+	1.01	-2.87	0.50	0.76	0.34	0.41	0.23	0.33	0.53	0.63
EPS Growth %	0.74%	-3.84%	1.17%	0.52%	-0.55%	0.21%	-0.44%	0.43%	0.61%	0.19%
EPS (Basic)	1.01	-2.87	0.50	0.76	0.34	0.41	0.23	0.33	0.53	0.63
Diluted Shares Outstanding	814.1M	814.8M	813.7M	778.7M	777.5M	755.4M	759.1M	742M	717.3M	684M
Basic Shares Outstanding	813.3M	814.8M	813.4M	778.1M	777M	755.4M	754.1M	738.1M	717.27M	688.6M
Dividend Payout Ratio	0.51%	-	0.78%	0.23%	0.56%	0.44%	0.84%	0.64%	0.41%	0.36%

Balance Sheet

	Dec 2015	Dec 2016	Dec 2017	Dec 2018	Dec 2019	Dec 2020	Dec 2021	Dec 2022	Dec 2023	Dec 2024
Total Current Assets+	4.1B	4.08B	3.29B	3.38B	3.17B	3.34B	3.22B	2.82B	2.43B	2.73B
Cash & Short-Term Investments	1.73B	1.47B	526M	568M	437M	1.1B	937M	558M	312M	543M
Cash Only	1.7B	1.46B	518M	568M	437M	1.1B	937M	558M	312M	543M
Short-Term Investments	28M	10M	8M	0	0	0	0	0	0	0
Accounts Receivable	1.15B	1.21B	740M	1.07B	1.13B	825M	882M	856M	831M	1.01B
Days Sales Outstanding	93.62	97.1	59.85	94.59	106.89	88.64	93.91	81.34	82.56	103.89
Inventory	211M	235M	148M	164M	169M	129M	98M	105M	91M	74M
Days Inventory Outstanding	38.88	40.98	26.15	30.81	33.2	26.65	20.48	18.73	18.06	15.51
Other Current Assets	1.12B	1.3B	1.79B	1.67B	1.3B	1.1B	1.1B	1.1B	861M	1.1B
Total Non-Current Assets+	7.54B	5.98B	4.6B	4.53B	4.48B	4.11B	4.12B	4.51B	4.29B	4.16B
Property, Plant & Equipment	320M	343M	281M	237M	618M	515M	366M	250M	217M	216M
Fixed Asset Turnover	13.96x	13.27x	16.06x	17.42x	6.26x	6.60x	9.37x	15.36x	16.93x	16.44x
Goodwill	4.13B	2.34B	2.03B	2.11B	2.14B	2.09B	2.15B	2.48B	2.43B	2.44B
Intangible Assets	1.03B	1.1B	934M	898M	761M	648M	624M	697M	657M	589M
Long-Term Investments	1.22B	1.3B	467M	618M	464M	144M	137M	158M	165M	153M
Other Non-Current Assets	558M	443M	796M	605M	436M	678M	793M	864M	819M	717M
Total Assets+	11.63B	10.07B	7.89B	7.91B	7.65B	7.45B	7.34B	7.31B	6.73B	6.89B
Asset Turnover	0.38x	0.45x	0.57x	0.52x	0.51x	0.46x	0.47x	0.53x	0.55x	0.52x
Asset Growth %	0.02%	-0.13%	-0.22%	0%	-0.03%	-0.03%	-0.01%	-0%	-0.08%	0.02%
Total Current Liabilities+	1.91B	1.92B	2.21B	2.13B	1.49B	1.65B	1.58B	1.48B	1.4B	1.48B
Accounts Payable	319M	333M	265M	311M	358M	340M	351M	348M	317M	273M
Days Payables Outstanding	58.78	58.07	46.82	58.42	70.33	70.23	73.33	62.08	62.92	57.23
Short-Term Debt	307M	39M	15M	66M	18M	181M	87M	26M	3M	250M
Deferred Revenue (Current)	1000K	1000K	1000K	1000K	1000K	1000K	1000K	1000K	1000K	0
Other Current Liabilities	885M	437M	1.43B	989M	-1.06B	410M	252M	181M	383M	846M
Current Ratio	2.15x	2.12x	1.49x	1.58x	2.13x	2.03x	2.04x	1.91x	1.73x	1.85x
Quick Ratio	2.04x	2.00x	1.42x	1.51x	2.01x	1.95x	1.98x	1.83x	1.67x	1.80x
Cash Conversion Cycle	73.72	80.01	39.18	66.97	69.76	45.06	41.05	37.99	37.7	62.17
Total Non-Current Liabilities+	3.31B	3.79B	1.66B	1.25B	1.83B	1.67B	1.48B	1.43B	1.33B	1.36B
Long-Term Debt	2.03B	2.4B	1.06B	672M	823M	787M	680M	610M	611M	705M
Capital Lease Obligations	4M	4M	4M	2M	749M	610M	565M	534M	483M	452M
Deferred Tax Liabilities	560M	466M	164M	136M	48M	62M	40M	37M	46M	63M
Other Non-Current Liabilities	455M	603M	397M	370M	160M	161M	142M	189M	122M	79M
Total Liabilities	5.22B	5.72B	3.87B	3.38B	3.33B	3.32B	3.06B	2.91B	2.74B	2.84B
Total Debt+	2.33B	2.47B	1.08B	720M	1.68B	1.65B	1.4B	1.24B	1.16B	1.47B
Net Debt	627M	1.01B	567M	152M	1.24B	554M	463M	683M	849M	929M
Debt / Equity	0.36x	0.57x	0.27x	0.16x	0.39x	0.40x	0.33x	0.28x	0.29x	0.36x
Debt / EBITDA	2.93x	-	0.98x	0.63x	1.93x	1.66x	2.00x	1.51x	1.12x	1.38x
Net Debt / EBITDA	0.79x	-	0.51x	0.13x	1.43x	0.56x	0.66x	0.83x	0.82x	0.87x
Interest Coverage	-8.78x	-42.32x	5.71x	6.08x	3.27x	5.20x	2.69x	3.93x	8.16x	6.85x
Total Equity+	6.42B	4.35B	4.02B	4.53B	4.32B	4.13B	4.28B	4.42B	3.99B	4.05B
Equity Growth %	0.07%	-0.32%	-0.08%	0.13%	-0.04%	-0.04%	0.04%	0.03%	-0.1%	0.02%
Book Value per Share	7.88	5.34	4.94	5.81	5.56	5.47	5.64	5.95	5.56	5.93
Total Shareholders' Equity	6.41B	4.34B	4.01B	4.52B	4.31B	4.13B	4.27B	4.4B	3.97B	4.04B
Common Stock	205M	205M	200M	195M	195M	188M	189M	179M	174M	166M
Retained Earnings	3.7B	716M	662M	1.04B	911M	865M	1.07B	881M	745M	827M
Treasury Stock	-72M	-79M	-61M	-33M	-24M	-7M	-12M	-15M	-19M	-7M
Accumulated OCI	-7M	905M	610M	708M	617M	459M	400M	724M	432M	403M
Minority Interest	4M	4M	8M	9M	10M	9M	10M	13M	14M	15M

Cash Flow

	Dec 2015	Dec 2016	Dec 2017	Dec 2018	Dec 2019	Dec 2020	Dec 2021	Dec 2022	Dec 2023	Dec 2024
Cash from Operations+	211M	410M	298M	462M	369M	389M	326M	361M	525M	627M
Operating CF Margin %	0.05%	0.09%	0.07%	0.11%	0.1%	0.11%	0.1%	0.09%	0.14%	0.18%
Operating CF Growth %	-0.54%	0.94%	-0.27%	0.55%	-0.2%	0.05%	-0.16%	0.11%	0.45%	0.19%
Net Income	823M	-2.33B	408M	590M	266M	310M	160M	242M	378M	510M
Depreciation & Amortization	1.2B	2.91B	313M	253M	389M	317M	408M	572M	543M	526M
Stock-Based Compensation	26M	22M	33M	37M	25M	29M	28M	38M	40M	44M
Deferred Taxes	-1.64B	-464M	-614M	34M	-181M	-282M	-280M	0	0	0
Other Non-Cash Items	-28M	41M	-5M	-428M	-12M	18M	8M	-540M	-340M	-400M
Working Capital Changes	-169M	234M	163M	10M	-118M	-3M	2M	49M	-96M	-53M
Change in Receivables	-99M	156M	133M	-15M	59M	-1M	-71M	33M	-24M	32M
Change in Inventory	10M	17M	24M	-10M	-20M	35M	22M	-34M	9M	15M
Change in Payables	-80M	61M	6M	35M	-157M	0	37M	0	-20M	0
Cash from Investing+	1.33B	-41M	651M	211M	-325M	591M	-80M	13M	-301M	-131M
Capital Expenditures	-247M	-245M	-232M	-200M	-193M	-134M	-176M	-57M	-30M	-33M
CapEx % of Revenue	0.06%	0.05%	0.05%	0.05%	0.05%	0.04%	0.05%	0.01%	0.01%	0.01%
Acquisitions	-	-	-	-	-	-	-	-	-	-
Investments	-	-	-	-	-	-	-	-	-	-
Other Investing	196M	165M	465M	311M	59M	170M	34M	298M	-56M	-45M
Cash from Financing+	-364M	-697M	-1.76B	-729M	-102M	-299M	-414M	-804M	-450M	-241M
Debt Issued (Net)	-	-	-	-	-	-	-	-	-	-
Equity Issued (Net)	-	-	-	-	-	-	-	-	-	-
Dividends Paid	-423M	-424M	-318M	-136M	-147M	-146M	-149M	-156M	-154M	-156M
Share Repurchases	-	-	-	-	-	-	-	-	-	-
Other Financing	10M	-5M	-5M	-5M	6M	5M	-88M	6M	9M	-78M
Net Change in Cash	-	-	-	-	-	-	-	-	-	-
Free Cash Flow+	-36M	165M	66M	262M	176M	255M	150M	304M	399M	503M
FCF Margin %	-0.01%	0.04%	0.01%	0.06%	0.05%	0.08%	0.04%	0.08%	0.11%	0.14%
FCF Growth %	-1.13%	5.58%	-0.6%	2.97%	-0.33%	0.45%	-0.41%	1.03%	0.31%	0.26%
FCF per Share	-0.04	0.20	0.08	0.34	0.23	0.34	0.20	0.41	0.56	0.74
FCF Conversion (FCF/Net Income)	0.26x	-0.18x	0.73x	0.79x	1.40x	1.18x	1.84x	1.49x	1.39x	1.44x
Interest Paid	0	0	0	0	0	0	0	57M	0	0
Taxes Paid	0	0	0	0	0	0	0	0	0	0

Key Ratios

Metric	2015	2016	2017	2018	2019	2020	2021	2022	2023	2024
Return on Equity (ROE)	13.27%	-43.41%	9.7%	13.76%	5.97%	7.8%	4.21%	5.57%	9%	10.79%
Return on Invested Capital (ROIC)	-4.12%	-30.2%	6.8%	8.95%	4.03%	6.01%	2.91%	4.13%	7.52%	8.26%
Gross Margin	55.66%	54.02%	54.22%	52.94%	51.98%	47.98%	49.04%	46.73%	49.95%	50.99%
Net Margin	18.42%	-51.34%	9%	14.24%	6.82%	9.71%	5.16%	6.3%	10.29%	12.22%
Debt / Equity	0.36x	0.57x	0.27x	0.16x	0.39x	0.40x	0.33x	0.28x	0.29x	0.36x
Interest Coverage	-8.78x	-42.32x	5.71x	6.08x	3.27x	5.20x	2.69x	3.93x	8.16x	6.85x
FCF Conversion	0.26x	-0.18x	0.73x	0.79x	1.40x	1.18x	1.84x	1.49x	1.39x	1.44x
Revenue Growth	-8.33%	1.88%	-0.86%	-8.51%	-6.3%	-12.2%	0.91%	12.05%	-4.35%	-3.32%

Revenue by Geography

	2017	2018	2019	2020
UNITED STATES	2.77B	2.63B	2.42B	2.33B
UNITED STATES Growth	-	-5.16%	-7.99%	-3.39%
Asia Pacific	643M	455M	441M	251M
Asia Pacific Growth	-	-29.24%	-3.08%	-43.08%
CANADA	126M	126M	105M	91M
CANADA Growth	-	0.00%	-16.67%	-13.33%
Other Countries	328M	298M	-	-
Other Countries Growth	-	-9.15%	-	-
Other European Countries	262M	246M	-	-
Other European Countries Growth	-	-6.11%	-	-

Frequently Asked Questions

Valuation & Price

Pearson plc (PSO) has a price-to-earnings (P/E) ratio of 20.5x. This is roughly in line with market averages.

Growth & Financials

Pearson plc (PSO) reported $7.07B in revenue for fiscal year 2024. This represents a 21% increase from $5.86B in 2011.

Pearson plc (PSO) saw revenue decline by 3.3% over the past year.

Yes, Pearson plc (PSO) is profitable, generating $790.0M in net income for fiscal year 2024 (12.2% net margin).

Dividend & Returns

Yes, Pearson plc (PSO) pays a dividend with a yield of 1.77%. This makes it attractive for income-focused investors.

Pearson plc (PSO) has a return on equity (ROE) of 10.8%. This is reasonable for most industries.

Pearson plc (PSO) generated $1.14B in free cash flow for fiscal year 2024. Positive FCF indicates the company can fund dividends, buybacks, or reinvestment.

US Stock Screener

...