Revenue growth has stabilized at 4.1% in 2026Q2, while gross margin expanded to 51.2% and operating margin reached 14.2%, reflecting a shift to higher-margin digital offerings.
Pearson plc (PSO) annual income statement — 30-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 | Dec'96 |
|---|
| Sales/Revenue | 7.16B | 3.58B | 3.55B | 3.67B | 3.84B | 3.43B | 3.4B | 3.87B | 4.13B | 4.51B | 4.55B | 4.47B | 4.87B | 5.07B | 5.06B | 5.86B | 5.66B | 5.14B | 4.81B | 4.16B | 3.99B | 3.81B | 3.7B | 4.05B | 4.32B | 4.23B | 3.88B | 3.33B | 2.4B | 2.29B | 2.19B |
| Revenue Growth % | -4.35% | 0.7% | -3.32% | -4.35% | 12.05% | 0.91% | -12.2% | -6.3% | -8.51% | -0.86% | 1.88% | -8.33% | -3.85% | 0.2% | -13.7% | 3.51% | 10.18% | 6.84% | 15.59% | 4.31% | 4.78% | 3.03% | -8.7% | -6.3% | 2.03% | 9.18% | 16.38% | 39.12% | 4.44% | 4.9% | 19.43% |
| Cost of Goods Sold | 3.45B | 1.72B | 1.74B | 1.84B | 2.05B | 1.75B | 1.77B | 1.86B | 1.94B | 2.07B | 2.09B | 1.98B | 2.2B | 2.31B | 2.22B | 2.62B | 2.59B | 2.38B | 2.17B | 1.91B | 1.84B | 1.79B | 1.79B | 1.91B | 2.06B | 1.91B | 1.35B | 0 | 1.18B | 1.11B | 0 |
| COGS % of Revenue | - | 48% | 49.01% | 50.05% | 53.27% | 50.96% | 52.02% | 48.02% | 47.06% | 45.78% | 45.98% | 44.34% | 45.18% | 45.61% | 43.96% | 44.76% | 45.7% | 46.34% | 45.19% | 45.89% | 46.14% | 46.93% | 48.4% | 47.12% | 47.8% | 45.03% | 34.93% | - | 49.1% | 48.59% | - |
| Gross Profit | 3.7B | 1.86B | 1.81B | 1.83B | 1.79B | 1.68B | 1.63B | 2.01B | 2.19B | 2.45B | 2.46B | 2.49B | 2.67B | 2.76B | 2.83B | 3.24B | 3.08B | 2.76B | 2.64B | 2.25B | 2.15B | 2.02B | 1.91B | 2.14B | 2.26B | 2.33B | 2.52B | 3.33B | 1.22B | 1.18B | 2.19B |
| Gross Margin % | 51.74% | 52% | 50.99% | 49.95% | 46.73% | 49.04% | 47.98% | 51.98% | 52.94% | 54.22% | 54.02% | 55.66% | 54.82% | 54.39% | 56.04% | 55.24% | 54.3% | 53.66% | 54.81% | 54.11% | 53.86% | 53.07% | 51.6% | 52.88% | 52.2% | 54.97% | 65.07% | 100% | 50.9% | 51.41% | 100% |
| Gross Profit Growth % | - | 2.71% | -1.31% | 2.23% | 6.78% | 3.13% | -18.95% | -8.01% | -10.67% | -0.49% | -1.13% | -6.92% | -3.08% | -2.75% | -12.45% | 5.3% | 11.49% | 4.59% | 17.1% | 4.79% | 6.33% | 5.98% | -10.91% | -5.07% | -3.12% | -7.76% | -24.27% | 173.34% | 3.4% | -46.07% | 19.43% |
| Operating Expenses | 2.61B | 1.26B | 1.27B | 1.34B | 1.52B | 1.5B | 1.22B | 1.81B | 1.91B | 2.2B | 2.5B | 2.09B | 2.33B | 2.35B | 2.22B | 2.01B | 2.37B | 2.17B | 1.99B | 1.7B | 1.65B | 1.91B | 1.53B | 3.56B | 3.78B | 2.32B | 2.38B | 3.19B | 1.02B | 855.7M | 2.09B |
| OpEx % of Revenue | - | 35.34% | 35.75% | 36.39% | 39.68% | 43.7% | 35.88% | 46.68% | 46.19% | 48.79% | 55.03% | 46.87% | 47.7% | 46.42% | 43.8% | 34.32% | 41.9% | 42.16% | 41.26% | 40.85% | 41.33% | 50.03% | 41.45% | 88.07% | 87.41% | 54.68% | 61.46% | 95.59% | 42.59% | 37.32% | 95.69% |
| Selling, General & Admin | 2.66B | 1.3B | 1.31B | 1.36B | 1.45B | 1.39B | 1.45B | 1.69B | 1.87B | 2.17B | 2.24B | 2.17B | 2.37B | 2.28B | 2.29B | 0 | 0 | 0 | 2.08B | 1.8B | 1.8B | 1.59B | 1.88B | 1.96B | 2.12B | 2.38B | 2.09B | 0 | 0 | 0 | 0 |
| SG&A % of Revenue | - | 36.23% | 36.8% | 37.1% | 37.7% | 40.4% | 42.6% | 43.68% | 45.34% | 48.15% | 49.12% | 48.57% | 48.52% | 44.96% | 45.23% | - | - | - | 43.14% | 43.34% | 45.17% | 41.8% | 50.8% | 48.43% | 49.12% | 56.24% | 54.02% | - | - | - | - |
| Research & Development | -5M | 0 | 291M | 284M | 303M | 279M | 280M | 13M | 14M | 14M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | 8.19% | 7.73% | 7.89% | 8.14% | 8.24% | 0.34% | 0.34% | 0.31% | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 0 | -32M | -37M | -26M | -227M | -166M | -508M | 103M | 21M | 0 | -60M | -111M | -124M | -102M | -72M | 2.01B | 2.37B | 30M | 25M | 23M | 24M | 14M | 8M | 87M | 80M | -66.07M | 288.56M | 3.19B | 1.02B | 855.7M | 2.09B |
| Operating Income | 1.09B | 618.15M | 541M | 498M | 271M | 183M | 411M | 275M | 553M | 451M | -2.5B | -404M | 398M | 458M | 515M | 1.23B | 743M | 619M | 676M | 574M | 522M | 516M | 404M | 226M | 143M | 13.08M | -148.63M | 318M | 250M | 323.2M | 147.6M |
| Operating Margin % | 15.24% | 17.28% | 15.23% | 13.55% | 7.06% | 5.34% | 12.1% | 7.11% | 13.39% | 9.99% | -54.85% | -9.04% | 8.17% | 9.04% | 10.18% | 20.91% | 13.12% | 12.04% | 14.05% | 13.79% | 13.08% | 13.55% | 10.93% | 5.58% | 3.31% | 0.31% | -3.83% | 9.54% | 10.44% | 14.09% | 6.75% |
| Operating Income Growth % | - | 14.26% | 8.63% | 83.76% | 48.09% | -55.47% | 49.45% | -50.27% | 22.62% | 118.06% | -518.07% | -201.51% | -13.1% | -11.07% | -57.99% | 65.01% | 20.03% | -8.43% | 17.77% | 9.96% | 1.16% | 27.72% | 78.76% | 58.04% | 993.58% | 108.8% | -146.74% | 27.2% | -22.65% | 118.97% | -37.88% |
| EBITDA | 2.17B | 1.19B | 1.07B | 1.04B | 822M | 701M | 996M | 870M | 1.14B | 1.1B | -1.78B | 796M | 799M | 767M | 832M | 1.48B | 989M | 851M | 872M | 712M | 867M | 817M | 681M | 594M | 557M | 496.21M | 139.93M | 400M | 262M | 323.2M | 210.8M |
| EBITDA Margin % | 30.39% | 33.24% | 30.04% | 28.33% | 21.4% | 20.45% | 29.32% | 22.49% | 27.71% | 24.42% | -39.17% | 17.82% | 16.39% | 15.13% | 16.45% | 25.3% | 17.46% | 16.56% | 18.13% | 17.11% | 21.73% | 21.45% | 18.43% | 14.67% | 12.89% | 11.72% | 3.61% | 12% | 10.94% | 14.09% | 9.64% |
| EBITDA Growth % | 12.4% | 11.45% | 2.5% | 26.64% | 17.26% | -29.62% | 14.48% | -23.95% | 3.81% | 161.81% | -324% | -0.38% | 4.17% | -7.81% | -43.9% | 49.95% | 16.22% | -2.41% | 22.47% | -17.88% | 6.12% | 19.97% | 14.65% | 6.64% | 12.25% | 254.62% | -65.02% | 52.67% | -18.94% | 53.32% | -29.52% |
| D&A (Non-Cash Add-back) | 1.08B | 571M | 526M | 543M | 551M | 518M | 585M | 595M | 591M | 651M | 714M | 1.2B | 401M | 309M | 317M | 257M | 246M | 232M | 196M | 138M | 345M | 301M | 277M | 368M | 414M | 483.14M | 288.56M | 82M | 12M | 0 | 63.2M |
| EBIT | 1.14B | 532M | 589M | 549M | 379M | 233M | 232M | 245M | 496M | 442M | -2.58B | -372M | 336M | 467M | 468M | 1.11B | 779M | 645M | 721M | 574.34M | 521.64M | 516.07M | 381.64M | 225.68M | 194.33M | 12.39M | 139.93M | 148.98M | 199M | 323.2M | 427.6M |
| Net Interest Income | -89.17M | -52.82M | -24M | -11M | -2M | -53M | -55M | -28M | -14M | -82M | -48M | -42M | -63M | -84M | -94M | -56M | -73M | -96M | -91M | -85M | -90M | 0 | -79M | 0 | 0 | 0 | 0 | -145M | 0 | 0 | -29.5M |
| Interest Income | 127.47M | 16.63M | 55M | 50M | 67M | 15M | 24M | 41M | 36M | 23M | 26M | 19M | 18M | 35M | 23M | 26M | 36M | 27M | 8M | 10M | 4M | 0 | 17M | 0 | 0 | 0 | 0 | 39M | 0 | 0 | 41.3M |
| Interest Expense | 184.23M | 69.44M | 79M | 61M | 69M | 68M | 79M | 84M | 91M | 79M | 59M | 46M | 81M | 72M | 65M | 97M | 109M | 98M | 89M | 95M | 94M | 84M | 96M | 80M | 131M | 620.78M | 0 | 184M | 0 | 196.3M | 70.8M |
| Other Income/Expense | -130.13M | -171.16M | -31M | -5M | 51M | -6M | -31M | -43M | -55M | -30M | -60M | -29M | -93M | -76M | -53M | -179M | -73M | -96M | -91M | -129.34M | -97.64M | -84.07M | -78.73M | -73.68M | -241.51M | -472.13M | 433.85M | 330.72M | 379M | -194.6M | 209.2M |
| Pretax Income | 960.04M | 446.99M | 510M | 493M | 322M | 177M | 380M | 232M | 498M | 421M | -2.56B | -433M | 305M | 382M | 434M | 1.16B | 670M | 523M | 585M | 468M | 448M | 446M | 325M | 152M | -25M | -459.05M | 285.22M | 477M | 629M | 128.6M | 356.8M |
| Pretax Margin % | 13.42% | 12.5% | 14.36% | 13.42% | 8.38% | 5.16% | 11.19% | 6% | 12.06% | 9.33% | -56.17% | -9.69% | 6.26% | 7.54% | 8.58% | 19.7% | 11.83% | 10.18% | 12.16% | 11.24% | 11.23% | 11.71% | 8.79% | 3.75% | -0.58% | -10.84% | 7.36% | 14.32% | 26.26% | 5.61% | 16.32% |
| Income Tax | 197.99M | 118.35M | 75M | 113M | 79M | -1M | 50M | -34M | -92M | 13M | -222M | -81M | 63M | 87M | 148M | 199M | 146M | 146M | 172M | 131M | 4M | 116M | 63M | 75M | 64M | -67.45M | 105.78M | 177M | 188M | 88.6M | 108.6M |
| Effective Tax Rate % | 20.62% | 26.48% | 14.71% | 22.92% | 24.53% | -0.56% | 13.16% | -14.66% | -18.47% | 3.09% | 8.68% | 18.71% | 20.66% | 22.77% | 34.1% | 17.23% | 21.79% | 27.92% | 29.4% | 27.99% | 0.89% | 26.01% | 19.38% | 49.34% | -256% | 14.69% | 37.09% | 37.11% | 29.89% | 68.9% | 30.44% |
| Net Income | 760.04M | 327.66M | 434M | 378M | 242M | 177M | 330M | 264M | 588M | 406M | -2.34B | 823M | 471M | 538M | 326M | 957M | 1.3B | 425M | 292M | 284M | 446M | 624M | 262M | 55M | -111M | -391.6M | 179.43M | 294M | 437M | 38.3M | 240.5M |
| Net Margin % | 10.62% | 9.16% | 12.22% | 10.29% | 6.3% | 5.16% | 9.71% | 6.82% | 14.24% | 9% | -51.34% | 18.42% | 9.66% | 10.61% | 6.44% | 16.33% | 22.9% | 8.27% | 6.07% | 6.82% | 11.18% | 16.39% | 7.09% | 1.36% | -2.57% | -9.25% | 4.63% | 8.82% | 18.25% | 1.67% | 11% |
| Net Income Growth % | 17.65% | -24.5% | 14.81% | 56.2% | 36.72% | -46.36% | 25% | -55.1% | 44.83% | 117.37% | -383.96% | 74.73% | -12.45% | 65.03% | -65.94% | -26.21% | 205.18% | 45.55% | 2.82% | -36.32% | -28.53% | 138.17% | 376.36% | 149.55% | 71.66% | -318.25% | -38.97% | -32.72% | 1040.99% | -84.07% | -7.85% |
| Net Income (Continuing) | 762.05M | 328.64M | 435M | 380M | 243M | 178M | 330M | 266M | 590M | 330M | -2.33B | -352M | 191M | 241M | 253M | 885M | 524M | 377M | 413M | 314M | 420M | 316M | 254M | 54.88M | -111.13M | -391.6M | 179.43M | 299.81M | 11M | 40M | 248.2M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1.18B | 271M | 244M | 61M | 71M | 0 | 85M | 0 | -27.11M | 25M | -5.66M | 22M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 15.9M | 14.97M | 15M | 14M | 13M | 10M | 9M | 10M | 9M | 8M | 4M | 4M | 6M | 6M | 24M | 19M | 67M | 291M | 274M | 179M | 168M | 169M | 214M | 195M | 192M | 176.19M | 165.37M | 6M | 36M | 3.5M | 3.7M |
| EPS (Diluted) | 1.22 | 0.50 | 0.63 | 0.53 | 0.33 | 0.23 | 0.41 | 0.34 | 0.76 | 0.50 | -2.87 | 1.01 | 0.58 | 0.67 | 0.41 | 2.39 | 1.62 | 0.53 | 0.37 | 0.36 | 0.56 | 0.78 | 0.33 | 0.32 | -0.14 | -0.49 | 0.25 | 0.42 | 0.65 | 0.06 | 0.38 |
| EPS Growth % | 26.37% | -20.63% | 18.87% | 60.61% | 43.48% | -43.9% | 20.59% | -55.26% | 52% | 117.42% | -384.16% | 74.14% | -13.43% | 63.41% | -82.85% | 47.53% | 205.66% | 43.24% | 2.78% | -35.71% | -28.21% | 136.36% | 3.13% | 328.57% | 71.43% | -296% | -40.48% | -35.38% | 999.83% | -84.45% | -9.52% |
| EPS (Basic) | - | 0.50 | 0.63 | 0.53 | 0.33 | 0.23 | 0.41 | 0.34 | 0.76 | 0.50 | -2.87 | 1.01 | 0.58 | 0.67 | 0.41 | 2.39 | 1.62 | 0.53 | 0.37 | 0.36 | 0.56 | 0.78 | 0.33 | 0.32 | -0.14 | -0.49 | 0.25 | 0.43 | 0.65 | 0.06 | 0.38 |
| Diluted Shares Outstanding | 622.4M | 660.3M | 684M | 717.3M | 742M | 759.1M | 755.4M | 777.5M | 778.7M | 813.7M | 814.8M | 814.1M | 811.9M | 808.9M | 805.6M | 801.9M | 803M | 800.1M | 797.5M | 798.1M | 799.9M | 801.03M | 796.7M | 798.17M | 796.3M | 795.62M | 729.3M | 709.72M | 682.61M | 650.23M | 636.28M |
| Basic Shares Outstanding | 616.3M | 651.3M | 688.6M | 717.27M | 738.1M | 754.1M | 755.4M | 777M | 778.1M | 813.4M | 814.8M | 813.3M | 810.9M | 807.8M | 804.3M | 800.2M | 801.2M | 799.3M | 797M | 796.8M | 798.4M | 800.01M | 795.6M | 798.17M | 796.3M | 795.62M | 729.3M | 699.82M | 675.24M | 650.23M | 636.28M |
| Dividend Payout Ratio | - | 47.76% | 35.94% | 40.74% | 64.46% | 84.18% | 44.24% | 55.68% | 23.13% | 78.33% | - | 51.4% | 84.29% | 69.14% | 105.52% | 33.23% | 22.51% | 64.24% | 88.01% | 83.8% | 49.33% | 32.85% | 74.43% | 341.09% | - | - | 79.85% | 45.21% | 25.86% | 278.07% | - |
Quick answers to the most common questions about buying PSO stock.
For fiscal year 2025, Pearson plc (PSO) reported total revenue of $3.58B. This represents a 63.6% increase compared to $2.19B in 1996.
Pearson plc (PSO) is profitable, generating $327.7M in net income for the fiscal year ending 2025 with a net profit margin of 9.2%.
Pearson plc (PSO) reported an operating income of $618.1M, resulting in an operating profit margin of 17.3%. This margin reflects the operational efficiency of the business before interest and taxes.
Pearson plc (PSO) generated $1.86B in gross profit for the year, representing a gross profit margin of 52.0%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Regulatory and AI disruption
Stabilizing Revenue Amid Structural Shifts
Pearson's revenue growth has stabilized around 2-4% in recent quarters, with 2026Q2 showing 4.1% growth, according to the latest income statement data, suggesting a halt to the earlier declines.
The revenue trajectory has transitioned from a contraction phase (2023Q4: -12.6%) to a modest recovery, with 2026Q2 growth of 4.1% and 2025Q4 at 2.5%. This stabilization appears driven by the resilience of Assessment & Qualifications and the gradual adoption of digital subscriptions, though the pace remains subdued relative to ed-tech peers. The flat growth in 2024Q4 (0.2%) and 2025Q2 (-1.8%) indicates that the company is still navigating the decline in Higher Education print, but the recent uptick suggests a potential inflection point.
Gross Margin Expansion Reflects Digital Mix
Gross margin has improved from 46.1% in 2022Q2 to 51.2% in 2026Q2, as reported in financial statements, indicating a structural shift toward higher-margin digital and assessment revenues.
The consistent expansion in gross margin, from 46.1% in 2022Q2 to 51.2% in 2026Q2, underscores the ongoing transition away from print and toward digital delivery, which carries lower variable costs. However, the pace of improvement has slowed recently, with 2026Q2 margin (51.2%) slightly below 2025Q4 (52.9%), suggesting that the benefits of digital mix may be plateauing. This margin level is comparable to Scholastic (52.7%) but below Perdoceo's 71.7%, indicating room for further optimization if Pearson can scale its assessment and virtual learning segments.
Operating Leverage Emerging from Cost Discipline
Operating margin has risen from 5.7% in 2021Q4 to 14.2% in 2026Q2, as per income statement data, indicating that cost restructuring is translating into improved operational efficiency.
The operating margin has more than doubled since 2021Q4 (5.7%) to 14.2% in 2026Q2, with a peak of 17.9% in 2024Q4. This improvement appears driven by aggressive cost-cutting and a focus on higher-margin segments, as SG&A has been relatively flat while revenue has grown. However, the recent dip from 17.9% to 14.2% suggests that some of the leverage may be temporary, possibly due to increased investment in AI tools and platform enhancements. Investors should monitor whether this margin expansion is sustainable or if it reflects one-time restructuring benefits.
Earnings Quality Tempered by One-Time Items
Net income quality is mixed, with 2024Q4 EPS of $0.40 boosted by a negative R&D expense of -$144M, as reported in the income statement, which appears to be a one-time credit.
The reported net income and EPS figures have been volatile, with 2024Q4 showing an unusually high EPS of $0.40, partly due to a negative R&D expense of -$144M, which likely reflects a reversal or credit. Excluding that anomaly, underlying EPS growth has been modest, with 2026Q2 EPS of $0.24 down 4% year-over-year. Stock-based compensation has been relatively stable at around $22M per quarter, which is not excessive but does dilute shareholders. The tax rate appears normal, but the presence of restructuring charges and portfolio adjustments suggests that investors should focus on adjusted earnings to gauge true operational performance.
Cost Discipline Drives Margin Gains
SG&A as a percentage of revenue has declined from 44.7% in 2021Q4 to 36.8% in 2026Q2, based on reported figures, indicating effective overhead control.
The reduction in SG&A intensity, from 44.7% of revenue in 2021Q4 to 36.8% in 2026Q2, is a key driver of operating margin expansion. This reflects the company's restructuring efforts and the shift to digital, which reduces distribution and sales costs. However, R&D spending has been inconsistent, with some quarters showing zero or negative values, which may indicate that the company is capitalizing or deferring certain development costs. The recent increase in R&D in 2025Q2 ($139M) suggests a renewed investment in AI and platform enhancements, which could pressure margins in the near term but is necessary for long-term competitiveness.
AI Threat and Regulatory Risks Loom
Despite margin improvements, Pearson faces structural risks from AI commoditization of content and regulatory changes in student visas, which could undermine growth in key segments.
The most significant challenge to Pearson's narrative is the potential for generative AI to disrupt its Higher Education and English Language Learning segments, as AI-powered tools could reduce demand for traditional courseware and even assessment services. While the Assessment & Qualifications segment may be more resilient due to proctored exams, the market's concern about AI is not unfounded, as evidenced by the recent decline in Chegg's valuation. Additionally, regulatory scrutiny of international student visas in key markets like Canada and the UK could negatively impact the high-margin PTE business, which is a critical growth driver. The flat revenue growth in recent quarters suggests that these headwinds are already materializing, and investors should monitor whether Pearson can offset them with its AI-integrated Pearson+ platform and workforce skills offerings.