Detailed financial statements for Pearson plc (PSO): income statement, balance sheet and cash-flow summary. Track margins, debt, liquidity and profitability trends year over year: ten fiscal years free and up to 20 with Premium.
Pearson plc is a prominent international provider of educational content, evaluations, and related services. Its operations span the globe, with a significant presence in regions such as the United Kingdom, the United States, Canada, the Asia Pacific, and various other European countries. The company structures its diverse offerings across five main divisions: Assessment & Qualifications, Virtual Learning, English Language Learning, Higher Education, and Workforce Skills.
Analysis Summary
Pearson plc reported revenue of 3.58B GBP in the most recent fiscal year, growing at a 5-year CAGR of 1.0%. Net income reached 327.7M GBP, with a -0.1% 5-year CAGR.
Trailing-twelve-month margins: gross margin 52.0%, operating margin 14.5%, net margin 8.8%. Free cash flow grew at 20.5% CAGR over 5 years.
At $17.31 (closing price, November 2, 2026), PSO trades at a P/E of 25.40 and an ROE of 9.13%. Market capitalisation stands at $10.4B, placing it among large-cap names.
Balance sheet quality for PSO: debt-to-equity ratio of 0.53, current ratio of 2.00 over the last 12 months, net debt of 1.15B GBP at the end of the last fiscal year. A debt-to-equity below 1.0 typically signals conservative capital structure, while a current ratio above 1.5 indicates comfortable short-term liquidity.
Cash flow quality is strong: free cash flow of 646.5M GBP represents 197% conversion of reported net income. High conversion (above 90%) suggests earnings translate cleanly into cash; lower conversion may indicate working capital tightness or accounting timing differences.
Income Statement (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 4.55B GBP | 4.51B GBP | 4.13B GBP | 3.87B GBP | 3.40B GBP | 3.43B GBP | 3.84B GBP | 3.67B GBP | 3.55B GBP | 3.58B GBP |
| Cost of Revenue | 2.09B GBP | 2.07B GBP | 1.94B GBP | 1.86B GBP | 1.77B GBP | 1.75B GBP | 2.05B GBP | 1.84B GBP | 1.74B GBP | 1.72B GBP |
| Gross Profit | 2.46B GBP | 2.45B GBP | 2.19B GBP | 2.01B GBP | 1.63B GBP | 1.68B GBP | 1.79B GBP | 1.83B GBP | 1.81B GBP | 1.86B GBP |
| Research & Development | 0 | 14.0M GBP | 14.0M GBP | 13.0M GBP | 280.0M GBP | 279.0M GBP | 303.0M GBP | 284.0M GBP | 291.0M GBP | 0 |
| Selling, General & Admin | 2.24B GBP | 2.17B GBP | 1.87B GBP | 1.69B GBP | 1.45B GBP | 1.39B GBP | 1.45B GBP | 1.36B GBP | 1.31B GBP | 1.30B GBP |
| Operating Expenses | 2.50B GBP | 2.20B GBP | 1.91B GBP | 1.81B GBP | 1.22B GBP | 1.50B GBP | 1.52B GBP | 1.34B GBP | 1.27B GBP | 1.26B GBP |
| Operating Income | -2.50B GBP | 451.0M GBP | 553.0M GBP | 275.0M GBP | 411.0M GBP | 183.0M GBP | 271.0M GBP | 498.0M GBP | 541.0M GBP | 618.1M GBP |
| EBITDA | 332.0M GBP | 755.0M GBP | 749.0M GBP | 634.0M GBP | 829.0M GBP | 748.7M GBP | 938.0M GBP | 1.10B GBP | 1.11B GBP | 1.10B GBP |
| Interest Expense | 59.0M GBP | 79.0M GBP | 91.0M GBP | 84.0M GBP | 79.0M GBP | 68.0M GBP | 69.0M GBP | 61.0M GBP | 79.0M GBP | 69.4M GBP |
| Pre-tax Income | -2.56B GBP | 421.0M GBP | 498.0M GBP | 232.0M GBP | 380.0M GBP | 177.0M GBP | 322.0M GBP | 493.0M GBP | 510.0M GBP | 447.0M GBP |
| Income Tax | -222.0M GBP | 13.0M GBP | -92.0M GBP | -34.0M GBP | 50.0M GBP | -1.0M GBP | 79.0M GBP | 113.0M GBP | 75.0M GBP | 118.3M GBP |
| Net Income | -2.34B GBP | 406.0M GBP | 588.0M GBP | 264.0M GBP | 330.0M GBP | 177.0M GBP | 242.0M GBP | 378.0M GBP | 434.0M GBP | 327.7M GBP |
| EPS | -2.87 GBP | 0.50 GBP | 0.76 GBP | 0.34 GBP | 0.41 GBP | 0.23 GBP | 0.33 GBP | 0.53 GBP | 0.63 GBP | 0.50 GBP |
| EPS (Diluted) | -2.87 GBP | 0.50 GBP | 0.76 GBP | 0.34 GBP | 0.41 GBP | 0.23 GBP | 0.33 GBP | 0.53 GBP | 0.63 GBP | 0.50 GBP |
| Shares Outstanding (Diluted) | 814.8 M | 813.7 M | 778.7 M | 777.5 M | 755.4 M | 759.1 M | 742.0 M | 717.3 M | 684.0 M | 660.3 M |
Income Statement (Quarterly)
| Year | 2024-Q4 | 2025-Q2 | 2025-Q4 | 2026-Q2 |
|---|---|---|---|---|
| Revenue | 1.80B GBP | 1.72B GBP | 1.84B GBP | 1.79B GBP |
| Gross Profit | 932.0M GBP | 879.0M GBP | 975.0M GBP | 916.7M GBP |
| Operating Income | 322.0M GBP | 240.0M GBP | 273.3M GBP | 254.9M GBP |
| EBITDA | 597.2M GBP | 491.1M GBP | 613.2M GBP | 503.8M GBP |
| Net Income | 277.0M GBP | 164.0M GBP | 169.9M GBP | 149.1M GBP |
| EPS | 0.40 GBP | 0.25 GBP | 0.27 GBP | 0.24 GBP |
| EPS (Diluted) | 0.40 GBP | 0.25 GBP | 0.26 GBP | 0.24 GBP |
Balance Sheet (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Cash & Equivalents | 1.46B GBP | 518.0M GBP | 568.0M GBP | 437.0M GBP | 1.10B GBP | 937.0M GBP | 558.0M GBP | 312.0M GBP | 543.0M GBP | 332.4M GBP |
| Short-term Investments | 10.0M GBP | 8.0M GBP | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Receivables | 1.21B GBP | 740.0M GBP | 1.07B GBP | 1.13B GBP | 825.0M GBP | 882.0M GBP | 856.0M GBP | 831.0M GBP | 1.01B GBP | 1.10B GBP |
| Inventory | 235.0M GBP | 148.0M GBP | 164.0M GBP | 169.0M GBP | 129.0M GBP | 98.0M GBP | 105.0M GBP | 91.0M GBP | 74.0M GBP | 65.9M GBP |
| Total Current Assets | 4.08B GBP | 3.29B GBP | 3.38B GBP | 3.17B GBP | 3.34B GBP | 3.22B GBP | 2.82B GBP | 2.43B GBP | 2.73B GBP | 2.32B GBP |
| Property, Plant & Equipment | 343.0M GBP | 281.0M GBP | 237.0M GBP | 618.0M GBP | 515.0M GBP | 366.0M GBP | 250.0M GBP | 217.0M GBP | 216.0M GBP | 209.6M GBP |
| Goodwill | 2.34B GBP | 2.03B GBP | 2.11B GBP | 2.14B GBP | 2.09B GBP | 2.15B GBP | 2.48B GBP | 2.43B GBP | 2.44B GBP | 2.42B GBP |
| Intangible Assets | 1.10B GBP | 934.0M GBP | 898.0M GBP | 761.0M GBP | 648.0M GBP | 624.0M GBP | 697.0M GBP | 657.0M GBP | 589.0M GBP | 583.0M GBP |
| Total Assets | 10.07B GBP | 7.89B GBP | 7.91B GBP | 7.65B GBP | 7.45B GBP | 7.34B GBP | 7.31B GBP | 6.73B GBP | 6.89B GBP | 6.45B GBP |
| Accounts Payable | 333.0M GBP | 265.0M GBP | 311.0M GBP | 358.0M GBP | 340.0M GBP | 351.0M GBP | 348.0M GBP | 317.0M GBP | 273.0M GBP | 1.04B GBP |
| Short-term Debt | 39.0M GBP | 15.0M GBP | 66.0M GBP | 18.0M GBP | 181.0M GBP | 87.0M GBP | 26.0M GBP | 3.0M GBP | 250.0M GBP | 61.9M GBP |
| Total Current Liabilities | 1.92B GBP | 2.21B GBP | 2.13B GBP | 1.49B GBP | 1.65B GBP | 1.58B GBP | 1.48B GBP | 1.40B GBP | 1.48B GBP | 1.16B GBP |
| Long-term Debt | 2.40B GBP | 1.06B GBP | 672.0M GBP | 823.0M GBP | 787.0M GBP | 680.0M GBP | 610.0M GBP | 611.0M GBP | 705.0M GBP | 1.00B GBP |
| Total Liabilities | 5.72B GBP | 3.87B GBP | 3.38B GBP | 3.33B GBP | 3.32B GBP | 3.06B GBP | 2.91B GBP | 2.74B GBP | 2.84B GBP | 2.79B GBP |
| Retained Earnings | 716.0M GBP | 662.0M GBP | 1.04B GBP | 911.0M GBP | 865.0M GBP | 1.07B GBP | 881.0M GBP | 745.0M GBP | 827.0M GBP | 627.9M GBP |
| Total Equity | 4.34B GBP | 4.01B GBP | 4.52B GBP | 4.31B GBP | 4.12B GBP | 4.27B GBP | 4.40B GBP | 3.97B GBP | 4.04B GBP | 3.64B GBP |
| Total Debt | 2.47B GBP | 1.08B GBP | 720.0M GBP | 1.68B GBP | 1.65B GBP | 1.40B GBP | 1.24B GBP | 1.16B GBP | 1.47B GBP | 1.48B GBP |
| Net Debt | 999.0M GBP | 559.0M GBP | 152.0M GBP | 1.24B GBP | 554.0M GBP | 463.0M GBP | 683.0M GBP | 849.0M GBP | 929.0M GBP | 1.15B GBP |
| Working Capital | 2.16B GBP | 1.08B GBP | 1.24B GBP | 1.68B GBP | 1.70B GBP | 1.64B GBP | 1.34B GBP | 1.03B GBP | 1.25B GBP | 1.16B GBP |
Balance Sheet (Quarterly)
| Year | 2024-Q4 | 2025-Q2 | 2025-Q4 | 2026-Q2 |
|---|---|---|---|---|
| Cash & Equivalents | 543.0M GBP | 347.0M GBP | 332.4M GBP | 337.0M GBP |
| Total Assets | 6.89B GBP | 6.22B GBP | 6.45B GBP | 6.33B GBP |
| Total Liabilities | 2.84B GBP | 2.62B GBP | 2.79B GBP | 3.00B GBP |
| Total Equity | 4.04B GBP | 3.59B GBP | 3.64B GBP | 3.32B GBP |
| Total Debt | 1.47B GBP | 1.50B GBP | 1.48B GBP | 1.75B GBP |
Cash Flow (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Net Income | -2.33B GBP | 408.0M GBP | 590.0M GBP | 266.0M GBP | 310.0M GBP | 160.0M GBP | 242.0M GBP | 378.0M GBP | 510.0M GBP | 457.0M GBP |
| Depreciation & Amortization | 2.91B GBP | 313.0M GBP | 253.0M GBP | 389.0M GBP | 597.0M GBP | 515.7M GBP | 559.0M GBP | 543.0M GBP | 526.0M GBP | 571.0M GBP |
| Stock-based Compensation | 22.0M GBP | 33.0M GBP | 37.0M GBP | 25.0M GBP | 29.0M GBP | 28.0M GBP | 38.0M GBP | 40.0M GBP | 44.0M GBP | 39.0M GBP |
| Change in Working Capital | 234.0M GBP | 163.0M GBP | 10.0M GBP | -118.0M GBP | -3.0M GBP | 2.0M GBP | 49.0M GBP | -96.0M GBP | -53.0M GBP | -81.2M GBP |
| Operating Cash Flow | 410.0M GBP | 298.0M GBP | 462.0M GBP | 369.0M GBP | 389.0M GBP | 326.0M GBP | 361.0M GBP | 525.0M GBP | 627.0M GBP | 674.9M GBP |
| Capital Expenditure | -245.0M GBP | -232.0M GBP | -200.0M GBP | -193.0M GBP | -134.0M GBP | -176.0M GBP | -57.0M GBP | -126.0M GBP | -124.0M GBP | -28.4M GBP |
| Acquisitions | -65.0M GBP | 419.0M GBP | 96.0M GBP | -186.0M GBP | 625.0M GBP | 18.0M GBP | -228.0M GBP | -214.0M GBP | -46.0M GBP | -152.6M GBP |
| Stock Repurchased | -27.0M GBP | -149.0M GBP | -153.0M GBP | -52.0M GBP | -182.0M GBP | -16.0M GBP | -390.0M GBP | -221.0M GBP | -358.0M GBP | -414.7M GBP |
| Dividends Paid | -424.0M GBP | -318.0M GBP | -136.0M GBP | -147.0M GBP | -146.0M GBP | -149.0M GBP | -156.0M GBP | -154.0M GBP | -156.0M GBP | -156.5M GBP |
| Free Cash Flow | 165.0M GBP | 66.0M GBP | 262.0M GBP | 176.0M GBP | 255.0M GBP | 150.0M GBP | 304.0M GBP | 399.0M GBP | 503.0M GBP | 646.5M GBP |
Cash Flow (Quarterly)
| Year | 2024-Q4 | 2025-Q2 | 2025-Q4 | 2026-Q2 |
|---|---|---|---|---|
| Operating Cash Flow | 552.0M GBP | 192.0M GBP | 476.0M GBP | 342.0M GBP |
| Capital Expenditure | -106.0M GBP | -14.0M GBP | -15.3M GBP | -26.0M GBP |
| Free Cash Flow | 446.0M GBP | 178.0M GBP | 460.6M GBP | 316.0M GBP |
| Dividends Paid | -49.0M GBP | -110.0M GBP | -53.2M GBP | -108.0M GBP |
| Stock-based Compensation | 21.0M GBP | 22.0M GBP | 0 | 22.0M GBP |
Growth & Margins (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue Growth (YoY) | -0.9% | -8.5% | -6.3% | -12.2% | +0.9% | +12.0% | -4.3% | -3.3% | +0.7% | |
| Net Income Growth (YoY) | +117.4% | +44.8% | -55.1% | +25.0% | -46.4% | +36.7% | +56.2% | +14.8% | -24.5% | |
| EPS Growth (YoY) | +117.4% | +52.0% | -55.3% | +20.6% | -43.9% | +43.5% | +60.6% | +18.9% | -20.6% | |
| Shares Change (YoY) | -0.1% | -4.3% | -0.2% | -2.8% | +0.5% | -2.3% | -3.3% | -4.6% | -3.5% | |
| FCF Growth (YoY) | -60.0% | +297.0% | -32.8% | +44.9% | -41.2% | +102.7% | +31.2% | +26.1% | +28.5% | |
| Gross Margin | 54.0% | 54.2% | 52.9% | 52.0% | 48.0% | 49.0% | 46.7% | 49.9% | 51.0% | 52.0% |
| Operating Margin | -54.9% | 10.0% | 13.4% | 7.1% | 12.1% | 5.3% | 7.1% | 13.6% | 15.2% | 17.3% |
| EBITDA Margin | 7.3% | 16.7% | 18.1% | 16.4% | 24.4% | 21.8% | 24.4% | 29.9% | 31.4% | 30.8% |
| Net Margin | -51.3% | 9.0% | 14.2% | 6.8% | 9.7% | 5.2% | 6.3% | 10.3% | 12.2% | 9.2% |
| FCF Margin | 3.6% | 1.5% | 6.3% | 4.5% | 7.5% | 4.4% | 7.9% | 10.9% | 14.2% | 18.1% |
| Effective Tax Rate | 8.7% | 3.1% | -18.5% | -14.7% | 13.2% | -0.6% | 24.5% | 22.9% | 14.7% | 26.5% |
Per-Share Data (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| FCF Per Share | 0.20 GBP | 0.08 GBP | 0.34 GBP | 0.23 GBP | 0.34 GBP | 0.20 GBP | 0.41 GBP | 0.56 GBP | 0.74 GBP | 0.98 GBP |
| Dividends Per Share | 0.52 GBP | 0.39 GBP | 0.17 GBP | 0.19 GBP | 0.19 GBP | 0.20 GBP | 0.21 GBP | 0.21 GBP | 0.23 GBP | 0.24 GBP |
| Shares Outstanding (Basic) | 814.8 M | 813.4 M | 778.1 M | 777.0 M | 755.4 M | 754.1 M | 738.1 M | 717.3 M | 684.0 M | 651.3 M |
What to look at in Technology companies
- Revenue growth 3y (>=15%/year) — Validates sustained traction, not a one-off.
- Gross margin (Sub-sector dependent) — SaaS >=70%, Internet >=55%, Semis >=45%, Hardware >=35%.
- FCF / Revenue (>=20%) — Real cash generated. Many tech firms dress up non-GAAP earnings.
- ROIC (>=15%) — Capital reinvested efficiency — Buffett's first metric.
- SBC / Revenue (<10% healthy) — Stock-based compensation. Silent dilution: >20% destroys value.
- Net Debt / EBITDA (<=2x (1.5x SaaS)) — Resilience in downturns and rate hikes.
Profitability
| Return on Equity | 9.13% |
| Return on Invested Capital | 7.15% |
| Return on Assets | 5.01% |
| Gross Margin | 52.04% |
| Operating Margin | 14.53% |
| Net Margin | 8.78% |
Financial Health
| Debt / Equity | 0.53 |
| Current Ratio | 2.00 |
| Piotroski F-Score | 7 |
| Altman Z-Score | 2.68 |
Key Ratios (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| P/E | -2.82 | 14.67 | 12.32 | 18.70 | 16.39 | 26.98 | 28.23 | 18.23 | 20.45 | 20.84 |
| P/B | 1.52 | 1.49 | 1.61 | 1.15 | 1.23 | 1.10 | 1.56 | 1.74 | 2.18 | 1.86 |
| P/S | 1.45 | 1.32 | 1.76 | 1.28 | 1.49 | 1.37 | 1.79 | 1.89 | 2.48 | 1.90 |
| Gross Margin | 54.0% | 54.2% | 52.9% | 52.0% | 48.0% | 49.0% | 46.7% | 49.9% | 51.0% | 52.0% |
| Operating Margin | -54.9% | 10.0% | 13.4% | 7.1% | 12.1% | 5.3% | 7.1% | 13.6% | 15.2% | 17.3% |
| Net Margin | -51.3% | 9.0% | 14.2% | 6.8% | 9.7% | 5.2% | 6.3% | 10.3% | 12.2% | 9.2% |
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