Pearson 2025 profit in line, shares flat despite AI push

British education company Pearson Plc reported full-year 2025 results in line with market expectations on February 27, 2026, but saw its London-listed shares remain unchanged as investors showed little enthusiasm for the company's push to position itself as a beneficiary of artificial intelligence-driven demand for skills training. The company's financial performance showed underlying sales growth of 4% with adjusted operating profit rising 6% to £614 million, within their guided range of £610-615 million. Adjusted earnings per share increased 4% to 64.5 pence. However, statutory operating profit fell 6% to £507 million due to £87 million in product development impairment charges and adverse currency movements that reduced sales by £112 million. Free cash flow improved by 8% to £527 million, with a conversion rate of 125%, though this dropped to 98% when excluding a £97 million one-time repayment from Britain's tax authority HMRC. Pearson emphasized its progress in integrating AI across its business, with CEO Omar Abbosh highlighting the company's position to meet growing demand for skills validation in an AI-enabled world. Approximately 90% of 2025 adjusted operating profit came from assessment and operationally complex large-scale services. Division performance varied, with Assessment and Qualifications growing 4% to £1.604 billion, Virtual Learning surging 8% to £511 million with a 29% increase in operating profit, Higher Education rising 2% to £775 million, English Language Learning growing 1% to £405 million, and Enterprise Learning and Skills increasing 6% to £282 million with a 45% jump in operating profit. The company also announced a leadership change, with CFO Sally Johnson leaving after 26 years to join a private company, while Simon Robson, current CFO at Sky, will take over on May 7 after joining on March 30. For 2026, Pearson guided for mid-single digit underlying sales growth and adjusted operating profit of £640-685 million at an exchange rate of £:$ 1.35, with free cash flow conversion of 90-100%. Analysts like Morgan Stanley, which rates the stock 'equal-weight' with a price target of 1,170 pence, noted that the guidance was broadly in line with consensus, contributing to the flat share performance.