Good morning everyone, and welcome to Pearson's 2026 Q1 trading update. We will begin with a brief update on our first-quarter performance, followed by an open Q&A session.

If you would like to ask a question, press *1. To withdraw your question, press *2.

For operator assistance, press *0. With that, I'll hand over to Omar.

Thank you, Alex. Good morning everyone, and thank you for joining us today.

I'm here in London with our CFO, Sally Johnson. Many of you will already have seen our Q1 results announcement this morning, and so I'll just pick out a few key points, and then we'll open it up for Q&A.

First, we're encouraged by the good start to 2026, reporting revenue growth of 4%. I'm pleased with the momentum that we're seeing in our business driven by continued strong execution from all our teams.

We remain confident in achieving our guidance for 2026, and we reconfirm our medium-term outlook. Looking at performance by business unit: Assessments & Qualifications declined 1% as we had expected, and this is on track to return to growth in Q2 and beyond, supported by new business such as the Standards and Testing Agency in the UK, and recently extended or awarded contracts, including ACCA and Google Cloud.

Virtual Learning delivered another standout result with 21% revenue growth, driven by another excellent enrollment performance, which accelerated from the fall semester. We're further encouraged by preliminary market share data, which indicates that we're gaining share in the market.

Higher Education delivered 2% growth, with another solid performance in our US core courseware business, which continues to deliver sustained growth. We expect Higher Education revenue growth for the year to be higher than 2025, with improvements in the K-12 channel and international markets.

English Language Learning was up 2%, reflecting growth in the institutional business driven by China and our enterprise offerings. We continue to expect PTE to return to growth this year driven by share gains and pricing, although the market remains pressured, including in the Middle East, which I'll touch on in a moment.

Lastly, Enterprise Learning & Skills grew 8%, supported by good growth in vocational qualifications and continued momentum in enterprise solutions. The strength of our Q1 results illustrates the message we gave at the prelims: Pearson is successful thanks to our unique characteristics and enduring competitive strengths.

You'll remember that about 90% of our profit comes from operationally complex, interconnected, hybrid physical and digital services, which comprise assessments, virtual schools, and print. These demand uncompromising quality levels and trust.

The remaining approximately 10% of profit comes from primary digital courseware, where we're deeply integrated in the critical workflows that decision-makers use to perform their roles. We're seeing the benefits of these characteristics and strengths in our Q1 performance, and they underpin our confidence in delivering attractive long-term growth.

Second, we've made good strategic progress against the priorities we set out for 2026. Let me share a couple of examples.

We continue to expand our AI learning and skilling programs through the launch of our Foundations of AI course for US school teachers. Together with Adobe, we launched the first professional certification for Adobe Firefly.

These reflect our opportunity in helping learners and workers upskill in an AI era. In enterprise skilling, our teams have been further developing the strategic relationships across our nine partners, including recently with Salesforce, as reflected in our Q1 results.

We are just at the beginning of what we can achieve with these partners, and we're working with these companies that are amongst the world's leading technology players to shape the approach, tools, and solutions for reskilling in the AI era. This is why they have committed hundreds of millions of dollars of incremental revenues up to 2030 to Pearson.

We're using Pearson's proprietary content, data, and assessment capabilities with their scale to serve their skilling needs, those of their partner ecosystems, and those of their customers. Communication Coach, developed alongside Microsoft, is just one example in this area.

Third, we wanted to acknowledge the conflict in the Middle East. Our first priority is and always will be the safety of our people, and we're committed to doing everything we can to support them.

This region, including near adjacent countries such as Turkey and Pakistan, represents approximately 2% of our revenues, mainly across A&Q and ELL. We do not expect the conflict to impact full-year group growth in any meaningful way, but our teams are dealing with operational considerations, such as the announced changes to school exam delivery this year, where we're leveraging well-established contingency arrangements to support schools and students.

We are seeing early signs of possible disruption to the migration and study abroad market, relevant for our PTE business. However, both of these factors are small in the context of Pearson's overall performance, and thanks to our very resilient business model, we remain confident in our 2026 guidance.

Lastly, as this is our wonderful and lovely Sally's last set of results. I wanted to say thank you again.

What a fantastic partner she is and a friend she's been to me and the whole Pearson executive team. Sally has been working very closely with Simon Robson, our new CFO, to ensure a very smooth transition, and we look forward to introducing you to Simon at our interim results this summer.

With that, Sally and I are pleased to answer your questions.

Thanks a million. Thanks a million, guys, for the presentation, or the the comments.

Just on A&Q, could you just remind us of the dynamics going into Q2 around any impact from the New Jersey contract loss, PDRI, and just trying to help us understand the return to growth comments in Q2 within A&Q? Then just in Virtual Learning, those enrollment growth numbers very strong versus some peers that have reported recently.

Could you just help us understand any dynamics around the enrollment growth trends in there? Thanks.

Sure.

I think those are both mine, aren't they? [laughter] Thanks, Ciarán.

A&Q in Q1, you will remember, has the comp for PDRI because the federal impact happened in Q2 last year. Q1 hadn't got that, so that's part of the dynamic in Q1 along with New Jersey.

The New Jersey impact is across Q1 and Q2, it's still relevant in Q2, but the PDRI piece isn't so relevant in Q2. Then we have growth coming from the underlying businesses, but also some new contracts that we've had.

The new contracts like Salesforce and ServiceNow that started in the second half of last year, and also in our Qualifications business, we have our NCT contract, so that is the delivery of exams for primary school kids in the UK. Of course, if you've got primary school kids in the UK, you will know that they take those exams in the summer term.

That will also be part of the growth that we see in A&Q for Q2. Very confident in A&Q growth in Q2.

Then Virtual Learning enrollments are up 15% for Pearson. I know one of our competitors reported earlier with a lower enrollment number.

There are some specific dynamics in their business that I will let you go and look at that are relevant to them. I'm not gonna necessarily talk to a competitor's numbers, but really good performance in Virtual Learning.

The dynamics there are a market with a tailwind, the kind of drive for parental choice is meaning that people are turning to the virtual learning environment, and then we've been really pleased with what we've been doing in terms of our enrollment processes and improvements there, as well as how we have driven marketing. I think one thing that is worth pointing out is that we talked about 13% for fall back-to-school, the 15% is demonstrating that we've actually added enrollments in-year, which has been partly a factor of how we've done our marketing this year in terms of when we put marketing spend into the funnel.

Really pleased with Virtual Learning.

Thanks a million, and best of luck in the new role, Sally.

Thanks, Ciarán.

Morning, James.

Good morning,

James.

Morning, Omar, Sally. It's James from Goldman.

Three questions, please. I guess, firstly, just on the US student assessment business in A&Q, you recently won or expanded contracts with Maryland and Wyoming.

Do these have a financial benefit in calendar 2026, or is this delivery in the first half of '27? Then I guess are there any other upcoming tenders you'd flag, either to win or retain over the next few quarters?

Secondly, on ELS, we're now a third of the way through the year, do you have any more visibility on growth for the division this year? Do you expect to see an acceleration from the 8% in Q1, given the current product rollouts from some of the new partnerships?

Then lastly, on capital allocation, the accelerated share buyback is due to be completed by the end of May, I think, and leverage remains below the 2x maximum you've outlined. How should we think about the scope to increase this through the rest of '26 and the timing for such a decision?

Thank you.

Shall I take the first one and the third one and—

Go for it,

Sally. —then you can take the second one.

Sure.

US student assessment, yeah, we've got the New Jersey impact in Q1 and Q2. You're quite right.

We renewed many contracts last year, I think

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was the number that we talked about at prelims. We'd also talked about the extension of the Maryland contract and the win in Wyoming.

Both of those come through a small amount in the second half of 2026, but then also there'll be the upside in 2027 as well, when we have a full year. I guess the answer to your question there, James, is both.

Then in terms of other tenders, it's very, very normal for there to be an RFP cycle in this business. There are tenders that are coming up.

I'd remind you of our track record in terms of our retention rate, 96% last year, and that included New Jersey. Lots of confidence in our ability to retain those contracts going forward.

Then on the share buyback, obviously we're midst the share buyback at the moment, there's no capital allocation for the board to be making a decision on. At the point that we then get into a next cycle where that decision is made, we will apply our capital allocation policy, which I think is quite clear to people from a go-forward basis.

Perfect. Let me just pick up the ELS comments, James.

Obviously, we're not sort of giving a segmental guidance by quarter for each of these BUs. We feel very good about where ELS is.

The performance in Q1 was strong in vocational qualifications, which, as you probably know, always is biased somewhat to H1. That one has performed very well.

We're very good with how it's tracking for the year. Enterprise Solutions, which is where a lot of our enterprise partnerships are inked, is trending in a very good way.

The way those contracts are designed, they're all, let's say, five-year contracts, and they ramp over time is essentially how they work. What our teams are doing is working alongside our partners to, of course, figure out where do we apply very helpful engineering resources in terms of transforming and improving Pearson's business.

How do we bring Pearson solutions and skilling capabilities into their businesses to help their people? Importantly, how do we work together on joint go-to-markets?

The most obvious vector of activity in the short term that we're seeing is the tech companies asking for help in skilling their sales people on their own AI, because the tech is moving so quickly and that's providing a a area of growth. Importantly, also for their partner organizations.

To give you a sense, an organization like IBM will have something like 30,000 partner organizations around it that help them implement their tech with their end customers. Those partners also need help in skilling with the new tech that's coming out of IBM.

Then you have the actual end customers who also need help with using that AI in the most effective way. That obviously, in order for these companies to derive ROI on their investments in the tech that they're building, they need their customers to be using it effectively.

That's where our teams are working together on shaping the products and services to meet that need, and that's why we're very confident in the future growth in that business.

Very clear. Thank you.

Thanks, Sally. All the best for the future.

Thanks, James.

Morning, Steve.

Yeah. Morning.

Just a couple of phasing questions actually. Just going back to Virtual Learning, it looks to me as though the second-quarter comp is still relatively easy when we look back at next year, and then it gets more difficult in the second half.

Is it fair to assume that the second-quarter growth rate can be at a similar rate to the first quarter, and then it starts slowing down? Is that the kind of way to think about it?

That's the first question. Then I think I heard you refer in vocational, I know it's first-half weighted, but there was some phasing benefit in the first quarter.

Can you just clarify whether I was correct on that? Thanks.

I'll take both of those. Hi, Steve.

On Virtual Learning, you're quite right. The comp for Q2 is is easy, in inverted commas, the way the one in in Q1 was, because you think about this business semester by semester, Q1 and Q2 generally would look very similar, and actually H1 would look very similar to H2 of the previous year, because the the enrollments effectively that you're getting are mostly for that school year.

The one thing I would point out is that we've highlighted that we got a small amount of funding upside in Q1, which we would normally get in Q2. Whilst the growth in Q2 will be very good for Virtual Schools, it won't be quite as high as it was in Q1.

The way I would encourage you to think about it is that H1 will look very much like H2 last year, and I think H2 last year we told you was 18%. Then on vocational, yes.

It's really small in pound terms, but we have had a a a very small phasing benefit in vocational in Q1 that that normalizes in Q2, but it in it's really small from a pound pound-million point of view.

Perfect. Thank you so much.

Thanks, Steve.

Great. Looks like the update was comprehensive, we've covered questions quite quickly.

Thank you very much everybody for your interest in Pearson, and with that, goodbye.

Thank you, everyone, and thank you, Sally Johnson.