Pearson reported faster sales growth in the third quarter and signaled a stronger finish to the year, but it is the firm’s use of AI that may prove the more consequential development
Sales rose 4% in the three months to the end of September, bringing year-to-date growth to 2%. The standout performance came from the company’s Virtual Learning division, where sales jumped 17% in the third quarter as student enrollments climbed. Pearson runs online schools that embed AI tools into course materials, and the company says it has growing evidence that those tools are helping students achieve better results.
Pearson has been rolling out a portfolio of AI learning content and products. Recent launches include AI Literacy Modules to teach students how to use AI platforms effectively and responsibly, and Study Prep, a video platform that incorporates human tutors and AI study tools. The company also introduced a chatbot integrated into an English-learning app that is available to roughly one million students in China.
Pearson’s progress looks notable against a broader backdrop of unfulfilled expectations. A widely cited MIT study published in August found that roughly 95% of corporate AI pilot projects failed to deliver profit gains. The headline number sparked a tech sell-off and fueled a debate about whether AI is more hype than help, but the real insight from the report was that most failures stemmed from a “learning gap.”
Companies, the report found, often did not understand how to use the AI tools or failed to adapt workflows to make best use of the technology. The AI systems themselves, in many pilots, could not learn or adapt to new information over time.
The firms making real progress took a different path, customizing AI tools for narrow processes and judging success by business outcomes. They looked for systems that fit existing operations and improved them over time. Pearson’s playbook appears to be following a similar approach.
The company’s transformation stretches back long before its recent tech investments. Pearson’s roots stretch back to the mid-1800s, when it began as a construction company that later diversified into oil, banking and electricity. The conglomerate pivoted toward publishing and media during the second half of the 20th century, with acquisitions of the Financial Times, the Economist and Penguin Books. But by the 1990s, Pearson was shedding most non-core businesses to focus on education.
A turbulent period of profit warnings and layoffs preceded Andy Bird’s tenure as CEO from October 2020 to early 2024. The former Disney executive began steering Pearson’s transformation from a traditional textbook publisher into a digital-first learning company.
Omar Abbosh, a former president of Microsoft’s Industry Solutions business and longtime Accenture executive, succeeded Bird and has sought to accelerate Pearson’s transformation. The strategy has helped to drive a 118% jump in its London-listed shares over the past five years.
The early signs are promising, but the harder work now is to prove that AI can improve learning and the bottom line everywhere Pearson operates.