About Pearson

Pearson plc operates as a learning company worldwide. The company has its principal operations in the education, assessments and certifications markets. It delivers content, assessment and services, powered by technology, in order to drive personalized learning at scale. The company creates and manages intellectual property, which it promotes and sells to its customers under well-known brand names. The company delivers its content in a variety of forms and through a variety of channels, with emphasis on digital services. Though it has a presence in circa 200 countries around the world, its largest markets are North America (67% of 2021 sales) and Europe (including the U.K.) (18% of 2021 sales). The company is a provider of educational materials and learning technologies. It provides test development, processing and scoring services to governments, educational institutions, corporations and professional bodies around the world. It provides content across the curriculum and a range of education services, including teacher development, educational software and system-wide solutions. It owns and operates colleges and schools (including virtual schools). The company is operating around six geographical areas (the U.K., Europe, the U.S., Canada, the Asia Pacific, and Other countries). Within each geographical area, the company provides content, assessment and digital services to schools, colleges and universities, as well as professional and vocational education to learners. Segments The company operates through Assessment & Qualifications, Virtual Learning, English Language Learning, Workforce Skills, and Higher Education segments. In addition, the International Courseware local publishing businesses are under strategic review and during this time are being managed as a separate division, known as Strategic Review. Assessment & Qualifications This segment includes Pearson VUE, US School Assessment, Clinical Assessment, UK GCSE and A Levels and International academic qualifications. As people up-skill and re-skill often in their lives, they are looking to some form of certification to prove their achievement. Everything the company does across its five divisions has the potential to lead to some form of assessment, qualification, or certificate. This segment provides the assessments, qualifications, certifications, and licenses that enable people to demonstrate their knowledge, skills and aptitude across a lifetime of learning, from school to professional careers. The learning that the company offers in all its other divisions has the potential to lead to some form of assessment, qualification, certification or license, and this continues to be a significant opportunity for the company. The company’s partners include major multinational employers, governments, schools and professional bodies. Its services are used in some of the growing institutions and industries in the world, such as K-12 (primary/secondary) schools in the U.S., healthcare, cloud computing and information technology (IT). This segment operates through four business units, including Pearson VUE; US Student Assessment; UK & International Qualifications; and Clinical Assessment. Through Pearson VUE, learners validate what they have learned to gain a certificate or license. Learners take approximately 17 million exams through Pearson VUE each year in more than 200 countries. To serve customers and help people advance in their careers during the pandemic, Pearson VUE enables people to test remotely from their home, emerging as a player in online invigilation. The company’s US Student Assessment division acts as a partner with states, districts and educators to help K-12 students advance at an appropriate pace in their schooling. UK & International Qualifications develops highly sought after academic and vocational qualifications. Clinical Assessment provides psychological assessment in health and education. The business produces hundreds of scientifically backed products and solutions designed to help experts understand how people learn. The team brings together innovation with test design to develop tools for children and adults, educators and clinicians. Virtual Learning Virtual Learning includes the company’s Virtual Schools and Online Program Management (OPM) businesses. The company’s Virtual Learning division offers online learning for every age and stage of education. Users are able to learn where, when, and how they learn, giving them a personalized experience. Students in grades K-12 in the U.S. (equivalent to primary and secondary school in the U.K.) can enroll in full-time online public or private school programs offered by Pearson Virtual Schools. Fully accredited and staffed with specially trained teachers, these online schools provide alternatives to the traditional classroom experience. K-12 online school options include Connections Academy (the U.S.-based public schools), Pearson Online Academies (international private schools), and programs for school districts across the U.S. Adult learners, universities and employers rely on the company for exclusive online higher education programs and Online Program Management (OPM) services, including degrees, certificates and short courses. Students gain access to online learning to boost employability and advance in their careers, while higher education institutions extend their reach and provide the flexible online options their students want. For employers, the company’s OPM business delivers upskilling and reskilling to keep pace with the future of work. This business operates in the U.S. and internationally. English Language Learning This segment includes Pearson Test of English (PTE), Institutional Courseware and English Online Solutions. The company has a set of assets to support its English learners. The Global Scale of English, a global measurement standard, enables people to gauge and track their progress in English. The Pearson Test of English is a digital test with AI scoring that provides results. The company is available in 118 countries, operating a network of 389 Pearson VUE test centers. The company also offers digital and blended English solutions to academic institutions and private language schools in 163 countries around the world, bringing together courseware and assessment with teacher support and learning platforms. Workforce Skills This segment includes BTEC, GED, TalentLens, Pearson College (Pearson College Limited) and Apprenticeships. It also encompasses acquired businesses, Faethm and Credly. The company helps employers understand labor market dynamics and how best to futureproof their workforces at scale, while helping workers gain the skills they need to boost their employability and open up new job and career prospects. The company’s offer uses workforce analysis, personalized learning, assessment and verified skills credentials to close skills gaps, realize untapped potential and mobilize talent. Higher Education This segment includes the company’s U.S., Canadian and International Higher Education Courseware businesses. The company creates personalized, digital learning experiences for higher education and college students. It produces higher education learning media in North America, as well as reaches into other major markets around the world. The company offers digital content with experiences that lead to positive learning outcomes for more than 10 million higher education students every year. The company partners with thousands of authors to create content in more than 100 academic disciplines. It is a leader in science, technology, engineering and maths (STEM), as well as IT among other disciplines. The company’s content is delivered through digital eBooks and interactive multimedia on platforms, such as MyLab, including new Interactive Labs; Mastering; Revel; and Pearson+. In July 2021, the company launched Pearson+, a direct-to-consumer subscription experience that gives students access to eBooks and study tools. In addition to helping build student relationships, Pearson+ will shift commerce away from secondary market sellers to the company’s owned sites and apps. This gives students an e-commerce experience and access to the learning content and study tools. The company’s higher education products are guided by professional insights from educators and by preferences expressed by faculties. Strategic Review Strategic Review comprises the International Courseware local publishing businesses. Acquisitions In September 2021, the company completed the acquisition of 100% of the share capital of Faethm Holdings Pty Limited (Faethm). The company made two additional acquisitions of subsidiaries, Opinion Interactive LLC in February 2021 and MZ Development Inc. in July 2021. In January 2022, the company completed the acquisition of 100% of the share capital of Credly Inc. (Credly), having previously held a 19.9% interest in the company. Dispositions In November 2020, the company announced the sale of its interests in Pearson Institute of Higher Education (PIHE) in South Africa. The sale completed in February 2021. In October 2021, the sale of the company’s interests in K12 Sistemas in Brazil was completed. Operating Cycles The Higher Education courseware market is primarily driven by an adoption cycle, with colleges and professors typically refreshing their courses and selecting revised programs on a regular basis, often in line with the release of new content or new technology offerings. The company renews its product development assets to reflect new content and capabilities, which enhance the attractiveness of its offering to both educators and learners. The analysis of historical data shows that the typical life cycle of Higher Education content is up to 5 years but varies by product. In addition to content, the company develops technology platforms for products and the life cycle for these platforms can be in excess of the 5 years cycle for content. Again, the operating cycle for content and platforms mirrors the market cycle. Historically for a major content refresh a development phase of typically 12 to 18 months for Higher Education precedes the period during which the company receives and delivers against orders for the products it has developed for the program. The operating cycles in respect of the company’s professional and clinical content are more specialized in nature as they relate to educational or heavy reference products released into smaller markets (e.g. the financial training and IT sectors). Typically, the life cycle is 5 years for Professional content and 7 years for Clinical content. Elsewhere in the company, operating cycles are typically less than one year. Suppliers The company purchases most of its paper through its global outsourcing partner LSC Communications located in the United States. Competition In Assessment & Qualifications, the company competes with other companies offering test development and administration, including Educational Testing Service (ETS), American Institute for Research (AIR), Measured Progress Inc, and others. The U.K. qualifications business competes with AQA and OCR in general qualifications. In Virtual Learning, the company competes with companies, such as Stride in virtual schools and 2U Inc. in Online Program Management, alongside smaller niche players that specialize in a particular academic discipline or focus on a learning technology. In English language teaching (ELT) courseware, the company competes with Oxford University Press, Macmillan Publishers and other publishers. In English language testing, Pearson Test of English Academic competes with alternative tests, including iELTS and TOEFL. In Workforce Skills, the vocational qualifications business competes with City and Guilds globally alongside smaller niche and local market providers, its assessments businesses compete with HiSET in high school equivalency and SHL in skills and ability testing, and its enterprise data, technology and learning businesses compete with Learning platforms, such as Guild, talent management platforms, such as Eightfold.ai, and data services, such as Emsi. In Higher Education, the company competes with the other publishers and creators of educational materials and services. These companies include publishers, such as Cengage Learning, McGraw-Hill Education and Houghton Mifflin Harcourt. History Pearson plc was founded in 1844. The company was incorporated and registered in 1897 under the laws of England and Wales as a limited company and re-registered under the U.K. Companies Act as a public limited company in 1981.