Afya (AFYA) Q1 2025 earnings summary

Executive summary

• Net revenue for 1Q25 grew 16.4% year-over-year to R$936.4 million, with adjusted EBITDA up 23.7% to R$492 million and a record margin of 52.5%.

• Net income increased 23.4% year-over-year to R$257 million, with adjusted net income up 17.1% to R$294 million and EPS rising 23.3% to R$2.79.

• Strong cash flow from operations reached R$470.2 million, with a cash conversion ratio of 96.8% and cash position at R$1,154.9 million.

• Medical student base expanded to nearly 26,000, a 14.5% increase year-over-year, and approved medical seats rose to 3,653 after acquisitions.

• Moody’s upgraded the national credit rating to AAA.br with a stable outlook; MSCI awarded a BBB ESG rating.

Financial highlights

• 1Q25 net revenue was R$936.4 million (+16.4% YoY); adjusted EBITDA reached R$492 million (+23.7% YoY) with a 52.5% margin.

• Adjusted net income for 1Q25 was R$294 million (+17.1% YoY); basic EPS was R$2.79 (+23.3% YoY), adjusted EPS R$3.20 (+17%).

• Cash and equivalents at quarter-end were R$1,154.9 million; net debt/adjusted EBITDA at 0.9x.

• Gross margin expanded, driven by higher ticket prices in medicine courses (+3.9%) and operational efficiency.

• CAPEX for 1Q25 was R$56.2 million (6.0% of net revenue).

Outlook and guidance

• 2025 net revenue guidance is R$3,670–3,770 million, with adjusted EBITDA guidance of R$1,455.7–1,720 million; guidance excludes impact from the FUNIC acquisition.

• Management expects continued margin expansion, robust cash generation, and strong intake with 100% occupancy in medical schools.

• Expectation for undergrad ticket growth to remain close to inflation, with no significant pricing challenges anticipated.

• Continuing education segment expected to maintain close to 10% growth for the year, with graduate programs driving expansion.