Afya (AFYA) Q2 2026 earnings summary

Executive summary

• Revenue for 1H26 grew 7.0% year-over-year to R$1,984.8 million, with adjusted EBITDA up 2.8% to R$918.0 million and net income rising 6.8% to R$463.1 million; basic EPS increased 8.7% to R$5.10.

• Operating cash conversion remained strong at 87.8%, and Free Cash Flow to Equity reached R$423.4 million in 1H26.

• Over 100% of Free Cash Flow to Equity was returned to shareholders in 1H26, totaling R$448 million through dividends and buybacks.

• 85% of revenue in 1H26 was generated from medicine-related programs.

• Moody’s reaffirmed the company’s AAA.br credit rating with a stable outlook in May 2026.

Financial highlights

• Adjusted EBITDA margin for 1H26 was 46.2%, down 190 bps year-over-year due to higher sales and marketing expenses.

• Net debt/Adjusted EBITDA (ex-IFRS16) stood at 0.8x as of 1H26, with net debt at R$1,394 million.

• Cash flow from operating activities totaled R$806 million, up 3% year-over-year.

• Free Cash Flow to Equity yield over the last 12 months was 11%.

• Gross debt as of June 2026 was R$2.4 billion, down from R$2.7 billion a year earlier.

Outlook and guidance

• 2026 guidance reaffirmed: revenue between R$3,950–4,100 million, adjusted EBITDA between R$1,700–1,800 million, and CAPEX between R$340–380 million.

• CapEx is expected to accelerate in the second half, with a focus on intangibles, particularly in continuing education and medical practice solutions.

• Management targets 40% of 2025 net income for dividends and continues disciplined capital allocation.

• Continuing education revenue is expected to maintain high single-digit growth for the remainder of the year.

• Continued investment in the ecosystem and support for physicians at all career stages.