Afya (AFYA) Q3 2024 earnings summary

Executive summary

• Net revenue for Q3 2024 rose 16.3% year-over-year to BRL 841.2 million, with adjusted EBITDA up 25% to BRL 347.9 million and a margin of 41.4%.

• Adjusted net income for Q3 2024 was BRL 165.4 million, up 28.8% year-over-year, and adjusted EPS increased 29.9% to BRL 1.79.

• Operating cash flow for the nine months reached BRL 1,167.5 million, up 25% year-over-year, with a cash conversion ratio of 109.7%.

• Medical student base exceeded 24,000, up 12.4% year-over-year, and approved medical seats increased by 13.6% to 3,593.

• Major acquisitions included Unidom and Unidompedro, expanding medical seats and strengthening presence in key regions.

Financial highlights

• Q3 2024 net revenue: BRL 841.2 million (+16.3% YoY); nine-month net revenue: BRL 2,455.3 million (+14.4% YoY).

• Adjusted EBITDA for Q3: BRL 347.9 million (+25% YoY), margin 41.4% (+290 bps); nine-month adjusted EBITDA: BRL 1,089.7 million (+24.3% YoY), margin 44.4% (+350 bps).

• Adjusted net income for Q3: BRL 165.4 million (+28.8% YoY); nine-month adjusted net income: BRL 626.7 million (+46.9% YoY).

• Adjusted EPS for Q3: BRL 1.79 (+29.9% YoY); nine-month adjusted EPS: BRL 6.81 (+48.7% YoY).

• Operating cash flow for nine months: BRL 1,167.5 million (+25% YoY), conversion ratio 109.7%.

Outlook and guidance

• Margin expansion expected to continue, driven by operational leverage and efficiency gains in all business units.

• Mix effects may impact overall margin as undergrad grows slower than continuing education and digital services.

• Continuing education segment expected to remain flat in Q4 due to seasonality, with improvement anticipated in 2025.

• M&A pipeline robust, with expectations for lower acquisition multiples per seat in 2025.

• FY2024 guidance reaffirmed: net revenue BRL 3,225–3,325 million, adjusted EBITDA BRL 1,375–1,475 million, CAPEX BRL 220–260 million.