Cogna Educação (COGN3) Q1 2025 earnings summary

Executive summary

• Net revenue grew 5.8% year-over-year to R$1,627.6 million, driven by Kroton's strong performance and efficiency gains across the group.

• Recurring EBITDA increased 12.2% to R$556.0 million, with margin up 2.0 p.p. to 34.2%, reflecting operational improvements.

• Net profit reached R$95.1 million, reversing prior losses, supported by higher operating results and cost control.

• Free cash generation surged to R$149.6 million, 16x higher than the same quarter last year.

• Leverage (Net Debt/EBITDA) improved to 1.28x from 1.79x year-over-year, the lowest since 4Q18.

Financial highlights

• Adjusted net profit was R$154.4 million, up 205.7% year-over-year, with a margin of 9.5%.

• Operating cash generation after Capex reached R$250.3 million, up 19.1% year-over-year.

• Net debt decreased by R$462.5 million year-over-year, reaching R$2,814.2 million.

• Consolidated gross margin rose 3.6 p.p. to 78.2%.

• Capex increased 28.7% to R$128.9 million, mainly for infrastructure and technology.

Outlook and guidance

• Management expects a resumption of growth in Saber in 2H25 with the High School Program purchase cycle.

• Ongoing focus on efficiency, innovation, and digital transformation to drive sustainable growth and new revenue streams.

• Continued deleveraging and disciplined capital allocation remain priorities.

• Anticipates ongoing dividend distributions and share buybacks as part of capital return strategy.

• Regulatory changes in online education are expected to be beneficial due to existing infrastructure for presential classes.