Cogna Educação (COGN3) Q2 2024 earnings summary

Executive summary

• Recurring EBITDA grew 13.1% in Q2 2024, with margin up 2.7 p.p. to 33.4%, reflecting operational efficiency and structural changes, especially in Kroton.

• Net revenue increased 4.0% year-over-year in Q2 2024 to R$1,441.8 million, driven by Kroton and Vasta, with Kroton’s student base up 15.8% YoY to over 1.2 million.

• Adjusted net profit reached R$50.5 million in Q2 2024, up 359% YoY, aided by higher operating income and lower non-recurring items.

• Ongoing liability management reduced debt costs, stabilized leverage, and extended amortization schedules.

• Operating cash generation after Capex was R$96.9 million in Q2 2024, down 43.3% YoY due to higher supplier payments and working capital effects.

Financial highlights

• Q2 2024 net revenue: R$1,441.8 million, up 4.0% YoY; semester revenue growth: Kroton 8.3%, Vasta 12%, Saber 21%.

• Recurring EBITDA in Q2: R$481.6 million, up 13.1% YoY, with a margin of 33.4%.

• Adjusted net profit in Q2: R$50.5 million, margin at 3.5%; semester adjusted net profit: R$101 million.

• Operating cash generation in Q2: R$97 million, down 43% YoY due to higher supplier payments.

• Free cash flow was negative R$845.8 million in Q2 2024, mainly due to liability management actions.

Outlook and guidance

• Management remains confident in achieving 2024 guidance, supported by Kroton’s student base growth and positive seasonality in Vasta and Saber.

• Expecting strong revenue and EBITDA in H2 2024, especially in Q4 due to seasonality.

• Focus on growth in student intake, subscription expansion, and efficiency through innovation and digitalization.