Cogna Educação (COGN3) Q3 2024 earnings summary

Executive summary

• Recurring EBITDA rose 25.9% to R$385.0 million in 3Q24, with margin up 6.0 p.p., reflecting operational efficiency and process improvements.

• Net revenue in 3Q24 was R$1,281.6 million, up to 2.5% year-over-year; 9M24 net revenue reached R$4,261.9 million, up 6.9%.

• Adjusted net profit reached R$32.8 million in 3Q24, reversing a loss in 3Q23; 9M24 adjusted net profit up 58.1%.

• Free cash flow was R$191.6 million in 3Q24, with operating cash generation after Capex up 57% to R$400.1 million.

• Net debt reduced by R$257.5 million year-over-year to R$3,050 million, with leverage at 1.58x, the lowest in 22 quarters.

Financial highlights

• 3Q24 recurring EBITDA margin expanded to 30.0% (+6.0 p.p.); 9M24 margin at 32.0% (+2.3 p.p.).

• 3Q24 net profit was -R$29.1 million, a 71.6% improvement over 3Q23; adjusted net margin at 2.6%.

• Free cash flow in 3Q24 was R$191.6 million; OCG after Capex and debt service at R$291.2 million.

• Capex in 3Q24 was R$84.3 million, down 25.6% year-over-year.

• Coverage ratio for accounts receivable improved to 61.2% in 3Q24.

Outlook and guidance

• Confident in achieving 2024 guidance: R$1 billion in OCG after Capex and over R$2.1 billion in recurring EBITDA.

• Expecting higher revenue in 4Q24 from Vasta (2025 cycle) and Saber (NBTP/PNLD program) due to seasonality and government contracts.

• Anticipates continued revenue and margin growth in 2025, with ACV growth in Vasta expected to exceed 12.5%.

• Ongoing focus on debt reduction and potential for future dividend payments as net profit improves.