Cruzeiro do Sul Educacional (CSED3) Q2 2024 earnings summary

Executive summary

• Net revenue grew 13.0% in 1H24 and 11.3% in 2Q24, driven by a 9.8–10% increase in the student base and higher average ticket in both on-campus and digital segments.

• Adjusted EBITDA rose 10.2% in 1H24 (margin 30.3%) and 1.7% in 2Q24 (margin 28.6%).

• Adjusted net earnings increased 67.8% in 1H24 (margin 8.3%) and 21.1% in 2Q24 (margin 9.2%).

• Free cash flow reached R$208 million in 1H24 (+77% YoY) and R$72.5–73 million in 2Q24, reflecting strong cash generation.

• Acquisition of FAPI for R$158–182.6 million added 154 medical school seats, expanding presence in Curitiba.

Financial highlights

• 2Q24 net revenue: R$670.2 million (+11.3% YoY); 1H24: R$1.28 billion (+13.0% YoY).

• Adjusted EBITDA in 2Q24: R$191.4 million (+1.7% YoY), margin 28.6%; 1H24: R$387.5–388 million (+10.2% YoY), margin 30.3%.

• Adjusted net earnings in 2Q24: R$61.9 million (+21.1% YoY), margin 9.2%; 1H24: R$105.9 million (+67.8% YoY), margin 8.3%.

• Capex in 2Q24: R$29.9–30 million (-45.4% YoY); 1H24: R$68 million (-17.5% YoY), with focus shifting to technology.

• Net debt: R$851.7–852 million (ex-lease liabilities), net debt/EBITDA (ex-IFRS 16): 1.7x at 2Q24.

Outlook and guidance

• Management expects continued efficiency gains and margin improvements from digital transformation and automation projects.

• Ongoing investments in technology and process automation to support growth and operational optimization.

• Expansion in medical education and hybrid course offerings to support future growth.