Cruzeiro do Sul Educacional (CSED3) Q3 2024 earnings summary

Executive summary

• Achieved record free cash flow of R$199 million in 3Q24, the highest in company history, driven by EBITDA growth, working capital improvements, and lower capex.

• Adjusted net earnings reached R$64 million in 3Q24 (+88.5% YoY), the highest since IPO, with net margin up 4.2 p.p. to 10.2%.

• Medical school seats expanded by 49% in the last six months, reaching 1,019 seats, through acquisitions and regulatory approvals.

• Maintained healthy leverage at 1.4x net debt/EBITDA ex-IFRS 16, even after acquisitions and dividend distributions.

• Student base grew 8.6% YoY to 525,000, with strong retention and re-enrollment rates.

Financial highlights

• Net revenue for 3Q24 was R$625 million (+10.6% YoY); 9M24 net revenue reached R$1.91 billion (+12.2% YoY).

• Adjusted EBITDA for 3Q24 was R$216 million (+20.5% YoY), margin 34.6% (+2.8 p.p.); 9M24: R$604 million (+13.7% YoY), margin 31.7%.

• Adjusted net earnings for 3Q24 were R$64 million (+88.5% YoY); 9M24: R$169 million (+75% YoY).

• Free cash flow: R$199 million in 3Q24 (+55.7% YoY); R$407 million in 9M24 (+65.8% YoY).

• Gross margin in 3Q24 was 49.9% (+0.8 p.p. YoY); 9M24: 49.6% (+1.3 p.p. YoY).

Outlook and guidance

• Management expects continued resilience and growth, especially in medical courses and high-value segments, with ongoing investments in technology and operational efficiency.

• Prepared to adapt to regulatory changes in distance learning, with minimal impact expected due to proactive optimization.

• Expansion in medical education and digital offerings expected to support future revenue and margin growth.