Cruzeiro do Sul Educacional (CSED3) Q3 2025 earnings summary

Executive summary

• Net income for 3Q25 reached R$113 million, up 82% year-over-year, and R$262 million for 9M25, a 70% increase over 9M24, driven by 11% revenue growth and a 9% expansion in the student base.

• Adjusted net earnings rose 78.3% in 3Q25 year-over-year and 55.3% for the nine-month period.

• Free cash flow to equity reached R$428 million in 9M25, up 66% year-over-year, with 3Q25 at R$221 million, up 35% year-over-year.

• Digital and health segments led operational growth, with digital student base up 13% and health courses now representing 71% of on-campus revenue.

• Celebrated 60th anniversary in September 2025, highlighting decades of sustainable management and stakeholder value creation.

Financial highlights

• Net revenue for 3Q25 was R$694 million (+11.1% YoY); 9M25 revenue was R$2.1 billion (+9.5% YoY).

• Adjusted EBITDA for 3Q25 was R$278 million (+29% YoY, margin 40.1%); 9M25 was R$731 million (+21% YoY, margin 35.0%).

• Adjusted net income for 3Q25 was R$113 million (+78.3% YoY); 9M25 was R$263 million (+55.3% YoY).

• Gross margin for 3Q25 improved to 53.8% (+3.9 p.p. YoY), driven by efficiency and growth in medical and digital courses.

• Free cash flow to equity conversion reached 94% of EBITDA in 3Q25 and 77% for 9M25.

Outlook and guidance

• Management expects continued growth in digital and hybrid segments, supported by regulatory changes and operational efficiency.

• Focus remains on cash generation, operational excellence, and margin expansion.

• No specific guidance provided for gross margin or future mix due to regulatory and market uncertainties.

• Updated PDA curve will cause seasonality in quarterly results throughout 2025.

• Ongoing improvements in credit and collection processes expected to support future margin expansion.