Ser Educacional (SEER3) Q2 2024 earnings summary

Executive summary

• Operational optimization over the past 18 months led to cost reductions, brand unification, improved margins, cash generation, and lower leverage.

• Strong student intake and growth in the hybrid learning undergraduate base, now representing 49.2% of the total higher education base.

• Regulatory advances, including a favorable Supreme Court (ADC 81/STF) decision, enabled a 69.1% increase in annual medical course seats, supporting future growth.

• The company is positioned for continued growth, focusing on hybrid learning, digital profitability, and further operational synergies.

Financial highlights

• Net revenue rose 5.2% year-over-year to R$532.3 million in 2Q24; 6M24 revenue reached R$983.0 million, up 5.6%.

• Adjusted EBITDA grew 7.9% year-over-year in 2Q24 to R$130.6 million, with margin up 0.6 p.p. to 24.5%.

• Adjusted net income for 2Q24 was R$46.2 million, up 8.5% year-over-year; net income for 2Q24 was R$48.9 million, up 55.8%.

• Operating net cash generation increased 35.5% year-over-year to R$38.9 million.

• Net debt fell 4.6% from December 2023, ending at R$756.3 million.

Outlook and guidance

• Completion of the operational optimization plan expected in 3Q24, with continued focus on profitable growth, hybrid learning expansion, and leveraging new medical seats.

• CapEx expected to normalize to 5%-6% of net revenue in the second half of 2024.

• Continued development of the continuing education ecosystem and increased recurring net cash generation post-CAPEX.