Ser Educacional (SEER3) Q2 2024 earnings summary

Executive summary

• Strong student intake and operational optimization drove growth in student base, revenue, and profitability, with hybrid and health courses leading expansion.

• Operational optimization plan completed, improving margins, cash generation, and reducing net debt/EBITDA to 1.93x.

• Regulatory progress, including Supreme Court and Ministry of Education decisions, enabled a 69% increase in annual medical course seats, supporting future growth.

• Focus remains on enhancing student experience, optimizing capital allocation, and expanding high-margin course offerings.

Financial highlights

• Net revenue rose 5.2% year-over-year to R$532.3M in 2Q24; adjusted EBITDA increased 7.9% to R$130.6M.

• Adjusted EBITDA margin improved by 0.6 p.p. to 24.5% in 2Q24.

• Net operating cash generation increased 35.5% year-over-year to R$38.9M.

• Adjusted net income grew 8.5% year-over-year to R$46.2M in 2Q24.

• Net Debt/EBITDA improved to 1.93x from 2.68x in 2022.

Outlook and guidance

• Confident in continued margin expansion and further synergies from operational optimization in H2 2024.

• Expecting growth from new medical course seats and ongoing student intake.

• CapEx expected to normalize to 5-6% of net revenue in H2 2024.

• PDD anticipated to stabilize around 8% of net revenue from H2 2024 onward.

• Focus on operational leverage, debt reduction, and expanding high-margin courses.