Ser Educacional (SEER3) Q3 2024 earnings summary

Executive summary

• Net revenue grew 13.5% year-over-year in 3Q24, driven by higher student intake and increased average ticket, especially in health and medical courses, with operational optimization supporting a new growth cycle.

• Adjusted EBITDA rose 38.7% to R$93.7 million, with margin expanding 3.6 p.p. to 19.7% and adjusted net income reaching R$19.4 million, reversing prior losses.

• Operational optimization and the Ser Solidarity/Solidário Program improved revenue recognition, supported new student intake, and enhanced profitability.

• Expansion in medical course offerings followed favorable legal and regulatory developments, increasing annual seats by 80.6%.

• Strong operational cash generation, with net operational cash up 206.4% to R$85.3 million in 3Q24.

Financial highlights

• Net revenue reached R$474.6 million in 3Q24, up 13.5% year-over-year; 9M24 net revenue up 8.1%.

• Adjusted EBITDA margin increased by 3.6 p.p. to 19.7%; adjusted net margin reached 4.1%, up 9.4 p.p. from -5.3% in 3Q23.

• Adjusted cash gross margin improved 4.3 p.p. to 67.5% in 3Q24; adjusted cash gross profit was R$320.5 million, up 21.2%.

• Net operational cash generation surged to R$85.3 million, up 206.4% year-over-year.

• Net debt/Adjusted EBITDA improved to 1.76x, down from 2.24x in 3Q23.

Outlook and guidance

• Expansion of medical courses with 80.6% increase in annual seats and full implementation of the Ser Solidarity/Solidário Program expected in 2025.

• Focus on operational leverage, debt reduction, and expanding high-margin, high-ticket courses, with recurring dividend payments planned after further deleveraging.

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

• Management expects continued growth in health-related courses and operational resilience, supported by a young student base.