Ser Educacional (SEER3) Q3 2024 earnings summary

Executive summary

• Completion of operational optimization project and implementation of the Ser Solidário Program marked a transition to a new growth cycle, driving improved revenue, profitability, and operational synergies, with net revenue up 13.5% and adjusted EBITDA up 38.7% year-over-year in Q3 2024.

• Enrollment and intake in hybrid and digital undergraduate programs grew, especially in health and medical courses, supporting a 5.8% to 9.3% increase in the undergraduate student base.

• Adjusted net income turned positive, reaching R$19.4 million in Q3 2024, reversing prior losses.

• Expansion in medical course offerings followed favorable legal and regulatory developments, increasing annual seats by 80.6% to 941.

• Operational cash generation surged, supporting reduced leverage and positioning for future growth.

Financial highlights

• Net revenue reached R$474.6 million in Q3 2024, up 13.5% year-over-year; 9M24 net revenue was R$1.46 billion, up 8.1%.

• Adjusted EBITDA for Q3 2024 was R$93.7 million (19.7% margin), up 38.7% year-over-year; adjusted net income was R$19.4 million.

• Adjusted cash gross margin improved to 67.5% in Q3 2024; gross margin reached 56.8%.

• Net operational cash generation rose 206.4% to R$85.3 million in Q3 2024.

• Net debt/Adjusted EBITDA (LTM) improved to 1.76x from 2.17x at year-end 2023; net debt at R$737.9 million.

Outlook and guidance

• New medical course seats and the Ser Solidário Program are expected to be fully implemented in 2025, providing new revenue streams and supporting future margin expansion.

• Focus remains on operational leverage, debt reduction, and expanding high-margin, high-ticket courses, especially in health.

• Continued operational and financial optimization is expected, with a young student base and strong demand for health-related courses supporting future growth.