Yduqs Participações (YDUQ3) Q1 2025 earnings summary

Executive summary

• Operating cash generation increased 31% year-over-year to nearly BRL 1.4 billion, with FCFE surging 194% to BRL 528 million LTM and operating cash flow for the quarter at BRL 461 million.

• Premium segments, especially IBMEC and Medical School (Idomed), drove revenue quality improvements, with IBMEC revenue up 20% and EBITDA up 31%, and Idomed revenue up 13% with the undergraduate base surpassing 10,000.

• Semi-on campus offerings expanded, showing higher ticket prices, better renewals, and a 96% increase in intake, contributing to revenue consistency.

• Tuition waiver program for non-engaged students implemented, impacting short-term revenue but expected to improve long-term quality and reduce volatility.

• Dividend payments of BRL 150 million and a BRL 300 million share buyback program completed at an average price of BRL 9.80 per share.

Financial highlights

• Net revenue grew 2% year-over-year to BRL 1,487 million, with pro-forma growth of 3% excluding non-engaged freshmen impact.

• Adjusted EBITDA reached BRL 537 million (+4% YoY), margin stable at 35%; adjusted EBITDA margin at 34.6% (-0.7 p.p. YoY).

• Adjusted net income was BRL 154 million (-11% YoY), with EPS of BRL 1.73, up 47% from 2023.

• Operating cash flow conversion reached 113.5% of EBITDA ex-IFRS 16; DSO improved by 8 days.

• Net debt/EBITDA (ex-IFRS 16) at 1.59x, with no maturities until 2026 and average debt cost at CDI + 1.07%.

Outlook and guidance

• 2025 FCFE guidance is BRL 500 million–BRL 600 million, with confidence in exceeding prior year’s second quarter.

• EPS guidance for 2025 is BRL 1.7–2.0, with 2027 projected at BRL 3.0–4.0 and long-term outlook (2028–2030) for EPS raised to BRL 3.5–4.5.

• Cash generation target of BRL 10 billion by 2029, with focus on deleveraging and disciplined capital allocation.