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 in the last 12 months.

• Premium segments, especially IBMEC and Medical School (IDOMED), drove revenue and margin growth, with IBMEC revenue up 20% and EBITDA up 31%.

• Strategic focus on premium offerings, semi-on-campus expansion, and a tuition waiver program for non-engaged students to improve revenue quality.

• Shareholder returns prioritized with BRL 150 million in dividends paid and a BRL 300 million share buyback program completed at BRL 9.80 per share.

• Debt maturities extended to 2030, reducing cost and improving liquidity, with no maturities before 2026.

Financial highlights

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

• Adjusted EBITDA increased 4% year-over-year to BRL 537 million, with margin stable at 35%.

• Adjusted net income reached BRL 154 million, with EPS of BRL 1.73, up 47% from 2023.

• Operating cash flow for the quarter was BRL 461 million; FCFE for the past 12 months was BRL 528 million (+194% YoY).

• DSO improved by 8 days, reflecting better receivables management.

Outlook and guidance

• Guidance for 2025 FCFE is BRL 500 million–BRL 600 million, with strong confidence in achieving this range.

• 2025 EPS guidance set at BRL 1.7–2.0; long-term EPS target raised to BRL 3–4 by 2027.

• Cash generation target of BRL 10 billion by 2029.

• Capital allocation prioritizes reducing leverage to 1x net debt/EBITDA, maintaining minimum dividends, and selective acquisitions.