Yduqs Participações (YDUQ3) Q2 2024 earnings summary

Executive summary

• Net revenue grew 6.3% in 1H24, with all business units contributing and Premium segment leading growth; student base expanded across all segments, reversing a decade-long on-campus decline.

• Adjusted EBITDA increased 4.4% and adjusted net income rose 10.7% year-over-year in 1H24, with margin improvement driven by premium and digital segments.

• Newton Paiva acquisition announced in May to strengthen the premium portfolio, pending regulatory approval.

• Guidance for 2024 reaffirmed, expecting results near the lower end of the range, with margin recovery and improved efficiency anticipated in 2H24.

• Maintained strong financial position, with average cost of debt reduced to CDI +1.26% and net debt/EBITDA at 1.69x.

Financial highlights

• Premium segment net revenue up 18% and adjusted EBITDA margin up to 47% in 1H24; Digital up 4%, On-campus up 2%.

• Adjusted EBITDA reached R$941.9M in 1H24 (+4.4% vs. 1H23), with margin at 33.8%.

• Adjusted net income was R$229.7M in 1H24 (+10.7% vs. 1H23); adjusted net income per share guidance for 2024 set at R$1.6–1.9.

• Capex at 7.5% of net revenue in 1H24, trending toward long-term guidance of below 8%.

• Dividend payment of R$80 million in 1H24, paid early in the quarter.

Outlook and guidance

• Full-year guidance reaffirmed, with expectations to deliver at the lower end of the range and focus on cost discipline and efficiency.

• Second half expected to see margin recovery, lower transfer and bad debt levels, and improved cost efficiency.

• Net profit for the second half projected to nearly double compared to the same period last year, driven by operational levers and cost controls.

• Capex expected to close the year at R$470M, stabilizing at 7–8% of revenue medium-term.

• 2025 outlook includes single-digit revenue growth, margin expansion, and strong net income, supported by premium segment and medicine course growth.