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; adjusted EBITDA rose 4.4% and adjusted net income increased 10.7% year-over-year, supported by operational efficiency and resilience amid challenging market conditions.

• Student base expanded across Premium (+19.2%), Digital (+2.9%), and On-campus (+2%) segments, reversing a decade-long on-campus decline.

• Maintained strong financial position with low leverage (net debt/EBITDA at 1.69x), reduced average cost of debt (CDI +1.26%), and robust cash generation.

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

• Advanced ESG initiatives, including social impact programs, diversity achievements, and support for Olympic and Paralympic athletes.

Financial highlights

• Premium segment net revenue up 17.7–18%, Digital up 4–4.1%, and On-campus up 1.7–2% in 1H24 versus 1H23.

• Adjusted EBITDA for 1H24 was R$941.9M (+4.4% vs. 1H23), with margin at 33.8%; Premium margin expanded to 46.8–47%.

• Adjusted net income for 1H24 was R$229.7M (+10.7% vs. 1H23), with margin of 8.2%.

• Capex at 7.5% of net revenue in 1H24, totaling R$209.7M.

• Dividend payment of R$80M in 1H24, paid early in 2Q24.

Outlook and guidance

• Guidance for 2024 reaffirmed: adjusted net income per share between R$1.6 and R$1.9, with expectations to deliver at the lower end of the range.

• 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 remain between 7–8% of net revenue for the year.

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