Yduqs Participações (YDUQ3) Q2 2025 earnings summary

Executive summary

• Leadership transition completed, with Rossano Marques Leandro as CEO and Eduardo Parente moving to the board, ensuring continuity and strategic focus.

• Free Cash Flow to Equity (FCFE) reached R$613M in the last 12 months, surpassing 2025 guidance ceiling, reflecting strong cash generation and a resilient business model focused on returns to investors.

• Premium brands Idomed and Ibmec now represent 29% of revenue and nearly 45% of EBITDA, with Ibmec achieving a 45% adjusted EBITDA margin in 1H25.

• Technology and AI initiatives have reduced customer acquisition costs by 17% and digital content costs by up to 24% since 2021, driving operational efficiency.

• Student intake for the 25.3 cycle rose 16% year-over-year, with strong growth in semi on-campus and digital modalities.

Financial highlights

• Gross revenue rose 9.1% year-over-year to R$3,241.5M in 2Q25; net revenue reached R$2,920M in 1H25, up 5% year-over-year.

• Adjusted EBITDA for 1H25 was R$954M, a 1% increase versus 1H24, with margin at 32% and Premium contributing 44% of EBITDA.

• Adjusted net income for 1H25 was R$184M, down 20% year-over-year, and adjusted net income dropped 45.6% in 2Q25 due to non-recurring items.

• Operating cash flow for the last twelve months increased 65% to R$1,554M; FCFE yield reached 17.2%.

• DSO improved to 94 days, a 9-day reduction year-over-year, reflecting improved receivables management.

Outlook and guidance

• FCFE for the last 12 months already exceeds the upper end of 2025 guidance (R$500M–R$600M), supporting confidence in future cash generation.

• EPS and FCFE guidance for 2025 are reiterated, with expectations for a strong second half and continued high cash generation.

• Intake and retention improvements, lower bad debt, and G&A control expected to drive stronger 2H25 results.

• Strategic focus on premium segment growth, digital transformation, and operational efficiency to drive future performance.

• New regulatory framework for semi on-campus and distance learning reduces industry uncertainty and increases predictability.