Yduqs Participações (YDUQ3) Q4 2024 earnings summary

Executive summary

• Achieved adjusted EBITDA growth of 6% to BRL 1.8 billion in 2024, with margin expansion to 33.9% and strong operational cash flow of BRL 1.3 billion, up 16% year-over-year.

• Net income rose 40% year-over-year to BRL 480 million, with EPS increasing to BRL 1.73, surpassing guidance.

• Free cash flow to equity reached BRL 362 million, surging 438% year-over-year, supporting share buybacks and dividends.

• Strategic acquisitions of Newton Paiva and Edufor added over 10,000 students and 474 new medicine seats at minimal CapEx.

• Maintained consistent dividend payments since IPO, with BRL 150 million proposed for 2025.

Financial highlights

• Net revenue grew 4% year-over-year to BRL 5.36 billion, led by premium segments (IBMEC and IDOMED) whose share of total revenue increased by 3 percentage points.

• Adjusted EBITDA margin improved to 33.9% (+0.6 p.p. YoY), and net income for the year was BRL 480 million, up from BRL 342 million.

• Free cash flow to equity (FCFE) was BRL 362 million, up BRL 295 million from 2023.

• CapEx was BRL 468 million (8.7% of net revenue), below guidance and moving toward a medium-term target of less than 8%.

• Bad debt as a percentage of net revenue declined to 12.3% in 4Q24, reflecting improved collection.

Outlook and guidance

• Confident in strong cash generation for 2025, with a positive working capital profile and no debt maturities until 2026.

• Expect continued growth in semi-on-campus, medicine, and IBMEC segments, maintaining a lean cost structure and high cash conversion.

• CapEx as a percentage of revenue expected to stabilize between 7% and 8% from 2025.

• Intake for 2025.1 up 2% over the same period in 2024, with strong expansion in semi-on-campus courses (+95%).

• Proposed dividends of BRL 150 million for 2025, continuing a consistent payout since IPO.