Afya Limited Announces First-Quarter 2025 Financial Results
Impressive Adjusted EBITDA Margin Expansion and Cash Generation
Full Year 2025 Guidance Reaffirmed
NOVA LIMA, Brazil--(BUSINESS WIRE)--May 08, 2025--
Afya Limited (Nasdaq: AFYA; B3: A2FY34) ("Afya" or the "Company"), the leading medical education group and medical practice solutions provider in Brazil, reported today its financial and operating results for the three-month period ended March 31, 2025 (first quarter 2025). Financial results are expressed in Brazilian Reais and are presented in accordance with International Financial Reporting Standards (IFRS).
First Quarter 2025 Highlights
-- 1Q25 Net Revenue increased 16.4% YoY to R$936.4 million. Net Revenue
excluding acquisitions increased 10.9%, reaching R$891.5 million.
-- 1Q25 Adjusted EBITDA increased 23.7% YoY reaching R$492.0 million, with
an Adjusted EBITDA Margin of 52.5%. Adjusted EBITDA Margin increased 300
bps YoY. Adjusted EBITDA excluding acquisitions grew 15.8%, reaching
R$460.6 million, with an Adjusted EBITDA Margin of 51.7%.
-- 1Q25 Net Income increased 23.4% YoY, reaching R$257.0 million, and
Adjusted Net Income increased 17.1% YoY, reaching R$293.9 million. Basic
EPS growth was 23.3% in the same period.
-- Operating Cash Conversion ratio of 96.8%, with a solid cash position of
R$1,154.9 million.
-- Over 317 thousand users in Afya's ecosystem.
Table 1: Financial
Highlights
------- -------------- ------- ------- -------------
For the three months period ended March 31,
--------------------------------------------------------
2025 Ex % Chg Ex
(in thousand of R$) 2025 Acquisitions* 2024 % Chg Acquisitions
-------------------- ------- -------------- ------- ------- -------------
(a) Net Revenue 936,360 891,527 804,239 16.4% 10.9%
-------------------- ------- -------------- ------- ------- -------------
(b) Adjusted EBITDA
(2) 491,971 460,603 397,853 23.7% 15.8%
-------------------- ------- -------------- ------- ------- -------------
(c) = (b)/(a)
Adjusted EBITDA
Margin 52.5% 51.7% 49.5% 300 bps 220 bps
-------------------- ------- -------------- ------- ------- -------------
Net income 257,036 - 208,299 23.4% -
-------------------- ------- -------------- ------- ------- -------------
Adjusted Net income 293,897 - 250,966 17.1% -
-------------------- ------- -------------- ------- ------- -------------
*For the three months period ended March 31, 2025, "2025 Ex Acquisitions"
excludes: UNIDOM (January to March, 2025; Closing of UNIDOM was in July
2024).
(2) See more information on "Non-GAAP Financial Measures" (Item
08).
Message from Management
It is with much satisfaction that Afya starts another year of great operational and financial performance. This quarterly result shows the high predictability of our business and successful execution of our strategy, that once again, combines strong growth, with higher profitability and cash generation -- Afya's three pillars business model. This quarter was marked by Gross margin expansion within our Undergraduate and Continuing Education segments, combined with solid cash generation, and robust EPS growth, showing our consistent business expansion.
Our Revenue Growth this quarter was supported by a successful intake process in all our medical school campuses, ensuring 100% occupancy in our integrated medical schools. Most notably, an example that highlights the effectiveness of our strategy was the acquisition of Unidom with a medical campus located in Salvador that had an occupancy rate below 60% prior to our acquisition. After only two intake processes the campus reached nearly 100% occupancy. This highlights the ongoing value of our ecosystem and the increasing recognition of our brand across the country.
We proudly present our highest Adjusted EBITDA Margin, ending the first quarter of 2025 with a record of 52.5%. This margin expansion reflects the strong performance of the Undergraduate segment, further enhanced by the continued ramp-up of the four Mais Médicos campuses launched in 3Q22, and most recently the Unidom acquisition. Our ongoing operational restructuring in the Continuing Education and Medical Practice Solutions segments contributed to improve cost management across selling, general, and administrative expenses in addition to enhancements to our shared services center, centralizing operations and increasing efficiency and operational synergies.
With the closing of the acquisition of Funic, we are excited to expand our undergraduate presence into the metropolitan area of Belo Horizonte, capital of Minas Gerais. This acquisition contributes 60 medical seats to Afya in Contagem, bringing our total approved medical seats to 3,653 in Brazil.
Furthermore, we are proud to highlight the excellent performance of our undergraduate medical schools in the most recent ENADE (Exame Nacional de Desempenho dos Estudantes -- National Student Performance Exam), which reaffirms Afya's commitment to academic excellence and the quality of medical education we provide across Brazil.
In April, we were proud to receive two significant recognitions. Moody's Local Brazil upgraded our national scale credit rating from AA+.br to AAA.br with a stable outlook, reflecting our strong balance sheet, rewarded by cash generation, and financial discipline. They also highlighted our leadership in medical education and successful acquisition integration. We are also pleased to highlight that we successfully achieved all the IFC-defined targets for 2024, including the number of free medical consultations provided and the percentage of medical courses rated with the highest quality scores. This achievement will trigger a 15 bps step-down in our loan interest rate over the next 12 months, reinforcing and solidifying both our social impact and financial discipline. Additionally, we received our first ESG rating from MSCI, debuting with a solid BBB score. MSCI's sector relative methodology underscores that Afya outperformed a significant portion of its peers, particularly in areas like data privacy and security, where our practices were stronger than many in the industry.
Looking ahead, Afya remains committed to its mission: to provide an integrated ecosystem of education and medical practice solutions throughout the entire medical journey. We continuously strive to support healthcare professionals' development, ongoing learning, and productivity. We are proud of our achievements and excited about what lies ahead.
1. Key Events in the Quarter
-- On March 12, 2025, the Company's Board of Directors approved the first
dividend distribution in the amount of R$129,784, representing 20% of the
Company's consolidated net income for the year ended December 31, 2024
and a dividend per share of R$1.348923, paid in U.S. dollars on April 4,
2025, to the shareholders on record as of the close of business on March
26, 2025 at the exchange rate (PTAX) published by the Brazilian Central
Bank on March 13, 2025.
-- On December 27, 2024, Law 15,079/2024 was enacted, establishing the
implementation of the OECD's Pillar Two global minimum tax in Brazil,
effective as of January 1, 2025. Law 15,079/2024 aligns the Brazilian tax
legislation to the OECD's Global Anti-Base Erosion (GloBE) rules by
introducing a minimum effective taxation of 15% through an additional
Social Contribution on Net Profit ("CSLL"). This regulation applies to
multinational groups within the scope of the OECD's GloBE rules,
specifically those whose ultimate parent entity reported annual
consolidated revenues of at least EUR750 million in at least two of the
four fiscal years immediately preceding the year under review. The rules
are designed to ensure that the additional CSLL qualifies as a Qualified
Domestic Minimum Top-up Tax (QDMTT) under the OECD Inclusive Framework,
subjecting Brazilian entities to a minimum tax rate of 15%. On March 28,
2025, the Company filed a writ of mandamus with the Brazilian Federal
Court challenging the enforceability of the newly enacted additional
CSLL. The legal proceeding is grounded on constitutional and statutory
arguments, and is waiting for court decision to prevent the collection of
the additional CSLL, which is scheduled to be required in 2026 with
respect to the 2025 fiscal year. The additional income tax expense as a
result of Law 15,079/2024 for the three-month period ended March 31, 2025
was R$23,212.
2. Subsequent Event
-- On May 7, 2025, Afya Participações announced the closing of its
acquisition of 100% of the total share capital of Faculdade Masterclass
Ltda. ("FUNIC"), located in Contagem, a city in the metropolitan area of
Belo Horizonte, the capital of the State of Minas Gerais.
The acquisition contributes 60 medical school seats to Afya. FUNIC is pre-operational, with leased real estate prepared for a medical school operation, which is expected to start in the second semester of 2025.
The aggregate purchase price is R$ 100 million, net of the estimated Net Debt deducted from the down payment. The price and payment conditions were: (i) R$ 60 million, net of the estimated Net Debt, paid in cash on May 07, 2025; and (ii) R$ 40 million will be paid in three annual installments adjusted by CDI.
Additionally, the acquisition includes a contingent consideration for up to 60 additional medical school seats. If approved by MEC within 36 months from the closing date, it will result in an additional payment of R$1,000 per approved seat.
Afya expects an EV/EBITDA of 3.3x at full maturity and post synergies in 2030 with expected Net Revenues of R$ 52.4 million, of which 100% will come from Medicine.
3. 2025 Guidance
The Company is reaffirming its guidance for 2025, which considers the successful acceptance of new students for the first semester of 2025. The guidance for 2025 is defined in the following table:
Guidance for 2025
---------------------------- ----------------------------------------------
Net Revenue (1) R$ 3,670 mn <= <= R$ 3,770 mn
---------------------------- ----------------------------------------------
Adjusted EBITDA R$ 1,620 mn <= <= R$ 1,720 mn
---------------------------- ----------------------------------------------
CAPEX R$ 250 mn <= <= R$ 290 mn
---------------------------- ----------------------------------------------
(1) Excludes any acquisition that may be concluded after the issuance of the
guidance, notably excluding Funic.
4. 1Q25 Overview
Segment Information
The Company has three reportable segments as follows:
Undergraduate, which provides educational services through undergraduate courses related to medical school, undergraduate health science and other ex-health undergraduate programs;
Continuing education, which provides medical education (including residency preparation programs, specialization test preparation and other medical capabilities), specialization and graduate courses in medicine, delivered through digital and in-person content; and
Medical Practice Solutions, which provides clinical decision, clinical management and doctor-patient relationships for physicians and provide access, demand and efficiency for the healthcare players.
Key Revenue Drivers -- Undergraduate Programs
Table 2: Key Revenue Drivers Three months period ended March 31,
---------------------------------------
2025 2024 % Chg
------------------------------------- ------------- ------------- ---------
Undergraduate Programs
------------------------------------- ------------- ------------- ---------
MEDICAL SCHOOL
------------------------------------- ------------- ------------- ---------
Approved Seats 3,593 3,203 12.2%
------------------------------------- ------------- ------------- ---------
Operating Seats (1) 3,543 3,153 12.4%
------------------------------------- ------------- ------------- ---------
Total Students (end of period) 25,879 22,609 14.5%
------------------------------------- ------------- ------------- ---------
Average Total Students 25,879 22,609 14.5%
------------------------------------- ------------- ------------- ---------
Average Total Students
(ex-Acquisitions)* 24,263 22,609 7.3%
------------------------------------- ------------- ------------- ---------
Net Revenue (Total - R$ '000) 714,713 603,025 18.5%
------------------------------------- ------------- ------------- ---------
Net Revenue (ex- Acquisitions* -
R$ '000) 672,589 603,025 11.5%
------------------------------------- ------------- ------------- ---------
Medical School Net Avg. Ticket
(ex- Acquisitions* - R$/month) 9,240 8,891 3.9%
------------------------------------- ------------- ------------- ---------
UNDERGRADUATE HEALTH SCIENCE
------------------------------------- ------------- ------------- ---------
Total Students (end of period) 26,134 24,881 5.0%
------------------------------------- ------------- ------------- ---------
Average Total Students 26,134 24,881 5.0%
------------------------------------- ------------- ------------- ---------
Average Total Students
(ex-Acquisitions)* 25,348 24,881 1.9%
------------------------------------- ------------- ------------- ---------
Net Revenue (Total - R$ '000) 62,811 58,736 6.9%
------------------------------------- ------------- ------------- ---------
Net Revenue (ex- Acquisitions* -
R$ '000) 61,730 58,736 5.1%
------------------------------------- ------------- ------------- ---------
OTHER EX- HEALTH UNDERGRADUATE
------------------------------------- ------------- ------------- ---------
Total Students (end of period) 34,995 28,563 22.5%
------------------------------------- ------------- ------------- ---------
Average Total Students 34,995 28,563 22.5%
------------------------------------- ------------- ------------- ---------
Average Total Students
(ex-Acquisitions)* 33,492 28,563 17.3%
------------------------------------- ------------- ------------- ---------
Net Revenue (Total - R$ '000) 49,848 42,758 16.6%
------------------------------------- ------------- ------------- ---------
Net Revenue (ex- Acquisitions* -
R$ '000) 48,220 42,758 12.8%
------------------------------------- ------------- ------------- ---------
Total Net Revenue
------------------------------------- ------------- ------------- ---------
Net Revenue (Total - R$ '000) 827,372 704,519 17.4%
------------------------------------- ------------- ------------- ---------
Net Revenue (ex- Acquisitions* -
R$ '000) 782,539 704,519 11.1%
------------------------------------- ------------- ------------- ---------
*For the three months period ended March 31, 2025, "2025 Ex Acquisitions"
excludes: UNIDOM (January to March, 2025; Closing of UNIDOM was in July
2024).
(1) The difference between approved and operating seats refers to Cametá,
a campus that is still pre-operational.
Key Revenue Drivers -- Continuing Education
Table 3: Key Revenue Drivers Three months period ended March 31,
---------------------------------------
2025 2024 % Chg
------------------------------------- ------------ ------------ -----------
Continuing Education (1)
------------------------------------- ------------ ------------ -----------
Total Students (end of period)
------------------------------------- ------------ ------------ -----------
Residency Journey - Business to
Physicians B2P 12,203 14,693 -16.9%
------------------------------------- ------------ ------------ -----------
Graduate Journey - Business to
Physicians B2P 8,542 7,366 16.0%
------------------------------------- ------------ ------------ -----------
Other Courses - B2P and Business
to Business Offerings 26,164 26,983 -3.0%
------------------------------------- ------------ ------------ -----------
Total Students (end of period) 46,909 49,042 -4.3%
------------------------------------- ------------ ------------ -----------
Net Revenue (R$ '000)
------------------------------------- ------------ ------------ -----------
Business to Physicians - B2P 65,444 60,538 8.1%
------------------------------------- ------------ ------------ -----------
Business to Business - B2B 5,660 4,877 16.0%
------------------------------------- ------------ ------------ -----------
Total Net Revenue 71,103 65,415 8.7%
------------------------------------- ------------ ------------ -----------
(1) The figure above does not contemplate intercompany transactions
Key Revenue -- Medical Practice Solutions
Table 4: Key Revenue Drivers Three months period ended March 31,
---------------------------------------
2025 2024 % Chg
------------------------------------- -------------- ------------- --------
Medical Practice Solutions (1)
------------------------------------- -------------- ------------- --------
Active Payers (end of period)
------------------------------------- -------------- ------------- --------
Clinical Decision 163,071 159,183 2.4%
------------------------------------- -------------- ------------- --------
Clinical Management 34,934 31,806 9.8%
------------------------------------- -------------- ------------- --------
Total Active Payers (end of period) 198,005 190,989 3.7%
------------------------------------- -------------- ------------- --------
Monthly Active Users (MaU)
------------------------------------- -------------- ------------- --------
Total Monthly Active Users (MaU) -
Digital Services 244,518 262,717 -6.9%
------------------------------------- -------------- ------------- --------
Net Revenue (R$ '000)(2)
------------------------------------- -------------- ------------- --------
Business to Physicians - B2P 37,231 32,730 13.7% ------------------------------------- -------------- ------------- -------- Business to Business - B2B 4,453 3,843 15.9% ------------------------------------- -------------- ------------- -------- Total Net Revenue 41,684 36,573 14.0% ------------------------------------- -------------- ------------- -------- (1) The figure above does not contemplate intercompany transactions (2) Net Revenue from 'Shosp', the clinical management software, was reclassified from B2B to B2P.
Key Operational Drivers -- Users Positively Impacted by Afya
The Users Positively Impacted by Afya represents the total number of medical students from the Undergraduate segment, students from the Continuing Education and users from Medical Practice Solutions. For the first quarter of 2025, Afya's ecosystem reached 317,306 users.
Table 5: Key Revenue Drivers Three months period ended March 31,
---------------------------------------
2025 2024 % Chg
------------------------------------- ------------- ------------- ---------
Users Positively Impacted by Afya (1)
------------------------------------- ------------- ------------- ---------
Undergraduate (Total Medical
School Students - End of Period) 25,879 22,609 14.5%
------------------------------------- ------------- ------------- ---------
Continuing Education (Total
Students - End of Period) 46,909 49,042 -4.3%
------------------------------------- ------------- ------------- ---------
Medical Practice Solutions
(Monthly Active Users) 244,518 262,717 -6.9%
------------------------------------- ------------- ------------- ---------
Ecosystem Outreach 317,306 334,368 -5.1%
------------------------------------- ------------- ------------- ---------
(1) Ecosystem outreach does not contemplate intercompany figures. Note that
there may be overlap in student numbers within the data.
Seasonality of Operations
Undergraduate tuition revenues are related to the intake process, and monthly tuition fees charged to students and do not significantly fluctuate during each semester.
Continuing education revenues are mostly related to: (i) monthly intakes and tuition fees on medical education, which do not have a considerable concentration in any period; (ii) Residency journey product revenues, derived from e-books transferred at a point of time, which are concentrated at in the first and last quarter of the year due to the enrollments.
Medical Practice Solutions are comprised mainly of Afya Whitebook and Afya iClinic revenues, which do not have significant fluctuations regarding seasonality.
Net Revenue
Net Revenue for the first quarter of 2025 was R$936.4 million, an increase of 16.4% over the same period in the prior year. Excluding acquisitions, Net Revenue in the first quarter increased by 10.9% YoY to R$891.5 million.
The quarter revenue increase was mainly due to higher tickets in medicine courses, the maturation of medical school seats, the acquisition and the increase of occupancy in Unidom, and the advancement of Medical Practice Solutions and Continuing Education segments.
Table 6: Revenue & Revenue
Mix
(in thousands of
R$) For the three months period ended March 31,
----------------- --------------------------------------------------------
2025 Ex % Chg Ex
2025 Acquisitions* 2024 % Chg Acquisitions
----------------- ------- -------------- ------- ----- ---------------
Net Revenue Mix
------------------ ------- -------------- ------- ----- ---------------
Undergraduate 827,372 782,539 704,519 17.4% 11.1%
------------------ ------- -------------- ------- ----- ---------------
Continuing
Education 71,103 71,103 65,415 8.7% 8.7%
------------------ ------- -------------- ------- ----- ---------------
Medical
Practice
Solutions 41,684 41,684 36,573 14.0% 14.0%
------------------ ------- -------------- ------- ----- ---------------
Inter-segment
transactions (3,799) (3,799) (2,268) 67.5% 67.5%
------------------ ------- -------------- ------- ----- ---------------
Total Reported Net
Revenue 936,360 891,527 804,239 16.4% 10.9%
------------------ ------- -------------- ------- ----- ---------------
*For the three months period ended March 31, 2025, "2025 Ex Acquisitions"
excludes: UNIDOM (January to March, 2025; Closing of UNIDOM was in July
2024).
Adjusted EBITDA
Adjusted EBITDA for the first quarter of 2025 increased by 23.7% to R$492.0 million, up from R$397.9 million in the same period of the prior year, with the Adjusted EBITDA Margin rising by 300 basis points to 52.5%.
The increase in Adjusted EBITDA Margin was mainly driven by: (a) higher gross margin in the Undergraduate and Continuing Education segments; (b) the continued ramp-up of the four Mais Médicos campuses launched in 3Q22; (c) restructuring initiatives within Continuing Education and Medical Practice Solutions; and (d) improved cost efficiency in Selling, General, and Administrative expenses.
Table 7: Reconciliation between Adjusted EBITDA
and Net Income
(in thousands of R$) For the three months period ended March 31,
-----------------------------------------------
2025 2024 % Chg
----------------------------- ------------------ ------------- ------------
Net income 257,036 208,299 23.4%
----------------------------- ------------------ ------------- ------------
Net financial result 94,994 74,366 27.7%
----------------------------- ------------------ ------------- ------------
Income taxes expense 24,782 10,865 128.1%
----------------------------- ------------------ ------------- ------------
Depreciation and amortization 91,755 79,269 15.8%
----------------------------- ------------------ ------------- ------------
Interest received (1) 14,532 12,415 17.1%
----------------------------- ------------------ ------------- ------------
Income share associate (4,285) (4,172) 2.7%
----------------------------- ------------------ ------------- ------------
Share-based compensation 6,963 8,629 -19.3%
----------------------------- ------------------ ------------- ------------
Non-recurring expenses: 6,194 8,181 -24.3%
----------------------------- ------------------ ------------- ------------
- Integration of new
companies (2) 5,970 5,870 1.7%
----------------------------- ------------------ ------------- ------------
- M&A advisory and due
diligence (3) 88 248 -64.5%
----------------------------- ------------------ ------------- ------------
- Expansion projects (4) 124 605 -79.5%
----------------------------- ------------------ ------------- ------------
- Restructuring expenses (5) 12 1,458 -99.2%
----------------------------- ------------------ ------------- ------------
Adjusted EBITDA 491,971 397,853 23.7%
Adjusted EBITDA Margin 52.5% 49.5% 300 bps
----------------------------- ------------------ ------------- ------------
(1) Represents the interest received on late payments of monthly tuition fees.
(2) Consists of expenses related to the integration of newly acquired
companies.
(3) Consists of expenses related to professional and consultant fees in
connection with due diligence services for our M&A transactions.
(4) Consists of expenses related to professional and consultant fees in
connection with the opening of new campuses.
(5) Consists of expenses related to the employee redundancies in connection
with the organizational restructuring of our acquired companies.
Adjusted Net Income
Net Income for the first quarter of 2025, totaled R$257.0 million, reflecting a 23.4% increase YoY. Adjusted Net Income reached R$293.9 million, up 17.1% from the same period in the prior year. This growth was primarily driven by improved operational performance that was partially offset by a higher tax rate compared to the previous year due to the provision of additional CSLL towards OECD's Pillar Two global minimum tax effects.
Adjusted EPS reached R$3.20 per share for the first quarter ended March 31, 2025, an increase of 17.0% YoY, supported by higher Net Income and a disciplined capital allocation strategy.
Table 8: Adjusted Net Income
----------------------------- ---------------- --------------- ------------
(in thousands of R$) For the three months period ended March 31,
-----------------------------------------------
2025 2024 % Chg
----------------------------- ---------------- --------------- ------------
Net income 257,036 208,299 23.4%
----------------------------- ---------------- --------------- ------------
Amortization of Intangible
Assets (1) 23,704 25,856 -8.3%
----------------------------- ---------------- --------------- ------------
Share-based compensation 6,963 8,630 -19.3%
----------------------------- ---------------- --------------- ------------
Non-recurring expenses: 6,194 8,181 -24.3%
----------------------------- ---------------- --------------- ------------
- Integration of new
companies (2) 5,970 5,870 1.7%
----------------------------- ---------------- --------------- ------------
- M&A advisory and due
diligence (3) 88 248 -64.5%
----------------------------- ---------------- --------------- ------------
- Expansion projects (4) 124 605 -79.5%
----------------------------- ---------------- --------------- ------------
- Restructuring expenses (5) 12 1,458 -99.2%
----------------------------- ---------------- --------------- ------------
Adjusted Net Income 293,897 250,966 17.1%
----------------------------- ---------------- --------------- ------------
Basic earnings per share - in
R$ (6) 2.79 2.26 23.3%
----------------------------- ---------------- --------------- ------------
Adjusted earnings per share -
in R$ (7) 3.20 2.73 17.0%
----------------------------- ---------------- --------------- ------------
(1) Consists of amortization of intangible assets identified in business
combinations.
(2) Consists of expenses related to the integration of newly acquired
companies.
(3) Consists of expenses related to professional and consultant fees in
connection with due diligence services for our M&A transactions.
(4) Consists of expenses related to professional and consultant fees in
connection with the opening of new campuses.
(5) Consists of expenses related to the employee redundancies in connection
with the organizational restructuring of our acquired companies.
(6) Basic earnings per share: Net Income/Weighted average number of
outstanding shares.
(7) Adjusted earnings per share: Adjusted Net Income attributable to equity
holders of the Parent/Weighted average number of outstanding shares.
Cash and Debt Position
As of March 31, 2025, Cash and Cash Equivalents totaled R$1,154.9 million, an increase of 26.8% over December 31, 2024. Net Debt, excluding the effect of IFRS 16, reached R$1,524.1 million, compared to December 31, 2024, Afya reduced its Net Debt by R$290.8 million due to solid Cash Flow from Operating Activities.
For the three-month period ended March 31, 2025, Afya generated R$470.2 million in Cash Flow from Operating Activities, up from R$429.1 million in the same period of the previous year, an increase of 9.6% YoY, boosted by operational results. The Operating Cash Conversion Ratio reached 96.8%.
Table 9: Operating Cash
Conversion Ratio
Reconciliation For the three months period ended March 31,
-----------------------------------------------
(in thousands of R$) Considering the adoption of IFRS 16
-----------------------------------------------
2025 2024 % Chg
----------------------------- -------------- ------------- ----------------
(a) Net cash flows from
operating activities 463,850 417,860 11.0%
----------------------------- -------------- ------------- ----------------
(b) Income taxes paid 6,386 11,194 -43.0%
----------------------------- -------------- ------------- ----------------
(c) = (a) + (b) Cash flow
from operating activities 470,236 429,054 9.6%
----------------------------- -------------- ------------- ----------------
(d) Adjusted EBITDA 491,971 397,853 23.7%
----------------------------- -------------- ------------- ----------------
(e) Non-recurring expenses: 6,194 8,181 -24.3%
----------------------------- -------------- ------------- ----------------
- Integration of new
companies (1) 5,970 5,870 1.7%
----------------------------- -------------- ------------- ----------------
- M&A advisory and due
diligence (2) 88 248 -64.5%
----------------------------- -------------- ------------- ----------------
- Expansion projects (3) 124 605 -79.5%
----------------------------- -------------- ------------- ----------------
- Restructuring Expenses (4) 12 1,458 -99.2%
----------------------------- -------------- ------------- ----------------
(f) = (d) - (e) Adjusted
EBITDA ex- non-recurring
expenses 485,777 389,672 24.7%
----------------------------- -------------- ------------- ----------------
(g) = (c) / (f) Operating
cash conversion ratio 96.8% 110.1% -1330 bps
----------------------------- -------------- ------------- ----------------
(1) Consists of expenses related to the integration of newly acquired
companies.
(2) Consists of expenses related to professional and consultant fees in
connection with due diligence services for M&A transactions.
(3) Consists of expenses related to professional and consultant fees in
connection with the opening of new campuses.
(4) Consists of expenses related to the employee redundancies in connection
with the organizational restructuring of acquired companies.
The following table provides additional details on the cost of debt for the first quarter of 2025, considering loans and financing and accounts payable to selling shareholders. Afya's capital structure remains solid, with a conservative leveraging position and a low cost of debt. Afya's Net Debt (excluding the effect of IFRS16) divided by Adjusted EBITDA mid guidance for 2025 would be 0.9x.
Table 10: Gross Debt and Average Cost of Debt
------------------------------------------------------------------ ---- ----
(in millions of
R$) For the three months period ended March 31,
------------------------------------------------------------
Cost of Debt
------ ------ ------ -------- --------------------------
Gross Debt Duration (Years) Per year %CDI(2)
-------------- ---------------- -------------- ----------
2025 2024 2025 2024 2025 2024 2025 2024
---------------- ------ ------ ------ -------- ------ ------ ---- ----
Loans and
financing:
Softbank 850 826 1.1 2.1 8.6% 6.5% 69% 57%
---------------- ------ ------ ------ -------- ------ ------ ---- ----
Loans and
financing:
Debentures 513 510 2.3 3.3 14.6% 12.7% 115% 117%
---------------- ------ ------ ------ -------- ------ ------ ---- ----
Loans and
financing:
Others 328 446 0.5 1.3 14.7% 12.7% 115% 116%
---------------- ------ ------ ------ -------- ------ ------ ---- ----
Loans and
financing: IFC 522 - 3.6 - 14.0% - 110% -
---------------- ------ ------ ------ -------- ------ ------ ---- ----
Accounts payable
to selling
shareholders 466 405 3.6 0.9 12.7% 10.8% 100% 100%
---------------- ------ ------ ------ -------- ------ ------ ---- ----
Total(1)|
Average 2,679 2,189 2.2 2.1 12.2% 9.8% 97% 91%
---------------- ------ ------ ------ -------- ------ ------ ---- ----
(1) Total amount refers only to the "Gross Debt" columns
(2) Based on the annualized Interbank Certificates of Deposit ("CDI") rate for
the period as a reference: 1Q25: 14,15% p.y. and for 1Q24: 10.65% p.y.
Table 11: Cash and Debt
Position
----------------------------- --------- --------- ------ --------- ------
(in thousands of R$)
1Q25 FY2024 % Chg 1Q24 % Chg
----------------------------- --------- --------- ------ --------- ------
(+) Cash and Cash Equivalents 1,154,888 911,015 26.8% 611,077 89.0%
----------------------------- --------- --------- ------ --------- ------
Cash and Bank Deposits 3,508 6,078 -42.3% 5,573 -37.1%
----------------------------- --------- --------- ------ --------- ------
Cash Equivalents 1,151,380 904,937 27.2% 605,504 90.2%
----------------------------- --------- --------- ------ --------- ------
(-) Loans and Financing 2,212,674 2,195,161 0.8% 1,783,094 24.1% ----------------------------- --------- --------- ------ --------- ------ Current 373,275 363,554 2.7% 161,675 130.9% ----------------------------- --------- --------- ------ --------- ------ Non-Current 1,839,399 1,831,607 0.4% 1,621,419 13.4% ----------------------------- --------- --------- ------ --------- ------ (-) Accounts Payable to Selling Shareholders 466,341 530,772 -12.1% 405,410 15.0% ----------------------------- --------- --------- ------ --------- ------ Current 191,698 185,318 3.4% 244,865 -21.7% ----------------------------- --------- --------- ------ --------- ------ Non-Current 274,643 345,454 -20.5% 160,545 71.1% ----------------------------- --------- --------- ------ --------- ------ (-) Other Short and Long Term Obligations - - n.a. - n.a. ----------------------------- --------- --------- ------ --------- ------ (=) Net Debt (Cash) excluding IFRS 16 1,524,127 1,814,918 -16.0% 1,577,427 -3.4% ----------------------------- --------- --------- ------ --------- ------ (-) Lease Liabilities 989,184 978,336 1.1% 902,542 9.6% ----------------------------- --------- --------- ------ --------- ------ Current 47,762 45,580 4.8% 40,030 19.3% ----------------------------- --------- --------- ------ --------- ------ Non-Current 941,422 932,756 0.9% 862,512 9.1% ----------------------------- --------- --------- ------ --------- ------ Net Debt (Cash) with IFRS 16 2,513,311 2,793,254 -10.0% 2,479,969 1.3% ----------------------------- --------- --------- ------ --------- ------
CAPEX
Capital expenditures consist of the purchase of property and equipment and intangible assets, including expenditures mainly related to the expansion and maintenance of Afya's campuses and headquarters, leasehold improvements, and the development of new solutions in the Medical Practice Solutions and content in the Continuing Education.
For the three-months period ending March 31, 2025, CAPEX was R$56.2 million, representing 6.0% of Afya's Net Revenue.
Table 12: CAPEX
------------------------------------------------------------------------------
(in thousands of R$) For the three months period ended March 31,
===============================================
2025 2024 % Chg
--------------------------- -------- --------
CAPEX 56,212 92,901 -39.5%
----------------------------- --------------------------- -------- --------
Property and equipment 38,477 22,955 67.6%
----------------------------- --------------------------- -------- --------
Intangible assets 17,735 69,946 -74.6%
----------------------------- --------------------------- -------- --------
- Licenses(1) - 49,600 n.a.
----------------------------- --------------------------- -------- --------
- Others 17,735 20,346 -12.8%
============================= =========================== ======== ========
(1) One-off effect of R$ 49.6 million regarding the Earnout of FIP Guanambi,
due to the expansion of 40 seats as disclosed to the market in January 2024.
ESG Metrics
ESG commitment is an important part of Afya's strategy and permeates the Company's core values. Afya has been advancing year after year on its core pillars and, since 2021, ESG metrics have been disclosed in the Company's quarterly financial results in three key metrics, Governance and Employee Management, Environmental and Social.
The 2023 Sustainability Report can be found at: https://ir.afya.com.br/annual-report/
Table 13: ESG Metrics (1, 2 & 3) 1Q25 1Q24 2024 2023
-------------------------------- --------------------------- --------------------------- -------------------------- --------------------------
Governance and
# GRI Employee Management
Number of
1 405-1 employees 9,810 9,914 9,717 9,680
Percentage of
2 405-1 female employees 59% 58% 59% 58%
Percentage of
female employees
in the board of
3 405-1 directors 30% 36% 30% 36%
Percentage of
independent
member in the
board of
4 102-24 directors 40% 36% 40% 36%
------ -------------------- --------------------------- --------------------------- -------------------------- --------------------------
Environmental
Total renewable
energy generated
by own
photovoltaic
5 plants (MWh) 1,447.552 1,794.215 6,329.796 4,510.637
Total energy
6 302-1 consumed (MWh) 6,330.837 5,831.206 24,260.662 24,036.608
7 302-1 % of renewable 19.5% 26.8% 23.2% 16.0%
energy consumed
from own
generation
8 302-1 % of energy 37.6% 30.8% 34.8% 60.3%
consumed from the
power grid
9 302-1 % of energy 42.9% 42.3% 42.0% 23.7%
consumed from the
free market
Social
10 413-1 Number of free 212,549 147,757 846,264 586,611
clinical
consultations
offered by Afya
11 Number of 23,032 20,220 22,867 20,197
physicians
graduated in
Afya's campuses
12 201-4 Number of 12,825 10,815 12,342 10,584
students with
financing and
scholarship
programs (FIES
and PROUNI)
13 % students with 14.7% 14.2% 16.0% 16.0%
scholarships over
total
undergraduate
students
14 413-1 Hospital, clinics 524 518 614 649
and city halls
partnerships
(1) Some factors can influence in the adequate proportionality analysis of data over the years, such as: climate changes, COVID-19 pandemic
effects, seasonalities, number of employees, number of students, number of active units, among others.
(2) Starting in 2Q22, previously disclosed social data were updated to consider: (a) the number of graduated physicians considering all units
after its closing, and (b) partnerships related only to medical schools.
(3) The number of students with financing and scholarship programs (FIES and PROUNI) in 2023 excludes students from the Unima and FCM
Jaboatão acquisition, and for 3Q24 onwards, also excludes those from the UNIDOM acquisition.
5. Conference Call and Webcast Information
When: May 8, 2025 at 5:00 p.m. EDT.
Who: Mr. Virgilio Gibbon, Chief Executive Officer
Mr. Luis André Blanco, Chief Financial Officer
Webcast: https://afya.zoom.us/j/99527431135
OR
Dial-in:
Brazil: +55 11 4632 2236 or +55 11 4632 2237 or +55 11 4680 6788 or +55 11 4700 9668 or +55 21 3958 7888
United States: +1 346 248 7799 or +1 360 209 5623 or +1 386 347 5053 or +1 507 473 4847 or +1 564 217 2000 or +1 646 931 3860 or +1 669 444 9171 or +1 669 900 6833 or +1 689 278 1000 or +1 719 359 4580 or +1 929 205 6099 or +1 253 205 0468 or +1 253 215 8782 or +1 301 715 8592 or +1 305 224 1968 or +1 309 205 3325 or +1 312 626 6799
Webinar ID: 995 2743 1135
Other Numbers: https://afya.zoom.us/u/advMyerzrb
6. About Afya Limited (Nasdaq: AFYA; B3: A2FY34)
Afya is a leading medical education group in Brazil based on the number of medical school seats, delivering an end-to-end physician-centric ecosystem that serves and empowers students and physicians to transform their ambitions into rewarding lifelong experiences from the moment they join us as medical students through their medical residency preparation, graduation program, continuing medical education activities and offering medical practice solutions to help doctors enhance their healthcare services through their whole career. For more information, please visit www.afya.com.br.
7. Forward -- Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. All statements other than statements of historical fact could be deemed forward-looking, including risks and uncertainties related to statements about our competition; our ability to attract, upsell and retain students; our capacity to increase tuition prices; our ability to anticipate and meet the evolving needs of students and teachers; our capacity to source and successfully integrate acquisitions; as well as general market, political, economic, and business conditions. Additionally, these statements include financial targets such as revenue, share count and IFRS and non-IFRS financial measures including gross margin, operating margin, net income (loss) per diluted share, and free cash flow. These statements are not guarantees of future performance and undue reliance should not be placed on them.
The Company assumes no obligation to update any forward-looking statements made in this press release to reflect events or circumstances occurring after its publication, nor to incorporate new information or the occurrence of unanticipated events, except as required by law. The achievement or success of the matters covered by such forward-looking statements involves known and unknown risks, uncertainties and assumptions. If any of these risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from those expressed or implied by the forward-looking statements we make.
Readers should not rely upon forward-looking statements as predictions of future events. Forward-looking statements represent management's beliefs and assumptions only as of the date they are made. Further information on these and other factors that could affect the Company's financial results is included in filings made with the United States Securities and Exchange Commission $(SEC.UK)$ from time to time, including the section titled "Risk Factors" in the most recent annual report on Form 20-F. These documents are available in the SEC Filings section of the investor relations section of our website at: https://ir.afya.com.br/.
8. Non-GAAP Financial Measures
To supplement the Company's consolidated financial statements, which are prepared and presented in accordance with IFRS accounting standards as issued by the International Accounting Standards Board--IASB, Afya presents Adjusted EBITDA, Operating Cash Conversion Ratio, Adjusted Net Income and Adjusted EPS, which are non-GAAP financial measures, for the convenience of investors. A non-GAAP financial measure is generally defined as one that intends to measure financial performance but excludes or includes amounts that would not be equally adjusted in the most comparable GAAP measure.
Afya calculates Adjusted EBITDA as net income plus/minus net financial result, plus income taxes expense, plus depreciation and amortization, plus interest received on late payments of monthly tuition fees, plus share-based compensation, plus/minus income share associate, plus/minus non-recurring expenses/income. Operating Cash Conversion Ratio is calculated as the Cash flow from Operating Activities plus income taxes paid, minus/plus non-recurring expenses/income divided by Adjusted EBITDA. The calculation of Adjusted Net Income is the Net Income plus amortization of customer relationships and trademark, plus share-based compensation, plus/minus non-recurring expenses/income. The calculation of Adjusted EPS is the Adjusted Net Income minus the non-controlling interests divided by the Weighted average number of outstanding shares.
The non-GAAP supplemental financial measures are provided with the intend to help investors in assessing the overall performance of Afya's business regarding its core operations, cash generation and profitability. The non-GAAP financial measures described in this release are not substitutes for the IFRS measures. In addition, the calculations of Adjusted EBITDA, Operating Cash Conversion Ratio, Adjusted Net Income and Adjusted EPS are not standardized financial measures and may differ from the calculations used by other companies, including competitors in the education services industry, and therefore, Afya's measures may not be comparable to those of other companies.
9. Investor Relations Contact
E-mail: ir@afya.com.br
10. Financial Tables
Unaudited interim condensed consolidated statements of financial position
As of March 31, 2025 and December 31, 2024
(In thousands of Brazilian reais)
March 31, 2025 December 31, 2024
-------------- -----------------
Assets (unaudited)
Current assets
Cash and cash equivalents 1,154,888 911,015
Trade receivables 636,906 595,898
Recoverable taxes 32,118 25,726
Other assets 57,304 57,145
-------------- -----------------
Total current assets 1,881,216 1,589,784
-------------- -----------------
Non-current assets
Trade receivables 34,014 35,948
Deferred tax assets 7,146 -
Other assets 116,371 115,875
Investment in associate 53,129 54,442
Property and equipment 670,162 658,482
Right-of-use assets 845,698 842,219
Intangible assets 5,504,138 5,532,789
-------------- -----------------
Total non-current assets 7,230,658 7,239,755
-------------- -----------------
Total assets 9,111,874 8,829,539
-------------- -----------------
Liabilities
Current liabilities
Trade payables 129,973 128,080
Loans and financing 373,275 363,554
Lease liabilities 47,762 45,580
Accounts payable to selling
shareholders 191,698 185,318
Advances from customers 161,262 161,048
Dividends payable 130,798 -
Labor and social obligations 237,850 208,076
Taxes payable 35,695 33,456
Income taxes payable 9,517 4,247
Other liabilities 5,137 10,836
-------------- -----------------
Total current liabilities 1,322,967 1,140,195
-------------- -----------------
Non-current liabilities
Loans and financing 1,839,399 1,831,607
Lease liabilities 941,422 932,756
Accounts payable to selling
shareholders 274,643 345,454
Taxes payable 134,355 112,681
Provision for legal proceedings 115,599 113,521
Other liabilities 42,074 42,742
-------------- -----------------
Total non-current liabilities 3,347,492 3,378,761
-------------- -----------------
Total liabilities 4,670,459 4,518,956
-------------- -----------------
Equity
Share capital 17 17
Additional paid-in capital 2,343,939 2,344,521
Treasury shares (271,751) (273,955)
Share-based compensation reserve 194,460 187,497
Retained earnings 2,134,090 2,011,875
-------------- -----------------
Equity attributable to equity holders of
the parent 4,400,755 4,269,955
-------------- -----------------
Non-controlling interests 40,660 40,628
-------------- -----------------
Total equity 4,441,415 4,310,583
-------------- -----------------
Total liabilities and equity 9,111,874 8,829,539
============== =================
Unaudited interim condensed consolidated statements of income and
comprehensive income For the three-month periods ended March 31, 2025 and 2024
(In thousands of Brazilian reais, except for earnings per share information)
March 31, 2025 March 31, 2024
---------------- ---------------
(unaudited) (unaudited)
Revenue 936,360 804,239
Cost of services (282,639) (269,504)
---------------- ---------------
Gross profit 653,721 534,735
---------------- ---------------
Selling, general and administrative
expenses (281,500) (241,164)
Other income (expenses), net 306 (4,213)
Operating income 372,527 289,358
---------------- ---------------
Finance income 43,481 25,530
Finance expenses (138,475) (99,896)
---------------- ---------------
Net finance result (94,994) (74,366)
---------------- ---------------
Share of income of associate 4,285 4,172
Income before income taxes 281,818 219,164
---------------- ---------------
Income taxes expenses (24,782) (10,865)
Net income 257,036 208,299
---------------- ---------------
Other comprehensive income - -
Total comprehensive income 257,036 208,299
================ ===============
Income attributable to:
Equity holders of the parent 251,999 203,393
Non-controlling interests 5,037 4,906
---------------- ---------------
257,036 208,299
================ ===============
Basic earnings per common share 2.79 2.26
Diluted earnings per common share 2.76 2.22
Unaudited interim condensed consolidated statements of cash flows
For the three-month periods ended March 31, 2025 and 2024
(In thousands of Brazilian reais)
March 31, 2025 March 31, 2024
-------------- --------------
(unaudited) (unaudited)
Operating activities
Income before income taxes 281,818 219,164
Adjustments to reconcile income before
income taxes
Depreciation and amortization
expenses 91,755 79,269
Write-off of property and equipment 305 19
Allowance for expected credit losses 16,558 15,264
Share-based compensation expense 6,963 8,630
Net foreign exchange differences 476 (190)
Accrued interest 76,939 51,745
Accrued interest on lease liabilities 29,563 26,744
Share of income of associate (4,285) (4,172)
Provision (reversal) for legal
proceedings 408 (1,851)
Changes in assets and liabilities
Trade receivables (55,632) (6,434)
Recoverable taxes (6,392) (6,914)
Other assets (6,131) 1,458
Trade payables 1,893 14,472
Taxes payable 10,787 5,439
Advances from customers 214 3,095
Labor and social obligations 29,774 23,528
Other liabilities (4,777) (212)
-------------- --------------
470,236 429,054
-------------- --------------
Income taxes paid (6,386) (11,194)
-------------- --------------
Net cash flows from operating activities 463,850 417,860
-------------- --------------
Investing activities
Acquisition of property and equipment (38,477) (22,955)
Acquisition of intangibles assets (17,735) (69,946)
Dividends received 5,598 3,900
Acquisition of subsidiaries, net of cash
acquired (65,162) (147,262)
Payments of interest from acquisition of
subsidiaries and intangibles (14,536) (24,735)
-------------- --------------
Net cash flows used in investing activities (130,312) (260,998)
-------------- --------------
Financing activities
Payments of principal of loans and
financing (769) (10,762)
Payments of interest of loans and financing (44,980) (48,806)
Payments of principal of lease liabilities (11,904) (9,648)
Payments of interest of lease liabilities (29,167) (26,903)
Proceeds from exercise of stock options 1,622 826
Dividends paid to non-controlling
shareholders (3,991) (3,712)
-------------- --------------
Net cash flows used in financing activities (89,189) (99,005)
-------------- --------------
Net foreign exchange differences (476) 190
-------------- --------------
Net increase in cash and cash equivalents 243,873 58,047
============== ==============
Cash and cash equivalents at the beginning
of the period 911,015 553,030
Cash and cash equivalents at the end of the
period 1,154,888 611,077
View source version on businesswire.com: https://www.businesswire.com/news/home/20250508364394/en/
CONTACT: Investor Relations Contact:
Afya Limited
ir@afya.com.br
(END) Dow Jones Newswires
May 08, 2025 20:11 ET (00:11 GMT)
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