Arco Platform Limited

Good afternoon, everyone. Thank you for standing by and welcome to ARCO Platform second quarter 2021 earnings call. This event is being recorded and all participants will be in a listening-only mode during the company's presentation. After ARCO remarks, there will be a question and answer session. At that time, further instructions will be given. Should any participant need assistance during this call, please press star zero to reach the operator. This event is also being broadcast live via webcast and may be accessed through ARCO's website at investor.arcoplatform.com, where the presentation is also available. Now, I will turn the conference over to Karina Carreira, ARCO IR Director. Karina, you may begin your presentation.

Thank you. I'm pleased to welcome you to ARCO's second quarter 2021 conference call. With me on the call today, we have Argo's CEO, Eridu Saka Bocanti Neto, and Argo's CFO, Roberto Otero. During today's presentation, our executives will make forward-looking statements. Forward-looking statements generally relate to future events or future financial or operating performance, and involve known and unknown risks, uncertainties, and other factors that may cause or actually result to differ materially from those contemplated by these forward-looking statements. Fortlogging statements in this presentation include, but are not limited to, statements related to our business and financial performance, our expectations and guidance for future periods, our expectations regarding strategic product initiatives and their related benefits, and our expectations regarding the market. These risks include those set forth in the documents that we issued earlier today, as well as those more fully described in our findings with the Securities and Exchange Commission. The forward-looking statements in this presentation are based on the information available to us as of the day hereof. You should not rely on them as prediction of future events, and we disclaim any obligation to update any forward-looking statements except as required by law. In addition, management may reference non-IFRS financial measures on this call. The non-IFRS financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with IFRS. We have provided a reconciliation of these non-IFRS financial measures to the most directly comparable IFRS financial measure in our press release. Please note that except from revenue, gross margin, selling expense, G&A, and cash flow from operations, all other financial measures we discuss here are non-IFRS, and growth rates are compared to the prior year comparable period unless otherwise stated. We also note that year-over-year comparisons are affected by acquisitions that were not included in our 2020 financials. Let me now turn the call over to Ari, our co-CEO.

Thank you, Karina, and thanks, everyone, for joining today's conference call. We hope that you and your families are all healthy and safe. We would like to present four topics today, as shown in slide 3. First, on the results, we had 21.9% revenue recognition in the quarter, leading to a net revenue of R$ 588 million for the first six months of 2021, or an 18% increase versus the same period of 2020. Adjusted EBITDA this quarter was impacted by lower revenue recognition, product development, and sales force increase as we prepare for a post-pandemic recovery. leading to an accumulated adjusted EBITDA margin for the first six months of the year of 32.4%. Despite an even softer third quarter ahead, following historical seasonality trends, as Otero will show in a few minutes, we are confident that the fourth quarter will lead us to meet the adjusted EBITDA margin guidance of 35.5% and 37.5% range. The free cash flow improved this quarter as we collected the receivables generated by the extension of the payment terms to assist our partner schools, taking us back to our strong cash generation profile. Second, the commercial cycle for 2022 school year continues to show encouraging results as pandemic-related restrictions are progressively lifted. At this point, we see organic growth pace for core solutions in line with pre-pandemic levels, while supplemental solutions accelerate versus 2020, but indicate a two-step recovery to pre-pandemic growth rate levels. We are achieving great results from our cross-sell initiatives, which will now be powered by the creation of a centralized supplemental business unit called ARCO+. Third, As we continue to search for innovative ways of better service our clients and consolidate our leadership position in the industry, we launched this year SaaS Adapt, a customizable and data-oriented version of SaaS, our most premium core solution, allowing us to better serve the premium segment. SASADAPT was developed on top of EDUCOS LMS, a solution we acquired in July that will integrate our ArcoTec portfolio and has great data analytics capabilities. And finally, we concluded our first step towards disclosure improvement and commitment to increase our impact with the release of our first ESG report. I will now turn the call to Otero to discuss the results for the quarter. Otero, please go ahead.