Arco Platform Limited

Good afternoon everyone and thank you for standing by and welcome to ARCO platform fourth quarter and full year 2022 earnings call. This event is being recorded and all participants will be in a listen-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 investors.arcoplatform.com, where the presentation is also available. Now, I will turn the conference over to Karina Carreira, ARCO's IR Director. Karina, you may begin your presentation.

Thank you. I'm pleased to welcome you to Argo's fourth quarter and full year 2022 conference call. With me on the call today, we have Argo's CEO, Arigisaka Bokanchinetu, 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 our actual results to differ materially from those contemplated by these forward-looking statements. Forward-looking 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 date 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 know that year-over-year comparisons are affected by acquisitions that were not included in our 2021 financials. Let me now turn the call over to Ari, ARCO CEO.

Thank you, Karina, and thanks everyone for joining today's conference call. 2022 was an important year for ARCO. We delivered solid results across our main commitments with investors, including another strong year for ACV growth. The resumption of our healthy operating cash flow profile and important evolutions in our integration agenda to better and more efficiently serve our clients and continue to grow in a more sustainable way. On cash generation, we showed improvements on all metrics that drives free cash flow generation, including higher profitability with 150 basis point expansion of our adjusted EBITDA margin to 36.5%, better capital allocation, taking our CAPEX back to historical levels at 9% of revenues, lower working capital consumption, and finally, a lower effective tax rate. As a consequence, we generate the higher cash flow after CAPEX of ARCO's history. On growth, the commercial cycle for 2023 year proved that we can focus on cash flow generation and dedicate energy to agendas without jeopardizing our growth rates. We posted intake and a strong price increase across all brands, leading to a 24% year-over-year ACV growth to 1.9 billion reais, 100% organic. Our two main core brands combined sustained high growth rates at 96%, and our most recent acquired brand, COC, delivered good results in terms of growth, retention, and price increase. Our cross-selling efforts were once again key to such successful commercial cycle for supplemental solutions, with 71% of its intake originated from cross-sell. Finally, we had an important outcome from our integration agenda with the corporate organization leading to improved process and higher GNA dilution. We remain focused on reducing redundancy in IT and in Archotech platform aiming at a more efficient capital allocation and higher quality across the brands. I will now turn the call to Otero who will continue the presentation. Otero, please go ahead.