Vasta Platform Limited

Ladies and gentlemen, thank you for standing by and welcome to the VASTA platform third quarter 21 conference call. At this time, all participants are in listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during this time, you will need to press star 1 on your telephone keypad. And if you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Mr. Bruno Giardino. Thank you. Please go ahead.

Good evening, everyone, and thank you for joining me in this conference call to discuss Vasta Platform's third quarter 2021 results. With me on the call today, we have Mario Guio, Vasta CEO, and Guilherme Melega, Vasta COO. 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, expectations for future periods, our expectations regarding our strategic product initiatives and their related benefit and our expectations regarding the market. Forward-looking statements are based on our management beliefs and assumptions and on information currently available to our management. These risks include those set forth in the press release that we issued today, as well as those more fully described in our filings 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 predictions of the future events and we disclaim any obligation to update any forward-looking statements except as required by law. In addition, management may reference known IFRS financial measures on this call. The known IFRS financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with IFRI. Let me now give the call over to Gil to make his opening statement.

Thank you, Bruno. Thank you very much for participating in our earnest release, and I would like to start on slide number three with some highlights of the quarter. The third quarter was the last one of the 2021 commercial cycle, one of the most if not the most challenging period in our history. As we commented in the previous calls, the second wave of COVID came up right at the back-to-school period, hitting the students' enrollment at our partner schools and also the sales of the pedagogical materials for the 2021 school year. Nevertheless, Vesta concluded the 2021 commercial cycle with a 7% subscription revenue growth over the same period of the last year, and 11% if we exclude PAR, our hybrid subscription product based on textbooks. Our total net revenue dropped 12%, as the pandemic effect on the textbook business was even more severe, leading to a strong decline in our non-subscription revenue. Our adjusted EBITDA reached $168 million in the 2021 cycle, a 35% drop in comparison with the 2020 cycle. driven by the reduction in the net revenues and higher provision for adoptable accounts, among other factors. Excluding the write-off of editorial costs recorded in the third quarter, our adjusted FDTA totaled 188,027% lower versus the 2021 cycle, yielding a margin of 21%. If 2021 was a lost year in terms of financial results, it has been a great year for the expansion of our Plural platform. The B2B2C services debuted in October with the Plural MyTeacher and Plural Adapter recording its first sales. Plural Store, which offers complementary solutions in partnership with EdTechs all over the world, is also live. We have reasons to say, however, that the worst is behind. The preliminary 2022 ACV reached a total of $888 million by the end of October, showing an organic growth of 20% versus 21% subscription revenue, with still two months to go in the commercial campaign. If we include the acquisition of Eleva, the preliminary ACV goes up to $975 million, showing a growth of 32% year-to-date. Having said that, I'll pass the floor to our CFO, Bruno.