Vasta Platform Limited

Ladies and gentlemen, thank you for standing by and welcome to the VASTA platform first quarter 2022 conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on the touchtone telephone. I would now like to turn the conference over to your host, Mr. Bruno Ghiardino, CFO. Sir, please go ahead.

Good evening, everyone, and thank you for joining me in this conference call to discuss VASTA Platform's first quarter 2022 results. With me on the call today, we have Mario Guil, VASTA's CEO. 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 act as 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 initiative, and their related benefits and our expectations regarding the market. Forward-looking statements are based on our management's 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 freely described in our filings with the Securities and Exchange Commissions. The forward-looking statements in this presentation are based on the information available to us as the date hereof. You should not rely on them as predictions 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 known IFRS financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with IFRS. Let me now give the call over to Gil to make his opening statement.

Thank you, Bruno. Thank you all for participating in our earnings release. I would like to start on slide three with some highlights of this quarter that has a special meaning for us. Vast first quarter results confirmed the recovery trend on operational results. After a long period of results being hit by the COVID-19 pandemic, numbers finally affected the businesses back to the high growth field. 2022 ACV for school year total 1 billion reais, which represents a growth of 35% over the subscription revenue for the last cycle, for the 2021 cycle. and the 2022 ACV showed a richer mix in source of revenue as we managed to increase growth in our premium brands and to initiate the migration from textbook paper-based products, PAR, to digital subscription products, textbook as a service. Therefore, excluding PAR, the ACV grew 48%. Complementary Solutions had the highest growth rate over 70% year-over-year among the business segments as we accelerated ramp-up of these solutions. In 2032 cycle, from fourth quarter 21 to first quarter 22, the net revenue grew 25% due to the recognition of 68% of BACD. No subscription segment revenue as expected was stable compared to the previous cycle. Adjusted EBITDA grew more than 100% in the quarter and 41% in the 2022 cycle as a result of the net revenue growth, operating leverage gains, and cost savings, with margins increased of 430 base points. For the second quarter of 2022, we expect the ACV recognition to range between 16% and 18%, reiterating our belief that 2022 will be able to collect 100% of the ACV. Moving to the slide number four, we detail the ACV growth composition. 2022 ACV is less concentrated in the first two quarters than in the previous years due to the different seasonality of new products such as Aleva, McKinsey, and Textbook as a service platform. That means that although the first two quarters continue registering the largest part of the ACV revenue, there was less revenue captured in the first half of this cycle when compared to the previous year, being 68% in the first half of 2022 cycle versus 71% in the same period of 2022 cycle. In this first quarter, the net revenue increased 36% year-on-year to R$381 million, exceeding the R$370 million guidance. Subscription revenue totaled $334 million, an increase of 37% driven by the 2022 ACV recognition, also exceeding the guidance, and the non-subscription came in line with the guidance. For the following quarter, as I mentioned, we expected the ACV recognition to range between 16% and 18%. I will now pass the floor to Bruno Jardim, our CFO.