Vasta Platform Limited

Good afternoon, everyone, and welcome to the VASTA Platform Limited Third Quarter 2022 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star 1 on your telephone keypad. To withdraw your question, press star 1 again. At this time, I would like to turn the conference over to Mr. Marcelo Wernick. Please go ahead, sir.

Hi, good evening, everyone, and thank you for joining us in this conference call to discuss Vasta Platform's third quarter 2022 results, but most importantly, the conclusion of our commercial cycle, which goes from October 21 to September 22. I am Marcelo Wernick, Vasta's IR, and with me on the call today, we have Mario Gil, Vasta's CEO, Guilherme Melliga, Vasta's COO, and Cesar Silva, Vasta's CFO. Before we begin, I'd like to read a forward look statement. During today's presentation, our executives will make forward look statements. Forward look statements generally relate to future events or future financial or operating performances 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 look statements. Forward-look statements in this presentation include, but are not limited to, statements related to our business and financial performances, expectations for future periods, our expectations regarding our strategic product initiatives and their related benefits, and our expectations regarding the market. Forward-look statements are based on our management beliefs and assumptions and the information currently available to our management. These risks include those set forth in the press release that we are issuing today, as well as those more fully 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 of today. You should not rely on them as predictions of the future events and we disclaim any obligations 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 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 statements.

Thank you, Marcelo. Thank you all for participating in our earnings release call. I'd like to cover the slide number three with some highlights of the commercial cycle. In this quarter, we concluded the 2022 commercial cycle, and we believe that the commercial cycle is the best way to understand our business. Vasta concluded this cycle with a 38% subscription revenue growth over the same period last year. Subscription revenues Subscription revenues totaled 1 billion and 24 million reais and thus exceeded by 2.4% our ACV guidance of 1 billion, excluding par, the ACV grew 47%. The subscription revenue highlights in this cycle are the performance of our premium brands and also an excellent cross-selling of complementary solutions that grew 77%. compared to the last cycle. The non-subscription segment, as expected, declined compared to the previous cycle, with textbook sales representing now only 12% of VASTA's revenue. Thus, in 2022 cycle, the net revenue grew 30%. VASTA's EBITDA was $336 million, in the commercial cycle, and the margin expanded 10 percentage points, reaching 29%. In the third quarter vision, the EBDA was 23 million, recovering from a loss of 29 million in the same quarter of the previous year. This increase is a result of better product mix, workforce optimization, and our budgetary discipline. And finally, our free cash saw a significant improvement of 174 million reais and total 55 million reais in this commercial cycle when compared to a consumption of 190 million in the last cycle. The improvement is driven by the recovery of operating results and better working capital dynamic. that is bringing down the net debt EBITDA ratio to less than three times. This is the 30th consecutive quarter of improvement in this indicator. With that being said, I pass the word to our COO, Malega, that will give more details about the 2022 ACV growth.