Vasta Platform Limited

Hey everyone, and welcome to the VASTA Platform Fourth Quarter 2023 Financial Results Call. Before we begin, I would like to read a forward-looking statement. 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 facts that may cause our actual results to differ materially from those contemplated by those 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's beliefs and assumptions and on 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 Commission. 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 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. I will now turn the call over to Marcelo Warnick, Investor Relations. Please go ahead.

Good evening, everyone. Thank you for joining us in this conference call to discuss VASA Platform's fourth quarter and full year of 23 results. The fourth quarter also represents the first quarter of the 2024 sales cycle, which goes from October 23 to September 24. I am Marcelo Derneck, Vassar's Investor Relations, and today we have the presence of Guilherme Melliga, Vassar's CEO, and Cesar Silva, Vassar's CFO, who will be joining me on the call. Let me now hand over the floor to Guilherme Melliga to make his opening statement.

Thank you, Marcelo. Thank you all for participating in our earnings release call. I'd like to cover slide number three with some highlights of 2023 fiscal year. Vasta concluded this year with an 18% net revenue growth over the same period of last year, mostly due to the conversion of ACV into revenue and the performance of the B2G business unit. Vasta's subscription revenue has reached R$1,278,000,000. Our complementary solution segment continues to stand out, showcasing the highest growth rate among our business segments, with a 34% increase compared to 2022, and with an accelerated increase in both student base and market penetration. Moreover, as mentioned in the last quarter, In 2023, VASTA started to offer its products and services to the Brazilian public sector, and we generated 81 million reais in revenue from the B2G sector in 2023 fiscal year. The expansion into the public sector marks a momentous opportunity for VASTA, allowing us to contribute to advanced education in Brazil while creating new revenue streams. Moving to the company's profitability, in 2023, our adjusted EBITDA experienced a growth of 20%, reaching R$451 million, while increasing an adjusted EBITDA margin to 30.3%. This increase was mainly driven by gains in operating efficiency, cost savings, and sales mix that benefited from the growth of subscription products. Finally, This was another year of significant improvement in our cash flow. In 2023, free cash flow totaled R$189 million, a R$100 million increase from R$89 million in 2022. The free cash flow to adjusted ABTDA conversion rate improved from 24% to 42% as a result of VASTER's growth and implementation of efficiency measures. I will now turn back to Marcelo, who will talk about the financial results on the quarter in 2023 fiscal year.