Vasta Platform Limited

Ladies and gentlemen, thank you for standing by. My name is Desiree and I will be your conference operator today. At this time, I would like to welcome everyone to the VASTA platform first quarter 2024 financial results. 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 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 products initiatives 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. This race includes 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 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 financial measures are not intended to be considered in isolation or as substitute for results prepared in accordance with IFRS. Thank you. I would now like to turn the conference over to Marcelo Werneck, VASTA's Investor Relations. Please go ahead.

Good evening, everyone. Thank you for joining us in this conference call to discuss VASTA platform first quarter of 2024 results. I'm Marcelo Werneck, Vassar's Investor Relations, and today we have the presence of Guilherme Mellega, 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 Mellega, our CEO, 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 our 2024 cycle to date. This first quarter also represents halfway through the 2024 commercial cycle, which goes from October 2023 to September 2024. And we have delivered strong economic and financial results. Vasta concluded the 2024 cycle to date with a 12% net revenue growth over the same period last year, mostly due to the conversion of ACV into revenue and to the performance of the B2G business unit. VASCA's subscription revenue has reached 872 million reais, a 9% increase compared to 2023. Complementary solutions continue to present the highest growth rate among our business segments, with a 21% expansion in the cycle to date compared to the same period last year. And as per announced in our last earnings release, we have already renewed our first B2G contract for 2024. And we have generated 69 million reais from the B2G sector in the first quarter of 2024. Moving to the company's profitability, in 2024 cycle to date, our adjusted EBITDA experienced a growth of 21%, reaching $402 million, while increasing and adjusted EBITDA margin to 39.6%. This increase was mainly driven by improved gross margin benefiting from better product, a reduced impact of product cost, and operating efficiencies. Finally, we continue to see significant improvement in our cash flow. In the 2024 cycle today, free cash flow totaled 52 million reais, a 59 million reais increase from negative 7 million reais in 2023. In the last 12 months, free cash flow to adjusted ABTDA conversion rate improved from 31% to 43% as a result of VASTA's growth and implementation of efficiency measures. I will now move to slide number four to discuss 2024 ACV. In line with our commitment to total transparency, we have adjusted our ACV bookings for 2024 sales cycle. It's important to note that our previous ACV booking has been revised downward by 3.7% to R$1,350,000 due to the effective number of students at our partner schools after complementary orders in Q1. New ACV bookings represent an organic growth of 12%, compared to 2023 sales cycle. Our top performers continue to be premium brands and our complementary solutions. On slide number five, as previously mentioned, VASTA subscription revenue in 2024 cycle to date has reached R$872 million, a 9% increase compared to the same period last year. It's noteworthy that the distribution of subscription revenue throughout 2024 deferred slightly from the previous year, with less concentration in the first two quarters. The 2024 cycle to date accounts for 64.5% of the total ACV compared to 66.4% in the previous cycle, mainly due to product deliveries migrate to third commercial quarter and different seasonality of new contracts. I will now turn back to Marcelo Wernicke, who will talk about the financial results of the quarter in 2024 cycle to date.