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spk01: Good evening, ladies and gentlemen, and welcome to Vitru's third quarter 2021 earnings conference call. All participants are in a listen-only mode now. Later on, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, this call is being recorded and will be available on Vitru's IR website. Now, I would like to introduce the host for today's conference call, Mr. Carlos Freitas, Vitru's CFO. You may begin.
spk04: Thank you, Pereira. Good evening, everyone, and thanks for joining us. It's a real pleasure to be here with you all for the release of our 3421 numbers, as well as the numbers for the first nine months of this year. I hope all of you are doing well and healthy, and here with me I have Pedro Graça, the CEO of Vitruv, Maria Carolina González, the head of our Investigation Department, as well as Raquel Suzaki, all from our IR team. A slide presentation will be part of today's webcast, which is available in our website at investors.vitru.com.br. I trust you all have this presentation in front of you, but as usual, before we begin, I'd like to make note that as detailed in page two and three of the presentation, safe harbor is in effect for this call. So now I invite you to go to the page five, the first page of our presentation with the highlights for this quarter. So the first highlight, it's not new, is the announcement of our agreement with for the business combination with them. That was announced three months ago. But we are never tired of reinforcing the beauty of this deal. They are the leading institution in Brazil in terms of quality indicators for this learning in the Brazilian segment, besides having a sizable and growing business of medicine and other health-related courses. So, later on, I'm going to go back to this information, I'm going to show you more figures about the clinic in the market. We also had this quarter unexpected in the past. We launched new courses, specifically the course of nursing was offered in August of this year and in a couple of months, in two months, already became the number one course in our current intaking cycle in our portfolio of undergrad courses. So it's a huge success and it reinforces our speech and our belief that the digital education segment is going to increase even further throughout the country. We have reached almost 260,000 digital education students, with a 27% increase in intake, in the current intake cycle, compared to the same cycle, same period of last year, with a relevant growth in the southeast region, which is, as you know, our new growth frontier. The net revenue in our core digital education undergrad segments increased by around 20% this quarter, with a consolidated net revenue growth of around 17%. The EBDA increased 26% in the first nine months of this year. It's always better to show the EBDA numbers on a year-to-date basis because of the sustainability we have in our business. So the 90-month EBITDA growth is 26% with an adjusted EBITDA margin of 29% growing as well, one point compared to the same period of last year. And finally, last but not least, cash flow from operations reaching 130 million reais in 9 months with an adjusted cash flow conversion from operations of 92%, so we not only grew our revenue but also generated a lot of cash from our operations. So now, before we move forward to show what were the main figures of this quarter, let me show to you on page six a brief reminder, a refresh of what we have been delivering over the last 12 months. We have now the first, we had the first anniversary of our IPO in September of this year. At that time, one year ago, when we were going through the IPO discussions with you guys, we said that we would grow in four growth avenues, three of which organic and one inorganic. We have been delivering what we promised over the last year. The first one was the ramp up of current hubs. We said that this was going to be the main organic growth driver in our revenues, which is being delivered. We have now more than two-thirds of our student base in new hubs, in expansion hubs, the hubs that were opened in the last four years, while one year ago, this number was 59%. Today, we have more than 90% of the hubs still in ramp-up phase, still maturing over time. our season base also by around 25% in these 12 months. We opened more than 240 hubs, of which 100 hubs in the Southeast, of which half 50 in Sao Paulo. So we are growing in the Southeast as we were announcing before. And also we expanded the course offering. So as I said, first new big course was nursing. So nursing already, again, the number one course in the current intaking cycle. It is a premium course. It is a course with a ticket that is 50% higher than our normal ticket. And hopefully soon we will have offerings also in law and psychology. And for example, in law we have already the authorization, the great evaluation, sorry, from the Ministry of Education with a grade five, the highest grade possible, and the possibility to offer 22,000 seats per year. And in the case of nursing and psychology, it's 11,000 seats per year. So this will be an important growth avenue going forward as well, and an important level to sustain tickets as well. And finally, inorganically speaking, we announced, as I said, the deal which is The best view we could ever consider, we always consider them to be the benchmark company in Brazil when we think about quality indicators in digital learning and digital education in the country. So with this transactional one, if it's allowed to be concluded and closed by the undersourced authority in Brazil, we will become the number two, the second largest digital learning player in Brazil with the best quality indicators. So now, on page seven, some more information about Unicef do Mar. Before we come back to Vitruv. So this combination will create this disruptive player, a reference player when you think about high growth business in the higher education segment in Brazil. Unicef do Mar has a size, Close to ours, so as of June of this year, this is before June, they had a bit less than 800 hubs. Today they have around 900 hubs, such as us. So to combine we will have around today 1,800 hubs. More than 700,000 students combined with us. They had last year, sorry, they had in the last four years a CAGR of 49%. And last year, a net revenue of 610 million reais with a 40% adjustability margin. So it is higher than our margin with around 30%. And the main driver for that, the main reason for that is the business of medicine. Here on the bottom left part of the slide, you can see some information about their medical business. They are the fifth best medical course in Brazil among private institutions. which is a high-demand course, as you all know. It is an 11 to 1 ratio of applicants per seat, with an average ticket of more than R$ 9,000 per month. On top of that, here on the right, I show some quality indicators from SEDOMAR. They have an IBB of 3.75, which is 43% above the average of the market. Even above ours, our IDD is 3.3 in the last cycle, which is the highest IDD in distance learning among all literate players in Brazil. We have, UNICEF has, the highest IDD in distance learning among all literate players in Brazil, and Santa Marta has an even higher IDD ratio. This is satisfaction, this is contribution, this is value added that you bring to the students when you compare the NN grade with the NID grade. And they are, as ranked by the Ministry of Education, when you see the IGC courses rate, they are among the 2% best educational institutions in Brazil. So it's really a reference player, and together with them, we're going to be, I believe, a reference player. So, on page eight, We have more information about the profile of students and why we believe that we are going to keep growing hand-in-hand once the deal is approved. So here on the left, you see that the student profile is slightly different. That's why we intend to maintain, to keep both brands because they set different markets. The students that usually go to UNICEF have a lower income. and someone who appreciates the local tutor, the human touch, and needs the local presence of a person who is going to provide the hand-holding for the students. So this local support from a tutor is also very important for this public. On the other hand, they have a higher average income students, slightly higher, and also a more tech-oriented and tech-savvy students because they have a much more tech-oriented learning experience than the peers. So it is a different product to attract different people. In the middle we have a huge potential for commercial synergies. Today we have more than 600 cities. Today, or sorry, in June, that has either a hub of Unia itself, but not Sedomar, or vice versa. So here we have a huge potential to quickly deploy and offer both brands throughout the country. And on the right part of the slide, the whole market has been growing at around 19% in the last year. These are the information coming from the census made by the MEC, and together we have gained eight points in market share between 16 and 19. 19, as a reminder, is the latest available information we have. So we went from 10.5, combined with them, to 18.5 in 2019. And why was that on page nine? Because we have intrinsic competitive advantages. On page nine, we compare the models that we have in Brazil for distance learning. Unia itself is the sole player to focus on this hybrid model with a local tutor, so a tutor-centered hybrid model, with weekly meetings, lectured by local tutors, someone who provides the hand-holding, someone who is also playing a role model for the class, and you have this sense of belonging with our model. So this is our competitive advantage. the model, which is complex to create, but we know how to play it. On their end, offer a 100% online product, but they are, as I mentioned before, they are their reference player in terms of quality, so they have a much more tech-based methodology, with nice hubs as well, as we have, so that's why they are the reference player when you think about digital learning in Brazil. That's why both companies with this intrinsic competitive advantages are growing faster than competition. And on page 10, I have here some public information to confirm this reputation and to confirm our, I would say, competitive advantage. Here on the left, this is public information coming from the Apple Store and Play Store. If you go now with your cell phone at Apple Store, for example, you will see that the app of Onze de Mar has highest ranking, highest rate among all little players in Brazil. 4.7 out of 5. The second highest rank is UniaCelta with 4.3. The highest of 5 little players are between 2.7 and 1.8. So this is public information to show, to reinforce our tech-oriented approach. Our culture, our mindset much more oriented, much more, I'd say, concerned and much more, delivering a much better technological experience for our customers, our students. On the right, you see Reclame Aqui, also public information. Reclame Aqui, if you go now to Reclame Aqui to see it yourself, you'll see that we have a 7.6 rating, which is the highest score among all Brazilian listening players. Punta do Mar has an 8.2 ranking, even higher than ours. They have the best in Brazil. So this is public information. This is official information from Reclaim Aqui and from Google and Apple Store. So this is why we are, on which we are leveraging our reputation to build a solid business to create value for shareholders and to grow faster than competition. So on page 11, not back to Vitruv and UniaSelvi. Again, we're offering new premium courses to expand the market and improve tickets. So nursing already with 11,000 seats covered in three months, which represented 8% of the current intake cycle. Our intake cycle was 128,000 students of which 11,000 in nursing. and hopefully we will be allowed to offer Zoom, Law, and Cyclones. Those three courses, as a reminder, represent around one-third of the products on campus market in Brazil. So it's a huge opportunity for a player as us, which has a hybrid model. This was on page 11, sorry. On page 12, The growth in our base was led by digital education segments. We grew 20% year on year, the student base. This growth was also important to highlight that this was coming from a very high comparable base. We grew last year, in the second cycle of intake, we grew 40%. And now we grew, on top of this base, 27%. So that's an important growth of 27% in the intake year over year, even though that comparison base is higher. And 138.6 new students in the second semester of this year, of which almost 113,000 only in the third quarter of this year. On page 13, growth was spread throughout Brazil. So even here in our original base, original region in the south of the country, we grew 13% year-on-year. Again, even knowing that the comparison rate was high last year. And in the southeast, 50% here on the left. On the right, the special hubs, as I said, 242 new hubs in the last 12 months. On page 14, the focus on the southeast region of Brazil. We opened there almost 100 hubs in the last 12 months and increased the student base by 50%. So we opened very recently a lot of new hubs in the last, I would say, three months, in fact. So we are preparing the base to accelerate even further the growth there in the tuition, which represents 40% of the total market in Brazil. On page 15, the maturation of our hubs. Again, the most important organic driver for growth, which is growth with limited execution risk. We keep expanding our maturation of hubs. If you see all the new hubs that we opened the last four years, we are still around 31% of the potential of those hubs. And also important to highlight here on the bottom left part of the slide, the share of newcomers and the share of intake in the overall student base. This is something that I mentioned already a few times in the past, but now we're showing you the numbers. If you see that we reach now in the first half of this year, what we believe to be the peak ratio between intake and overall base. Why is that important? First, because the slight decrease over time of this ratio, as we mature more hubs, as more and more hubs fill up and we increase faster the percentage of seniors compared to the percentage of newcomers, we are going to increase margins over time. we're going to decrease dropout ratios. We're going to decrease PDA ratios. Why? Because, as you know, newcomers, freshmen, dilute market. Most of our selling expenses is aimed at attracting new students. Newcomers, they drop more than seniors. And hence, PDA ratio is also higher among newcomers. So over the last four years, we have been increasing the duration, but now, according to our forecast, and from the first half already of next year, we are going to slowly but steadily increase more the participation of seniors compared to newcomers. So this is important driver of margin going forward. So on page 16, before talking about margins, Net revenue growing at around 20-25%, 20% in the quarter, 25% in the nine-month period of this year, driven by the expansion of days, as I showed before, 20% year-on-year, plus a 2% increase in tickets. This is also something that differentiates Vitro from the competition because we offer a different product because we differentiate ourselves from the competition, we have been able to more or less maintain tickets over time. So there was an increase last year, there was a decrease in the first half of this year, now an increase again, so more or less we are maintaining our tickets and in fact increasing 2% year on year on year, if you see the third quarter numbers, and this is conforming the resilience of our model. Now on page 17, some more financials. So the consolidated net revenue growing at around 22% on a nine month period. ABDA growing 26% and ROC margin growing 31%. I'm gonna show each of them now in detail. So on page 18, if you see the cumulative number for nine months, for example, the growth of 22% driven by the digital education business under graduation and graduation, mainly continuing education. Both segments growing quite a lot over the last year, as was the case over the last year, and on-campus segments decreasing over time, 17%, which is here on page 19. On page 19 you have more details about the continuing education segment and on-campus segment, So in continued education, the growth was driven by our digital graduation courses, which expanded a lot this year with more offerings and also leverage on digital marketing. On the other hand, on campus, segment two is declining over time, in line with our view for the sector, because slowly but steadily, there is this decline in the interest of on campus education the corresponding increase in the interest of digital education, which we don't believe will reverse once the pandemic is over. We have a lot of questions about it, whether there will be a decline in interest in digital education once the pandemic is over, hopefully next year. We don't believe in that. We do believe that there was a shift in mindset in the prior document about buying from home, working from home, and also studying from home. Nobody believes that e-commerce will go down once the pandemic is over, because people now have experimented this type of experience. And the mindset, the interest of digital education has also grown a lot and will continue to grow in the future. So, margins every day on page 20. Again, let's focus here on the nine month period. An increase of 21 to 28 to 39% of margin, one point. This increase was mostly driven by reduction in the cost of services and the percentage of revenues, which I'm going to show in the following slides. So, page 21. Cost of service, there was an important increase in efficiency over time. Four points increase, so 35 to 31% decrease in cost of service as a percentage of net revenue. This was driven mostly by two reasons. First, the overall optimization in personal cost as we optimize the ratio between students per tutor and the overall growth of the business. As we go further, it is easier for us to optimize also the ratio of students per ratio and besides the implementation of the flex courses that we mentioned in the beginning of this year, that we created also this new concept of flex courses through which we We gathered non-optimized classes that we were offering in small cities, for example. We have a much more optimized ratio now with students per tutor, enhanced, driven, driving as well this expansion in margins, in gross margin. On the right, you see G&A, also an increased efficiency. reflecting our focus in maintaining to be a lean company, a digital-oriented company. We have now less than 8% of our net revenue in G&E. This is a reflection of how we operate. This is a consequence of how we drive the business. We are much more agile and lean than competition, that's why we react faster to change in the market, and that's why we have been growing faster than competition as well. On page 22, selling expenses and PDAs, so net impairment losses on second assets is what we call here the PDA. So selling expenses increased, so if you see again the nine-month period, there was an increase of 36%. this year, and again, two points from 16.8 to 18.8 of net revenues. This was caused by first, as we said before, overall throughout this year, an increase in online media as a result of the pandemic. So, last year, a big chunk of our intake in the first semester of last year was made before the pandemic, so when our hubs were opened, and the hubs are an important piece in our selling machine. So because we have this hybrid model, the student sometimes, not sometimes, usually goes to the hub to understand how would be his or her experience and then there in the hub, he or she decides to really to enroll. So now the hubs are closed so we had to invest more in online media. The second reason was the strong intake cycle, which is natural, and also the commercial efforts in new pre-owned quarters, such as nursing. So there is still a ramp up now in the efficiency curve for new quarters, such as nursing. So there was an increase of 30%, but if you see the cut, the customer acquisition cost, it increased only 3.6% in nine months of this year compared to the first nine months of last year. PDA, on the right. There was a big increase in PDA this quarter, if you compare to the third quarter of last year, of .9 points. Despite the need for students, despite the strong presence of freshmen and newcomers, as I said before, again, we have reached the peak in this ratio now, in the first half of this year. And also despite the current crisis in Brazil, which does not help at all Now, on page 23, to finish, net income, we have an increase when you see the quarterly numbers and a decrease when you see the 90-month numbers. This was due to two things. The first one was a couple of non-recurring items we had last year. The first one was in the first quarter of last year, we recognized for the first time before-tax assets. This was an amount of around 18 million reais. That was the first time we recognized before-tax assets last year, which improved our net results last year. And also, in the third quarter of last year, we had, as well, FX gains related to the IPO. So we raised funds in dollars last year, and we brought dollars to Brazil, so about 3 reais, at a higher rate. So we gained 13 million reais last year. So these two events represent 31 million reais. Together with the increase in financial expenses this year due to the increase of the PBI and IPCA, we have a reduction on a yearly basis of our net results. To finish on page 24, cash flow. Cash flow here also a bit affected by extraordinary events of last year. Again, this $13 million FX gain, for accounting reasons, this FX gain is accounted as part, of course, of our net results and as well as part of our cash flow from operations. Don't ask me why, but it is the way the rules are. We recognized last year this $13 million FX gain as part of our cash flow from operations. On top of that, we had, as well, in the third quarter of last year, a rectification of some prepaid expenses, 60 million reais that we had already prepaid in preparation of our IPO, that when we executed the IPO in September, these were reclassified to transaction costs of the IPO. When you see the cash flow from operations, they increased as well as improved the cash flow from patients last year in 16 million reais. So here on the right, we put a table trying to reconcile these numbers. So when you reconcile, when you normalize this cash flow from operations, you see that we have, when you see, for example, the third quarter numbers, a increase of 28% in cash flow from operations and 31% increase in cash flow from operations in the 90 months. When you see the cash flow from a conversion, we went from 98% last year to 112% this year in the quarter and from 66% to 92% in the 90 month period of this year. So a very important result as well from a cash flow generation perspective. So, that was it, so page 25, just to wrap up, we are the leading peer player in digital education in Brazil. Before Nesomar, with Nesomar we wanted to consolidate as the reference player in digital education in the country, delivering what we had promised in the IPO, which was expansion of markets, continue organic growth, and now with the best NADO we could ever dream of which used the transaction with Telemar. So thank you very much, and now I'd like to open for questions.
spk01: As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw a question, press the PAN key, and please stand by while we compile the Q&A roster. Once again, please press the star, then the number 1 on your telephone. Your first question is from Vitor Tanita of Goldman Sachs. Your line is open.
spk05: Hello. Good evening, all, and thanks for taking your questions. Two questions from our side. The first is if you could give an update on how you see our strategy for medical and healthcare programs following the and following the approval of the digital nursing program. and if this strategy could include potentially further acquisitions on the national front. Second question from our side is if you could give us some more detail on how you saw dropouts and non-renewal rates evolve in the third quarter and on how you expect those metrics to trend going forward. Thank you very much.
spk04: Hi, Vitor. Thanks for your question. So, the first one about a medicine with . We're going to wait for the closing of the transaction so that we can have further conversation with them about how to deploy this business in the future. Because right now, as you can imagine, we cannot have this type of conversation with them. What we know now is that they have this, I would say, healthy and growing and high margin business, which is medicine. And we feature, we are not a player today in medicine education, but they are. And they know quite well how to play this segment. That's why they are the fifth best medicine school in Brazil among the private institutions. So this is still open for discussion. We are going to have these definitions together with them. but only after the deal is closed. On your second question about dropouts, in fact, we had a slight increase in dropouts this quarter when you compare to our expected numbers. And the reason for that, we have two reasons for that, in fact. The first one was the intake profile of the first half of this year. Because the intake in the first half of this year was much more back-ended, a big part of our new students joined us in the second quarter of this year instead of the first quarter of this year. That's why our dropout rate in the second quarter of this year was much better then the dropout rate in the second quarter of last year. So because most of them arrived late in the intake cycle, so those guys that drop out, instead of dropping out during the semester, during the second quarter for example, some of them dropped now only in the third quarter. So the intake profile improved the dropout ratio in the second quarter, but deteriorated the dropout rate in the third quarter. That's the first reason. And the second one was, as I mentioned before, the ratio between intake and seniors, the intake in students as a whole. So, as I showed before now in the presentation, we have reached the peak in the ratio between intake and base. So, we have a lot of newcomers, a lot of students that are joining us for the first time this first half of this year. So, this translates into a much higher dropout because, as you know, freshmen and newcomers drop more than seniors. Very clear. Thank you very much. So, going forward, Victor. we expect a normalization of this ratio. First, because we expect to have a more normal intake curve in the next years. Second one, also just important to bear in mind that part of our user experience is built around the presence in a hub. So because today we are still not in our full capacity of user experience. That's all I want to say. Once we are allowed to have, again, live classes in our hub, we believe we're going to also to improve the retention rate because the user experience will be fulfilled.
spk05: Thank you.
spk01: Once again, to ask a question, please press star, then the number one on your telephone. Your next question is from Mauricio Cepeda of Credit Suisse. Your line is open.
spk03: Hello, guys. Thank you for the space for the questions. I have just one question. It's motivated by one of the statements in the release that says the cost has improved because the the penetration of the FLEX courses. And it calls attention to the point that if you consider this as a way going forward exactly to, let's say, optimize costs, so if you consider this as a way to do so, and if the FLEX course itself was able, apart from the costs, to also increase the demands, so increase the student base for this modality specifically. Thank you.
spk04: So about FlexCourse, just as a reminder, I invite you to go to page 31 of our presentation. So just as a reminder, the FlexCourse was taught after the pandemic. So the idea of the FlexCourse appeared to us after the pandemic because we realized that we had the opportunity to optimize the ratio and to offer new courses for new students in Brazil with the FlexCourse. And why was that? Before, I mean, until, let's say, until last year, until one year and a half ago, we had a group of students, a number of students, that were not optimized in terms of students per tutor. Because it was either in a small or medium city, in a course that you didn't have enough demand. So instead of having, let's say, 40 people per tutor, you had 20 for them. And now, once we... started to have the weekly meeting in a virtual way because of pandemic, we had the idea of why not offer, instead of offering these flex courses that are not optimized. And sometimes, even not with the tutor that is specialized in your own field, because sometimes we didn't have enough of, say, scale to have a tutor for example, that teaches in accounting, for an accounting class. I have a general tutor that was teaching for people who were from different courses. So this was not ideal. So the idea of the Flex course was to optimize it so those classes that were not optimized with a tutor, for example, that was not someone specialized in your field, instead of offering this course, configuration, why not offering them in a Flex course with a tutor that was giving a class to 40 people, but online. But still, a online class with a live class from someone from your region, instead of being from your city, from your region, for example. So this was an optimization that we made in the first quarter of this year, which had two effects. The first immediate effect was improvement in efficiency, which is here to stay. So the fact that we reorganized those non-optimized classes around some flex courses is efficiency that is here to stay. So it's not something that's going to change after the pandemic. So once the pandemic is over, the normal UniaSELVI class will return to weekly live meetings in the Hub. But the FlexCourse will continue to be provided in virtual meetings, but with a tutor from the region. So that was the first immediate consequence. It was improvement of efficiency through this optimization in the duration between students and tutor. The second consequence of FlexCourse, and in this more medium term, is the possibility to enter into the smaller cities. A city that did not have the scale for a full-fledged, normal UniaSelfie hub, but you can have there a smaller hub, basically for you to go there to have your monthly exam for them. So it is a possibility to accelerate penetration throughout Brazil within smaller cities. So that was the Kafka Hub platform, the fourth one. immediate consequence in terms of courses and that was executed without any impact in satisfaction because before that, you had a tutor that was not from your specific area, for example. If you were studying accounting, you could have someone that was someone from business administration, for example, providing classes to people that were not from business administration. So here now with the FlexCourse you have someone from your field. So it is someone, and we have made researches and surveyed on that to see whether the student is happier with this FlexCourse and they are happier with this course. So it is an opportunity to increase efficiency, to penetrate further throughout Brazil and to improve the overall user experience.
spk03: Okay, now I see. So it was something that was designed for the pandemics, right? But part of it will continue, right? Part of it will continue, and this is allowing you to address the cities that are, let's say, subscale, right, for the tutor model, right? So it's both a cost and revenue combination, if understood correctly.
spk04: Exactly, both the cost and revenue combination. After the pandemic, the normal product, which is a hybrid, tour-centered, live meetings in a hub will return to be live meetings, so physical encounters in a hub without any impact in terms of cost. because now we already have the same tutors online. Next year they will be again meeting students face-to-face. The same will be with the FLEX course. So today they are virtual meetings. Next year they will continue to be virtual meetings with the same tutors.
spk03: Is there a risk that the cost increases when you get back to the physical one, to the physical model, the tutoring model?
spk04: Yes. Not in our case, so in the digital education segment, you won't see this issue because today we don't have specific temporary savings when you think about tutors. We already have today the tutors that are meeting his or her students online instead of physically, but the ratio is the same. next year, but it is a minor effect, is in our own campus segment, we as anybody else, once the classes return, there will be a expected increase in cost there. But in our case, because it is a smaller piece of our overall results, it won't be a major amount.
spk03: No, very clear. Very clear, Klaus. Thank you. Thank you.
spk01: Once again, to ask a question, please press the star, then the number one on your telephone. Your next question is from Lucama Grisney of Etel BBA. Your line is open.
spk02: Good evening, everyone. Thanks for taking our questions. So we have two questions from our side. The first is regarding the average ticket. So the average ticket increased 2% on the digital education undergrad segment. Could you please comment on how the breakdown was for freshmen and veterans? And then the second question would be regarding PDA. So PDA increased in the nine-month period due to the change in the mix of students. Could you please comment on how this should evolve going forward? Thank you.
spk04: I'm going to answer your first question first. So regarding tickets, we had this 2% increase in the overall average ticket. When you see the intake tickets and the tickets that we are now getting with newcomers, this is more or less in line with what we had last year. So, it was on average the same number that we had last year when we see the F2F comparison. When you include nursing, for example, and then this ticket increases. So, when you see the overall intake in the current intake cycle, we had a slight increase in tickets when you compare to the last year. and that was driven by new courses which we expect in the future. So in the future, we expect to increase over time the percentage of premium courses such as nursing. Again, we have only today around 11,000 students enrolled in nursing and which today 80% of the intake but when you see that we had 300 thousand students in digital education, it is nothing, it is 3%, 3-4%. So it is natural that the percentage of premium courses such as nursing and in the future hopefully law and psychology for example and others that we already offer today in health courses such as nutrition and biomedicine that start to be offered more recently, those are going to be important drivers over time to sustain the ticket over time. I'm sorry, what was your second question? I didn't get it.
spk02: So the second question is regarding PDA. The increase was due to the change in mix of students. Could you please comment on how this should evolve going forward? Should you like an increase in PDA level?
spk04: Okay, great. The PDA is impacted by a number of things. Some will certainly change or hopefully change next year. Some will not. The first thing is that PDA is a function of a mix of students. Again, because we had in the first half of this year When we see the overall intake we had in the first intake cycle this year and you compare it to the overall base we had in the first half of this year, we reached this peak in this ratio. So we had in the first half of this year a higher than ever percentage of newcomers in our base. And those newcomers, they have a higher dropout rate and hence a higher PDA. So they are contributing to higher PDA on a consolidated basis. Over time, as we mature the hubs, as we fill up the hubs, and hence as we increase further and faster the percentage of seniors compared to newcomers, the weight of average PDA will tend to go down. That's the first thing. The second thing about PDA is the fact that we are still not in our full user experience mode, which is the fact that we have the Hubs closed. So part of the user experience is the fact that you meet your colleagues in Hubs. And so the fact that we have a Hub closed and hence we are still not in full potential to exploit our model and to benefit the students with our full user experience is not helping in the PDA. So hopefully next year, once we are allowed to open again the hubs, we shall have a decrease in PDA because the overall engagement will tend to increase because it's a section level and overall engagement will tend to increase and this has a high correlation with dropout-enhanced PDAs. And the third reason, and we are all on the same page here, is the current economic crisis, which does not help at all about delinquency rates. Hopefully it will improve next year, but what we see throughout this year and last year was a clear impact of delinquency driven by the current crisis.
spk02: Very clear, Carlos. Thank you.
spk04: Thank you, Luca.
spk00: No questions at this time. I would like to turn the call back to Carlos.
spk04: Thank you, Pereira. I want you to read now a couple of questions that came from the web. First one from Pedro Lima from BTG. Hello everyone, just two quick questions here. Google posted a resilience every ticket in digital education undergrad courses this quarter. Should we expect the trend to continue over the next year? That was the first question that we just answered, that we expect to see a positive contribution of premium courses. So we expect to see a stable ticket as we have been delivering in the last year. Second question from Pedro was the new PDA policy should continue to provide improvements as seen this quarter. What should expect as an ideal PDA level when we relate to net revenue, considering the 16 in third quarter? And I mean, ideal is a complicated word. What we see is that 16% is not ideal, that's clear, because we're not in an ideal context. What we see is that going forward, we shall expect improvement in PDA with the mixed students, with the improvement in the overall youth experience, and the economic crisis. The second question is now from Javier, from Morgan Stanley. Quite consistent price growth one more time. Average DE and undergrad ticket up 2%. since last year, I guess that part of that has to do with the MIX and part with your current model. But on the other side, hub maturation reduced, so maybe in fact MIX was not a positive price driver. I think there's a confusion here about the maturation index. The maturation index is basically the ratio between the total number of students we have in the new hubs, divided by the potential, the number of students in maturity. So, and this is for the overall portfolio of hubs. So, for example, if we open tomorrow, let's say 1,000 hubs, the maturation of hubs will drop a lot, basically because we'll have a lot of new hubs. And because we opened 240 hubs over the last 12 months, and a big chunk of them in the last three or six months, our monthly index is more or less the same. It was 32%, 32% a few months ago, now it's 31%, but not because we're not growing, but because we are opening a lot of new hubs, and that's why. And the final question, Javier, is how much have you increased net prices in intake and ring rolling students? I just answered, so the intake price, there was a slight increase as well this quarter compared to this quarter. When you see the overall intake, including nursing, for example. For rigor rolling, what we applied was a minor increase this quarter, but nothing meaningful. The ring rolling increasing price is usually executed in January of each year. Those were the questions we had from the web. I thank you all for your interest. Anyway, myself, Carol, and Raquel, we are fully available for any further questions. Thank you and good night.
spk01: This concludes today's conference call. Thank you for participating. You may now disconnect.
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