Cogna Educacao S A S/Adr

Good morning, everyone, and thank you for waiting. Welcome to the teleconference to results of the first part of 24 of Cogne Education. For those in need of simultaneous translation, we have this tool available in the platform. To access, just click the interpretation button in the globe icon in the bottom part of the screen. Then you choose your language of preference, Portuguese or English. For those hearing the conference in English, there is choice of muting the original audio. We inform that this teleconference is being recorded and will be available in the website of the company, www.ri.cogna.com.br, where the complete material of our result disclosure is available. You can download the presentation in the chat, even in English. During the presentation of the company, all participants will have their mics enabled then we'll have the q a session at this moment if you wanna ask question click in the q a icon and write your question to enter the list when you are invited there will be a request to open your mic then you open the mic to ask the questions we suggest questions are all made at the same time And we would like to clear that event of declarations that may be carried out during this conference regarding the business perspectives of Cognite projections, operational targets and funding are the premises of the company, as well as the information currently available to Cognite. Future considerations are not insurance of performance. It involves risks, uncertainties, and premises because they deal with future events. Therefore, depend on circumstances that may or may not happen. Investors and analysts must understand that general conditions and other operational factors may affect the future results of Cognite and may lead to different results from those expressed in many of the considerations here. Now I pass on the floor to Mr. Roberto Valério, Cognite CEO, who will start the presentation. Please, Mr. Roberto, go on. Thank you. Good morning, everyone. And thank you for participating in this teleconference to discuss cognitive results for the first quarter 24. As usual, I have here Frederico Villa, our financial vice president, Guilherme Melaga from Vasta, and Eduardo Gonzaga, director of relations with investors and corporate fundings. We'll have one hour in this call. We'll try to have the presentation in 30 minutes to leave 30 for the Q&A. Well, good morning, everyone. Going on, I would like to start with the slide number three, the administration message. I think the main points of the quarter are the net revenue of Cogna that is growing double digits as the previous quarters, emphasizing all business units, Croton, Vasta, and Saber, growing as well in double digits in a consistent way. The recurrent EBITDA of the company grows for the 12th quarter consecutively with almost 10% growth at 9.5 compared to the first quarter of 23, reaching R$495 million. The operational cash flow after CAPEX is positive in 9.4 million. We are quite happy with this indicator. It shows our cash generation because we can operate the whole company and have all the capex investments as expected. You know, our estimator here is something close to 400, 420 million reais in capex investing in technology and infrastructure and content. Also, we pay all the debt services and we still have some cash some positive cash in almost 10 million reais. As the first quarter highlights, the portfolio, as we've been saying, the diversification of Cogna products is our strength. And most of all, the three business lines showing a lot of resilience. Croton with a growth of 14.7%, growing any distance education and presentation, which is important because this is something that we didn't have for some time. VASTA also growing consistently and especially the strength of our new growth, that is sales to governments with a first contracted B2G of 69 million in this first quarter, besides Saber with a growth of more than 45% of net revenue. being pushed both for the PNLD and educational solutions that we are selling, especially to city halls. In this context, especially in cash generation, our leverage has decreased some points. It's 1.79 times the EBITDA. This is the sixth consecutive quarter. And we have continuous liability and management actions. Fred, the CFO, will talk more about what we did and what is about to come with some positive perspectives and many banks searching for us. and possibilities to reduce the cost of debt and enlarge the deadline. Before going to the next slide, the cash generation after CAPEX, despite the drop of 7.4, we have 50 million referring to the P&L date that was to be received in January, and the federal government just paid the last days of the fourth quarter. If we consider that in the cash generation of the first quarter, we would have 206 million in GCO, which would be 15% growth versus the first quarter of 2023. So despite the GCO being lower than the first quarter of 2023, it's not a point of concern to us because we know that was due to time and we are pretty sure about our ability to deliver the 24 guidance, both the EBITDA and the cash generation. With that, I will go to slide five to talk a little bit about Croton. So, The CAPTCHA growth of 14.7, which is 53 more students than the corresponding cycle last year with emphasis to the growth in presential 14.1 and distance education 14.2, so both lines growing. We try to anticipate the enrollment in this quarter we invested more in marketing i would explore more that later on we invested more in marketing because we understand that captures in the beginning of the year make the students experience to be better therefore both from the point of view of non-payment and engagement it increases our enrollment i emphasize that in the general macroeconomic scenario this first quarter was quite positive we had january and february with a lot of demand. Looking to the other sectors, we see that retail and some sectors as car sales, especially the use of ones that we follow here to fill the market was also good. So I believe we have here efficiency in operation, but also a scenario that seems more positive for Croton in the beginning of this year. The last highlight in capture is the revenue of Safra. That is an indication that we've had for many years. Obviously, volume is important, but most important is that the capture has more revenue in Safra. And in this period, we have more than 30% of growth in the revenue here compared to the other year, with more capture and more enrollment, considering we're having less underpayment and more engagement. The total base of students' growth Strongly, 12%, especially in crop-on-med, that is one of our measurements. And at EAD, that is the other measure. So it's quite important to have this growth. And you remember that we are saying that EAD has a lot of operational leverage and crop-on-med. In fact, it has a positive margin. So growing the base in this segment is positive. Now talking about the ticket, we can send the inflation to the veterans and the mix of capture, especially in EAD, this cycle is more concentrated in EAD courses that we call the hybrid ones or premium ones that are the engineering and health courses with a high average ticket with more presentation in physical labs. So the positive here is in the sense and go into slide number six to talk about the financial performance, our revenue grew 12.5%, especially pushed by Croton Med and EAD, with a small drop in the presentation of 4%. Remember that despite growing the basis of presentation or keeping it stable after many years without growth, the students graduated, they have higher tickets than the newcomers, so that's why the revenue has this negative effect than the basis that was stable growing point two. As I said, this revenue is not only accelerated by the amount of students, but due to inflation as well. And it's quite strong, especially because we could anticipate enrollment for the first quarter, the new ones. From the point of view of gross profit, I emphasize an important gain in the gross margin. And this is a question that we receive constantly about the space to gain in gross margin. And we understand that because of the leverage of EAD. So we have a bigger part to that. the variable, so if it's a growing margin, we'll gain on that, and you see that in our release with the opening of the primary margin per business line, and you can see they gain the margin in EAD and medicine. So from the point of view of efficiency, Kratom Med and digital learning have a lot of opportunities here. We believe it is in the perspective In this perspective to the future, the effects will keep here in the next quarters. I would like to emphasize a little about marketing because we were anticipating that we were speeding up the expenses or at least anticipating the marketing expenses due to two reasons. First, because we wanted to anticipate and we could have a strong growth in capturing the first trimester. but also because we are consolidating Anhanguera brand as a national brand, which is in slide seven. And here we bring some information for you to see how this strategy is working. And this first graph shows the evolution of the search share per brand, organic search, okay? So if your brand, is more known, better known with more awareness and more interest of the audience, there are more people searching for the brand in Google. And this graph shows that in 21, there was 10% of organic search in our brands than 12.5 in 23, 22 and 14, 23. And we started in 22 with the strategy of consolidating the Anguera brand. So we are growing. and we have the numbers identified with the peers. So you have the numbers, some gain market share, but the second one gains half of us. We grew 3.9, almost 4%, and the second peer grew 1.9%. So just to highlight the current cycle, You can see in the next graph with the orange bars, the growth of search in Google per cycle, but especially in this cycle, 24.1, we are growing 31.5% and the average is 15 of the competitors. So the interest of the market by Anhanguera brand grew twice as the market average, which shows the investment we are doing on the brand makes sense. And the results are present here. It's not a sample search. This is concrete data on internet search. With that, the last slide of Croton, just to reinforce that we have gained inefficiency in online. We are gaining in the gross margin 17.5% and operational expenses 2.5%. PCLD also efficiency in 1.6%, corporate expenses 0.5%, but I would say it's stable. And knowing that we had this space for margin and efficient gain, we knew we had space for more marketing. We used this space. We decreased a little the EBITDA margin this quarter, but I would like to make it clear that it is part of the strategy. And I even mentioned in many meetings here in the last call for the fourth quarter that this is our strategy to build the brand and also to bring new students. So we have important results in line, except marketing due to this strategy. With that, I finish. So I would like to pass on the floor to Guilherme Meninger to talk about Vasta. Thank you, Roberta. Going on in slide 10, talking about the net revenue of us, starting on the graph on the left, I emphasize the growth of our net revenue in 14.4%, emphasizing B2G that we acknowledge 69 median in the revenue in the first quarter. Talking about cycle, the growth of the cycle of revenue is 12%. Besides the contribution of B2G, we also acknowledge 9% of growth in ACV, emphasizing complementary solutions that grow a lot in the level of 21%. In line with the transparency that we've always had, we are reducing here our estimate of ACV bookings and growth for this year from 16% to 12%. due to the first quarter of the complementary requests of the schools that we saw a softer market in general, and less students in our partner schools. With that, we are informing the new estimate of growth of ECD in 12%. Now in slide 11, we have cost and expenses. In total, we have Costs growing 7.4% in the quarter. Remember that the revenues grew 14%. Therefore, our costs are growing below our revenue gain, generating efficiency. I'll emphasize here the percentage on the right. Our stocks representing a drop of 7.4%. due to the reduction of paper, the pressure for paper and graph costs here, and also a series of initiatives to reduce costs, mainly the logistic optimization in the return to glass. Another important point to emphasize is the expense contention that we had administratively, keeping the flat in absolute values, and receiving a decrease in percentage of 1.5%. Therefore, we have an important space to invest in our growth and invest in 25. So you see that the marketing expenses, selling and marketing expenses had 3.2% in line with our strategy and ensuring a good start in our ACV in 25. In slide 12, the result of growing revenue and cost grew later, as well as lower. So we had 28% of EBITDA and the year-ending cycle 394 million, 22% growth in the same period last year. I emphasize here, the margin growth that in the cycle grew from 35.6 to 38.9%, three points percent in the margin growth. It's important to our business and to our profitability. In slide 13, I would like to emphasize other aspects of our business. We have a growth avenue that is quite important, that is to start a bilingual school, that is our franchising of bilingual schools that we launched last year. So, in this that we have, it's exactly one year since we launched our bilingual franchising. We have two operating units in São José do Brasil and Alcagiria, our first unit that is a franchising. overcoming our expectations with 190 students. The target was 120, which reinforces our confidence in our business model. And we are here to launch CPC Pasteur in São Paulo. That will be launched in 2025 with a flagship of about 1,000 students here in São Paulo. I also emphasize the acceleration of contract signing. We have two contracts signed in 10 units of the Federation, which is important to us. And most importantly, we have more than 230 ongoing negotiations. So we reinforce our trust in START that will soon be an important business line to our company, close to our core business and our competence to generate good academic results. Lastly, in slide 14, I would like to emphasize the launch of Plural IA, that is the artificial intelligence in our platform, serving to our servers. And we also launched that with an intelligent assistant to professors and educators. And we have this assistant in the creative content of the platform that the teacher can have consultations and classes and exercises and homework and generate videos or audio-visual material for classrooms. So this is an artificial intelligence with the content that the teachers use, the same for the students, so that they can study and clear the doubts with the generative artificial intelligence. We believe it's a technological breakthrough that will create a big bond with our teachers and students, and it will be offered to all the network. With that, I pass on the floor to Fred to go on with the results of Saber. Thank you, Madigan. Thank you all to participate here, start the presentation in slide 16, talking about Saber. Just to remind you, the investors, that Saber is the business of the Didactic Books, Red Balloon, and other businesses. So I emphasize here the net revenue in the first quarter of 24, with a growth in revenue of 47%. Reaching in the first Q, a revenue of 193 million reais. This growth comes from the sales of the national program of Didactic Books, with a growth of 55%. Additionally, an increase in the sales in our program, Acerta Brasil, with a growth of 137%. Considering this growth in the revenue, we also had a growth here in our EBITDA. And this growth was 40%, about 40%. And we reached here a recurrent EBITDA of 47.6 million reais. However, despite having a slight retraction in the margin of the company, this retraction of about 1.2% was due to the cost of paper and printing that were still related to the amount that we had in our stocks in 23 and regarding the concentration of revenue in products of lower brands. However, our expectation is that this margin recovery is present in the next quarters. in line with the margin in 23. Just to finish the presentation of Sabir and go into the final part of the presentation talking about Cogna, that is the concentration of some of the three big business. I emphasize the financial result here in the graph in the left. Strong growth in the net revenue of 15.7%, reaching 1.538 billion reais. I emphasize, as mentioned before, a growth in our three business units. Just to remind you, Crouton growing 12.5% in net revenue, Saber 46% growth, and Vasta a growth of 14.4%. showing how strong our businesses are. And mentioning the recurring EBITDA and margin, we had here the 13th consecutive semester of EBITDA growth reaching 9.5%. And this recurring EBITDA reached 496 million reais. The marketing strategy for Proton and the price of the stocks as I mentioned in the presentation of Xavier, impacted our margin, our consolidated margin, decreasing 1.8%. But as I mentioned before, our expectation is that in the next quarters, we would have a margin that would go back to what it is and what we had in 23. Now in slide 19, that is the operating cash generation, we had a slight reduction in the operational cash in the first part of 24 compared to 23. We mentioned before that we had an anticipation in the operational cash to the fourth Q of 23 of about 50 million reais. And somehow it impacted the previous quarter, but also this one, if we didn't receive in anticipation in the fourth quarter of 23, we would have 50 million more. So we would reach 260 million in total. So we had anticipating marketing to strengthen our debtor cycle to bring the best student base. Additionally, in the graph, in 19 on the right. We have the operating cash generation after caps and debt service positive in 9.4 million reais with a growth compared to the first Q last year of about 56 million reais, which is quite positive to analyze that after the services and debts. In slide 20, I showed the net profit and the margin, so the net profit is adjusted. So our adjusted net profit, I mean, the difference between the adjusted net profit and the adjusted net margin, we have only one adjustment that is the amortization of our tangibles that is quite clear, and it's shown in page 21. We had here a decrease in the net profit of about 67 million reais. This increase here, we had an increase in the operational results of the company of about 12 million reais. But we had some effects like the one-off, let's say, in the transaction that we had with the LEV of about 16 million reais. Our net profit, as I mentioned, last year we had a net profit that was positive of 54 million reais with a loss of 8.5. But this effect, as I mentioned, of 16 million reais of one off. Just to remind you that last year we had a reversion of contingency of opening values that in the first quarter of 23 was positive. in about 75 million reais, and we didn't have this effect in the first Q24. In slide 21, talking about leverage and indebtedness, we see the positive trajectory of how the company is leveraging. So we have the leverage on the net debt of the company. over the EBITDA of the last 12 months. So in the first quarter of 23, we had a leverage of 2.1 times. And in the first quarter of 24, our leverage reached 1.79 times, a reduction of 0.30% in the leverage. And this leverage is mainly due to the strong cash generation and the growth of our business, mainly in EBITDA. In April, I emphasized that in April 24, the company carried out the full optional early redemption of about 170 million reais to reduce the net and gross debt. And this debt has a cost of CDI of 2.75%. So the company is in this process of the green negotiating the liability management. So in April 24, we also started offering the public distribution of the shares of about 1.8% with a capital cost lower than the prepaid debt. And the goal of this operation is to allow the debt and additionally to reduce the fees. And in the last slide, slide 22, it deals with the previous one because the company has a cash position in March 31st, 2024 of 1.72 billion reais, a gross debt of 4 million. And this net debt is shown of 3,275,000. The amortization schedule is in the other slide. The company has a lot of cash and we are in a different process that today our credit is better than the previous years. And we aim to see this liability management process bringing the reduction of that along with the cash in every quarter. Lastly, I would like to emphasize just for information that we adopted the IFRS 16, 2019, and we recognize our lease. Then we are given an important information to the investors and analysts that in the first quarter of 24, our amount of lease to be paid and ready to be paid is 2.8 billion reais. of which 1.6 billion in rental obligations and 1.2 billion in renewals. That is the right of the company to have the pre-negotiations and to renew automatically the contracts. This information is important because, as I mentioned many times, our contracts are contracts that have nothing to do with IFRS 16 We had the term of the contract plus the renewal, so we get visibility here to show that the renewal is the right. I have no obligation. I have the right. And if I do that, I have one more billion in renewal. So 1.2, if I don't take this right, I don't need to pay for these two billion in the long term. With that, I finished my brief presentation and pass on the floor to Roberto Valente. Thank you, Fred. I think that we started 24 as we finished 23. I focused in our six pillars that we call the six strategic pillars. Obviously, growth is one of them. There is no revenue if there is no growth. So that's why I reinforced that the revenue growth in the three business units make us confident that the business is healthy with the high potential for growth. And I would like to reinforce the point that we are quite optimistic with the ability to deliver growth in the three business units. I mean, Prato, Vasht and Sabir. Experience is another pillar and an example of that is the anticipated enrollment to give a better experience for our study and in a better way enrollment and we have a lot of initiatives with clients like the pastor with all the uh process of attending schools and returning to schools as mega mentioned and the students and teachers and the example that he gave put out and in uh online education and the b2c initiatives important to improve the NPS of our experience of our students that is growing and evolving with all the developments and to improve the systems. Efficiency, obviously searching for efficiency and gaining performance and improving the margin is still our focus and the cash generation. The operating cash is positive and it shows that we can generate efficiency and they call the K-TEX investment thinking about the growth of the company in the long run as taking all the services of the debt and deliver the company. So this is an important pillar in this part of the company forever and we'll keep focusing on that. People in culture, I reinforce what I say that we have this team spirit, present and customer centricity It's important we need to do well with the students and schools and government and all the development of talent and diversity. We have the GPT-CEO award for many years and this is the second year that we are GPTW specifically in this niche of women. Innovation is part of what we are trying to do more and more. So example was the partnership for post-graduation with McKinsey, as we mentioned, and Start Young, the bilingual franchising, and the B2G initiatives as the infoproduct platform, the co-creators, that is a smaller operation that is growing every month in the DMV, and I'm pretty sure that in the future will be a very important initiative. And obviously, we couldn't forget the ESG as one of the pillars. Remember that we are the first company to be part of the EZD3, the only company with Proactica seal from the government that we understand is very important, especially to all the sales initiatives to government and internal controls that we have here. So just to reinforce this point, we are still with the same strategy that we had for the last three years. We are all here, especially those here in the company. We have 70 partners in the company who want not only to deliver the guidance for 24, but also to generate value to the shareholders because we are the shareholders of the company and we want the company to generate more value. Having that said, I'll open the floor for the Q&A session. Thank you very much. Now we start the Q&A session. Remember that to ask your question, you must click the Q&A icon in the bottom part of the screen and write a question to be in line. When you are invited, there will be a request to activate your mic, and then you have to activate your mic to ask the question. We ask you, please, to make all the questions at once. The first question is from Luca Marchesini from CellSight. So Luca will open your mic so that you ask your questions. Luca, you may go on. Good morning, everyone. Thank you for the question regarding the expenses with marketing and sales that we see a relevant increase in the quarter that you mentioned would be strategic But looking to the future, the thought is, thinking about the movement of consolidating a better brand, how much of this work was carried out and how much should be done? I mean, how many quarters to see a higher level and when you see not a normalization but a drop in this level? Please, thank you. Hi, Lucas. Thank you for your question. We understand that there is still one more quarter that is the second one with all the funds that we purchase and all the agenda of investments in the brand. So the second quarter, you will see a little bit more marketing, but starting on the second quarter, the marketing expenses will decrease. So it's not impermanent. Obviously, building a brand and awareness is something that is never stopping. If we take the graph that I showed with the participation of search and the total search, we have 14% of all the search today. But obviously, if I can have 17, 20, 30% of search, it is a better awareness for the brand. And we'll search for that. It's important to make it clear, Lucas, as I said, that everything we do in marketing is quite well calculated. A great part of the investment we have is I would say basically what we do is to invest in digital media that we can manage quite well. I reinforce the point that we are a world benchmark. Even to Google, our case is presented in many of their events, not only here, but also abroad. And even in the new book of Philip Potter, we are there present as a case of efficiency in the digital marketing. So I reinforce that despite the volume of marketing and investment is higher from the point of view of Apex, it's good and it's well thought and administered. So the CAC will have a small growth in the year, very small, but we have one of the CACs, one of them that is the acquisition with the lower cost of the market. So it is just to reinforce that it's like an expense that we don't know what we are doing. We know quite well what we're investing on and we can regulate to gain on efficiency. But to answer your question, more than one father for us to finish this first flight, as we say here in marketing, but in the second semester, who have much less expenses in marketing. This is the plan and this is the budget. Okay, thank you very much. Let's go to the next question from Jessica Miller, self-signed analyst. Jessica will open our audio for you to ask your question. Jessica, you may go on. Good morning, Roberto Madagafred, and thank you for the space for questions. If you can go deeper on the competitive myth, because Roberto mentioned you are seeing a positive microenvironment to the beginning of the year, but when we look at the growth of the ticket in the on-campus segment, we see like a flat growth. I would like to understand how it should be looking to the future, taking into consideration that you have a strategy to increase the mix of premium courses in this segment. I'd like to understand how you see this strategy. Thank you very much. Well, Jessica, thank you for your question. So I'll start with a structural explanation because I think it's important to say that the entering ticket is quite influenced by the competition dynamics of the market. So our strategy is to be competitive, but obviously not to be the first mover for price reduction. As all peers, we have assessment in prices that is dynamics. We use robots to have that more efficiently. so maybe in one campus the course is growing and in the other unit it's decreasing so this is the first point of what i feel in the last cycles is that the competition for prices is more organizing it's less aggressive i think we've seen that in this first quarter but what i think is that there was more demand on the market. We saw a lot of demand in January and February, a lot of conversions from any romance and in the campus, especially in the on-site search, it's growing and it shows that families have more money, they are choosing more home site courses and the first option in general is presidential when they can pay they choose for that i would say that this growth in the presidential would be due to this availability of money on the market and people searching more for the courses but these courses are competitive so it's more difficult to pass on ticket we can grow the amount but the tickets are competitive then just for a direct response of the average ticket to not grow so much in the presentation, it's that we have a natural effect that the graduates, they leave the student base with a higher ticket than when they come. So when we say that our presentation graduation basis is stable or growing 0.2, it means that part of the students that are graduating We are recomposing, but the ones leaving, the veterans, they have a ticket of four or five years of inflation. So their ticket is higher than the entry ticket. So sometimes it makes your understanding a little difficult. So our expectation is that we can repass the same way we are doing with the presidential week because of this dynamic. So I gave you a strict explanation for you to understand why tickets are not growing despite the volume is growing. I think if the demand in the presidential keeps this way over time, we can adjust the prices. And then the last point to emphasize, despite your question is in the presidential, in the online education it's important that the capture has more revenue obviously the average ticket here is growing it's good each of the weeks and online has more engineering courses with higher tickets but important is that the revenue grows because as the costs are basically fixed revenue is a growing margin i hope i could answer your question Okay, it was quite clear. Thank you very much. The next question is from Rafael Barros. Rafael, we'll open the mic to you so that you ask your question. Rafael, you may go on. Thank you for taking my question. Well, I have two questions here. The first is to understand a little about the digital ticket. because you have a strong growth in the digital ticket. And I'd like to understand how much of that, of this increase in the ticket, is sustainable. If there is the risk of having abandoned this number, if there is some sustainability in the impact. and if it impacted positive ticket. And the second question about VASTA, about the B2G, that it was the biggest responsible of the revenue growth. But we have some difficulties in understanding that. We'd like to understand a little bit the functionality of this account and the potential risk of increasing the B2G that it can bring. Thank you. Rafael, thank you for your question. First, I'll answer the ticket, and Meliger will mention the B2G. Well, the online ticket in this cycle had a positive growth of more than 10%. I think it is much more related to this growth that we see in the interest for courses that are more presential, like the mix of the online courses has a lot of participation of the more presential courses. So I would say that there is no difficulty in believing that the growth would be in double digits, all the quarters. It's difficult to foresee the interest of presential courses or online courses that are more hybrid. How long it will happen during the year. As I said, the first quarter was very good, so I would say that yes, and I believe the tickets can keep growing, but online courses at a level of 10%, it would be quite optimistic. And now I pass on the floor to Madigan to talk about B2G. Thank you, Roberto. Rafael, let me talk about the B2G. So, as mentioned in the presentation, we started with the acknowledgement of 69 in the regarding Pará. So, we worked a lot in Pará in this first quarter, we supplied all the elements there, and we made the services of this contract available, so that's why we acknowledge the revenue. There may be other requests in this contract in a lower scale over the next quarter, but what we expect, I mean, we are in a funnel, with all the states, we hope that in the second few, we can sign the contract and perform in the second semester. So thinking about seasonability, I can give the expectation for this year, that is this acknowledgement in the first quarter and the expectation in view of more relevant acknowledgment of a graphic UB2G in the second semester. Remember that in coming a day, as we didn't have a better number, we would say 20% growth in our B2G business. So we take the expectation of 95 million for the year, and we, I would say 100 million, and we acknowledge 69, so you may expect other 30 million happening in the second semester. Regarding the PDD, it is a business that we believe there is no risk in BTT because the hiring is only if we have a 50% budget. So we don't hire if we don't have an extended budget. So once we hire, there is an extended budget for that. And when there is the purchase order, the service order, if we consider the private market, that would be this request for purchase, and then we keep this budget in the government. So this is a business that after performed, we don't have BDD. Okay, thank you, Roberto and Megan. Now the next question from Lucas Steiner. Lucas will open your budget so that you can ask your question. Lucas, you may go on. Good morning, Madigan Valerio and everyone from the space. I have two questions. So the first one is about the marketing. I think it was quite clear in the budget for the year, but I'm thinking about the trends. Do you think that the sector as a whole is more aggressive in marketing and it could imply a level of expenses that is structurally higher for the next years? And the second is about the Kratom med ticket, if you could comment, because it grew 4%. So how was the process in this increase? I mean, how is it in medicine? If there was an impact for the meds or mass medics or FIES? Well, Lucas, thank you for your questions. I'll take two questions. I guess, no, the market expenses shouldn't be greater than it is in our longer term, although it is not this way. So we don't see as a percentage of that growth above what we have, especially due to these opportunities of efficiency that come from investment that is more and more digital. I understand competitors are also working with this movement for the digital world. so the gains in efficiency are much greater than the competition that allows us to spend more in marketing. So this is my understanding. I can talk about my peers. Just for you to know in our model, we don't foresee having more expenses in marketing. And the average ticket in Kratom Med is important because Kratom Med are premium units, so we have the ability to repass the inflation in an important way. So it's not only inflation, but we can also give more than inflation. So that's why they have a better ticket performance. And there's also the mix of residential courses with higher LTV. So I think this is the dynamics of ProtonMed with the ability of being even above the inflation for some years. I don't see Why not keeping disability over the next years? Okay, Valerio, quite clear. Thank you very much. Now let's go to the next question from Leandro from City. Leandro, open your mic so that you ask your question. Leandro, you may go on. Thank you. Good morning. The first question is, has to do with marketing. So what if we think about the capital margin for the year and the expectation of deceleration of marketing for the second semester? Can we imagine stronger margins? How would be the first quarter if you could talk a little bit about it? I think it would be interesting. This is the first question. And the second, I'd like to know about the printing. So I've seen that there was a slight increase So if you can discuss a little about the strategy for the program, how it's working and how it's used, it would be good to understand that. Thank you. So Leandro, I'll answer the first one about the Kraton and Fred will comment the second one. Our expectations for Kraton margin taken into account the effect of the market in the first quarter, It's a positive stable margin. I can give you a specific number, but it's not negative. Our expectation is to gain in the margin, not just in the efficiency. In an operation like this comes over time, but we have the primary margin. If we gain efficiency, efficiency of the operation, expenses, everything is sufficient to compensate the expenses with marketing. and our expectation is to gain a margin in 2024 compared to 2023. Now I'll pass on the floor to Fred. Okay, thank you for the question, talking about PMT. As I mentioned before, we still have the program of late enrollment, but in the past, this difference was only paid after the student graduated. This program is a program that now the student will pay during the course. So what happened in the first quarter is that we have, in fact, an increase in the late enrollment students entering in this program later with an increase in our receivables, but the epitome is diluted because the student pays during overtime. So our PDD reflects this effect. We have a PDD that is about 70, 75% of the total program. So to us, it's nothing strange. It's natural to our business. Okay, thank you. Now the next question from Mirela Oliveira. from Bank of America. Mirela, we'll open your mic so that you can ask your question. Mirela, you may go on, please. Good morning, everyone. Thank you. In fact, I would like a follow-up on marketing, because in 23, in the fourth quarter, we see an anticipation and this expense helping in the first semester with new students, and I would like to understand if this strategy will follow this year and how it deals with this delusion that we'll see in the second semester if we wait for some impact for the next cycle 4-25, considering there will be less expenses in the second semester. And the second question regarding guidance, considering the pressure for market, so what lines would have some space to deliver the top guidance as possible when it would be necessary to reach this 2.4 billion. Thank you. Mirela, thank you for the questions regarding marketing. No, we don't see any greater expense in marketing. So it's important to remember that the second semester, the cycle, from the point of view of the amount of students, it's lower. We generally say that from the total of students, 60% come in the first semester and report in the second. So the expense is naturally lower, the amount of students is lower. We always take into account how to use capital. as a reference and we know that in the second semester we'll spend less in marketing because naturally considering the efficiency in capital, the nominal volume will be lower. So we are quite well in knowing that this is the experience that we've had in the other years. I hope I could answer the marketing and regarding the guidance I'll pass on the floor to Fred and then to Clement. Okay, Merala, thank you for your question. Your question is, if we think increase of expenses with marketers, what are the lines that we need to look ahead? We may have this compensation. The growth of revenue, you see the strong growth in revenue, and payments are still in line with the same improvements, so looking to the future, we might have some positive effect in PCOD and corporate expenses as a whole. And regarding courses in other places, if we go to the future, we may have a positive effect to compensate a little of the marketing effects. But what I would like to tell you about marketing is this default that Robert mentioned, and we've mentioned sometimes, that is the effect of displacement. I had an anticipation, so the relation of the marketing forces with the revenue is not changing, remembering that our CAC is better than the EBITDA. So this is a little bit of the update, but this is something that we see as a displacement. So just to complement Miguel, I guess we still trust a lot of our guidance, both for EBITDA and cash, and it's important to say that the one driving the result in this trust is the cost of revenue growth. With the revenue growth in this way, the decrease is natural in the fixed cost, so the first quarter we grew 15.7% of revenue, with a lot of fixed costs that will be diluted over time. We invested more in the first quarter, and we won't do that in the second, like you as well, Gonzalo. There are many opportunities in the B2G that we expect to perform in the second semester. And I think there are many things happening that we are discussing with the market that makes us trust that the The result of the first quarter is quite well, especially in the top line. And we are completely aware that we will give the guidance of EBITDA and cash. Thank you very much. The next question from Caio. Would it be worse over time? As we know, the dropouts are very high. The first model is that the student is the basis. So anything you can share with us about the profile of the students and if you see that this is a student that you in fact know. So thank you very much if you can share that. Okay, Caio, thank you for the question. We are convinced not due to perception, but also by numbers. Generally, when we analyze the dropouts and re-enrollments, we see the students almost with the daily entries. So I would say that the first and second and third January, if we compare who enrolled in January or beginning of February with more enrollments than in April, we see, for example, whereas non-payment and participation in tests and exams and in the virtual environment of learning much higher. So we know in practice that, yeah, they do have better quality. I think we are improving the rates of enrollment. That's why our student base is growing. We grew 12%, so it's nothing new. We know the effects. of the anticipated enrollment, and we know it has a positive effect as we are improving the enrollment. Without the strategy of anticipation, we understand that it can even be better for our enrollment rate. So just for you to understand, we have the enrollment rate 2% better than the corresponding cycle last year. So we know that our base today is 2.7% healthier than last year in the same period due to the same series of actions and effects that we have. But obviously, having the best students, we know that the students in January and February, they made decisions, they made everything at the proper time. This is not the last time decision, you know? so we can be sure it will bring some value. Okay, thank you very much. The Q&A session is over, so now I'm going to pass on the floor to the final considerations of the company. Well, I would like to thank once again all the Cognite team, almost 25,000 employees working daily to our students and clients. Thank you very much. Congratulations. The result belongs to us. I would like to reinforce that the team is here to deliver the results of the analysts or investors. Thank you very much and have a nice day. The result of the teleconference regarding the results of the first quarter of Cogna is now over. The Department of Relations with Investors is available to answer any other questions or doubts. Thank you all and have a nice afternoon.