Cogna Educacao S A S/Adr

everybody, and thank you for waiting. Welcome to the teleconference on disclosing the outcomes of fourth semester of 2024. Those who need simultaneous interpretation, we have the tool available in the platform. In order to access that, just press the button Interpretation, the globe icon in the lower side of the screen, and choose your preferred language, Portuguese or English. For those listening to the teleconference in English, the option of muting the original audio in Portuguese Express, you just have to click Mute Original Audio. We would like to inform that the teleconference is recorded and it will be made available in the website of the company, www.ri.com.br, where you have the full material of our output results. You can download the presentation On the chat icon, also in English, during the presentation, all participants will have their phones, their microphones off, and then we'll start the Q&A session. In order to make questions, click the icon, Q&A, in the lower side of your screen, and write your question in order to put it in line. Once it's requested, the request to activate your microphone will appear on screen and then you must activate the microphone to make a question. We would like to tell you to make your questions all at once. Before moving on, we would like to clarify that Eventually, declarations that may be done throughout the teleconference related to the business perspective of Cognite, projections, operational and financial goals, are beliefs and premises of the company, as well as information that are currently available about Cognite. Future considerations are not guaranteed of performance and involve hazards and uncertainties and premises because they are related to future events and therefore, they depend on the circumstances that may or may not occur. Investors and analysts must understand that general conditions, sector conditions, among other operational factors, may affect the outcomes of Cogna and may guide to outcomes that differ materially of those expressed in future projections. Now, I would like to give the floor to Mr. Roberto Valerio, CEO from Cogna, who will start our presentation. Please, Mr. Roberto, the floor is yours. Thank you. Good morning, everybody, and thank you all for participating in our teleconference on the outcomes of the fourth quadrimester of 2024. As we always do, we have in this call Frederico Villa, our Financial Vice President, This call must endure for more or less one hour, with 40 minutes of presentations, followed by 20 minutes for the Q&A session. Well, I would like to start this conference with slide number three, stating that clearly the fourth Quadimension of 2024 was amazing, and 2024 as the year was excellent regarding but undoubtedly the highlight is the guidance delivery that we're always certain that it would be in the deadline. And that's why we all know because we live in Brazil and we know how things are, but the main highlight, the main satisfaction both from the management side as well as of the team and the council is that we haven't just reached the guidance, but we've reached goals of EBITDA. We've grown more than three times our EBITDA, which is leverage of 33% a year. For the past three years in our EBITDA and GCO, we were even better. We've grown four times with 45% a year. obviously, regards the year, but it's important to highlight that everything has been done with the same assets that we started in 2020 with an expressive role throughout this journey. Here, over this journey and the preparation for this presentation, we've wondered how many companies in Brazil faced with a macroeconomy as the one we have competition, which is quite strong in the sectors we react on. How many companies in Brazil were able to grow that much in four years with such a turnaround strategy, followed by a growth of such magnitude? I would like to reiterate that the outcomes, the results, are a fruit of a simple strategy. Throughout these four years, we say there is no rocket science. It's a simple strategy, quite clear. The management, the way I see it, is very competent, and it's such a team that is very talented and resilient, most of all, to overcome all the challenges and to implement all the projects and make the changes that we had to do over these two turnaround steps for growth. I am sure that even the skeptical ones must acknowledge our capabilities for delivering that keeps our down-to-earth perspective, it has consistency, and it shows our consistency. Now, going to slide number four, the management message focusing on the fourth trimester, the revenue of 13.2%, and to be an almost 9%, 8.9% in 2024. We say that the fourth trimester, ever since the first trimester, we said that the fourth trimester would be very strong and indeed it was, especially regarding EBITDA and revenue management, revenue generation. And 47% is a strong expansion of image. And I would like to reinforce that it reflects the consistency that we pursue. This is the 15th consecutive trimester of the increase in our EBITDA of our margins. The three BU's have been growing quite strongly. EBITDA, Crotone was growing 55%, Vasta 28%, Sabele 77%. So it shows the quality of our assets, the quality of our VUs, and how are we able to deliver. I would like to highlight SABE has overcome the guidance that we've given. We all know that SABE and PNLD are something very difficult to project. So, we started this guidance practice, and they have a guidance of 200 million, EBITDA, and 230, actually. And we were able to reach 157 million, which shows the quality of our products, especially the strategy of offering complementary solutions, government solutions, especially municipalities, but also a few states. of reinforcing learning. So great outcome here. Now back to the fourth trimester, the operational generation of revenue post-capits has reached 37 million, a growth of 40%. We mentioned, we've said before how the fourth trimester will be strong, that's natural. We both said they are able to They have a lot of income cash, the fourth trimester, so we worked throughout the whole year by means of P&LD, we delivered in the fourth trimester, received the government's cash, this is why we had the fourth trimester, very strong. They always say that it would be strong, and in 2024, our net revenue almost 880 million reais as a net revenue this is how our company will be able to start assume distributing dividends and this is the proposal that must be approved in midi now regarding the leveraging there was some questions about this four years we were able to reach 1.35 times the beta I'd like to highlight that this is a tremendous leverage since the first trimester of 2018. Of course, we have a growth scenario of interest growth, but our consistency in growing with the results and, above all, with the reduction of net debt of almost R$100 million, we have a great credit quality for sure. Many look after that and they want to talk with us. We are very glad with all this generation of revenue and aiming at the future. We believe we'll keep on growing like this. The priorities on the cash use are all oriented towards debt and we are repurchasing into our stocks. Even given the payments of dividends, we We will keep reducing net debt and repurchasing stocks because it will keep on growing for 2025. Well, now moving on to slide number six, to talk about Krotten and the operational side, I would like to start talking about the collection. There is little to no impact in our outcomes, the outcomes that the revenue already shows. And still, I need to comment that about the collection of four semesters of 2014, 14% under the same period in 2023. But this isn't something concerning for us due to some simple reasons that I will explain. First of all, the smaller collection of students via ProUni, the number was smaller. And why is that? There was no need to make available more students, so this base of collection has dropped. Of course, it impacts the overall collection, and also it's made up of adjustments, and we've reduced the intensity of the actions we were undertaking to recover the Winbeck students. In order to try and recover those students, we are always making accounts, of course bringing an evaded student demands a lot of effort and we understand that this is a minor quality revenue so our efforts are all towards growing in order to and the reduction of feedback has impacted our collection of course it's a complex semester from the perspective of collecting and distance learning people that are studying percent online it's a very volatile market but i think now what we need to do is look ahead And of course, we cannot give guidance, there is still some time missing in the collection cycle, but 2025 is positive in our revenue and very positive too. So, looking ahead, we believe in the continuity of revenue growth. Now, talking about evasion, and I think it's important to note that even though we had a mixed based in EAD, distance learning, there was a drop in 0.4%, even with VIX and distance learning that has a lot more evasion, actually. But now looking on the evasion rates of distance learning, we can see that it had dropped in the year after year. This is also very important in our outcomes. Now, specifically talking about the base of students that's strong grades, 2.5% and growing. Of course, distance learning grows at a bigger rate. I would like to highlight the on-site learning. This is the first year we grow based on the on-site learning. That's something special regarding these four years. Now, moving on to slide number seven, talking about revenue. The revenue over the semester has grown almost 16%, which is very strong. This growth has raised in volume in the last collection cycles, and the good harvesting that we've done impacts the total revenue of the company, re-subscription, Registration has improved, the year after year has been better and better, and this is how we were able to share the extra. Specifically here in the fourth trimester, I will explore further ahead, but we also have an alteration on the registration of discounts that also contribute to the acceleration of the revenue in the front. In the accumulation of the year, we've grown And even though it's a somewhat timid growth, the revenue has resumed its growth. So it's been strong 13.8%, EAD 70%, but on-site that four years have dropped, now is resuming its growth. And now we see a positive collection cycle on site learning. So we have good prospects in this business line. Now moving to slide eight, talking about the that revenue, and I think they raised 20% of the profit. Of course, the greater participation of EAD students helps a lot in that, because EAD costs are fixed, so greater participation of students, and the mix generates a revenue, but I would like to highlight that we've all been able to have on-site students' class, so there are more students being registered to have more robust classrooms, and that has an impact on the initial profit margin. All businesses growing their net revenue 10%, 20%, 30%. Very healthy in the year accumulation, especially crop media and EAD, business learning. The final highlight of 2% roll points for this trimester. Now, slide number nine. Talking about expenses, I think I would like to highlight that the total expenses has grown 3%. Our revenue has grown a lot more. Our revenue has grown 16% and 12%. Of course, it has hit our margin. Just a quick highlight on corporate expenses. So, we've won 1.2% of points of effectiveness, a change in process, a change in systems, automation, the use of AI has enabled us to gain efficiency. The reduction in corporate expenses, two of these same items, but also has accelerated due to the revision of contingency in $35 million and text processes in the fourth trimester. We're at 2022, but in the fourth trimester, obviously, 35 million is a huge number, but not that relevant given our base. I would like to go a little further on the PCLD. There is a change that it's important to clarify to you all. First, we already expected that PCLD would come a little bit strong in the fourth ride given the seasonality of VPD in the first three trimesters. So we renegotiated the first trimester with students, we renegotiated the second, and the re-registration period, so they pay their debts throughout the month. So naturally, in the fair trimesters and the even trimesters, this is what happens. In the second item, we've had a change in the accounting, registers of evaded students, and such a change is aligned to market practices. So I think now we are equal to all the other players in the way they do such a registration. But above all, most importantly for us, such change will enable our election teams to be more effective in their negotiations, bringing more cash to our companies. Very important. Such change has no impact in our EBITDA. It's going neutral. It's just a change in years. And here I would like to reinforce the best way to look at things, given the seasonality of the trimesters within the PDD of the overall semester. I was given a lot of highlights. Now moving to slide number 10. The expenses of the year have grown 13% and one revenue has grown 11%. Obviously, it hits our margins. In the same lines, we see again the efficiency in corporate expenses, a half a percent of points, 5.4 percent of points in operational expenses. Here, I would like to highlight that marketing expenses may remain stable. And to be conservative in the practice, we even want to 0.2 percent of points in marketing expense over time. net revenue, what reinforces what we've stated in the first semester, repeating the second, third, and now we are showing it in the fourth, that has just changed the strategy of marketing, as it's focusing a lot more on the markets in the odd semesters and the year would be stable. So I'd like to highlight also, I think this is a construction of credibility that's important, not just because through the last four years we've been delivering consistency, but it reinforces The point on what we've said, we have a tendency of being rather conservative, and we are here carrying out what we said we would do. So, we've won 1.3% of points due to what I have already mentioned, and operational expenses, part of the cost. So, the baseline growth generates some money. on the PCOD, specifically speaking of all that, has been the change of the registration, the accounting. I would like to highlight that PMNL is stable for the fourth year. So, in fact, we have no problems in the PDD. It was just a change in the registration. Now moving towards slide 11. Of course, this is the outcome of everything I've said in the previous slides, but EBITDA has grown 55% in the trimester. We've won 7.4% of points in our margin, and the year accumulation has grown 24%, 3.5% of margin points. I remember that we got some requests in the first trimester of the year, Wow, have you done everything, the whole research on Proton? You've expanded your portfolio. Is it possible to grow more at Proton? Yes, we may be able to grow one, one and a half points, but shows that some of the same assets, it shows that there was a lot of, the team is able to look at the processes of the systems and being able to do it more efficiently. Proceedings are not focusing on growing without efficiency. There's a lot of growth, too. That being said, I wrapped up the crowding session. I would like to give the floor to Guilherme Madigan, president of VASTA, so he can make his comments. Thank you, Roberto. We'll move on to slide 13, talking about the net revenue of VASTA, starting off by the chart on the left, talking about the trimester. I would like to highlight the acknowledgement of 619 million in our ECD, the growth of 20% that I think was my message. I would like also to highlight the acknowledgement of 35 million in our new business line, B2G. B2G we've grown and the general revenue has grown 35%. So the year revenue has grown 12.6%, with a highlight for acknowledgement on this peak, which is about 1,462,000,000, a 14.4% growth, which is aligned to what we imagine we will be able to maintain for the ACV in the next few years. With regard to B2G, in Yeruvenira, we are growing 29%, reaching 105,000,000. On slide 14, now I will make brief comments on the trimester's expenses and I will go deeper on the annual expenses. In the trimester, we had a growth in productivity of absolutely all ESG&A expenses and direct costs We've had a raise of 4.9. Basically, a mix of products and seasonality. This is no effective enhancement in the company's costs. Now, slide 15, we have a better portrait of the expenses and costs of the year. Already normalized throughout all the year's trimesters. We see all corporate expenses that are aligned. the operational and PCLG expenses with gain productivity, specifically in our SG&A, with 8% of points of production. Here we see our direct costs, such as the percentage of the revenue, something that is totally flat, a level of 31%, 38.1%. And the human expenses with 9.2%, Since our revenue has grown 12.6%, expected a little bit gain. The margin that you can see is slide 16. Slide 16. And I will start by reading the trimester on the left. We were able to reach 300 million reais. A bit during the fourth trimester, growth of 28.1%. And here you can see the margin of the portfolio method from 41.2% to 43%. Now the accumulated EBITDA will reach 500 million, which is a milestone at VASA. And our IPO will reach 500 million EBITDA, a 20% growth with regard to 2023. And the company growing, diluting its costs with a better mix of premium and complementary solutions, we are able to obtain a full-growth margin gain of EBITDA coming from 28% to 29.9% a year of EBITDA margin in our business. So we are very glad with the year we just delivered, a robust growth. for business and solutions, complementary solutions. And what isn't reflected in our numbers is how much we've walked already through Anglo schools. 40 contracts signed, two flagships in operations, seven units that are already operational in 2025. And the 40 contracts for sure will represent some schools opening for the next few years, and a growth trend that's very important for us, that together with B2G, which is already a reality, will add up to our company's organic growth. The organic growth, we are about two digits in core and complementary. And that being said, as we look and move on with this presentation, the floor is yours. Thank you, Guilherme. Good morning, everybody, and I would like to start my presentation talking about SABIR. So, slide 18, talking about SABIR's net revenue here in this slide, or net revenue. I would like to highlight the reduction of the trimesters, reduction that had two effects. The main effect is the reduction of the revenue due to P&LD. because this is a commercial calendar that does not contemplate purchases. And an impact on selling of superior learning, teaching materials. If I didn't have the accumulation, if I didn't have the selling of SEDs, in fact, my revenue would have a growth of 2.5%, instead of having a What's important is that the person is now moving to the left side. The trimester we had, despite growing the revenue, we had a net revenue of 75% among other services that are basically here represented by the Brothers for Government, Acerca Brasil, which had an extraordinary growth of 92%. Moving on to the next slide, you will see the output. the results. Slide number 19 from Saber, talking about recurring EBITDA and EBITDA margin. It's important to highlight that given the difficulties for projecting, or projection difficulties by the analysts on how the revenue would be the EBITDA, we see here, we have a guidance set about 200, 230 million accumulated a year. In the year, we were able to reach 257 million reais. So, we hit the superior end of the guidance, 27 million reais. Now, looking at the trimester, as I've mentioned before, the expansion specifically, a set of Brazil's products which have a better margin than that of P&LG products, they elevated our margin of our business. So really, talking about recurring margin, 50% of the fourth trimester and expansion of approximately 23% of all points. So it's been a fantastic year for Saber, the fourth trimester, which was our expectation. And this is why we passed the guidance. But in some ways, it has overcome our expectations. And such a number of data also is part of our cash. And we have the collection of data those products within the year 2024, as our expectations have been. Now, moving to the end of my presentation, then I would like to move to slide number 21 to talk about Cogna. So, talking about Cogna's trimester. The fourth trimester of Cogna had a growth of 13.2% with revenue of 260 million reais. remembering that we've grown together in our businesses and our revenue at Saber has grown, but both in the trimester and all year in Vasta and Corotum that represent approximately 90% of our business. So indeed, it was a year where our business has delivered excellent outcomes. Now moving to slide number 22, to talk about EBITDA, Here, the recurring EBITDA in the trimester, we have an EBITDA of 812 million reais, a growth of 47%. And in the year, 25.2%, reaching 2 billion and 174. Remembering that back in 2004, we had a crush on guidance. the guidance would be 2 million reais. We've had a guidance in 2020. We didn't know, we didn't know our revenues, but here, gladly, we see that we want to share to our stakeholders that our guidance has reached approximately 2.2 million reais, billion reais. Now, moving to slide number 23. to talk about net revenue. The best way to see our net revenue is not a trimester, but a trimester. What we need to know is the accumulated net revenue. We had a loss of R$192 million. Just reminding everyone that last year, we had a drop in the IRS that has impacted our loss and now this year we've had a revenue for distributing dividends of 870 million reais that profit comes from the use of our revenue, especially of our business, a strong growth of our revenue in our business, a bit the growth and the effects and reversions on the competencies that represented, and that's written, it's described, And presented in our release, the contingency has an effect on our net profit of 800 million reais. And thereby, the company has resumed its generation of profit. We are proposing payment of dividends for May 2025. That's being proposed of 120 million reais that will be approved in our general ordinary meeting. Now slide number 24, second guidance, the generation of operational cash. And here we don't have a guidance in our free cash, but I would like to highlight both the operational and the free generation of cash flow. We have a guidance for the year of delivering an operational cash of 1 billion reais. We've delivered 1 billion and 45 million reais in year X year of 70% and the growth of X trimester of 40%. As I have mentioned, such a growth in our cash that comes from Crotons and fastest revenue and a better conversion of cash and given the incoming of P&OD and cyber products. Here I would like to mention in our pre-cash generation, we've been here the generation of rational cash, post capex and post payment of interest of our debt, we were able to generate 395 million reais. This is the message that I would like you to keep in mind. So we can move to the next slide on the debt leveraging. The company had a debt in 2023 of 1.83 times remembering that our leveraging. of net debt over the past years. We were able to reach the fourth trimester 1.35 times. So it's noteworthy the amount of 400 million reais of debt. This is why I wanted you to keep in mind because it has a match with our generation of free cash. It was the 395 that's represented in our cash and our debt. So we had this reduction of our net debt reaching $2.2 billion. And this is another message I want to share with you. The average cost of our, considering the CDI, but in the fourth trimester of 2023, we had an average cost of CDI plus $1.16. We were able to reach the fourth trimester of 2024. The CDI of 1.75. And I would like just to remind you that the company in the year 2024 has renegotiated the liability of 100% of the debt. So that represents, it is represented in the financial results. And the message that is in our numbers, in our figures, I want to share with you the company. According to the accounting practices, we mark all the financial instruments and we have tests that are IPCA plus and we've changed CDI. So we've registered these devs, embarking the capital and the maximum. Considering the expectation of CDI on the long-term curve, our CDI close to 7% and our outcomes would be approximately 100 million reais. And this is in our figures. If we didn't need to market our leveraging would reduce a little bit. Now we're into the end of my presentation on the position of cash and leveraging. The message I would like to share with you is that the company has a net debt of 4.2 billion reais and availability of 1.3 million. The net debt, as I've mentioned before, 2 billion, 280, But now looking ahead, our timetables, even our renegotiations of the debt in 2020, we will start at 160 million reais, 26, 24 million reais. And starting from 2027, we will have a tower near to 1 billion reais. So it's noteworthy that for the past two years, we don't have a robust drop. I'm not talking about 2025, but I just remind you all to remind the world of 2025, but the operational cash generation of 1 billion reais, a net cash generation of 255. This doesn't look like a problem. And the final, the ending, I'd like just to remind you all that the company in January, 2025, we have announced the closure of the repurchase program of 44 million reais. And we started a new program of approximately 144 million reais. In December, 2024, we repurchased approximately 30 million reais and our Capital allocations is the best allocation that we could do. Repurchasing stocks means that payment, if we haven't done such an investment or a net debt, would reduce a lot more. It would be $250,000, but in our hands, on the board, this is the best we could do, and we've carried it out. And that being said, I would like to wrap up part of the presentation of the financial results and I would like to give the floor to Roberto Valerio. Very well, Fred, thank you very much. Slide 27 to wrap up the year. 2024, as we've always said, a simple strategy, six pillars, because they're very diligent in keeping up with all of them and improving all of them regarding our growth. Croton and Vasa have grown, Fred has explained the seasonality of Saber, but most importantly, you must know that we keep on growing and the best indication of re-registration at Croton, with subscription at Vasa both before and the complementary solutions. New product lines that we didn't have before, all complementary solutions, selling both through I've been studying to governments, several lines are growing, and we have perspectives of having even more things ahead of us. And our experience, I think that we've been quite well in all checklists, not just in the students' experience, but also parents' experience. The experience and the processes with the government brought on this year has been a lot of order. reference prize awards in the market that reinforce our commitment in providing the best experience possible to our students. And obviously this means an acknowledgement on the trust and the confidence that both our clients and students. Croton ever since its journey, Croton has grown 22% of points in the NPS of students of higher education. Invasa has increased 22% of points in satisfaction, and it's being recommended by partners in schools. So these are incredible outcomes that suggest that we've been working hard, improving our processes, focusing on clients. Effectiveness is in our DNA. We gain efficiency in all business units. We're very diligent in the operational side and the processes. using new technologies, and that certainly has helped us reach this four-year guidance. Without such a perspective, we wouldn't be able to go this far. And efficiency, something that's not a privilege from one or another area. All products have their efficiency in hand. And culture is very important in our society. teamwork, spirit, vision of growth, shared growth and thinking about the new, not being stuck to what we already know, looking ahead and the survey of engagement with our employees shows very positive improvements in these four years, a NPS employee which is the goal that we apply has 70% of points that shows that we have a team that like the company, likes to work here. They are all quite engaged. They believe in our strategy. And this is one of the main, our main strengths. The innovation is also part of our strategy. We've been investing a lot in several front lines, not just in hype or AI, the hyped ones like AI, but obviously building alliance with startups. and the opening, bringing improvements to everything we can do. I'm very glad with the award from Valor for innovation. We are amongst the 30 biggest companies, most focused in education, we are the 27th, and for short in education, we are the first. ESG, several of our directions, especially those focused on education, our core, I'm glad to being able to keep on performing as much as we deserve the Education Award, and we are glad to support this initiative, aside from several other forums on education and ESG. And that being said, the presentation side is finished, so we start the Q&A session. Thank you all very much. Now it starts the Q&A session, reminding everyone that in order to make your request, you must click the Q&A icon on the lower side of the screen and write down your question to enter in line. As you are announced, as an announce to turn on your microphone appears on screen, you must activate your microphone to state your question. We would like to request questions to be done all at once. So let's go to our first question. Rafael, self-signed analyst of XP. Rafael, move on. Well, good morning, Roberto, Fred, Guilherme, and all the other participants. Thank you for giving room for our questions. We have three questions on our end. Regarding crowdfunding, how should we see the behavior related to greater representation, the impact of the ticket. I'm trying to understand whether there was some effect that I think it's worth mentioning. And the second question, essentially, regarding The vision that was reverted in the previous trimester, I think a more comfortable model. And the third is more related to 2025. It was a brief talk on how do you see this cycle of collection. But I would like you to give a little bit more details on competitiveness, on competition or perhaps market inside and also separating regarding the different segments. Thank you all. Thank you, Rafael. I will take some questions. Fred, feel free to contribute regarding the net margin of Crowd1Metal. Actually, we can give guidance, but I'd like to tell you that the participation, the great participation of distance learning should be neutral. The margin stands. We indeed have more students growing, the base of ex-med students in the total. But we also have the maturation of several new courses. So this year alone, we've approved 110 positions on medicine in Santa Luís and Contemporá, that will affect our margin for a command of sites that we have the maturations of, courses of more, mais médicos, So, in general, I could say that it's neutral to the market. I think your question regarding the PCLD, right? When you've mentioned reversion, PCLD, I guess, and I think... Rafael and Fred, please feel free to make your comments. It's not perversion, but rather the effect that I've mentioned in the third trimester. In fact, we have a minor piece of LG due to the renegotiation. And the fourth trimester, it returns stronger because the student space is not that much debt, but it ends up more... With that, that's natural because in the end we were mixing accountable version. Indeed, it's the natural seasonality have less PDD in the third trimester than in the second. And the way we described this slide maybe have brought such conclusions, not a reversion, but rather a seasonality. And would you like to add something? Exactly that. Seasonality, reminding that in that the odd trimesters, the ones where students renegotiate, if they have debts, they have a percentage. When they renegotiate, it's been negotiated, so there is a payment of a tax and this cash payment is, I try to revert the PDD. Naturally, if such a student is in debt, over the event remasters, the PDD will return less than normal. That's totally natural. I made this comment on the results call on the first trimester. Again, PDD on the first trimester, it's structural. The net revenue on PDD on the first trimester is approximately 7%. Naturally, it's about 10%, 11%, which is what happened. So there is no accountable effect. This is something natural in our business that happens. But trimesters, I have a PDD, a reversion of the PDD, so it's smaller. And even semesters, trimesters, bigger. How is the best way to analyze that? Semester, year, and within trimester and year, you will see that there is no effect. And our third question of Rafael was about the cycles of collection. And how being careful not to give any guidance, talking in a quality scope, both in volume and revenue, it's better in the revenue. because we've been able to grow more on-site and hybrid courses, courses that demand attendance in the distance learning segments. So we are positive in this cycle. It's a very important cycle that brings a lot of registrations, and that keeps us in a positive regarding the vision of future by Corel. Quite clear. Thanks. Next question comes from Luca Marquezine, senior analyst at Itaú. Luca, please. Good morning, everybody. Thank you for your question. We have two questions from our end regarding dividends. We've seen the announcement of dividends over a few years, so thinking about 2025 with the mindset of improving cash, I would like to make a few comments whether we'll have a similar level if you keep on seeing the distribution of dividends, would be a similar level as it's being presented. We were talking about rational dividends. And the second point would be regarding marketing at profit. We've seen a drop in the past semesters. So could you explain a little bit to us regarding the marketing strategy? Will there be a drop in the next semesters? That would be helpful to us, please. Hello, Luca. Fred here. First question on the dividends. We've had a profit that had an effect on the contingencies. We've paid dividends. When our proposal for dividends, as I've mentioned, 120 million reais and the company here, and now there is a strong generation of cash and we are opening up a new stage on paying dividends. I cannot give you a guidance on how much will it be. how much our EBITDA will be on our net profit. But here, we have a new normal in our company. It inaugurates the cycle of return to stakeholders, the capital by means of dividends. Okay, great. I'd like to reinforce what Scott has said. We are very glad of being able to distribute dividends to our stakeholders. We knew from the beginning that improving things, aligning things, growing our margins, cash generation that would hit our profit at some point. So we've returned and of course the point that this is the way to return, one of the ways actually of returning capital to stakeholders and we keep on working in this front line. Then regarding our second question on marketing at Proton, we think there is efficiency to gain marketing, but you can You can assume some efficiency over the year, more stable on the percent of net profit or net revenue. This is our vision. Okay, crystal clear, guys. Thanks. Our next question comes from Samuel Campos, sales side, BPG analyst. Samuel, please. Good morning, Valerio, Fred, Merida. Good morning, everybody. Two questions from our end. First question is about the effects of reaching the guidance. Of course, taking the cue to congratulate the company by delivering the guidance. I would like to ask whether there is a BOMS or P&R on the achievement of the goal. And if it happens, does that have some position? This is the first question. And the second question is about subject. Of course, there are different cycles at the P&LD, but I imagine that there is room for growing sub-ETA 2025. Provided that in the purchase cycle, we imagine that the revenue will grow, but we bring forth this question considering there was an extension of the margin at sub-ETA 2024 of 11% of points. But we would like to understand whether this margin will be recurrent, because that's the key point in order to understand if the beta can grow or not. This is it. Thank you. Hey, Samuel, Fred here. And I'll take the first pass to the company. Our workers, they had in their internal rules reaching guidance both operational cash, generational operational cash, both in the so there is no difference from what we have registered in our prognostics. Zero effects. Those figures are open in our notifications because we are obliged to do that. So you can check them. Now regarding the question of Saber, would you like to take that too? Yes, I can add that up. So Saber, Samuel, it's a near of purchasing things. So we have plenty of markets and expenses. Teaching materials, we have samples for our teachers. We'll be traveling a lot, so it's a little bit more difficult growing our EBITDA. So I could say that it's a more stable EBITDA. But let's experience the year and see how the winds blow. So can I just add something here as well? Since we are repurchasing things, rebuying things, the revenue growth year after year, of course, the first investment, everything I have in marketing and the the editorial, they have a cost that is lost, but despite the revenue growth, the bit here that Roberto had mentioned reflects, but I would like to reinforce this, what Steve mentioned, it is up to us to find out our, we all know the avenues where we will work, and we will work on what, based on what happened to our guidance 2024. Well, I got it. Thank you all, and good morning. Our next question, from Oscar Moscadini, analyst at Santander. Hi, guys. Good morning. My question is related to Proton. Apparently, the overall feedback is that there is a better dynamic in the distance learning, especially in the 100% online distance learning. And I would like to ask about your vision on the dynamic and the long run, whether you think that will extend a little bit longer. And regarding VASTA, a question on the number of students at VASTA. We have very good readers. 2.2 for the complementary. How is this growth? Is there a more premium or a baseline revenue if you could give us something about that? Thank you very much. Madigan, would you like to start? Yes. Thank you, Caio, for your question. So in fact, we have a very robust growth. in our systems both in learning systems as any complementary solutions reminding everyone that this number of growth in the first trimester surfaces slight adjustment in the second trimester when we receive the contractual devolution so it's normal having a first trimester a little higher than the second but the volumes the figures are in that order i'd like to highlight that In other areas, we've been growing premium tickets, so Angolu, PH, Amplia, and McKinsey have been growing growth drivers as an average median ticket of companies who have had a gain of The next season is 2025, and complementary solutions that have a level of 20%, which is something that reaches $200 million in revenue. So it also represents an important growth, and it's something complementary to the premium mix gain that I was mentioning. Thank you, Madigan. Well, Kyle, regarding your question, It's quite noteworthy that when students or families have more income available, they end up choosing more expensive courses, courses that they effectively want. And when they have more income, these are the courses they can afford. It's very hard to pinpoint something for sure as an explanation, but I would say that due to the level of unemployment, which is lower, the income of families is slightly higher right now. I think this is what has influenced the growth in the collection, which is more positive in on-site learning. And I don't know if that's something structural, time will tell. Obviously, we are glad with those circumstances, but I think that's too early to pinpoint something as a new trend. Okay, thank you very much. Next question, Jessica, the outside analyst at Deepmark. Jessica, please. Good morning, everybody. Thank you for choosing my question. My first question is about if you could talk a little bit more on the margin expectation for 2025 and how is it compared to 2024 having side the reversion of the fourth trimester? And then I would like to do a follow up on the answer on the market line. You've mentioned that it must be stable. for 2025, and I would like to confirm if that's how it will be stable, and how much stable are we talking about? I will take your question. Fred, feel free to add something if you would like to. Regarding the margin expectation, I think there are two answers. It depends on how you see our figures. If you're seeing printed figures, I can say that the margins are stable. So we forecast stable margins to understand that the printed margin isn't structural and then each one have their own. The petitioner would say that there is a closed margin. Now, regarding marketing problem, I think the guidance here has to do with the percentage on net revenue. It's not a guidance for the reference. We don't give guidance for the reference. Stable markets, you have the percentage of the net in line with what we've done in 2014, we understand that even in a competitive market as it is, we don't need to spend more proportionally to our revenue. Perfect. Thank you. Lucas Nagano, Southside Morgan State Analyst. You open your audio so you can make your question.

Can you all hear me?

Thank you for I gave you room for my questions. I have two. First, on the new accountable criterion, and I think it's quite clear that it won't impact EBITDA, but it may be something different to what we've seen. We look in the last trimester of 2024, it's grown 25%, but it's on a competitive basis because it was a drop in the revenue. And I know you may get a few comments on the past, but I would like just to ask you more objectively on compared baseline if the growth of revenue for the second semester of 2014. The second question is about the regulation and I'd like to be more objective on the perspective and the alterations, what is the demand for more time studying. I understand there's no apprenticeship or theoretical classes on-site. How such a demand will change the operation and will change the structure of the classroom? Thank you very much. Hello, Luca, Fred. I will take the first question about revenue and PCLD. This isn't an accountable criteria. This adjustment was done because It was counterintuitive. There was a discount and you reduced your revenue and the effect could be just on the PTT. And the answer that I'd like to give you is that in order not to demonstrate our principles of transparency, page number 10 of our release has the growth of revenue for the fourth trimester, which was 15.9, your question, and what is the growth without the social adjustment was 70%, and what was the year growth, 11.4, and the growth without the social adjustment was 9.1, and this effect is the contrary in the PCLD. So you can see that on page number 10 in our release. If you have any other questions, me, Leticia, We are at your disposal to show some frame we can arrange it. And now, second question. Regulation. Thank you for your question.

Mic check. Mic check. as well as the semi-essential courses.

So we all know how to operate all our pools. They have classrooms, they have labs. Even in the smaller pools, they have such an infrastructure, so that would be no barrier to our pedagogics Professorship, I think the main challenge of professorship isn't in the on-site attendance, but rather in the apprenticeship. Even the previous DCN, the apprenticeship was something more to the end of the course. So you imagine that you, let me give an hypothetical example, 100 students in one town, and when you are going to send them to the apprenticeship, you send 40 or 50 because the more towards the second half, then there is a natural evasion. The new regulation, the apprenticeship takes place more in the beginning. What means that you have more students who need to be assigned in schools so they can perform their apprenticeships. So given the amount of students, I think this is our main challenge. finding apprenticeship field that demands a coordination with city halls, state governments. This is the point we are working more strongly. Okay, thank you, Valerio and Fred. Understood. Our next question comes from Gustavo Meli, sales side analyst at Goldman Sachs. Gustavo, please, take your question. Good morning, Valerio, Fred, Guilherme. Thank you for your presentation. I have two questions. The first, taking the cue on the cat talk, you see this deleveraging of the company brings a reduction of costs and debts. That's very important. It's been a flag that you've been using for the market. Just to understand in order to be more in tune with what you have in perspective, for debt in 2025? That would be the first question. The second question on Croton, I would like you to help us to try to understand this growth in ticket both on-site and distance learning and what was a readjustment and what is the mixed effect so we can understand how close from the inflation the adjustments of veterans remain in these two categories. That's it. Thank you. Thank you, Gustavo. Fred, you would like to say the first one? Gustavo, thank you. Fred here. The allocation of capital or the likes to reinforce our commitment of the allocation of capital towards taking over as always preserving what would be our net debt and the reduction of net debt. That is, as I said previously, the allocation of capital. We believe that our best capital allocation here is to re-buy our stocks and for the payment of debts. Let's see different investments. On debt costs, we are in an optimal level. I think it's hard to reduce the net debt. The reduction of our leveraging comes from the generation of operational cash in our business. As I said before, the company is out of guidance. And we are not talking about 2025. This is a company that's generating an operational cash flow of more than 1 billion reais in 2024. And 2025 must not be that much different. So it remains natural, but our commitment here is to allocate capital and also generate the best return to stakeholders. Thank you, Fred. Gustavo, regarding your question on the median average ticket, it's important to explain two things. The entrance average tickets, we have some power of influencing that price. Of course, we work for our prices based on the cost. We try to optimize some. Yeah, it's here and there, so it can be competitive, every course, but without losing the average ticket, minimizing the impact and the potential competitiveness of the entrance ticket, but on the other hand, we've been able to share by several different tools, the reduction of cost, the average ticket of students throughout the journey, et cetera. what in an average means that we are able to either to repass the price by means of these strategies that I've mentioned. So it has a lot less to do with the mix, especially with the mix of the last cycles because it's been more concentrated in distance learning, a smaller ticket, but rather effective as our operation in price reviews for each of the students according to the clusters. that we look at. I think it's about operational efficiency. Okay, crystal clear. Thank you, Valerio, Fred. Good day. Our next question from Renan Prata, Southside State Analyst. Good morning, everybody. Thank you all. Two quick questions on cash generation. One, can you help us and a qualitative perspective to conciliate the fourth trimester cash and the P&LD, but now just to understand what were the drivers. And the second question, thinking about generation of cash for 2025, if we should conceive a seasonality similar to 2024, or especially regarding the fourth trimester, I don't know if you have some seasonality for 2025. Let's see. Thank you very much. Okay, Hannah and Fred talking here, talking about the operational cash generation. We've been talking about that. There was a strong cash generation for the first trimester, given the seasonality of our business. We all know that our business, P&LD, the incoming, coming, comes from Saber P&LD, as the past few years have been. So, the way I see it in the, and we must reconsider the numbers, but we have a generation of operational crash that's been positive in all our businesses, in all our trade business. So effectively, it wasn't just the generation of operational crash. There's some positive in Croton, Vasta, and Sabertu. And you can give us a call, we'll help you out regarding that. And now looking at 2025, I see that. I don't see how much a difference it will be. Just reminding everyone that we had here approximately, using a rule of three, we had a slightly stronger fourth semester. But no semester, we had something about 250 minutes. Many times we have 700 billion reais, so slightly bigger than the fourth trimester, but it isn't simply explained given the because our business are generating operational cash, and I'd like to reiterate, our ticket here in the company is in the operational cash generation. This is gone. The free cash and the reduction of net debt, that shows that duration of free cash is on the direct method, 395 million reais. And that has converses with the net debt, the reduction of a hundred million reais that you have reduced even more with the better location of our cap. So answering, I think we are quite comfortable that the seasonality should be similar to 2024. and all of our business generated operational cash in the first trimester of 2024. Now regarding the seasonality, I would like to highlight, aside from what Fred had said, I think it's important that everyone look at the seasonality of what I'd like to remind everyone that less than 65% of our revenue comes from higher education and the other 35% comes from do you have a seasonality that's different? So I think that when the market somehow was helpful regarding our capability of generating cash in the first semester, I think it's more about not taking into account in the modeling the seasonality of sabir and pasta, and they are structural seasonalities. And this is why Fred is stating that from the perspective of generation and distribution, it should be a lot more similar to 2024, because this is the structure of the company. This is how we are. Okay, thank you. Our next question. Flavio Hiroshida, Southside Bank of America. Flavio, move on with your question. Hello, good morning. I have two questions from my end. The first one looks specifically to general administrative revenue. Even adjusting the reversion of contingencies, we see that the percentage of the revenue This way represents 13% of the net revenue. And compared to a history of 18, 20%, I would like to defend that If it was something specific for this smaller ground, was it something recurring? I'd like you to explore a little bit further on that. And my other question has to do with PDD. So when you look at PDD of 2024, compared to 2024 and the percent of the revenue we see that it has increased a little bit. I'd like to understand what has weight in PDD and what are you expecting for 2025? Thank you. I will take your questions. Regarding general administrative expenses, what happens is that in 2023, our general administrative expenses were worse. We had some effects in 2023. Such effects in our end, they were recurring effects. But it isn't up to me to judge whether it was recurring or not. We've done many comments about that, but now the figures are small. We see that it's something structural, so looking ahead, that should be the same percent on the BDD revenue, the efficiency that we were able to capture. So that's just to reinforce the point that we like to talk a lot about being recurring or not. But the way I see it, I always see no recurring, they're always negative. So there is no problem. It isn't up to us to take. So it's up to you to generate the figure and that's structuring and you can project on the same percentile. I'm talking about PDD. I'd like to bring force on page number 10 of our release. Yeah, what do we talk about? Nothing different from what it's been. If I didn't have the adjustment, our PDD would be 10.8% on the net revenue. Since we have done adjustment, our revenue became greater. Our PDD to our real revenue was 2.7% a year. The projection for next year I have no evidence that it would be different from what's been happening in the past few years of the company. And you can see in our chart, our PCD in the criteria was close to 10%. And the new criteria, next to 2%. So any criterion I am always, I'm reaffirming, not reaffirming, but what I'm saying is that this is structurally part of the company, but based on the past few years history, and we'll keep on the same way. What's something important that is in price for us is that such a change that we performed, the expectation is bringing more cash to the company. And on the criterion that we used back in the past, there was a discount and there was a negative effect on the revenue. It's a counter... Now you just have an effect on the PDD, but we believe that it may have an effect on generation of operational cash. Thank you very much. Thank you, Fred. The next and last question comes from Eduardo Rezende, Health Side Analyst at UBS. Please, Eduardo. Good morning, everybody. Two questions from my end. The first about the evasion. We've seen continuous improvements throughout the last trimester. So I'd like to know from you if you could give an overview on the strategies you've been approaching to reduce evasion. And if you think there is room for keep improving. And the second question, B2G, and Acerta Brasil and Saber. At Vasta, I would like to know about the visibility you may have, the evolution of touchlines from now on, if you could share that with us. This is it. Thank you very much. Thank you, Eduardo. I will take the question on evasion, and maybe we can talk about Vasta, and we can add up on Saber, too. So evasion. Let me give you a few quotes without giving spoilers. I think there's not much a secret. It's redoing the basics, improving the students' experience, both in the on-site experience, so improving the processes within the campus, improving the infrastructure, everything that is digital experience updating our experiences. We have a very ambitious program called the Cogna Transformation Program, which has an important systemic change. All EAD or business learning students are entering on this system, which has a state-of-the-art app, great experience. From a financial perspective, we are making available recurring payments based We are trying to guarantee students not to be finding a hard time to pay their debts because otherwise it will be very difficult for them to pay. It's a set of actions that's very broad. There is no silver bullet. There's a lot being done right now that helps improving our evaluation numbers. This is learning 100% alignment. There are opportunities for improvement. There's always room for improvement. There's always systems to be improved, experiences to be improved, well, onboarding to be better performed. So I think for sure that improves besides the element of quality on capturing on the collection, we've been quite criterious on what we consider the amount of collection that we consider as a revenue. So a student must have signed a contract, must have paid, they must have experience in the virtual learning environment. So we consider students, they will never more engage the students. And I think there are special friends, scholar fronts, that go towards using, that proceed towards using more data, more AI, so we can boost their custom-made experience or their planning. That's always been a dream for us in the sector, but now, given the new technology, it's been very possible. So, the way I see it, there's plenty of opportunity to keep on improving in your vision levels, and then, oh, Madigan. I will talk about B2G and we'll give a few colors on the B2G market in our expectations. So, Eduardo, you've mentioned Saber's product, Acerta. That product addresses the same market at Somos, Prepara. It's a re-composition of learning product. And we've seen great volumetrics for the past few years. This year, 2025, is the year where Saeb will be measured in October. So both Acerta and Prepara are preparations for this exam. So in fact, we have a huge positive expectation for growing the first trimester to prepare students of the fifth year and the third years aiming at October's exam. And we see that in Saeb's figures, That's product speaking. And it's basically a B2G at Somos focused on the market. Additionally, Saber offers a gamut of products, teaching materials, bilingual materials that follow the growth a good growth level. So perspectives are very favorable for B2G this year. And I think just to add up the validity of the product's impact, the quality of the product has been very good, and being able to help education offices and other numbers, and that is a market for us to catch new partners. Okay, crystal clear. Thank you. The Q&A session is over. Now, we would like to give the floor for the final words of the company. Well, thank you. Above all, I would like to thank our 24,000 collaborators, all those who have lived in the past four years, not just in here, and of course, for America 2024. I would like to state that we are very optimistic with what we can do There is a lot ahead of us, a lot that can be done and we'd like to reinforce the availability that we have to answer any questions. Thank you and good day for everyone. The teleconference on results related to the fourth trimester of 2024 of Cognite Educação is over. The Department of Relations with Investors is at your disposal to answer any questions you may have. Thank you all for participating and enjoy your afternoon.