Cogna Educacao S A S/Adr

everyone and thanks for waiting. Welcome to the conference for the disclosure of results of the third quarter 25 of Cogna Education. If you need simultaneous translation, we have the feature available in the platform. Just click the interpretation button in the globe in the bottom part of the screen and choose a language of preference, Portuguese or English. If you hear the teleconference in English, you have the option of muting the original audio. Just go to the mic and click and mute original audio. We inform you that this conference is being recorded and will be available in the RI site of the company. www.cogna.com.br, where you can find the whole material for this result disclosure. You can also download the presentation in the chat icon, even in English. During the company's presentation, all participants will have their mics on mute. Then we'll start the Q&A session. To ask your question, click the Q&A icon in the bottom part of your screen and write your question to remain in line. When invited, there will be a request to turn on your mic, so you turn it on and ask your questions. We suggest that questions are made all at once. Before going on, We would like to clear that the eventual declarations being made in this conference regarding the business perspectives of Cogna, projections, operational and financial targets are the beliefs and premises of the company and the management, as well as the information available for Cogna. future information are not a guarantee performance and they depend on circumstances that may happen or not so you have to understand that the general conditions the sector conditions and other operational factors may affect the future results of cognitive and may lead to results that will be materially different from those expressed in future conditions I'd like now to pass on the floor to Roberto Valério, CEO of Cogna, to start his presentation. Mr. Roberto, please, the floor is yours. Good morning, everyone. Thank you for participating on the conference to discuss the results of the third quarter of 25. As we always do, we have Frederico Villa, our CFO here, Guilherme Malaguer, the head of VASTA. This call will last one hour in which we'll have a 40-minute presentation and 20 minutes for the Q&A. So I'd like to start this meeting by saying once again that we understand this is one more quarter with great results in our understanding. We keep growing. With the ability of operational delivery in a quite good way, it grows in a fast pace in double digits. In the quarter and in the nine months or so, we are growing almost 19% of revenue in the third quarter and 13 in the nine months. And I'd like to say that both of the core business, therefore, higher education and basic education are growing double digits and we keep investing. in new fronts and future opportunities, as it is the case of our business line for governmental sales, as another example with our franchise starting. So from the point of view of growth, We understand that the core has a lot of capacity to deliver results. We are growing double digits with the same message since the beginning of the structure in 2021. We understand that the core businesses still have a lot of opportunity to grow. basically refining and improving processes and the client experience. But we keep here planting and seeding new business to grow the company. The same way the operational results keeps growing in double digits, basically 10% in the quarter. and 12.4 in the year, in the accumulator of the year. So this is the 18th consecutive quarter with the EBITDA growing. I'd like to reinforce our concern with consistency and its structural growth. So it's been four and a half years that we are consecutively growing operational results. From the point of view of EBITDA margin, This quarter is pressured by an increase in the PCLD regarding Pagfácio. That was something that we did in Croton in the commercial cycle. We will explore in the next slides as well as a lower margin in Saber due to sazonality. And as you know, Saber, as Somos, has the fourth quarter and the first quarter as the strong quarters from the point of view of results. And the third quarter is a smaller one. But in this case here of Saber, it pressured a little, but we'll talk specifically about PCLD later on. Now, talking about the net revenue, we had $405 million in the nine months accumulated. So I invited the data growth in the quarter to the net income was $220 million because we had losses in the third quarter of 24. And when we analyzed the nine months, the delta of the net income is $450 million. Obviously, it's being fostered by the improvement in operational results that we emphasized earlier. in the quarters we are talking about, but not especially, but also due to the reduction in the financial expenses to reduce the debts and our liability management strategies that allow the cost of debt to be lower. Therefore, the operational results with the lower expenses is happening in the net income. In terms of cash generation, We reached 392 million reais with 1.9 less compared to last year. And as we always do, we let you judge if these points are positive. but in the third quarter of 24, we recovered taxes in cash of more than 115 million reais. Obviously, if we compare operational to operational in the recovery of taxes, our growth in the GCO would be 38%, therefore quite a strong one. And accumulated 33% of growth, almost 940 million reais in post-caps OGC. So the highlight of the quarter and the nine months is the free cash flow. We reached 300 million in this quarter, 583 in the nine months accumulated, just to emphasize it. There's almost 584 million in nine months. It's 50% more than all the free cash flow generation in the whole year of 24. So in nine months, we generated more cash, 50% more of free cash flow than the whole year of 24. Now, going to the debt, we reduced the net debt to R$ 474 million in the 12 months. I emphasize that only in the second quarter to here, our reduction was more than R$ 220 million. So the cash generation is in fact being used to reduce debts. And then Fred will explain that aside from the reduction, we can also have important reductions in the average cost of the debts. Regarding leverage, we reached 1.1 times the EBITDA, the lowest one in the last seven years. The last time we had this level of leverage was in 2018. Therefore, We are quite satisfied with the results and prospectively thinking for the fourth quarter to 26, we keep optimistic and trusting that we have everything to have consistent results. now going to slide five we'll talk about the operational performance of croton and i think i can start by emphasizing uh the growth in intake more than seven percent in the period i would like to emphasize specifically the growth of the presidential one that is not the first cycle of intake it's the third cycle that we have growth in the presidential and With the growth, I'll talk later, but with the growth specifically in the high LBV, I mean the most expensive courses which help us in the ticket. And I relate this growth in the presidential to our commercial model that is fine-tuned in the campaign and is allowing this growth. And in distance education, with a growth of 6.4%, that is specifically to the change in the regulation for GL that fostered the course, mainly the healthcare care courses that bring not only the benefit of growth but also the improvement of the average ticket So in the mix, it helps a lot. Obviously, we have a lot of evolution in the team, improvement of processes, systems, and commercial strategies. But I reinforce that in the present show, this fine-tuned model in the campus helped a lot. And the change in the regulation of DL fostered the enrollment mainly in the health care courses that are the most impacted by the new regulation. The student base grew 2.7 in total. But if we consider only Prouni and Ex-Prouni, the ones that in fact pay and generate cash to us, the student base grew 4%, quite important and consistent as it's been over the last years from the point of view of average ticket. I also have an emphasis here in this quarter because the Croton as a whole is growing 11.7% in three segments. Presential, DL, and on-site. I'm sorry, and we have two points helping the average. Newcomers, as I mentioned, on-site, we have more enrollment in the most expensive tickets, and in DL, also more newcomers in the healthcare courses. on average, with a greater ticket. But I also have to mention that we can repass the inflation to the old students in Croton Med on site and DL. So we have both old and new students with an increase in the average ticket, which pushes this growth to almost 12 points. Now in slide six, talking about the net revenue, obviously, If we have more enrollment, and I forgot to say something important here about intake reinforcing that obviously the volume of intake is important to us, but the balance between volume and ticket is very relevant. We always analyze intake, analyzing the revenue in the period, and the revenue grew 41% in this period. When we have a new period growing the revenue, and we know that the students will be with us for many semesters in perspective, we have quite a positive result regarding the revenue for the next months and quarters. Now, talking about revenue specifically, so we grew almost 21%, growing a lot on-site and online education. So we grew a lot in both fronts. So to be completely transparent, even if we reclassify the discounts that, as you know, we have a complete disclosure with all the items we are using, since we reclassified the discount with inactive students, for PDG with a neutral impact in the EBITDA, but adjusting the revenue, this growth instead of 20.9 would be 15.9, but even though quite a strong double-digit growth. And talking about the accumulated, it's the same, 17% in on-site NDL, and here we see the effect of 5-facil, that we'll talk later, is more diluted. Therefore, the delta between the growth we see of 17.4% and the growth ex-PagFacio is smoother. Now, in slide 7, and talking about the gross profit, as a whole, it grew 21.5%. with a small increase in the gross margin of from 79.4 to 79.9 and in the same way in the accumulated in the year we had an important growth in gross profit and a slight growth in the gross margin which shows that the growth in operation in its core that is revenue minus cost is quite positive And we are gaining on efficiency. When we analyzed the nine months, the gross margin improved 0.7 points percent with a small reduction in the margin of proton med. And it's important to emphasize that in the 18 courses that we have, the medicine courses that we have, three are new and as they mature, they increase the basic cost as we hire more professors so the amount of hours increase the general cost increases so with pressures a little the margin but according to expected and completely in line with our plans so in the slide eight costs and expenses as you can see when we analyze costs and expenses with the percentage of net revenue we have a gaining performance in no line so corporate expenses with a small gaining performance the operational ones gaining more than three points percent of market and sales with diluting one point percent as the costs as i mentioned in the previous slide so The company grows and grows. keeping the costs controlled and specifically the expenses controlled which makes us gain efficiency and diluted them with the percentage of net revenue the only difference is uh tclg that i'll explore in two slides because in the third quarter 24 it was 6.2 points percent to grow in 7.6 going to 13.8% due to two factors, both the reclassification of the discounts for inactive students, as well as the greater penetration of PagFacio. But I will talk about it in other slides. When we look at the accumulated, you see that we keep growing in efficiency with the no operation expenses and marketing and costs, and I'm in slide nine. So we have two points more of dilution and marketing 1.4. So gaining efficiency, we see that the operation is quite adjusted. Now in slide 10, so that we take more time here explaining those differences in the PCLD. We made this diagram to be easier to understand. So I am on the left and considering the third quarter of 24 with the first information, you can see the net revenue, $939 million, which was published in the third quarter of 24. The PCLD was $58 million. Therefore, the percentage would be 6.2%. with the reclassification of the discounts that is so that we didn't have reduction in the revenue every time we renegotiated with an inactive student we would start classifying the discounts in the pda so in the proform of the third quarter of 24 the PDA would be 98 million and not the 58, but the revenue would increase it from 939 to 980 million. So in the pro forma comparing it, the third quarter of 24 to 25, the PDA divided by the raw would be 13.4 and 13.8 million. therefore an increase of 3.7% in the PDA. So I explained the first delta of the 6.2% that adjusted by the reclassification of discount would be 10.1%. And if we consider delta for PagFacio, that is the offer that we implemented in this quarter, the PDA would be stable. And why would it be stable? Because our inadimplency is not increasing. It's kept the same. The fact is that when we offer more offers in Pagifácio, that is the... facility to pay the first installments we don't have the history of credit of the student so we provision more than a student that we already have their history so that you have a reference the level of provisioning is close to 10 percent to the student with the history and in this case here of the students coming with this offer of pagifacio we provision 47%, therefore a greater provision. So that's the explanation. So why the PDA is growing? So it increases in this quarter because this is when we give the offer to the student. And in the fourth quarter, we don't have the offer anymore because we don't have newcomers anymore. So you see a convergence of the PDD to the closer number of performer. So, explaining the movements, I would like to take some minutes here for you to understand the offer itself. So, with the change of the regulatory framework, many players among started communicating that they should take the period before the... regulatory framework change to enrolling courses that won't be available anymore. But during the intake process, we realized that many players were offering discounts in the monthly payment. So in practice, it reduces the LTV of the student because all the payments that we come along the life of the student will be with a lower ticket. So we decided another offer. So to keep the average ticket, but offering to pay the first and second payments in July and August, in our case, installment. So the student enrolls because they are making the enrollment in middle of August when classes started. So they didn't pay July and they didn't pay August. They are starting to pay from August on. So these two parcels were not a bonus so we divided them installments during the period of the student's course so in this case a student in four years would be divided into 46 months so as we don't know the credit profile of the student they are new so we provision more with these two uh payments that we booked and we are receiving month by month. So for you to understand clearly the offer, that's it. And it makes sense because we don't give up on the average ticket. We don't reduce the LTV of the student. We simply consider installments for the payment of one or two monthly payments along their course of time. So if you have more doubts regarding that, we can discuss in the Q&A. And we have a second table that is the deadline for receiving, which shows that the default is still positive. That's why we are decreasing the average deadline from 47 to 34 days. So this is the clear proof that is... the P&L, because we see that the student is in fact generating cash. Now going to slide 11, the consequence of all that is the EBITDA result. Therefore, the EBITDA in the quarter grew 10% in the year cumulated 15.8. So you can see a drop in the margin between the third quarter of 24 and 25 going from 37 to 36. So the reclassification of discounts and the admission of provision of PagFacio is pressuring the margin. because it is increasing the BDD, but all the other costs like marketing, operationals, corporate, they are all diluted and gaining on efficiency, and we see that clearly in the results and in the cash generation. With that, I finish the explanation of Croton, and I'd like to pass on the floor to Guilherme Melliger for the comments on VASTAF. Thank you, Roberto. I'll go on with slide 13 on the net revenue. I'll concentrate on the graph on the right with the commercial cycle because the third quarter is the one finishing what we call the commercial cycle of Somos Educação that goes from October to September. so here we have the total idea of how the classroom behaved and everything that happened and will have that happen in 25 so we reached 1 billion 737 which is 13.6 percent considering the cycle of 24 the highlight is the subscription products with the teaching and complementary solutions that grew 14.3 percent reaching 1 billion point 32 and now the non-subscription had an increase of 17 percent reaching a hundred and 18.6 million result of the growth of our two flagships in Anglo, one in São José do Rio Preto and the Pasteur Institute, also with the growth in the pre-SAT courses in the year, so we acknowledge the growth in the two main business lines of the company. I also emphasize the B2G, bringing a natural volatility, but we could... with new contracts, keep the balance in this line of revenue. Also keeping a similar level to 24. Reaching 76.2 million now go 66.8 i'm sorry in slide 14 i'll show our subscription sector so we start on the right where we have the breakdown of the core segments that are the learning and teaching segments, and the complementary, the social-emotional, bilingual, makers, and other complementary activities to the basic subjects. Our growth was quite robust, reaching 14.3% in total. But the core segments grew 12.5% and the complementary segments 25%. As we can see, a faster growth in the complementary over the years. And I'd also like to emphasize something that Roberto commented that is quite important to us. that is our consistency over the years delivering that. So on the left, we see the first ACV of Asta that is in 2020, when we acknowledge 692 compared to 1,552,000 that we are delivering by the end of this semester. It represents 2.3 times more, so a figure of 17.5%. So we are quite satisfied with the performance we can reach with the gain in market share and the penetration that our products are having on the private market. Now, going to slide 15, talking about the EBITDA, we grew 10.6% in our EBITDA, focusing here also in the cycle. We reached 480.9 million EBITDA, the greatest one of VASTA in a commercial cycle, representing a margin increase. of about 28% in line with the previous year. And here we'll decompose a little our expenses going to slide 16. I'll talk briefly because the third quarter to Vasta is not so significant, but it is important to note when we look at the table, our recurring gain in the lower provisioning of pcld so we had a provisioning here a lower one as we observed in other quarters and we have more investments in marketing and sales because we are in the peak of the campaign for 26 but when we analyze the next slide 17 we have an idea on how our expenses behaved in a complete cycle. So here we have our total expenses when we analyze the table with the percentage of revenue, keeping in 71%, with emphasis to the gains in productivity that we have in corporate expenses, operational expenses, and PDA, as I mentioned in the previous slide. We have a small investment in marketing and sales that should keep the double digits of the revenue. And in costs, I call your attention to the impact of 2.1% result of a mix that comprises more and more complementary products that we pay royalties for so they have a higher cost like bilinguals and social emotional as well as the mckinsey system that grows in a fast pace so these products have royalty they increment a little our costs on the other hand we do not deliver capital to develop the product so When you look at the benefit that we have in the cash, it's much greater than the small points of margin that we observe in the total costs. And lastly, I would like to emphasize that we are in the peak of the commercial campaign for the cycle of 26. We are quite optimistic with this period to keep the growth and keep the history of ACV as we saw before. We'll have probably quite a good 26. I emphasize that we reached more than 50 contracts and start to outlook. We are operating six units this year. Next year will be eight as franchising with a total of 14 units. And the B2G is a big path of growth that we have. with a lot of prospection at this moment, and we hope to have quite a hot fourth quarter to supply the cycle of 26. Now I pass on the floor to Fred to go on the presentation. Thank you, Guilherme. Good morning, everyone. I'll start the presentation of Saber here. And remember that Saber has some businesses, the National Program of Didactic Books, languages, other services, encompassing governmental solutions and so on. So note the graph on the left, that in the quarter we grew the revenue of 9.4%. So this growth was fostered by the hitting of two business first of all 17 in languages and secondly the growth of acerta brazil that is governmental solutions with a growth of about 38 percent it's important to remember that in 26 25 This is the year of purchase for high school and repurchase for elementary school. In high school, we had a gain of 8% in market share, which shows the growth that we have in our products with the program of didactic books. However, we see that there is no representativity in the quarter. We had a displacement from the third to the fourth quarter. Now, going to the graph on the right, in the accumulated, I had a reduction of 9% in nine months, comparing 24 to 25. So this reduction, as I mentioned before, is only a reflex of the displacement and the reduction of the PDA, but it's according to the fourth quarter... And we had businesses with a positive impact of about 32 million in nine months in 24. And in the year, in the nine months, the big effect here was in the first quarter that we've had. a revenue that walked back in about 60 million reais. But our expectations, as I mentioned before, is that we will have a stronger fourth quarter with the displacement of the didactic books program. So going to slide 20, talking about the recurring EBITDA and margin EBITDA. As we said before, this is a year to grow the margin. But with the EBITDA growing, and it shouldn't, mainly due to the effects of investments that we'll have in the material for marketing and all the commercial part, mainly, as I mentioned before, due to the repurchase program. of high school when in the accumulated of nine nine months that finish in september 30 we saw a growth in our ebida of 16 percent leaving from going from 67.5 to 78.5 with an expansion of margin and 4.7%. So it's a neutral semester with a growth in revenue, but without growing the EBITDA, but this is due mainly to the displacement of the PDA. Our expectation is to have quite a positive fourth quarter. Finishing the presentation of Saber, I start now Cogna. Incognito represents our three main businesses like Proton and Somos and Vasta and I just mentioned Sabia. So just a brief summary going to the final presentation. We had the growth in the revenue in the quarter Incognito of 18.9% reaching 1.523 billion. So we grew revenue in all businesses and in the accumulated we also reached 4 billion point 816 billion with a robust growth that go into slide 23 we have the demonstration in the recurring EBITDA and margin EBITDA so we grew the EBITDA in the third quarter 9.8 reaching an EBITDA of almost 433 million reais. And as I mentioned, We grew the revenue in our three main businesses. In Sabir, we decreased the EBITDA, but we have the effect, as Roberto mentioned before, the effect of our commercial strategy in Croton for intakes via Pai Fácil. And the main goal here was to keep the average ticket. You can see in our release, that we can keep and have even growth in our intakes. And we had an impact in the PDA. We grew with a program to pay installments in Croton. And in this way, we grew the PDA. In the accumulator of nine months, we grew 12.4%, reaching an EBITDA of 1.5%. of 30 billion reais now growing to going to slide 34 with net profit and margin in the quarter the third quarter of 34 we had losses of 29 million reais and now we reached a net profit of 192 million reais with a growth of more than 700 percent and a growth in the margin of net profit and this comes from the growth of our operational results and it grew about 10% we had the reduction of our financial results so with many initiatives here in liability management and renegotiation we reduce our financial results in 13% and the main factor here is the fact of taxes of 126 million reais in the visa we've demonstrated this conciliation and operational effects and what are these effects mainly here with the reversion in the contingency that is not going over our bid and the recurrent result and we had the condition of the income that are briefly explained means that we had a company saber that had the tax losses in revenue income. And we incorporated this company so that we had this benefit. in this year and future benefits. So look at this year, we had accountability effects of 126 million reais, but in the fourth quarter, we'll compensate 11 million reais in taxes. So this operation brings not only accountant benefits, but in the cash of 25 and the years to come. If the accumulated benefits we reached almost 406 million reais next year, last year. In December 31, 24, we had the profit of 879 million reais. Just remember that part would come from a reversion of contingency and our net profit of the operation was 120 million reais. So in nine months, X effect of the income taxes, we reached the net profit of the operation compared to the previous year. And finishing that, the most important to us in the company is as we manage the company and we look a lot that for getting EBITDA and now analyzing the net profit and the cash generation. and free cash so we can see that in the operational cash generation we had the slight reduction of 12 percent reaching going from 392 last years and last year we had a positive effect of 115 million reais of receivables of taxes from the federal revenue and we had this benefit last year we didn't have the benefit this year but it's part of the game so there is no adjustments we are not proposing that we are just explaining but the most important to us is the free cash flow that we grill in the free cash flow. And when I say that, it is the generation of operational cash, post-capture, capex and debt. So we reach 300 million reais with a growth of about 3%. I'd like to mention also that the company analyzing the risks, we kept the second quarter of 24, 25 compared to the third one or the third of 24. With the third quarter of 25, we had a risk neutral with a small decrease of about 9 million regarding the second quarter of 25 and 17 compared to the third quarter of 24. So you can see that the free cash flow is not coming from postponing the risk. we are reducing our risk. And just to finish the free cash flow, an important data is that in the accumulated, we reached 584 million reais last year. We've had a generation of 395 million reais. So remember that our fourth quarter, as I mentioned, is strong here in the national program of didactic books and it's also a strong quarter in somos education so we are thrilled with what is about to come to the fourth quarter now going to the end of the presentation our cash position and depth we in slide 26 I would show that the importance is that we are reducing the net debt. So we reach a 2,576 million. We finished the third quarter in a strong cash position with 1,277,000,000. And the message here is analyzing the amortization schedule. In 26, we don't need to do any debts and we have no amortization for 26 months. which is generally a difficult year because it's the elections year. Now going to slide 27, the last one of my presentation, I'd like to show the leverage of the company. We reached the leverage of 1.11 times our lowest level of leverage since the fourth quarter 2018. Considering the third quarter of 24, our leverage would be 1.58 times. We had a reduction in more than leverage. We monitor also the net debt. So we had a reduction of net debt compared to the last year, R$ 474 million. And regarding the second quarter of 25, compared to the third one, a reduction of 230 million, which shows that in the last four years we are doing what we say, what we committed to hit the revenue and generate EBITDA that will do the leverage of the company free cash flow and reduction of net debt. And last but not least, our average cost of debt is reducing So in the third quarter, 24, we had an average cost of 1.82, when in the third quarter, it's 1.52. And as we understand the market and our rating, that we maintain that, but with the positive prognostics, We have costs of an eventual debt for a future liability management in a lower cost than this one that I mentioned of 1.52. So we are still thrilled with more execution, more work, and I pass on the floor to Roberto Valerio for the final considerations. Thank you. Now go to slide 28. I reaffirm our pillars and growth is one of the pillars. It's not by chance it's the first in the list. As we showed, we grow in all operations and we are planting and developing new pathways of growth to the future, as Fred mentioned. We are thrilled to the end of the year, the fourth quarter, that is generally with no news in Croton, but given the diversity of our portfolio, we have good quarters in Vasht and Sabir with a positive perspective to the year. And we see no different challenge to 26. We see the level of unemployment rising. very low, people with good income. This is next year's electoral year, which benefits our businesses. We are quite positive to this item of growth from the point of view of efficiency. It's in the DNA of the company. We have quite well designed all the processes. We are converging systems to one or two single systems to gain on synergy and speed. So we are working in improvement of processes, automation systems, implementing AI. That is something we've been doing since 23. So basically two years, almost three. And this is something that is spreading in our value chain and it will keep bringing efficiency and growth margin and the reduction of expenses. So this is another front that we see opportunities. experience the client experience is something that is the core of our decisions we keep improving the uh nps of students and partners so just for you to understand in this third fourth we had four important awards that are related to customer experience in many segments so It is still our focus and we understand that we serve well to reduce the turn and improve the growth. And people and culture is an important pillar. We are investing a lot in training and development and assessing performance and skills and feedback of our workers so that they know how to develop and external trainings and courses. I think we are progressing a lot in this front. And it's not by chance that we could be in the ranking of the best companies, great places to work. So we have the GPTW CEO, we've had that, but being in the ranking is very difficult. And we are there at the 12th position and We are in the 66th position. I'm sorry. And it's quite nice and innovation. We are supporting the business areas of the company, speeding up the B2G and new ideas that are under discovery in the initial steps but I'm pretty sure are the seeds for our growth in education that is a big segment and our approach is not only one segment we have a multi-segmentary strategy we have a broad portfolio which in fact increases the options of growth to us from the point of view of ESG It is too important in the agenda. We had the fifth education in ESG forum this quarter. We work knowledge in the ranking besides being acknowledged for being in the best companies in customer satisfaction by the Mask Institute and some awards among which the best legal department in the education sector. So it's said by other people, which is also more important because it's not our opinion. It's the experts in the sector saying that to us. With that, I finish our presentation and I open for the Q&A. Thank you. now we'll start the q a session please remember that you ask your question you must click the q a icon in the lower part of your screen and write your question to get in line when called you turn on your mic after the request to make your question we ask you that you make all questions at once The first question is from Marcelo Santos, cell site analyst, JP Morgan. Marcelo, we'll open your audio for you to ask your questions. Marcelo, please, you may go on. Thank you. Good morning, everyone. I have two questions. First, I'd like to mention Tag Fácil, because you've always had the pmt so i understand that in fact you increase the amount of that but the program would be the same so i'd like to be sure of that and was it more focused and dl is it does it have something to do with competition i would like to understand why it's the stronger in the divisions that you showed and i would like to know if next year it will be more normalized And the second question is related to the cash generation, because the fourth quarter last year was very good. So is there any event, any effect to change the seasonality for this year? Or you would bet to say that it would be the same as last year? Well, Marcelo, thank you for the question. So regarding PagFacio, you are correct. It's the same program we already had. So the mechanism is the same. The only thing is that now we are offering to more students. In general, we would offer the benefits to the students later on in the course when they enter in august of september and we offer now since the beginning of the intake process when we start offering the benefit beforehand more students make use of this So the penetration of the program increases. So it's the same program with the same greater penetration for newcomers, which means that looking ahead, we shouldn't see new growth. It should be more stable when comparing the quarters because the penetration was almost absolute, let's say, quite high. Basically, all students enrolled took... advantage of PagFacio in the period. And regarding the cash generation, Fred will say, well, Marcelo, thank you for your question. In the fourth quarter last year, we had a strong operational cash generation. This is the beauty of our business, the diversity that we have. So last year, we had a positive effect of the National Program of Didactic Votes and also governmental solutions. And the cash here wouldn't have anything different compared to what happened in Croton last year. And our expectation is to have a positive cash. And it comes with the same effect that we've had last year with the National Program of Dietetic Boots. A point of attention here is that we are a little late. We would imagine that our third quarter quarter would be stronger the government is late so it may bring some impact to the cash in the fourth quarter but our expectation is not different from previous years it is to receive in the fourth quarter but if we don't Marcelo then we should receive in the first 15 days or the first 20 first days in January 26 but as I mentioned It is our daily life. Just a follow-up in PagFácil, Roberto. It is more concentrated in some of the units or due to the competition, it was more in DL or is it general? I would like to understand this point. Sorry, you asked this question and I didn't answer. It's generated. It's not focused in DL, but both on-site and DL and the corresponding courses of Kratom-Med. Okay, perfect. Thank you. The next question comes from Vinicius Figueiredo, Cell Site Analyst, Itaú BBA. Vinicius, we open your audio so that you make your questions. Vinicius, please, you may go on. Good morning, everyone. Thank you for the question. I'd like to discuss a little bit about this quarter because we had a more concentrated effect. You mentioned a lot PDA in Tag Fácil that reached the margin, but having that said, a good behavior of all lines in this quarter. along with the fourth quarter not being with such a strong PDD due to the lower intake. So does it make sense that this quarter was quite atypical regarding the performance comparing the margins of the years? And we would see the cycle again in expansion in the fourth quarter. And then in the context of next year, Will this affect along with the investments to adequate to regulation? How is that as a whole? And the second point is a follow-up to Marcelo's question. What would you see here as the balance point to PagFácio? outside this context this is a typical context of the second semester and looking ahead what is the participation it should have as a whole thank you vinicius thank you for your questions i think it is quite an important topic to us that you have it quite clear in pag fasio and PDD. So as basically all students came via PagFácil, there shouldn't have any additional impact in any other quarter. So let's consider that in the third quarter, 26, if all students have PagFácil, the delta should be only the growth of the enrollment and not the take rate of PagFácil. So we have nowhere to go because basically all students took PagFácil, whatever grows in the PCLD is related to the intake for the future. So this is the first point. The second point you are correct, as in the fourth quarter. we don't have newcomers, therefore we don't have the pressure of PagFacio. The trend is that PCLD comes to the average and reduces to a lower level, like the inadimplency and the numbers that we have here, as Fred always mentions. A PDA of proxies of inadimplency would converge to that, therefore remove the pressure. of the PDA improving the margin trend, and you were perfect in your observation. Obviously, we cannot predict, we cannot give a specific guidance, but this is the specification. I don't know, Fred, do you have any additional comments? Well, no comments, it's exactly that. The comment I would make is that that as we collected more with PagFacio, because PagFacio and Timiti are only different commercial names, but basically it's the same. So the important is that the PDA is high due to the payment installments. If our inadimplency is in X, so this effect is in line and close to 10%. So we'll see the quarters and understand that there's nothing new because it's already provision. If we improve the inadequacy and improve the dropouts, we'll have an upside to the future. Otherwise, the PDD is already correct. So regarding the perspectives for DEL, considering the regulation, it's difficult to predict but we can have some ideas considering two important aspects one that in the beginning in may when it was disclosed how much of restriction of courses that were dl and now are semi-presential and how it could restrict the movement of the student i mean going from dl to one site So this is the first doubt. We are seeing that, yeah, there is quite a positive migration effect. In the first weeks, we are in the beginning of the cycle, but in the first weeks where the nursing courses are not available, in DL, we don't have the regulation defined, we see quite a strong growth effect. of these courses especially nursing in on-site so the first doubt well if the fact we don't have cheap del the students won't be able to study therefore we won't have so many enrollments we don't see that we see a strong growth in the on-site which is positive from the growth point of view with the pressures on the margin because on-site courses have lower margin, but the nominal contribution is much greater. The final benefit to the cash generation is quite positive. So this is the first element. The second one that is in the air, and we expect to have more information in the last weeks, is how the fast track of approval of the nursing courses will be and how... from that on, how many units and homes will offer this course. And we are quite optimistic that MAC will propose a transition rule to allow that those operating keep operating. But this is only an expectation. We don't have any official information regarding the cost impacts. We keep having the same view that we've had since the A regulatory framework was launched, if you know that. From the point of view of cost, we understand it's quite not relevant, both in online and semi-presential or DL. So they are prone to repasses in the average ticket of the student. As you can see, we keep repassing inflation. The average ticket is growing for newcomers and old students. So we have the same view and we don't have elements to say that DL will have a non-manageable impact, let's say. Okay, good. Quite a complete response. Thank you very much. The next question comes from Caio Muscardini, sell-side analyst of Santander. Caio will open your audience so that you ask your question. Caio, please, you may go on. Hello, everyone. Thank you for allowing me to ask. Could you talk a little bit more of Vasta ACV, what we can expect in this new cycle, if the 14% that we saw in 2025 is a good proxy? I think it helps a lot. And in Saber, just to confirm if this market share of 30% is regarding a new cycle of the PDA from 26 to 29, that the government has a budget close to $2 billion. And what should we expect in terms of EBITDA for Vasta in the fourth quarter, if we can grow this EBITDA of Saber in 26, comparing year to year? So, thank you, Guilherme, here. I'll talk about the Vasta ACV. As shown in the presentation, we are having quite a positive track record in the evolution of ACV. We have a CAGR of 17,000, but I can tell you that we'll keep the growth for 26 at a similar level as we had from 24 to 25. So in the mid-double digits of growth. Okay, thank you, Madiga. Regarding your question of saber, Caio, you are correct. The last purchase of high school government typically makes one purchase a year. It can be fund one or two on the average and the fourth quarter we are talking about high school. We've had market shares in schools and teaching systems choosing 30% of all the purchase being with our books from Sabir. And we'll have a take rate of 30% of the program compared to a take rate of 22% in 2021. So it's 8% more in shares. So this is the information. So yeah, we do expect to grow our income in this sense. And we know that MAC as FNDA are discussing budget to comply with this purchase. And remember that next year's program is the new high school program. It's different with more disciplines, more content. But your interpretation is correct. I'm basically confirming what you said in your comment. Okay, thank you. And regarding Sabir in the fourth quarter, going from 24 to 25 it should grow year by year hi kyle fred speaking here our point of attention is only sessionality if you have a displacement from the fourth quarter to the first one as i mentioned due to the delays but evidence should be neutral positive because as it is a year of purchase as roberto mentioned i also have expenses with marketing and advertising which affects a lot the cost but due to the growth of eight points percent it can be positive okay thank you very much The next question is from Samuel. Samuel will open your audio so that you ask your question. Samuel, please, you may go on. Hello, Valerio, Fred, Guilherme. Thank you for the space. My first question is about receivables and maybe it's related to the comments before about PagFacio because we saw an important increase in receivables after one year. So can it be related to PagFacio so that I get your idea about the aging? This is the first question. And a second question. is having a follow-up on the topic of the PDA. If I'm not mistaken, the company had a certain target of EBITDA to 25 in saber of about 200, 230 million reais, if I'm not mistaken, but something like that. So you were mentioning this point that Fred mentioned now about the marketing expenses and the cycle of purchase as a challenge. So it caught my attention, the comment of EBITDA being neutral or positive compared to the years in the fourth quarter, because it would be above that. So was it my misperception of not understanding your comment, considering it was 360%? I guess the EBITDA last year of 200 million was adjusted just to make it more clear about Saber's performance. Thank you. Well, Samuel, I'll start with Saber and Fred will talk about the aging. It's important to consider that Fred's aspect is that We are not so certain or clear on the income of high school in the fourth quarter. As the orders are delayed, maybe part of this income will decrease in the first week of January. So it's difficult to be content and understand what is the EBITDA in the fourth quarter considering the uncertainty in the displacement of income. we have almost no doubt regarding the effectiveness of the purchase of the government. Therefore, government needs to handle the books to students in February when classes start. So maybe this misperception is a little more regarding the conviction that we have that the fourth quarter specifically will have a neutral positive EBITDA without knowing exactly what is the displacement of the income. So any displacement should be of weeks because the program must be carried out. I don't know if I made myself clear. If you have any doubts, we can discuss more. And I'll then pass on the floor to Fred to talk about aging. Hi, Samuel. Fred here. about the aging of receivables. You were analyzing the IPR of the company. So I have the growth and the installment programs for PagFácil. So I'm growing this potential, but the second effect of growth in the aging above 365 days is not for pipe pass you it's the pet effect pp the program that fin already finished and here we have more than 70 percent provision so we have our natural efforts here for charging nothing different from what we already have nothing different from previous quarters or years okay quite clear fragile thank you very much and thank you valerio our question is from lucas nagano cell site analyst morgan stanley we'll open your mic so that you ask your question lucas please you may go on hi everyone thank you for the space we have two questions as well the first one is regarding pagfacio and first of all i'd like to check some points on the coverage Because you mentioned the provision in the beginning is 40% and in advocacy, default is converted to 10%. So if it's 47%, is it the same of the P&D of the previous year or it varies in the cycle? And the second one is regarding nursing, considering that the government will facilitate the provision accreditation how far it could smoothen the effects of the margin how feasible would be the implementation and offer of professors and the demand available for this level of teaching hi lucas fragile start with Pagfacio's doubt because our provision uses always the historic as a criteria the past history because as I mentioned Pagfacio and PMT are just the commercial trade names so I need to use the history and we use it in the beginning We provision 60%, but as I naturally have returns every month, the index of provision coverage is 47%. So just to make it clear to you, I used the history in the beginning and I provisioned 60% of the budget. And in the history, it's 47%. You can do the math, okay? Back to the second question. Okay, thank you, Fred. Well, Lucas, regarding nursing, your question about the feasibility to carry out on-site nursing and this transition the feasibility on our site is complete i would like to emphasize two things one our nursing costs where we would offer nursing in the post already had on-site hours of 42% with the new rule it's 70% so I already have tutors and professors and labs and classrooms and everything. So we would be working in a lower percentage. So going from 42% or 52% to 70% is as simple as increasing the amount of hours of the professors and tutors that we have. This is our reality because we always operate with healthcare courses, with off-site labs. We didn't have practice of offering nursing, as you asked it. In 100% online model, we always had the labs and so on. So if we have a fast track made by Mac based on the evidence that we already have the lab and all the scholars, it would be quite fast, this impact. And it's fast and the impact basically is zero, considering that students are migrating from DL to on-site, where we have these offers presentially. So this is my understanding. Obviously, we need to live to be sure that this scenario is the practice. But I have enough elements to say that, yeah, that's it. And just a quick follow up, how should it affect the first point? of this polls, well, the average price of a non-site nursing course is 30% higher than the semi-presential. This is how the prices were made. And I think that pricing is less related to ability of payment of the students and more related to the level of competition of prices among the many players in the city. if you remove players because they have no labs or professors or so on the trend is that you can repass the prices and students can pay so that's why we are seeing a strong growth in the campus even with the on-site being more expensive than some presidential or dl Okay, Valerio and Fred, thank you. The next question is from Eduardo Rezende, suicide analyst, UBS. Eduardo will open your audio so that you ask your question. Eduardo, please, you may go on. Thank you, Roberto, Fred, Guilherme. I have two questions here. The first regarding the migration of DL students to the on-site or hybrid models, as you mentioned, and I would like to understand what was the difference in the commercial strategy now to the next cycle that you see this movement so anything that you had to do differently in the marketing or any other front that might be helping that and the second question is regarding Acerta Brasil in Sabercas. This year and last year, we had this line contributing a lot to the growth, and I'd like to understand if we have space to expand in the next years or if now raising the bar too low for that. That's my question. Those are my questions. Thank you. Hi, Eduardo. Now to answer questions regarding the new commercial strategies to foster the migration from DL to on-site. The answer is no. It's a natural movement on the market. The student... had options and we are talking specifically about the campus we had the on-site and the DL offers as DL it's cheaper we have more demand on DL but we kept making groups and enrolling students for on-site we don't have DL now they have to enroll for the on-site education so we keep the levels of enrollment the same but they simply migrated from a simple line of products to the other one with a higher average ticket which means a match Profit with a greater nominal contribution. As I said, a lower percentage of profit, but with a greater nominal contribution. But directly talking about your question, we have nothing specific. It's a natural movement of the market. And now talking about Acerta Brasil, there's no doubt Acerta Brasil reinforces the learning, especially... for Portuguese and math that we deal with the state and municipal secretaries of education. It's a good product. The indicators show that the evolution of the students using this material. And we still have space to grow Brazil. has many states and cities and we have more than 5,000 cities and we sell to a small amount of that. So we believe we still have space to grow. Okay, thank you. Next question is from Flavio Yoshida, sales side analyst, Bank of America. Flavio, open your mic so that you can ask your questions. Flávio, please, you may go on. Hello, good morning. My doubt here is regarding PagFácio as well. I'd like to understand better the economics of the students in PagFácio when we compare to out-of-pocket students and understanding the dropouts and the quality of payment of PagFácio. And my second question is specifically regarding the technology capex. We know that when we consider the nine months of 25 compared to the previous year, we had an expressive increase of almost 70%. So I would like to understand the drivers here and if we should wait impressive growth in 26 as well. Fred, you start with Capex? Yes, I start with Capex. Father, thank you for your question regarding Capex. Technology is a product here, so we have strong investments in technology. We are doing this investment and note that in the nine months compared to 2024 and 2023, We also grill and we are here building this tool that is an academic RP and we believe nobody has that on the market. Aside from the investment, we are also making to improve the students learning and all the development of AI. And here, this is what we look in terms of product view. What we mentioned before is that we don't understand that in the total CAPEX of the company, we are not growing nominally compared to the year. And for the next years, we believe that the CAPEX is simply... a seesaw we reduce technology and invest more in the field but it's natural i cannot say only technology but the capex as a whole should shouldn't even grow nominally comparing the years the second question regarding pagifacio well flyview it is important i'll try to explain better because the student pagifacio is the out-of-pocket student. They pay, they are not funded. We don't fund any student. All of them pay to us every month. We don't fund, we haven't funded students for a while. And this is Pagfaso because the first monthly payments that are paid as they understand late, is that they pay in installment. So, considering January, so that you understand, if the student enrolls in December, for example, December 25 to start studying in February 26, when they pay the monthly fee in December, what are they paying? They are paying the January monthly fee. So the second is February, the third March, April, so on. So when it is already March, and the student comes late, they say, hey, but it's not fair. Why do I have to pay January and February if I didn't study? We still didn't have classes. It's already March. And then we say, well, in fact, the point is you pay for the semester in six installments as it's already March. I am facilitating. That's why it's called easily. So you are late. So I let you pay installments January and February. So you choose 46 or 47 installments. So we explain to the students and to make it clear, Pagfacio historically is a student that is late in paying the installments. They don't want to pay all the time. So we facilitate by paying installments. So there is no difference between Pagfacio and the one that pays. The difference is that we only had this offer of Pagfaz, we started in February, March, April, and now we are offering even for December, January. for those who were correcting payments. So that's why we increased the penetration of PagFacio. So in this case, there is more quality or less quality. We understand they have more quality because if you enrolled previously, you are scheduled to that, you organize. If you are enrolling in January or December, they are more organized and more engaged, probably a better payer. So, in our understanding, the fact of allowing the monthly fees in installments wouldn't facilitate the dropouts because they are good students. They come before the ones that are late in their enrollment. So, it's important to say that all this process to the students is quite clear. They sign a contract, acceptance terms, so... they can pay the installments that are, let's say, late or they choose how to participate. So, obviously, they have to choose the benefit. That's why they have such a big penetration. So, that's why we are completely transparent in all questions that we understand this strategy than simply reducing the prices to be competitive commercially. So, this is the strategy plan of PagFácil. Okay, quite clear. The next question is from Renan Prato, Cell Site Analyst City. Renan, we'll open your mic so that you ask your question. Renan, please, you may go on. Hello, everyone. Thank you for the space. Quite briefly, regarding... the results I think this line that we have four semesters with gains I would like to understand your point of view on this funding and I don't know what you are thinking for this line and the other if you can give an update of the trade-off of Vasta because there was some delay regarding SEC but if you can update us it will help as well thank you very much Hello, Janan, the first question of Risco Sacado. The risk is something that we know we are keeping that. And in this case, it is in Saber e Vasta. That is the installment, the funding of our raw material, mainly paper and printing. there is a correlation with the growth of revenue. As I grow the revenue, I need more paper and print the books and so on. So note that I'm growing the revenue in Soma, Soma Educação, and not Saber, but this strategy is ongoing. So why? Because today my average cost of debt is CDI plus 1.5 and risco sacado is 2.9. So what happens is that we are doing that naturally, because if I simply remove all the risk and put it into a debt account, I have no problems in leverage and the debtor risk was always clear in the company. But if I do that, I reduce the operational cash at the moment, zeroing 490 million. So naturally, you will see that this line that was correlated to the revenue will be a line that will reduce revenue. uh quarter by quarter to you we understand that we do not have to consider the adapter risk is the main reason is the average cost of adapter risk regarding our depth first question the second one regarding the trader offer of vasta it's public So I won't say anything different. So we are just waiting for the American SEC, that is the Brazilian CVM, that is in the shutdown process due to political problems in North America. So we are waiting for the reopening of SEC so that we can have the operational and legal process bureaucracy for the operation. We postponed the operation due to the shutdown of the SEC and until the deadline that is December 9, our expectation in discussions with our legal consultants in North America is that SEC will open In November, and this is a data that I'm just repassing what I've heard. There is no commitment in what I'm saying. So the expectation is that until nine, we can have more elements in this operation to close everything. Okay, quite clear. Thank you very much. The Q&A session is over, so we'll now pass on the floor to Mr. Roberto Valério to his final considerations. Well, I thank you all for your participation. I'd like to reinforce my thanks to every one of the 26,000 workers that are working nonstop so that we can reach these results and get better to our clients and students. Thank you very much. And we are still available with our team to clear any doubts necessary. Thank you very much. And we see you in the next quarter. The result conference regarding the third quarter of 25 of Cognitive Education is over. The Department of Relations with Investors is available to clear any doubts you might have. Thank you very much to the participants and have a nice afternoon.