Cogna Educacao S A S/Adr

Good morning, everyone, and thank you for waiting. Welcome to the teleconference to disclose the results of the first quarter of 26 of Cognitive Education. I emphasize that if you need simultaneous translation, we have this tool available in the platform. To access it, just click the Interpretation button in the globe icon in the bottom part of your screen and choose the language you prefer, Portuguese or English. For those hearing the teleconference in English, there is the option to mute the original audio in Portuguese by clicking in mute original audio. We inform that the teleconference is being recorded and will be available in the RI website of the company at www.ri.cogna.com.br, where you can see the whole results disclosure. You can also download the presentation and the chat icon, even in English. During the presentation of the company, all participants will have their mic enabled. Then we'll start the Q&A. To ask a question, click the Q&A icon in the bottom part of your screen and write your question to be in line. When invited, there will be a request to unmute the mic and then you unmute the mic. we suggest that all questions are made at once. Before going on, we'd like to clear that the event or declarations made during the telecom projections, operational and financial targets are consistent premises of the company administration as information currently available for the future as they involve risks and uncertainties as they refer to future events and depend on circumstances that may or not withstand the general conditions or conditions of the sector or other operational factors can affect the future results of Cogna leading to different results from the ones expressed in the future considerations. Now I'd like to pass on the floor to Mr. Roberto Valerio to start his presentation. Please, Mr. Roberto, you may go on. Good morning, everyone. Thank you for being in this teleconference to discuss the results of our first quarter of 26. We have here in this poll Federico, our financial vice president, Guilherme Melaga, our vice president. Thank you. This call should last one hour, comprising 40 minutes of presentation and then 20 minutes of the Q&A. So I'd like to start in slide three, mentioning something very important to us, that this April we celebrated six years of wonderful story that started with five teachers in 66, five teachers in 35, students at the Pythagoras course in Belo Horizonte, and the most important part is that 33 out of the 35 students were approved in our SATs. So our history of approval has always been very high, considering the early beginning of our history at Pythagoras. But to Now we have more than 25 million students in our educational institutions. And as you know, they have books, education system, technical courses, graduation, post-graduation courses, technology platforms, franchising. And we are very proud of our history. That is a great motivation for the next generation. 60 years with this view that we understand that Pogna is the only company able to deal with that and foster people from 2 to 100 years old as we have credits for all ages. So one fact that was very important and that is very happy for us to celebrate this 60 years. My second comment is regarding the capital of Vasta because we integrate in the operations of Sabir and Cogne, we have both operations working together, reflecting in the development of a vertical that we present to you as the basic education. So basic education is today Vastan and Sabir all together, and higher education is the old Crofton. So today we have two verticals of basic education and higher education regarding integration of Vastan I'd like to say that BAST and TABIR teams are already integrated with a single leadership. Therefore, Guilherme Meliger is the leader joining systems and processes. And part of it is already integrated. Other part is being integrated so that you have a reference. The RP of Somnus is now SAP, that is the RT of Cognite, in the middle of this year, so in the second semester, will be integrated, even from the point of view of systems and RP, and considering the B2G, that is important, and a question that you used to ask about the opportunities with the two teams, considering that the overlap that we had between SOMS and Sabir would be the sales for government, and both teams are already integrated and restructured. Much less in the synergy of costs, but much more in the restructure, seeing the opportunity for growth as we see many opportunities for this segment. And the last comment before the financial highlights is that we presented in this result our new division of graduation courses following the regulation, therefore now presenting the on-site hybrid and distance learning modalities. And we'll talk more about it later in our presentation. Now, going to the results in page four, we understand that this is one positive quarter with all businesses growing double digits in the revenue, in the EBITDA as well, and cash integration. The net revenue this quarter grew 32%. And obviously, it was pushed by the P&LD revenue that dislocated. And now, even if we gather the revenue of our businesses and the consolidate of Cogna and X-PenLD, we would have a double-digit growth, a very high of about 14%, 15% of growth. Therefore, with all the business units growing strongly, and obviously, with the PNLD going well. And in the fourth quarter, we mentioned that there was a delay in the invoices of the government and this revenue would be for the first quarter. And we now have a guidance that would be 160 millions. And in the end, we could have 300 million in the first quarter. And this increased is much more than our initial guidance and due to the We improved a lot the market share of the program and remember that more participation and more sharing the program as we purchase material also chasing the subsequent years. So one important highlight here of overcoming P&LD, not only for displacement, but because we performed better from the point of view of choosing that from part of the teachers and professors. Talking about the EBITDA, it grew 32%, 120 million more than last year. We had a loss in cash flow of 2.5%. We'll go through this explanation with Malaga and Jefferson talking about it. But I think we have two big items. that make the margin to decrease. The first one is greater participation of PNLD that is proportional with the contribution of basic education and PNLD from the point of view of EBITDA to the total EBITDA of Cogna with the participation in basic education in the same quarter of last year. that was 33% of EBITDA in this first quarter. It is more than 40%, to be more precise, 41%. And the PNLD is a line of product with a percentage margin that is lower. So as it participates more in the mix of EBITDA, of Cogna, it pressures the margin of Cogna and it is the second in the part of cotton in higher education. And in this first quarter, we have this pressure to reduce the margin, especially by the displacement of expenses in technology, but with more investment in marketing. And Jefferson will always also discuss that. But basically, we have this pressure in the margin of higher education, making the margin this quarter to decrease 2.5%. Now, one of the big highlights And Fred likes that a lot, is that we are looking less to the EBITDA and more to the free cash flow. And now our focus is more in the free cash flow and the profits. We grew 49% compared in the years. It's more than 95 million compared to 2025 compared compared to that that was 25 million and the cash generation after capex growing 27%, 68 million more than the first quarter of 25. And finally, the free cash flow with 69% of growth that is 103 million reais more than the first quarter 25. And remember that in this quarter, We also had a distribution of dividends of R$119.5 million paid in February. And even though we reduced the net debt in R$35 million because the cash generation was quite strong from the point of view of leverage, it had grown in the fourth quarter due to the closing of Capital Vasta, but now it decreased again 1.13 times of the EBITDA It is not critical to us, and it's been like this for a while, but this is an indicator that the market follows. So these are the initial highlights. Just to finish my part, we've had quite a positive quarter. Jefferson will talk a little bit about income and due to the change in the regulation. And I emphasize that... that the revenue grew almost 4% despite a different mix, more concentrated in site and hybrid than DL. But as we've been saying for the last five years, the volume is important, okay, but the most important to us is that the intake compared to the previous year grows, and it grows 4%. So when we talk about the base of re-enrollment, we see a strong base with an increase in the average ticket showing that we can repass even above inflation. And I think it is a little of the doubt of the market when the government more than a year ago had the new regulation. We were in doubt if we could repass the cost increase in the prices to the clients. And the ticket shows that, yes, we can do that. But Jefferson will talk more about that. Having that time, I'll pass on the floor to Guilherme Meliger so that he discusses the basic education. Thank you, Roberto. I'll start in slide six, talking about the new results that we consolidated Sabir. We now open our revenue in the segment of subscription, that is the B2B, the B2G, that is the sales of solutions for states and municipalities. P&LD and the disclosure of the business of franchising of languages, that is Red Balloon. And going to the left, the total net revenue of the quarter reached 950 million reais, of which 462 million of subscriptions. So we grew 15.5% in the quarter, followed by the B2G. Again, the B2G is the sales of systems of teaching and recovery of learning, no PNLD reaching 22% growth versus years. I emphasize the NBTP that decreased in the fourth quarter compared to the first one, and we performed 307.7 million. The growth is very big compared to the first quarter of 25 with only 6 million. So now we'll show the impact of this displacement as well. And I also emphasize the growth of our language of franchising that is growing 14.6%. And then we reach this growth in the quarter. And now this considering the effect of NBTP and looking only at the other business, we would grow 17%. When we analyze the ACV, the graph on the right, we reach 1.8 billion reais, 8.8%. And as we've been seeing the last cycles, the core growth is a little below the complementary. The complementary increases its contribution in this total. And this 8.8% has a displacement to the third and fourth quarter. And we expect to reach two digits as we've been doing the last five commercial cycles. Now going to slide number seven, I'll talk a little bit about our expenses. And I emphasize the total costs that obviously is impacted by the NBTP. As we grow more in the revenue, we have more due to this NBTP, which makes... the total costs with the percentage of revenue grow at 11%. This is the effect of the NBTP. But when we look at the other costs of marketing operational expenses, corporate expenses, we see a dilution of this revenue with less costs in all of them. I emphasize here as well, oh, by the way, I mentioned that marketing and sales, when we talk about B2B, the percentage of revenue is absolutely flat. So we keep the same expense of revenue in the B2B. When we look at operational revenues, even in absolute values, we have a reduction in 60%. from 67 to 62 million. So besides the benefit of the dilution with more revenue in the NBTP, we have effective gains in the reduction of operational expenses. Now going to the EBITDA, we reached 276 millions of EBITDA in the first quarter in basic education with a growth of 66.4%. If you pay attention, the margin goes from 30% to 29%, which is the impact of the NBTP with a higher consideration in the first quarter and a lower margin and the impact, even though it was not that big considering the evolution of other businesses and the growth of subscriptions and B2G. And we are quite optimistic for this year, not only in the delivery of the rest of the ACV, but we finished the first measure of the commercial cycle of 2017 and we are In the front line, compared to the previous years, we are in the middle of the bet. That is quite an important conference to our business. And we are quite optimistic with the interactions we are having. And in the B2G, it reflects the benefits of working all together with a single team and the same objective quite clear to everyone and the joint marketing reflecting in the growth of 22% of this business in the first quarter. Now, I pass on the floor to my colleague and friend, Jefferson Ortiz, to talk about higher education. Thank you, Malagor. Good morning, everyone. Thank you, Roberto Valerio, for the opportunity of making the presentation of the results of Croton. And I'll start in slide 10 with the operational performance of Croton. I would like to emphasize the impact of the recurring changes with the new regulatory framework. So this new regulation established offers and in the online and onsite. So it changes the basis of intake courses of pedagogy, nursing, and so on are in different categories compared to the previous year. In the case of nursing, the discontinuation of the offer onsite was 420 points. So we are thrilled with the offers and the possibilities in 53 polls offered for on-site courses of nursing representing about 44% of the amount of the 120 polls for accreditation now. With this observation of the regulation, we see the first graph with the intake with a reduction of 14.2 reflects of this reduction of 32% in DL. And the present shall grow in 14% and 4.6 in the hybrid. Despite the challenges, we are growing the revenue of this intake period, as Roberto mentioned in the beginning, in 3.5%. It's a great indication to us that we could keep the operational structure of the period. The second graph shows that the student base had a reduction of 4.6%, a result of a decrease of 18.2%. DL and growing 8.9 in on-site and 12.6 in hybrid. Going to the last graph on the right, the average ticket grows 19.4%, emphasizing here the growth in all modalities, a reflex of this change of this mix in our basis. On site and hybrid, we have a mix of courses of high LTV and DL. We changed the mix of courses in the basis, considering the migration and classification. For example, the courses go into the hybrid. In slide 11, we have a double-digit growth in the net revenue, 10.9%. And here we see that the revenue is not reducing speed, it's growing all business modalities. I emphasize particularly the positive growth of the on-site of 15.2% that is quite important to this regulatory change that we can see. And the gross profit reached 997 million with a 10.4% growth compared to the first quarter, 25, also highlighting 17% growth on the on-site, followed by 5% in hybrid and 8.5% in DL. It is important to say that we expect more pressure in the margin of costs due to the pressure in the sector, especially in the hybrid courses that are also courses under maturation. But it's important to say that in the net EBITDA and cash generation, we are positive with the highest ticket. Now going to slide 12, we see the analysis of costs and expenses with a growth of 2.1%. Points per cent, that is the result of the time of some actions, as Roberto mentioned, mainly in technology, displaced from the first quarter to the second quarter, 25, impacting negatively the comparison. Additionally, the first quarter, 26, we have expenses with marketing and sales with an increase. That is due to being more careful regarding the potential impact of the number of enrollments. Therefore, we invested more in marketing, being aware that we'll have benefits not only the first quarter, but reinforcing the strength of our brands. And regarding the NOR, we had the growth due to the program, PagFácil, that instead of reducing the average ticket, we offered installments. Therefore, we have this effect of more provisioning in the installments for the students who pay. Now, the last slide, 13, we have a recurring EBITDA growing for almost 4% with a pressure of 2.5%. As explained before, I thank you all for your attention. Now I pass on the floor to Fred to go on with his presentation. Thank you, Jefferson. I'll start my presentation talking about Cogna. And please remember that I talk about Cogna, that is the two big businesses that we have, the ones presented by Maligar and Jefferson. And I'll start the presentation in slide 15 with the financial performance. On the left, we have the net revenue. So please note that we grew in the revenue in our two businesses. And we reached a net revenue incognito of $2,146,000, a 32% growth compared to the first quarter of 2025, as explained before by the growth in the NBPP, in the basic education. Now going to the graph on the right, we have the recurring EBITDA with a strong growth of about 22%, reaching almost 680 million, as compared to the first quarter last year that we reached at 556 million. In slide 17, next page, We mentioned before that one of our main indicators and how we measure the company is with the free cash flow and the net profit. And we analyze the revenue and debt, but we now focus on the free cash flow and the EBITDA without the other indicators showing that we grew in the operational cash flow. And please remember that the generation of this operational cash is after CAPEX and we grew 27% reaching 318 million reais with a growth of about 68 million reais. And as I mentioned before, going from the operational cash to the free cash generation, that is the operational minus CAPEX and minus the interest to the corporate cash, we had a growth of about almost 69% reaching the first quarter, a free cash of 252 million reais with a growth of about 102 million reais, showing here the resilience of our business. growing in revenue in EBITDA and in the free cash generation that gets to the reduction of the net debt of the company. Now in slide 17, as I mentioned, the free cash flow, we have the next indicator of net income. We had 49% of growth. And remember that the net income last year was 95 million reais. And this net income comes and is the result of the growth of the operational result that was about 25%. And in the first quarter, this net income has an impact in the expenses of a tax pay, the current one and the third one, with an impact of about 45% in our net income. It was expense and the liability, but I'd like to remember you that we cannot assess our tax payment in only one quarter. We need to analyze the whole year and we had a greater impact in education and in basic education because the revenue, the EBITDA of that basic education reached $265 And this growth generated 34% of payment and 34% of impact. And looking ahead, and this is not a guidance, we have tools to look at the year of 26 and our current tax shouldn't be different from the net profit. tax payment to the current tax payment as it was presented in 26 and 25 and 24. Now in slide 18, the depth of the company and one quarter comparing now the first quarter 26 and 25, we reduced our net debt in 52 million. considering that we started with 2.8 million reaching 2.7 million and the main impacts in the worry in the generation of free cash and the return to the shareholder with the dividends that we pay. In February 13, we paid 119 million of the shareholders returns and the other movements that reach 8 million reais. Now in slide 19 in depthness, we have one more quarter with the reduction in the leverage. As I mentioned many times, the leverage is not a problem to us. our covenants of debts are net debt divided by the average of the 12 months in 3.5 times and the leverage reached the first quarter 26, 1.13 times comparing to the fourth quarter in the previous slide, we had a reduction that was 1.20 times and comparing with the first quarter 25, we reduced that it was 1.28 and we reached 1.13. So that's completely normal. This is what we presented over the last four years, this reduction of leverage. The average cost of debt in line with the fourth quarter 25, the average cost is CDI plus 1.33. We now don't have for the next quarter big liability management costs will happen in the first quarter of 26 as our debts are located and we cannot negotiate. And now looking at the amortization schedule for the next years, you can see that in 26, we have no big amortization as in 27. So only in 28, but then from now until the beginning of 28, we have a lot of time to renegotiate liabilities and we can deal with the banks. We still have a good cash, so it's not a problem to us. And I'll finish this brief presentation of Cogna with a summary of the big businesses and I'll pass on the floor to Roberto Valerio. Thank you, Fred. Now, going to slide 20, talking about capital allocation and the priorities for the capital allocation, I reinforce that they are still the same priorities. The first focus, the main focus, keeps being the reduction of financial expenses, considering the high interest rate. So everything we can do to pay a debt in advance, we are doing. We are doing that in 25 and 26, as seen in the slide, many liability management actions. If we consider all the actions, we have 1.7 billion in negotiations, obviously, with the reduction of the debt costs and elongating the profile of amortization. We are doing that quite efficiently. So this is the primary focus when we talk about financial expenses. Then we have the return to the shareholders. In 2006, we've had about 300 million reais returned and in buyback. with 120 million reais in April 25 and in February 26 almost 120 million in dividends plus 60 millions in repurchase of shares. So 300 million reais in dividends and buyback also with the signs on the payment of new dividends with the approvals. And I even reinforce the information that on May 30, we'll pay 28.5 million reais based on the AGM of April. So this is our second priority. We don't have an M&A strategy to consume a lot of our cash. We are still focused on generating value with that. assets we have we understand we have a broad portfolio very rich with the strong brands and the potential to grow and look for example that we are having sales for governments and what we have with the start leveraging the brands and the assets and the editorial capacity of management that we have so our mna view is very strategic I can mention two cases considering the context with the closing of a capital that was an opportunity, a vast tender offer, I'm sorry. It was very important to use a capital for that. We had an F&D acquisition last year. with a good price and a strategically important location to us. And we also had an acquisition of an OPM that was very small last year, but we understand that It is opening opportunities for us to operate with the premium brands after graduation, like McKinsey, Instituto Maui, ESPM. And we understand that despite not having a proper asset for the brands, we can generate value working in the segments with partnerships with third parties. So just to mention the priorities of capital allocation. Now go into the last slide with the final remarks, the closing remarks. In 21, when we started the turnaround, we talked a lot about ambidextrous heritage to evolve not only in the former and the teaching system, but in graduation, which shows that we are doing that consistently with a consistent growth over the five years, really more than double digits, as well as operating with the new business opportunities. And I mentioned here, B2G start ungluing the platform of info producers that is growing. So it's not a thesis to us. It's a proof of the capacity of the company. and our teams and how we can use assets, brands, systems, processes, competences to create new businesses. We understand that it opens many opportunities for the future, which makes us very thrilled regardless of what happens here or there in one or other segment. The strategy is of a diversified portfolio. And this quarter has shown that even with the regulatory changes in one business, the others are performing well. And a business like the PNF, I'm sorry, like the NBTP is stable and mature, but we gain market share with 85% more revenue than we imagined. So this bid dexterity is proven with a concrete execution. A second important point is that we are still focused a lot in the student client, no matter if it's a... Mariana Alegre- Here of education and school or a b2c student team of English school or graduation school, we are focusing a lot in improving the nps and satisfaction and making the processes simpler and easier. It is generating a lot of value to us. We'll focus about that. And I'm talking a lot about culture. This work is very nice to hear with a mentor. I reinforce we have 60 partners that are people with shares of the company that gather every month to talk about results and culture and how we can do better and carry out better our strategies. So in the mid and long term, we'll bring more capacity of delivery to be used then to change for assets. That is our thesis to change assets in a platform or a set of educational services. We don't see ourselves as a graduation company as we were in the past in 2017, 18, no more like a publishing house. We are a service company. We provide B2B, B2C, B2G, services in many different segments and it is this strategy that we want to keep up having because it opens opportunities to many growth pathways always focusing on the value generation and little by little patiently and with a lot of focus and ability to deliver and carry out we are improving all indicators and the example is this quarter that from one side to the other of revenue, EBITDA, cash generation, free cash flow, leverage, and free debt and net debt, everything has positive results reinforcing that we are not focusing on one or the other thing. We have a broader view of our business. We know how to operate so that with the net profit and the free cash flow, we can show our capacity of delivery with our team and assets to generate value to the shareholders. And remember that we are all shareholders of the company. Having that said, I finish the presentation and we now open the floor for the Q&A session. Thank you very much. We'll now start the Q&A session. Please remember that to ask your question, you must click the Q&A question in the bottom part of your screen and write your question to enter the line. When announcing, you may unmute your mic and then after unmuting it, you ask your questions. We ask you please to ask all questions at once. Going on with the first question, we have Luca Marquezini from Itaú. Luca, please, the floor is yours. Good morning, everyone. Thank you for the questions. We have two here. The first one regarding nursing, because we had the relevant impact in intake. And how do you see that the approval of five units of fast track of nursing Because our idea is to understand how the roadmap and operational of these new units would be and how it should eventually compensate or offset this impact in 2026. So I'd like to understand how you imagine to have been taking these units and how it could happen, helping the results. And the second point regarding Crocomag, if you can comment on the dynamic of the competition that you see for the intake in the first quarter, if there was some worsening in the competition, needs for discounts, if you can comment on that, it will help a lot. Thank you. Hi, Luca, thank you for your questions. You answered the first one, and then if they want to compliment, they can. So regarding nursing, Well, we asked 122 folks to be pre-approved for the on-site nursing course, and today we have 53 out of the 122 approved. There's 53... can intake students, although the cycle for the semester hasn't started yet. Our expectation and what we have discussed with the Ministry of Education is that over the next weeks, all posts will have these authorizations. In other words, we expect to have the 120 polls operational in the second semester and remember that they are already prepared. We've already had classrooms and labs. We would take a lot of students. They had the big a student's base. So we didn't have so much to do. So it means that as soon as we have the authorization, it's much more of having the courses offered, the website and starting the communication, generating leads and conversion. So you made a question regarding the roadmap of implementation. It's immediate. We don't have any time that is relevant for that. Regarding the impact in 2016, we understand that each one of these polls will have 100 spots authorized. They are big polls with a lot of enrollments, and we understand that we'll, not in 26, but we understand that once it's stabilized, we can enroll 100 students during the year, which means that these 120 polls can generate an amount of students that is something like half of what we would have in nursing intake in the polls and the question you may ask is well if it's healthy you will lose revenue but we understand that maybe a little but we have the possibility of compared this revenue to the previous one because the present show downside tickets are higher than the DL, so our nursing ticket on-site would be 399 average, and I'm sorry, this was the DL, and on-site it goes about 1800 reais, so it's more than double. So, having half of the students on the on-site modality but paying more than twice the average ticket, we have the possibility of recovering the revenue over time. But to answer your question directly, the impact in 2016 is that we will be able to collect and have a good recovery in the second semester, but in the first semester we don't have this revenue. In fact, when we look at the intake revenue and we say that it grew 4% a year, it is considering that we lost almost 28,000 students of nursing and DL. If we would have students and revenue, the a collection time would have grown water. So in other words, we are quite optimistic and positive. We see that quite positively. I mean the fact of operating this 120 poles in the second cycle. Regarding crop on magic, we've seen in this first cycle of 26 more pressure for competition and in practice what we see is a number of candidates per spot that is lower. I reinforce what I've mentioned before that our more traditional brands like NIC, UNIDEP, that are traditional and quite interesting brands in the market don't suffer this pressure. But on the countryside, we see more difficulties in enrollment. so much so that our business there is different from other players, but well, I think that's it. Okay, Roberto, thank you very much. The next question comes from Lucas Morgan Stanley. Lucas, please go on. Hello, everyone. We also have two questions. The first is about the intake in volume, because this is what we have information. And if you could give a number on how DL was taken into consideration at the end of Pedagogy, and that a decrease in 33%, and this trade-off for hybrid in Pedagogy helped the intake So we knew there was this loss in nursing as well, but just for me to understand the trend of demands in comparable basis. And the second question is about proton merging and the components to the future, because it seems that the costs in the The costing and BTP are stronger, but I think that technology and market seems to be something more specific in seasonality in the first quarter, which would suggest a lower decrease in the margin for the next quarter. So I'd like to know if it makes sense. Well, Lucas, the first one regarding the graduation, it's difficult to open the numbers. We don't generally do that, but directionally speaking, the reduction in the intake in DL is basically focused in pedagogy and nursing. So if you consider the presential DL and compared to what we have today. The impact comes basically from pedagogy and nursing. But obviously, pedagogy and licenciatura that now are on-site courses, they demand the formation of a group of students, which generates a conversion rate that is smaller, so directionally. We don't open, but yes, we've recovered. We have a lot of enrollment with a lot of students in pedagogy, but not the same ratio of the DL. We had a net loss in pedagogy students in this transition from DL to onsite. And regarding the margins, Fred, you can answer. Yeah. Hi, Luca. Talking about the margin crop, I'm considering the first quarter of 26. And in the comparison, looking to the future, our first quarter 26 had an impact of expenses of marketing and marketing costs and sales as well. And this is the impact that we analyze it. And we have a new dynamic after the regulatory changes. milestone, we had a great investment in the first quarters. So for the next quarters, we might have not a guidance, but naturally, we'll change. So we'll have a reduction in this sense. But our strategy to have cost in marketing is to bring the students from courses with a higher added value. So in fact, looking at our strategy, the strategy work because we are growing revenue of intake and we are mainly growing the courses with more value that are in the presidential one, but we to the future, we should have a slight reduction of marketing expenses. And in technology, as you question, we've had an impact in the first quarter that should be smoothed over the year, and there shouldn't be a greater difference than the inflation or something different, like it happened in 25. Yeah, just to... Emphasize a little more the answer, because I mentioned about DL and I can talk about the hybrid. So the DL base, we lost a lot because of pedagogy that migrated, yes, and helped the growth of the hybrid one. But you might ask, well, but the hybrid didn't grow. But you cannot forget that in our hybrid, we already had nursing. So we grew, I guess, 4.5% in on-site, considering that you have zero of nursing. And we are the biggest nursing player in DL. So we lost 27,000 students in nursing in the hybrid. So I guess it can explain better. So in other words, we could help in the hybrid, but they had the pressure of not having nursing. If we would have asked, we will have in the second semester, the intake for hybrid will be greater in the second semester because of the new nursing courses that we are offering. Yeah, and just to explain a little bit more the migration of pedagogy that happened, we do not offer that anymore. We don't have that in DL anymore. There was this migration, but the liquid was negative for us. It's not a positive liquid. We lost much more than we gained. And as Roberto mentioned, from 27 to 28,000 nursing students that didn't have the courses, And now you can infer the number and it's not for us to do that, but you can if you want to infer the number and see that our hybrid instead of growing 4.6 would grow much more and then more than two digits, okay? Okay, perfect, quite clear. Thank you very much. The next question comes from Marcelo Santos, JP Morgan. Marcelo, please, the floor is yours. Good morning, everyone. The first question would be regarding Croton. If you could comment on the adoption of PagFacio comparing the first quarter of 26 to 25, it was a component to help the world ticket or not. And the second would be the K12. If you can mention the elements we should consider to think about the ear margin. of 26 compared to 25 and what are the detractors and the pushers? Thank you very much. Okay, Fred here. The first question about higher education and PagFacio. Just remember that PagFacio, we already offered that for the basis In the summer and winter cycles in 25, we offered that. So with the same product, we didn't change and we offered for the whole base in intake, right? Yes. Yeah, you cannot compare to students' base. Yeah, the intake base. So there was no change of the product. There is no difference of product. And it was available when we offered to the whole base. So to answer your question, yes, it was important. We kept it here. In the middle of this war of prices in some centers, we kept that in our strategy not to reduce the intake price. And PagFácil is an installment. So it's not a fund. It's just installment. And you can see that how we could increase that we had the growth in the revenue. And as I always mentioned, the strategy is correct. We just need to analyze PagFacio in the net PDD because looking at the PDD, I'm growing in PagFacio but also the PDD of PagFacio because it's a percentage of what I'm offer and we do the PDD taking into consideration that PagFacil PDD has dropped out as the main factor when the students drop out and provision 100% of it. So it put us in the correct position in the commercial intake strategy and this effect is already in the EBITDA. So this is how we show that and we understand that it is correct. Anything else? Well, just to add something to this point of BDD and BDP comparing one quarter and the other with the hybrid and more on site, it's natural that we have more because the delta ticket of two or three months that is what we work in installments. When it's on site, it's higher. But to reinforce Fred's point, it's nothing different from what we're doing or explaining to you over the time. Okay, Marcelo, let me just explain a little of the margins of basic education because Vasta traditionally operated with 30% of EBITDA. a little higher, a little lower, and we understand this is the level of margin we want to operate in this business, in this new configuration with a saber. And then I'll look back. If we consolidated the results of saber consumos, the level of margin in EBITDA would be a little below 30. Due to the NBDP, when we're talking about a year that

And he.

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regulation and how we should think about the gross margin of Okay, Eduardo, thank you. I would get the receivables of Saber. In your question, you gave the correct answer because it is the NBTP. We acknowledge 300 million this quarter, but it's absolutely in the normal flow of business. And in these receivables, it becomes cash in the second quarter. So the regular business flow. And that's it. Okay, good Eduardo. Now I will get the gross margin of Crotam. The first comment is that the growth margin is better understood in the semester much more than in the quarter because comparing quarters remember that a student can enroll and as we allocate the hours for the professors and have the physical space rented we do that for the end of the semester so sometimes we have some displacement here and there we hire a little before or after with one more professor or not so this is the first information you might consider And the second more direction of considering that we cannot give a guidance is that, yes, it's natural that we see some pressure in the gross margin considering the mix of presidential and hybrid, on-site and hybrid. And they have a different gross margin than DL. So the margin of growth will face pressure over time, which doesn't mean that we won't work for new alternatives to mitigate that, but the natural flow of the process with this mix would have a reduction on the margin, although you can see that so clear from one quarter to the other. And it's also important to say that despite the expression of percentage margin, the on-site courses have a greater nominal contribution when we talk about the ticket of the students that we are enrolling now it's much higher than what we did with the dl so it's a different dynamic with a different margins but important nominal growth okay quite clear just regarding the adequation to the regulatory framework uh the current of intake is already in line with the new rules or they will be gradually implemented during this transition period until May next year? Well, I can talk about it. Well, particularly in 26, we are having this adaptation of the framework until we get to 27. So we have a period of adaptation despite the offer is already established the way it is classified. So both in DL that you cannot have some courses like pedagogy and licensing or even engineering is being established this offer for the hybrid And then during the year, you have all the need to operate all the required premises. So in 27, we'll have all the regulations completely implemented. Then in the second semester in nursing, we'll have this offer classified as an on-site course with all the legislation being strictly

much for the answers.

The next question comes from Mirela .

And the second question is regarding .

The changes of products due to the new regulations. Those were the questions. Thank you. I'm Mirela. Fred, I'll answer the first question.

Please remember that in fact, we had roads in the first quarter

And remember that the best analysis in this case is to compare with the rest of the video.

Thank you.

most disciplined and granulated in looking at price readjustment and dropout. So trying to bring a simple explanation here. Many times, we can't repass the prices at a ratio above the inflation. And obviously, when we repass above the inflation, you pressure the dropout. We're always doing the math to see if we gain on the readjustment. We do not put it on the table regarding the amount of re-enrollment. And historically, we've seen that it's better to speed up the price readjustment, therefore improving the tickets compared to the losses in the re-enrollment. Just for you to know that we also do this math and we have quite evolved predictive models considering we've been doing that for almost five years. So in other words, the dropout rate is not a problem to us in the first quarter because it's not the last one, the final one we need to consider this semester. And we look at that with a lot of granularity and we are always doing a trade off between the tickets and the dropouts aiming to have the best revenue and profitability. Okay, quite clear. Thank you very much. The Q&A session is over. Now we'll pass on the floor to the considerations of the company. Well, with that, we finish the presentation. I thank you once again for your dedication and the performance of all teams. More than 26,000 workers working nonstop. And I reinforce that we are quite optimistic regarding the year with a lot of opportunities and challenges. Yes, but many opportunities as well. And we are available to clear any doubts you might have. Thank you very much. And I see you in the next conference. The teleconference of results of the first quarter 26 of Common Education is over. The Department of Relations with Investors is available to clear any other doubts you might have. Thank you to all the participants. I wish you all the best.