Cogna Educacao S A S/Adr

www.ricogna.com.br, where the complete materials for our earnings release are also available. You can also download the presentation using the chat icon, including the English version. During the company's presentation, all participants' microphones will be muted. Afterward, we will begin the question and answer session. To ask a question, click the Q&A icon at the bottom part of your Zoom screen and type your question to join the queue. When your name is called, a prompt to enable your microphone will appear on the screen, so you must then enable your microphone to ask your question. We ask that all questions be asked at once. Before proceeding, we would like to clarify that any statements made during the conference call regarding Cogna's business outlook projections and operational and financial goals constitute the beliefs and assumptions of the company's management, as well as information currently available to Cogna. Forward-looking statements are not guarantees of performance and involve risks and uncertainties and assumptions as they refer to future events and therefore depend on circumstances that may or may not occur. Investors and analysts should understand that general conditions, industry conditions and other operational factors may affect Cogna's future. and may lead to results that differ materially from those expressed in such forward-looking statements. I would like now to turn the floor to Mr. Roberto Valera, CEO of Cogna, who will begin the presentation. Please, Mr. Roberto, you may proceed. Good morning. Good morning, everyone. I would like to thank you all for joining the conference call to discuss our first quarter 2026 results. So joining me on this call, Frederico Vila, our chief financial officer, Guilherme Melga, our vice president of K-12 education, and Jefferson Ortiz, our vice president of higher education, and Rodrigo Cavalcante, As well. So this call is expected from the last different from the last call. So we have like some introductions from the market and we will do it a little bit different. So you will last about one hour composed of 20 minutes of presentation and 40 minutes for Q&A. Therefore, you have more opportunities to ask questions and then we can have like a fire chat. So be welcome. I would like to begin highlighting that this semester, this quarter of 2026 was very good results, very positive results with the two BU's really growing. Obviously we're highlighted to the BU of basic education, which is growing along all its business lines. So the B2B and B2G, But reinforcing, and I always like to say that this quarter is a very good example that shows the quality of our strategy to act in a very diverse segment, not only with higher education, but also in basic education and the diversification of the portfolio within all these different segments, and no doubt, the quality of its execution since we began to turn around the company in 2021. So I believe that the whole market recognized. So the consistency of all deliveries and some quarters, one BU performing a little bit better than the others. So we have the seasonality of all the different businesses, but showing a very strong strength. So last year, like the higher education was very good and this quarter, and obviously the second quarter, the basic education, performing really well. So the composition made the company to grow at very high rates. So talking a little bit about the financial highlights. So our net revenue grew almost 18% pushed by the basic education. And the semester is even stronger. We grew almost 25% year over year. So the EBITDA is growing 6.8% on the quarter and almost like 14% in the semester. So I like to highlight the semester because in the business of higher education, the semester brings a neutrality that may be not a big difference like between semester, including like the enrollment. I also highlight the margin. pressures in relation to the new regulatory framework, we would have a big pressure on the margins. And that wouldn't mean like the reduction of growth in EBITDA and generation of cash, because we replaced like EAD with a percent margin with insight and hybrid courses that have a higher percent margin, but the growth is steady. And this is very clear. even though we are losing like three points in the margin in the quarter and 2.7 in the semester. So the EBITDA, both for the higher education and also Cogner as a whole, keeps growing in the semester, almost 15%. So in relation of the free cash flow, so we are considering like the free cash flow with almost like it is eight, of growth so we generated free cash flow of 504 million reais so as a reference last year the whole entire year we generated 716 million reais so in the first semester we reached 4 million which is a very important growth so and the net uh profit also 23 and a quarter and 35% in the semester. So once again, this quarter was a quarter of reducing debts. We reduced it to like 21 million in debt. So I will explore this a little bit more in the specific slide that we talk about capital allocation. and how what we are thinking and what we've been executing in a very constant fashion in terms of capital allocation. So moving to the next slide, the one that talks about the revenues. So I believe that this is very clear, like the diversity of our business. And I would like to highlight the growth of basic education. You see that we are growing like 50% in the quarter. and 60% in the semester. And for those who had the opportunity to read our report, so you see that all lines are growing. If we get like basic education and segmented B2B and B2G, So within B2B, so the subscription grew like 22% in the quarter and 18% in the semester. So the non-subscription, so in refer to the textbooks 33% in the semester and 17% in the semester, as much as our language, that we have Red Balloon and others that have important growth, growing 31% in the quarter and 20% in the semester. Meaning that the lines of B2B growing in a very strong way and steady way. So I know that B2G where the solutions for the government had an extraordinary growth in the semester. But I would like to highlight that was not only due to the B2G that we grew strongly, the revenue and the basic education. So our lines and our products B2B meeting the demand to schools, partners, and franchises and growing very steadily. And talking about basic education, so one important highlight to the BND growing 450%. So it's important to highlight the three things. So there is a displacement in the revenue from the PND that generally is in the fourth quarter and the first semester and everybody knows and had this information, there was a displacement on the revenue to the first and the second quarters. So this is one of the reasons of the PNLG growing so much, but it's important to highlight as well that the program of like mid education, it was bigger than the initial expectation. And then so that why we had more revenue. and the company achieved eight points of market share. So we moved from 22% in the last program to 30% in the textbooks. So the program was much bigger and we achieved more market share. Also, there was a displacement for the second cycle and that benefit the results for the second semester on P and LD, but the stronger result even without the displacement. So in the B2G, our line of solutions, specific solutions with the Secretariat of Education and in the states and municipalities, we follow the growth, 45% of the growth on the quarter and 35% at the end of the semester. It's a line of business that not too far away, less than $41 million of revenue four years ago and last year. So the revenue was $400 million, and we still have a lot of opportunities to grow. Speaking briefly about the higher education, it grew 6.3 and a quarter and more in the semester. So our business B2C 6.3 and 8.5 in the semester. And then there was a transitional moment and the change of the regulation where the change in the profile of more like insight than a hybrid, but with containers growing in a consistent way. And as I say, I like to look at the semester because it's more stable and a growth of 8.5 on the revenue. So moving to the next slide, I'm talking about EBITDA and margin. So it wouldn't be different like stronger education is strong growth and the basic education brings results and the editor of the basic education growing 62.7 in the quarter and 6.5 and the semester and we have an expression in the margin we are achieving a better margin. And it's important to remind you that the PNLD has less mean growth than the B2B. So it ends up like pulling our margin. A little bit downwards, even with concentrated growth on the PNLD, our margin grew and shows like the quality of the basic education in terms of portfolio and also like services offered to our clients. So basic education, actually higher education. So the EBITDA grew a little bit less, but 1.8 and a quarter and 2.5 in the semester. So we are losing margin, as we've mentioned, due to the mix However, we understand that this is a transitional moment and it's natural that it occurs. And we are continually looking at a growth in terms of nominal and absolute both in the revenue and EBITDA looking ahead. So when we move to the net profit, so we grew 18% in the quarter and 23% in the semester. I think that the highlight here is due to the operational results. very financial discipline and talking about the GCL. It's a highlight in a company like our capacity of making important investments that we've been investing in cutbacks and making our investments both in expansion and also like related to technology use. And so following this investment, we are still growing with the GCL. So the leverage So we got to 1.63 in EBITDA. And I would like to highlight that it's the smallest leverage since 2017. But it did not fall more because we had There are levels that we are going to explore, and then I can clarify some of your questions. Otherwise, the leverage would have fallen even more. And then on the chart, the yellow line, you see the mean cost of the debt. There was an increase of the mean cost. And then in the second quarter, so we have like the incorporation of the bank that we have credit lines that are more expensive than the Cogna average. We understand that there's mean cost, this is going to reflect in the numbers. So moving to the last slide before the questions and answers, I'm talking about the location of capital. So it's noticeable. And we've been talking for the past three, four years that our priorities in terms of capital allocation are financial expenses, the reduction of financial expenses, and the reduction of debts. And in our case of basic education, reducing the withdrawn debt has a risk above our mean Average. So the risk it's like 36.7 million and we have like the responsibility to reduce our expenses in the line and also the reduction of the net debt 21.8. So fully aligned with everything that we've been saying. looking to reduce the debts, not only through leverage, since we have this optimum leverage, but to reduce the financial expenses, which is quite heavy due to the interest rate in the market. So we did it, but not so we are still giving a good return to our shareholders. So we pay like $28.5 million in dividends, and each of the $120 million is paid in and distributed 148 million in the dividends to our shareholders. And as we always say, so MNAs, strategic MNAs are part of our strategy. So last year we had an acquisition of a medical school at a cost per seat. Very positive. So around 750 million reais and we bought an Editec like to strengthen our other business and Instituto Mauá and many other clients. And now in this quarter, we had the acquisition. We were already investors at the bank. We had 43% of the startup, and now we bought 47% for 46 million reais. So you see that this is an important and well-balanced capital allocation, looking for the reduction of financial expenses. But we have small and important strategy acquisitions that are important to generate value. The same thing that we did when we created our B2G business. It began small, and now it's quite important. And the same thing for Santiago. And now we have 70 contracts celebrated with schools already working. So we move on with this. vision of balancing like capital allocation, but without giving up the future of the company. So having said that, I would now want to pass on to Q&A. And as your request, we left more room for questions and clarified questions that you may have. So now we will begin the Q&A session, reminding you that to ask your questions, you should click on the Q&A at the bottom bar of the Zoom screen and write your question to get into the chat. So once your name is called, then your microphone will be turned on and then you have to activate it to ask your questions. So we kindly ask you that the questions are made in advance. So let's go to our first question, Marcelo Santos from JP Morgan. So we will turn on your audio so you can ask your questions. So please, Marcelo, you may proceed.

MARCELO SANTOS, JP MORGAN.

Good morning, everyone. Thank you for the opportunity to ask questions. Congratulations of the new format. So the first question is in relation to the vestibular in the second half of the year. So how do you see the demand and the ticket in the higher education? The second question. So please, if you could tell us about the commercial cycle 2027. OK. Point. So hi Marcelo, how are you? So thank you for your questions in relation to the vestibular. So it's important to say that everybody knew that this cycle would be very challenging due to some specific factors. The same one, because in the same date last year, we had an increase of the demand because the market knew that the rules would change. So a lot of people, I speed up and made the re-enrollment and we observed that. So we had a growth that was very fast, both in the enrollment for the in presence and also the hybrid with a growth in volume. A single digit very high, which made it very clear in a competitive base and important challenge. So this is the first important aspect to bring the second one. So we have this dynamic of the World Cup. And we observed that during the World Cup, like the enrollment did not follow the same pattern. And then at the end of the World Cup, they speed up and we noticed that this was kind of like a clogged and our classes began recently. So our in-person began on Monday this week and the hybrid began last week. We know that the very first three weeks, there is a lot of new enrollments. So we've been seeing the seasonality of the enrollments a little bit different than the big challenges that we have in relation to the base comparing to last year. And having said that, including the vestibular is very challenging from the perspective of volume, we are not growing. Generally speaking, obviously the dynamic among modalities between in-person and hybrid perform better than the EAD, but Among the modalities, we are following the same dynamic of the first cycle of collection. So that's what I said. So EAD decreasing and around 30% and insight and hybrid growing. So another point of view of the tickets, we see some aggressiveness in the offering. We've increased our prices through the month of June Imagine the market would pretty much do the same and that didn't happen. So what is going on now in a slower fashion than what we anticipated before. And then we reduce the price more towards the end of the World Cup and we speed up our enrollments. So I know that I end up like passing a lot of information, but I tried to make the explanation a little bit simpler. So we knew that the scenario was going to be challenging due to the comparative basis. And after this year and the bases are the same of the next year, the percent of growth will become more clear. But as we are speeding up in the past few weeks, we understand that we still have a lot of things to move forward. But today, the reduction of enrollment year over year without creating any harm for the future revenue because the average tickets are higher and this cycle of collection is just smaller affecting very little the the students basis so we are continuously growing and looking at our forecast we see a growth in the revenue and the third and fourth So I ended up answering all the questions and now we can move on to somebody else. So thank you, Roberto. Thank you, Marcelo. So let me just give a little bit of like flavor in our commercial cycle for 2027 reminding you that this commercial cycle for 2027 is composed by two segments based One is the maintenance of the renew of our base schools and the other one is the commercial harvest of new contracts, both coming from new schools and also contracts coming from the current schools. So in relation to the renewal, we've been having very positive behavior in our base. We have to be ahead of the renewals that we had last year and pulling by the premium brands. So we have a new cycle, very robust until this very moment. So when it comes to the commercial harvest of our contracts, we had a first quarter very heated up, different from other sectors in the economy that had the effect of the World Cup and so on. We did not see the same. So we saw a constant flow of new contracts, significantly above the previous year, including new schools, And also like contracts of the farming that of the base contracts. But reminding you that the first semester, historically speaking, corresponds to 20% of the total. So the trend of the first 20% is quite positive. And if it remains the same, we'll get a much better harvest than we had last year. But the whole entire game is going to be played in the second semester. But we are very strong and very, very heated up. So thank you very much for your question, Marcelo. So thank you both for your answers. So the next question is from Luca Marquezine. And this is from the Itaú. So Luca, you may proceed. So good morning, everyone. So the first one is related to the average ticket. I was doing a follow-up in relation to Roberto's answer. So what caught our attention the second quarter is that you showed a growth of the average ticket in all modalities different from what we had seen in the other companies. So considering the second semester that you talked about, that the competition a little bit more challenging and we had the reduction in price recently. So I want to know if it makes sense that this average chicken and the second semester to make it a little bit more clear. And second is the PNLD. We know that is a stronger diver for growth in the revenue in the first semester and understand if this level of the growing the revenue for the second semester could be repeated. in the second semester. So I want you to comment on that. So I'll get the first question. And then the second, we will pass to Malegan. So it's important to say that in the segments, we can keep, so well, let me rephrase it. So a good part of the increase of the average ticket comes from this strategy of like repassing the prices for the student space. It is important to say that we have to, we've done that historically for many years, we can repass it above the inflation rate. So that help us like with the average ticket, including the base, in the specific case of the comment that I made in the terms of like the capitation. So it doesn't have a trend like to impact negatively like the average ticket because we try to increase and not reduce from the point where we were. So there was an average point for the inside and EAD. So our intention is that given our new regulatory framework, we try to pull the price up Assuming that additional costs, the market would do the same movement. And in fact, it did and not in the same dimension and all the portfolio that we've had. So we had to make adjustments to down because of the process. I thank you. It's not that we are reducing the average ticket vis-a-vis with the previous movements. We tried to make it go up and then we had to make adjustments. So I think that the explanation is clear now. So thank you, Luca. I'll give a little bit more flavor to that. So in the first semester, so we recognize 431 millions of PNLD, which basically the PNLD for the basic and the previous cycle, the PNLD that historically It is recognized, you know, thinking the previous year as the basis. So we have to look at this year and we recognize 431 millions in the first semester. So this number, when compared to the first semester of 2025, correspond of 1,400 growth. And this is not typical and reflects with most of the problem with basic education, meaning that this is concentrated in the first semester. And already, we had already did a lot in what is still missing for the second semester in the P&OD, some like repurchases that are done from one fund and the program of the fund too. Well, the repurchase of Fund 2 and the program of the Fund 1, which is the program that is being announced now. So if we have like the same procedure that we had with the other segment, we will have a small percentage in the second semester. So just to give you an idea of the values. So what, in terms of a repurchase that has already been formed by the PLT, we would have something around 56 millions of revenue in the second semester, because this is already like orders placed to us. So in relation to the phone one, it's a much smaller program. So basically like half. And that depends on the amount the government will buy in 2026 and then how much this is going to be turned for 2027. So keeping the same rate ratio, we should have a recognition of a funditude of something around 20 million that historically if it's the same percentage of the previous year, depending on our market share, which is unknown. So these are the grandeurs that you can expect for the PNLD for the second semester. So very clear. Thank you. Next question comes from Maria Eduardo Rezende from PTG. Maria Eduardo, the floor is yours.

Oi, pessoal.

Hello, everyone. Good morning. So the last column. So you talked about 120 followers in operational margins appear for the second semester, if I'm not mistaken. So it was close to our base 30 million students according to the regulatory framework. So my question is, how many polls of this 120 are already authorized? And what is your expectation to recover part of this volume? And my second question, so we had some months for the integration. I would like to understand, so you began seeing the benefits, and be it in the cross-selling or cost reduction of others. And specifically on the B2G, do we have any evidence in terms of like the average ticket of a relationship to the contract? So thank you. Maria Eduarda, thank you very much for your question. So Jefferson will answer related to the polls with nursing. And Malaga will get the second question. Thank you Maria Eduardo, thank you very much for your question and the perspective of our polls. We had like 120 and we received the authorization for 113, all of them structure to operate. So they began operating like the cycle of fundraising in a very positive way according to the regulatory. demands. So this is important for the higher education. So when we look at the cycle of fundraising, so the dynamic we've already talked about it, and it's quite important to understand most of all the operations, uh, presented the cycle has a different dynamism, but all Paul, I have enrollment and we have one cycle that even though it's short, basically It's very favorable when we look ahead with the number of enrollment. So we have a very positive growth with the interaction since the beginning of the operation. And the expectation is even more favorable for 2027. So thank you, Maria Eduarda. So let me talk a little bit about integration. So yes, we are already talking about a lot of synergies and I will talk about the most relevant, the most important one, the commercial synergy that we are acting together with an integrated team. We So the B2G market is now one and we integrated the portfolio so we had complementarity of products and we could segment better those products and the result you'll see by means of the sales and year to date we have like 30% more sales on the B2G. So this is very clear is synergy of a joint actuation. So we are quite optimistic with this business line. So the main synergy and one of the main motivators of integration was that we could act with much more robust in the public area, which is this important market that we are acting. with doubt but continue considering like the synergies that we had already captured. So like we are listed as we no longer have like the same expenses in terms of like councils and TMO and governance and auditing. And so now we have an important reduction of like classes and synergy that we've got just that when you look at our operational Expenses We've Been Working Absorbing Inflation So Both On The Side Of The Expenses As Much As On The Side Of The Revenue So The Synergies Are Here And On The First Semester Thank You Thank You Very Much Next Question Comes From The Thank you very much for this space and open for questions. So I have like two questions on our side. So the first one I would like you should talk about the equation. And so I would like to get this capex like a head considering for the end of 2026 and 2027. The second question is related like to the reef of tariffs. So what's the strategy in terms of when it comes to the reef of tariffs, because last year we had an acceleration and upcycle of those products. So I want to understand a little bit your perception in the product offering when it comes to the reef of tariffs. Hello, Renato. So your first question relates to CAPEX. As we've mentioned before, We having more investment in capex. And as we've said before, had an impact in the maturation of our courses in the medical field and other capex that we are doing. We already have some return. And in this quarter, we had a capex of 150 million. So the growth versus the second semester of 2025, 50 million, as I've mentioned. So when I look at last year, 2026 in relation to 2025, I had already talked about that wouldn't have like a growth in capex and infrastructure and technology that would be around last year 500 million and now a little bit about above like 600 million reais and for the next year looking at the net following years we should be keeping this capex close to the 2026 different from what 2025 was so however This is not the reason for a changing of regulatory framework, because in the regulatory framework, as you know, the effect of not saying in the polls, but the polls that make a whole lot of investments in the polls. So these are all related to our medical courses and some capex that we are making that we do have return for our shareholders, giving the example that what we are doing, investing in a medical field and some of our can't be. They're not that big, but we understand that these investments can increase like the average ticket of like gap collection in our units of like medical schools. Second question is the riff of tariff. So we are working with the same of the previous cycle. So comparatively speaking is in line and no increment. So reminding you that this is a parcel of the installment of the payments. So the student that is joining now in August should have paid the July. So we make like installments throughout the entire courses. So we are doing the same thing of installments that we did last year. We are not projecting any huge impact of receivables in relation to the step-by-step. Clear, thank you. Our next question comes from Caio, analyst of Santander. So, Caio, you may proceed. Hello, everyone. So the first question is related to the capital allocation that Roberto talked a little bit about. But I want to understand about dividends giving this strong generation of cash flow. and we know that structurally is stronger and the level of leverage that you have now So I would like to know from you. So when are we going to see that there's a policy of dividends a little bit higher, so an increase on the payout, giving this competition of low leverage and stronger cash flow? And the second question is related to the P and LZ. So the revenue for next year, given this competitive base, that it's quite difficult that we are going to have So what should we expect for the revenue in terms of the PNLD for 2027? Can we grow like the revenue in face of all the repurchases? So what do we expect? Thank you. Hello, Caio. This is Fred. I would like to get the first question about leverage and what would be like the capital allocation here. So the discussion about dividends is the discussion that we have been having and many questions are coming from our shareholders. So we do have an ongoing discussion, but our understanding that the best allocation for our capital is continued to reduce our financial expenses. So we are in the optimum leverage. So we do not need like to reduce our leverages. So the optimum leverage is allow us like a better benefit in the line of income tax. However, we are reducing so the drawn risk. So in terms of leverage, it doesn't consider that our leverage and net debt over the EBITDA of financial debts according to our clauses. However, we have one line which is like the payment for the suppliers in 360 days and this line supplies basically our business of Somos and Saber so online of like paper and printing so we have like the books and booklets so however our understanding that the best allocation of our capital is to reduce the financial expenses due to the high cost of the SELIC tax. However, we are having this discussion that in the second moment, we could increase and have a better dividend policy and increase our payout. Second question related to the PNLD. I will pass it to Guilherme. So let me give a little bit of flavor here. So the PNLD program is the biggest program of PNLD in high school. That's the one that we have like more students and more recent. So the program that we are now going in and fundamental one with the size of the program, historically, it's a half. of the PNLD program. So the purchase cycles is yet to come. It's smaller than what we have just lived in the high school. So your question is related to 2027 and what's missing. So we have many variables that in fact we do not control. The first one is how much of this new program is going to be bought in 2027. Last year there was a small percentage in around 15, 18% that was bought in the same year. The rest move on to 2027. So for the time being is the best current number that I have to tell you for the year in terms of the P and a different one. So we do not know like the market share of this P and LG, assuming that the market share will explode will be around 25% in the program. So it's a program that is half of the previous one. So we would have like around 25%. And what is recognized this year, if it's the same as last year, will be around 15%. However, for next year, we have like one expected repurchase in the high school much higher. We've performed well with 30% of the market share. So historical percentages of like re purchase around 30%. So I'm giving historical references and not guidances as Fred mentioned. We don't know how much it's going to be for the high school, but the historical Repurchase is 30% in a program that we had around $500 million in revenue. So these are the big numbers to tell you related to P&LP with a lot of uncertainties due to all the changes from the government. Well, I understand. So just like one quick follow up. So why don't you issue like that because your cost of that like around 1.6 are paid? and paid like this cost that is much higher. Well, thank you, Caio. So naturally is what we are doing already. We are in the midst of a discussion about that, like increase like our bank debt with a very low capital cost and reduce the other one. So this is what you investors and analysts will observe for the next months. So that's precisely that. Thank you. Our next question, Lucas Nagano, analyst from Morgan Stanley. Lucas, the floor is yours. So thank you very much. I also have two questions. The first is like nursing and the polls. from those 113 polls. What is the perspective of occupation of the vacancies in the middle of the year? And this would be interesting for the second for the first semester. And when you said, Valerio, that is a growing considering this upside of nursing in the polls or And the second question is related to the margin for basic education. Thinking under the perspective for the next two months, what's going to happen to the PNLT? What is the perspective of margin in volumes of PNLT? Maybe the revenue is strong and maybe it would be a little bit more favorable for the margin. Thank you. Hello, Lucas. Thank you for the questions. I got the first one for nursing and Maligan will take the second. So in relationship to the nursing, so we have quite optimists with the polls. So we had more than 400 polls in the EAD. So the Ministry authorized only 113 that we talked about. So the expectation is that, as the Minister promised, year after year, so they increase the polls, as we had this opportunity. So specifically talking about the 113, They are already active and they are enrolling students. So the main challenge is like to enroll like 100 in the mid year cycle. It's quite difficult. So I can tell you that we won't be able to occupy 100 of the openings because this is a shorter cycle of less enrollments. And we have received the authorization and we began operating in like 45 to 50 days ago. So there is a repressed demand, but it's a demand that comes throughout the year. But we are quite optimistic with nursing when we look ahead. So the cycle, the main challenge when we enroll, like as many students as possible, but due to this shorter cycle. And hello, Lucas. So according to our margins for basic education, we observed that in the first semester and the second quarter is that in fact, and I believe that the gross revenue, we are 10 pp below when we compare to 2025. And this is clearly like the burden of the PNLG that we had in the high school, this concentration of high school that we had in the first semester of 2026. So this effect of the PNLD that lowers in 10 PP. And I said that the PNLD is going to be smaller in the second semester with a concentration in the B2B and B2G. Remind you that the fourth quarter is the big one for the supply because it's the return, it's the back to school and we're going to have an effect on the margins and also in the B2G. So our expectation is that it will continue to grow And this is going to be compensated the margin that was below in the first semester. So historically speaking, that we did not have a concentration in the B2G. The margin was like 30% on the EBITDA. And if we look at incorporating like Sabir, this margin should due to the PNLD, it should be a little bit bigger. But on the other hand, we have B2B growing and B2G growing as well that will give another weight to this margin. So it's not an absurd to think about when we look ahead, so around 30%. Thank you. Thank you very much. Our next question comes from Marcelo Santos.

Thank you for the follow up.

Thank you. Thank you very much for the follow up. So my question would be to Malaga Malaga. We are in election year, but it knows I want to understand how do you see the risks and the contracts like B to G? If like with a change of the government, it would be interesting to know like how many the contracts are for the states or municipalities. Any consideration you may provide? Marcelo, thank you very much for the question. So let me give a little bit of a context. So telling you that we are also learning in this segment, this is the very first governmental change that we are going to face. But we have a very diversified portfolio in B2G. So we have like hundreds of municipalities in some states. We have a state of Pará and Paraná, São Paulo and Bahia with products and solutions with different contract types. But we do have like big clients in the states and lots of clients in the municipalities and the Elections won't have a relevant impact. Reminding you that all the contracts B2G are annual. We do not have pluriannual contracts in B2G. We have renew of contracts that are good performing. So what we expect is that the election does not cause any friction on the rhythm of our business growth. And we don't see that. We see states keeping their contracts and new entries, and also municipalities that the capillarity is very big are continuously growing and representing the biggest base of our contracts. They are already in force.

All right.

Thank you very much. Our next question comes from Mirela Oliveira from Bank of America. Mirela Oliveira, the floor is yours. I don't have access to the audio. Mirela, we've sent you a command to activate your microphone and ask a question. The Q&A is now closed. We'll pass the floor for the final remarks from the company. So thank you all very much for those who participated and the pool of results. So one more quarter that we understand that we are keeping moving and growing. I would like to thank everyone more than 25,000 collaborators that are building a much better company and meeting the demands of our clients. So thank you all. Have a great day and until next time. So the conference and reference to the second quarter from co-organ education is now finished. So the Department of Investor Relations is ready to answer any more questions. So thank you all very much for the participation. Have a great afternoon.