Afya (AFYA) Q2 2024 earnings summary

Executive summary

• Net revenue for Q2 2024 increased 13.7% year-over-year to R$809.9 million; first half net revenue up 13.5% to R$1,614.1 million, driven by organic growth and higher ticket prices in medical courses.

• Adjusted EBITDA grew 28.2% year-over-year in Q2 to R$343.8 million, with margin expanding 490 bps to 42.5%; 1H24 Adjusted EBITDA was R$741.7 million, up 23.9% year-over-year.

• Adjusted net income for Q2 reached R$210.3 million, up 59.5% year-over-year; adjusted EPS rose 61.8% to R$2.29.

• Cash flow from operations in 1H24 was R$683.4 million, up 20.6% year-over-year, with a cash conversion ratio of 94.3%.

• Medical student base grew 9% year-over-year to 22,661; approved medical seats increased to 3,583 after acquisitions.

Financial highlights

• Undergrad program net revenue rose 13.5% year-over-year to R$1,414.2 million in 1H24; medical school net average ticket up 5.4%.

• Continuing education net revenue grew 12.2% year-over-year to R$127.5 million in 1H24.

• Medical practice solutions revenue increased 13.3% year-over-year to R$76.9 million in 1H24, with 12.7% growth in active payers.

• Gross margin expansion in undergrad and continuing education segments contributed to higher EBITDA margins.

• Adjusted net income for 1H24 was R$461.3 million, up 54.7% year-over-year; adjusted EPS was R$5.03 (+56.9%).

Outlook and guidance

• FY2024 net revenue guidance raised to R$3,225–3,325 million; adjusted EBITDA to R$1,375–1,475 million; CAPEX to R$220–260 million.

• Guidance revision driven by strong H1 performance, Unidom acquisition, and robust intake cycle; guidance incorporates Unidom acquisition and UNIMA seat expansion.

• Guidance excludes acquisitions completed after issuance; Unidom acquisition and additional Unima seats are subsequent events.