Afya (AFYA) Q3 2024 earnings summary

Executive summary

• Net revenue for Q3 2024 rose 16.3% year-over-year to BRL 841.2 million, with adjusted EBITDA up 25% to BRL 347.9 million and a margin of 41.4%.

• Adjusted net income for Q3 2024 was BRL 165.4 million, up 28.8% year-over-year, and adjusted EPS increased 29.9% to BRL 1.79.

• Operating cash flow for the nine months reached BRL 1,168 million, up 25% year-over-year, with a cash conversion ratio of 109.7%.

• Medical school students at period end totaled 24,234, up 12.4% year-over-year, with approved seats rising 13.6% to 3,593.

• Strategic expansion through the Unidom acquisition and new seat authorizations reinforced leadership in medical education.

Financial highlights

• Nine-month net revenue totaled BRL 2,455.3 million, up 14.4% year-over-year.

• Adjusted EBITDA for the nine months was BRL 1,089.7 million, up 24.3% year-over-year, with a margin of 44.4%.

• Adjusted net income for the nine months reached BRL 627 million, a 47% increase year-over-year.

• Adjusted EPS for the nine months was BRL 6.81, up 49% year-over-year.

• Continuing education net revenue for 9M24 was BRL 187.7 million, up 10.4% year-over-year; medical practice solutions net revenue was BRL 117.3 million, up 15% year-over-year.

Outlook and guidance

• FY2024 guidance reaffirmed: net revenue BRL 3,225–3,325 million, adjusted EBITDA BRL 1,375–1,475 million, CAPEX BRL 220–260 million.

• Margin expansion expected to continue, driven by operational leverage and new campus openings.

• Tuition fees for new students in 2025 projected to rise 5.1%, above 2024 inflation expectations.

• Caution advised regarding margin mix as undergrad growth may lag continuing education and digital services.

• M&A activity expected to continue, with lower multiples per seat anticipated in 2025.