Ser Educacional (SEER3) Q1 2024 earnings summary

Executive summary

• Q1 2024 marked continued progress in the company's turnaround, with strong hybrid learning enrollment and operational improvements driving profitability and cash generation.

• The company is nearing the final phase of its turnaround, with further cost reductions expected from property returns and lease renegotiations by mid-year.

• Strategic focus remains on optimizing course mix, especially expanding healthcare offerings, and improving student quality and average ticket.

Financial highlights

• Net revenue grew, supported by a 10% year-over-year increase in hybrid learning enrollment and higher average ticket.

• Adjusted EBITDA rose 25% year-over-year, with a three percentage point increase in adjusted EBITDA margin.

• Adjusted net loss was BRL 2.8 million, a significant improvement from the prior year; excluding IFRS 16, the result was BRL 5.7 million.

• Operational cash flow generation increased by approximately 200% year-over-year, excluding non-recurring items.

• Net debt was reduced by about 32% sequentially, with BRL 100 million in debt repaid during the quarter.

Outlook and guidance

• The final wave of property returns and lease renegotiations is expected to be completed by July, unlocking further cost savings.

• Additional operational improvements and automation projects are anticipated to further enhance efficiency and cash generation in the second half of 2024.

• Management expects continued improvement in PDD (provision for doubtful debts) and student quality in the second half of the year.