Ser Educacional (SEER3) Q2 2024 earnings summary

Executive summary

• Strong student intake and operational optimization drove growth in student base, revenue, and profitability, with hybrid and health courses leading expansion.

• Operational optimization plan completed, delivering cost reductions, brand unification, and further synergies, with additional benefits expected from 3Q24.

• Regulatory and STF decisions enabled a 69% increase in annual medical course places since 1Q23, supporting future growth.

• Focus remains on enhancing student experience, optimizing capital allocation, and expanding high-margin course offerings.

• Adjusted net income reached R$46.2 million in 2Q24, up 8.5% year-over-year, driven by hybrid education and operational gains.

Financial highlights

• Net revenue rose 5.2% year-over-year to R$532.3 million in 2Q24; 6M24 up 5.6% to R$983.0 million.

• Adjusted EBITDA increased 7.9% to R$130.6 million in 2Q24, with margin up 0.6 p.p. to 24.5%.

• Adjusted net income grew 8.5% to R$46.2 million in 2Q24; 6M24 up 78.3%.

• Net operational cash generation up 35.5% year-over-year to R$38.9 million in 2Q24.

• Adjusted cash gross margin improved 1.7 p.p. to 65.5% in 2Q24.

Outlook and guidance

• Confident in continued margin expansion and further synergies from operational optimization in 2H24.

• Focus on operational leverage, debt reduction, and expanding high-margin and medical course offerings.

• CapEx expected to normalize to 5-6% of net revenue in H2 2024.

• PDD (provision for doubtful debts) anticipated to stabilize around 8% of net revenue from H2 2024 onward.