UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

OR

OR

OR

Commission file number: 001-38673

Arco Platform Limited
(Exact name of Registrant as specified in its charter)

Not applicable

(Translation of Registrant’s name into English)

Cayman Islands
(Jurisdiction of incorporation or organization)

Rua Augusta 2840, 9th floor, suite 91

Consolação, São Paulo – SP

01.305-000,
01412-100, Brazil

+55 (11) 3047-2699
(Address of principal executive offices)

David Peixoto dos Santos,Alexandre Nakamaru, Chief Financial Officer

Tel: +55 (11) 3047-2699 

Rua Augusta 2840, 9th floor, suite 91

Consolação, São Paulo – SP

01.305-000,
01412-100, Brazil

+55 (11) 3047-2699

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Copies toto:
:
Manuel Garciadiaz
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, NY 10017
Phone: (212) 450-4000
Fax: (212) 450-6858

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

The number of outstanding shares as of December 31, 20182020 was 22,602,73730,186,715 Class A common shares and 27,658,29027,400,848 Class B common shares.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes☐               No☒

Yes ¨

No x

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes☐               No☒

Yes ¨

No x

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes☒               No☐

Yes x

No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes☐

Yes x               No☐(not required)

No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer, "acceleratedfiler”, “accelerated filer,” and "emerging“emerging growth company"company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer☐                Accelerated Filer☐                Non-accelerated Filer☒                Emerging growth company☒

Large Accelerated Filer x

Accelerated Filer ¨

Non-accelerated Filer ¨

Emerging growth company ¨

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.☐¨

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report: x

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this annual report:filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

☐ Item 17               ☐

¨ Item 17

¨ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes☐               No☒

Yes ¨

No x

Arco platform limitedAPPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS

TABLE OF CONTENTS

PageIndicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

ARCO PLATFORM LIMITED

table of contents

Presentation of Financial and other Information

Unless otherwise indicated or the context otherwise requires, all references in this annual report to “Arco” or the “Company,” “we,” “our,” “ours,” “us” or similar terms refer to Arco Platform Limited, together with its subsidiaries.

The term “Brazil” refers to the Federative Republic of Brazil and the phrase “Brazilian government” refers to the federal government of Brazil. “Central Bank” refers to the Brazilian Central Bank (Banco Central do Brasil). References in the annual report to “real,” “reais” or “R$” refer to the Brazilianreal,, the official currency of Brazil and references to “U.S. dollar,” “U.S. dollars” or “US$” refer to U.S. dollars, the official currency of the United States.

All references to “IFRS” are to International Financial Reporting Standards, as issued by the IASB.

Financial Statements

Arco was incorporated on April 12, 2018, as a Cayman Islands exempted company with limited liability, duly registered with the Cayman Islands Registrar of Companies. UntilArco became the contribution of sharesparent company of Arco Educação S.A., or Arco Brazil, to Arco prior to the consummation of the initial public offering, Arco had not commenced operations and had only nominal assets and liabilities and no material contingent liabilities or commitments. The consolidated financial statements prepared by Arco subsequent tothrough the completion of the initial public offering and the corporate reorganization described in Notenote 1 of our consolidated financial statements are presented “as if” EAS is the predecessor of Arco. Accordingly, these consolidated financial statements reflect: (i) the historical operating results of EAS prior to the reorganization; (ii) the consolidated results of the Company, Arco Brazil and EAS following the reorganization; and (iii) the assets and liabilities of EAS at their historical cost.statements.

We present in this annual report our audited consolidated financial statements as of December 31, 20182020 and 20172019 and for the years ended December 31, 2018, 20172020, 2019 and 2016.2018. Our financial statements are prepared in accordance with IFRS, as issued by the IASB.

We maintain our books and records in Brazilianreais, the presentation currency for our financial statements and also the functional currency of our operations in Brazil. Unless otherwise noted, our financial information presented herein as of December 31, 20182020 and 20172019 and for the years ended December 31, 2018, 20172020, 2019 and 20162018 is stated in Brazilianreais, our reporting currency. The consolidated financial information contained in this annual report is derived from our audited consolidated financial statements as of December 31, 20182020 and 20172019 and for the years ended December 31, 2018, 20172020, 2019 and 2016,2018, together with the notes thereto. All references herein to “our financial statements,” “our unaudited interim condensed consolidated financial statements,” “our audited consolidated financial information,” and “our audited consolidated financial statements” are to our consolidated financial statements included elsewhere in this annual report.

This financial information should be read in conjunction with “Item 5. Operating and Financial Review and Prospects” and our consolidated financial statements, including the notes thereto, included elsewhere in this annual report.

Our fiscal year ends on December 31. References in this annual report to a fiscal year, such as “fiscal year 2018,2020,” relate to our fiscal year ended on December 31 of that calendar year.

Corporate Events

Our Incorporation

We are a Cayman Islands exempted company incorporated with limited liability on April 12, 2018 for purposes2018. On October 29, 2019, we completed a follow-on public offering, consisting of effectuating our initial3,450,656 Class A common shares issued and sold by us, and 4,268,847 Class A common shares sold by certain selling shareholders. The public offering. At the timeoffering price was US$43.00 per Class A common share. We received net proceeds of our incorporation, Oto Brasil de Sá Cavalcante, Margarida Maria Porto Soares de Sá Cavalcante, Ari de Sá Cavalcante Neto, Mariana Magalhães de Sá Cavalcante, Patrícia Soares de Sá Cavalcante, Paula Soares de Sá CavalcanteUS$143.9 million, after deducting US$3.7 million in underwriting discounts and Luciana Soares de Sá Cavalcante Moraes, or the Founding Shareholders, andcommissions. On November 26, 2019, an additional 661,112 Class A common shares were sold by General Atlantic Arco (Bermuda), L.P., or following the GA Entity, held 7,476,705 sharesexercise by the underwriters of Arco Brazil, which were all of the shares of Arco Brazil, and Arco Brazil held all the shares of EAS Educação S.A., or EAS Brazil, our principal operating company.

Our Corporate Reorganizationtheir option to purchase additional shares.

On February 19, 2018, SASPAR Participações Ltda., or SASPAR, throughJune 4, 2020, we completed a follow-on public offering, by which the Founding Shareholders held their shares in Arco Brazil, was merged into Arco Brazil (formerly General Atlantic Arco (Bermuda), L.P. and Alfaco Holding Participações S.A.). Following the merger, the total numberInc. sold an aggregate amount of outstanding5,563,203 Class A common shares issued by us, at a public offering price of Arco Brazil was 7,476,705.US$47.70 per Class A common share. We did not receive any proceeds from the sale of Class A common shares by the selling shareholders in connection with this offering.

On September 14, 2018, in connection with and in preparation for our initial8, 2020, we completed a follow-on public offering, the Founding Shareholders and the GA Entity contributed allconsisting of their shares in Arco Brazil to us. In return for this contribution, we issued 27,658,290 new Class B common shares to the Founding Shareholders and 9,725,235 new2,500,000 Class A common shares to the GA Entityissued and sold by us. The public offering price was US$44.80 per Class A common share. We received net proceeds of US$109.8 million, after deducting USS$2.2 million in a one-to-five exchange for the shares of Arco Brazil contributed to us.underwriting discounts and commissions.

On September 14, 2018,January 6, 2021, our director Alberto Menache and his spouse, Fabiana Menache, through Alfaco Holding Inc.,Board of Directors approved a company incorporated inshare repurchase program, or the British Virgin Islands, or Alfaco, andRepurchase Program, to comply with management long-term incentive plan obligations. Pursuant to the sharesRepurchase Program, we may repurchase up to 500,000 of which Mr. and Mrs. Menache own 100%, purchased 99,725our outstanding Class A common shares in the open market, based on prevailing market prices, or in privately negotiated transactions, over a period beginning on January 6, 2021 continuing until the earlier of Arco, at a price equal to R$ 31.00 per share.

On September 25, 2018, the registration Statement on Form F-1 (File No 333-7007) relating to our initial public offeringcompletion of our class A common shares was declared effective by the SEC. On September 25, 2018,repurchase or January 6, 2023, depending upon market conditions. As of the date of this annual report, we commenced our initial public offering. On September 28, 2018, we closed our initial public offering, pursuant to which we issued and sold 12,777,777had purchased an aggregate of 276,581 Class A common shares for a total of Arco for an aggregate price ofapproximately US$223,611,098 (R$895.2 million).9.8 million under the Repurchase Program.

Furthermore, we are currently implementing certain additional changes to the organizational structure of certain of our operating subsidiaries in Brazil. We expect to complete this reorganization during the first half of calendar year 2019. This reorganization will be an internal corporate reorganization and is not expected to affect us on a consolidated basis.

Organizational Structure

The diagram below depicts our organizational structure as of the date of this annual report:

Financial Information in U.S. Dollars

Solely for the convenience of the reader, we have translated some of thereal amounts included in this annual report fromreais into U.S. dollars. You should not construe these translations as representations by us that the amounts actually represent these U.S. dollar amounts or could be converted into U.S. dollars at the rates indicated. Unless otherwise indicated, we have translatedreal amounts into U.S. dollars using a rate of R$3.8755.197 to US$1.00, the commercial selling rate for U.S. dollars as of December 31, 20182020 as reported by the Central Bank. See “Item 3. Key Information—A. Selected financial data—Exchange Rates” for more detailed information regarding translation ofreais into U.S. dollars and for historical exchange rates for the Brazilianreal.

Special Note Regarding Non-GAAP Financial Measures

This annual report presents our Adjusted EBITDA, Adjusted Net Income and Free Cash Flow information for the convenience of investors. Adjusted EBITDA, Adjusted Net Income and Free Cash Flow are the key performance indicators used by us to measure financial operating performance. Our management believes that these Non-GAAP financial measures provide useful information to investors and shareholders. We also use these measures internally to establish budgets and operational goals to manage and monitor our business, evaluate our underlying historical performance and business strategies and to report our results to the board of directors.

We calculate Adjusted EBITDA as profit (loss) for the year plusplus/minus income taxes plus/minus finance result plus depreciation and amortization plusplus/minus share of (profit) loss of equity-accounted investees plus share-based compensation plan.plan, restricted stock units and related payroll taxes (restricted stock units), plus M&A expenses, plus non-recurring expenses, which are related to legal services (mainly due to International School arbitration) and consulting expenses for Sarbanes-Oxley implementation, plus effects related to COVID-19 pandemic, which includes the revision of the Company’s estimated credit losses from its trade receivables based on expected increases in financial default and in unemployment rates in Brazil for the year.

We calculate Adjusted Net Income as profit (loss) for the year plus share-based compensation plan, restricted stock units and related payroll taxes (restricted stock units) plus amortization of intangible assets from business combinations (which refers to the amortization of the following intangible assets from business combinations: (i) rights on contracts, (ii) customer relationships, (iii) educational system, (iv) trademarks, and (v) non-compete agreement) less/plusagreement and (vi) software resulting from acquisitions), plus/minus changes in fair value of derivative instruments and contingent consideration (which refers to (i) changes in fair value of derivative instruments—finance income, plus (ii) changes in fair value of derivative instruments—finance costs, and plus (iii)costs), plus/minus changes in accounts payable to selling shareholders (which refers to changes in fair value of contingent consideration—consideration and accounts payable to selling shareholders—finance costs), plus share of loss of equity-accounted investees, plus foreign exchange effects on cash and cash equivalents, plus interest income (expenses), net (which refers to interest expenses related to accounts payable to selling shareholders from business combinations and investments in associates, net of interest income related to receivables from sale of subsidiary and loans to related parties), plus/minus changes in current and deferred tax recognized in statements of income applied to all adjustments to net income (which refers to tax effects of changes in deferred tax assets and liabilities recognized in profit or loss corresponding to financial instruments from acquisition of interests, tax benefit from tax deductible goodwill, share-based compensation and amortization of intangible assets.assets), plus M&A expenses (which refers to non-recurring expenses related to the acquisitions of the year), plus non-recurring expenses, which are related to legal services (mainly due to International School arbitration) and consulting expenses for Sarbanes-Oxley implementation, plus effects related to COVID-19 pandemic, which includes the revision of the Company’s estimated credit losses from its trade receivables based on expected increases in financial default and in unemployment rates in Brazil for the year.

We calculate Free Cash Flow as net cash flows from operating activities less acquisition of property and equipment less acquisition of intangible assetsassets. We consider Free Cash Flow to be a liquidity measuremeasures that provides useful information to management and investors about the amount of cash generated by operating activities and cash used for investments in property and equipment required to maintain and grow our business.

We understand that, although Adjusted EBITDA, Adjusted Net Income and Free Cash Flow are used by investors and securities analysts in their evaluation of companies, these measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results of operations as reported under IFRS. Additionally, our calculations of Adjusted EBITDA, Adjusted Net Income and Free Cash Flow may be different from the calculationcalculations used by other companies, including our competitors in the education services industry, and therefore, our measures may not be comparable to those of other companies.

For a reconciliation of our non-GAAP measures, see “Item 3. Key Information—A. Selected Financial and Other Information—Reconciliations for Non-GAAP Financial Measures.”

Special Note Regarding ACV Bookings and Number of Enrolled Students

This annual report presents our Annual Contract Value bookings, or ACV Bookings, for the convenience of investors. This operating metric is not prepared in accordance with IFRS. ACV Bookings is a non-accounting managerial metric and represents our partner schools’ commitmentcommitments to pay for our solutions offerings. We believe it is a meaningful indicator of demand for our platform and the market’s response to it. In particular, weWe believe ACV Bookings is a helpful metric because it is designed to show amounts that we expect to be recognized as revenue for the 12-month period between October of one fiscal year through September of the following fiscal year. We deliver our educational materials to our partner schools for their convenience in the last calendar quarter of each year, so that our partner schools can prepare their classes in advance prior to the start of the following school year in January. As a result, our results of operations for the last quarter of a given fiscal year contain revenues relating to the following school year, relating towhich reflects the content that has been delivered prior to the start of the new fiscal

year. Therefore, ACV Bookings conveys information that has predictive value for subsequent months, and which may not be as clearly conveyed or understood by simply analyzing our revenues in our statements of income (loss), especially in view of our recent growth.

We define ACV Bookings as the revenue we would contractually expect to recognize from a partner school in each school year pursuant to the terms of our contract with such partner school, assuming no further additions or reductions in the number of enrolled students that will access our content at such partner school in such school year. ACV Booking is a non-accounting managerial operating metric and is not prepared in accordance with IFRS. We calculate ACV Bookings by multiplying the number of enrolled students at each partner school with the average ticket per student per year; the related number of enrolled students and average ticket per student per year are each calculated in accordance with the terms of each contract with the related partner school. Although our contracts with our partner schools are typically for three-year terms, we record one year of revenue under such contracts as ACV Bookings. For example, if a school enters into a three-year contract with us to provide our Core Curriculum solution to 100 students for a contractual fee of $100 per student per year, we record $10,000 as ACV Bookings, not $30,000.

We measure our ACV Bookings on a monthly basis throughout the school year, starting in November of the preceding fiscal year. Pursuant to the terms of our contracts with our partner schools, they are required, by the end of November of each year, to provide us with an estimate of the number of enrolled students that will access our platform in the next school year. Since we allow our partner schools to make small adjustments to their estimates to account for late admissions and early dropouts, this number may fluctuate slightly until March 31, when it becomes more accurate. Accordingly, we believe this metric is most accurately reflected as of March 31 of each year. year, and in this annual report, we refer to our ACV Bookings as of March 31 in each year as our ACV Bookings.

However, following March 31 in a calendar year, our partner schools may experience additional admissions and/or additional dropouts up to September 30 of such year, which is the date on which the final amount of our ACV Bookings for the year becomes final, or our Delivered ACV Bookings. In prior years, the difference between our ACV Bookings and our Delivered ACV Bookings was not material, demonstrating the predictability of our business. However, during 2020 and as result of the impacts of the COVID-19 pandemic, our partner schools experienced atypical dropout rates from March 31, 2020 to September 30, 2020, and our ACV Bookings decreased from ACV Bookings of R$1,005.7 million as of March 31, 2020, to Delivered ACV Bookings of R$952.8 million as of September 30, 2020, plus R$ 8.9 million of 2020 school year revenues booked in the fourth quarter of 2020, for a total Delivered ACV Bookings for the 2020 school year of R$961.7 million. Consequentially, the dynamics mentioned above also impacted the number of enrolled students in our partner schools.

Following March 31 in a calendar year, our partner schools may experience additional admissions and/or additional dropouts up to September 30 of such year, which is the date on which the number of students for the year becomes final, or our Final Number of Enrolled Students. In prior years, the difference between the expected number of enrolled students as of March 31, or the Number of Enrolled Students, and the Final Number of Enrolled Students as of September 30 was not material, demonstrating the predictability of our business. However, during 2020 and as result of the impacts of the COVID-19 pandemic, our partner schools experienced atypical dropout rates from March 31, 2020 to September 30, 2020, and our number of students decreased from Number of Enrolled Students of 1,362,141 as of March 31, 2020, to Final Number of Students of 1,239,937 as of September 30, 2020.

Average ticket per student per year reflects the average price per student for the relevant school year and is presented in order to link this average price with the number of enrolled students in our partner schools, resulting in the ACV Bookings metric.

We understand that, although ACV Bookings may be used by investors and securities analysts in their evaluation of companies, it has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results of operations as reported under IFRS.

Market Share and Other Information

This annual report contains data related to economic conditions in the market in which we operate. The information contained in this annual report concerning economic conditions is based on publicly available information from third-party sources that we believe to be reasonable. Market data and certain industry forecast data used in this annual report were obtained from internal reports and studies, where appropriate, as well as estimates, market research, publicly available information (including information available from the United States Securities and Exchange Commission website) and industry publications. We obtained the information included in this annual report relating to the industry in which we operate, as well as the estimates concerning market shares, through internal research, public information and publications on the industry prepared by official public sources, such as the Central Bank, the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística), or IBGE, the United Nations Educational, Scientific and Cultural Organization,Brazilian Education Ministry (Ministério da Educação), or UNESCO,MEC, the MEC,National High School Exam (Exame Nacional do Ensino Médio), or ENEM, the National Index for Basic Education (Índice de Desenvolvimento da Educação Básica), or IDEB, the Brazilian National Institute for Educational Studies and Research (Instituto Nacional de Estudos e Pesquisas Educacionais Anísio Teixeira), or INEP, as well as private sources, such as Hoper Consultoria and Gismarket, consulting and research companies in the Brazilian education industry, and Getulio Vargas Foundation (Fundação Getúlio Vargas), or FGV, among others.

Industry publications, governmental publications, and other market sources, including those referred to above, generally state that the information they include has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Except as disclosed in this annual report, none of the publications, reports or other published industry sources referred to in this annual report were commissioned by us or prepared at our request. Except as disclosed in this annual report, we have not sought or obtained the consent of any of these sources to include such market data in this annual report.

Rounding

We have made rounding adjustments to some of the figures included in this annual report. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.

Forward-Looking Statements

This annual report on Form 20-F contains statements that constitute forward-looking statements. Many of the forward-looking statements contained in this annual report can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “may”, “predict”, “continue”,“may,” “predict,” “continue,” “estimate” and “potential,” among others.

Forward-looking statements appear in a number of places in this annual report and include, but are not limited to, statements regarding our intent, belief or current expectations. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to, those identified under the section entitled “Risk Factors” in this annual report. These risks and uncertainties include factors relating to:

Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

Not applicable.

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

Not applicable.

ITEM 3. KEY INFORMATION

You should read the following selected financial data together with “Item 5. Operating and Financial Review andProspects” Prospects” and our Consolidated Financial Statements and the related notes appearing elsewhere in this annual report.

The summary statements of financial positionbalance sheet as of December 31, 20182020 and 20172019 and the statementsstatement of incomeoperations for the years ended December 31, 2018, 20172020, 2019 and 20162018 have been derived from our audited consolidated financial statements included elsewhere in this annual report, prepared in accordance with IFRS, as issued by the IASB.