VSTA - Earnings call transcript Q1 2024

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Operator

Ladies and gentlemen, thank you for standing by. My name is Nazareen I will be your conference operator today. At this time, I would like to welcome everyone to the Vasta Platform First Quarter 2024 Financial Results.

Before we begin, I would like to read a forward-looking statement.

During today's presentation, our executives will make forward-looking statements.

our to involve or uncertainties by known factors may relate operating financial and these generally differ that and to performance and cause forward-looking statements statements. future those future events or other materially Forward-looking from results contemplated actual unknown risks,

our Forward-looking this strategic related periods, future our but regarding our presentation regarding are statements the limited to expectations for statements to performance, our and expectations initiatives market. in product benefits and related business include, not and the financial expectations

Forward-looking based Commission. our on as set today that are with filings risks our on statements release and our and issuing in those assumptions information management. well the Securities management's as and forth includes to press are beliefs in those the currently Exchange more available we described This fully

The this in to as of the are on us based forward-looking statements today. information available presentation

should You disclaim predictions the as we future on and except statements, required events, to forward-looking as not rely any law. by obligation of any them update

In considered addition, measures to with prepared measures accordance intended on are as not may non-IFRS be financial call. in The this isolation substitute for financial or IFRS. a results reference in management non-IFRS

to Investor now turn over would Werneck, conference Vasta's like I Marcelo Relations. to ahead. go Please the

Marcelo Werneck

joining me CEO; Melega, Relations. will who on And everyone. today, Guilherme Thank I'm Silva, call evening, Vasta joining Investor Vasta's of Quarter in discuss Cesar Platform presence Vasta's to we Good the First you Vasta's us for be Werneck, conference this the Results. of Marcelo and XXXX call. CFO, have

statements. CEO, floor Melega, opening to his hand now Let over our the Guilherme me make to

Guilherme Melega

our Marcelo. Thank you, you Thank in for participating earnings call. release all

also to last BXG first unit. year, XXXX strong XXX to the with the X% financial same Slide mostly revenue of economic into delivered some a cover has cycle, through the Vasta BRL our conversion revenue to increase and of September which ACV subscription quarter growth XXXX and due XX% revenue to October to date. cycle business with halfway highlights over the And Vasta's net a XXXX compared XXXX. have from of date commercial XXXX. to XXXX period like million, we results. through goes #X the reached cycle This represents concluded performance I'd the

continue the solutions among have the period present our compared to segments cycle per rate date the and generated already expansion Complementary a in business in to XX% last for growth highest we first first as year. to same in announced XXXX, the have And renewed BXG with our of BXG we sector XXXX. quarter last from million XX earnings contract release, our BRL the

increase to This cycle BRL a operating the reducing reaching impact date, XX.X%. and profitability. experienced adjusted XXX a our EBITDA driven was benefiting of product better by improved an margin of efficiencies. company's mainly to XXXX gross margin to growth million In XX%, cost increasing EBITDA while from adjusted Moving product,

BRL negative months, we XX% XX from free continue cash million flow-to-adjusted XXXX BRL in totaled the significant BRL flow. date, EBITDA XXXX. to free the to XX%. last to from cycle in improved In a million X XX our In cash cash conversion XX million, Finally, improvement rate see flow increase

Vasta's efficiency implementation growth of measures. result a and As of

after to for we It's to partner now In been discuss our have XXXX important to transparency, to will commitment QX. to downward billion note booking cycle. with move revised total students our at #X by effective sales adjusted I complementary BRL Slide previous our to has schools the XXXX our number in ACV. orders ACV bookings of X.XXX line due that ACV X.X%

XXXX growth XX% comparing organic New sales ACV to bookings cycle. of an represent

continue solutions. complementary premium performers Our to and our top be brands

increase the X% the total slightly has date subscription as concentration the deferred subscription for from XXXX mentioned, to million, of cycle, XXXX product #X, less noteworthy reached throughout distribution previously revenue in to in to the accounts a last cycle with year. XX.X% new same commercial revenue previous compared cycle third to Slide BRL compared the seasonality X the year to that period It's Vasta On ACV previous and first to mainly quarters. due The in different of deliveries of contracts. XX.X% XXXX migrate quarter date XXX

turn the I who Werneck, cycle quarter financial date. of to back the Marcelo results will to in about will XXXX talk now

Marcelo Werneck

Vasta's we revenue. slide, of Thank present the you, Melega. net In this composition

the Guilherme. the you in before now XX million. XX% state the BXG this X% quarter in renew total BRL by to to sector, with year-on-year was reaching total million. XXX dropped BRL can on effects contract increased with only the first which the Total in XX revenues, BRL net mainly revenue, mentioned which for Pará. due BRL to subscription organic revenue of with generated side, by million the left million growth observe XX%, 'XX flat due revenue quarter, XXX first On of revenue the Nonsubscription, And the the represents in of we quarter

BXG the an growth to side, total of share. dropped amounting and XX% contributor to representing continues XX%, cycle XXX Nonsubscription to of net cycle revenue net XXXX million, to to overall BRL X.XXX to to organic of X%, of revenues, revenue reaching XX% XX major the BRL sales million had revenue, revenue and in BRL date. be Subscription the our increase contributed as 'XX revenue we analyzed date. for the to an billion. Moving right X% the expected, revenue We the achieved our

with XXX of EBITDA BRL XXX a from relevant the Slide of 'XX. amounted increase to BRL million quarter, first million XX.X%, quarter in the our Moving XX% #X. In of adjusted and a margin this to

adjusted in XXXX that side, date. percentage and million points XX.X% XX% above the of sales or cycles On BRL margin to the we EBITDA right by a with see increased XXXX cycle XXX reached X.X

XXXX points observe XX.X% to we XXXX improved in EBITDA Let's #X, percentage move to to the margin. next sales date. breakdown the margin sales explain cycle can the that the slide X.X EBITDA On in XX.X% cycle and adjusted Slide of from

our and product percentage reduced the mix industry in from increase that by Firstly, caused on of better costs cost higher points X was global costs. product increased production margin as and paper year 'XX impact the inflation faced gross gross benefited the and inventory margin

stable years, accounts, Provisions was with in PDA, between the line landscape. for the doubtful revised credit

percentage As G&A discipline increased by to cash points, a marketing percentage mainly of net workforce improving investments. expenses revenue, expansion higher And optimization by commercial by percentage and related X.X and measures. driven our expenses by adjusted driven X.X budgetary points, expenses business

XX% quarter increase net adjusted net first sales BRL profit cycle of the XX XXX first to BRL profit. Moving a in XX XX the XX% date, to 'XX. BRL Slide profit of compared adjusted million net reached net adjusted the quarter adjusted million, from in XXXX 'XX, profit million, In adjusted cycle. increase the million to of XXXX the a sales we the #X, net In of totaled show BRL profit

we BRL Moving of to of BRL 'XX, million, compared the of Slide XX flow representing XX the first quarter cash cash an 'XX. free flow #XX, increase show the totaled in evolution. free the In first quarter XX% million to

in side, increase X cycle. cycle XX million, XX free XXXX right BRL flow from in solid million sales our million the a BRL XXXX to reached date, negative On the the cash BRL

cash last of be generation message a our reinforcing the rate metric, continues focus that area important our conversion EBITDA to free XX% XX%, XX months key improved another cash On business. flow-to-adjusted to from

BRL Slide of provision accounts. to with quarter compared to 'XX the Moving million, X.X% the XX expenses quarter. revenue totaled Total show PDA net we XX, first expense an XX in comparable the doubtful total representing of in BRL for of million

X.X observe PDA improvement, points slide, the X.X to Moving of percentage dropped for impacted revenue. although that credit a the review. can to of cycle landscape net right side shows by It sales XXXX we the the still percentage slight

days of than we Moving first the of 'XX, of business. to portfolio average Vasta's XX XXX in line receivable payment slide, the observed quarter terms with was which the is in the days the accounts comparable seasonality our next that and lower quarter

the a #XX, to let's debt take movement. closer Slide look on net now Moving

the a also interest repurchase debt compared which by fully driven the of X comparison BRL were the of the the beginning 'XX, 'XX due quarter the quarter. increased and had million, partially to positive the to BRL period. BRL second first and million financial which of financial completed second costs the mainly costs last this increase In 'XX, in position program, debt XX net million BRL XXX the of cycle, of were interest net to the offset As sales a cash of third the of from X.XXX BRL million quarter, program, during quarter position the flow impact by billion, repurchase Vasta XX

debt consecutive net that EBITDA the to fourth observe fourth now and to to conclude my to quarter where the which months marks quarter part first and XX quarter this #XX, of last can will 'XX, of Slide 'XX ratio stands presentation of X.XXx, the I an improvement 'XX. with as of quarter compared the the of an for continues improve compared adjusted X.XXx of when first of at we X.XXx the improvement

pass the being our to CEO, that Melega. word With said, I'll Guilherme

Guilherme Melega

avenue Slide an of Thank Marcelo. our me of On you, XX, with Vasta. growth exciting let update on you significant provide

first XXXX quarter, in two up units streams. in Alphaville franchise academic with of expectation with last continues our is combining our operating target launch signify XXX expansion and excellence revenue of our Anglo the exceeding the new are of students, As operational ramp over our Start students. education strategic bilingual surpassing the mentioned in to and now Both franchise XXX fully

in broad We strong market geographic future contracts. and XX the across robust signed and for XX potential states underscore negotiation. growth over and of presence have in Anglo. have now Start penetration contracts, prospects Security XXX we and This X pipeline new distributed Brazil

XX. Slide to Moving

unveiled to at assistant, tremendous met student latest last introduce Finally, and success, which our would been our the I with teacher Plurall has AI breakthrough platform. intelligent month, like [indiscernible]

prepares your lessons material. generative its brand develop and of AI AI knowledge generate scripts plans, guidelines. education decides knowledge and gathered our all we presentation, Plurall create It divides, Building interaction, request, summary, help enables to understands response. related the searches, best for In With itself. list our and from study images, content want each that question supplementary AI all to by and students enable several creating on systems excellence bases features classifies its put and preparation, we separated content basic

learning. students' creators empower how enhance process a This efficient educational to in learners groundbreaking teaching aims innovation This and engage, and reshaping and more dynamic is offering tool their experience. teachers

AI more how we are learning and inspiring and learning providing further and education, transforming a national-wide. teaching Plurall environment, see the smarter we enhance can't to will wait With platform, it

said all to our presentation finish session. I that, invite Q&A the Having and you

Operator

Oliveira Your line from Instructions] question the with first of [Operator Bank Mirela comes America. of

Mirela Rodrigues de Oliveira

my I have two side. on

of more you onwards XXXX a one-off contract. if bit a due the from a the comment BXG the these the more we seasonality the Could is ACV seasonality is little contracts on seasonality on were this secondly, on quarter contract, to it second the of new And contracts. from previously that First cycle? or government expected recognition understood

So is another first or this this could you the revenue specifics bit of a comment related Q? recognition Is in [indiscernible] the to on contract?

Guilherme Melega

your for new year, contracts seasonality. serving Mirela, the we that you, year, are ACV in seasonality. the different have more slightly This and will Thank we year. start twice more questions. we Every had a a I with contracts,

So little recognition the and on concentrates QX QX. a bit

we that's on we last why for last the more can period -- now, QX year as from you that ACV, expect presentation same mentioned the because And that's expect to the and landscape related recognition QX our to year. contracts. this on So have seasonality of

bookings, the and are we year. do a of to this bookings related terms soft one-off our students in of expect a ACV at to we -- it And the partner reduction market seeing ACV be schools, to enrolled

we recognized the orders year so from Regarding we had the contract same of we the Pará. BXG, that last far government that received from

we have in this So XX being QX. is the coming yet, are And contract million to that and [indiscernible] services more products related to QX enhancement contract. We come can but from regarding and we yes, also already serving we this orders more secure don't secured provided we that contract, definitely Pará. in the BRL orders more expect

Operator

comes question Santos JPMorgan. the next of Our with from line Marcelo

Marcelo Santos

understand a in deeper -- first just better BXG I to to bit all didn't go to trying for get little this mechanics. buying little the would bit you or dynamics. would you quarter the they wanted get? be the service [indiscernible] students so wanted be extra I product enhancement. the the a on mean, orders What could Just

the to margin want good do question, had year. would I outlook the of how And XXXX? I a in XXXX second ask see for compared when start mean beginning as to a you the you very

following the quarters should is So remain that expect to something in we that for place?

Guilherme Melega

Marcelo, your questions. thanks for

grades not as details but it This not me year, more you the a in the we that there from which different exactly are teacher This recognized, same high there the do serving represents more second to are we and we last contract. grade QX, are fourth not materials Let year. improvement shipped but we students, about of QX. serving training to provide served in products give school, more that and BXG year, can in that pretty room were expect We in much same much this is such be contract. contract. assessments That's number

for a of This a better mix. had We remaining good the year. Regarding related the to great the margin is start. outlook start

products. focusing are We on premium

BXG margin. of And products, that margins. We our obviously, have have with this better fixed already huge QX reflected costs. has dilutes the on stated growth that recognition on we And our strategy premium is

-- don't year. same in as we have to the costs pressure -- that we had So had last costs looking we same production and the

So a the historical remaining we when margin. With bit we of we of look the fewer in margin, above it BXG, better on should to convert more but little BXG. a realigns year, volumes the expect volume

Operator

the from line with Cepeda Morgan Stanley. comes question Mauricio Next of

Mauricio Cepeda

have two I questions.

it the year little So students if you be a the was in the happens? as contracts the of there of more you exactly the it that would base this contract. revision kind one, detail there in students for originally bit far in foreseen understand, I about saw could which ACV, tolerance a as less than First was and mechanism

can to recognition the bit the revenue translates versus you kind that should little we of explain variance mechanism year? and in expect future, kind variation if a how the of this if it there throughout the a allowed ACV So a

second mix. my question the And is about

If cetera? could and margin play mix, in PDA, strategy on bit positioning to you how in could you how you it terms of product in want the comment terms et in private market a your of help gross in the little

Guilherme Melega

Thank you questions. very much, Mauricio, for your

our give Let bookings, the the slightly the with ACV, ACV or some details the normally overall in we schools ACV with contracts have discounts on -- the students. price our our more contract is for in of the it the new the of our We price see mechanism. number that secured contracts, me a in and sharing each we are the about breakeven you share that we when students have happen. There room order to fewer contract in contract, Normally, customers. contracts doesn't above. we

the the during on complementary orders observed year, And of that schools. in reporting than fewer are to quarter these we we received What because complementary fewer we contracts. initially orders And received depending contracted. this QX, This pace students the complementary enrollments. in QX, the schools is orders in fulfill in expected of majority we the than contracts the

our ACV slightly So But chain. students of to the our this above mechanics is, is premium our not decision schools. that you was that's schools. are impacts sharing the That always a obviously with this of pretty soft impact the mainstream schools much the protected, And same. to X.X%, more the more year push What previously is bookings the products we opinion, are number and And in respect and strategy do much premium on have reported. why we market.

That allows mix. me on comment to

Fibonacci and brands. better market Amplia. pH, talking Anglo, are about moving Our strategy a we pursue share premium for I'm is fast. our to And

we focusing start enhancing enhancing pretty in premium brands. sales our enhancing sales on as QX are And goes the mentioned, where we have investing AI a are that We I product, good very Plurall the XXXX, is premium campaign for products, campaign we in optimistic much schools. of campaign sales the cross-sell But led And track. right products campaign XXXX very on our are on the those grow that first we to schools. us what to for premium pursuing are quarter the complementary and

Operator

There call time. you. this turn are the Melega, further no over Mr. I at questions back Guilherme to

Guilherme Melega

you very Vasta's conference Thank in call. QX to much participate

of just than some first we very significant launched make us the period good are we not track. right contract signed very it's to in very campaign, XXXX, same a the is yet last strong in sales like we a to of already for on important year. the had We Xx very amount quarter. We a campaign had would Obviously, make start but I comments. that and terms our total confident more

pipeline BXG. very a have We robust on

We we us. for this huge demand expect have ahead to are and quarter. be have sales few we forecast On Bilingual contracts. and more already it, contracts a for we signed School, reached soon this our in very XX Start already important a Anglo years, segment very will of confident that a It's

our implementing much more with be of And lastly, AI big that to schools teachers efficient, our a relationship we their very believe to really of we're producing materials in our strong important, and and and implementation but in And teachers. will their network platform time that by the allow technology breakthrough so, we are doing Plurall save students. our for classes with our

are year. you the much. call. Having look the very And with we QX that, of very to for I optimistic talk remaining earnings Thank you said forward in

Operator

today's Ladies call. and concludes gentlemen, conference this

You disconnect. may now

Vasta Platform Limited (VSTA) 8 May 242024 Q1 Earnings call transcript