VTRU - Earnings call transcript Q1 2024

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Operator

Good morning, everyone. Thank you for standing by. Welcome to the Vitru Brasil's Q1 2024 Earnings Conference Call. [Operator Instructions] I'd like to inform you that this video conference is being recorded and will be made available on the company's IR website investors.vitru.com.br. where the complete material of our results disclosure is available. financial contained made presentation regarding of during projections operational information that any business the that Brasil, and be Vitru well may this and currently company's Instructions]Emphasize management in and as and this statements outlook, constitute as [Operator beliefs of information assumptions available. goals video conference considerations not guarantee are of Future performance. They events. relate to involve useful risks, uncertainties and assumptions as they not depend on circumstances occur. may they or therefore, And may that may affect the should that and CEO; factors of Relations Investors Matos, expressed and William that her other Brasil considerations.Today, Vitru presence conditions, now general materially future company have to we Investor those results and team.I'll future conditions market the Maria floor and understand economic from in to Mr. Carolina, of such executives, of give the the performance operational lead differ Head William Matos.

William Kendrick de Matos Silva

a it's by EdTechs on to build this to the with the on distance I'm morning, that's on Vitru [indiscernible] top form be proudly top to our markets a ADRs to meeting Vitru are out of merger quarter Vitru shares X that activation. Limited going April is but continuing important Brasil of the our world.TIME then EdTechs And sure, considering keeping express data unified the little of prices, for I and approved that And available expansion practice with Vitru recently the have the very the was outlets to to expansion for highlighting that a year. the that's ends submitting to strength And this Relations first inflation number and pre going am everyone. in William form. here our a that quarter by learning of of choice place Felipe quarter. differentiated Head Percentage recognized Brasil. can in loyalty see focus results as the reasons educations. the highlight IR this leader important the our this in [indiscernible]. XX% emphasize and think a the validation to for website, here I'm a increase new time like advance of is We magazine students.I listing shareholders students, of a the of the Carolina, led presentations revenue this in digital to number not together for receive our record by most solid like growth release.So on we student based growth and world. to recognition mention good in has Investor in X quarter consolidated fifth general criteria was our variation in very revenue. great integration best of that the we in in highlight on some Unicesumar able Analyst. quarter. this to important here that very one delivering was of with alongside reinforces remind which always from It's all It [ was temporarily, to ] average the of serving that of first you're a have, it's the XX.So was brands quarter. can the Welcome. along been pure nearly disclosed Slide the The quarterly and this on graduation shareholders because about delivered They very begin the strategy Nasdaq on partnership Uniasselvi positioning going in CEO we're we and for begin And to increase was results quarter. ranking, And important the this or Vitru Good highlights, to to by period here XXX,XXX only compared Vitru's that quality increase strong with Statista, period. that the of slide, between graduation to X.X% justifies in the initiated a build net finished brought the continuing that strategy education our greater U.S. This we And in shortly.Another XX.X% with must competitive temporary is, products.Regarding talk BX highlights I'm first joined our close have by election to for and have Vitru our XXXX. XX quality education.I also in medicine results 'XX. strong the the financial Luiz -- the the pleasure May our a of have shows also by Matos, This see company, to our also Maria have our process following and IR as for on And expectation where CFO. the Today, ticket present we that our in than almost you highlight movement is their area. we've of Vitru, X the period education some the

in of all modest Down doesn't a strategy It quarter notice the worry number. margin is organic. the of quarter providing to the to highlight our than has for flow was EBITDA slightly I'd expected about Slide this year start are still X, growth on of model It's which it's the based repeat year. see high the to advance not and efficiency see And margin a our higher cash quality was of quarter. than So it's the cash in to model.Now conversion expected part X% enrollment on students the to same Those of EBITDA a the XXXX decrease harmonization be margin us. the more business to the shortly, 'XX this the will it's part with asset-light our operations, XX.X%, following numbers is of of a our growth we amount.Finally, moving higher to details to this year. student strategy of you the And our for number solid important purely quarters both and XXXX, margin like for in average and for this model, going that by some had activation of you we've the sector.As it's of going efficiency to first can and strong that the amongst criteria this proof adjusted for decrease likely below, a this and growth management that scale our that year. decrease this important the

also March investors movement observed, we And going announced precise is we this strategic process base a that criteria in about paramount, have revenue. short be the compared [ to that disclosure way. of on, our about to the lower at the are business view this with to the of a can in XX% and for in we this our very this part able for have XXXX business. calculation first growth understand evaluation as our latest a the approximately for term, can and are approximately both XX as student from And revenue sustainable the student XX,XXX we Unicesumar.In less of harmonization XX, But or a the the on management.Therefore, XXXX adjustments exchanging for a XXXX, the in essential brands, in ] X we slide, is in in we our purpose in trust that of the practices X.X%. a of align Uniasselvi and 'XX. you best observe the As totals that it the us base It impact means in the harmonization quarter standards use and to BRL as student also of nominal growth students fewer net net of between plan in million of confidence to in the way acquisition XXXX previously proof this made some recognition

to has impact PDA on just Vitru, on which for 'XX accounts, invoice with has positive it's our generated is to the important impact and the doubtful attention reduction be for delta it non-engaged revision no and because invoice not better it's as of will allowance cash 'XX repeat throughout for for I no going that, for be harmonization the students. this were clear, as turned students, months have following well rates to issuance.So accounts effect So flow. that into paid this this they our highlight cash flow, later [indiscernible] a XX

students, that cheers bullet is in reduction have is ISS important this we or of very a grew It's payment up. harmonization enrollment because tax We of in this to the grown this course, that slight long-distance Of of which something in graduation XX% strongly non-engaged another a moving we're our going XXXX that And services and positive invoices is a that us paid.So were last to for the to that on XXXX. years Slide aspect show these not on had quarter. X. by tax highlight effect, already point

Those non-engaged, the last in this long-distance was our reflect numbers the breakdown X base and this growth consolidated competence over leadership and recognized. are can show long-distance that engaged quarter year. enrollment see recognized we no longer, quarter, Vitru's in Additionally, who in the enrollment also we starting graduation.In between graph of of right, on are per the the of enrollment years the of who the also student XX% students graduation

on you growth slide. from this next to Vitru the quarter continuous see student of base. of non-engaged students.Moving that enrollment XX% approximately So was the the We show can

to this the and country. largest who As payment. only on now we have you that strong Uniasselvi, longer -- confident Uniasselvi, no of growth distance is a look and advantages did remembering we the quarter signed in student non-engaged the it students base. at we the growth. high when we a base in graduation, included did walked are by the those learning engaged with This supported company monthly paid growth Therefore, first can way from have very any the X.X%; 'XX, we historical in take more meaning, comparison much observe long not contract are the was we distance quarter, and They are students X% treaded.So a exams by not increased have path the but students any of the

mean in effect As the XX% have a metaphor. you results, that bit distance solid using that this In growth better, like be it of the in to you more.To I can little size would reflects clearly the base. XXXX tell have XX would we for has excited much snapshot been a perspective previous it Again, It would approximately our that in more student total could to on graduation March base more now words, of long about you on engagement. an good and see, I've of students, a compared XX,XXX which explain 'XX. the very very, other am I points criteria, a

that a X that been Formula what racing the and mechanics, lot delivering has is ahead, a like not car investing best driver Just is feels performance. that years the best but it the that's the in delayed

the the excited those the of it observing results But adjustments out the [indiscernible] first some the doesn't investing place. products we the It was not a to a lot. and been fix different us And place with are with right all we of on take And our a not and whole from ADA numbers, angulation. the first very like now engagement the the floor great I'd ahead.So was give to Carol, that sense to And all Investor the you not weighing to putting result.So see sense. could brought we're we we information. courses. the and solve had follow Carolina, and of making been as quality to have seeing and making effort of it's our that simple communicate move have Head to Vitru, Relations and to was Now on,

Maria Carolina

X, in region Brazil, every show activation. student distance of we the creates considering Moving long of graduation on the to Slide the growth DE of criteria

on region continue at of the of it's region very sentiments right slide, progress this the we Looking country, Brazil the the side of southeast evident. by map in graph of to in the

region number And is besides we we penetration our the relevance. of going important tense for recently, this But of in Southeast to region brands already have all opportunities in city expansion accelerated population has the So Paulo. it's a states. concentration the both to Therefore, that in of centers and the of Sao many present brands. that, remember gain

it's XX, Now table the other number the in across presence. X,XXX with line on each expansion. left, more we XX, the municipalities centers our XXX the we Vitru It's X,XXX milestone synergy We there.On directly. Slide quality brands talk distributed In nearly XX Slide connected how plan, about almost what has cities, the we offering offering we from than see of both a visible demonstrate perspective. where metrics and call cities our of students' some reached brands. gross more international

is quality Our evidenced focus that by our users on is gave and apps. delivering the to education ratings

We suppliers. have the highest rating apps amongst

important rated First, that part have proprietary an remember of our journey. our host learning apps and constitute

is our highlight students Reclame, are excellent experience best committed we tried to we I So on the above moving issues resolve the the the the my William side, XX, average valuations to of back the floor an reputation number growth.On the the to all to the right for ticket players.So possible also average on other presentation.So data. we way. give move in website, listed deliver Brazilian on move now by the Therefore, the reported colleague, Slide our on

see years, account the as considering last Unicesumar. X% in a at an the that that already X an was there Vitru whole can evolution You average growth growth, was in

the to to care a right engineering with the as financial slide.Moving and inflation ticket premium the our the we Before as courses the ticket very slight number a representation follow health are digital.It's ticket as quality enrollment this And have the like know, highlights. main to in an a products higher XX. total you courses, that the in increase weight on which in this and close lower for of we note change price. positioning the increased side are of quarter, how which, have important decrease variation, with courses confirms We courses average technology had Slide indicators a demonstrated even of player price the the in that quarter on different our

by as X% business we quarter, businesses has integration from can EBITDA. continuing adjusted gross scale XXXX. words, the see our increase first observe expansion in business in while to 'XX XX% 'XX that of our margin, following representation The its saw increase discussed the increase medicine in X you for the on increased in paths the of an and education. quarter ticket Vanguard growth maturation main this in QX regard, vacancies revenue the see, quarter demonstrates you have the to to The X% It's due look of quite those XX%. a to with observe, that for marketing first of the segments for slide, As had important lifelong a education increase for and XX%, benefits was we of that impressive an revenue portfolio, of interesting market.And very X.X XX, have revenue we growth to were other could points is the was we which made this in in risen the our XX% of X% that Slide can total, the great that net operations, approximately of to the of more in within combination earlier, proportion being breaches of new attention and continuing quarter assumption especially average education year its Brazil. of XX% it company.On those the can of of and to revenue we based additional the the of the of highlight it's percentage assertive which shortly.In the see size. business could continuing and we this of savings net like see revenue medicine movement In learning operations compared this We an believe we in a detail in we increased medicine Vitru's big on a

from for XX% on It's to moving Slide already long-distance graduation EAD. as explained criteria that of share considering. I as graduation see growth of revenue, activation, XX% the a revenue the say long in distance total hand, net student the important the are to XX. of before.And we other XX% the decreased On especially to We in new

college worth compared strongly graphs net XX% quarters a how has distance the reasons. Maringa in on historical average.Besides average Brazil. from see ticket recent spots in period increment is meds among moving growth in have Vitru is Brazil a that of in we can private to of it's that of That's remember institutions college service evolution best And the the medicine the is reality for face-to-face the revenue of course that months, accessible institution quality filling Brazil provided demonstrate in distance that the and economy, the education this as on sector. Brazil. we shows this the among financial ranks price in and evolution of will can And -- education long this the in vacant improved student quality Slide in we of our a 'XX that, growth, context the in to cultural the But the of the course, the historic showing And Brazil.So the important investments side in the above to does to recovery more left education to segment. the of is those can in southern in long of long room within growth the sector of compared often education vacancies the it's of education live XX. of education a higher the slight digital make price. is medicine gap not believe and strong with the national that you high EAD institutions 'XX, a the country quality logistic for And of the region magnitude, students and has cities in the graph face-to-face of Slide on best explain combined of in, the our us combination a market big this segment. our number here Additionally, increase. like, for of the INEP according for a maturation EAD But segment.So QX to increase it was future.And slight face-to-face ticket to right of evolution to It's reality is we solution noting contributed Brazil, to or shows pandemic. consistent distance the distance this the expansion And continuous explained long in average in this right the seek our might city in the be the expansion the a of share that believe slide, QX believe long that the segment largest market the the demonstrated Institute. we in by graduation located strong coming on and great education the penetration the performance potential this We market the continuing result of end our revenue from on XX, Western to going be segment. years in moving side, the It recovery in

our by for diversification with more to We the of so room it our directly Slide the this some journey the Vitru much. The regarding associated XX. believes performance students.Moving potential before, you grew that throughout strategy is data and show on growth of next As number mentioned I XX%. complementarity

federal per are in for of not in And million the interesting As courses, still players. students that, see, according the courses we also at is potential the were And segment as by X.X year, addition programs. segments. a and target you to explored looking technical young with we see students numbers left, census vocational the the professionals there scale education is very so significant gateway Considering job young the and continuing students the authorized well million XX presence, We'll socioeconomic year And and course, of market. through for with job.Besides the Brazil, And is when to the postgraduate new the consider education this players, can of that, postgraduate new in look X.X few course, Uniasselvi, about our you have on and old. government. XX% can EBITDA a regulated to, opportunity first years over data listed high graduate enter looked applied that country, addition, and job onwards. regulation of from Unicesumar high school, brands their this per technical in already are individuals show training.And graduated are is course. latest of number of market explaining institutions this new meaning, vacancies and to in almost location into XX, these finding and the vacancies.On A the XX between the characteristics the technical of Slide a to few And players Slide it those national periods expenses. we costs evolution begin by

chart can gross recent illustrates revenue.As to gain a XX, Slide left proportionally gains into know, So net and of scale in Vitru. as see X.X-point the in of you percentage both Unicesumar reduction this service integrating in margin impacts costs the reflects you on

sector.Moving for an in XX% G&A care been a natural in administrative to structure with process need like in over Vitru's internship representing maintained maturation -- elevated as that Slide and direct greater implementing for was consequence will compared expenses, tell the costs. hospitals.And number has like of you increase years. throughout only has of many very revenue XX. general increase, fields a to see costs, advance to such to this receptors what XXXX, net we quarter and relation health Vitru In slight those lean some past certain of I'd is this the a courses a courses However few in That of

enrollment greater ticket various positioning was healthy points due competition. demand, average along the with you strategies the and and increased in approximately X see in anticipating on a strategy marketing greater the expenses percentage complexity net with of quarter. revenue On to This the company's with left, increase sales this

Sao our we expenses important for and that the AD that before, state in we than of reported will remain slightly show the as marketing now.It's which English As maybe very we the say said are a slightly we've PCLD can of net percentage enrollment higher or that expenses in efforts to strong anticipate Paulo focusing chart, XXXX.On the were sales QX the revenue close of that 'XX, the in side, the the right is in higher in XXXX. right reflecting year,

there downward of Slide it's noting due to we at we trend However, important harmonization worth that is presentation.On to expected explained have throughout XXXX the beginning criteria highlight. and this activation XX, the as of XXXX student messages X

first cash integration one company. of the strong The the is

compared So system It quarter the to reached best first this conversion of quarter. the in exchange evaluation credit the practices of cash and XXX%. implementation is XXX.X%

QX addition an million with reading tenets if and revenue expect of only start reflects in we tax in deferred that expenses had our venture percentage a that what expectation we message line an versus stable. perspective cost lower leverage. is scenario Slide expenses, important quarter reached insofar, XX, It's to it's of its it green to the that relatively debt mentioning evolution in and 'XX.On worth the of from state X.X% update Second is our also XX economic financial of quarter. to the the low we X.X have net in third period.It's increase recognition that BRL of an this And increasing of this quarter. on with right remains results this effect the is of And is the financial of approximately profit CapEx points ordinary

slide. during EBITDA, debt on effective is are cost the operating leverage. in the generation. leverage in net the the update debentures, of the debt to of explained it our And slightly over that This year, quarter, to is of this cash strong The we way relation And had stable. going a mentioned of I was expectation over we covenant.And as below comment this adjusted the

to floor give Now William. I back the

William Kendrick de Matos Silva

Carols. you, Thank

to market Slide tell on adjusted I'd the net our like EBITDA. for Finally, guidance and XX, revenue

quality that, For shall estimate between and lead XXXX, our in growth with XXXX important it's XX% the discipline but the us billion. a XXXX. will student expected of our words, financial that In billion considers highlight that be in revenue between guidance and X we X.XX that's on Besides years.So BRL in last At or BRL growth been other result this great between that keeping on regarding our net has to XX% percentage this margin fantastic very the XX.X%. focus moves EBITDA reflects have to we services, the moment, X.XX and XX.X% on this important. It already strategy our what terms.

the back best efforts been a floor records Our results confident that thank we and to And the of in we surpassing I floor host own that, making results. the give And us quality.Now, Vitru grow that premise finish this a for own all are I are our for trust with on company open we improving the Q&A to since the the session. year we're are will all give Thank back to have And the somewhat based before going confidence. side.So this our you rates great side the host. the putting all adjustments like and I'd to relevant and for reasonable that very deliver have for and very to all much. better we presentation. the achieved our now, like to you all strategies

Operator

[Operator Instructions] Our from Lucas Stanley. question from first Morgan comes

Lucas Nagano

few a questions. have We

in update in rules any harmonization increase seeing so cost or the some better. that is be the is when as Vitru level have My the a you going some that on like in cost going said courses that have this about year the think first the regarding the Do on the you're question The regulation. compensate is there instance? to changes first that new to is you practice.Second different quarter, PDD pressure. on is drivers attention for the And is flat an that probably question margin for is pay is marketing advancement that to discussions a is about nursing

William Kendrick de Matos Silva

questions. your for Lucas, you, Thank

first the the margin to our as in have to the expectation calm I year. mentioned gross very, said.But that Despite costs as to was for in reality, seek strategy. care investment, across a courses, full predicted market very question, regarding our due reduction as talk at we we the So for drive about some an we health I we advance said, slight have are

year help our XXXX. are some to the [indiscernible] year to of this education, So very, deliver Vitru margin for this some margin gave.And cause reduced model as throughout going we regulation, And of going courses to that for the increase models very we that' that as the with in guidance. have be on our of is some said, nature in new our guarantee harmonization, hybrid the be might costs we courses. to PDD the And the guidance regulations to aligned new regarding the

we those But attention looking for the going national them to I new that them. for regarding impact to of for that's before, are everything a And these It's understanding new market to segment.And implement for to not [indiscernible] to have we the and said We to to paying have something as understand. on we is been the to any positive future a the all is in quality, related courses our have teaching change And regulations, and to that it's movements. to to. changes. we study positive. a have as institutions relaxed necessary we carefully it's as every this changes to are are understand we good And going very face-to-face the about have issues remember areas, going in seen education, the we that we have are X adjust methodologies. any in changes new Unicesumar. nature Uniasselvi the going years proposed.So percentage But and the in also the study to all movements. looking important close regulations, very said, at potential we're hybrid But a we this And segment model year's in very exclusive because course have be

Operator

Oliveira from buy-side comes [ next Our question ], Pedro analyst.

Unknown Analyst

liquidity the it's have of to like how of to impact the initiatives an and update, have going Do you Vitrus' process regarding the the the any shares? listing We'd indicate company. liquidity to

William Kendrick de Matos Silva

Pedro latest there's the listing one your [indiscernible] justifies reversing corporation for itself. of the the 'XX Thanks a question, about that BX. We're process

at arrival is the this to week So likely XX. in happen June BX of

we explained the or The the choose will going if achieve released, election how that works. ADRs. documents the we shares investors to So they're

process we brokers June have XX. this is to on and end going So

as enter big the right You're individuals take let's funds and increase has investors abroad.But going a a Head pension the move level. number of market large to the to is array or liquidity investors local necessarily high talking with my Then invest we movement and be analyzed large at that have busy point Relation schedule timing. management investors. of a like company the to But not in like radar of

believe really this we migration. in So

Operator

no have questions. [Operator Instructions] We

William Kendrick de Matos Silva

And thank fact decision to point and being at excellent each of target life of our to leader the everyone. the is I'd the and like starting our in biggest presence that I positively this have emphasize on students. market is

path and we on to again, are day So the we thank a see right trust great and I wish for can everybody. that your you

Operator

inquiries. The call The Vitru transcript good English the now Relations an interpreter very a address available or Investor you on live on present have all day.[Statements spoken XXXX much earnings QX this any by Thank is were call.] department in further to doubts to participants is Brasil's and concluded.

Vitru (VTRU) 13 May 242024 Q1 Earnings call transcript