Good morning, ladies and gentlemen. Welcome to Ser Educacional Video Conference. We'll hold a discussion over the results from the third quarter 2025. The conference will be recorded, and you may access the recording through the website. It's also available for download. Participants will only be watching the presentation. Afterwards, we'll have a Q&A. We'll provide further instructions. Before starting, I'd like to remind you all that the presentations follow the values of Ser Educacional. The declarations may bring risks and uncertainties. After all, they're related to future facts that may or not come to fruition. For that reason, journalists may take into account the economic environment, and for that reason, the results may actually be different from the ones presented here. We have with us Mr.Jânyo Diniz , President and CEO, João Aguiar, CFO, and Rodrigo Alves, Head of Investor Relations.
With you now Jânyo Diniz , who opened the presentation. Mr. Jânyo please, the word is yours.
Good morning, everyone. I'd like to welcome you all to another teleconference for Ser Educacional. I need to apologize because I had a medical procedure in my eye, and that's why I'm keeping my camera closed. I'd like to go straight to slide four. Here we present the highlights of the third quarter, which again was a positive period for operational results, but especially for our financial results. There we saw a sharp increase in cash generation that more than doubled when compared to the prior year. It helped our financial leverage to fall by more than 20% and helped us reach leverage levels that are increasingly comfortable.
Another positive highlight is the period of growth in the student base of 12% in the first quarter, thanks to solid enrollment recorded in the first half of the year and a solid performance in re-enrollment. We registered a decline in dropout rate while maintaining solid cash flow generation mentioned earlier. The combined effect of raising the student base and cash shows that our student base is healthy and resilient. This is in line with the strategy we began adopting a few years ago. We focused on reformulating our operations to increase efficiency, and now we are reaping the benefits of these initiatives. Now, slide number five. Increase in operational efficiency. Here we present a few interesting indicators that illustrate the efficiency gains in recent years. Notice how we increased the student-to-unit ratio by almost 50% between 2025 and 2022. We also grew by more than 4 percentage points.
This reflects the effort we put into reducing the amount of occupied real estate, even in units in operation, as well as the focus on offering courses with greater market attractiveness, which are healthcare and law programs. Slide number six. Here we show again an efficiency through income and leverage. Notice that we moved from a virtually zero net income between 2022 and 2023 to a net income adjusted of almost BRL 200 million in the last 12 months. On the other hand, our financial leverage fell to less than half. It shows we are converging towards a significant financial solidity for our shareholders, especially in this cycle of rising interest rates that are experiencing—it could be landing. Slide number eight. Now, we analyze the results of fundraising in the third quarter, a period which we slightly shifted our fundraising strategy compared with previous periods.
This occurred due to us having already carried out substantial fundraising, and we had a good re-enrollment rate. As a result, we had solid demand fundraising with a good average ticket, though nominally somewhat lower than last year. It's also worth noting that last year fundraising had elevated volume, growing by two digits in comparison to the third quarter of 2023. In the digital aspect, we believe the market remains more aggressive on prices, especially due to recent changes in the rules governing this offering modality. Notice slide number nine. The combination of a successful fundraising season with solid evasion control resulted in a positive performance for our hybrid education student base in the semester. It grew about 12%. In addition, the total base of undergraduate students increased by 5%. A special highlight goes to the growth in medical student base, which registered a 12% increase.
This is driven by the growth in the last 18 months. Slide number ten. We show that our student base in health programs, both in hybrid and digital education, continues to grow. The shift has been occurring over the past few years. It's one of the main factors contributing to the positive results we're achieving this year. These programs have higher average ticket and are in strong demand. Slide number eleven. We present the evolution of the average ticket, which grew by 3.5%, mainly due to the growth in the share of hybrid education, which rose from 52% to 55% of the total undergraduate student base, and from the average in digital education student, which rose by 2.5%. The hybrid education average ticket grew by 1.9%, mainly through the ProUni student base. Excluding this effect, the average ticket rose by almost 1%.
These are my initial comments, and now I pass the word to Mr. João Aguiar to discuss the financial results.
Thank you, .Jânyo Good morning, everyone. Let's move on to slide number 13. Here we'll evaluate the net income. The second quarter, as well as the first, showed robust growth in revenue and 8.4%, driven by growth in the student base associated with improvement overall ticket. It's clear we need to mention that the hybrid education ticket remains pressured this year, but the main factor behind our ticket being reduced in the segment is related to a series of changes we implemented in our billing process in recent months.
They encourage students to pay on time through initiatives we implemented, such as the possibility of postponement payment due to date with a punctuality discount and extension to payments due to a campaign discount, combined with initiatives that tighten negotiations for students who still delay payments. These initiatives increased and encouraged on time, which generated about 10% discount on invoice payment, and they generate an average discount between 10% to 15% when compared to the same previous year. The discount impacts the income statement, but as well as you'll see later, has been one of the main factors that helped us achieve a strong cash generation this year, especially in this last quarter. Slide number 14. Here we share the EBITDA and as well as Adjusted EBITDA, which again showed significant growth in this quarter, and again with improvement margin.
A highlight in this quarter is the reduction in marketing expense, as already recorded throughout the year, and the broad dilution of cost. It's worth mentioning that this quarter specifically payroll and services cost rose somewhat more than the previous quarters due to adjustments made for instructions and health course professors. In addition, we had a one-off expense of about BRL 5 million related to concessions and union negotiations, and this should not repeat in the next quarter. Slide number 15. We summarize the impact of Ser Solidario Program, which in this quarter completed its first year since its implementation. The slide shows that the program has not only progressed well in contributing to revenue and Adjusted EBITDA, but also that the accounts receivable of the program are very well controlled, which with receivables substantiated lowered through its implementation. Slide number 16.
We presented the evolution of our net income and adjusted net income, which, as can be seen in the figures, reversed the situation of accounting loss to a profit of nearly BRL 15 million in this period. On a recurring basis, our adjusted net income rose almost 25% due to combined effect of solid operations, but also through a significant reduction of financial costs thanks to the reduction seen in the last 12 months. Slide number 17. We highlight our operation cash flow, both pre and post-CAPEX, which is undoubtedly the most relevant highlight of the quarter's results, with the post-CAPEX more than doubling in comparison to the last year. This is due to improvements in our collection process and the better credit profile of our current student base, in addition to synergies and the operational optimization plan.
This Cash flow has been fundamental to reducing our indebtedness and repositioning the company at a very high financial level. The most interesting information in the company has a cash generation profile that's not only more aligned with our Adjusted EBITDA when we look at these years to year-to-year result, but is also sustainable for the next few years. We're only talking about the first and second quarters, but they'll continue to keep helping us improve these numbers for the next few years. Slide number 18. We present our average collection period, which is decreasing for the fourth consecutive year, again reinforcing our view of the quality of our accounts receivable. It's worth noting that in this third quarter of 2025, there is no sale or portfolio anticipation of any kind.
It demonstrates the solidity of financial results achieved in the period, as well as it reinforces our perception of the financial quality of our current student base. Slide 19. We see here a drop of 22% in our indebtedness compared to the last year. We're moving firmly to reduce our leverage ratio to less than the net one debt to EBITDA, as well as illustrated by the trajectory shown in the chart. Our strategic objective remains to operate with leverage below one, which we consider healthy for our company, especially due to the absence of a tax shield in our sector. We have all the markers of a healthy company generating Cash flow, investing in expansion, while also rewarding shareholders with dividends. Slide number 20. Here's our CAPEX. It saw a significant reduction compared to last year, which has been the trend for the year.
This occurred for the following main reasons. First, completion of some investments made to adapt properties to receive students, allowing the return of some buildings in line with our operation optimization plans. Two, additions that of the works that had been started for the medicine programs that we do not need to do this year. This way, we are able to postpone the beginning of some work that will restart in the second semester. The Beauvais Building saw the beginning of some work. These were my comments, and now, Jânyo for the final remarks. Unama has a permanent role in the event, reinforcing its position as the most respected brand in the northern region, one of the few examples in Brazilian private education, with a brand recognition spread across several states in the north, including states in central, west, and northeast.
To engage the academic community, authorities, and the public in Belém, Unama organized several academic and social initiatives with the aim of broadening awareness of COP30, as well as climate topics. Since last year, we have promoted actions such as distributing COP30 handbooks to high schools and authorities, incorporating the topic into our annual university video festival across all Brazilian units, holding an interdisciplinary university COP and a global course taught in four languages, with more than 18 international climate specialists as references. These initiatives not only helped to broaden the public understanding of COP30 messages, as well as consolidate Unama and Ser Educacional as the regional academic references and knowledge, dialogue, and concrete actions on climate change. With that, we close our remarks and remain available for the Q&A session. Thank you all for participating in the results briefing.
We shall begin the Q&A session for analysts and investors. If you have any questions, please click on the reaction button. After that, please lower your hand. First question comes from Lucas Nagano from Morgan Stanley.
Good morning, Jânyo, João, Rodrigo. I have two questions. The first is about net income in healthcare. We saw strong growth, but we also saw a DA acceleration when compared to the first trimester, both on the ticket as well as average student. It looks like there was a drop, between, when comparing different quarters. The second one was about the gross margin. There was a recurring and a non-recurring one. Could you go back to that and expand on it a bit? Thank you very much.
Hello, Lucas. I'm going to start with the medicine. There are two effects we should take into account for the average ticket. First, the new spots for medicine were approved in the third quarter. Any distortions generated in the first trimester were better balanced. The reason is because they have similar prices. Second part, this goes to the question of the base. Here's what we did this year. We anticipated all entry exams for medicine, including the ones that took place half half part of the year. We used to have a weaker base for the first trimester. Now we had the normal medicine course evasion that tends to happen at the halfway point. We are also working on some of the legislation for other courses. We are operating under a judicial order. The course should have a little more friction until that is sorted out. This has impacted on the speed of the income. I'm going to let Aguiar answer to the payment sheet.
Good morning, Lucas. Thank you for the question. Indeed, in terms of medicine course in this first year, we've had to adapt in some ways. I'm talking about adapting to hiring new professors, especially when it comes to places where we didn't have the program previously. These adaptation measures had to come in place to respond to the needs of the course. The concession plan was anchored on the share average price. The value came out a little bit higher by the end of August than the final value. Now, onto the third point. We needed to offer compensation in terms of health insurance plan, transportation, and food. This will no longer be included in the base of our collaborators.
You could exclude that impact from now on, and that would help you realize that the margin is a little bit above what was first planned. Look, as the effect that Aguiar mentioned impacted the result, it's not being treated as non-recurrent. It had an impact of BRL 5 million. It appeared in the third quarter, but should not be there for the fourth quarter.
That's great. Thank you.
Next question comes from Flavio Yoshi from Bank of America.
Hello, good morning, everyone. Thank you for the opportunity. I have two questions with me. The first is about Gross Margin. What can we expect in terms of evolution of Gross Margin? We're going to see the maturation of the medicine courses or healthcare courses. Should we expect a gain in Gross Margin? I'd like to hear your words on that. Next point is distance learning. When can we expect a growth in the base? Thank you.
Hello, Flavio. Let me talk to you first about the margin. We had a year with a larger growth for the first semester. We expected that speed would decrease for the second semester in that year. It was somehow in our plans for the rest of the year. Our work in expanding the margin should keep moving forward, but now it should be a little more focused in the continued improvement of the average ticket. Excluding the medicine courses, there is a lot of room for improvement. Of course, you know, once the building has higher occupancy, you have a better chance to improve the ticket value.
We have a very recent student base, which decreases the chance of a large volume innovation. We see opportunities both on the ticket side as well as in the growth for medicine courses. We are in a very comfortable position there. Our business plan is to generate bigger margins, as well as a larger Cash flow. EBITDA Cash flow. Obviously, we do not expect to see the same sort of growth that we saw in the first semester, but it does not mean that the improvement cycle is over.
Good morning, Flavio. There are two points there. There has been a change in legislation, which made things more confusing for us. We are noticing quite a bit of pressure in terms of price and in the market. Our goal is to improve the ticket in distance learning, as well as growth in our base. We see the strengthening of the offer, the offer, the kind of programs that we offer. We're also aiming for a growth in different points that's compatible with the profile, the courses that we offer.
Thank you very much.
Next question comes from Marcelo Santos from JP Morgan.
Good morning, everyone. Thank you for listening to my questions. I'd like to hear you on your perspective for next year in terms of medicine. How do you compare this with previous years? I know this is very early on, but anything you could share with us would be greatly appreciated. Second point. In terms of the release ticket, you talked about anticipating the enrollment cycle. Is this exclusively for medicine? It wasn't specified in the release. Are there other programs that also saw this anticipation? Thank you.
The entrance exam for med school started very recently. We haven't noticed any large changes at this point. We believe that this is a solid market and should continue so for next year. We see a trend where we have the most spots, and we are not concerned. This is the ending weekend, the entrance exam weekend. One positive indicator was the large amount of students that took the exam. We see a large number of new students entering the university. One of the new measures that should help us is the tax exemption for those that have an income of up to BRL 5,000. This should benefit us, especially in the place where we operate that has a lower average income than the rest of the country. You mentioned the transfer of income, and this is due to medicine.
It's also related to our plans for the second semester. We focused on the negotiation of the second year. We worked very hard on communicating with the students. We also worked on this in order to up the value for the average ticket. We started the year with a high number of students per class. So an intake average also helped us to keep the occupancy rate up and high. This is true for both periods. Our aim now is to have a high intake for the first semester for med school. I don't think we'll have a low occupancy problem, but if that is the case, we'll repeat the process. In terms of in-person classes, we are aiming to keep a high occupancy.
We were hoping to keep that in the second semester, so we will not need to depend on another intake cycle to have the good numbers for the end of the year. We have been able to work very successfully throughout the year. Yeah, we are in the middle of a professional reorganization. Actually, we are coming to the end of that process. At first, we focused on cost, and the next phase will be on maximizing our income.
Thank you. Thank you. Our revenue, pardon me.
Second question from Luca Marchesini from Itau BBA.
Hello, everyone. Thank you. I have two questions. The first is related to the average ticket. We saw an impact in relation to the student base. Can you tell us a little bit about the competitive dynamic? Second point will be on marketing cost. Let us think about 2026. What are your plans in terms of marketing costs for next year?
Look, I'm going to tackle the first question, and I'll leave the second to Aguiar. ProUni had an impact in the ticket. The second one was, hardiness in payment. We changed the way we charge and the deadlines. So students have a discount for punctuality. We gave extra days so students could pay on time. However, once that deadline wasn't fulfilled, we were tougher in charging extra fees. So we had bigger carrots and bigger sticks. We encouraged the whole student base to pay on time and to pay upfront, actually. This helped us with our Cash flow. Aguiar mentioned that during his opening remarks. This is a pure cash flow increase based on signing up for the second trimester. This was good in terms of Cash flow.
On the other hand, it tightened a little bit the numbers around the average ticket. ProUni indeed had an impact. However, our whole team believes this. It's better to have strong growth in terms of cash flow than to have a bigger revenue. That's how we made this decision. Our goal was to reduce our debt. I think we're very close to our goal. This should ensure that we have fewer costs in terms of interest rates for next year, which should improve our profitability for the next year. I'm passing the word to João Aguiar
Hello, Luca. Thank you for the question. We have been working very, very hard, not just in marketing. We're working hard in many areas, but of course, marketing is the one that shows the most. We're trying to be very granular in the way we spend our money in marketing.
We're hoping to understand school evasion, marketing, different groups, and so on. We want to have an institutional marketing that focuses on different regions. We are hoping to understand where we need to focus, what are alternative publicity forms. We worked very, very hard to understand how our brand is perceived, and we're starting to reap the benefits. We saw interesting numbers last year. We saw a very good intake, but all this is aligned with our need and improvement and the quality of our base. We've been doing that repeatedly in our main locations, in our main units. We would like to implement this in all our units. We want to improve our permeability. After all, we have a very good rapport with most of our communities. This is continuous work.
We recognize that these numbers will hardly reach previous costs unless we start with a new project. We recognize that the current level of marketing is very close to our goals in marketing costs. This work was developed in operational marketing costs, and I think we're reaping positive results.
Thank you.
Just a reminder, anyone that would like to ask a question, please click on raise your hand. Q&A session is over now. Now with the word, Mr. Jânyo Diniz , for final remarks
. I'd like to thank you everyone for your participation in another quarter result conference. Our whole team is available for further information.
Good afternoon to you all. The video conference from educational session is over. Thank you for participation. Have a good day.