Good morning, ladies and gentlemen. Welcome to Yduqs' Video Conference to present the details of the second quarter of 2025. This video conference is being recorded, and the replay can be accessed on the company's website, www.yduqs.com.br. The presentation is also available for download. We inform that all participants will be only watching the video conference during the presentation, and then we will start the questions and answer session when further instructions will be provided. Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the company's business prospects, operational and financial projections, and goals are beliefs and assumptions of Yduqs' executive board and the current information available to the company. Those statements may involve risks and uncertainties as they relate to future events and therefore depend on circumstances that may or may not occur.
Investors, analysts, and journalists should be aware that events related to the macroeconomic scenario, the industry, and other factors could cause results to differ materially from those expressed in the respective forward-looking statements. It is important to highlight that to better view the presentation, we recommend to enable full screen mode. Present at this video conference, we have Mr. Eduardo Parente, Board Member of Yduqs, Mr. Rossano Marques Leandro , CEO, Mr. Alexandre Aquino, CFO, and Mr. Eduardo Lobão, Investor Relations Officer. I'd like to give the floor to Mr. Eduardo Parente, who's going to start the presentation. Mr. Parente, you may proceed.
Good morning, everyone. Welcome to Yduqs' Q2 2025 presentation. As you see, my last day as an executive at Yduqs. Rossano takes over as our CEO.
I have been CEO for 16 years, many boards I've taken part in, and never seen such a well-planned transition to take Yduqs to a higher level.
Thank you. Eduardo will go into the board. I'm very happy to take on this position, honored with this very well-made transition process, very honored with the company's results and the results when we look at cash generation, which has been the most important indicator in the company. We're going to see a lot of cash generation in this first half, a great evolution compared to previous years. Also, how we're bidding 2026, that is very solid, both on one side, conservative revenue paid and actually intake getting back to previous years. Let's look at the levels. Look at the evolution of operating cash flow here on one side. We're moving from BRL 1.5 million in the past 12 months.
When we look at cash generation, BRL 613 million above the higher level of guidance of BRL 500 million- BRL 600 million. When we look down here, this number is very important. We had not seen numbers like those since 2023. Intake growing, not only total size, the mix as well, improving compared to previous years. The last one on the left corner, this digital renewal. It's always been well below the even-numbered quarters compared to odd-numbered quarters. This year is close to a new level that we consider of renewal in even-numbered quarters. This indicates that we have the drop in nine days of days sales outstanding (DSO). We see free cash flow to equity (FCFE) in the past years above the guidance we have. The second half, it needs to be equal to last year to be above guidance. The second half, we see it very optimistically.
We had lots of intake. We have very strong numbers in intake. The scenario of comparability of interest is favorable second half. We keep this whole dynamic that we have, the discipline we have in the process of cash generation, receivables conversion. We have to, again, we're totally ready for a super strong second half. Ibmec, only good news, again. Great joy in all quarters, strong margin, 7% points increase of margin vis-à-vis last year. We have plus live graduate intake, 79% increase, and semi-on-campus has been highlighting strong growth supported by the new regulation. New regulation regulates our segment that has grown the most and continues to grow, giving great trust in the future. Before we proceed, it's important to talk about this. We talked about this last quarter. What is this conservative revenue management that we have? We mentioned the first half, the same policy.
We're more conservative in the revenue growth of non-engaged students. We got the estimate of previous years, the engagement of students that enrolled did not engage with the academic material of the course. This is a student that presented a percentage of dropout. Now we have a provision in the beginning of the revenue of the student reducing our ROE and actually improving our EBITDA. This would be impact or the cash impact, revenue growth improves our, now our NOR and brings better results, recurring results that are stronger for the second half. When we look at revenue, it's grown 3%. If it hadn't been for that, what Rossano said would be 5. There's an additional point. We have an addition to DSO, which is smaller, leading to smaller revenue. We know ahead, this tends to be positive in terms of the results of bad debt, etc.
Just reinforcing this, we see more, we give more transparency to the product. It is, you know, less dropout in DSO. The same model that we mentioned regarding revenue, it reduces revenue in the beginning, it improves dropout in the future. A neutral cash impact, but positive results for all the quarters. When we look at on-campus, we see revenue evolution of 7% quarter- over- quarter. This is an important number. Also, student base, we have, you know, a different number. We see much greater drops, and we are starting to control that. This shows very much the ascertained strategy of evolving to semi-on-campus, almost doubling the revenue vis-à-vis the previous year. Great correct action that we are delivering here, as we mentioned to you. When we look at the EBITDA, there's a drop in margin, but again, smaller business units every quarter, you have to cut here and there.
This is not something that concerns us. When we look at it at the closing of the year, we tend to have a very similar margin to previous year. We have some displacement of spending in the second quarter. This slightly impacts the quarter. We're very confident regarding the end-of-year results. We're going to talk about more of this diversion. We have very stable results, around 84, 83, 85. When we look at average ticket, it's important we took a leap of 7 in 2022. Then Natalia was more stable, and we see a recovery here that is really nice in the on-campus unit. As to distance learning, what do we have here? We mentioned to you the semi-on-campus, the important evolution on the business plan. It was very clear that we had the possibility. We faced that as positive cannibalization.
People go into a site or a center, they could choose between digital and semi. It has higher tickets, similar costs with digital, greater margins for us, as Rossano mentioned, very in line with a new legal framework. This cannibalization, quote unquote, we see it as positive, natural reflex. The revenue shrinking a bit year over year, the base moving sideways. When we look at EBITDA, there are specific issues of quarter. We don't see EBITDA at the end of year losing margin vis-à-vis previous year. Down here, the ticket, you remember that we made an offer throughout the course in 2023. We told you in 2024 it was over. We moved to M6, M7, and there's minus two. We saw higher drops. Now we see this number M7 reflecting on the base as something that is going to pull this upwards.
The great highlight of digital this quarter is the great growth we had in renewals. What is cool, what is behind it, increase in quality that we've had in our product in the past quarters, the past years, actually, investing a lot in technology. Along with the investment in technology, we have great concern on quality, several points, customer student service, the sharing of knowledge, etc. This is reflected in the renewal grade initial indicator in the perception of quality by students. It's a priority in the organization to deliver a better quality product. In terms of intake, it's pressured due to positive factors, which is the upgrade, the upsell for the semi-on-campus. With upsell, when we look at the third quarter, still strong for semi-on-campus and digital showing positive numbers compared to previous year in terms of intake. Let's look at idomed.
idomed has a growth trajectory that is contracted way back when we said we're going to get to 10,000 students. We have 10,000 some. We still have growth contracted. There are people that, the class is still joining, and some are not graduating. We don't have the fifth or sixth year that you have natural contracted growth in the unit. We have two-digit growth above and below, looking at 477 new seats in last year. It's a great accomplishment of people that do things right, those that fulfill the goals set by the government, the agreements with the town halls. We have a reward. We have this rate of new seats higher than all the markets and average. These 474 new seats in the first year, this makes up if you multiply by six, and then we get to seven. We get great growth contracted here.
You know, evolution of EBITDA very similar to last year. Specific points here, we don't see great differences happening this year. The average ticket, obviously, we have a mix. Sometimes you have a lot of people moving, coming in from Mice Magicals or the Mall Tossas, and you have a mix when you stop growing. In some places, that's going to happen in a while. They have stability, and this goes back to growing at levels when we perhaps transfer or have inflation, etc., and renewal booming around 100%. Just another highlight in the margin. When we look at the semester Idomed margin, we see it's very close to the reality we're going to see second half. Once again, doing very well, very high margins with renewal very high, and a business that continues to be very strong. For a while, we actually broke down Idomed from Ibmec.
We presented premiums together, but Ibmec has been actually revealed a great source of revenue for us. It became relevant to our portfolio that you're going to see ahead how we're much more premium than we were originally. We grow this quite strongly. Ibmec has strong growth of revenue and student base. So 23%, 17% of base, and actually graduate studies growing well. It's the beginning. We have great room for progress and a bit of evolving. When we look at DSO, on-campus, digital, semi-on-campus vis-à-vis previous years, here again, operating in advantages, new buildings that are failing. The trend is to have great margin here. Average ticket evolving well and renewals close to Idomed, natural in premium world to be above 95%. Highlight that in the growth of Idomed, the regional growth is strengthening, increasingly more in São Paulo, higher ticket.
We have a stronger brand in the region and the expansion of product Idomed recognizes with causes in management, expanding to technology, law, important areas for us to continue our growth. Now we evolve to the financial charts, revenue, a bit of etc. I'm going to call Alexandre Aquino, who has been with us for a bit over five years. Very special person, very talented, very dear in the company. Graduated from ITA, worked for McKinsey, was a Financial Officer at Tallinn. Great person in the house. It's great to have changes and new open space for the company to have great people with us. Welcome. Welcome, Aquino.
Good morning, Rossano and good morning, everyone. I'm very happy with this new challenge for me. It's an honor, a pleasure to join the leadership team of Yduqs, a very competent team that works jointly in a very effective way.
Super competent team with me. This transition that we're making is a clear sign of shareholders through the Board of Directors that is a transition of continuity in the legacy we helped to build and we're committed to continue. A legacy of proximity to operations, a focus on cash generation for shareholders, transparency in our accounting reports, and transparency in the relationship with the markets. Lastly, but not least, a legacy of continuity of strategy of allocation that is very careful in the capital of shareholders.
Very happy to have you next to me as a successor. You've been working with me for some years. You're totally able to continue delivering this history of 55 years of company and honoring our legacy.
Thank you very much.
Let's talk about revenue.
Sure. We had this intake in the first half that was similar to last year.
When we look at comparable basis, we grew 5% year- over- year. The growth would be 8% if it hadn't been lower additions to our freshmen. We have our premium brands, Idomed and Ibmec. When we look at their share in 2021, it was 19%. They grew to 29%, 50% growth in the four-year period. It's important to comment on this regarding the growth in the case of Ibmec. It was 100% organic. We had only a few small M&A. Looking ahead, we had this contracted growth that is significant simply due to the maturation of certain points. When we look at our expenses, this shows the great discipline we have in terms of spending management or discipline. We had comparable lines compared to last year. We have some in G&A and others. That's some situations that can be explained. Perfect. All this diversion is here in G&A.
We should actually open up. We see it as something specific in the second half. When we look at the second half, it's much more positive. We project to end the year very similarly to last year considering margin. What were the diversions? We had contingencies, especially in the labor part. This was resolved with the restructuring project we had in 2015, 2022, and then end of year and pandemic cycles of legal processes that still impact 2025. The good news is that we see this curve changing with key indicators. Key indicators for the labor part are entries and average ticket. Those started this turning curve after a long curve. It takes a while to show up when you compare semester to semester. You can compare it better with the second semester last year. It was unfavorable when we look at first semester over first semester.
It's a line that is not going to be present like that. Second factor is non-cash. It's a positive evaluation of our shares that impacts long-term line of our executives. This is a non-cash factor that may be positive or negative in specific quarters. Last factor is comparability. The second quarter of 2024 was benefited with the reversion in this line. That did not happen this year. It was just specific think comparability with the second quarter, but it does not have a negative impact when we look at the second half. When we look at EBITDA, the impact we had on the cost led to a drop in margin. We had in comparable basis a very similar EBITDA to last year without considering the lower addition to this that we had now.
The second half this year will have a similar margin that we had last year in the accrued. It leads us to believe that we're going to have a much more positive semester, you know, having an equivalent margin to previous years supported by the premium growth. We're seeing that both businesses, Idomed and Ibmec, when we look at revenue, it's, you know, 29% of NOR. EBITDA, so we have 44% of the total grown to 29% compared to 2021. Great growth in those two businesses. That helps us a lot in our margin at the end, leading us to our net income or comparable business. We have a growth of 8% net income year over year. Even with the pressured margins that we see in the second quarter, it's a specific effect, makes us comfortable to the deliverables at year-end that we have seven to raise operations.
We have 1.7 comparable basis. We would have 1.9. This 2.9 is impacted by BRL 37 million of negative impact in the SELIC evaluation. Two adjustments we make to have better comparability. We talked about one, which is revenue growth, engaged students. The second one is migration of the private funding that we have received within the semester, matching receivable with, you know, revenue. Very important for our cash generation. Very comfortable that we are following to our guidance. This slide here clearly shows the result of our base. Past years, any indicator of cash generation of a company has grown in a very significant way. We had a leap in the past 12 months, showing our operating cash flow. We grew 66% from one point to moving to BRL 1.5 million when you look at FCFE. FCFE saw 613 of cash flow for shareholders in the past 12 months.
This number is ahead or above the guidance. Only looking at June, the past 12 months we attained, we exceeded the ceiling of the guidance. Very optimistic, of this guidance for the end of year. You did, you know, simple math. FCFE yield, we attained over 17% of return. This shows our focus on return to shareholders. We wouldn't have attained these results if it hadn't been the great performance in receivables. We have days sales outstanding dropped nine days in the second quarter of this year. Great work of the company to lead to this result. We have better level of renewal, improvements in the collection process, and also a different way of changing the model of receivables of private financing. To reconcile this FCFE, moving to the next slide, we see 613 of FCFE that was generated. We have a difference in the cash balance.
We use the total in the framework proposed in the business. What we mentioned in our Yduqs date, payment of the BRL 50 million of minimum dividends, as we mentioned in the past, buyback runs BRL 300 million below BRL 10 per share as average price, generating a lot of return for shareholders. 116 of them made following our guidelines. This is always critical for the business. This reached BRL 2.8 billion of cash balance. Reconciliation though, with the numbers, you know, accounted or accrued interest not yet disbursed. It was dropping to BRL 20 million. Even numbered quarters, this difference should be close to zero, and it should be the same in the second half. When we look at debt, we see a drop that is consistent in our spread, getting to 1% second quarter 2025 with the 8% emission of the debentures. We have a spread of 0.85.
We have two indications here that the market recognizes our financial soundness, and it's a conservative way we manage our debt, allows us to tap into market opportunities and also having more favorable interest rates. Looking at our leverage, everything we did to, you know, shareholder return, M&A, buyback, we had very healthy leverage of 1.66 times. This leverage would have dropped to 1.41 if it hadn't been to the buyback and dividends that we had. Looking ahead, we don't have any amortization that is mandatory this year. We have these towers or bars of amortization that are very manageable in the forthcoming years. To reinforce our vision that we're very focused on reducing leverage, major focus of our capital allocation, we want to get a good level of net debt/EBITDA. This is a slide showing our history of growth.
I thank you, Aquino, for your participation. See you again during the Q&A.
Okay. Thank you.
Looking at the left, you know, revenue growth and EBITDA, we see 7% CAGR since 2019. It's impressive, you know, the stability of adjusted EBITDA margin. When you look at share price, if people think it's volatile, you see very high level throughout the period, knowing we had a pandemic, several hiccups that we had to face, we continued growing constantly, keeping EBITDA in a very high margin. Up here on the right, we see highlights to the share buyback, very successful program, as we mentioned in previous slides. Price below BRL 10, return for shareholders, continue paying dividends. We paid dividends since our IPO. This period more focused on reducing leverage, bringing the dividend payments close to mandatory. On the slide that we like, or the part we like most on the slide, we talked a bit about that.
In 2021, we had a FCFE of -BRL 149 million, and closing to here, we got to BRL 613 million. This is a number that we'll highlight because this is a focus of our business where we think we're going to show our value generation for shareholders. On this slide, we have some news for you. The newest acquisition, Unifametro, an institution from Ceará State, focused on on-campus and for talents, over 8,000 students. This brand joins to the wide umbrella, local brands that are recognized and well-positioned in the Northeast and inner state São Paulo. We have a strong portfolio in health of Unifametro. This brings differentiated tickets for the group. The brand is well recognized, not only health, but also other causes.
They have the institutional concept or grade, which is five of our Ministry of Education, and another business done within the capital allocation framework that we mentioned, our Yduqs state. We have 2.6x EV over EBITDA for 2027. In addition, this business brings future growth possibilities for medicine seats. We have, through certain injections and mice medicals programs. This will be fantastic for us. This business has certain differentials that would support and highlight. CapEx is totally realized. The structure is ready to receive the cost until its maturity, and it's in a region that is very strong, great demand, great population density, great search for medical causes and seats, and it's going to add to the on-campus will allow us to work with the margin better than the average.
I'm going to bring you some updates for us to talk about the last acquisitions, showing that we're strengthening our capital location. The previous one were Newton Pive IDU4 from Belo Horizonte, very recognized brand in the whole state of Minas Gerais. It's very much focused in health. It's almost 20% of local market share dentistry. We have high ticket, a whole portfolio, and we have a projection of 2025 for 2.2 times EV over EBITDA. IDU4 strong in health and law. We have an EBITDA of 4.1x EV over EBITDA. Things are going to be more or take longer for maturation within our capital wave framework. We've been operating the same way. As we mentioned to you, we see opportunities for M&A. We're going to carry them out. We get to a very important slide for the present and future of the company, something that is very important.
Currently, we'll be increasingly more in the forthcoming years. We're going to highlight, this is part of our culture and our model. We don't actually talk before we do. We have great initiatives happening here in AI, learning models. It's part of our core, the taking, you know, the way we share knowledge with our students, the way the quality is attained to students. AI is broadly used. A more obvious case of service, the whole market moves. We have great results. 100% of our service is digital, being supported by the use of AI. Another case, martech, an area that we have greatly evolved in the past years, it generates, you know, promising to have better results in the future, ability to improve our go-to-market, or reaching our process through technologies, AI. The whole vertical is called martech.
It's been giving great contribution to our whole marketing process, personalization content, depending on the behaviors of the users of the digital platforms. Again, we expect great results from there. Another thing linked to our core, employability improvement of our students with the job matching, the matchmaking of actually helping students find the perfect position. The last story that involves highlighting one of our invested companies, QConcursus, great success case. Our CEO, Caio Moretti, is making a statement in the use of this tool, Lobon, for streamlining of the launch of our product in an exponential way. The ability of launching new products in QConcursus, the whole Yduqs institution, is very boosted by the low-code, no-code tools, highlighting some indicators that we have been very supported by intensive AI use. Drop in our CAC is 17% in 2021 to 2024.
Our production costs are dropping over 20% using those tools advanced. Lastly, student promoters, you know, we have a boost of growth of 7% points growth in the period. Very happy with the AI initiatives. I'm sure they'll continue to help the company grow. Moving from to ESG, a very important topic for the company. The past quarter, we had a great victory for the whole organization. Our campaign won the Grand Prix Award in the Cannes Advertising Festival, aiming increasing diversity in the medical world in Brazil and increasing the awareness of people addressing diversity in the country. Great victory for the whole team, the ESG and medical schools. It brings great contribution to the society. If you are interested, you can actually use the QR code to watch the movie of the campaign. Another highlight, 25% more students in our literacy program.
It's still our mission of reducing illiteracy around our institutions. We are contributing increasingly more with society with programs of reducing illiteracy in adults. Going back to the results, the slides looking at the next quarters, we have, you know, intake fulfilled. We see a growth of 16%. We hadn't seen it since 2023. We've been talking about the past quarters that we had intake that were harder, led to several external factors, and we saw this turning point starting now. We're starting to see the second half. We have the confirmation of those numbers. We're very happy for the results. The second half, 60% of intake. We are confident that we're going to have relevant growth in intake as of the results of the third quarter.
Important to see that we obviously will continue semi-on-campus leading this growth, both on-campus and digital, digital even suffering a bit of cannibalization due to semi-on-campus growth. It's isolated. We had a 5% growth year over year with this new growth. Good news of intake. We look at the second half. As I said, second quarter, we had some specific cost impact and impacted the quarter. When we look ahead, we see various factors diluting a very positive outlook for the end of year. Very briefly over the factors that lead us to be optimistic for us. Intake and retention have been very positive. We don't see growth in delinquency, greater retention in our academic students, great focus of our action in content delivered. Retention is just this should lead to better results second half this year.
In the third quarter, contingencies we saw were on the great issues second half or second quarter. We saw growth in spending, but we see stabilization happening now. Second half in comparative base year over year. We stopped having this line as something that is a shortcoming. Bad debt, it will be very much influenced second half. We saw positive results second half. We had a new program of non-recognition of non-engaged. This reduces revenue of the first half, and we have an improvement in bad debt. Starting second half 2025, we have full results in 2026. We start being benefiting in 2025 for this model and fully second half. I'm going to have a benefit of bad debt and the lower adhesion to this as you saw in the last year and actually in the previous intakes. In G&A overall, we see the main impact was legal and personnel.
We had some points above of expenses that we expected. We have spending structuring program taking place in the company, and it should lead to improvements in G&A, improving margin in the second half this year. We're very positive in terms of delivering our guidance with these numbers. Moving to final remarks, I'd like to call Pedro Lobão , our new Director of IR, M&A. Very happy to have you, Lobão.
Good morning, everyone. I'd like to comment that I am starting this trajectory at Yduqs, a company that I have acted as a Board Member. I'm very comfortable with the results of the company. I'm very excited about future prospects of the company. I think it's a company that has a very nice purpose that is bringing quality education to so many Brazilians. To say that I hope to contribute a lot with this investor vision within the company.
I'm very excited with this opportunity. Thank you. I thank Rossano [and Edu] for this opportunity. Very happy to start this journey.
I'm very happy to have you here. To close this presentation with very strong cash generation in the past 12 months, above guidance we gave to the market year-end, very much focused on return to shareholders. We saw the free cash flow yield that we see in the past 12 months. The company is very focused, very confident in the second half is going to be even better than the first half, ability to generate cash. We have, as I said, a lot of things above ceiling. The new legal framework strengthens our strengths within the company. Semi-on-campus that has been growing a lot is being regulated now. We had a long, a large overhanging in the financial market. We eliminated risk.
That is very important for companies that deliver quality. As you mentioned, we are a company very much concerned with quality. We think the new legal framework directs us with that. We're well positioned compared to the competition. We are very excited with the intake for the second half. We've had a 16% increase, 60% of intake happening. Renewal rates are very high, showing our correct strategy, quality of products, our strategy of care, and focus on students 100% of times. Another prospect of growth, medicine, the Mice Magicals III, with preliminary results in the second half. We're sure that it's going to be a winner in this process. Great timing for your arrival. Thank you, Lobão. To close, I'm going to ask Eduardo to wrap it up.
Thank you, Lobão. Thank you, Rossano . Thank you, Rossano and, Aquino. I think it's been seven spectacular years.
We had a company that was without convenient two billion. We moved to five. What we propose to do as a group to evolve M&A, medicine, distance learning, 82% of our EBITDA comes from businesses that did not exist when we look at 2017. A very successful group, Rossano , Aroldo, Marcel, Claudia, Silvio, Aquino, Camilla, and others that have been through this group. We are very proud to work here with a lot of people that are very nice. Almost 18,000 associates that we have here. Thank you very much. Thank you very much for your trust to be with us and me over this period. We move on to higher levels and I'm sure much further than we are here today.
Thank you, Eduardo. Thank you for seven years of dedication to the company. Now we're going to start the Q&A sessions for investors and analysts.
If you wish to ask a question, please press the reaction button and then click raise hand. If your question is answered, you can leave the queue by clicking on lower hand. Our first question is from Caio Moscarcini from Santander.
Hi, everyone. Thank you for taking my questions. Two questions on my side. We've seen intake second half. That seems to be very good. I'd like to understand a bit what about the price of this intake. If you could comment on that, it helps a lot. Second question regarding receivables. We see in days of receivable a significant improvement generated because of the change in receivables of financing. I'd like to understand whether this is a level that we should see in the next quarters or if we have a greater chance of seeing some improvement on the side of days for receivables. That's it. Thank you.
Good morning, Caio. Thank you for your question. Let me start with a second and I can address it here, and then I'll ask Marcelo to complement what I said. For receivables, yes, the level of receivables we've attained is a level that is not only stable, but also we see improvements ahead. As you can see, we have a penetration of this that is reducing every intake. This will improve receivables. The change in the model of private financing is a permanent change that will reduce receivables ahead. We also have in accounts receivable. Remember when we made the change in the model, we did not anticipate the upperclassmen. This will improve or it will drop and improve actually the level of receivable in the first question of intake. Actually, we're very happy with the intake process. We've had a number that is above what we expected.
The market overall is very disciplined regarding the ticket cost. Let me ask [Marcelo] to complement.
Thank you, Caio. I'd just like to add to Rossano. In terms of ticket, the market is very well behaved. We haven't seen any craziness or aggressiveness that is too strong. We have this characteristic in the on-campus prices quite similar to last year of freshmen or new entrants. The distance learning in our portfolio is quite similar, switching to the courses a bit more to where we see a better performance of technologists and coming also in the part of health. This is it. The market is quite well behaved in terms of pricing.
Thank you. Parente. Congratulations on your trajectory and welcome, Lobão.
Greetings. Thank you.
Thank you, Caio.
Our next question is from Marcelo Santos, JP Morgan.
Good morning, everyone. Parente, Rossano, Aquino, Lobão, Marcelo, and all the Yduqs team.
Thanks for the opportunity of asking questions. I have two. First, broader. We had the new framework of distance learning. Several rules changing. You had time to analyze the impact. Can you go into how you see the impact? First, that you know how you see that impact in price. You don't have a crystal ball. Impact to cost, transferred and not transferred. Second, I mentioned the market. How should this change the market and the players in your view? Second question. If you could talk about the competitive environment of medicine for the intake for the second half of the year. Thank you.
Good morning, Marcel. Thank you for your questions. I'm going to ask for help from the experts on both.
Just to talk about the framework on the general message, we see the net of the impact of the framework as very positive for the industry as a whole. It organizes and gives greater clarity. It's good not only for the financial market. There was this overhanging in the industry overall because of the uncertainties and also for students. Today, it's clear for students that they have three modalities available. It actually turns official the modality we grew the most in the past quarters, which is semi-on-campus. It reinforces quality. We're very comfortable with the quality we deliver and should actually reinforce our competitive positioning. I'm going to turn over to [Aroldo] to talk about how he sees the impact on intake.
Thank you, Rossano. Thank you, Marcel, for your question. Good question. We see this in a very positive and optimistic, you know, the framework.
I'm going to go into details here. First point is that our expansion. I'm going to talk about the first point on Yduqs and the market. At Yduqs, our expansion to partnering centers is more recent. This happened at the end of the second quarter last year, this expansion of capillarity with all partners. The infrastructure was made in the forms of what we had talked about. They don't change when we see the framework. This is important for us from now on. The second point, people talked about small centers. We continue with our premise of having as wide as possible centers, scalable as possible. That's what we've been saying for many years. How we adapt that for the new framework, we think there is little change because the centers in our model have always been enabled and profitable with the distance learning courses of origin.
That changed relatively little in the current scenario. They were not based. We did not have profitability based on the semi-on-campus. This supports those centers to make them more profitable. The adaptation of semi-on-campus that the current change comes from a project that was not feasible, and it helps the profitability and the results of the centers that we have. Perhaps the third point I'd like to comment on is to conclude, semi-on-campus continues to be an opportunity for us. This increase in capillarity is recent. It has not yet matured. It's completed one year now, a bit over a year. The third quarter, we have this intake that we have that is strong in comparable basis compared to the number of centers, and we see it growing strongly in comparable basis regarding capillarity. To us, it's relevant. This is what we wanted.
What is it going to be in comparable basis? We have, and we see strong intake with the same base. We are optimistic considering that we first, you mentioned the cost structure regarding infrastructure is given. There's no change with the framework, with what we had implemented in our own centers that were very strong, similar to on-campus, and the partnering centers that are more recent regarding recurring cost structure OpEx. We have access to mitigate practically everything. Last note is that we had the mirroring of the new modalities according to the framework. The courses that change, that will change, are already being sold currently and the next one. We have this test running for over a month. A great part is mitigated, Marcelo. As to market, a lot has been talked about. People are optimistic regarding what Rossano said. The uncertainties are over.
We had this anxiety as to what was coming, and it's already here. People adapt. People had to adapt in their own ways. The fact is that the market sees it as something positive, and uncertainties are over. How do we add to mitigate cost and capture as much as possible? Revenue, a point that Rossano mentioned in his presentation, is that we're going to have cannibalizations that are positive regarding ticket. People don't talk so much. Distance learning that goes to semi-on-campus that goes to ticket and on-campus ticket. What we see today is that semi-on-campus is an opportunity considering our recent expansion. I don't know if I've answered your question.
Very complete, [Aroldo]. Thank you. As always, great.
Moving to the next point of medicine, I'm going to turn over to Silvio to detail that to reinforce once that we position Idomed as a premium brand in all markets where we operate. This gives us comfort of positioning. It's more competitive. These, you know, seed offer may play a role, but our positioning is differentiated that we have for our brands. I'm going to turn over to Silvio so that he can talk about his views on the market.
Great, Marcelo. Thank you. Good morning. In line with what Rossano mentioned, we suddenly follow and monitor the market behavior with the new medical seats coming in. Really, what we see is the most traditional courses that have a positioning in their marketplaces that are stronger tend to suffer less. We have had a first half that has been very positive in intake.
We have a strategy of actually putting most monthly payment students in the first half. The balance of annualized seats, we concentrate in the first half. When you asked about the second half, we have more dedication to or planning the taking of seats of what we have of public financing FIES. That is why the curve is a bit slower. Clearly, we see that we do not see any great concerning point regarding increases in seats, especially with the increase of the FIES ceiling. It moves from BRL 10,000- BRL 13,000 of average ticket, an important lever of strengthening and assurance that we are strong in the growth of seats in the second half. As Rossano put it quite well, the differentiation of attributes from the viewpoint of quality, future, tradition, reputation, this no doubt makes a great difference. The impacts in the medicine market are not linear.
They are totally differentiated depending on the region, more protected, less protected, even in places that possibly are more challenging. We see that the presence of a stronger unit stands out regarding the others considering, you know, applicant seat. We are monitoring everything. We see how we expand those attributes of differentiation. It does not seem to be of great concern, at least in the regions and marketplaces where we operate.
Perfect. Thank you for both answers.
Our next question is from Samuel Alves, BTG Pactual. You may proceed.
Good morning, Rossano , Parente, Aquino, and other directors. Two questions on our side. First is more specific on contingencies provision, about BRL 50 million. This quarter, you described it, BRL 14 million related to tax process. When we take it out, BRL 37 million per quarter. Is the understanding correct that is the new recurring level?
If there is some seasonality regarding quarters, this is the first question on contingency provision. The second question is a bit more long-term, looking ahead. I know it is early to talk about 2026, but I would like to take this qualitative head of view. Your confidence of the management is very clear on hybrid. Can you grow on on-campus? Is there a dynamic of stability for next year? Considering everything you've mentioned on the new framework, distance learning, do you think that it's sort of moving downwards? There is more growth on premium and hybrid. I'd like to hear you thinking about next year, if it is possible to have operational leverage. If not, if the company has to reinforce its faculty because of the framework, trying to understand your minds for next year. Thank you.
Good questions. Let me start with a second.
It's always very difficult to forecast intake. It's a factor that is very exposed to macro conditions. It's hard to predict that. We tried. We've always said that. We tried to do that with several indicators. Very difficult. There is this aspect of trust, consumption, income availability of the population. It depends on several factors: political, social, economic. Makes this predictability difficult. We try to be fundamental in that. We had difficult intakes, but we saw, in short, a reversing of that. We're very happy to see second half coming with an intake above of what to expect. Great growth compared to last year. In all segments, semi-on-campus, that was stronger. It's even stronger now. Digital and on-campus, a single-digit growth as we expected. We're very confident. The trend is that this would translate and reflect in 2026.
When you look at the scenario of intake, second half of one year is a good indicator for the scenario of the following year. It's hard for us to predict. On on-campus, we had stabilization of intake. If you take data of INEP, this was stabilized in the previous years. Our view is that at some point it would start a trajectory of growth, single digit still, but it should be confirmed. The current data confirm the ability of on-campus to grow on single digits. We don't see great potential for growth if we don't have anything relevant. We think the on-campus still business there will have growth. This is something that we see now. We're very well positioned. We have a great footprint in all cities where we are and all capital cities. We're very well positioned to capture this intake.
This should be influenced by the legal framework, but this is an upside that may come up. Part of the direction of the new framework is on campus. I think, and we think we are the most or best prepared players for this position or for this move. How do we see potential growth in all scenarios? This can generate operational leverage. ABMAC, we see that, especially in campuses that are maturing. This brings an obvious operational leverage. Medicine, we have more of the seats in the new units that are not so mature, bringing operational leverage for the company. As we said, on campus, they are the best ones in terms of operational leverage. The additional students, higher tickets, all of them play directly to our EBITDA. We're very confident. The strength of Yduqs, reminding you, is this diversified portfolio allowing us to navigate in different scenarios.
You have semesters that are better for one. One business unit is more pressured here. The other one is being better. This enables us to navigate very well in several scenarios. Your questions on contingencies, I'm going to turn over to Aquino to answer. He's very much knowledgeable about that.
Hi, Marcelo. Thanks for your question. As Rossano mentioned during the presentation, we are being impacted now by a cycle of labor costs and actually layoffs. This started reverting as of 2024. We had fewer layoffs, so we had fewer legal actions. The labor legal actions in Brazil are longer, despite the indicators that anticipate the improvement of this line, having been improved with lower average tickets through all this process of working on root causes so that we could have fewer actions and lower tickets as we get the cases. They have happened.
We're starting to actually reap the benefits, but it takes a while. The level we should have in terms of legal actions last year, the first half, and the first half of last year and this year, we believe they're going to be kept until the end of 2026 with the reduction as of 2027. This is basically our projection regarding those numbers.
Thank you. I'd like to take the opportunity to wish Aquino, Parente, Lobão success in their new roles.
Thank you, Marcelo.
Next question from Eduardo Rezengi from UBS. You may proceed.
Good morning, Parente, Rossano , Lobão, Aquino. Two questions on my side. The first, I'd like to get an update as to how you see dropout in semi-on-campus, looking at stronger intake that we had in the first half. If you've seen an increase in dropout second half. The second question is on leverage.
We've seen that the company has made an acquisition yesterday. We're going to more medical on cash flow. I'd like to hear from you on the leverage of the company. What do you consider a healthy level from now on that may allow movements as we've seen yesterday? This is what I have on my side. Thank you.
Morning, Eduardo. Thank you for your question. I'm going to start with the second, and for the first, I'm going to ask [Aroldo] to help. Leverage, we follow this framework we actually mentioned in our Yduqs Day last year. Our main focus is reducing leverage. We aim at getting to one-time net debt/EBITDA. This is where we're heading to. As we mentioned on our Yduqs Day, we're going to work on M&A.
When we see things that are accretive of strong brands, well-positioned in cities that we believe in their potential, we're going to tap into the opportunity. You see those deals. A small part of the cash generated will continue acting like that until we get to this net debt/EBITDA level once and for all. This is our aim. We follow strictly on the framework of capital allocation that we mentioned in the past year. I'm going to turn over to [Aroldo] to answer the first question.
Thanks, Eduardo and Rossano. Yes, we've seen indeed an increase in dropout as expected since it's a new product in partnering center, new base. Naturally, we have this experience of launching new products. We are in this learning curve both regarding the product that is new of partners, and we're moving to the third cycle, and we see an improvement that is totally projected.
We compared very much when we made the live product synchronous and our projection curve and planning curve followed a higher value, an improvement with learning, improved productivity, and we see this confirmed when we launch a product. It's born with higher dropout rates. We see an improvement, nothing that is very different from what we had experienced in the launch of new products with the base being matured, with the learning from centers, with the base maturing. We naturally will see improved dropouts and getting to the levels that we see in other products.
Perfect. Rossano and, [Aroldo], thank you.
Our next question is from Flavio Yoshida from Bank of America. You may proceed.
Hello. Good morning, everyone. Congratulations, Parente, for your trajectory, Rossano, Lobão, for your new responsibilities. My question is regarding cash generation for the second half of this year.
I'd like to understand how you view the semester and which line should help more or give more comfort to you for you to attain the guidance more on this line. Thank you.
Flavio, thank you for your question. Cash is the great highlight of our performance so far, and all the factors that have been positive over the year are maintained for the second half. As you've seen, we are operating above the ceiling of the guidance when we look at the past 12 months. We're basically operating at the same level of the second half of 2024. Now, in the second half of 2025, our idea was to operate above the ceiling of the guidance. We're very comfortable about that.
Our forecast is to end in BRL 500 million, BRL 600 million, and the result pointed to for the first half gives great confidence to be very well positioned in this range. This is the focus of the company, Flavio, since the Yduqs Day. With great effort, we are actually making specific adjustments, especially in the revenue recognition to be more conservative, have leaner results, reducing volatility because at the end of the day, we're reassured that the focus is cash and increased every day. All the adjustments we make is to show greater ability to have cash conversion for the company once it's zeroed. As I mentioned before, to execute the capital framework we mentioned, the initial focus on leverage reduction. We continue paying dividends close to the minimum. We have what we've done before and tapping into M&A in terms of timeliness that we have.
We have strong cash generation leading to leverage lower. Now we see our buyback, BRL 300 million is a very strong program if you compare to the rest of the market, reminding you that it was an average price below BRL 10 per share. It's a program that generated a lot of value for shareholders. You've seen the Fomento, or you see the recent acquisitions we made in previous years. They're very creative results, both synergies. These are the current numbers. We're very comfortable, and this FCFE number is what makes us very confident regarding the future of the company. Thank you for your question.
Thank you.
Our next question is from Mauricio Sepeda from Morgan Stanley. You may proceed.
Hi, Eduardo, Rossanoon, other directors. Thank you for this time. We have questions on regulatory implications, starting with the intake of the third quarter.
The fact that you have this stronger intake, the market has a stronger intake, as you've mentioned. May there be any influence of students benefiting from this regulatory transition, especially in the distance learning? Is there anything that could be this regulatory influence, considering that you've mentioned it's not just price? There's not great aggressiveness now. Second question also in terms of regulations, if there could be other consequences, the footprint of your centers, the footprint that the centers that you have around the country could be rationalized considering all the changes and minimum scale. If there would be any kind of risk because the Ministry of Education is leaving open the possibility of regulating more courses, if you could have more imposition of on-campus with certain bands of certain formats.
Thank you for your question. I'm going to turn over to [Aroldo] directly.
Hi, Sepeda.
Impact on intake is a concern that we have from the beginning. We have been following intake, breaking down into modalities, impacted courses, and non-impacted courses by the regulation. What do we see? We do see some impact, but we see the two groups for each modality growing. On distance learning, we see growth. Those that are impacted, those that are not, semi-on-campus the same. On-campus, there is nothing. No courses are impacted. We still see in the future impact of nursing schools. We have a footprint of on-campus that are nursing schools that are well installed. It's not captured yet, but I do hope that happens once there is interruption in the intake of semi-on-campus. What is stronger is what we see on courses impacted, but we see growth in all modalities, impacted and not impacted courses. The second point is regarding possible impact to footprint.
I briefly mentioned in another answer that most of our centers have been designed in a lean way to have semi-on-campus intake growth. We see that the impact that we may have in some changes is more related to productivity of the center more than actual changes in the regulatory framework. Considering the changes from on-campus to semi-on-campus, we have greater impacts that are actually the teaching courses. We have a great offer of courses to provide in partnering hubs, and the changing footprint will be very specific. We have several scenarios and sensitivities of changes in the mix of intake. We continue again with this assumption of keeping everything as light as possible to be protected with possible changes that could happen in terms of price or changes in regulation of price. The last point is regarding future risk. We have certain ordinances here.
We can have certain regulations that may come up that are specific for courses that may place specific restrictions. We don't see anything coming up yet, but what may occur is that some regulation regarding certain infrastructure, the part of infrastructure is embedded in the ordinances that were actually passed. Nothing is being talked about. We're going to have certain regulations that come naturally and we'll expect that on certain modalities as a whole. They have already been launched. What may come up is something that may come in specific regulation of courses. This may come up again. That may change some specific courses.
Thanks, [Aroldo]. Thank you, and good luck on the board.
Thanks.
Our next question is from Vinícius Figueiredo from Itaú BBA. You may proceed.
Good morning, everyone. Thanks for taking my question. I'd also like to explore the scenario, the new scenario with the political changes as well. To talk a bit about the conversation you have with the centers. It's clear that your own sites or centers have very reduced impact. You mentioned that in some previous answers. When you talk about third-party centers, especially smaller ones, what is this conversation like? I think it's interesting to know how representative they are on the center base and student base. Some start feeling a bit more after this. Do you think they're going to start feeling a bit more after this? The change is actually in effect. Should we expect a closing in the next cycle? The second is also a follow-up question regarding semi-on-campus intake.
If you could talk a bit about how you see the market in the same segment because this is growing quite significantly. I assume it's a migration between segments that is taking place. If the semi-on-campus segment, do you observe that it's a student that is being captured perhaps from a more regional school? Or if it's a change in profile, they want to have this experience, that they sort of pay a bit more? Just for us to try to understand whom you're getting and getting the share of.
Thank you for your question. I'll turn to [Aroldo] to complement on your point of migration and between segments, if there is an explanation. I see then the intake of third quarter strong intake in the three segments. Semi-on-campus is very strong, leading semi-on-campus. It took a bit longer to make this expansion of semi-on-campus and the center.
It was a late starter, so great leverage for growth. Our semi-on-campus started in line with the guidelines of the new legal framework. We keep this opportunity of growth that is very strong now on. We saw, obviously, a migration that was happening from digital to semi-on-campus. For us, it's positive. You know, the ticket is higher from digital. It was a big part of the digital demand and the demand dropping to our competitors. Now we're very happy to see semi-on-campus and digital also growing again. On stealing, there are always, you know, competitive forces that we see that it seems to be a consolidated market movement. Growth and intake, we see competitors that have shown results and, you know, surfaces open. We see the market is recovering. We have strong intake in the second half. We know it may be benefited by the legal framework.
As I mentioned, the effective landmark removed the uncertainties from students. We had greater challenges in intake because of the uncertainties generated in the market. The end of uncertainties should actually lead to a new growth in the demand. That was certainly not happened in the second half. Let me turn over to Arul to do the compliment.
Second question is that, Vinícius. What I could add to that is that there are more products on the shelves with new attributes. As always, we're going to have part of cannibalization and part of students that would expect that the value being on campus, and we didn't have that in our products. They had in the competition. Certainly, we follow part of, well, there is part of cannibalization, but it's highly positive. We did not have that on the shelf.
This attribute in great parts of the centers, we start having it. Part will come from an upsell of those that had a cheaper product, but if they want to be in the brand and part values more what the fact that it is on campus. This is an important attribute for those who bring the market. Nothing to do with cannibalization. It's somebody that we could not offer. Competition could. Now we capture part of this market. This is what we see. That is the greatest part. Actually, students that wanted to have this intake, as we've been talking about that for a long time, Eduardo mentioned that the semi-on-campus is the on-campus for those that have a bit more financial restrictions, and we start having that on a much more capillary base.
Moving to the first question regarding size of centers, footprint, I'd like to reinstate that we have a base of centers that are small, that is reasonable. A great point here is much more related to the cost structure that we input the center of profitability that they have, much more than there being small or not. The cost structure and profitability structure is totally different between the market players. We follow that very closely. We've been talking about this for many years. We have this area that we know more about profitability of the center more than the partners themselves. We follow that very closely. We help having, you know, profitability, not transferring prices. After we had the launch of the framework, this has not changed. We want to keep our centers profitable, and they continue to be. They continue to be.
They have not had any impact because, you know, intake is very positive. They have positive impact. The intake is good. Digital is good. Semi-on-campus is good. We see more profitable centers. The future, what it will be, we see a reduction on distance learning, especially the initial impact, but then it will grow grand. We'll have this migration. The fact is that the centers have been designed to have profitability without semi-on-campus. Semi-on-campus is helping. The conversation with those centers has been on that. They recognize they have, perhaps they have not all the financials written and recorded. They know what's going up. They can see cash generated because they're capturing semi-on-campus with higher ticket. This is what they did not have in the past. We don't see that as negative. A lot has been talked about that.
The fact is that we're very austere with our profitability and partners' profitability. We don't want to have structures that are unnecessary, higher lease, or structure of personnel that is bigger than necessary. No, it impacts their profitability, and this is bad for the business as a whole. We have to be increasingly more austere and partnering of our partners, so to speak, regarding their profitability. What we see is that today, it hasn't been a great point of concern, and we see this. We did a lot of math. We don't see that as negative. Semi-on-campus is here and helping.
Excellent. Thank you very much for your answers.
Our next question is from Gustavo Miele from Goldman Sachs. You may proceed.
Good morning, Parente, Rossano, Aquino, and other directors. Thank you for your presentation. I have two questions. The first question on Ibmec.
Rossano mentioned in the beginning of the presentation a bit on, you know, interesting perspective, news, the increase in the offer of courses within Ibmec, moving away from the traditional courses of management, expanding the assortment for other areas. I'd like to know how much this may be a springboard within Ibmec, both for ticket and margin. You see healthy dynamics in those two variables, very much due to pricing power and operational leverage. I'd like to know how much this mix changing, moving to 2026, may help in acceleration of margin expansion. First question. Second, more a bit thinking about M&A environment, more exogenous on this topic. How do you see competitive processes taking this on Unifametro that you mentioned? What is the evaluation of the market as a whole or the great consolidators in this competition for acquisitions?
If the temperature is higher or lower, thinking about future deals of the company. Thank you.
Thank you. Good questions. First, on ibmec, we're very happy with what has been happening, the ability of ibmec to find its growth levers, maturation of new campuses, growth, especially in Sapporo, which is the highest ticket of ours nationally, strengthening the brand even more, expansion, bringing operational levers. What we thought of ibmec is actually how can we tap into the strength of the brand, the quality delivery to the student and the ability of ibmec to translate those great differentials it has, considering other geographies and other areas. Our lever is increasing in portfolio of products. ibmec is very recognized for the courses, especially linked to businesses. The term business is expanding. We'll be tapping into technology linked to business.
ibmec, in being a business course, helps to expand to technology courses, obviously, with moving towards business. We have other marketplaces with an expansion of other courses. We have an important tapping into courses. We diversify. We have several brands for other locations. We have levers, the whole lifelong. ibmec uses a lot of its brands to offer lifelong courses, B2B courses. We've been working to expand as vertical. ibmec only joys and good prospects of growth for the future. As to M&A, we're eternally frustrated because we cannot find more businesses. We think this market should be more consolidated than it is. We're very active in the search of opportunities. It's very conservative in capital allocation. We only actually make deals that are accretive in marketplaces that we like with good regional brands. Things that combine those three criteria are not easy to come up with.
We've done two to three deals per year. This seems to be the pace that will follow in the next years, not due to lack of diligence of ours of seeking those assets. We think this is a move in the market that generates a lot of value. We are a player in operations with very efficient operations and quality operations that generate value for any business that comes into this umbrella. This value may be shared with the selling part or party. You know, there are factors that are not objective, not financial, that actually do not allow us to have a higher number of businesses or deals. We don't know whether these things will increase in the future. We're very happy with this deal of ibmec. We're sure that we'll generate a lot of value to everyone from ibmec to our shareholders.
Once we close the cycle of the acquisitions, we're very happy with this deal, and we hope to have some more ahead. I hope others hear our speech and will come and talk to us. We're totally open.
Excellent, Rossano. Super clear.
Thank you very much. Have a good day.
Our next question is from Leandro Bastos from Citi. You may proceed.
Good morning, everyone. Thank you. I have two brief questions. The first one, going back to the guidance, and you talked about several levers for better margins. I'd like to take, you know, this below EBITDA. I see opportunities. You know, you had taxes, some helped, you know, the EBITDA. I'd like to know if for this year we could think about something similar, something GPS guidance. First point. Second, on medicine, you've mentioned, you know, seats increasing.
If you could shed some light on seats, what happened in the recent intake? Freshmen and average ticket of medicine. Very important. For how long should this remain in the numbers and the average medicine ticket a bit lower? Those are my points. Thank you.
Thanks, Leandro, for your questions. On the guidance, you know, the below-the-line effect, we don't see great positive impact compared to the previous period. It should be below the line, very similar to previous years. We have the negative impact of Siddiq that we detailed on the presentation. Speaking of first half, unfortunately, it seems it will continue in the second half, but it's a comparison that is actually less, with a smaller leap when you look at the second half compared to the previous year. Nothing relevant below the line for you to project.
On medicine, I should start with the end and then ask with a compliment. The effect of the mix will continue as the most mature campuses are maturing. This should take two to three years to have complete maturing of those campuses. For freshmen ticket, you'd ask about the dynamics. We don't actually open up this, you know, applicant seat. We have greater offer of seats when you have greater demand. You impact this competitive demand. Our strategy is of differentiation, position ourselves as main brand in each one of the states where we operate, sending that a natural barrier to a specific impact on new institutions coming in, offering new seats. They tend to be more milder over the year because the quality is proven over time. The experience we offer to our students is very differentiated, and this is shown in practice.
We believe that we're actually going to reduce the pressure on the market with new seats, with the strengthening that is greater of our positioning. Would you like to add, Silvio?
Sure. Precisely that. We have this mix in which we have increased the proportion within the student base of maturing in the mice magicals units. They have a ticket that is a bit smaller, and we're dear to Fies and Prouni, and it was Prouni, you know, social Prouni. Those periods, they lead to this change, and this change or differentiation in the ticket tends to stabilize, as Hosanna mentioned, especially with this change in the ceiling, as it's been mentioned, of Fies that it turns this representativeness of Fies more interesting from the standpoint of the ticket. Also, as Hosanna put it quite well, the ratio of applicants' seats is we have a unified model.
There is an offset of marketplaces where we have greater demand or smaller demands. As we fill the seats of those that have not been admitted in that marketplace, they migrate, have the opportunity of joining other courses. Our model leads this ratio that leads not great changes or variation despite the market being the most challenging that we're living. Another additional point here mentioned by Hosanna, when there is a marketplace where we have higher ticket above average, this conversion, while students go to a lower-cost course, it's very common for those students to realize that the ticket difference is not worthwhile regarding what they have in terms of subsidy delivery. They transfer it eventually. Those that actually do not renew or they actually move away, they come back and actually go back. We never had so many reopenings of registration.
Despite their leaving for a lower ticket, they understand that the difference is not worth it regarding the opportunity they have. You know, research, practice centers are very expensive for medical schools. They come back, you know, reopening or resetting their registration, you know, following the global ticket. Very much in this rationale that Hosanna mentioned, just adding a few points.
Very clear. Thank you very much.
Have a good day.
The Q&A session is closed. We'd like to turn the floor over to Mr. Rossano Marcus Zander for the final remarks.
I think we were cut. Before my final remarks, I'd like to say that at the end of our presentation, there was some flaw in the audio. Eduardo was actually thanking everyone. I'd like to thank Eduardo for the seven years that it looks, grows, strengthening our relationship with the market, with our students.
We're very happy with this history that has been built. The whole team talking to you has been part of it. I wish Eduardo luck that he continues to be kind to us when he's in the Board. He's now taking a seat on the Board of Directors from now on. Thank you and congratulations, Eduardo.
Thank you, Rossano. Seven years that have been really nice, and I'm happy to have made up this winning team. Thank you all very much for your trust. Greetings to all of you or hugs to you.
Thank you, Eduardo. Looking ahead again, our message of strong cash generation. This is the focus of the company. This is a great indicator that shows our path, the future of the company. We're very happy with the results that we've had in terms of intake. This enables the growth of our business.
The signs are very positive. The other thing we're very happy with, and if I may, through we had the opportunity of talking about that and the questions, the deal that shows the ability of Yduqs to generate value in this industry. We have several growth levers in organic growth. It's certainly one of them that should be consolidating long term. We're positioned for that, but we also see several growth levers in all our segments in an organic way. We have been working a lot with the team to identify and put necessary resources to ensure that those levers generate great results for the future. With this, I thank you all for your presence. It's been a pleasure to have you all with us. Thank you again, and hugs and greetings to all of you.
The Yduqs video conference is closed.
We thank everyone for your participation and wish you all an excellent day.