Good morning, ladies and gentlemen. Welcome to YDUQS' Video Conference to discuss the Results Regarding the First Quarter of 2026. This video conference is being recorded, and the replay can be accessed on the company's website, www.yduqs.com.br. The presentation is available for download also on the company's website. Please be advised that all participants will only be watching the video conference during the presentation, and then we will start the Q&A session when further instructions will be provided. Before proceeding, we would like to clarify that any statements that may be made during this conference regarding the company's business prospect projections and operational and financial goals are beliefs and assumptions of YDUQS ' board of directors based on 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 take into account that events related to the macroeconomic environment, the education segment, and other factors could cause results to differ materially from those expressed in the respective forward-looking statements. It is important to stress that for a better viewing of the presentation, we recommend enabling full- screen mode. Present at this video conference, we have Mr. Rossano Marques, CEO of YDUQS, Mr. Alexandre Aquino, CFO, and Mr. Marcel Desco, Vice President of Marketing and Sales. We would now like to give the floor to Mr. Rossano Marques, who will begin the presentation. Please, Mr. Marques, you may proceed.
Good morning, everyone. Thank you for being with us. We're here to inform you the first quarter results of YDUQS. I have here our CFO, Aquino. Well, let's talk about the results. First slide, please. It's a quarter that once again shows the great power of YDUQS' portfolio. We talk about this constantly. It's very common in our speech. This is our positioning. We are a higher education company focused on this horizontal portfolio.
With different verticals, we can bring stability and constancy in the growth of results of the company. Yet another quarter that proves that this generates record cash generation to the company, BRL 276 cash generation first quarter at market prices. It's a return of almost 20%. We'll talk about how this drives our current buyback program. Let's talk about our portfolio strength of two major levers, Ibmec and Idomed. At this moment, when we have challenges on demand, especially B and C classes, income, you know, problems with indebtedness of community, A class products suffer less with that.
This reassures us as business, as corporation, as results that Ibmec, Idomed can be strong and behave well when the market is growing. Ibmec is growing 23% year-over-year, EBITDA 4 percentage points, that was happening before at Ibmec, a brand that is increasingly premium. We bring the ticket view first quarter, 10% above previous year. Well, very well-positioned in the market as one of the main brands in every marketplace with great growth opportunity. We're going to talk about Ibmec in a specific slide. Added to that, we have Idomed. We knew it would be challenging for intake in medical schools because of the great offerings. We believe in the strength of our brand and the ascertained strategy. This is another growth, you know, 10% year-over-year.
Stable margin, even considering investments and quality investments with a premium brand of every market it operates. We have very strong results attaining highest intake, over 2,000 students for the first time in a challenging market scenario. The two brands together, we attained almost half of our business. This is a company that has over 50 years. It started with single brand, focused on a specific audience, has been expanding, we see the strength of portfolio, Ibmec, Idomed, new brands to the company. Well, they're young within YDUQS , attaining half of the result of our company. It changed the profile. What we have is constant results, strength of our business shown very clearly by cash generation. Our cash allocation with this cash continues in 2024. We showed that we wanted to reduce leverage.
Well, if we hadn't paid dividend and our buyback, we would be at 1.2. Early in 2026, we're clearly following the space to get to this net debt EBITDA by 2027. This is the growth path. Even with the investments, buyback, and constant dividend payment over the past years, we follow the pace to get to this level of deleveraging. We keep our shares buyback program. Our priority is deleveraging. We would actually take the timely opportunities in market. What we have, FCFE yield, it's a great opportunity for us. It's another successful buyback program, just as the one we had in 2024 and 2025, where we bring cash to the great driver. This change, we made some adjustments in the revenue recognition, turning our results simpler to understand, more predictable and cleaner.
A way of showing that is the drop in this, you know, the DSO. When we look at revenue over year-over-year, the results in this cleaner way is actually reducing DSO and also our bad debt. We have a drop in bad debt year-over-year, and we've been telling the market that will be continuous. It'll keep happening over the next quarters. Let's talk about individual businesses, and we'll go into detail on the next slide. Net revenue, EBITDA, consolidated company. We have a breakdown in each one of the brands we talked about, Ibmec . We have Estácio Wyden here. First, highlighting what we talked about, highlights the Ibmec, ibmec 49% stake. That was 32 in 2022. Since the pandemic, strong growth of two brands that continue to present new growth levers, high margins with very fast growth rates.
We'll talk about the opportunities we see both for Idomed and Ibmec. It's important to say that we have this view that is in comparable basis year-over-year, excluding the fact that I have a loss in this dilution or the DIS effect. 2Q 2025, we started having a drop of the DIS effect or dilution. We talked about that in 2025. 1Q 2026 has this relevant difference here in terms of DIS dilution. This improves the quality of our results and our earnings. It reduces revenue, reduces bad debt and volatility over years. This is happening. We see lower bad debt now in a comparative year-over-year. The first quarter's a drop in revenue that is not relevant to cash. It's accounting that will reflect into lower bad debt.
This is important for comparable basis to bring this growth without the DIS number. The number is there if you want to make the adjustment. It shows clearly what the impact is when we see comparable basis, we have a 5% growth in this environment that for families is more difficult in Brazil, 5% growth and with a margin growth 7% in EBITDA. With the Estácio Wyden, we have a resilience at a time of regulatory change. Very challenging time. It's a year of transition. It's a year that we have the effectiveness of the changes of the legal or regulatory framework. This has been undermining the trust of consumers in the distance learning modality that was kind of pursued by this kind of regulation. Yet it strengthened the semi on-campus that we had been highlighting.
We named it as a modality under the new framework. It's a delivery format. Semi on-campus is very appreciated under the new framework. We see different intakes, semi on-campus growing 67%. We're leading this segment. We bet a lot along with the government. It is really enforced by this framework, and we have great room for growth with the expansion of supply or offerings in the various centers, and we have our campuses on campus, and we started offering that on the various centers and this great lever that we have of expansion. Through our hubs, we have the strategy that we've been adopting at campuses. We have a footprint strategy, actually privileging smaller campuses in more noble positions of retail, smaller campuses, better located, better positioned with great semi on-campus offering possibilities.
We have a strategy that we believe strongly that it's turning this year will yield great results in 2027. We have no doubts about that. Speaking on the legal framework, the changes of the three delivery pharmacy brings some challenges in this transition phase, along with the scenario of indebtedness in families. We have been observing that through market analysis, other segments, retail consumption. It's not different for education. It's a challenging year for this audience, for our families. In comparable basis, excluding the DIS factor, that is the third one that impacts this vision. This is just an accounting view. If we reduce that, we keep on growing. Very much driven by semi on-campus. It's a transition year that will bring great positive fruits for Estácio Wyden. We believe very much on the power of the two brands.
We see great growth potential Wyden our umbrella of local brands. We historically grew a lot with a single brand. Estácio made acquisitions incorporated into the Estácio brand. We decided some years ago to create this second expansion strategy with local brands that are strong, that have a positioning in a tier 2 of population that allows us to have higher tickets, and we decide to keep the local brands. Under the Estácio Wyden umbrella. This has been having great growth potential in on-campus and digital. We have good positioning of the on-campus Wyden brand. We're going to strengthen that on the digital, actually having the strength of the Wyden umbrella with great growth opportunities. Speaking of this outlook that is quite positive for the future, we have total intake without the performance we expected.
Student base with a slight drop because of this, you know, digital distance learning change. It lost some strength and growth when we look at ticket structure, very important. On campus, following the strategy we've been talking about of ticket recovery, attained certain stability on its base. We've been fighting for growing ticket positioning, increasingly better position while recovering what we had lost, especially during the pandemic. This will bring some fruits. You know, we have healthier cycles with a reduction of DIS, better positioned ticket with a strategy that is less aggressive. We have better quality students. We have 88% of renewal rates, and it should improve in the forthcoming years. When we look at semi on-campus and digital, yeah, the ticket is almost twice as much as digital. This migration of digital to semi brings this additional benefit.
It has much higher ticket with the behavior of students that we believe will tend to behave closer to the on-campus. We see that in the more matured cycle in renewal rates. We see closer to digital, but they have great concentration of students in the first, second period. That's where we have the highest rates of dropout. They move on in their studies. We have students paying more with a ticket that is stronger with a trend of greater retention. General quality of the student base will be higher than digital students. Digital students, we keep the ticket stable in a very challenging market. Yeah, we're not doing anything crazy there. We're keeping it stable year-over-year, and that will be our strategy from now on.
We look at a bit loss of margin in absolute numbers, most of it comes from the DIS decline. If this factor were to be excluded, our margin would be stable. Even if it's an extremely challenging scenario of indebtedness of families, you know, problems with revenue, you know, a lot of the families, the revenue is being consumed. You know, it's election year, usually complex for consumption market overall, brings uncertainties in this change of regulatory framework. You know, the consumption decision of students has an horizon to up to six years. They need to have certain stability when they look ahead. Obviously, a year with so many legal changes brings uncertainties. Considering all the scenarios, turning 2026 a complex year, we bring results that are very robust for the Estácio Wyden brand. Getting to medicine.
In the opening, we said it's a year that would be challenging considering the great offerings that we have in the market because of the consolidation of past years. We worked hard in the past years to keep the Idomed brand as the preferred brand in private education or medical education for our marketplace in this more fierce competition scenario. This has been happening. 2026, Idomed brand is positioning very well, 10% revenue growth, pulled by great growth of intake, 8% of intake growth, retaining over 2,000 students for the first time. A symbolic brand or cornerstone for Idomed. Congratulations to the whole Idomed team in a challenging time, keeping the margins relatively stable. We keep on making investments, keeping quality teaching, very well-maintained structure, extremely high quality with the margin being kept at a very high level.
We continue having ticket on [inaudible] very close to inflation to upperclassmen, also influenced by the intake. We have a differentiated strategy here. We talked about the new seats affect differently different markets. We have appropriate ticket appropriate to each environment. We have very high success in these strategy. You know, in Rio de Janeiro marketplace that was competitive, becoming more competitive. Idomed is performing very well with great intake, excellent levels of NPS, very premium view of brands. You know, students leave for best residencies and activities. We're very well-positioned in Rio. It's very important marketplace for us. On the second premium vertical, Ibmec expanding its portfolio that was more restricted in the past. It's been very successful in courses related to technology, law school, expanding its graduate studies. Very important. We haven't talked about that in the Idomed.
It's a very important lever, you know, graduate studies. This is very important for Idomed and also for Ibmec. It's very large business here with a potential for growth that is huge. Only good news here, 23% of revenue year-over-year, very strong growth and margin close to 50%. 46% margin growing 3.7 percentage points year-over-year with great growth, high growth and high margin with growing margin within that. Intake doing very well. Growth in ticket, upperclassmen above inflation, but most importantly, intake ticket growing a lot, two-digit growth, positioning Ibmec as a premium player in each one of its pro-marketplaces.
You know, we have 95% stable, you know, renewal rates. You know, increase in profitability. It's doing very well considering all its metrics. It's going to continue being a relevant growth lever. We analyze new opportunities of growth levers that we have on our pipeline to carry out in the future. Getting to costs and expenses, I'm going to turn over to Aquino.
Talking about cost and expense, I think the very relevant point here for us to notice on the slides is that even going through a difficult macroeconomic with moment, with indebtedness of companies, quality of our revenue engagement we had with students, we notice reduction that is strong in our bad debt. Well, we have reduction of bad debt with lower discounts and more penalties paid. You know, the two last impacting our financial results, we had an improvement of 2 percentage points compared to the first quarter 2025. Only in bad debt, the improvement was 0.7 percentage points with Estácio Wyden and most impacted brands for you know, macroeconomic conditions had an improvement of 0.8 percentage points.
Additionally, if we make the comparison equivalent basis without the impact of the drop in DIS, we had an improvement of 1 percentage point compared to the previous year. Looking at numbers as reported, we had an increase of 0.3 percentage points of M&S. This is very related to the increase in allocation of M&S to the two premium brands that are growing very strongly, CGE, Idomed, Ibmec. Looking to the cost, G&A is related to two item. One-third of this variation comes from the increase of on-lending to main partners. Half of it is linked to more collection with positive re-effect on bad debt. The other one related to the, you know, compliance of our centers to the regulatory framework. It will have a negative impact to our cost or 0.3 percentage points over this year.
Second important part is that with the increase of our portfolio, premium portfolio of our brands, growth of Ibmec and Idomed, we have an impact of cost of faculty. Two-thirds of this vary in Estácio Wyden, and we have more on campus with the growth of semi on-campus that increase the cost. On comparable basis, our net income is growing 29% year-over-year. as we mentioned previously, the effect of DIS decline has an accounting impact, but it does not impact our cash. You'll see on the next slide that the cash growth that we see compared year-over-year is much closer to the growth that we have when we make the adjustment of our net income because of the decline in DIS.
In the quarter, we had, helping our results, we had very positive financial results with, you know, interest fines and financial discounts that minimize the impact of the increase of the Selic or the interest rate in the quarter. Do you remember the first half of last year, Selic had a growing trajectory reaching 15% in June, and we have a decreasing trajectory of Selic, and so the negative impact of Selic is greater? Now, our part on our part is the first quarter, so we have depreciation and amortization. We have small impact. On the next slide, we see, as always, the strength that we've had in our cash generation that has been recurring in our results in the past quarter.
In this quarter, we had a growth of 10% in cash generation compared year-over-year, made by the FCFE, getting to BRL 276 million record of first quarter. We never had such strong cash generation. We accumulated in 12 months of BRL 525 million FCFE yield of 20%. Such high return that we decided in this quarter to start a buyback program, as you will see in the next slide. Again, as we've mentioned previously, the fact that we have this decline does not reflect in our cash generation because it's much more accounting effect rather than business results. We have a DIS decline. Our cleaner results more predictable with future drop of bad debt that we don't yet see in our results.
This addition with renewal of our students, the way we receive of private financing or loans. With the measures we took in the past years allowed us to actually have a reduction to the 16 days, you know, the DSO compared first quarter 2025 to 2026. When we look at the end of first quarter, we close the very cash position exceeding BRL 1 billion. We see the amortization programs that we have this year in FY 2026 and FY 2027. We have amortizations that are quite easy or smooth. We can do with our cash. We start having amortization plans in 2028 and 2029. We're going to work over this period to extend the debt as we did in the past years.
This conservative attitude that we have to extend our debts allows us to tap into opportunities in the market, and we were able to leave with that with from a spread of 2% practically in the first quarter 2023, one of the lowest in the Brazilian market, to below 1% in the first quarter of 2026. With this journey, we see our leverage. We had our debt. If we could reduce that, it would get 1.2x our EBITDA. If it hadn't been for the program we had following our strategy, our framework of capital allocation, of having buyback, dividend payout, and M&A. In the past two years, we made major payments of dividends. We usually pay dividends in April. This year, we decided to bring it earlier for February.
We had a drop in leverage that was less relevant had we kept it for April. This will be reverted when we look at the results of second quarter. Additionally, we closed the Unifametro acquisition, yet another brand for our portfolio with on-campus operations and 60 seats for medicine. We closed the payment this first quarter, including our net debt. We have BRL 75 million to pay, we paid. The share price, well, with deeper than new FCFE yield was, well, actually allowed us to have FCFE yield, where we have a buyback program. We had BRL 30 million in this program. Now I'm going to call Rossano to continue with the presentation.
Thank you, Aquino. This is a traditional slide that we have every quarter. We're very focused on the short-term results. Now it's time for us to store the drone to have a sort more macro view longer term. It's important for the business view that we have this feeling of ownership that we have, you know, have the long-term value building, very consistent since 2019 before the pandemic, CAGR at 7% year-over-year, very constant growth with margin keeping at very high levels, suffering very little in during the pandemic, always above 30% year-over-year.
We kept, you know, return to shareholders very constant, paying dividends every year, making several shares buyback programs, highlight to 2024-2025, almost BRL 300 million. Now we launched this year a new buyback program of BRL 100 million we've been carrying out with discipline. All of this is driven or boosted by the great cash generation that we have in the past years.
We moved from negative cash flow in 2022, moving to a cash flow in the past 12 months of BRL 525 million. We're going to show in our guides, showing the trust we have in this growth of cash generation over the years. Closing slide, we have a transition. I'm going to say goodbye to Aquino. He will be back at the Q&A, and Marcel is going to talk about AI now. Okay, see you soon. AI is increasingly a key part of our strategy. We've been talking about key investments that we've making over the years, right, Marcel, setting up the basis so that we could take off and fly in our data structure so that we can bring features for the company, a leap that we started seeing this year, and Marcel is going to talk about our experience.
Thank you, Rossano. Good morning once again. To comment on our AI initiative that we've been carrying out at YDUQS quite broadly, it's a strategic pillar for the company. We want to share what we've been doing in terms of expansion within the organization. March this year, we took an important step, launching Play, which are our platform of agents for YDUQS, with the goal of having the company included in various processes. We had great addition in the part of creation of agents and training of all YDUQS associates. Today, we have over 365 agents on topics and issues of the various areas. They are actually using the tools that are available to solve problems that happen on the day-to-day. It's very much in our minds to have the AI tool supporting efficiency, productivity, increasing quality of our work, especially to serve our students.
I have two examples of projects that were born in the Champions program. It's a program of replicating and expanding the literacy in AI of all our associates. The first one is the Nora project that was born thinking about digital product development. It encompasses not only being a quality predictive in the software development, but it reorganizes the whole ideation, planning, story creation, and implementation, very close to digital product, with also coding. The gains in rework, resource allocation, productivity are obvious and very fast. I think it's a project that was born within a digital product cell to resolve an existing problem. Another one, how AI agents have been driving the operations, which we've been trying to help Aquino with the tools and the team.
Financial operations has developed within the bad debt project, a tool that analyzes and reduces a lot of time spent in financial information that are quite spread in the organization. Those initiatives show the potential of the tool to have as a great accelerator of AI in the company, the associates. That's wonderful, Marcel. In the past quarters, there were some cases, top-down, great cases of use in the organization of agents and customer service, sales, content production, things that we do in a centralized way, and we open up. This is a view that is bottom up. We actually prepare our associates to have this ability and understand the day-to-day problem, how they're going to use AI to their benefit. This is one of the great revolutions of AI. It's a technological leap that is very important.
Democratizing the access of tools that are used to be very restricted to technology. Now there are tools available to anyone in any area, in finance, technology. We have many people in marketing. It is funny to see this change as how we have been facing this technological change in a dual way, bottom up and top down, and the two yielding great results to the organization with important training aspect. We start training internally, and we think how we take that capacity-building program to students. Well, we've been discussing a lot the replacement of humans by AI, but we want to boost human capacity to deliver results. On our ESG slide, we highlight the publication last year of our integrated report 2025 once again. 2025 was super important year. We published our sustainability strategy for the 2025, 2030 period.
Our leading role in these ESG, you know, we have four important, you know, education, governance, and several areas. We have important roles in these pillars. Several certificates obtained, 2025. One of them, YDUQS , once again, has this leadership role in education. We look at 2026, we have several accomplishments. I'm going to talk about the literacy program, as you know, I'm very fond of it. We aim through our educational lever. We know it's a company that is focused in higher education, but we have this commitment in our surroundings to eliminate illiteracy. In each one of our units, communities, we're trying to actually boost those programs. We have important place there. We are present in 10 states in Brazil. The idea is to expand the program to the whole of Brazil. We were at the Forum Women in Sports.
You know, we are actually the only partners of the Brazilian Olympic Committee. Innovation and employability, we've been developing several initiatives. I'm going to highlight the professional experiences that we provide to our students, immersing students in fields of events, audiovisual, manufacturing, and scientific research. Employability is the core of our business and covered by this umbrella of ESG of the company.
Thank you, Marcel. Now we get to the guidance slide. Traditionally closing the first quarter of the year, the strongest in intake. We have more confidence to talk about our yearly view, 2026, and the forthcoming years. We commented over the presentation, we have this portfolio of businesses that is very strong, giving very great reassurance. We see a scenario of growth for the business, all verticals.
It's a more challenging year in the intake of Estácio Wyden because macroeconomic conditions, you know, debtness level, the regulatory framework. When we look ahead, we see great opportunities for growth, several levels of growth that we've been exploring within the Estácio Wyden, Ibmec. Ibmec, as we mentioned previously, deploying their levers of growth, and we finding other growth levers. We're delivering this growth in an environment that is challenging with high profitability, very strong cash generation. We think it's a main indicator to look at the basis of our business and the outlook we have ahead. We have the impact. We talked a bit about the penetration of DIS, a decline, it impacts revenue, the result, but almost no impact to cash. Cash is the clearest indicator for you to envisage results over the next years.
In the release, we have other results of initiatives that have impacted the results over 2025 and not impacted cash. The profit should be recovered considering the cash. Okay, our view of cash that we deliver BRL 400 million of cash generation or free cash flow to equity. Very strong. We'll look at 2026. We see the growth again on this number that is already high. We have a range from BRL 520 million-BRL 620 million over 2026. We look ahead, we continue, we're declaring here or stating our vision of growth of results in this interval between 2027 and 2030. The earnings per share impacted by some of the accounting points we had in 2025. We see a range of growth. We're expanding the range of guidance. Last year, we had a range of only BRL 0.03 per share minimum maximum of guidance.
Today, we are expanding that. While small variations on revenue, the number is not proportional. Profit is very leveraged in a sense, they impact the earnings. We increase the range. Guidance for growth of 2026, we're going to look at 27 to 30 with the EPS going from 2x- 3.5x i n our maximum scales. Very confident in the future of company, our capability for growth with very high profitability, very strong cash generation. This is our view of results for the next years. Now we get to the end of our presentation. Thank you very much to all of you who have been with us up to now. It's been another quarter that strengthens our strategy. We had a very strong cash generation quarter, which has been our main discourse in the over the past years.
We're certain that this is what shows the strength of our business. We have our guidance, the confidence we have on the continuity of this delivery. This has been done thanks to the strength of our portfolio. first quarter, very much defended by Idomed, Ibmec, great growth with high profitability, growth on all verticals with several levels still to be developed. Great potential for growth in the future for those units. When we look at Estácio, why do we see the great resilience in a macroeconomic environment that is very challenging?
The availability of income of the population are challenged, and the new regulatory framework being put into effect creates challenges. These difficulties position Estácio as the leader in the segment, and I'm sure it will be even stronger in 2027, contributing to our journey of growth, of cash generation. We're sure that with our discipline and capital allocation, our framework that has been communicated, has been executed with great discipline. We're a company that will generate great value to shareholders in the mid or short, mid, long term. Thank you very much for your time. We'll move on to Q&A now.
We'll start the Q&A session for investors and analysts. If you wish to ask a question, please press the button Reaction and Raise Your Hand. If your question is answered, you can actually leave the queue lowering your hand. Our first question comes from Flavio Yoshida from Bank of America.
Hi, good morning, Rossano, Aquino. Thanks for the time for questions. We have two here. First, on receivables. You mentioned during the presentation, shows how you are generating cash. We see a reduction in the DSO that is quite important. I'd like to know if this term is sustainable in this level, if you have room for improvement, and which would be the levers for this receivable to improve ahead if there is room. The other question is regarding personnel cost. We see an increase that is more relevant there when we compare with the revenue evolution. I'd like to understand looking ahead if this level is sustainable, if you have some more costs to come in as you move on along the year and until 2027.
Thank you. Good morning, Flavio. Thank you for your question. I'm going to start answering the first, and then I'll turn over to Aquino to add. It's very sustainable. We had been talking about receivables. This is a move we had been building. It's an important integral part of the strategy of cleaning results that makes results more stable, more consistent, more predictable. It's a message that we had been sharing since early last year. It continues. Fact is that you know this reduction, gradual reduction, decline of DIS that impacts the revenue year-over-year. It reduces bad debt. It was featuring on fourth quarter last year.
This will be stronger this year. Provision for non-engaged students we started working on last year. It reduces the account of, you know, accounts receivable and bad debt. Yes, it is sustainable. We have room for improvement. There are still things to be captured and will happen this year. It's not by chance. It's a planned action, structured one, that will go in the direction of what we believe in terms of our market strategy. Aquino will answer your second question.
Good morning, Flavio. Thank you for your questions. I think Rossano covered the points quite well. We've been showing this, you know, decreasing strategy by, you know, average receivable outstanding trying to, you know, this, you know, better strategy, you know, the Days Sales Outstanding. This has led us to consistently be reducing our DSO. Looking ahead, we have this effect that is temporary this year of the change in the Pravaler. We received as students paid. We started receiving in the semester the student are in the school, so this is transitory. We had an improvement of BRL 90 million. This year, we have about BRL 35 million to improve. That will reduce our accounts receivable in the future. The decline in [DIS] has helped us in the past quarters. We noticed looking ahead that potentially it will stabilize.
This is what we've noticed. This adhesion dropped a lot first quarter last year, even more so in the second semester last year. We are at a level now very similar to what we had in the second half of last year. This part actually is related to your second question. When we look at our drop in profitability, smaller margin as the number reported, this is linked to the, you know, the decline in this. If we eliminated this effect, we would have an increase of 1 percentage point in our margin compare year-over-year. Looking ahead, so this [inaudible] will be more stable second half when we compare it to last year. This effect will no longer exist in the second half.
Regarding costs, what we had is the increase of on-campus, you know, our premium brands on the portfolio, Idomed, Ibmec, and the semi on-campus. The net should be an increase in margin that we would have seen if it hadn't been, you know, this decline in this. We had increase in costs we offset in the other lines, and we'll have a margin increase of that. Let me add to private financing or private loans. Like, you know, this is a move that is sustainable and stabilizes actually, you know, lower levels of accounts receivable. Before you had, you know, long-term receiving or receivable model as students, you know, after course we received cash, we turned, yeah, actually everything students pay in the quarter. You know, we kept the long-term accounts receivable.
As accounts long-term accounts receivable is reduced, generates specific cash inputs. It will further reduce that this year. Another help this year that will actually improve our DSO. It's structured action that will remain at the level that we have today, and drop a bit considering the moves we are expecting to happen. Thank you, Flavio.
Thank you for your answers.
Our next question is from Caio Moscardini from Santander.
Hi, everyone. Thanks for taking my questions. Two questions on the guidance. Looking at the GPS guidance, what's the level of recovery of distance learning that you're considering for second semester, what level of margin that is embedded in this guidance? Second question is regarding the cash generation. You sold a property. How much of the cash generation in the guidance comes from the sale of this property? How much of it is in the first quarter? Just for us to try to understand this recurrence in cash generation.
Thank you. Caio. Good questions, Caio. Well, you know, how much you have in recovery of distance learning. First quarter, when we look at it until the year, we see the strong migration of less distance learning and more on-campus. This should continue over the year. First quarter is more impacted by intake when it's stronger, but in proportional terms, we don't see great fluctuation happening for the guidance to happen. We have upsides here as if we have better performance over the year. The margin, I think Aquino mentioned that. We see it stable year-over-year. On the guidance, we don't see great levers for growth, no margin reduction. Our aim is that the margin should be relatively stable.
Excellent question regarding the property that may generate the question. The impact of cash of this property is about BRL 1 million, BRL 1.5 million that almost did not impact the cash of this year. We have some positive impact, it was very little for the year. It was a sale on installments. The negative impact that we had, it was precisely the sold amount that will be turned into cash of the accounting value. A negative, you know, cash impact was BRL 0.68 million. The receivable will happen on installments, the impact of this quarter, very small, BRL 1 million or BRL 1.5 million in the quarter. Anything to add, Aquino?
I think it was BRL 1.3 million in the quarter. In the year, BRL 5 million, around BRL 5 million. Very little impact to the cash flow when considering the sale of this building.
Thank you. Our next question comes from Marcelo Santos from JPMorgan.
Good morning, everyone. Thanks for the opportunity of asking questions. You've mentioned the fierce competition in medical schools. I'd like to have some more flavor of that. What market suffered more? What was the ratio, you know, candidate seats? The second question, you just mentioned that see the margin on the guidance kind of stable. How is this broken down in the different business units that you've opened up? Just to understand. Thank you.
Well, Marcelo, thanks for the question. I'd like to thank everyone. Take the opportunity. Well, I'd like to thank everyone for all the analysts for being here. I know you're quite busy this week, everyone making their presentation.
Thank you very much for honoring our call and asking your questions. Great question on fierce competition. We've mentioned that. This is an important year. That is very important for our medical schools. Everybody was anxious regarding the market with this great volume of new seats. Considering legal measures in the past years, we would see this impact more significant than previous. We see it happening, in fact. What happened, you know, market by market, it's very hard to reach in some marketplaces were very protective because they had a smaller volume of new seats. Maybe the brands were very consolidated. Some marketplace who have 25, 30 years of market presence and were very solid there. In those places, nothing changed. We had very similar competitive dynamics in our behavior, our situation had no impact.
Now the marketplace, the most impacted marketplace, we actually have two factors, you know, isolated and added. There are small marketplaces in inner states that depend on the larger marketplace to feed students, they had too many additional seats offered. The market was more competitive. Everybody was looking into that to understand the competitive environment. In our call also our market partners, other companies working on medical education, what happened was an expansion of penetration of FIES to supply greater competitiveness in the market. It was not a transforming volume, that actually impacted intake. We had a successful intake. We showed the number for the first time. Idomed attaining the level of 2,000 students, you know, highest intake in our history of the history of Idomed.
It's a challenging environment, we had this market, or this cornerstone level of 2,000 new students. This impacts the initial effect of revenue. You have, you know, FIES, the funding, you recognize that and that. Now, we have more quality students there. FIES will have zero bad debt. The discount is an anticipation of recognized bad debt by the government, a much higher level of retention. Students stay much more than normal, ordinary, you know, tuition fee paying students. Financially, you eliminate the disadvantage of initial NOR. We have, you know, the FIES students with an additional benefit.
It's academically very strong with competitiveness, competing for the FIES seats in institutions. This is very high. The filter is very tight, students that join with very high scores, very high accomplished students. This will impact, you know, at the end when we have the general examination of the government, the ENADE examination, they're going to perform very well. I'm going to leave the second question for Aquino to answer.
Morning, Marcelo. Thanks for your question. As we've seen in the first quarter, if we look at our margin, the consolidated margin, we had a margin of Idomed moving sideways and Ibmec growing up year-over-year. Estácio Wyden was impacted because of the decline in DIS. Looking ahead, our expectation is that we don't have decline DIS. The comparable basis is more favorable from now onwards and the even numbers there. Quarters we have, you know, similar to this. The levels will be the same as last year. Idomed with similar margin. In the Ibmec, we should have some margin gain compared year-over-year.
Thank you very much. Very clear.
Marcelo, I am going to allow Silvio to add that because the medicine question was very good. Tell us about the outlook on the quarter. It is important for Silvio to give you some flavor of medicine from now on very briefly. It is fact that some marketplaces we have seen this move, which we had more seats change in the demand. We noticed this cycle proves that it reinforces our view onwards. Some families that chose some courses that were new in places that are not so consolidated, we notice a return of the demand, the perception, the quality, the offerings, technology, and infrastructure. They briefly is noticed as a differential. Now we see some places, as Rio de Janeiro, for example, that you followed, that it was a first moment or move of opening courses, moved the distribution of demand.
This briefly was resumed because the courses are in places that do not deliver the level of service that is comparable. Even with a ticket that is BRL 1,000 to BRL 1,000 below, this is not worthwhile. We mentioned that previously. We kept on investing on differentiation. Naturally, this would be rebalancing. We keep on believing on that. Despite having more seats, the differential actually gives an impact to this kind of audience. What do you need? One or two intakes to have this return. One or two cycles, then you start noticing the return. Yes, precisely one or two intakes, then we start noticing this resumption of schools with more tradition. Not only our case, every one of everyone.
You know, those adventurous schools with lower quality, they had a move of pulling the flow. Two cycles later, we see the return. Not a cycle. You know, we had 2,000 students of, you know, freshmen, we see the return. Students go to other institutions with no benefits, they have, you know, external transfer. This has been a clear movement in the industry.
Thank you.
Our next question is from Vinicius Figueiredo from Itaú BBA.
Good morning, everyone. Thanks for taking my question. I'd just like to understand a specific point when we look at results. It's a very specific result. Looking at the earnings with more operations, when we talk about fines, receivables on the side of revenue and discounts, we see great improvement. You had an increase of a bit over 20% in revenue, it dropped, you know, financial discount.
I'd like to understand a bit of the reason behind this. If we could continue on this part of financial, you know, operating financial results, if we call it so, what would be the recurrence of this in the next quarters? Another point I'd like to dive into, you've talked a lot about cash generation, but I'd just like to see what it is implied here in the minds of the head of company for capital allocation. You've been very assertive in the buyback program. You have dividend payments overall. Just for us to understand if there is a wish of the company of trying to outline a specific policy of dividend payout every time the company shows cash generation of X, it attains a net debt of X. It actually pays out to shareholders. I don't know if you can explore these topics a bit. It would be great.
Thanks, Vinicius. Great questions. Second question. We launched in our YDUQS Day, our capital allocation strategy. We mentioned that the main focus would be reducing leverage. We would generate cash, and we would use the cash fundamentally to reduce leverage until we would reach the multiple of 1 time net debt EBITDA. We are on the track. We would tap into opportunities. We would be opportunist, but considering opportunities, we had BRL 3 million in buyback 2024, 2025, a new buyback program of BRL 100 million because of market conditions. We have our guidance, our framework. We didn't know how the market would react. Obviously, we cannot be blind considering those opportunities we have. We have to embrace them. A specific M&A has just came up. We recently had Unifametro.
It's a very well-positioned institution in Fortaleza. We're very happy with the acquisition of on campus. It's a brand on digital grade, school of medicine. We're sure that it's very accretive to the group, and we'll keep on looking for small opportunities. We are focused on getting one time net debt EBITDA, and this should happen in 2027. We should attain this goal. Dividend payment happens or follows what we mentioned.
We fell closer to the minimum using adjusted net income to calculate. The minimum should have stable payment as we had in 2025, similar in 2026, until we attain the goal. From then on, the idea is to have a vision of payment of dividends more established until we get there. This is the framework towards reducing leverage at payment of dividends close to minimum, similar to what we've been doing in 25 and 26. Let me turn over to Aquino to answer the second.
Excellent question, Vinicius. We actually had it on our report, if you look at it in details. When we report Bad Debt, we report those two lines to show that this has been a very positive effect that has helped our financial results, not only this quarter, but in the past ones relating to our better renewal rates and we being able with a better collection and keep both academically, keep more engagement of students and lower short-term bad debts. As we renew students, we need to offer less discounts for the renewal and generate positive results in addition to improvement in bad debt. We have positive results on the two loans of our financial results. Our expectation is to keep on this level much better than previous year.
Thank you.
Our next question is from Eduardo Resende from UBS.
Good morning. Thanks for allowing me to ask questions. I have two on our side. The first regards slightly higher dropout rate year-over-year on On Campus. I'd like to better understand that if the company sees any risk of cannibalization of the On Campus offer a higher offering of the semi on-campus. Some courses can only be offered on campus, but for other courses overall, I'd like to know if you see a bit of this trend as a company. Second is on the intake cycle of first quarter. We had, you know, the key turning of regulations. What has worked, what hasn't, how the company has been addressing what did not work well for the intake in mid-year? Thank you.
Thank you, Eduardo, for your questions. On your first point on dropout, it's really negligible, you know, on campus. Nothing structural, certainly has nothing to do with the expansion of semi on-campus. The semi on-campus, at the campuses where you could actually have this migration, has been happening for a long time. Very little impacted now. What is impacted on campus, on the campuses, the positive in, you know, the starting of nothing within the schools or courses. It's not a great impact. We're working hard to improve, you know, students' satisfaction. We're working hard on AI. This, we should actually increase our level of retention that we have in our institutions. On intake, I'll turn over to Marcel.
Overall, we actually are happy with the intake results. As I said, obviously, in a year everybody can see the news, the, you know, families are in debt. Now, this is historical. This makes the decision of students more difficult, so they actually have to decide on higher education. These are more challenging years. Considering that, it's been a very good year considering the difficulty of implementing, well, on the intake. You know, you have the new, you know, regulatory framework fully implemented, but for intake we have, you know, all the courses adapted to the framework.
It's a year that is adapted until we get to the right level of prices for the students to understand their options. It takes a bit longer for the learning of students and the offerings to balance. This has been the scenario of intake considering that, you know, we grew. We knew on campus growing a lot, semi on-campus grew a lot with, you know, the delivery official format. This is actually working. We've been having great results. Let me turn over to Marcel to go into details here.
Thank you, Rossano and Eduardo. Just to add, we've been very prudent in the part of pricing tickets, especially on campus. We've been following this wave for some semesters, we've been able to keep that quite well and control it. Something we managed to do quite well has been our marketing investments that were needed to get our intake.
Adding to what Rossano mentioned, in line with what we're looking ahead, I believe again we have this market pricing discovery in the semi on-campus that we're following up. For clients, this is becoming increasingly clearer, the boundaries of each one of the products, and we understand how the dynamics of those courses operate that are mostly on distance learning. On campus, we've been working on portfolio improvement and expansion of course distribution. That's something we've been working on, generates a work front that has been in operation the past quarters, and now we are more robust and stronger to expand. This implies reviewing the course portfolio that we have in every marketplace and privilege the courses that are more on campus that naturally have higher pricing.
Thanks. Our next question comes from Marcio Osako from Bradesco BBI. I have three questions, actually.
The first on contingencies. Last year you showed on the release the mismatch you had between what happens in the income statement and cash disbursement, and how do you set for 2026, and if you have this, the mismatch? The second one on cash generation, if you see there any change of any gain in the working capital excluding the Pravaler aspect? The third is whether you could talk a bit about the situation. How do you see the financial situation of the center in this new environment where we had a drop in intake that was relevant?
If a higher ticket offsets, if there is any risk of sustainability of the various hubs in this new scenario, if you should have an increase in online learning for partnering hubs to be maintained if there is an adjustment on the regulatory part that could hinder financial sustainability of the partnering sites. Thank you. Good question. It allows us to talk about topics that have not addressed. Great insight. To speak on contingency, I am going to turn over to Aquino to go into detail.
At this point, it is very important when we look at the future outlook, cash was the best way of looking at our results and predict how it is going to behave in the future. We have several lines that take the P&L to be delivering with a gap below the cash view. One of them is contingency. We see higher expense of contingency than we actually have in cash. We have a provision rearrangement. This will stabilize, it should actually match the cash outflow.
This is something we've been doing for a long time to reduce our contingency impact, especially labor side. This will stabilize 2025, 2026, we should seek a balance trying to reduce it as of 2027. This is one of the lines. We have other lines that shows the importance of looking at cash effectively as one of the most important results for the company to look into. I'm going to ask Rossano , you know, talk about, then Rodolfo can talk about partnering.
Great question on the partnering centers. A key concern of ours, partners are very important lever for delivery of our students and future growth. Super important to have your point for us to ensure that they have a healthy view of their businesses that we are supporting in whatever is possible within the organization. I'll allow Aquino to address the two first, and then I'll turn over to Rodolfo.
Marcio Osako, thank you for your question. Excellent questions. As Rossano mentioned, if we take the results of last year, we had three main factors that kept the difference between our FCFE and our net income. One of them was the difference between contingencies impacting our cash and contingency impacting our net income. Last year, the difference was BRL 50 million. For this year, we still see the difference happening. As of 2027, this number will be comparable. It will be closer to cash disbursement as we have in our provision line.
The other important variation we had over the next years, this should take a bit longer than one year to balance, is the difference between depreciation or level of CapEx. We have BRL 40 million, BRL 50 million that we had last year in difference, and in quite major reduce our CapEx level of previous years. We'll keep the same level for the next years, but our depreciation is about BRL 40 million above what we had of CapEx last year. Probably will be similar to this year. Lastly, we have the, you know, after 2026, you know, impact of lending or lend or what we have in terms of leasing. This generates a negative impact to the profits. From there on, it's positive. After the contract, it's actually on a zero level. On our contract, we're still generating this effect that is negative.
It has been about BRL 30 million. These three factors, about 120, BRL 30 million in difference of last year, it is a point on which we think that our cash generation gives much better visibility than our income for our actually profitability. If we take the cash that we are going to generate this year, that is consistent, nothing, non-recurring effect that is relevant here. We have only BRL 20 million as bottom of guidance. BRL 0.20 per share, which is equivalent to the top of the guidance when we look at net income. Speaking of working capital for 2026, last year was quite positive. As we said, we had several ways of increasing our transparency, predictability of revenue we presented in the past years that generated a negative effect to our revenue, our EBITDA, and net income that has no cash effect.
The counterpart of what we did last year came up as positive working capital. This year, first quarter, we had a new drop or decline in this. It helped us to have more positive working capital at first quarter. Looking ahead, we see those effects reducing increasingly more. The trend is that our working capital should be close to more neutral working capital over the year without having the positive effects we had last year, with the capture of results coming more directly on EBITDA. Rodolfo, would you take the third question?
Sure. Good morning. Thanks for the question, Marcio. I think this is one of the fundamental points of attention. We have to balance a bit of this of this scale, you know, profitability and sustainability for partners. This story starts when we make more, well, faster expansion of our sites. Financial expectation in the opening of business and following it up over time is one of the strengths that we have here. Our operations, our regional hubs, and they are business consultants, and their mission is to ens ure profitability and the alignment to regulation, infrastructure of the business, just as our profitability.
Over the past many years, we have a lot of data to help the partners to understand what the profitability of their business is, what is the best cost we have of real estate, of personnel. We have this infrastructure of information and personnel for that. When we have the new legal framework, especially the last year, we know what we have to do. We had structured results, we had operation. We built very solid plan over the transition of two years.
Now we have yet one year until May 2027 for the regulatory framework to be totally in effect. We make this transition considering all the variables with the legal framework in a very transparent way in terms of the impact to profitability. Part of what Aquino mentioned of some marginal impact that we had of margin of this year was because of that, of the adjustment we needed to make in a, you know, site hub infrastructure. We don't believe this will have great variations of the on-landing percentage for those centers. We see migration to distance learning, a bit of what sort of mentioned from what, you know, distance learning to semi on-campus.
It's a sustainable way for those centers to keep on working, and we have other products that will be implemented. We've been talking about undergraduate, we have other alternatives of expansion on campus and professionalizing courses. We have a more diversified portfolio of revenue makes the sustainability of the partners not to be a concern, although we work hard to adapt and follow up that over time, okay?
Thank you. Next question from Mauricio Cepeda from Morgan Stanley.
Hi, José, Aquino and other directors. Thanks for the time. Let me tap into the center question to ask about something else. Even if you're trying to offset the economics of those sites, we may understand that some places become unfeasible because they can no longer have pedagogy. Some courses have become more unlikely. Do you see any potential reduction of the number of sites considering the new legal framework? How many will be shut down, consolidate the profile of those locations that are more impacted?
What kind of course will be offered on those centers if this actually changes the profile of what those centers will be in the future? I'd like to go back to another topic of dropout rates, not looking at the past, but looking to the future. You comment a lot on the results of macroeconomic pressure, elections, greater indebtedness of families, less trust or confidence. Do you see there would be a greater pressure on dropout rates in 2026? Would you lose more than normal of the intake that you had in first quarter of the year? Thank you.
Thank you for the question, Cepeda. Well, second question is a good question. We don't see this phenomenon happening any other times. The mass education market is cyclic. You see this phenomenon, you know, credit tightness, and then you have an economic relief, greater intake. We don't see this correlation with dropout rates happening in intake. Much on the contrary, when you have lower intakes, lower volumes of intake, it's almost like a peeling of the student base.
You have more qualified students coming in that have a greater trend, retaining more financial possibilities leading to lower dropout rates historically. This is not what we see. You know, we don't consider that we have greater pressure for dropout rates. We had similar scenarios, you know, tight scenarios with interest rates, more indebtedness of families, we don't see that happening or impacting our dropout rates. This is what should happen this year. I'll allow Rodolfo to talk, to keep talking about the various centers.
Thank you for the question, Cepeda. In this context, we're talking about legal framework and center sustainability. This has different impacts when we talk about locations. Large and mid-sized companies will have more restricted impact. We see that as a growth opportunity for semi on-campus in small towns that we had been signaling since the legal framework was disclosed, was how much this could actually limit the access. In small towns, actually, what we see, that they tend to have a movement of reduction. This is not relevant, it's important to clarify, considering the business model that we've been building. It is sustainable, although with all the reductions, changes in portfolio, we've had semi on-campus offset part of that, but some locations will end up will be shut down is not of great impact considering the impact, you know, of those hubs.
You know, they had actually little impact. We won't have impact in terms of the number of centers and results. I'd like to draw the attention to this point. We are a company focused on results, but we also have this accountability in terms of social impact. As a public policy, we think it's a topic to be addressed by the government to think about access in some places where obviously this move towards a more restrictive legal framework for distance learning excludes a certain segment of the population, certain marketplaces. It's little representative for our profit and our results, but certainly has a social impact. There may be an impact side there as a public policy should be resumed. Going back to our fundamentals, Brazil is a country for great opportunity for higher education penetration.
We have structural reasons for us to believe that it's still a country in which higher education has great value. You know, employability when we think about students now coming out of higher education and not coming out of, you know, middle school, you know, it's a great difference. Studies show that clearly there is a great difference in value. We are exposed to the macroeconomic waves, but we keep it there p reserved . Yo u as a professional covering this industry can see this positive outlook that education industry has in terms of growth in Brazil, and this is a great fundament of education. This is a great fundament for education in Brazil. Thank you very much for your questions.
Thank you, Rossano and Rodolfo.
Our next question is from Renan Prata from Citi.
Good morning. Thanks for the time. Brief question, I'd like to understand this new opening brands giving a focus on Idomed, if this has any change in strategic bias of if you have an improvement in Ibmec, I mean. I'd like to understand the strategy for this business line, thinking about Ibmec specifically. On Ibmec, I understand that an avenue, a segment of high growth with the margin opportunity. I'd like to tap into what Aquino mentioned. You know, you have margin for Ibmec. Thinking about a mature center, how much do you expect of a margin and results for the company as a whole? This is it.
Renan, thank you for your questions. First, Ibmec is a super strategic vertical for us. We've been opening its results since last year, we bet strongly that it is a business of growth, of high profitability, not common in education as a whole. It's a jewel that we have in our portfolio that has been growing consistently with high margins and growing in some quarters. This will keep on happening. We still have opportunity for growth. We constantly find new growth opportunities for Ibmec. It has good penetration in the main marketplaces it operates. It's growing in Brasília.
The course is maturing. New campus in Rio. We have a new positioning. The campus is not so new in São Paulo, Faria Lima. New area with, you know, highlights in those cities. You know, we have possibilities of geographic expansion. We'll analyze carefully. Throughout its life, it's under-penetrated, just as Idomed, another opportunity, two very strong brands in undergraduate studies that do not have a super share. Throughout their lives, they have great room for expansion for Ibmec and Idomed.
Well, in terms of margin, obviously we'll not keep expanding 4 percentage points in margin. We still find rooms. We'll get close to stability. We should operate with a margin that is close to Idomed today. This will depend very much on the expand of Para a Vida Toda program, so we're constantly studying that. I cannot give you such clear outlook. We certainly have space for margin expansion and growth opportunities. I think I've answered your questions very clear, Rossano. Thank you.
Thank you. The Q&A session is closed. I'd like to give the floor to Mr. Rossano Marques for the final remarks.
Thank you very much once again. I'd like to thank everyone's presence. We know it's a very intense week for earnings results call. We had great questions that helped us to clarify even more the content of our presentation. I hope you have reinforced your belief in ours, that, which is great, in the capabilities of this business, of increased profitability, cash generation, and also growth. We talked about all the levers that we see. We have several others that we're sowing. Main verticals that we reported, Idomed, Ibmec. I just mentioned answering Renan's question.
We talked a bit of Estácio Wyden. Even though it's very mature, we still have great, fantastic opportunities for us of gaining a share, margin expansion or penetration. Fundamental reasons for us to believe in the expansion of business of higher education in Brazil. It will be a business that will generate a lot of cash for shareholders. You know, return on capital, very disciplined, you know, disclosed, clear, consistent of the business. I'd like to close our meeting. Once again, I'd like to thank everyone for your attendance.
YDUQS' video conference is closed. We thank everyone for their participation, and have a great day.