Good morning, ladies and gentlemen. Welcome to Yduqs video conference to discuss the results for the first quarter of 2024. This video conference is being recorded, and the replay will be available at the company's website at www.yduqs.com.br. The presentation will also be available for download. We would like to inform you that at 11:00 A.M. Brazilian Time, we will have the presentation in English. We would like to inform that all attendees will be watching the video conference during the presentation, and 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 prospects, operational, and financial projections and goals are the beliefs and assumptions of Yduqs' executive board and the current information available to the company.
These 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 note that for better viewing the presentation, it is recommended to enable full screen mode. Present at this video conference, we have Mr. Eduardo Parente, CEO of Yduqs, and Mr. Rossano Marques Leandro, CFO and Investor Relations Officer. I would like to hand the floor over to Mr. Eduardo Parente, who will begin the presentation. Please, Mr. Parente, you may proceed.
Thank you very much. Welcome to Yduqs presentation, first quarter 2024. Thank you for the presence, trust. I hope you're all well. We will see first quarter, we have another quarter of deliveries of our guidance, another quarter of growth of net income of third quarter, we present, and the fourth growth of net revenue in the following consecutive quarters. Looking to the left, we have a growth of 11% of net revenue or 7% of EBITDA, 11% adjusted net income.
We follow our trajectory of reducing leverage of [audio distortion], vis-à-vis 1.74 last year. Combined to the reduction that we have in the average cost of debt with showing the great trust the market has on us, along with the growing operations, leads to the results we're showing you. To the right of the chart, what do we have? When I mentioned the operating growth every year in the past three years of net income, we had a great leap last year.
This year, we have been able to continue a positive trajectory. Look at the green bubble. When we look at accumulated net income, BRL 360 million in the past 12 months is 80% higher than this number was a year ago. When we look business on business on premium, a growth of 18% year- over- year, and the student base ticket at upperclassmen of IBMEC, 9% important for our EBITDA and premium, since we gave focus to this six, five years ago. Digital intake, similar to last year within our guidance, led to net revenue growth, and we follow on a trajectory of growth of the average ticket here. On campus, we've been telling you how much we're excited about on campus. This has been another quarter with positive growth, 2 percentage points vis-à-vis last year, 20% EBITDA. Student base growing since 2014. The student base has been growing.
Intake within guidance, 15% compared to last year, and net revenue growth of 11%. Let's look business by business. Looking at premium, we have some news that people have asked us to separate IDOMED and IBMEC results showing you the businesses, and they're still doing well. On the top left, net revenue growing 13%, important for IBMEC. The great success that Faria Lima campus opened a year ago has had, growing on the student base, relevant growth, IBMEC 25%, medicine 12%. When we look at undergraduate students in the green bubble, you see 10% of medicine and IBMEC, quite important growth for our premium in group. On the bottom right, we have growth of ticket of IDOMED and IBMEC leads us to have this EBITDA growth, great growth and evolution that is quite important.
From the very beginning, this is a business that has great resilience in rainy days, and we're showing growth of 49% IBMEC, 9% medicine. This is the first quarter, and the greater discount of FG-Fies, where we didn't have that last year, and this year we have. If we compared apples to apples, the number would be a bit higher. Keeping the margin we have, this is the renew that varies a bit to this side, that side, 95% , 96%. Speaking of digital learning, what do we have? Initially, we attained the guidance. We had intake similar to the fantastic intake we had in 2023, showing history. In 2022, we had little elasticity in the market. We worked much more on price and then volume. In 2023, we returned to elasticity. We were much more aggressive in terms of pricing. What we see here is the reflex of that.
We see an increase of 11% in net revenue of the unit, 13% in undergraduate, increase in the 6% of the student base, the positive trajectory of price. We've been telling that this is more conservative price of 2022. Then we see next, the other one, the variations much closer to zero are a bit negative. When we look to the top right, what draws our attention is the drop of 7.5 percentage points in the margin. This is not something that worries us ahead. I want to share this with you. When we look at bad debt, well, first part is regarding this. We have a change of provision the first quarter, last quarter, start of second quarter last year from 15% to 20% of intake, and this very related to that. This actually related to this increase.
The other part is the great intake we had last year when we had the leap we had from first to second quarter, so freshmen drop off much more than upperclassmen. After a few quarters, we have an increase in a dropout that results in this number. The two, so we don't have leaps from 15% to 20%, the intake leap. We don't have other intake leaps. They tend to have a very smooth effect looking ahead. When we look at transfer, this is similar. Goal for transfers of the hubs and when they capture more, so we have a greater there. We had great collection last year. The number is carried on ahead, and we have a normal number. This goes back to the second quarter or second half, that's better. Marketing and sales is our option. We want to talk more about brand.
We have had a trajectory of great efficiency, so we decided to spend a bit more here looking at the present and future. On others, that is what we have to close on 7.5. That is the result of the base growing and operational. To close on digital, for intake, we actually went over, exceeded the guidance. When we look at renewal, we had wonderful intake, and it tends to cause greater dropout with a greater number of freshmen in the base. This is between 7.5, 7.3. This is very much within the expected. On campus, this is a chart filled with good news. Well, it may be news for some people that knows that we have been talking a lot about that. On the top relevant net revenue growth, 11%. When we look at the student base, we have a growth for the first time since 2014.
We had growth of the student base in on campus, very much anchored on semi on campus, very important for us to have operational leverage. It should grow more up potentially. When we look at the student base of on-campus base, we had intake greater than last year. We have the prospect or excited to shortly have a change in the only on campus.
Looking to the right, it is more of the same. Quarter after quarter, we show you the evolution of our ticket since 2021. This has something we look ahead, what we have, hiring what we are bringing, and we look ahead as a positive trajectory. Result of that, very relevant growth of EBITDA, 20% year-over-year and a growth of 2 percentage points on the margin. This natural fluctuation, the number is always between 7, 9, 80, 83. Variation that has great stability over the years, and we have exceeded our intake guidance of 5% vis-a-vis 6% last year or 15%, actually, intake. I am going to turn over to Rossano to talk about financials.
Thank you, Eduardo. We are coming to the financial indicator. We see robust growth of 11.5% year-over-year. Important to stress that this quarter we have all the segments growing double digit. Premium, as is traditional, growth of 13.5% digital that even with the student base grow very robustly in terms of revenue and on campus, highlight here, as we have been talking for a long time, the base started growing after a long time. With the continuity of the ticket growth, we get to this growth of two digits of on-campus revenue. That it makes us very happy.
Another highlight of premium plus digital reach at 58% total are two segments with greater margin, more representative in the total revenue of the company. On costs and expenses, we had a growth of 14% total costs and expenses, very much focused on bad debt and M&S. We will continue delivering good efficiency in all the others. G&A, rents and leasing, we are keeping that being stable. The cost line counting a reduction of 0.3 percentage points regarding revenue. Once again, demonstration of the discipline of company. When we look at the growth lines of bad debt and M&S was a planned growth where we wanted to invest more in our brands. We believe this is very important in the mid-term. We have the efficiency deliveries year after years putting us in the place of greatest or very efficient players in this year.
We decided to increase investment, especially in our brands, and this will bring great results in the long term. For bad debt, we have a growth of 2 percentage points, but half of that comes from a different comparison base. in the second quarter last year, 2023, we decided to increase the initial fees provision, increasing from 10% to 15%, to a quarter-over-quarter that has the impact in this compared debt. You will not see that in the second quarter 2024. The remainder of the impact of bad debt comes with the greater dropout, the great intake we had last year, as Eduardo Parente mentioned, in digital, when we had great, strong impact, it increases the number of freshmen, and so there is greater dropout.
Third and fourth quarter, we have the intake in showing an impact on dropout, and hence, an impact in final bad debt, considering this in the provision. So we have an increase of this in our general revenue as a result of greater intake. Getting to a EBITDA growth of 7% year-over-year, premium and on-campus driving that. Excellent news showing on-campus with 2 percentage points in margin. We are saying this is a great leverage business. Great. So the increase of this base is we start seeing this expansion of margin on on-campus segment that we continue betting a lot on. Digital is suffering a bit of margin this quarter. Eduardo Parente explained in detail to you the basis of this impact. Almost the whole impact, we see it disappearing over the year.
We do not see a year close to this negative impact you see here in the quarter in digital. Still very healthy business operating at very high margins. We will see that over the forthcoming quarters. Adjusted net income, we attained our guidance, very important. We have been telling the market to look at net income. We have had a trajectory of growth of net income year-over-year. You see that in the slides Eduardo Parente showed you, led by the EBITDA growth. We start seeing with financial results, positive drop of interest rates, all the work we have been carrying out in the financial results line, this result starts showing and an increase in net income comes after that. TNA has negative impact, resulting of great investment we made in technology over the past years. The curve is getting to the end.
We are going to start seeing positive, well, neutral or positive contributions and income tax, and it is slightly net over the period. On the next slide, we have a lot of good news. Operating cash, very strong here. You see a conversion of [audio distortion] cash compared to last year, very much focused on accounts payables. You see payments that has distorted the line of working capital and payables. We have very stable receivables, even a growth in intake of greater penetration of DIS. We have stable terms of three historical lines showing the discipline we have in the management of our accounts receivable and all the capital structure of the company. CapEx, following the delivery of our guidance. Okay, we follow the history of very disciplined 6% growth. So our CapEx has been very well-resulted, delivering results year after year.
Now we're getting to our midterm guidance, so below 5%. We're getting debt in our investments. Here we see the results of our cash generation capacity and reduction of evasion, showing a drop in leverage. Quite strong regarding last year, 1.56x our EBITDA. This is a line that is strong. Great focus of our business, this leverage reduction. We talk about capital allocation. We'll have the opportunity to discuss that in our Yduqs Day, but this is our strong trends of our business, working a lot on our leverage reduction, our business becoming stronger for cash generation for our shareholders.
Our debt average cost, CDI + 1.32%. We had a great emission of debentures, BRL 1.2 billion. We had an average term above three years of average term, and this very competitive cost of markets. Very confident in terms of liability. I go back, turn back to Eduardo to conclude the presentation.
Thank you, Rossano. This is a chart I like very much. It shows the evolution, resilience, the beauty of our portfolio. Resilience and care. Resilience goes back to where we are. Portfolio keeps on evolving or developing. Resiliency applies to difficult moments, and we see those moments being way back behind us. We see full line. We had BRL 6 million in on-campus. We started breaking down into business units. We went down there to 400. We are recovering gradually. We've been telling you, we moved from BRL 400 million in the fourth quarter 2022, not so long ago, to BRL 490 million in LTM that we have this moment. Premium, that moved from when we started talking about Premium, we had BRL 300 million EBITDA. We're getting to BRL 600 million now.
Twice as much in a very short period of time. Digital with very positive trajectory, moving slightly sideways in the past quarters because of the factors I mentioned, the other two businesses doing their or playing their role and showing that what we have on the left, net income showing a great evolution. When we look at what we talked about, the highlights, we're talking about BRL 360 million LTM. A year ago, we were talking about BRL 199 million last year. Very important trajectory for the strength of our portfolio, quality of our brands. On the right in the chart, we see operating cash flow moving from this comfortable place of BRL 600 million some, moving BRL 1 billion last year. We have a slight drop because of what Rossano mentioned, the accounts payable in March.
If it weren't for that's not going to happen over the year, we would be above what we were in the last quarter in terms of LTM. Another very important chart for us, since 2019, we have these results. We could go even back. We got the end of students and their Fies. We had two waves of COVID, several economic crisis, elections. What do we have? Growth every year. On average, since 2019, very difficult years, an average of 8% a year, growing every year with margins always above 30%, enabling us that 2007, our IPO paid dividends every year, and we made good capital allocations and did not make capital allocations that were poor over the period. This shows the essence of our business. I'd like to talk a bit about ESG. We have broad recognition of this from the market, other Brazilian companies, our industry.
Outside our industry, we have social tradition of almost 54 years. We've always looked around us, and some four years ago, we started talking much more about the market. Many people seeking us, very clear recognition with that is our A A evaluation MSCI. Few companies are recognized that, few companies in the world that are A A in terms of ESG. We brought some news regarding this quarter. Our insertion in the ISE B3, the report that we've released audited by PricewaterhouseCoopers according to market standards at the Instituto Yduqs. We have important news, new class with 479 enrolled in literacy and reading program. Our program that adds income to the ProUni students within medical students started in Rio. We've expanded to all our northeast units. We have companies of the Institute recognizing as a good vehicle for social investment, the Instituto Yduqs.
Three experts, all related to the financial market, Santander, Zurich, and Phi Institute. They have been with us in this journey around Brazil. We were recognized at the UN, New York by the Raça é Prioridade movement. 50% of Black and Indigenous people in leadership positions and promotion of education, qualification, development of Black and Indigenous people within the organization. This is what I'm saying, talking about what happened during the quarter. The whole package is, as Rossano mentioned, the Yduqs Day on the 21st May. I hope you can attend. There will be great things about our business, many cool things about our market and our country. I think it will be something that we are preparing with great care and people will remember for a long time. The next day, we'll have ESG forum.
I'd like to invite you to attend it on the 22nd May, to be here at the Maracanã Stadium to follow us. It's part of it and much more that we have to show you. Moving on to our final remarks. Again, a winning portfolio. Our strong operating leverage, another quarter of expansion in net income with guidance achievements. Average ticket of upperclassmen growing in all business, Medicine 6, IBMEC 9, Digital 5, On Campus 5. Intake, we achieved all guidances. Great intake, close to what we had last year. Very important growth for us in the On Campus of 15%.
Our net revenue grew, as Rossano mentioned, two digit or leading to a total of 11% EBITDA growing by 7% in the quarter, despite a drop in Digital, strong locomotive of ours, showing the strength of our portfolio, premium delivering On Campus, bringing a growth that we hadn't seen for a long time with 20% of our EBITDA. When we look at net income, we want to encourage you to go to your net income and your projections. The projections you make about us, this is what we're going to say. This whole industry, we're going to look much more at net income. We had a double digit growth of 11% in the quarter. When we look at LTM this quarter over the same quarter last year, we're talking about 81%, BRL 199 million to BRL 360 million, great evolution.
Cost of debt along with leverage reduction, working hard on this development of cash generation of net income. Average cost of debt of CDI + 1.32%, and we're getting to 1.6 in terms of leverage reduction. We've shown you great development of our business, the strength of our portfolio, bringing another quarter of positive development in net income, attaining all the guidances we've given you. Looking ahead, we see great development in net income and cash generation for shareholders. Next week, in Yduqs Day, we're going to talk a lot about that. What did we want to tell you today? We look at second quarter, we're going to see net income very much in line with what we saw last year. When we look at second half, we see a trend of this speeding up coming. Thank you very much.
Thank you very much for your time, your attention, your trust, and let's move on to our Q&A session. Before opening up to questions and answers, I'd like to turn over to Mr. Eduardo Parente.
Can you hear me? Good morning, everyone. Before we start the Q&A session, I would like to turn over to Aroldo, because, well, everybody is really worried and sad about the tragedy in Rio Grande do Sul. I'd like Aroldo to share with you what we've been doing about it.
Thank you, Eduardo. Good morning, everyone. Rio Grande do Sul, everybody's following. It's a very difficult moment. We'd like to start by giving our solidarity to all of you impacted throughout the country, especially Rio Grande do Sul. We took some measures right in the beginning of what happened there. Very worried about people. We have several associates impacted.
Three are being supported because they have been having psychological support. Andrea, assistant of a lab in the unit, she is being sheltered. We have been paying her accommodation at a hotel. She had nowhere to stay with her family. We are very close, collecting news daily, helping some with psychological support, and Andrea with financial support for her accommodation. Five people have been very much impacted of partnering hubs. We are closely following what has been happening and giving all the support possible to those families at such hard times. We have had two weeks with no classes. All the support being done remotely, so students keep on being supported. We have 80 of 140 hubs with no classes at the moment. This is a region. It's not large. A small one compared to our student base.
But in fact, we are very close to Rio Grande do Sul at the moment. Even those, the numbers are not so high in terms of our total numbers. We're going to help them financially with a month of tuition fees in the cities impacted. Again, it's not so relevant to us, but it is very important for the people at the moment. Eduardo, I think this is it. We're very worried about the people, the partners in the various centers or hubs, though they are not so much impacted. They live in higher regions. They have no water, but actually we could not have classes at the moment in those places. This is it. We're still here, very close and following closely to everything that is happening in the state.
Thank you, Aroldo. Let's move on to questions. Thank you.
We're going to start the Q&A sessions for investors and analysts. If you would like to ask a question, please push the button Raise Hand. If your question has been answered, you can leave the queue clicking on Lower Hand. Please wait while we collect questions. Our first question comes from Marcelo Santos from JP Morgan. Mr. Santos, your microphone is open.
Good morning, everyone. I'd like to thank you for the presentation and for the opportunity of asking questions. First question I have is regarding distance learning. I'd like to understand from you if you think we're getting to a maturation point of the business. I know many people in Brazil still need to have higher education, but there is this aspect of income. Should we see more modest growth from now on, or what we see this year is a bit something one-off? First question. Second question. You mentioned several times during the presentation an increase in marketing and sales, VNM, and focusing on the brands. I'd like to understand what are the expected results for this increase in investment? How are you going to measure whether you've been successful or not? Thank you. These are my two questions.
Thank you, Marcelo. I'm going to take the first then I'll turn to Marcel. Marcel, if you want to add to the first. Actually, we look at our results and of the competition, and we have similar intake in last year in distance learning. This is very centralized. We don't see it's stagnated. When we had under 1,000 students growing 20%, 30% is one thing. When you have 500,000, the percent growth is different.
On the other hand, what you said, you made a very good report showing the impact in terms of income of people when they have higher education. The other report of those that have not completed higher education, they also have a development, considering the number of years they attend school. This is not only restricted to us. We see there is great percentage coming from public high school, whereas people are in private education. So we have a year that there is strong recovery work of Portuguese and math, people that have ability to communicate, to understand text and reading, and they have much more than people that don't. So we have a totally different situation in our society where we look at numbers, 32 million people that have high school and no higher education. My view is different from yours. It's a matter of income.
We're talking about depending on course, BRL 130 to BRL 150. The insertion will happen through digital learning. I found somebody at the weekend said that the person invested in 4G in the past. This is what the program had, a program to take distance learning to the whole of the country. This is what's happening. There is a moment of greater growth, lower growth. Last year we had strong growth. I think it's a matter of time, market, trust. When we look at our industry and other industries around C class people and D+ are in a moment of lower consumption. We're not worried. It's obviously 30% every year. Last year was very difficult considering the student base we have. We don't think we are at a stagnant moment. We have a lot of growth ahead. Marcel.
Thank you, Eduardo. Marcelo, thank you for your question. Since late last year, we've been signaling this will of resuming marketing investment. We're aiming at this 1 percentage point above what we closed last year. We're very much on top of the plan. Our follow-up metrics obviously are to the cost that we have basically on our book value. This is what we see in the market. Internally, what we do on our day-to-day, aiming at reductions, mainly of pending paid traffic. When we talk about performance media, this is where we've seen an acceleration of inflation that is much higher compared to the other media. We have constant control of this unit cost of acquisition. We believe that, first of all, we are a multi-brand business. We have investments that go to IDOMED, IBMEC, undergraduate, graduate, and Estácio. Within Estácio, we have a position of relevance in the market.
It's a good brand in terms of search and size. We have a matter of defending that growth. We have regions where we proactively are addressing more strongly. We've mentioned that before. See the growth we've had in São Paulo State, for example, and we have this work of follow-up of this relevance of Estácio within the Brazilian market. So basically are those fronts that we are following up.
Marcel, I understood that the second metrics you mentioned is the reduction of dependence of paid traffic. What is the first? I didn't quite get it.
We checked nominal or the book. When we do the math of 1 percentage point that we circulate, this is what we have in terms of basis. Nothing can escape this number, as is set on stone that we already have. That follows the revenue we've been following.
Thank you. Perfect. Thank you, Marcel. Thank you, Eduardo Parente.
Thank you, Marcelo.
Our next question is from Samuel Alves from BTG Pactual. Your microphone is open.
Good morning, Eduardo Parente, Rossano, and other officers. Two questions on our side. The first is on transfer of the centers. Another reason for lower margins in the distance learning segment. If you could explain a bit how seasonality should work of this transfer over the year, if it should be reduced, especially in the second half after the performance of intake of this summer cycle. First question. The second is on the medicine ticket. We've seen a growth of 2% on consolidated and upperclassmen growing by 6%. Just to understand the reasons for the lower ticket or weaker ticket on freshman, or if you have something more related to seasons, seasonality.
Thank you, Samuel. I'm going to ask Rossano to answer both.
Thank you, Samuel. I'm going to start with the second of medical school. The ticket we had, 6%, is the best indicator of our ability of price transfer. It shows to students in the institution what the ticket is like semester after semester. When the consolidated, we have a mix. In the intake phase, we have greater concentration, the courses that are in the inner states in Brazil or countryside of Brazil. We have a mix of base influencing smaller growth when you look at upperclassmen. So in freshman, we have penetration in the inner states, and we see the difference in courses in the inner states, there's a difference in the big cities. First question I forgot. I didn't take note. Well, the transfer of centers is retarded. We have the goals they have to attain.
Based on the attainment of those goals, they will affect the percentage of their transfer to the next semester. In the first one, you've seen results of intake and grade attainment of the centers. Last year, we reviewed the goals. Eduardo Parente reviews the goals every semester based on the levels of attainment. We'll be following the pressure of the transfer line will be reduced over the year. Obviously, in the first quarter will be smaller, second quarter, and even less second semester.
Our next question comes from Mauricio Cepeda from Morgan Stanley. Your microphone is open.
Hi, Eduardo Parente, Rossano, Aroldo. Thanks for the space here. I'd like to go back to a question Marcelo started, but perhaps it was not very clear in distance learning. If we take the intake you had on distance learning. If you don't make the adjustment 2024.1, you wouldn't reach the guidance. Not precisely because of that, but thinking a bit ahead. Don't you see that this market may be de-accelerating now, this could be a trend that is a bit more midterm. Connecting to my second question on marketing, I understand you're talking about marketing efficiency. The question is, considering a scenario in which competitiveness may be higher at distance learning, won't you start needing marketing that is structurally greater? We see other players increasing investment in marketing. Isn't this some industry aspect that requires structurally more marketing? Thank you.
Thank you, Mauricio. Something that is important to note, you and somebody else have written that we haven't attained the guidance. We look at the intake of the quarter. There's a very clear moment in which we start bringing quarters to the next quarter. Last year, since we were flying in intake, we anticipate this moment. It ended up being in the first quarter when normally we advance one week, two weeks within April. That was abnormal because we had very strong moment where we compare apples to apples. Yes, we had the 186,000 students that I just mentioned in the presentation.
The same answer I gave to Marcelo. We have a time that sometimes it's more, sometimes it's less. 2022, we saw a year in which we evolved very little or did not evolve in intake year-over-year. 2023, we really had a boost compared to the previous year. Last year was quite similar, but that's a fantastic number. When you have 600,000 students, you bring 186,000.
It's a very strong number that even being smaller than last year allowed the increase in the base. The glimpse I had in the reports of competitors is quite similar. Competitors have a similar intake and even so the base is growing. I think this thing is related to the moment. There are moments in which we've mentioned that we see low elasticity in 2022, right after elections. In 2022, this elasticity came back. We brought more aggressive prices. We had intake that was quite strong. We're at a time in which this elasticity has reduced again. We look and start wondering whether what we're going to bring in terms of price policies from now onwards is not something that is making us worried. We have a large group of people that will come and study. The access tool for those that are out is the distance learning.
Like last year, where last year elasticity was only on distance learning. We are at a time, moment in on-campus. I reinforce that in 10 years, 40 quarters, we did not have a growth base in the base for on-campus is strongly considering semi. On-campus is close to on-campus because our semi, 99% of it is within a campus. It helps to dilute fixed costs. The students have their class in which they are inserted within the on-campus context. If we report differences, perhaps it would be different, but we understand this is all together managed within on-campus. It's a market question. Mauricio, I reinforce the strength of our portfolio. When you take the chart that I like very much showing. Well, you've been following us for a long time, you know it quite well.
Those that don't know so well when they look at business and business, well, premium last year moved sideways because we had great retention of GPS and digital was stronger. Now digital moved sideways and on-campus is increasing strongly. We built a portfolio. We have three businesses that are very strong, that help bad times. We have great leverage as we had in 2023, as we are sure that we'll have other moments ahead. The very long answer to you, no, we are not worried. We don't think it's stagnated. When you look at it, you have large cities with representations that are much higher than small towns. We haven't reached this. They haven't taken part of it. As I mentioned in Marcelo's report, it's very important for people to be in higher education. Regarding marketing, we plan spending more this year.
We've felt that in 2023, we spent too little. We tested, and then when you look at careful with ESU getting the VNM or marketing and sales. We have call centers. A lot of people report differently. When we look at our comparison, obviously, any business manager, we compare a business line with competitors to identify opportunities. We seek the line of publicity, we may find that in our results. Publicity pursued our booths regarding the market.
We had made a mistake below. 1.2 that you saw within distance learning of more publicity is not really actually a reaction to the market "that is worse," not growing so much. We had planned that from the beginning. That's very much in line with the planning we had. No, we're not going to stop. This is something that we're looking ahead. Perhaps it's not in this magnitude where we're planning to spend more indeed.
Thank you, Eduardo. Perfect.
A bit long, the answer. I'm not a professor. I tend to talk too much.
Very didactic. Thank you. I'm glad.
Our next question is from Mirela Oliveira from Bank of America. Your microphone is open.
Good morning, Parente, Rossano, everyone. I have two questions on our side regarding bad debt. If you could talk a bit of what you expect for the year, both on consolidated and distance learning, and understanding that this is a policy that the company intends to go. If you could give some details on internal initiatives to improve in this dropout of this student. Second question is regarding the second quarter. The company this quarter hasn't given a guidance on net income. What are you expecting for second quarter? What you can talk about?
I'll start inversely. I will ask Rossano to talk about bad debt, and he can give you more details. Regarding the second quarter, I think we talked about all the cell sites on Friday evening. People were a bit annoyed of our not giving the guidance for second quarter. What happens in the second quarter? Second quarter is because of accounting, nature of the business, is naturally the worst quarter of the year. The even numbers, the even-numbered quarters are worse. Our net income last year was BRL 50 million. We have several effects that are external effects from hedge. Change in interest rates that impact interest late. Our net income, actually, we have been telling you a lot about net income from now onwards. This is a bit part of the nature of the business, where we look at the growth that we had last year, 80%, 20%.
It is not what we see ahead. We have been looking at it. We are going to talk a lot about this next week in our Yduqs Day. We will be looking ahead and the revenue growth, margin of business a bit and not changing in a relevant way, but the revenue growth being much closer to single digit or mid to high single digit than what we had in the recent past.
On the other hand, we would like to draw your attention to cash generation and net income, which is the nature of our business. This applies to the business as a whole. We are a bit ahead of the industry in this process of inversion and going back to be a cash generation business. But this is a feature as a whole of the industry. When we look at second quarter last year, it was BRL 50 million of net income.
When you look +10%, +5% or -5%, you have variations that are a bit embarrassing for us to give you guidance. My guidance is more or less 20% of last year. I think this would not even be respectful towards you, giving a guidance same size. This is just like not giving a guidance. What do we see? Similar net income to last year, second quarter, and second semester, very good. Strong growth, because we particularly have our fourth quarter, if I remember correctly, was BRL 11 million net income. Now we see that as a chance of exceeding that in a relevant way. Same thing applying to the third quarter. The non-guidance for the second quarter, the guidance is similar to last year, and it is what we can deliver, and we have a tradition of looking ahead.
This is going to be good, this is going to be bad, this is going to be good. We are in this trajectory in a very consistent way. Not to give you something that would not mean anything or that would be so conservative to be raised all that is big. We decided to share with you that is going to be similar to last year with strong growth in the second half. Before Rossano talks about bad debt, I would like to talk about DIS. The DIS dropout is not higher to the dropout of non-DIS students. The numbers are similar. This is not a DIS student. DIS is a way that we, in 2018, several cycles, we know very well this product.
We had this vibe, we and the market as a whole of bringing the people that think that they cannot afford, have little money in their pockets or a little drive of maybe BRL 49 for entrance. BRL 49 , it was a bit kind of stayed like that. We understood that there was an opportunity for us to keep on talking about BRL 49 . This submission. But actually charging the full price of the tuition fee and funding or financing that over time. There is no greater dropout than not this. This is our way of our charging the full price from the beginning and diluting that over the life of students who along with us, it is not a matter of product and non-product, this student and non-this student.
Your question is very relevant, is that high dropout rates of freshmen, it is a relevant part in terms of impulse enrollment. Should we take that into consideration at the beginning? We cannot tell. We do not know whether students are going to be successful. People think it is not for them, and they sit down. First day of class, they go home, and they love it. People take longer for that. People are very excited about good grades, et cetera. They cannot afford anymore or have no discipline to follow distance learning. That requires greater discipline. You have older students studying in distance learning. It is not something that we have so much ability of selecting, of forecasting who is going to succeed, who are going to go to the end or not. One of our things, the #FicaCalouro. We, well, stay freshmen, great focus on that.
A lot of AI working to understand what kind of support freshmen need. If it is a person that has payment difficulties or people have difficulty using the system, it is one conversation. We need a call center to help them understand the system. If people have academic difficulties, it is another kind of support they need. We have been fine-tuning and working, moving ahead with the use of technology into that, where we would call them. There is the person is delinquent, we call them. Today we have fine-tuned that much more than we used to be. Rossano, bad debt.
Thank you, Mirela, for the question. Bad debt. The effect of first quarter, main important effect is important to reinforce, is the effect of change in provision policy. We are more conservative in the initial provision from the time the student is enrolled.
First quarter, when you compare to first quarter last year, we have initial provision of 20% against a provision of 15% first quarter last year. From the second quarter, the bases are comparable. Second quarter last year, we made the change, so this impact specific for second quarter disappears in the consolidated of the year. Great part of greater bad debt you see in first quarter is eliminated of the year. But you still have higher bad debt because of dropout of students intake of last year, as Eduardo Parente mentioned, it was excellent intake with this participation.
We have the impact of dropout of the students first quarter, and they have a higher intake because of just penetration last year, and it impacts our bad debt. We see no greater worries when we see the year-over-year 2024 over. We have a slight different points in the year-over-year comparison. Nothing comparable to what is happening first quarter for the reasons I have just described.
Perfect. Thank you.
Thank you, Mirela Oliveira.
Our next question comes from Leandro Bastos from Citi. Leandro, your microphone is open.
Thank you. Good morning. We have two questions on our side. The first, adding to the last answer on the guidance of profit in line for the second quarter. I would like to explore the qualitative aspect of this information thesis. Last year, we had more effect of FG-Fies in the second quarter, the growth of the company. What are the offenders here for you not to have so much significant income growth in the second quarter? Second one, talking about distance learning. If you could tell us how you see intake in terms of distance learning, in terms of volume metrics and price. Thank you.
Let me start with the question, and then Rossano will take the first. Very good question, Leandro. On distance learning, it is very much in the beginning and very similar to the first quarter, both in terms of price and volume. Very similar to last year as well. Not great news here. Second quarter last year, we had 80 over 90. First quarter, less relevant, but very much in line. Second half is when we have what we have that are smaller compared to the last year. We are going to bring better news from now on.
Well, thank you for your question, Leandro. On the second quarter, FG-Fies is no longer a relevant factor for the second quarter. What we see for the second quarter, again, as Eduardo Parente mentioned, second quarter is the harder quarter in education. Any variation and the profit. It is a leverage number operationally.
Any relevant variation of EBITDA drops or transfers to the net income. So this maintenance of net income, seeing some pressure of operating results and some lines below EBITDA. That is for some variation quarter over quarter, specifically our second quarter. Second quarter, we see great relevant expression. That will not feature when we see results of second quarter. There is a point below the line that I can highlight. The second quarter, we structured the debt, we stretched the term of the debt, reducing costs. This will have great impact second half. And this quarter we have the operation, we have the fees that incur.
So anticipated the debt and new emissions that cause some impact below the line. And you have some other financial expenses that increase in second quarter. We do not see that carrying over second half. Two specific factors of second half are below EBITDA. You see that disappearing second half, stronger in net income in comparison to the previous year.
Thank you very much. Cool. Well, have a good day.
Let me add something because I think your question has been very good. Look, there is something of devaluation or depreciation. Conversation we had last on Friday, people were out of the rate of 12% of our revenue with CapEx in 2021, moving to getting to 108, when the backs was long-term, then it became midterm, now we are practically reaching that. In short, this has a reversion of depreciation between EBITDA and net income. So probably this effect will start in the second semester. We still have to confirm that appropriately, but that is the trend. So someone is giving me a positive or a thumbs up. So Leandro, I think this is a very important point for all of you too.
It hasn't been, except for one or two, there hasn't been a migration to look at this 2025, 2026. There's a lot when we project that. We're going to talk a lot about that at the Yduqs Day next week. We're going to show some of our projections. When we start looking at what is coming ahead, 2025, 2026, of cash generation and net income, we have a lot of growth. Again, if we have a new 2023 ahead, well, it's going to be great. If we have smaller growth than we had last year, maintenance of margin and things coming below, I think the tone of our conversations, your reports will change a lot. We'll be celebrating growth of high single digit, low double digit, but with great impact between net income and cash generation.
The great debate of ours with you will be much more of capital allocation. What we'll be doing with all this money that will be generated from now onwards. This is something that foreign shareholders particularly focus so much, and they are totally right to do so. Thank you, Leandro.
Thank you. Good day.
Our next question is from Lucca Marquezini from Itaú BBA. Your microphone is open.
Good morning, everyone. How are you doing? Thank you for taking my question. More a sort of add-on on net income. Thinking about second semester, you mentioned that we should see an acceleration that is stronger regarding net income. If you could delve into leverages, if this comes from cash generation, from the business unit specifically, could you comment on that a bit? That would help us, please.
I'm going to start here and Rossano will add. The net income delta comes naturally, quote unquote, to all businesses. As I said, we had depreciation reduction. We have an increase in rate reduction, as Rossano mentioned a while ago. We had a leverage reduction. We have many things between the two. So between EBITDA and net income, they're quite strong. In addition, we have an effect. I don't know how much you know, you all demand from the industry, retail, healthcare, et cetera.
We have a peculiarity in education that EBITDA, practically all of it becomes net income. Well, let me make it up. BRL 30 million, BRL 40 million in EBITDA, it's not a huge variation. It's a huge variation when it all goes down to net income. I think there are many things that will happen that are good within the business, considering the strength of our portfolio, of our mix.
When we look at our businesses that grow the most, those that have greater margin, this has been constant. We moved two, three years ago, as I've just shown you, a margin of 30% to 33.3%, if I'm not mistaken, closing last year. This quarter, it was 35%. This is something that is part of the portfolio. What we had, quite interesting, Lucca, we were commenting on our business. We talked about growth in distance learning, medicine. We had this strong trajectory offsetting a loss in on-campus, as Rossano showed. We had three businesses growing double digit total, double digit growth and mix growing. Importantly, as I've just mentioned, the loss in margin in distance learning is not something that we see that worries us ahead.
When we look at the year, we see margins in each one of the businesses that are similar. In line a bit with margins, a bit was compared to last year, but we see an evolution in terms of the net income. It's not a matter of changing business, of growth of the business. I emphasize, we can have a year like 2023. Moving at the top line, there's something that is naturally important for you all to do your homework. Natural thing between EBIT and net income that obviously talk about cash generation for shareholders. Rossano, would you like?
Sure. Perfect. Eduardo, as you've mentioned, operating results bring great leverage for our profit. We have no negative effect when you look at year-over-year at the lines that are below EBITDA. Much on the contrary, start having positive results in all lines, practically.
Added to operating results bring great relevant results to net income. Results of first quarter financial depreciation, they are items that are going to be very positive second half depreciation, reached its peak by now. After the CapEx peak of 2022, we've been reducing CapEx gradually, and this starts showing in depreciation. Second half should be relevant factor that will help our results and low on EBITDA. Likewise, expenses, debt, we have a comparable base that is positive with CDI and our debt cost has been very reduced with operating result that is better second half, helped by below the line. More positive with the impact on net income is big.
The net income second half last year was much lower than first half last year. This year, we don't see a reason for this to happen. Much on the contrary, we see an acceleration in the operating results and strong acceleration in the lines below EBITDA. This is why we're so positive looking at net income second half.
Super clear. Thank you very much.
Thank you, Lucca.
The Q&A session is closed. I'd like to turn over to Mr. Eduardo Parente for the company's final remarks.
Once again, another quarter of net income growth with the strength of our portfolio, with operating leverage quite strong. A time that is not the most exciting for the industry. We see, sure, once again, we're growing BRL 360 million net income LTM. Last year, we were talking about BRL 199 million. We have a trajectory that is very positive, since 2014, reinventing the business and sometimes crossing the desert. We see very interesting moments from now onwards.
I'd like to restate the invitation to Yduqs Day [audio distortion] the forum ESG on the 22nd. We're talking about different things, talking about Brazil, the business, we will enable the increase in understanding of what it is. Education and higher education, all the brands from the elite or highbrow education. We're going to talk a lot about inclusive education and ESG forum, once again, showing why we are a reference here. Okay. I thank you very much for your trust, your attention, and your time. Thank you. Have a good day.
Yduqs video conference is now closed. We thank you for your participation and wish you all a very good day.