Good morning, ladies and gentlemen. Welcome to Yduqs video conference to discuss the results of the third quarter of 2022. 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 that all attendees will only be watching the video conference during the presentation. Then we will start the questions and answers section when further instructions will be provided. Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the company's business prospects, operational and financial projections and goals are the beliefs and assumptions of Yduqs executive board and 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 of events related to the macroeconomic scenario, the industry, and other factors that could cause results to differ materially from those expressed in the respective forward-looking statements. Present at this video conference, we have Mr. Eduardo Parente, CEO of Yduqs, and Mr. Rossano Marques, CFO and investor relations officer. I would like to hand the floor over to Mr. Eduardo Parente, who will begin the presentation. Please, Mr. Eduardo, you may proceed.
Thank you very much. Good morning to everyone. I hope everyone is healthy and fine. We are here to present to you the results from third quarter. We believe that it was a very interesting quarter with very positive results. Truth be told, results on third quarter were better than our expectations. We had the best EBITDA from our history and a post CapEx cash flow generation accumulated in the year of BRL 461 million , which implies a growth of more than 30% versus the same period last year. We left the pandemic with our business well put, with the student base guaranteeing our economies of scale and competitiveness and operation, which we right-sized for our current reality, making sure that we have space for strong growth at the slightest sign of recovery of the Brazilian economy.
Having our homes organized, we had a lot of comfort work on pricing in all the BUs, especially distance learning and onsite. Piece of this result you will see already here today. But on the third quarter intake now, we had recurring tickets increasing on the order of magnitude of 20%, both distance learning and onsite, which you shall see improving results, upcoming results on the next quarters. All in all, what we see on the left-hand side here is our operating revenue increased 3%, net operating revenue increased 3%, EBITDA also increased 3%. Our costs increasing way below inflation, that together generating a stable EBITDA margins. And a substantial growth in operating cash flow before CapEx and after CapEx on the quarter, increasing 10 percentage points the cash conversion, now 14% above what it was last year.
Post CapEx on the quarter increasing 40% of what it was last year. When we see business by business, we're going to enter each one of them in a little while. But summarizing everything, what we see on Premium is an impeccable execution on medicine that evolves like a clock. I've been always saying this, the growth is contracted and the execution of the team is great. We had projected a total graduate student base of 7,200 - 7,400 students in a year. We have today 7,500. Ibmec is evolving well, what it had been evolving before at São Paulo and Belo Horizonte. There was a great turnaround happening in Rio as well. When we look into distance learning, the picture of the quarter perhaps doesn't look so good, but there's a series of seasonal effects and of intake strategies that affected that.
As I will show you in a little while, the evolution of pricing and the compensation of the seasonality effect will generate an evolution of our fourth quarter EBITDA on the high teens that will make up for the current quarter. I'll go into details in a little while. When we see the onsite, I think for the first time since FIES was gone, I will show an EBITDA that's equivalent to the EBITDA in the past comparable periods for the year before. Q3 EBITDA 2022 is the same as last year. It was a slight evolution in the margins, a lot due to the cost discipline that we have. I think that the high point here is the evolution that we had on the freshman class that took us to the best renewal and cash flow generation on the freshman class that we ever had.
Similar to distance learning, the evolution of the returning price from this intake season, like I mentioned before, will bring relevant benefits on the next semesters, especially when the economy comes back to growth. I think that what you'll see here at the end of the day is that in the past four years, five years, we created a portfolio that allows us to grow and generate cash, even in deep crisis moments like the ones we're living. We'll keep on being so even if the crisis lasts longer than we expect. But the moment that we have some kind of economic relief, we have a very large expectations from the business. Talking about Premium. Again, like I said, it's like a clock. We grew revenues in the nine months, the first three quarters, 36%, a little bit more than medicine than in the Ibmec. EBITDA growing as well.
Margins growing on the comparison base for last year, but there's a little bit of seasonality here as well. We don't expect to finish the year with a substantial gain over the last years in terms of margin. Yes, in terms of absolute EBITDA, in terms of absolute revenue, but not in terms of margins. On the bottom left-hand side of the page, what we see, like I mentioned before, Ibmec resuming growth, and medicine a little bit above the guidance that we've given before. On the right-hand side, on the bottom of the page, we talk about prices. We introduced this last semester, last quarter, because there's a lot of price variations that are a result of us giving different types of discounts or having a greater base of freshmen or not, that at the end of the day hurts any comparison base that we want to have.
In order to take that noise out of this, we are bringing for all business units this average ticket of people that have been with us for more than a year. The reason for more than a year is that after a year, for sure, they are not impacted by any kind of special offer that we make. In Estácio and Ibmec, that is not all that relevant, especially because you are not providing many offers for people to join us. But still, to be parallel to the others, we prefer to show it this way. They do not very much to do with our numbers, but what we see here are numbers that are at or above inflation as the period goes for Ibmec and Estácio. Talk about distance learning.
The result of distance learning was severely affected by seasonality and by a decision that we made on this intake season, or since, especially in the second semester, but also in the first and the second quarter, to look more carefully about intake pricing. What we saw, we do tests every day here. We test everything since offer first semester, long-term pricing, how we communicate, how much we are spending on marketing and so forth. What we identified since May, approximately, is that there was very little elasticity when we dropped prices. So we had this experience in 2018 where we saw that the volume was not coming, and we chose to bring prices down, and at the end of the day, we ended up with a small class paying very little to us. What we did here was the contrary.
Instead of dropping prices, we raised prices, especially the seventh month's price, which is the price after the offers period. So we had a smaller intake than we had last year, but much better prices. So this seasonality and this decision to look stronger in prices had two impacts on us. The first one being revenues and EBITDA smaller than the comparison that we had against the third quarter in 2021, which will be compensated in the fourth quarter, where EBITDA will again be on the high teens versus the same period over the last year. The second impact is that you see the base moving sideways, but price coming different from the trend that we saw before. I have been always saying that distance learning prices will not follow inflation, where we saw exceptionally this semester and perhaps a little bit more moving forward.
We cannot be sure of that, but it is a different trend because, at the end of the day, we had classes that we charged way more, and this is bringing our average prices up. This applies both for the people that we are showing here on this chart, people that have been with us for more than a year, but also to people that we just brought in on this third quarter. Then we talk long-term pricing, we will see the effect of these people of the increase in price, these people just as of their seventh month, which is January onwards. The way we see this in signing, our projections here, we will have a growth both in our revenues and EBITDA with an average margin, very similar to what we had last year, which was around 39%. Okay. The seasonal effect comes from us introducing the intake by quarter.
Until a year and a half ago, we had intakes only on the semesters, and we have now students joining us every quarter. The second effect is that last year we had a big campaign called Tá Pago, that we postponed a lot of people from the first quarter to the second quarter. The intake on the even quarters helps us a lot on the onboarding experience. Then it reduces the variation on bad debt between quarters, increasing the bad debt on the odd quarters and reducing it on the even quarters. That is what we see now. You will see the even quarters coming down, and this is an odd quarter that bad debt is increasing. Besides that, it punishes the first year that we have the full per quarter intake season for distance learning. Rossano has been talking about this.
We are going to have this year bad debt one percentage point above what we quote unquote "called normal," because of that. What we had, the effect of the quarterly intake on this quarter specifically, is that we increased bad debt on the third quarter, reducing it both second and fourth. The second effect that I mentioned is the transfer from intakes last year from first quarter to second quarter. That was very important for us because by then our competitors were offering exemptions of payment for the first three months, and we realized that it would be much better for us to postpone everybody to April, so they had the same feeling as they were having in the competition of not paying January, February, March. But the effect that had is that the moment of truth where the freshmen all renew was postponed to October.
The normal that we have is a bigger intake on the odd semester. So the moment of truth being July. What happened last year is that because we postponed a lot of people from the even quarter, which was the second quarter, the moment of truth became October. What we saw here is a much bigger reference in terms of pace for last year than would be quote unquote "normal" had we had the intake all done in the first quarter and the moment of truth being July, August here. That increase of 10%, obviously we are going to see the opposite effect on the fourth quarter now. We are going to have in our even base seasons, we are going to have a much smaller freshmen on that base than we had in the past seasons.
We will have a renewal that will be much higher than the reference that we had in the fourth quarter last year. Neither this drop in renewal now is a concern, nor the substantial increase that we are going to have on the renewal in the fourth quarter is going to be great news. This is just a matter of a temporary effect on the seasonality because the comparison last year was a lot different than what it is now. This 10 percentage point increase on the more than one year add to the high teens on long-term ticket contracted on the last intake season that we had in the third quarter now, will bring us very good comfort on the returning base for the next periods. Moving forward to talk about on-site.
Here, what we had despite the drop in revenues, we have a few very positive points I would like to mention. The first one is the EBITDA moving sideways versus last year being exactly the same number, which we find it very positive. The slight increase in margin that we had is totally related to the disciplinary cost that you all know. Rossano will talk a little bit more about it ahead. The other positive effect that we see here is the renewal rate very close to what we had last year, despite the amount of freshmen representing way more than it was last year on the comparison that we had. We show this on the bottom right-hand side of the page. The intake first half last year, 72,000 students versus 101 on this.
That effect on the base is very large and we had a class that is completely different from the pandemic standards that we had, both in terms of academic performance, delinquency, and recurring tickets. What we see, it is our all-time record here in freshman renewal. We had never had that before, and that is due to the great class that we brought in, including on higher tickets than the average that we had been practicing on the recent semesters. There is still a bit to go for us to see the space resuming its growth in a more substantial matter. But the financial health is evolving, and we believe that the intake on the third quarter of 2022 will give an important contribution for that. Moving forward and talking about the ENADE results. ENADE is a standard test on the outgoing class of all universities in Brazil.
Our on-campus result was very positive, a direct result of all the investments that we have been making in technology, engaging way more the students. They have been spending way more time with us off-class than they had in the past. All this investment technology has an impact in cost, but also on engagement, on the time the students spend with us, and the result is clear on the left-hand side here on the on-campus. On the right-hand side, bear in mind here, distance learning is a shorter course. Most of the people here did more than half of the course fully during the pandemic. Traditionally, we have been number one and number two in distance learning, which is a huge source of pride for us.
Bear in mind that we are the only ones that are fully online, fully self-served, whereas our competitors, most of them have much smaller margins than we have because they have a much heavier cost structure with tutors, with big buildings and classes and so forth. Whereas we are in the people's cell phones. That not only generates a better experience, that NPS translates that. We have NPSs on the high 40s here comparable to the greatest on-site experiences in the world. But also on the results that we have on the comparison basis versus our competitors here. There is a lot of people in the financial market that want to give an opinion about this. They are short-staffed and sometimes a little bit in a hurry and deliver reports that perhaps are not the best reflection of reality.
We added here a QR code that is a link to a webinar at the Hopper Education, which is the greatest consulting company that focus on education and on quality of education. They give a webinar about this. You can put a camera here and be directed there, and they talk a lot about the results of ENADE, about us and our competitors. It is very interesting if you have the time and interest to go there. Moving on to Rossano, he is going to talk about our revenues and financial numbers.
Morning, everyone. On this slide, once again, we demonstrate the strength of our portfolio with our most profitable businesses, the Premium and the distance learning one, accounting to a total of 55% of the total revenue. The main highlight here, of course, the big expansion of the Premium business that even facing those challenging macro conditions in the scenario, has a very strong expansion, growing 29% year-over-year. Following to the next slide. As I mentioned, with this challenging macro scenario, the increasing pressure on our cost base surely was a big challenge for us in 2022. But once again, we demonstrate our focus and discipline with expenditure growing well below inflation. If exclude bad debt, the expansion was only about 0.5% against an inflation of 7%-8% of an already stressed cost base. As you know, we have negotiated lots of contracts last year.
We once again have to face this stressed supplier base that we have to renegotiate everything again. A very challenging scenario, but we once again show very good results on that. The bad debt, as Eduardo explained before, is impacted by the new seasonality of the digital business intake that started to occur every quarter starting last year. That cost 2022 to operate at around one percentage point above what would be the usual rate. That should be fully reverted in 2023 when we should get back to our normal bad debt rate. But even including the bad debt, the cost regression still sits well below inflation. One highlight is the marketing and sales cost that is operating on a much more efficient level, setting up a revised long-term trend that is due to a more efficient use of the overall media expenditure.
Also an adjustment in strategy based on our perception of a lower elasticity on the education demand. That is also obviously supported by a lower income availability of our target. Based on that, we have been much more efficient on the marketing and sales expenditure. Also very important to highlight the leasing cost that is probably one of the more stressed by inflation and by our previous negotiations. The reduction in 3% in that cost shows the meticulous work we have been doing, reducing space, but also renegotiating the increase on our contracts. Very good results so far. With all of that, we are showing, once again, very positive results on our strategy of cost control. Going to the next slide.
All of that leads us to an EBITDA growth of 3% with stable margins, once again, even facing the very challenging intake cycle, which is very remarkable. Once again, the Premium business demonstrates strong resilience, expanding margins while growing. Maintaining a very strict control even when it is expanding its business and showing very good results, renegotiating the debts we have assumed along the pandemic period. As you know, we have faced very difficult conditions having to negotiate debts along the pandemic. We have been forced by specific local laws that enforced us to make renews even when the student had this debt. Now we are being benefited by very good results, renegotiating those debts and getting paid by the students. Also very important to highlight is the on-campus margin stabilization.
Even without the benefit of the operational leverage and with the full impact of the on-site return that occurred in 2022, the on-campus business is able to maintain its margin, which shows the strength of this business that is very well prepared to be a good beneficiary of the future expansion of the business. You can move to the next one. Still facing a very high impact on our financial results due to the much higher base interest rate. Even though we present a very solid net income of BRL 67 million, I am sorry. Important to highlight our strong cash position of BRL 1.6 billion, which brings us a comfortable net debt situation that leads to a leverage of 1.9 x EBITDA, which makes us very comfortable with our overall financial and cash position situation. Moving on to the next one.
The quarter, once again, shows a very solid operating cash generation with high EBITDA conversion. We believe that this capacity of our business to generate cash is key to face the very volatile scenario that we might face ahead of us. The BRL 461 million cash generations along the year demonstrate the success of our strategy with very strict cost management, as explained in the previous slides. The strict control on receivables and efficient receivables management and a very good capital allocation. You can see that we are reducing CapEx 18% year-over-year, but very important to highlight that we keep the focus of our investments on IT and digital transformation. That already is fruitful for us. We think we are placed as a clear technological leader, not only in the education market, but on the general services landscape.
That brings a very high student satisfaction, reflecting on our NPS levels that further reflects on the renewal rates. That is a very high service quality, the educational excellence demonstrated on the ENADE results that Eduardo talked about. One highlight also, the accounts receivable days decreasing to 100 days. At the same time as our students are facing very diverse economic conditions, which shows once again, the quality of our business, the quality of our education, and our very well-managed cash position and receivable structure. Having said that, I get back to Eduardo that will guide you through the next slides.
Thank you. Guys, last time was the first time that we brought into the quarterly results the sustainability issue or ESG. We invite you all to take a look in our website on our ESG days forum that we made, talk about everything we do. It is about one hour on YouTube. We got very positive feedbacks on what we put together there and how much clarity we brought to the fact or to the reason that make us being the only A rating by MSCI education company in Brazil. On the left-hand side is pretty much what we showed last semester, more summarized. What are we doing in terms of environment? I think besides what you can read here, having our energy coming from renewable sources and then making our diagnosis on our emissions. We are big educators of people towards environmental issues and concerns.
This is one of our targets over there. On the social side, that is where we shine the most. This is pretty much our core business is educating people. A lot of people with a challenging socioeconomical background reflects that in our student base. We have 56% of black people, of 75% of the people have family incomes below four minimum wages, which in dollar terms should be about $800 in a family income. 84% of our employees have been our students. In our top-level management, we have 33% women and 31% black employees. In governance, we are true cooperation. 100% of our board is independent. And we have almost half of our top-level management with ESG goals moving to 100% next year. We brought in the right-hand side of the page, what we have evolved in the past months here. One is our inventory of emissions are almost concluded.
The second one is one thing that I take a lot of pride in this, and as the entire company. We had a very successful training for Blacks last year that we are now replicating. We had almost 6,000 applicants, which is very impressive. We are comparable to the top banks. The reason here is not that we are perhaps the best option in terms of finance, et cetera. But this is mouth to mouth, people talking about how important this is for us and the environment that people get once they get here. A lot of the companies that promoted these kind of programs are way behind us in terms of diversity and inclusion. And of course, this is an advantage for us, and we capitalize on this by attracting the greatest diversity talent for us. We have a number of Black teachers above 30%.
The national average is a little bit above 20%, but we are not satisfied with this. We wanted to get closer to what our student numbers are. And we had a target of hiring Black professors on this semester that we went 56% above, increasing our diversity here. We have also a major literacy program for adults that we do in our units. We opened 14 classes this semester for 300 students just now. One thing that we would like to share with you, I believe this QR code takes to a video in Portuguese. I am sorry about this, but the employees of Yduqs have joined forces, to help support students that have scholarships in the medical courses, scholarships from the government. So these people, they have very low-income households, and they are extremely well-performing in the SAT equivalents here.
But they have to study full-time, and they do not have. Of course, supporting themselves throughout medical school is challenging. So we started with the employees here, and that moved on to the board, that moved on to the company that is making a match to everything that the employees donate. And now outside our borders, a lot of people are using Instituto Yduqs, for instance, as birthday gifts. They say, "Instead of giving me a gift, you donate for this institute." And we have today, 120 students of medicine. We started in Rio, and now we are expanding to another six units that are being benefited by this program. So a good part of their cost of living is being sponsored by the employees of Yduqs and friends. If you are interested in knowing more about this and donating, please access this QR code here.
Moving on towards the end, we have our final remarks here. I think that what you see here is that in a very challenging macroeconomic scenario, we grew. We grew, we generated cash based on a very strong portfolio. When you see what we have created, we have been for the past four or five years working on what the new Estácio, the new Yduqs would be after the end of FIES. And we moved from a company that had ex-government revenues of BRL 2.5 billion to almost BRL 4.5 billion in the last 12 months. All ex-government, very light platform that is being able to present growth a lot now due to the Premium segment that serves Classes A and B. And it is very resilient to any crisis scenario that we have been living in. And we have created also a very tech-related business of both distance learning and onsite.
A lot of tech on the onsite as well, that is very ready to grow on this slightest sign of economic recovery. We are going to see Premium moving on to this contracted growth that it has, keep on delivering high growth. And a lot of growth coming again from distance learning and especially on the onsite. Bear in mind, there has been a lot of talks by the elected President Lula about FIES coming back. He has mentioned this at least 5x or 6 x on the media, on his Twitter, and so forth, on a speech yesterday. This FIES could be very beneficial for the sector, especially for the onsite. Bear in mind that when we talk about onsite, one onsite student generates the margin of about seven distance learning students.
Depending on how fast the economy resumes its growth and how much President Lula presses the gas on FIES, we can have very positive surprises, especially from the onsite business coming pretty soon. The numbers here, I already mentioned all of them, but to keep them on your minds. We generated BRL 461 million in free cash flow after CapEx in the first nine months. Had we not been in the situation that we are and the interest rates that we have been currently paying, we expect sometime in the future to be a very different situation, both from our repayment of debt and from the interest rate situation in the country.
This is almost BRL 500 million that, in past times, could be generating a lot of dividends, and in future times, I am sure that we will resume the strong dividend payments that we had in the past. Net revenue and adjusted EBITDA growing. Premium and digital becoming more important in our portfolio. Bear in mind that these two units are the ones that have the highest margins, and the fact they are becoming more important to the portfolio helps us sustain the same margins despite deflationary environment that we have, and our cost reduction efforts here. We had adjusted cost and expenses moving sideways as a percentage of net revenues, and the margins are still flat. CapEx dropping, and again, 2022, we have already, it is on the bottom right-hand side here given a guidance of what it is going to be at the end.
It is going to be a reduction of about 80% versus last year. As a percentage of revenues will also be smaller, as we expect next year to be smaller than this year as well. We remain very strong in ESG. If you have been following us, you know we are very transparent about how we see the macro, the impact on us. When we are seeing winter days ahead, we talk about them, when we see happy days ahead, we talk about them as well. On the bottom left-hand side here is what we said at the end of the first half, that what we expected towards the end of the year. This trapezoid here, whatever the figure is, this quadrilateral here in the middle, the dark red quadrilateral, is talking about how we see it now and how it evolved since the first half.
What we said in the first half, there will be a challenging intake with certainly no growth expectation versus last year, but we expected a positive evolution in recurring freshman tickets. What we saw was exactly that, a drop in intakes. Again, as I mentioned, Rossano mentioned as well, we saw very little elasticity in prices. We went for the, actually on the other end, on the opposite direction. Instead of dropping prices to get more volume, we did not see the volumes coming, we decided to increase prices. What we see is high teens increase in prices versus the recurring prices of the seventh-month ticket, like I mentioned, versus last year. It is pretty much in line with what we said.
Intake a little bit more challenging than we expected, but on the other hand, pricing coming much better than we expected, which allowed us to have the over-delivery on the bottom guidance. We mentioned the results on the second half were expected to be similar to last year's, with the third quarter slightly below, and the fourth quarter above. What we are seeing is the third quarter, we are actually above last year's. We are comfortable enough to give you a guidance that the fourth quarter will have a double-digit growth on EBITDA versus last year. Again, strong portfolio. We will close the year with a growth from the second half versus what we had last year.
The portfolio and our cost efficiency allows us to keep on growing and delivering cash despite the scenario, that we will keep on doing even if the scenario stays as challenging as it is. Expect from us a strong acceleration the moment that the economy recovers. Thank you very much. Thank you very much for your trust. Hoping to see you again pretty soon with news even better than this one. Thank you.
We are going to start the questions and answers section for investors and analysts. If you wish to ask a question, please press the button reaction and then click on Raise Hand. If your question has already been answered, you can leave the queue by clicking Put Hand Down. Please wait while we pull for questions. Since there are no questions at this time, we would like to hand the floor back to Mr. Eduardo Parente for the company's final remarks.
Guys, I think I had already done my final remarks. I want to thank you very much for your trust. Looking forward to seeing you in three months with even better news than what we had today. Thank you.
Thanks, everybody. Have a good day.
Yduqs video conference is now closed. We thank you for your participation and wish you a very good day.