Afya Limited (NASDAQ:AFYA) Q3 2022 Earnings Conference Call November 21, 2022 5:00 PM ET

Company Participants

Ana Raquel Torres - IR

Virgilio Gibbon - CEO

Luis Andre Blanco - CFO

Conference Call Participants

Luca Marcussini - Itau

Frederico Mendes - Bank of America Merrill Lynch

Marcelo Santos - JPMorgan

Vitor Tomita - Goldman Sachs

Mauricio Cepeda - Credit Suisse

Ana Raquel Torres

Thank you for joining us for Afya’s Third Quarter 2022 Conference Call. Today, I'm here with Afya’s CEO, Virgilio Gibbon and Luis Andre Blanco, our CFO.

During this presentation, our executives will make forward-looking statements. Forward-looking statements can be related to future events, future financial or operating performance, known and unknown risks, uncertainties, and other factors that may cause Afya's actual results to differ materially from those contemplated by these forward-looking statements.

Forward-looking statements in this presentation include, but are not limited to, statements related to the business and financial performance, expectations and guidance for future periods or expectations regarding the company's strategic product initiatives, its related benefits, and our expectations regarding the market as well as the potential impact from COVID-19.

These risks include those more fully described in our filings with the Securities and Exchange Commission. The forward-looking statements in this presentation are based on the information available to us as of the date hereof. You should not rely on them as predictions of future events, and we disclaim any obligation to update any forward-looking statements except as required by law.

In addition, management may reference non-IFRS financial measures on this call. These measures are not intended to be considered in isolation or as a substitute of the results prepared in accordance with IFRS. This presentation has reconciled these non-IFRS financial measures to the most directly comparable IFRS financial measures.

Let me now turn the call over to Virgilio Gibbon, Afya’s CEO, starting with Slide number 3.

Virgilio Gibbon

Thank you, Ana, and thanks everyone for joining us today. As we approach the end of the year, we can see Afya delivered strong results again, as well we will show you throughout this presentation.

So, moving now to Page number 4. Let’s start with our quarter highlights. Adjusted net revenue increased 25% year-over-year, reaching BRL580.2 million, followed by an adjusted EBITDA growth of more than 19% year-over-year, reaching BRL228.7 million with a margin of 39.4%. This lower EBITDA margin, about 190 bps below last year, reflects our effort to develop our new growth avenues in Continuing Education and Digital Health Services. It is worth mentioning that both segments are accelerating the growth pace quarter-by-quarter and reached 72% and 59% of topline growth in Q3 over the same period last year.