Core Insights - The event is the fifth edition of Afya Day, focusing on the company's commitment to physicians and showcasing its innovations and products [1][2] - The agenda includes presentations from various business units and discussions on trends in the medical career, emphasizing the company's physician-centric approach [2][3] - The introduction of the new Medical VP, Gustavo Meirelles, highlights the company's leadership changes and its focus on enhancing product offerings [3] Company Focus - The company emphasizes a strong focus on physicians and their needs, indicating a commitment to understanding and addressing the medical community's requirements [2] - Presentations will cover innovations and products, showcasing the company's efforts to drive results and cash flow [3] Leadership and Structure - The introduction of Gustavo Meirelles as the new Medical VP signifies a strategic move to strengthen the executive board with medical expertise [3] - The event includes an institutional panel moderated by Virgilio Gibbon, indicating a structured approach to discussions and presentations [2]

Core Points - Afya Limited, a leading medical education group and medical practice solutions provider in Brazil, has announced a Share Repurchase Agreement with SBLA Holdco LLC, an affiliate of Softbank [1] - The agreement involves the repurchase of all 150,000 Series A Perpetual Convertible Preferred Shares, each with a nominal or par value of US$0.00005 [1]

Group 1 - The article emphasizes the importance of enabling Javascript and cookies in browsers to prevent access issues [1] - It highlights that users with ad-blockers may face restrictions when trying to access content [1]

Medical Education Landscape in Brazil - In 2025, Brazil is projected to have 635,706 physicians, equating to 2.98 professionals per 1,000 inhabitants[31] - Brazil will have 1.15 million physicians, a ratio of 5.25 per 1,000 inhabitants[32] - Afya is the leader in medical seats in Brazil, with 3,653 seats across 33 cities in 14 states, serving 25,733 medical students[77] Afya's Unique Ecosystem and Solutions - Afya's ecosystem includes medical schools, industry relationships, and solutions for medical practice, residency, and professional education[17] - Afya's Impact Project shows a 12% average increase in physician density in analyzed municipalities[45] - Afya's ecosystem has over 300,000 monthly users and 57 partnerships with the pharmaceutical industry[141] - Over 33% of physicians and medical students in Brazil use Afya's products through an integrated ecosystem[140] Continuing Education and Digital Behavior - Afya has expanded its continuing education program to 25 on-site hubs with over 70 courses[114] - 16% of physicians indicate they have reached the peak of their careers[60] - 84% of physicians indicate that they have not yet reached the peak of their careers[62] - 50% of physicians use digital tools for medical updates and news[65] Financial Performance and Capital Discipline - Afya reaffirmed its 2025 guidance for revenue and adjusted EBITDA[222] - Afya's track record includes the acquisition of 11 undergraduate assets and 8 medical practice solutions assets, with a total value of over R$4.5 billion invested since the IPO[229] - The company issued a new debenture of R$1.5 billion[245]

Group 1 - The core announcement is that Afya Limited, a leading medical education group in Brazil, has approved the first issuance of book-entry commercial notes through its subsidiary Afya Participações S.A. [1] - The commercial notes will be issued in two series for private placement [1] - The notes will be sold to Opea Securitizadora S.A., a Brazilian securitization corporation [1]

Group 1 - The results indicate no significant change in the trend for the year, which had already been addressed after the 1Q25 results [1] - Quipus Capital adopts a long-only investment strategy, focusing on operational aspects and long-term earnings potential rather than market-driven dynamics [1] - The majority of Quipus Capital's recommendations will be holds, reflecting a cautious approach in a bullish market [1] Group 2 - The article emphasizes the importance of understanding competitive dynamics within industries for making informed investment decisions [1] - A very small fraction of companies are deemed suitable for a buy recommendation at any given time, highlighting a selective investment strategy [1]

Financial Data and Key Metrics Changes - Company reported a revenue growth of 15% year-over-year, reaching $1,856 million for the first half of 2025 [4] - Adjusted EBITDA increased by 20% year-over-year, totaling $893 million, with a margin of 48.1%, up 220 basis points from the previous year [4][17] - Basic EPS rose to 4.69, representing a 17% increase compared to the previous year [4] Business Line Data and Key Metrics Changes - Undergraduate segment revenue grew over 16%, totaling R$1,642 million, with a 14% increase in the number of medical students [10] - Continuing education revenue increased by 8% year-over-year, reaching R$138 million, driven by a 12% growth in graduate journey students [11] - Medical practice solutions segment saw a revenue growth of over 9%, reaching R$84 million, with B2P revenues up nearly 12% [12][13] Market Data and Key Metrics Changes - The ecosystem reached 302,000 active users, indicating strong engagement among physicians and medical students across Brazil [14] - The number of approved medical seats increased to 3,653, reflecting a 14% growth year-over-year [10] Company Strategy and Development Direction - Company remains focused on operational excellence, aiming for robust growth, increased profitability, and solid cash generation as strategic pillars for long-term value creation [3] - A new share repurchase program was approved, allowing the company to buy back up to 4 million Class A shares by the end of 2026, reflecting a commitment to shareholder value [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting full-year 2025 guidance, supported by strong business fundamentals and disciplined execution [4] - The competitive landscape for medical education is expected to be more intense in the second half of the year, but the company is optimistic about maintaining occupancy rates [45] Other Important Information - The company is actively addressing the implications of new tax legislation aligned with OECD Pillar Two rules, with ongoing legal and administrative efforts to challenge the tax charge [52][53] Q&A Session Summary Question: What are the main levers for profitability expansion in the quarter? - Management highlighted improved efficiency in SG&A expenses and centralization of services as key factors contributing to margin expansion [22][24] Question: Can you provide insights on the EBITDA guidance for the second half? - Management prefers to remain conservative due to seasonality in continuing education, despite strong performance in the first half [35][36] Question: What is the competitive outlook for the second half intake? - Management noted increased competition due to new approvals of medical seats and a reduced candidate ratio, but expressed confidence in maintaining occupancy [44][45] Question: What are the implications of the new taxation? - Management is pursuing both legal and administrative avenues to challenge the new tax legislation, emphasizing its impact on the ProUni program [52][53] Question: How is the M&A environment perceived? - Management indicated that they are looking for the right opportunities at favorable prices, with a focus on good locations and reputations [58][61] Question: What is the strategy behind the share buyback program? - Management explained that the buyback program aims to enhance shareholder value while considering liquidity impacts [62][64]

Financial Performance - Revenue reached R$1,855.8 million, a 15.0% year-over-year increase[7] - Adjusted EBITDA was R$892.8 million, up 20.4% year-over-year, with an adjusted EBITDA margin of 48.1%, a 220 bps increase[7] - Net income increased by 17.0% year-over-year to R$433.6 million, with earnings per share at R$4.69, a 16.9% increase[7] - Cash flow from operating activities increased by 14.6% year-over-year to R$783.0 million[7] Operational Highlights - Medical school students increased by 14% to 25,733[9, 7] - Continuing education revenue increased by 7.9% year-over-year to R$137.5 million[7, 19] - Medical Practice Solutions revenue increased by 9.3% year-over-year to R$84.0 million[7, 22] - The number of users in Afya's ecosystem positively impacted reached 302,000[7, 25] Capital Allocation - Afya's board approved a new share repurchase program of up to 4 million Class A shares[12] Regulatory Impact - Brazil adopted OECD Pillar Two rules, potentially increasing the effective tax rate to a 15% global minimum, with an additional income tax expense of R$56.6 million for the six-month period ended in June 2025[42, 45]

[Unaudited Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) [Statements of Financial Position](index=2&type=section&id=Statements%20of%20Financial%20Position) Afya Limited's financial position as of June 30, 2025, reflects increased total assets and equity, with a notable rise in current liabilities Consolidated Statements of Financial Position (June 30, 2025 vs. December 31, 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | December 31, 2024 | Change | % Change | | :------------------------------------- | :------------ | :---------------- | :----- | :------- | | **Assets** | | | | | | Total current assets | 1,882,992 | 1,589,784 | 293,208 | 18.44% | | Cash and cash equivalents | 1,099,107 | 911,015 | 188,092 | 20.65% | | Trade receivables (current) | 678,950 | 595,898 | 83,052 | 13.94% | | Total non-current assets | 7,355,176 | 7,239,755 | 115,421 | 1.59% | | Intangible assets | 5,583,909 | 5,532,789 | 51,120 | 0.92% | | Property and equipment | 684,279 | 658,482 | 25,797 | 3.92% | | **Total assets** | **9,238,168** | **8,829,539** | **408,629** | **4.63%**| | **Liabilities** | | | | | | Total current liabilities | 2,011,213 | 1,140,195 | 871,018 | 76.39% | | Loans and financing (current) | 1,216,994 | 363,554 | 853,440 | 234.76% | | Total non-current liabilities | 2,590,167 | 3,378,761 | (788,594) | -23.34% | | Loans and financing (non-current) | 996,973 | 1,831,607 | (834,634) | -45.57% | | **Total liabilities** | **4,601,380** | **4,518,956** | **82,424** | **1.82%**| | **Equity** | | | | | | Total equity | 4,636,788 | 4,310,583 | 326,205 | 7.57% | - Total assets increased by **R$408,629 thousand (4.63%)** from December 31, 2024, to June 30, 2025, reaching **R$9,238,168 thousand**[2](index=2&type=chunk) - Current liabilities saw a substantial increase of **R$871,018 thousand (76.39%)**, primarily due to a significant rise in current loans and financing[2](index=2&type=chunk) [Statements of Income and Comprehensive Income](index=3&type=section&id=Statements%20of%20Income%20and%20Comprehensive%20Income) Afya Limited reported strong H1 2025 financial performance, with significant growth in revenue, operating income, and net income Consolidated Statements of Income (Six-month periods ended June 30, 2025 and 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | June 30, 2024 | Change | % Change | | :------------------------------------- | :------------ | :------------ | :----- | :------- | | Revenue | 1,855,760 | 1,614,129 | 241,631 | 14.97% | | Cost of services | (625,346) | (584,346) | (41,000) | 7.02% | | Gross profit | 1,230,414 | 1,029,783 | 200,631 | 19.48% | | Selling, general and administrative expenses | (574,371) | (504,926) | (69,445) | 13.75% | | Operating income | 657,755 | 520,172 | 137,583 | 26.45% | | Net finance result | (189,803) | (142,917) | (46,886) | 32.81% | | Income before income taxes | 475,828 | 384,455 | 91,373 | 23.77% | | Income taxes expenses | (42,250) | (13,956) | (28,294) | 202.73% | | Net income | 433,578 | 370,499 | 63,079 | 17.03% | | Basic earnings per common share (R$) | 4.69 | 4.02 | 0.67 | 16.67% | | Diluted earnings per common share (R$) | 4.64 | 3.98 | 0.66 | 16.58% | - Net income attributable to equity holders of the parent increased by **17.03%** to **R$433,578 thousand** for the six-month period ended June 30, 2025, compared to **R$370,499 thousand** in the prior year period[3](index=3&type=chunk) - Basic earnings per common share rose to **R$4.69** for the six-month period ended June 30, 2025, up from **R$4.02** in the same period of 2024[3](index=3&type=chunk) [Statements of Changes in Equity](index=4&type=section&id=Statements%20of%20Changes%20in%20Equity) The Company's total equity increased in H1 2025, primarily driven by net income, partially offset by declared dividends Key Changes in Equity (Six-month periods ended June 30, 2025 and 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | June 30, 2024 | | :------------------------------------- | :------------ | :------------ | | Balances at January 1 | 4,310,583 | 3,643,012 | | Net income | 433,578 | 370,499 | | Share-based compensation | 12,520 | 20,428 | | Treasury shares transferred | 24,249 | 5,541 | | Restricted shares transferred | (4,885) | (8,299) | | Dividends declared | (139,257) | (9,399) | | Balances at June 30 | 4,636,788 | 4,021,782 | - Net income contributed **R$433,578 thousand** to equity in the first half of 2025, an increase from **R$370,499 thousand** in the same period of 2024[5](index=5&type=chunk) - Dividends declared significantly increased to **R$139,257 thousand** in H1 2025, compared to **R$9,399 thousand** in H1 2024[5](index=5&type=chunk) [Statements of Cash Flows](index=5&type=section&id=Statements%20of%20Cash%20Flows) Afya Limited generated higher operating cash flow in H1 2025, but cash used in financing activities significantly increased Consolidated Statements of Cash Flows (Six-month periods ended June 30, 2025 and 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | June 30, 2024 | Change | % Change | | :------------------------------------- | :------------ | :------------ | :----- | :------- | | Net cash flows from operating activities | 771,596 | 667,169 | 104,427 | 15.65% | | Net cash flows used in investing activities | (272,268) | (320,490) | 48,222 | -15.04% | | Net cash flows used in financing activities | (309,187) | (177,098) | (132,089) | 74.59% | | Net increase in cash and cash equivalents | 188,092 | 170,378 | 17,714 | 10.40% | | Cash and cash equivalents at end of period | 1,099,107 | 723,408 | 375,699 | 51.94% | - Net cash flows from operating activities increased by **15.65%** to **R$771,596 thousand** for the six-month period ended June 30, 2025[7](index=7&type=chunk) - Net cash flows used in financing activities increased significantly by **74.59%** to **R$309,187 thousand**, largely due to higher dividend payments and payments of principal and interest on loans and leases[7](index=7&type=chunk) [Notes to the Unaudited Interim Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) [1. Corporate Information](index=6&type=section&id=1%20Corporate%20information) Afya Limited, a Nasdaq-listed holding company, expanded its medical school seat capacity in Brazil through recent acquisitions - Afya is the largest educational group by the number of medical school seats in Brazil, operating in **19 Brazilian States**[10](index=10&type=chunk) - On July 1, 2024, Afya acquired Unidom Participações S.A., adding **300 operational medical school seats**, with **175 seats** subject to final court proceedings[11](index=11&type=chunk)[12](index=12&type=chunk) - On May 7, 2025, Afya acquired Faculdade Masterclass Ltda. (FUNIC), contributing **60 pre-operational medical school seats** expected to start in H2 2025, with a contingent consideration for up to **60 additional seats**[14](index=14&type=chunk)[16](index=16&type=chunk)[18](index=18&type=chunk) - As of June 30, 2025, Afya had **3,603 operating medical school seats**[19](index=19&type=chunk) [2. Material Accounting Policies](index=7&type=section&id=2%20Material%20accounting%20policies) Interim financial statements adhere to IAS 34 on a historical cost basis, with Brazilian Real as currency, and reflect no significant new accounting standard impacts - The financial statements are prepared in accordance with **IAS 34 Interim Financial Reporting** and on a historical cost basis, with contingent consideration measured at fair value[20](index=20&type=chunk) - The **Brazilian Real** is the Company's functional and presentation currency[21](index=21&type=chunk)[22](index=22&type=chunk) - Unidom was merged with Afya Brazil on January 1, 2025, resulting in Afya Brazil directly controlling Unidom's subsidiaries IBES and SESSA[24](index=24&type=chunk) - No new standards, interpretations, or amendments adopted in 2025 had significant impacts on the interim financial statements[26](index=26&type=chunk) [3. Segment Information](index=9&type=section&id=3%20Segment%20information) Afya Limited operates three segments, with Undergraduate being the largest revenue contributor, and varying seasonality across revenue streams - The Company has three reportable segments: Undergraduate, Continuing education, and Medical practice solutions[27](index=27&type=chunk) Revenue by Segment (Six-month periods ended June 30, 2025 and 2024) | Segment (in thousands of Brazilian reais) | June 30, 2025 | June 30, 2024 | Change | % Change | | :-------------------------------------- | :------------ | :------------ | :----- | :------- | | Undergraduate | 1,641,501 | 1,414,166 | 227,335 | 16.07% | | Continuing education | 137,520 | 127,506 | 10,014 | 7.85% | | Medical practice solutions | 84,004 | 76,854 | 7,150 | 9.30% | | Total Revenue | 1,855,760 | 1,614,129 | 241,631 | 14.97% | - Undergraduate tuition revenues are stable throughout each semester, while Continuing education revenues, particularly from Medcel's e-books, are concentrated in the first and last quarters[34](index=34&type=chunk)[35](index=35&type=chunk) [4. Cash and Cash Equivalents](index=12&type=section&id=4%20Cash%20and%20cash%20equivalents) Cash and cash equivalents significantly increased by 20.65% to R$1,099,107 thousand, primarily driven by highly liquid investment funds Cash and Cash Equivalents (June 30, 2025 vs. December 31, 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | December 31, 2024 | Change | % Change | | :------------------------------------- | :------------ | :---------------- | :----- | :------- | | Cash and bank deposits | 9,167 | 6,078 | 3,089 | 50.83% | | Cash equivalents | 1,089,940 | 904,937 | 185,003 | 20.44% | | Total | 1,099,107 | 911,015 | 188,092 | 20.65% | - Cash equivalents, primarily investment funds and Bank Certificates of Deposit (CDB), represent the majority of the balance and have an average interest rate of **101% of the Brazilian interbank interest rates (CDI)** as of June 30, 2025[38](index=38&type=chunk)[39](index=39&type=chunk) [5. Trade Receivables](index=12&type=section&id=5%20Trade%20receivables) Total trade receivables increased to R$710,312 thousand, driven by tuition and FIES, with a rise in credit loss allowance and past due amounts Trade Receivables Composition (June 30, 2025 vs. December 31, 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | December 31, 2024 | Change | % Change | | :------------------------------------- | :------------ | :---------------- | :----- | :------- | | Tuition fees | 529,757 | 488,962 | 40,795 | 8.34% | | FIES | 127,618 | 79,712 | 47,906 | 60.10% | | Mobile app subscription | 17,235 | 24,223 | (6,988) | -28.85% | | Total trade receivables (gross) | 788,797 | 703,323 | 85,474 | 12.15% | | Allowance for expected credit losses | (78,485) | (71,477) | (7,008) | 9.80% | | Total trade receivables (net) | 710,312 | 631,846 | 78,466 | 12.42% | Aging of Trade Receivables (June 30, 2025 vs. December 31, 2024) | Aging Category (in thousands of Brazilian reais) | June 30, 2025 | December 31, 2024 | Change | % Change | | :----------------------------------------------- | :------------ | :---------------- | :----- | :------- | | Neither past due nor impaired | 338,317 | 327,052 | 11,265 | 3.44% | | Past due: 1 to 30 days | 118,861 | 97,390 | 21,471 | 22.04% | | Past due: 31 to 90 days | 166,537 | 126,623 | 39,914 | 31.52% | | Past due: 91 to 180 days | 108,492 | 91,411 | 17,081 | 18.68% | | Past due: More than 180 days | 56,590 | 60,847 | (4,257) | -6.99% | - Additions to the allowance for expected credit losses increased to **R$33,053 thousand** for the six-month period ended June 30, 2025, from **R$30,018 thousand** in the prior year period[43](index=43&type=chunk) [6. Related Parties](index=13&type=section&id=6%20Related%20parties) Afya Limited maintains balances and transactions with related parties, and key management personnel compensation increased in H1 2025 Related Party Balances (June 30, 2025 vs. December 31, 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | December 31, 2024 | Change | % Change | | :------------------------------------- | :------------ | :---------------- | :----- | :------- | | Trade receivables (assets) | 506 | 507 | (1) | -0.20% | | Lease liabilities | 243,913 | 242,703 | 1,210 | 0.50% | Key Management Personnel Compensation (Six-month periods ended June 30, 2025 and 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | June 30, 2024 | Change | % Change | | :------------------------------------- | :------------ | :------------ | :----- | :------- | | Short-term employee benefits | 18,125 | 10,106 | 8,019 | 79.35% | | Share-based compensation plans | 9,056 | 12,412 | (3,356) | -27.04% | | Total compensation | 27,181 | 22,518 | 4,663 | 20.71% | - Lease payments to related parties increased to **R$18,253 thousand** for the six-month period ended June 30, 2025, from **R$16,962 thousand** in the prior year period[44](index=44&type=chunk) [7. Other Assets](index=14&type=section&id=7%20Other%20assets) Total other assets increased slightly to R$180,256 thousand, comprising indemnification assets, advances, judicial deposits, and prepaid expenses Other Assets Composition (June 30, 2025 vs. December 31, 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | December 31, 2024 | Change | % Change | | :------------------------------------- | :------------ | :---------------- | :----- | :------- | | Indemnification assets | 77,106 | 78,701 | (1,595) | -2.03% | | Advances | 22,023 | 35,140 | (13,117) | -37.33% | | Judicial deposits | 17,754 | 16,938 | 816 | 4.82% | | Prepaid expenses | 31,777 | 19,761 | 12,016 | 60.81% | | Other assets | 13,183 | 3,146 | 10,037 | 318.99% | | Total | 180,256 | 173,020 | 7,236 | 4.18% | - Prepaid expenses increased significantly by **60.81%** to **R$31,777 thousand** as of June 30, 2025[48](index=48&type=chunk) [8. Investment in Associate](index=14&type=section&id=8%20Investment%20in%20associate) Afya's 30% equity-method investment in UEPC slightly decreased, despite increased share of income and dividends received - Afya holds a **30% interest in UEPC**, a medical school, accounted for using the equity method[49](index=49&type=chunk) Investment in UEPC Movements (Six-month periods ended June 30, 2025 and 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | June 30, 2024 | Change | % Change | | :------------------------------------- | :------------ | :------------ | :----- | :------- | | Opening balance | 54,442 | 51,834 | 2,608 | 5.03% | | Share of income | 7,876 | 7,200 | 676 | 9.39% | | Dividends received | (8,803) | (6,195) | (2,608) | 42.10% | | Closing balance | 53,515 | 52,839 | 676 | 1.28% | - No impairment was recognized for the investment in UEPC as of June 30, 2025[50](index=50&type=chunk) [9. Property and Equipment](index=15&type=section&id=9%20Property%20and%20equipment) The net book value of property and equipment increased to R$684,279 thousand due to significant additions, with no impairment identified Property and Equipment Movements (Six-month periods ended June 30, 2025 and 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | June 30, 2024 | Change | % Change | | :------------------------------------- | :------------ | :------------ | :----- | :------- | | Additions | 81,617 | 45,989 | 35,628 | 77.47% | | Write-off (cost) | (2,072) | (1,040) | (1,032) | 99.23% | | Depreciation | (55,284) | (43,176) | (12,108) | 28.05% | | Net book value at period end | 684,279 | 802,477 | (118,198) | -14.73% | - Additions to property and equipment increased by **77.47%** to **R$81,617 thousand** in the first half of 2025 compared to the same period in 2024[54](index=54&type=chunk) - No impairment indicators were present for property and equipment as of June 30, 2025[51](index=51&type=chunk) [10. Intangible Assets](index=17&type=section&id=10%20Intangible%20assets) The net book value of intangible assets increased to R$5,583,909 thousand due to significant additions, with no impairment identified Intangible Assets Movements (Six-month periods ended June 30, 2025 and 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | June 30, 2024 | Change | % Change | | :------------------------------------- | :------------ | :------------ | :----- | :------- | | Additions | 143,455 | 91,119 | 52,336 | 57.44% | | Amortization | (92,254) | (86,542) | (5,712) | 6.60% | | Net book value at period end | 5,583,909 | 5,333,934 | 249,975 | 4.69% | - Additions to intangible assets for the six-month period ended June 30, 2025, included **R$99,629 thousand** for licenses with indefinite useful lives, specifically for an increase of **40 medical school seats**[56](index=56&type=chunk) - No impairment indicators were present for goodwill or intangible assets with indefinite or finite useful lives as of June 30, 2025[58](index=58&type=chunk)[60](index=60&type=chunk) [11. Financial Assets and Liabilities](index=18&type=section&id=11%20Financial%20assets%20and%20liabilities) Afya's financial assets and liabilities increased, driven by current loans, while the company actively manages market, credit, and liquidity risks Financial Assets and Liabilities (June 30, 2025 vs. December 31, 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | December 31, 2024 | Change | % Change | | :------------------------------------- | :------------ | :---------------- | :----- | :------- | | Financial assets (amortized cost) | 1,818,710 | 1,553,471 | 265,239 | 17.07% | | Financial liabilities (amortized cost) | 3,563,969 | 3,517,396 | 46,573 | 1.32% | | Financial liabilities (fair value) | 302,301 | 314,953 | (12,652) | -4.02% | - Current loans and financing increased by **R$853,440 thousand (234.76%)** to **R$1,216,994 thousand** as of June 30, 2025, compared to December 31, 2024[62](index=62&type=chunk) - The Company's net exposure to interest rate risk indicates that a **75 basis point increase** in interest rates would negatively impact profit before tax by **R$5,947 thousand**[75](index=75&type=chunk) [11.2.1 Loans and Financing](index=18&type=section&id=11.2.1%20Loans%20and%20financing) Total loans and financing slightly increased to R$2,213,967 thousand, with a significant shift towards current maturities Loans and Financing (June 30, 2025 vs. December 31, 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | December 31, 2024 | Change | % Change | | :------------------------------------- | :------------ | :---------------- | :----- | :------- | | Total Loans and financing | 2,213,967 | 2,195,161 | 18,806 | 0.86% | | Current | 1,216,994 | 363,554 | 853,440 | 234.76% | | Non-current | 996,973 | 1,831,607 | (834,634) | -45.57% | - The current portion of loans and financing increased by **R$853,440 thousand**, indicating a significant amount of debt maturing within one year[62](index=62&type=chunk) [11.2.2 Leases](index=19&type=section&id=11.2.2%20Leases) Right-of-use assets and lease liabilities increased in H1 2025 due to new additions and remeasurements, alongside recognized expenses and payments Lease Balances and Movements (Six-month periods ended June 30, 2025 and 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | June 30, 2024 | Change | % Change | | :------------------------------------- | :------------ | :------------ | :----- | :------- | | Right-of-use assets (closing balance) | 859,356 | 801,409 | 57,947 | 7.23% | | Lease liabilities (closing balance) | 1,011,091 | 921,701 | 89,390 | 9.70% | | Additions (ROU assets/liabilities) | 33,730 | 27,783 | 5,947 | 21.40% | | Depreciation expense (ROU assets) | (38,915) | (33,589) | (5,326) | 15.86% | | Interest expense (lease liabilities) | 59,727 | 53,770 | 5,957 | 11.08% | - Lease contracts generally have maturities between **five and 30 years**[63](index=63&type=chunk) [11.2.3 Accounts Payable to Selling Shareholders](index=20&type=section&id=11.2.3%20Accounts%20payable%20to%20selling%20shareholders) Accounts payable to selling shareholders decreased to R$506,113 thousand, with Unidom's contingent consideration probable to be paid Accounts Payable to Selling Shareholders (June 30, 2025 vs. December 31, 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | December 31, 2024 | Change | % Change | | :------------------------------------- | :------------ | :---------------- | :----- | :------- | | Accounts payable at amortized cost | 198,970 | 185,318 | 13,652 | 7.37% | | Accounts payable at fair value | 307,143 | 345,454 | (38,311) | -11.10% | | Total | 506,113 | 530,772 | (24,659) | -4.65% | - The contingent consideration for Unidom (**R$298,584 thousand**) is measured at fair value and is considered probable to be paid, based on the current stage of court proceedings regarding the authorization of **175 medical school seats**[66](index=66&type=chunk)[67](index=67&type=chunk) [11.3 Fair Values](index=20&type=section&id=11.3%20Fair%20values) Fair values for loans and financing are determined by discounted cash flow, while other instruments use carrying amounts, with no change in hierarchy Loans and Financing: Carrying Amount vs. Fair Value (June 30, 2025 vs. December 31, 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 Carrying amount | June 30, 2025 Fair value | December 31, 2024 Carrying amount | December 31, 2024 Fair value | | :------------------------------------- | :------------------------------ | :----------------------- | :-------------------------------- | :----------------------- | | Loans and financing | 2,213,967 | 2,159,243 | 2,195,161 | 2,196,152 | - The fair value of interest-bearing loans and financing is determined using the discounted cash flow method[70](index=70&type=chunk) [11.4 Financial Instruments Risk Management Objectives and Policies](index=21&type=section&id=11.4%20Financial%20instruments%20risk%20management%20objectives%20and%20policies) Afya manages market, credit, and liquidity risks under Board oversight, prohibiting speculative derivatives and performing sensitivity analyses - The Company monitors market, credit, and liquidity risks with the support and oversight of the Board of Directors[72](index=72&type=chunk) - The Company's policy is that no trading of derivatives for speculative purposes may be undertaken[72](index=72&type=chunk) - The Company's exposure to market risk is related to interest rate and foreign currency risk[73](index=73&type=chunk) [11.5 Changes in Liabilities Arising from Financing Activities](index=23&type=section&id=11.5%20Changes%20in%20liabilities%20arising%20from%20financing%20activities) Liabilities from financing activities in H1 2025 saw significant movements in loans, leases, and dividends, with substantial principal and interest payments Changes in Liabilities from Financing Activities (Six-month periods ended June 30, 2025 and 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | June 30, 2024 | | :------------------------------------- | :------------ | :------------ | | Loans and financing (Jan 1 balance) | 2,195,161 | 1,800,775 | | Loans and financing (June 30 balance) | 2,213,967 | 1,784,815 | | Lease liabilities (Jan 1 balance) | 978,336 | 874,569 | | Lease liabilities (June 30 balance) | 1,011,091 | 921,701 | | Dividends payable (Jan 1 balance) | - | - | | Dividends payable (June 30 balance) | 778 | - | | Total liabilities (Jan 1 balance) | 3,173,497 | 2,675,344 | | Total liabilities (June 30 balance) | 3,225,836 | 2,706,516 | - Payments of principal for loans and financing were **R$1,543 thousand**, and for lease liabilities were **R$24,222 thousand** in H1 2025[85](index=85&type=chunk) - Payments of interest for loans and financing totaled **R$110,399 thousand**, and for lease liabilities **R$58,793 thousand** in H1 2025[85](index=85&type=chunk) [12. Capital Management](index=24&type=section&id=12%20Capital%20management) Afya's capital management aims to maximize shareholder value and ensure compliance with all financial and non-financial covenants, with no breaches reported - The primary objective of the Company's capital management is to maximize shareholder value[86](index=86&type=chunk) - The Company ensures it meets financial and non-financial covenants under its debentures and other loans and financing[87](index=87&type=chunk) - There have been no breaches of financial and non-financial covenants in the current period[87](index=87&type=chunk) [13. Labor and Social Obligations](index=24&type=section&id=13%20Labor%20and%20social%20obligations) Labor and social obligations, including variable and share-based compensation, saw increased bonuses and new grants in H1 2025, despite decreased overall expense Variable Compensation (Bonuses) (Six-month periods ended June 30, 2025 and 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | June 30, 2024 | Change | % Change | | :------------------------------------- | :------------ | :------------ | :----- | :------- | | Bonuses recognized | 27,197 | 8,047 | 19,150 | 238.00% | - **60,000 stock options** were granted in April 2025 with a weighted average fair value of **R$45.95**[91](index=91&type=chunk) - **35,000 Restricted Stock Units (RSUs)** were granted in April 2025 with a weighted average fair value of **R$107.33**[95](index=95&type=chunk) Share-based Compensation Expense (Six-month periods ended June 30, 2025 and 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | June 30, 2024 | Change | % Change | | :------------------------------------- | :------------ | :------------ | :----- | :------- | | Stock options plan expense | 5,410 | 11,387 | (5,977) | -52.49% | | RSU program expense | 7,110 | 9,041 | (1,931) | -21.36% | | Total share-based compensation expense | 12,520 | 20,428 | (7,908) | -38.71% | [14. Equity](index=26&type=section&id=14%20Equity) Afya's share capital remained constant, while the Company approved its first dividend distribution and treasury shares decreased due to compensation plans - The Company's share capital remained at **R$17 thousand**, represented by **93,722,831 shares**[98](index=98&type=chunk) - On March 12, 2025, the Board of Directors approved the first dividend distribution of **R$129,784 thousand**, representing **20%** of the consolidated net income for 2024[100](index=100&type=chunk) Treasury Shares Movements (Six-month periods ended June 30, 2025 and 2024) | Metric | June 30, 2025 | June 30, 2024 | | :------------------------------------- | :------------ | :------------ | | Outstanding at January 1 | 3,455,538 | 3,773,478 | | Delivered under share-based compensation plans | (543,722) | (243,534) | | Outstanding at June 30 | 2,911,816 | 3,529,944 | [15. Earnings Per Share ("EPS")](index=27&type=section&id=15%20Earnings%20per%20share%20(%22EPS%22)) Afya reported increased basic and diluted earnings per share for H1 2025, with dilutive effects from stock options and RSUs, and antidilutive Softbank shares Basic and Diluted EPS (Six-month periods ended June 30, 2025 and 2024) | Metric (in Brazilian Reais) | June 30, 2025 | June 30, 2024 | Change | % Change | | :-------------------------- | :------------ | :------------ | :----- | :------- | | Basic earnings per share | 4.69 | 4.02 | 0.67 | 16.67% | | Diluted earnings per share | 4.64 | 3.98 | 0.66 | 16.58% | - Net income attributable to equity holders of the parent, adjusted for dilution, increased to **R$424,331 thousand** for H1 2025 from **R$387,060 thousand** for H1 2024[106](index=106&type=chunk) - Softbank's series A perpetual convertible preferred shares were antidilutive for the six-month period ended June 30, 2025, and thus not included in diluted EPS[105](index=105&type=chunk) [16. Revenue](index=28&type=section&id=16%20Revenue) Afya's total revenue increased by 14.97% in H1 2025, primarily from tuition fees and recognized over time, with increased deductions Revenue Composition (Six-month periods ended June 30, 2025 and 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | June 30, 2024 | Change | % Change | | :------------------------------------- | :------------ | :------------ | :----- | :------- | | Tuition fees | 2,332,390 | 1,967,573 | 364,817 | 18.54% | | Other revenue | 161,895 | 145,773 | 16,122 | 11.06% | | Deductions (total) | (638,725) | (549,287) | (89,440) | 16.28% | | Total Revenue | 1,855,760 | 1,614,129 | 241,631 | 14.97% | - Revenue from contracts with customers is entirely generated in Brazil[107](index=107&type=chunk) - The majority of revenue (**R$1,813,323 thousand** in H1 2025) is recognized over time, primarily from tuition, digital content, and app subscription fees[107](index=107&type=chunk)[109](index=109&type=chunk) [17. Costs and Expenses by Nature](index=29&type=section&id=17%20Costs%20and%20expenses%20by%20nature) Total costs and expenses increased by 10.14% in H1 2025, driven by payroll, depreciation, and sales/marketing, while some other expenses decreased Costs and Expenses by Nature (Six-month periods ended June 30, 2025 and 2024) | Expense Category (in thousands of Brazilian reais) | June 30, 2025 | June 30, 2024 | Change | % Change | | :----------------------------------------------- | :------------ | :------------ | :----- | :------- | | Payroll | (668,039) | (595,769) | (72,270) | 12.13% | | Hospital and medical agreements | (36,569) | (48,754) | 12,185 | -24.99% | | Depreciation and amortization | (186,453) | (163,307) | (23,146) | 14.17% | | Sales and marketing | (48,126) | (34,656) | (13,470) | 38.87% | | Allowance for expected credit losses | (33,053) | (30,018) | (3,035) | 10.11% | | Consulting fees | (14,702) | (23,718) | 9,016 | -38.01% | | Total Costs and Expenses | (1,199,717) | (1,089,272) | (110,445) | 10.14% | - Payroll expenses, including costs for pedagogical services, increased by **12.13%** to **R$668,039 thousand** in H1 2025[110](index=110&type=chunk) - Sales and marketing expenses saw a significant increase of **38.87%** to **R$48,126 thousand**[110](index=110&type=chunk) [18. Finance Result](index=29&type=section&id=18%20Finance%20result) Afya's net finance result worsened to negative R$189,803 thousand in H1 2025, primarily due to increased finance expenses, despite higher finance income Finance Result (Six-month periods ended June 30, 2025 and 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | June 30, 2024 | Change | % Change | | :------------------------------------- | :------------ | :------------ | :----- | :------- | | Finance income | 84,478 | 49,263 | 35,215 | 71.49% | | Financial income from cash equivalents | 56,815 | 25,468 | 31,347 | 123.00% | | Finance expenses | (274,281) | (192,180) | (82,101) | 42.72% | | Interest expense | (158,613) | (102,278) | (56,335) | 55.08% | | Interest expense on lease liabilities | (59,727) | (53,770) | (5,957) | 11.08% | | Net finance result | (189,803) | (142,917) | (46,886) | 32.81% | - Finance income from cash equivalents more than doubled, increasing by **123%** to **R$56,815 thousand** in H1 2025[111](index=111&type=chunk) - Interest expense, excluding lease liabilities, increased by **55.08%** to **R$158,613 thousand** in H1 2025[111](index=111&type=chunk) [19. Income Taxes](index=30&type=section&id=19%20Income%20taxes) Income tax expense significantly increased in H1 2025 due to Brazil's Pillar Two global minimum tax, raising the effective tax rate to 8.9% Income Taxes Expense (Six-month periods ended June 30, 2025 and 2024) | Metric (in thousands of Brazilian reais) | June 30, 2025 | June 30, 2024 | Change | % Change | | :------------------------------------- | :------------ | :------------ | :----- | :------- | | Income before income taxes | 475,828 | 384,455 | 91,373 | 23.77% | | Income taxes at statutory rate (34%) | (161,782) | (130,715) | (31,067) | 23.77% | | PROUNI - Fiscal incentive | 243,479 | 193,615 | 49,864 | 25.75% | | Pillar Two - Additional social contribution | (56,649) | - | (56,649) | N/A | | Income taxes expense | (42,250) | (13,956) | (28,294) | 202.73% | | Effective rate | 8.9% | 3.6% | 5.3% | 147.22% | - Law 15,079/2024, implementing the OECD's Pillar Two global minimum tax in Brazil, became effective January 1, 2025, introducing an additional Social Contribution on Net Profit (CSLL) to ensure a minimum effective taxation of **15%**[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) - The Company provisioned **R$56,649 thousand** for the additional CSLL in H1 2025, despite challenging its enforceability in Federal Court[116](index=116&type=chunk)[117](index=117&type=chunk) [20. Legal Proceedings and Contingencies](index=31&type=section&id=20%20Legal%20proceedings%20and%20contingencies) Provisions for probable legal proceedings increased to R$117,772 thousand, while other possible risk proceedings exist, and indemnification assets are held Provisions for Legal Proceedings (June 30, 2025 vs. January 1, 2025) | Category (in thousands of Brazilian reais) | June 30, 2025 | January 1, 2025 | Change | % Change | | :--------------------------------------- | :------------ | :-------------- | :----- | :------- | | Labor | 34,932 | 31,455 | 3,477 | 11.05% | | Civil | 25,990 | 25,140 | 850 | 3.38% | | Taxes | 56,850 | 56,926 | (76) | -0.13% | | Total | 117,772 | 113,521 | 4,251 | 3.74% | Possible Risk of Loss Proceedings (June 30, 2025 vs. December 31, 2024) | Category (in thousands of Brazilian reais) | June 30, 2025 | December 31, 2024 | Change | % Change | | :--------------------------------------- | :------------ | :---------------- | :----- | :------- | | Labor | 38,082 | 38,097 | (15) | -0.04% | | Civil | 57,371 | 50,667 | 6,704 | 13.23% | | Taxes | 25,968 | 17,498 | 8,470 | 48.41% | | Total | 121,421 | 106,262 | 15,159 | 14.27% | - The Company holds indemnification assets of **R$77,106 thousand** for legal proceedings arising from events prior to acquisition closing dates, for which selling shareholders are exclusively responsible[127](index=127&type=chunk)[128](index=128&type=chunk) [21. Non-Cash Transactions](index=33&type=section&id=21%20Non-cash%20transactions) Afya engaged in various non-cash transactions in H1 2025, including lease adjustments, legal provisions, acquisition payables, and dividends payable Non-Cash Transactions (Six-month periods ended June 30, 2025 and 2024) | Transaction (in thousands of Brazilian reais) | June 30, 2025 | June 30, 2024 | | :------------------------------------------ | :------------ | :------------ | | Additions and remeasurements of right-of-use assets and lease liabilities | 57,052 | 69,313 | | Additions (reversals) of provision for legal proceedings with corresponding indemnification asset, net | (1,595) | (8,145) | | Accounts payable to selling shareholders from FUNIC's acquisition | 40,000 | - | | Dividends payable | 778 | - | - The acquisition of FUNIC in 2025 resulted in **R$40,000 thousand** in accounts payable to selling shareholders as a non-cash transaction[130](index=130&type=chunk) [22. Subsequent Event](index=33&type=section&id=22%20Subsequent%20event) Afya's board approved a new share repurchase program on August 13, 2025, for up to 4,000,000 Class A common shares, running until December 31, 2026 - A new share repurchase program was approved on August 13, 2025, allowing Afya to repurchase up to **4,000,000 Class A common shares**[131](index=131&type=chunk) - The repurchase program will commence on August 15, 2025, and conclude by December 31, 2026[131](index=131&type=chunk) - The repurchased shares are intended for use in the stock option program, as consideration in future business combinations, and for general corporate purposes[132](index=132&type=chunk)

Group 1: Primoris Services (PRIM) - Primoris Services operates as one of the largest specialty contractors and infrastructure companies in the United States [1] - The company carries a Zacks Rank 1 (Strong Buy) [1] - The Zacks Consensus Estimate for its current year earnings has increased by 0.9% over the last 60 days [1] - Primoris has a PEG ratio of 1.57 compared to 3.83 for the industry [2] - The company possesses a Growth Score of A [2] Group 2: Afya (AFYA) - Afya is a medical education group primarily in Brazil [2] - The company carries a Zacks Rank 1 [2] - The Zacks Consensus Estimate for its current year earnings has increased by 4.6% over the last 60 days [2] - Afya has a PEG ratio of 0.47 compared to 0.82 for the industry [2] - The company possesses a Growth Score of B [2] Group 3: Jabil (JBL) - Jabil is one of the largest global suppliers of electronic manufacturing services [3] - The company carries a Zacks Rank 1 [3] - The Zacks Consensus Estimate for its current year earnings has increased by 5.2% over the last 60 days [3] - Jabil has a PEG ratio of 1.41 compared to 1.95 for the industry [3] - The company possesses a Growth Score of B [3]