Core Insights - Vasta Platform Limited reported a quarterly loss of $0.07 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.05, marking an earnings surprise of -40.00% [1] - The company generated revenues of $45.82 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 8.61%, but showing an increase from $39.71 million year-over-year [2] - The stock has increased approximately 146.5% since the beginning of the year, significantly outperforming the S&P 500's gain of 15.6% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.38 on revenues of $150.15 million, while for the current fiscal year, the estimate is $0.33 on revenues of $342.94 million [7] - The estimate revisions trend for Vasta Platform was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Schools industry, to which Vasta Platform belongs, is currently ranked in the bottom 31% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Legacy Education Inc., another company in the same industry, is expected to report quarterly earnings of $0.15 per share, reflecting a year-over-year decline of 28.6%, with revenues anticipated to be $18.34 million, up 30.9% from the previous year [9][10]

Financial Data and Key Metrics Changes - Subscription revenue grew by 14.3% compared to the previous cycle, supported by ACV bookings of BRL 1,552 million [5][6] - Net revenue increased by 13.6%, reaching BRL 1,737 million, reflecting the resilience of the core business [6][11] - Adjusted EBITDA reached BRL 494 million, a 10% increase compared to 2024, with a margin of 28.4%, slightly below last year's 29.4% [6][12] - Free cash flow totaled BRL 316 million, a 117% increase from the previous cycle, with a conversion rate of 64% [8][15] - Net debt decreased to BRL 863 million, with a leverage ratio of 1.75 times, down from 2.32 times in Q3 2024 [8][17] Business Line Data and Key Metrics Changes - Complementary solutions grew by 25.3% year over year, reinforcing the strength of the ecosystem [5][6] - In the B2G segment, revenues reached BRL 17 million from new customers, totaling BRL 67 million in the 2025 sales cycle [6][9] - Non-subscription revenue increased by 45% to BRL 21 million, driven by higher enrollment in flagship schools [11][12] Market Data and Key Metrics Changes - The company is gaining market share in premium learning systems, with expectations of continued growth in 2026 [19] - The Start Angle franchise operates six units, with plans to launch eight new operational units in the upcoming year [9][10] Company Strategy and Development Direction - The company is focused on innovation, particularly through RAU AI, to introduce tools for personalized learning [9][10] - The diversification strategy in the B2G segment aims to expand access to quality education through partnerships with public institutions [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth and enhancing profitability, with expectations of mid double-digit revenue growth for 2026 [19] - The company anticipates challenges in the credit environment but remains committed to operational efficiency and financial management [13][16] Other Important Information - Provisions for doubtful accounts improved to 3.1% of net revenue, reflecting better management despite a challenging credit environment [13] - Adjusted net profit reached BRL 82 million, a 32% increase from the previous year [14] Q&A Session Summary Question: Could you provide some color on the ACV build-up for 2026? - Management expects a continuation of the 14.3% subscription revenue growth trend into 2026, with mid double-digit growth anticipated [19]

3Q25 Earnings Presentation November 6, 2025 INDEX DISCLAIMER This presentation contains forward-looking statements that can be identified using forward-looking words such as "anticipate," "believe," "could," "expect," "should," "plan," "intend," "estimate" and "potential," among others. Forward-looking statements appear in several places in this presentation and include, but are not limited to, statements regarding our intent, belief or current expectations. Forward-looking statements are based on our manag ...

Core Insights - Vasta Platform Limited reported a net revenue of R$1,737 million for the 2025 sales cycle, marking a 13.6% increase from the previous cycle, primarily driven by the conversion of Annual Contract Value (ACV) into revenue [3][4][14] - The company achieved a net revenue of R$250 million in 3Q25, a 13.4% increase year-over-year, with significant contributions from the public-school sector and non-subscription revenue [4][15] - Adjusted EBITDA for the 2025 sales cycle reached R$494 million, a 9.9% increase compared to the previous cycle, while the Adjusted EBITDA margin decreased slightly to 28.4% [6][17] - Free cash flow (FCF) for the 2025 sales cycle totaled R$316 million, representing a substantial growth of 116.6% compared to R$146 million in the previous cycle [7][28] - The company’s net debt to LTM adjusted EBITDA ratio improved to 1.75x as of 3Q25, down from 2.32x in the same quarter of the previous year, indicating a focus on deleveraging and cash generation [8][30] Financial Performance - Subscription revenue in the 2025 sales cycle totaled R$1,552 million, a 14.3% increase, constituting 89.3% of total net revenue [5][14] - Non-subscription revenue increased by 15.7%, supported by higher enrollment in Start-Anglo bilingual schools [14] - Adjusted net profit for the 2025 sales cycle was R$82 million, a 32.2% increase compared to R$62 million in the previous cycle, with an adjusted net margin of 4.7% [24] Operating Performance - The student base for core content solutions reached approximately 1.5 million, while over 560,000 students benefited from complementary solutions [11][12] - The Start-Anglo bilingual school operations expanded, with plans to launch 8 new operating units next year [10] Market Segments - The B2G segment generated R$67 million in revenue during the 2025 sales cycle, with a strong pipeline for future projects [9] - The company continues to focus on enhancing its client base through a better mix of schools and premium education systems [12] Cash Flow and Debt Management - The FCF/Adjusted EBITDA conversion rate improved significantly from 32.5% to 64.0%, reflecting operational efficiency [28] - The company negotiated and extended the maturity of corporate loans while reducing interest rates, contributing to improved financial health [8][30] ESG and Sustainability - Vasta published its fourth sustainability report, reaffirming its commitment to transparency and sustainability, including initiatives for diversity and inclusion [31][32] - The company has maintained its FSC certifications and is actively involved in social impact programs, such as the Somos Futuro Program [31][36]

Core Insights - Vasta Platform Limited (VSTA) is currently more attractive to value investors compared to Lincoln Educational Services Corporation (LINC) based on various financial metrics and rankings [1][3][7] Valuation Metrics - VSTA has a forward P/E ratio of 14.94, significantly lower than LINC's forward P/E of 29.80, indicating that VSTA may be undervalued [5] - The PEG ratio for VSTA is 0.26, while LINC's PEG ratio is 1.99, suggesting that VSTA has a better growth outlook relative to its valuation [5] - VSTA's P/B ratio stands at 0.45, compared to LINC's P/B of 3.93, further indicating VSTA's undervaluation [6] Zacks Rank and Earnings Outlook - VSTA holds a Zacks Rank of 2 (Buy), indicating a positive earnings estimate revision trend, while LINC has a Zacks Rank of 3 (Hold) [3] - The improving earnings outlook for VSTA makes it a standout option in the Zacks Rank model [7] Value Grades - VSTA has received a Value grade of A, while LINC has a Value grade of C, highlighting VSTA's stronger position as a value investment [6]

Core Viewpoint - Vasta Platform Limited is scheduled to report its financial results for the third quarter of 2025 on November 6, 2025 [1] Company Summary - Vasta Platform Limited will disclose its Q3 2025 financial performance, indicating ongoing operations and financial transparency [1]

Group 1 - The article emphasizes a long-only investment strategy that evaluates companies from an operational and buy-and-hold perspective, focusing on long-term earnings power and competitive dynamics rather than market-driven price actions [1] - Quipus Capital's approach is to hold most companies, indicating that only a small fraction should be considered a buy at any given time, which is a deliberate strategy to provide valuable information for future investors [1] - The hold articles serve to introduce a healthy skepticism in a generally bullish market, highlighting the importance of operational aspects in investment decisions [1] Group 2 - The article does not disclose any stock, option, or derivative positions in the companies mentioned, nor does it plan to initiate any such positions in the near future [2] - The opinions expressed in the article are solely those of the author and are not influenced by any business relationships with the companies discussed [2] - Seeking Alpha clarifies that past performance does not guarantee future results and that the views expressed may not reflect the opinions of the platform as a whole [3]

Financial Data and Key Metrics Changes - Subscription revenue reached $1,340 million, a 16% increase compared to the same period in 2024 [6][14] - Net revenue for the 2025 cycle to date reached $1.488 billion, a 14% increase compared to the same period in 2024 [7][14] - Adjusted EBITDA reached $462 million with a margin of 31.1%, reflecting an 8.1% increase compared to the previous cycle [15][18] - Free cash flow totaled $223 million, an increase of 147% from 2024 [18][19] - Adjusted net losses totaled $29 million, an improvement from the adjusted net loss of $37 million in the same quarter of 2024 [18] Business Line Data and Key Metrics Changes - The complementary solutions business grew by 24%, supported by an expanded student base and market penetration [7] - In the B2G segment, revenue from new customers totaled $9 million, contributing to $14 million from new customers over the last two quarters [7][13] - Non-subscription revenues increased by 98% to $29 million due to seasonal effects [13] Market Data and Key Metrics Changes - The average payment terms for accounts receivable was 153 days, one day higher than the comparable quarter [22] - The net debt position decreased to $917 million, down $46 million from the previous quarter [22][23] Company Strategy and Development Direction - The company is committed to innovation and inclusion, with plans to introduce new tools focusing on equity and personalized learning in 2026 [11] - The strategy includes diversifying the B2G portfolio into states and municipalities, with a positive outlook for new contracts [30] Management's Comments on Operating Environment and Future Outlook - Management expressed a positive outlook for the commercial cycle and expects continued growth in complementary products [28][30] - The company anticipates a strong performance in the second half of the year, particularly in B2G contracts [36][38] Other Important Information - The company has implemented operational discipline measures, including automation in collection processes and centralized payment scheduling [19] - The net debt to last twelve months adjusted EBITDA ratio decreased to 1.9 times, down from 2.28 times in Q2 2024 [10][23] Q&A Session Summary Question: Comments on the commercial cycle and competitive environment - Management noted a positive outlook for complementary products and a strong portfolio supporting growth despite market competition [28][30] Question: Outlook for B2G contracts in an election year - Management indicated that while there is uncertainty, new governors and mayors may be open to new contracts, maintaining a positive outlook [32] Question: Impact of premium schools on EBITDA margin - Management confirmed that premium products and growth have positively influenced margins, with expectations for Q4 to exceed 30% [36] Question: Expectations for B2G in the second half of the year - Management expects growth in B2G contracts, particularly with the recognition of the Para contract and new customer acquisitions [36][38] Question: Start Anglo operations and non-subscription revenue - Management expects new contracts for Start Anglo to begin operations in 2026, with non-subscription revenue driven by tuition from flagship schools [43][44]

Financial Performance - Net Revenue increased by 14% compared to 2024[9] - Subscription Revenue increased by 16%[8, 17] - Adjusted EBITDA reached R$462 million, an 8% increase from R$428 million in 2024[11, 12] - Free Cash Flow increased by 147% to R$224 million compared to R$90 million in 2024[14, 34] - Adjusted EBITDA margin decreased by 1.6 percentage points to 31.1% compared to 32.7% in 2024[12, 28] Revenue Breakdown - Subscription revenue cycle to date increased by 16%[17] - Non-subscription revenue cycle to date increased by 11%[17] - B2G (Business-to-Government) revenue cycle to date decreased by 28%[17] Margin Analysis - Gross margin decreased by 0.6 percentage points[24] - Commercial expenses slightly increased but remained stable near 17% of net revenue[24, 26] - Adjusted G&A expenses decreased due to operational efficiencies and workforce optimization[24, 27] Debt and Cash Flow - Net Debt decreased by R$123 million cycle to date[47] - LTM (Last Twelve Months) FCF / LTM Adjusted EBITDA conversion improved by 25.8 percentage points to 57.7% compared to 31.9% in 2024[15, 34]

Unaudited Condensed Interim Consolidated Financial Statements This section presents the unaudited condensed interim consolidated financial statements and their accompanying notes for the period ended June 30, 2025 [Unaudited Condensed Interim Consolidated Statements of Financial Position](index=3&type=section&id=Unaudited%20Condensed%20Interim%20Consolidated%20Statements%20of%20Financial%20Position) The Company's financial position as of June 30, 2025, shows decreased total assets and equity, with reduced cash and trade receivables | Metric | June 30, 2025 (R$ thousands) | December 31, 2024 (R$ thousands) | Change (R$ thousands) | % Change | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Total Assets | 7,096,696 | 7,205,155 | (108,459) | -1.50% | | Total Liabilities | 2,160,553 | 2,211,844 | (51,291) | -2.32% | | Total Shareholder's Equity | 4,936,143 | 4,993,311 | (57,168) | -1.14% | | Cash and cash equivalents | 14,257 | 84,532 | (70,275) | -83.13% | | Marketable securities | 300,942 | 111,313 | 189,629 | 170.36% | | Trade receivables | 725,258 | 863,244 | (137,986) | -15.98% | | Intangible assets and goodwill | 5,088,974 | 5,160,785 | (71,811) | -1.39% | [Unaudited Condensed Interim Consolidated Statements of Profit or Loss and Other Comprehensive Income or Loss](index=5&type=section&id=Unaudited%20Condensed%20Interim%20Consolidated%20Statements%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income%20or%20Loss) The Company reported an increased net loss for the six-month period ended June 30, 2025, despite higher net revenue, due to increased operating expenses and negative finance results | Metric | June 30, 2025 (R$ thousands) | June 30, 2024 (R$ thousands) | Change (R$ thousands) | % Change | | :------------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Net revenue from sales and services | 788,892 | 755,068 | 33,824 | 4.48% | | Gross profit | 491,358 | 484,218 | 7,140 | 1.47% | | Operating income (expenses) | (465,468) | (431,502) | (33,966) | 7.87% | | Finance result (net) | (95,392) | (104,054) | 8,662 | -8.32% | | Loss for the period | (59,527) | (44,229) | (15,298) | 34.59% | | Basic Loss per share (R$) | (0.74) | (0.52) | (0.22) | 42.31% | | Diluted Loss per share (R$) | (0.74) | (0.52) | (0.22) | 42.31% | [Unaudited Condensed Interim Consolidated Statements of Changes in Equity](index=6&type=section&id=Unaudited%20Condensed%20Interim%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Total shareholder's equity decreased from R$4,993,311 thousand as of December 31, 2024, to R$4,936,143 thousand as of June 30, 2025, primarily due to the loss for the period | Metric | December 31, 2024 (R$ thousands) | June 30, 2025 (R$ thousands) | Change (R$ thousands) | | :-------------------------------- | :------------------------------- | :----------------------------- | :-------------------- | | Total Shareholder's Equity | 4,993,311 | 4,936,143 | (57,168) | | Loss for the period | - | (59,433) | (59,433) | | Share based compensation granted | - | 2,359 | 2,359 | [Unaudited Condensed Interim Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Interim%20Consolidated%20Statements%20of%20Cash%20Flows) The Company experienced a net decrease in cash and cash equivalents for the six-month period ended June 30, 2025, primarily driven by significant cash used in investing activities | Metric | June 30, 2025 (R$ thousands) | June 30, 2024 (R$ thousands) | Change (R$ thousands) | % Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Net cash from operating activities | 171,317 | 82,596 | 88,721 | 107.41% | | Net cash used in investing activities | (228,614) | (82,654) | (145,960) | 176.59% | | Net cash used in financing activities | (12,978) | (44,938) | 31,960 | -71.12% | | Net decrease in cash and cash equivalents | (70,275) | (44,996) | (25,279) | 56.18% | | Cash and cash equivalents at end of period | 14,257 | 50,868 | (36,611) | -71.97% | [Notes to the Unaudited Condensed Interim Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Interim%20Consolidated%20Financial%20Statements) This section provides detailed notes explaining the significant accounting policies, estimates, and financial risk management practices underlying the interim consolidated financial statements [1. The Company and Basis of Presentation](index=8&type=section&id=1.%20The%20Company%20and%20Basis%20of%20Presentation) Vasta Platform Limited, a Cayman Islands-incorporated company headquartered in São Paulo, Brazil, provides technology-powered educational content and digital solutions for K-12 private schools - Vasta Platform Limited is a publicly held company incorporated in the Cayman Islands, with headquarters in São Paulo, Brazil, providing technology-powered educational content and digital solutions for K-12 private schools[12](index=12&type=chunk) - The Company is a subsidiary of Cogna Educação S.A. and its shares are traded on Nasdaq Global Select Market under ticker symbol 'VSTA' since July 31, 2020[13](index=13&type=chunk) [2. Basis of accounting](index=8&type=section&id=2.%20Basis%20of%20accounting) The interim financial statements for the six-month period ended June 30, 2025, are prepared in accordance with IAS 34 and presented in thousands of Brazilian Reais, consolidating entities where Vasta holds a controlling interest - Interim Financial Statements are prepared in accordance with IAS 34 – Interim Financial reporting – and presented in thousands of Brazilian Reais ("R$"), the Company's functional currency[14](index=14&type=chunk)[15](index=15&type=chunk) | Company | Interest (June 30, 2025) | Interest (December 31, 2024) | | :------------------------------------------ | :----------------------- | :--------------------------- | | Somos Sistemas de Ensino S.A. | 100% | 100% | | Colégio Anglo São Paulo Ltda. | 100% | 100% | | MVP Consultoria e Sistemas Ltda. | 100% | 100% | | Sociedade Educacional da Lagoa Ltda | 100% | 100% | | EMME – Produções de Materiais em Multimídia Ltda | 100% | 100% | | Escola Start Ltda. | 51% | 51% | [3. Use of estimates and judgements](index=9&type=section&id=3.%20Use%20of%20estimates%20and%20judgements) Management applies judgments and estimates in preparing the interim financial statements, which affect reported amounts and are continuously evaluated, with fair value measurements categorized into Level 1, 2, or 3 inputs - Management makes judgments and estimates that affect the application of accounting policies and reported financial amounts, which are continually evaluated[19](index=19&type=chunk)[20](index=20&type=chunk) - Fair value measurements are categorized into Level 1 (quoted market prices), Level 2 (observable inputs), and Level 3 (unobservable inputs), with third-party appraisers engaged for Level 2/3 valuations if needed[21](index=21&type=chunk)[25](index=25&type=chunk) [4. Material accounting policies and new and not yet effective accounting standards](index=9&type=section&id=