Vasta Platform (VSTA) - 2025 Q1 - Quarterly Report

Unaudited Condensed Interim Consolidated Financial Statements This section presents the company's unaudited condensed interim consolidated financial statements, including the balance sheet, profit or loss, changes in equity, cash flows, and detailed notes Consolidated Statements of Financial Position (Balance Sheet) As of March 31, 2025, total assets slightly increased to R$7,214.2 thousand, with a shift from cash to marketable securities, while liabilities marginally rose and equity slightly decreased Statement of Financial Position Summary (in thousands of R$) | Account | March 31, 2025 (R$ thousand) | December 31, 2024 (R$ thousand) | | :--- | :--- | :--- | | Total Current Assets | 1,519,625 | 1,466,325 | | Cash and cash equivalents | 12,345 | 84,532 | | Marketable securities | 245,941 | 111,313 | | Trade receivables | 859,079 | 863,244 | | Total Non-current Assets | 5,694,531 | 5,738,830 | | Intangible assets and goodwill | 5,122,213 | 5,160,785 | | Total Assets | 7,214,156 | 7,205,155 | | Total Current Liabilities | 1,252,046 | 1,244,172 | | Total Non-current Liabilities | 970,400 | 967,672 | | Total Liabilities | 2,222,446 | 2,211,844 | | Total Shareholder's Equity | 4,991,710 | 4,993,311 | | Total Liabilities and Equity | 7,214,156 | 7,205,155 | Consolidated Statements of Profit or Loss For Q1 2025, the company reported a net loss of R$3.4 thousand, a significant decline from a profit in Q1 2024, due to decreased net revenue and increased operating expenses Profit or Loss Summary (in thousands of R$) | Account | March 31, 2025 (R$ thousand) | March 31, 2024 (R$ thousand) | | :--- | :--- | :--- | | Net revenue from sales and services | 430,392 | 460,716 | | Gross profit | 289,179 | 320,633 | | Operating income (expenses) | (242,871) | (224,582) | | Profit before finance result and taxes | 44,386 | 92,991 | | (Loss) profit for the period | (3,376) | 21,942 | | Basic (loss) profit per share | (0.04) | 0.27 | | Diluted (loss) profit per share | (0.04) | 0.30 | - The decline in profitability was influenced by lower net revenue, which fell from R$460.7 thousand to R$430.4 thousand, and higher commercial expenses, which rose from R$73.3 thousand to R$97.7 thousand year-over-year[7] Consolidated Statements of Changes in Equity Total shareholder's equity slightly decreased to R$4,991.7 thousand as of March 31, 2025, primarily due to the net loss for the period, partially offset by share-based compensation - The key movements in equity for the three months ended March 31, 2025 include: - Net loss for the period: (R$3,267 thousand) attributable to controlling shareholders[8] - Share-based compensation granted and issued: R$1,775 thousand[8] - Vested share-based compensation leading to a transfer to treasury shares: R$179 thousand[8] Consolidated Statements of Cash Flows For Q1 2025, the company reported a net decrease in cash and cash equivalents of R$72.2 thousand, driven by significant cash used in investing activities despite positive operating cash flow Cash Flow Summary (in thousands of R$) | Activity | March 31, 2025 (R$ thousand) | March 31, 2024 (R$ thousand) | | :--- | :--- | :--- | | Net cash from operating activities | 89,597 | 44,170 | | Net cash used in investing activities | (156,249) | (34,830) | | Net cash used in financing activities | (5,535) | (37,990) | | Net decrease in cash and cash equivalents | (72,187) | (28,650) | | Cash and cash equivalents at end of period | 12,345 | 67,214 | - The significant cash outflow in investing activities was driven by a net purchase of marketable securities amounting to R$129.8 thousand (R$319.0 thousand purchased vs. R$189.2 thousand in proceeds)[10] Notes to the Financial Statements The notes provide detailed explanations of accounting policies and breakdowns of significant financial statement items, covering financial risk, instruments, assets, liabilities, related parties, and revenue recognition Note 1 & 2: Company Overview and Basis of Presentation Vasta Platform Limited, a Cogna Educação S.A. subsidiary, provides K-12 educational solutions in Brazil, with interim financial statements prepared under IAS 34 in thousands of Brazilian Reais - The company is a technology-powered education content provider for the K-12 segment and is a subsidiary of Cogna Educação S.A[12][13] - The financial statements have been prepared in accordance with IAS 34 – Interim Financial Reporting and are presented in thousands of Brazilian Reais (R$)[14][15] Note 5: Financial Risk Management The company manages market, credit, and liquidity risks, with its gearing ratio increasing to 59% as of March 31, 2025, reflecting changes in its capital structure - The company's main financial risks are market risk (interest rate fluctuations on CDI and IPCA indexed debt), credit risk (trade receivables), and liquidity risk[27][28][29] Capital Management - Gearing Ratio | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net debt (i) (R$ thousand) | 1,845,262 | 1,798,568 | | Total shareholder's equity (R$ thousand) | 4,991,710 | 4,993,311 | | Gearing ratio (%) | 59% | 56% | Financial Liabilities by Maturity (as of March 31, 2025, in thousands of R$) | Liability | Less than one year (R$ thousand) | Between one and two years (R$ thousand) | Over two years (R$ thousand) | Total (R$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Bonds | 273,907 | - | 497,820 | 771,727 | | Lease liabilities | 23,253 | 9,251 | 77,876 | 110,380 | | Accounts payable for business combination | 224,643 | 222,916 | 1,908 | 449,467 | Note 9: Trade Receivables Net trade receivables slightly decreased to R$859.1 thousand as of March 31, 2025, with a significant portion not yet due and a provision for impairment losses Maturities of Trade Receivables (in thousands of R$) | Status | March 31, 2025 (R$ thousand) | December 31, 2024 (R$ thousand) | | :--- | :--- | :--- | | Not yet due | 728,441 | 693,581 | | Past due (Total) | 207,493 | 221,635 | | Impairment losses | (87,590) | (89,751) | | Net Trade Receivables | 859,079 | 863,244 | Note 14: Bonds Total bonds outstanding were R$771.7 thousand as of March 31, 2025, with the company in compliance with its Net Debt / Adjusted EBITDA covenant of 2.17 against a 3.50% limit - The company was in compliance with its bond covenants, with a Net Debt / Adjusted EBITDA ratio of 2.17, below the required maximum of 3.50%[71][73] Bond Maturities (in thousands of R$) | Maturity | March 31, 2025 (R$ thousand) | % | | :--- | :--- | :--- | | One year or less (Current) | 273,907 | 35.5% | | Over one year (Non-current) | 497,820 | 64.5% | | Total | 771,727 | 100.0% | Note 20: Related Parties The company conducts significant transactions with related parties, including R$771.7 thousand in bonds payable to Cogna Educação S.A., and incurred R$3.6 thousand in key management compensation Key Related Party Balances (March 31, 2025, in thousands of R$) | Counterparty | Nature | Amount (R$ thousand) | | :--- | :--- | :--- | | Cogna Educação S.A. | Bonds Payable | 771,727 | | Cogna Educação S.A. | Indemnification Asset | 154,812 | | Editora Ática S.A. | Other Liabilities | 11,072 | | Editora Ática S.A. | Suppliers | 3,602 | - Compensation for key management personnel amounted to R$3,615 thousand for the three months ended March 31, 2025, up from R$2,504 thousand in the same period of 2024[88][90] Note 23: Shareholder's Equity As of March 31, 2025, total shares outstanding were 83.6 million, with a share capital of R$4,820.8 thousand, resulting in a basic and diluted loss per share of R$0.04 - A share repurchase program for up to R$62.5 thousand was concluded on March 31, 2024[105] Share Ownership Structure (as of March 31, 2025, in units) | Shareholder | Class A (units) | Class B (units) | Total (units) | | :--- | :--- | :--- | :--- | | Cogna Group | - | 64,436,093 | 64,436,093 | | Free Float | 15,774,195 | - | 15,774,195 | | Treasury shares | 3,439,599 | - | 3,439,599 | | Total | 19,213,794 | 64,436,093 | 83,649,887 | Note 24: Net Revenue and Seasonality Net revenue for Q1 2025 decreased to R$430.4 thousand, primarily due to declines in Textbooks and Other products and services, reflecting the company's seasonal revenue pattern Net Revenue Breakdown (in thousands of R$) | Category | March 31, 2025 (R$ thousand) | March 31, 2024 (R$ thousand) | | :--- | :--- | :--- | | Learning systems | 318,347 | 257,552 | | Textbooks | 34,266 | 50,730 | | Complementary education services | 47,519 | 49,095 | | Other products and services | 30,260 | 103,339 | | Total | 430,392 | 460,716 | - Revenue is subject to seasonality, with the main deliveries and revenue recognition occurring in Q4 and Q1, aligned with the school year[114] This also impacts working capital needs, which are highest in Q3 and Q4[114]