Afya(US:AFYA)2023-05-25 01:16Financial Data and Key Metrics Changes - Adjusted net revenue increased by 25% year-over-year, reaching BRL 709.4 million [7][12] - Adjusted EBITDA grew almost 22% year-over-year, totaling BRL 330.2 million with a margin of 46.5% [7][12] - Strong cash flow generation of BRL 349.4 million, up 19% year-over-year, with a cash conversion of 112% [7][12] - Adjusted net income was BRL 166.4 million, consistent with the same period last year, impacted by higher financial expenses [8][14] Business Line Data and Key Metrics Changes - The number of operating medical seats increased by over 25.5% year-over-year, reaching 3,113 [8][15] - The number of undergraduate medical students grew by 18.8% year-over-year, reaching almost 21,000 [8][15] - Continuing education segment net revenue grew by more than 46.6% year-over-year, totaling BRL 34.9 million [8][17] - Digital health services reported a revenue increase of almost 20% year-over-year, reaching BRL 56.8 million [9][18] Market Data and Key Metrics Changes - The ecosystem now has 295,000 active users, indicating strong penetration among physicians and medical students in Brazil [9][18] - The average ticket for medical courses increased by 8.3% year-over-year, reaching BRL 8,570 [15][44] Company Strategy and Development Direction - The company aims to add 600 new medical seats by 2028, focusing on expanding its educational offerings [10][15] - The digital services segment is expected to grow significantly, with a focus on B2B engagements and new contracts with pharmaceutical companies [9][39] - The company is committed to maintaining a margin guidance of 40% to 42% for the year, despite current pressures from new acquisitions [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the Medcel offering and the overall digital services growth, anticipating a stronger intake cycle in the second half of the year [23][26] - The company is monitoring the competitive landscape and adapting its offerings to maintain market share [24][25] - Future pricing adjustments for medical courses will be based on inflation expectations, with a planned increase in September [44][46] Other Important Information - Cash and cash equivalents at the end of Q1 were BRL 723 million, a decrease of 8% year-over-year [19] - Net debt increased to BRL 2.29 billion, primarily due to acquisitions [19] Q&A Session Summary Question: Insights on Medcel's performance and competitive landscape - Management noted a decrease in active payers for Medcel but highlighted a good intake from other offerings, expecting recovery in the next cycle [22][23] Question: Expectations on margins and business mix - Management confirmed a commitment to margin guidance of 40% to 42%, with pressures from new acquisitions expected to stabilize over time [28][30] Question: Demand changes in medical schools and B2B product development - Management reported a strong candidate-to-seat ratio and ongoing development in B2B solutions, particularly in the pharmaceutical sector [34][39] Question: Future pricing behavior for medical tickets and updates on Mais Medicos - Management indicated an expected increase in medical ticket prices above inflation and mentioned ongoing developments regarding the Mais Medicos program [42][46]