Vasta Platform (VSTA)

Bruno Giardino CFO
Mário Ghio CEO
Marcelo Santos JPMorgan
Emiliano Flores Scotiabank
Lucas Nagano Morgan Stanley
Call transcript
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Ladies and gentlemen, thank you for standing by, and welcome to the Vasta Platform's First Quarter 2022 Conference Call. [Operator Instructions] I would now like to turn the conference over to your host, Mr. Bruno Giardino, CFO. Sir, please go ahead.

Bruno Giardino

Good evening, everyone, and thank you for joining me in this conference call to discuss Vasta Platform's first quarter 2022 results. call have the CEO. Ghio, on me today, Mário we Vasta's With

today's make will our statements. During executives forward-looking presentation,

Forward-looking statements unknown operating actual by performance other generally these financial that results and future relate factors from involve to to future forward-looking differ known those cause statements. and may risks, materially and events uncertainties, our or contemplated or

our strategic financial not related to statements initiatives, statements this performance, for related our Forward-looking expectations to, benefits in our presentation market. expectations limited include, expectations future the and regarding periods, business product but and regarding are and our the

in Forward-looking management's management. as on These and based based that on date information in as statements our those more with The hereof. as information filings Commission. include release are today Exchange us forth set fully the on beliefs and issued risks the are statements to and well in presentation the forward-looking the our currently described available press our available assumptions to this Securities we those

You statements, rely any any and update events, obligation by to predictions we forward-looking as should of on as disclaim required law. not except future them

isolation not In to call. The are may on be measures this prepared addition, financial substitute measures considered with refer management non-IFRS for a IFRS. non-IFRS financial or in results accordance as intended in

Let over the his to call me give opening now Ghio to statements. make

Mário Ghio

XX% the initiate as 'XX, grew subscription quarter Textbook to the of Complementary we as Service. highest hit results. solutions ramp-up highlights Therefore, over COVID-XX in the the products, of is cycle. revenue, field. of the long shows the R$X X meaning for a some participating subscription trend as first a to products, with mix for of In earnings XXXX business stable sources special -- paper-based savings PAR, pandemic, operational quarter as the After from Adjusted grew I release. digital Vasta's in up from richer in PAR, growth compared the net revenue results excluding finally the as the growth, fourth accelerated to to points. with year XX% to this cycle has XX% the XX%. revenue managed And for cost brands XX% a leverage represents among segment the XXXX more revenue net a EBITDA in to over our on gains cycle, than XXXX being our first the result growth period attest ACV you the in we the increase totaled ACV growth textbook quarter you, numbers was XX% segments business the all and for migration Slide cycle ACV Thank recognition quarter these of high-growth a recovery operating premium to solutions. of us. had year-over-year ACV. back last results Thank Non-subscription Bruno. increased would that billion, like XXX quarter XXX% due and expected, which and XXXX 'XX of on by for start confirm revenue basis a rate of that to the school the margins previous the XXXX cycle. grew

be we the reiterating our XXXX, second the to of that ACV. XXX% to XX%, For range belief recognition of the able between and quarter will XX% expect that collect ACV XXXX

cycle exceeding quarters part revenue same although previous year-on-year the half different first Slide to increased continued cycle. in than of R$XXX years of XXXX when in cycle recognition R$XXX XXXX less with was In in detail XXXX ACV Textbook ACV the previous the million, revenue of this captured and half the the Subscription registering of the first Mackenzie Service largest came versus to the the XX% XX%, XXXX as less first in new That the two the also in revenue the the the the driven X, XX% million revenue, period XX% platform. exceeding of net ACV by increase that totaled in Eleva, compared we a to Moving being products also this to the is R$XXX then first description an and guidance. of ACV guidance. year, due the concentrated two the composition. first means there seasonality such quarters growth quarter, guidance, line million, as

between Giardino, expect our floor range XX% For we the CFO. and ACV quarter, will the recognition mentioned, pass I as XX%. to now the following I Bruno to

Bruno Giardino

in Thank Slide of composition the In first XXXX. Vasta's we the you, revenue net of quarter the X, Ghio. present

total commented, our Ghio R$XXX revenue XX% guidance. increased As the million year-on-year, net exceeding

the center the from to slide components the growth. Moving see we the of of right, revenue

XX%, In XX% reflecting to increased in relevance reaching net XX% revenue total net revenue of revenue fell subscription XX% quarter XX% the revenue sales and jumped Non-subscription revenue. the superior in in the registered shifting the systems which in fourth digital year-on-year, at 'XX. total, offsetting first increased of decline strategy continued mix, with only. aligned from platforms. PAR, represented total is PAR quarter this the revenue of Excluding subscription XX%, our to gain revenue quality and XXXX ACV. textbooks learning of mix Textbooks

while XXX to G&A and stable total margin gross also revenue PAR analyze margin XX%. quarter and to driven year. period. down nonsubscription center jumping not bps XXXX XX%, this also helped ex-PAR by We more bps, total, doubled grew the XXXX the operating the the In R$XXX XXX fourth due quarter, fell again, we net than see revenue XX% subscription And expenses in the reaching revenue in The right, gains XX%, X. revenue, In XX% expenses the up respectively. subscription only adjusted the leverage revenue Slide in date, million, savings. was to ACV, while cost XX% the as to of growth from making commercial of plus Net net XX.X%, 'XX. result Slide cycle X, in revenue from expanded mostly bps, 'XX XXX by for adjusted quarter grew EBITDA to first a and but Moving

to of The adjusted the half R$XX EBITDA In chart million, first in is margin R$XXX than definitely EBITDA that a percentage increase much the and the cycle profitability recent XX.X% R$XX right, our is profit. our history. by with as standing In a higher is the the profit, is increased leverage on of of points. adjusted the company's of adjusted in profit company's XXX operating net Vasta's in XXXX first This grew margin partly an in on higher potential. the comments highest offset quarter net date, the quarter X% and million the interest level first evidence closer cycle financial of in in higher the following was XXXX reaching XXXX quarter the increased XX%, now the rates to million in the operating adjusted from which Slide growth first XXXX, X, increased In to profit country. the

normalized the materials We school million the usually is acquisition CapEx flow million, we Moving the the the but receivable operating if for XXXX quarter, in the totaled operating in -- evolution. the cash in cash amounting higher to show by of first first operating the we XXXX, upfront XXX% first same X, excluded generation Slide the up from million. to to the cash R$XX accounts flow as cycles. have operating our along million cash noteworthy flow invest first totaled in XXXX. operating In quarter flow negative of In the R$XX XXXX, zero part the production that of of increased quarter flow R$XXX Likewise, observed benefited was impacted quarter fourth cash operating preparation anticipation cycle the flow date, on for early period customers in the the the quarter received arrears we to cash R$XX from cycle R$XX even in solutions. million, in we Therefore, negative to providers. year, the royalties in negative half flow a basis, been XXXX. our payments flow generation are operating of operating payment of that Chromebooks from 'XX a by It cash million cash nearly that would digital R$XX first of content the normalized is the

the Slide Next, more our I'll the XX, give on in accounts provisions receivable. details in

PDA, As accounts, of the you our school for our know, over portfolio. decision business by the receivables the for environment the provision due last aging quarters, doubtful to we to them recognized which extending have well increases as higher as payment terms, support challenging partners

terms of That's While we to increased higher XXXX in the provision revenue this in the date. in the the in seen of why adopted second have the have the rate the have provisions first quarter. delinquency in half standards flat quarter, PDA we in for an cycle need net improvement

days, debt our XXX a Vasta quarter fourth R$XXX 'XX. of with receivables of with net right to the first days the quarter net Slide generation was the XXX the last In net the debt. average less. first Finally, which and XX in average see the By I in EBITDA days last decline, adjusted the offset position started the XX denominator, in to rates, same Phidelis the of Eleva's decreases that was months' conclude the of in reaching XX the X.XX, the XX-month receivables the adding time increase first days in of to more will the EBITDA, speech than of last level my revenue net accounts our we to as million. denominator. including 'XX, first quarter XX ended quarter chart, period. related flow debt From 'XX, months' leverage, cash accrual as X.XX the interest acquisition full by or quarter, measured has operating in in the

Ghio. We our base expect adjusted the floor said, quarters EBITDA coming as With trend continue I'll to back being downward that over to increases. this pass the

Mário Ghio

Thank you, Bruno.

XX. Moving to Slide

Brazilian approval Vasta's proud admission the in the leadership to in competitive in best numbers We our premium particularly the are was tests in competitive of career say the most Medicine, The of most the notable brand brands in performance that universities. country. maintain

University expanded with choosing admitted at education is the among considered key year. The universities when admissions content university Our the Brazil's K-XX at top-of-mind partner. brand, the Latin schools performance in in in Medicine top compared the attributes best the by according the XX% its Paulo, of Anglo, ranking students America higher to Sao best leadership increase a of last to for an

Slide Moving to XX.

Vasta little sustainability report a portal. according IR to the end first available. about hope talk report We elaborated was bit ESG its our Vasta's standards in By the of ESG. open much. Let's our about session. April, Thank Q&A highest available issued presentation very this ESG and community investor the you standards to serious I I understand Vasta. that, at Having will how help said we report finish are the now


Marcelo of line [Operator have Instructions] the the question of We JPMorgan. first Santos from comes

open. Your now line is

You may ask your question.

Marcelo Santos

Thanks for questions. asking to the opportunity

could initiatives. The your is a first on if comment question you bit BXBXC

You and have Plurall, recently I Tutor, also think, Plurall there My was Plurall Therapy. Maestro, Teacher, launched the

how are you said that expected outlook second say So levels more recover regarding the year if the could same least you be call, comment the interesting. a calendar the And going, you outlook? comment it of to would you previous make the margin In question Giardino to XXXX. XXXX. now, the could these is you renewed at for Could or

Mário Ghio

Plurall Thanks that is the My you Plurall offer for speaking. piloting period. Therapy, your initiatives call in Marcelo. BXCXB, are we question, Actually, right? Adapta, more Because Teacher, mentioned those Ghio we we This Plurall and

student that the our the we are mean the the a we that, and consider with to we opportunity we offer keep but to class the that by schools connect sales, not with then teacher just for give school to process. BXCXB. engaged of rebate Now I the offering to And

first We are with results in this happy quarter. the first

offering not revenues the that every right? not On service for -- on adaptive NPS over does programs basis you we students school preschool. classes are a programs this basis, the the for selling, cycle, students instance, I selling are very a We or are primary all selling classes is country. for on, school from in right? the of tell right? The high. regarding also private represent revenues adaptive they we course, of total Of But not still secondary daily meaningful can are daily private we the day, new And are

students, they right? of product pace the these will So more right? we that second of grades with we be and business generating know are plan, line services And demand in our for the kind is with for service, students, this even important semester, that in short, also the product this many considering recover in kind revenues Marcelo, we and generates more important are new When more must okay? of that

Bruno Giardino

we yes, right, we EBITDA XXXX adjusted level, than year to higher question, in had our Marcelo, closer that have regarding your reiterate second XXXX. what will view XXXX the fiscal margins

can we a thing environment is inflationary posted Eventually, this in you in the is surpass know, we outlook. renewed that, getting The is So difficult. XXXX. what as Brazil

So it a definitely, that and right the kind compromise Nothing will have to to ahead. this makes more level XXXX bit but terms for But any surpass adjusted that challenges we delivery will higher of levels we us close forecast it EBITDA of now. make eventually, adjusted margin. level will of be some of we in precise EBITDA, hard


Next, Emiliano of we of have line the Scotiabank. Flores

now open. Your line is

your ask may You question.

Emiliano Flores

for only one. It's taking question. my Thanks

How That seeing K-XX If XXXX you will the could thoughts in it. on share are you cycle. be the your outlook period? this for the recovery

Mário Ghio

trend means are see more preschool besides back for schools. entering that the first of right? because students, of that cycle will the of super with ACV, end And school, next returns results that, right? in full the we the this are see to this revenues, they students the good that in in we with cheaper preschool, terms of -- more right? are okay? us in marketing campaign for the or of targets the year, the come the that the and right? potential whole mean Great. to to in important we for positive the seeing positive are to commercial for so a share year, So the XXX% we So above our preschool, our and book preschool. building are in So the we stay deliver for quarter, preschool, by expecting year, So will April, period expecting I that's first the this also the in important happy, we we can ACV, you are right? the What we type first we have XX not with in of not commercial question. the schools. And year, the the We just can the this super least terms as can are of school ACV, the see regarding coming in building for beginning especially are to students, we terms next we the in gaps we okay, by are right? school Thanks the we are preschool we And that of are the finished finished Student so quarter a next students prices we they the but preschool life finished, in students this of for have results of maybe the marketing important that first in cycle, in of number kids, are will year I for for preschool, Well, the the kids quarter to number market in positive for back in motivated for at the a years, again all is but still some of have preschool, of kids and right? the next bring

Bruno Giardino

It's important go-to-market, with Emiliano, Giardino that the cycle the first to the us is us process. Eleva in of this XXXX remember we Mackenzie the commercial with speaking -- here, in -- year also for have

probably... will we So

Mário Ghio

asset. one will Fibonacci, Also, be that

Bruno Giardino

we complementary relatively brands have think base have. cross-sell penetration a incorporated the which Eleva small. the great we of the with And So opportunities which and is lot services into also in within go-to-market, is Mackenzie, a our of of strength we

sales very okay? cycle good potential think to XXXX, in a bring I So another good here we have


line question have the of Next [indiscernible] of from Itau. we

open. is line Your

question. your ask may You

Unidentified Analyst

the taking Thank for you question.

increase, we terms company a the regarding payment associated extended strong So with which in schools. the PDA, saw

the a Now that year? more what we year throughout should ACV of should have grade, for be normalized in terms the dynamics the PDA

Bruno Giardino

see Thank a payment in right, cycle. as you but of it's coming difficult ahead, we [indiscernible]. always beginning to Yes, for improvements the the some the we question, predict expect definitely quarters, the normalization

historical than little let's a where we X%, the PDA the should we in our level PDA an is portfolio. loss higher a of And the bit to. level gradually, had see receivables effective recovery, converge levels. to this So of say, X% Historically, should the

should trend come for make the definitely see coming predictions It's ahead, okay? So quarters, is difficult back this we to we but this gradually, to level. very the


[Operator Instructions] We have the question the of comes Stanley. line Morgan of from Lucas Nagano

line Your open. is now

You may ask question. your

Lucas Nagano

bit plateau this Thanks facing? on the the extended the inflation the you for about year? cycle, current could price taking year considering maybe gap comment my a inflation from question. we're from you Do above and expect close to last Also pricing XXXX

Mário Ghio

released going are beginning list prior we because to July phenomenon. the left in list and when our Yes, inflation enrollment inflation need last terms X.X%, that Brazil right? inflation last released in XX%, this pass here. last year, was of saw our prices So increase if wrong, the we price not of we So we to list the period, we price by inflation now X%, year we Lucas. wrong, ended around list aware of we decided right? of or I'm end are our again, X%, August, we of then gap the to if around year And around, last our when year, question, Great around not with the to right, okay? the price schools spike I'm price And

left pass inflation last to planning Which are this for to to not whole gap the the inflation table the inflation we the inflation to correct we planning So of of year. right? pass are above the of year the pass on the we left we prices year last expecting are year, gap this but plus to inflation, we and that means


now back like no I at sir? the would [Operator this time. Mr. Mário to turn showing to questions conference am Ghio, I further Instructions]

Mário Ghio

participating well you release, Thank all our and I and see hope all in healthy our for in to earnings quarter. next you


concludes you conference Thank all for participating. and Ladies Thank you. call. gentlemen, today's this

may You now disconnect.