YDUQS Participacoes SA

BOVESPA:YDUQ3

Q2-2025 Earnings Call

[Operator]

Good morning, ladies and gentlemen. Welcome to Yduqs video conference to present to details of the second quarter of 2025. This video conference is being recorded, and the replay can be accessed on the company's website, www.yduqs.com.br. The presentation is also available for download.

[Operator Instructions] Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the company's business prospects, operational and financial projections and goals are the beliefs and assumptions of Yduqs' Executive Board and the current information available to the company. Those statements may involve risks and uncertainties as they relate to future events and, therefore, depend on circumstances that may or may not occur.

Investors, analysts and journalists should be aware of events related to the macroeconomic scenario, the industry and other factors that could cause results to differ materially from those expressed in the respective forward-looking statements. It's important to highlight that to better view the presentation, we recommend to enable full screen mode.

Present at this video conference, we have Mr. Eduardo Parente, Board Member of Yduqs; Mr. Rossano Marques Leandro, the CEO; Mr. Alexandre Aquino, CFO; and [indiscernible] Investor Relations Officer. I would like to hand the floor over to Mr. Eduardo Parente, who is going to start the presentation.

Mr. Parente, you may proceed.

[Eduardo Menezes, executive]

Good morning, everyone. Welcome to Yduqs' Q2 2025 presentation. As you see, my last day as executive at Yduqs. Rossano takes over as our CEO. I have been CEO for 16 years. Many boards I have taken part and never seen such well-planned transition to take Yduqs to a higher level.

[Rossano Marques, executive]

Thank you. Eduardo is going to the Board. I'm very happy to take on this position, honored with this very well-made transition process, very honored with the company's results and the results when we look at cash generation, which has been the most important indicator in the company. We're going to see a lot of cash generation in this first half, great evolution compared to previous years. Also, how we're bidding 2026 that is very solid, both on one side, conservative revenue paid and actually intake getting back to previous years. Let's look at the levels.

Look at the evolution of operating cash flow here on one side. We're moving from BRL 1 million in the half in the last 12 months when we look at cash generation, BRL 613 million above the higher level of guidance of BRL 500 million to BRL 600 million. When we look down here, this number is very important. We have not seen numbers like those since 2023 intake growing not only total size, the mix as well, improving compared to previous years.

And the last one, on the left corner, this digital renewal. It's always been well below the even-numbered quarters compared to odd-number of quarters. And again, this year is close to a new level that we consider of renewal in even-numbered quarter. So this indicated that we have the drop in 9 days of DSO. So we see FCA in the past years above the guidance we have. So the second half needs to be equal to last year to be above guidance.

And the second half, we see it very optimistically. We had lots of intake. We have very strong numbers in intake scenario of comparability of it. So it is favorable second half. So we keep this whole dynamic that we have, the discipline we have in the process of cash generation, receivables conversion we have to -- again, we are totally ready for a super strong second half ibmec.

All good news. Again, great joy and all supporters strong, modest 7% points increase of margin vis-a-vis last year. So we have plus live graduate intake, 79% increase in Semi On-campus has been highlighting strong growth supported by the new regulation, new regulation regulates our segment that has grown the most and continues to grow, giving great trust in the future.

Before we proceed, it's important to talk about this. Well, we talked about this last quarter. What is this conservative revenue management that we have? We mentioned the first half, while the same policy, we're more conservative in the revenue growth of non-engaged students. We got the estimate of previous year's engagements that enrolled, did not engage with the academic material of the course. This is a student that presented a percentage of dropout. And now we have a provision in the beginning of the revenue of the student reducing our ROE and actually improving our EDD. So this would be impact or the cash impact.

Revenue growth improves our NOR and brings better results, recurring results that are stronger for the second. When we look at revenue, it's grown 3%, it hasn't been that what Rossano said, would be 5%. And there's an additional point. We have an addition this, which is smaller, leading to a smaller revenue we know ahead. This tends to be positive in terms of the results of bad debt et cetera.

Just reinforcing this, we see more -- we give more transparency to the product it is less drop out in this, the same model that we mentioned regarding revenue. It reduces revenue beginning, so improves drop out in the future. So neutral cash impact with positive results for all the quarters.

When we look at on-campus we see revenue evolution of 7% quarter-over-quarter. This is an important number, also student base. We have a different number. We see much greater drops, and we are starting to control that this shows very much the certain strategy of evolving to Semi On-campus, almost doubling the revenue vis-a-vis the previous year. No great correct action that we are delivering here. As I mentioned to you.

When we look at the EBITDA, there's a drop in margin. But again, smaller business units, every quarter, you have to cut here and there. This is not something that concerns us. When we look at it at the closing of the year, we tend to have a very similar margin to previous year. We have some displacement of spending in the second quarter. This slightly impacts the quarter. We're very confident regarding the end-of-year results. We're going to talk about more this diversion. So we have very stable result of around 84, 83, 85. When we look at average ticket, it's important. We took a leap of 7 in 2022, then Natalia was more stable, and we see a recovery here that is really nice in the On-Campus unit.

As to digital learning, what do we have here? We mentioned to you the Semi On-campus, the important evolution on the business plan, it was very clear that we had the possibility. We faced that as positive canalization, people go into side or center. They could choose between digital and semi. It has higher tickets, similar costs with digital greater margins for us, as Rossano mentioned, very in line with the new legal framework. This "cannibalization" we see it as positive. Natural reflex, the revenue shrinking a bit year over year, the base moving sideways when we look at EBITDA. There are specific issues of quarter. We don't see EBITDA at the end of year losing margin vis-a-vis previous year, down here the ticket. You remember that we made an offer throughout the course in 2023. We told you in 2024, it was over, we moved to M6, M7 and this minus 2. We saw higher drops. Now we see this number M7 reflecting on the base as something that is going to pull this upwards.

The great highlight of digital this quarter is the great growth we had in renewals. And what is behind it, increase in quality that we've had in our product in the past quarters, the past years, actually, investing a lot in technology, along with the investment in technology, we have a great concern on quality, several points customers students servers, the sharing of knowledge et cetera. This is reflected in the renewal grade, initial indicator in the perception of quality by students. It's a priority in the organization to get deliver a better quality product. In terms of intake, it's pressured due to positive factors, which is the upgrade, the upsell for the Semi On-campus with upsell when we look at the third quarter, still strong for Semi On-campus and Digital show positive numbers compared to previous year in terms of intake.

Let's look at IDOMED. IDOMED has a growth trajectory that is contracted way back when we said we're going to get to 10,000 students, we have 10,000-some. We still have growth contracted. There are people that well, the class is still joining. And so some are not graduated. We don't have the fifth or sixth year, that you have natural contracted growth in the unit. So, we have 2-digit growth above and below, looking at 477 new seats in last year. It's a great accomplishment. People do things right. Those that fulfill the goals set by the government.

There were good agreements with the town halls. We have a reward. We have this rate of new seats higher than all the markets and average. So these 474 new seats in the first year, this makes up if you multiply by 6 and then we get to 7, we get great growth contracted here.

Evolution of EBITDA very similar to last year, specific points here. We don't see great differences happening this year. The average ticket, obviously, we have a mix, sometimes you have a lot of people moving -- coming in from Mais Médicos or the More Doctors, and you have a mix. When you stop growing in some places, that's going to happen in a while. They have stability and this goes back to growing at levels when we, perhaps transfer or inflation, et cetera, and renewal booming around 100%. Just another highlight in the margin when we look at the semester IDOMED margin, we see it very close to the reality. We're going to see second half, once again, doing very well, very high margins with renewal very high and the business that continues to be very strong.

Now, we -- for a while, we actually brought down IDOMED from ibmec, we presented premiums together, but IBMEC has been actually reviewed a great source of revenue for us. It became relevance to our portfolio. Portfolio that you're going to see ahead, how we're much more premium than we were originally, we grow this quite strongly ibmec has strong growth both revenue and student base. So 23%, 17% of base and actually graduate studies growing well. Well, it's the beginning, we have great room for progress and EBITDA evolving, when we look at on-prem, both digital, Semi On-campus vis-a-vis previous years here, we gain operating advantages, new buildings that are filling. The trend is to have great margin here.

Average ticket evolving well and renewals, close to IDOMED, natural, in premium world to be above 95%, highlight that in the growth of IDOMED, regional growth is strengthening increasingly more in Sao Paulo, higher ticket. We have a stronger brand in the region and the expansion of project IDOMED recognized with courses in management, expanding to technology, low important areas for us to continue our growth.

Well and we evolved to the financial charts, revenue, EBITDA, et cetera, and I'm going to call Alexandre Aquino, who has been with us for a bit over 5 years, very special person, very talented, very dear in the company. Graduated from officer Estácio, worked for Marques, was the financial officer at Vale. Great person to have.

So great to have changes in new open space for the company to have great people with us. So welcome. Welcome Aquino.

[Alexandre Aquino, executive]

Good morning, Rossano. Good morning, everyone. I'm very happy with this new challenge for me, it's an honor, pleasure to join the leadership team of Yduqs. Very competent team that works jointly in a very effective way. Super competent team with me. This transition that we're making is a clear sign of shareholders through the Board of Directors that is a transition of continuity. And the legacy we helped to build and we're committed to continue, a legacy of proximity to operations, a focus on cash generation for shareholders, transparency in our accounting reports and transparency in the relationship with the market.

And lastly, but not least, the legacy of continuity of strategy of allocation that is very careful in the capital of shareholders. Very happy to have you next to me as a successor. You've been working with me for some years. You're totally able to continue delivering this history of 55 years of company, continuing honoring our legacy. Thank you very much. Let's talk about revenue. Sure. So we had this intake in the first half that was similar to last year. When we look at comparable basis, we grew 5% year-over-year. The growth would be 8%. It hadn't been lower addition to this to our freshmen. You know we have our premium brands, IDOMED and ibmec. When we look at their share in 2021, it was -- they grew to 29%, 50% growth in the 4-year period. It's important to comment on this regarding the growth.

In the case of ibmec, it was 100% organic. IDOMED, we had only a few small M&As. Looking ahead, we had this contracted growth that is significant simply due to the maturation of certain points. When we look at our expenses, this shows the great discipline we have in terms of spending management or discipline. So we had comparable lines compared to last year. So we have some G&A and others that had some situations that can be explained. Perfect. All this diversion is here in G&A. We should actually open up. We see it as something specific in the second half. When we look at second half, it's much more positive.

And we project to end the year very similarly to last year considering margin. What were the divergence? We had contingencies, especially in labor part. This was a result of the restructuring project we had in between 2015, 2022 and then end of the year and pandemic cycles of legal processes there, still impact 2025. The good news is that we see this curve changing with key indicators. The key indicators for the labor part are entries and average ticket. Those started this turning curve after a long curve. So it takes a while to show up.

And when you compare semester to semester, so you can compare it better with second semester last year. So it was unfavorable when we look at first semester over first semester. So it's a line that is not going to be present like that. Second factor is noncash. It's a positive evaluation of our shares that impacts long-term line of our executives.

So this is noncash factor that may be positive or negative in specific quarters. Last factor is comparability. Second quarter 2024 was benefited with the reversion in this line that did not happen this year. It was just specific comparability with second quarter, but it does not have a negative impact when we look at second half. When we look at EBITDA, the impact we had and the cost led to a drop in margin, we had in comparable basis, a very similar EBITDA to last year, without considering the low addition to this that we had now.

So second half this year, we'll have a similar margin that we had last year in the accrued. So it leads us to believe that we're going to have a much more positive semester, having an equivalent margin to previous years, supported by the premium growth. So we see that both businesses, IDOMED, ibmec, when we look at revenue, it's 29% of NOR.

So EBITDA, so we have 44% of the total from 29% compared to '21. It's great growth in those 2 businesses that helps us a lot in our margin at the end, leading us to our net income on a comparable basis. We have a growth of 8% net income year-over-year, even with the pressured margins that we see in the second quarter. It's a specific effect, makes us comfortable to the deliverables at year-end that we have BRL 7. So we have 1.7% comparable basis, we would have 1.9%. This 2.9% is impacted by BRL 37 million of negative impact in the Selic evaluation.

Two adjustments we make to have better comparability. We talked about one, which is revenue growth to engage to. The second one is migration of the private funding that we have received within the semester, matching receivable with revenue, very important for our cash generation, very comfortable that we are following to our guidance.

This slide here shows -- clearly shows the results of our base. So past years, an indicator of cash generation, the company has grown in a very significant way. We had a dip in the past 12 months, showing operating cash flow, we grew 66% from -- moving to BRL 1.5 billion when you look at FCFE, so BRL 613 million of cash flow for shareholders in the past 12 months.

This number is ahead or above the guidance. So only looking at June, past 12 months, we attained -- we exceeded the ceiling of the guidance, very optimistic of this guidance for the end of the year. So you know simple math, FCFE yield, we obtained over 17% of return. This shows our focus on return to shareholders.

We wouldn't have attained the results. It hasn't been the great performance in receivables. So we have days sales out dropped 9 days in second quarter this year. Great work of the company to lead to this result. So we have better level of renewal, improvements in the collection process and also a different way, changing the model of receivables of private financing.

To reconciliate this FCFE, moving to the next slide, we see BRL 613 million of FCFE that was generated in the period. We have a difference in the cash balance. We use the total in the framework proposed in the business, what we mentioned in our Yduqs date, payment of BRL 50 million of minimum dividends, as we mentioned in the past, a buyback around BRL 300 million below BRL 10 per share as average price, generating a lot of return for shareholders, another 16 of them following our guidelines.

This is always critical for the business. This reached BRL 2.8 billion of cash balance reconciliation with the numbers in accounted or proved interest not yet disbursed. It was dropping to BRL 20 million even-number quarters different should be close to 0, and it should be the same in the second half. When we look that, we see a drop that is consistent in our spread, getting to 1%. Second quarter 2025 with the emission of debentures, so we have a spread of 0.85%.

So we have 2 indications here that the market recognize our financial soundness. And it's a conservative way we manage our debt, allows us to tap into market opportunities and also having more favorable interest rate. Looking at our leverage, everything we did to shareholder return, M&A, buyback, we had very healthy leverage of 1.66x. This leverage would have dropped to 1.41. We hadn't been to the buyback and dividends that we had. Looking ahead, we don't have any amortization that is mandatory this year. We have these towers of bars of amortization that are very manageable in the forthcoming years. To reinforce our vision that we're very focused on reducing leverage, major focus of our capital allocation, we want to get a good level of net debt over EBITDA.

[Eduardo Menezes, executive]

This is a slide showing our history of growth. I thank you, Aquino, for your participation to you again during the Q&A.

Okay. Looking at the left, revenue growth and EBITDA. So we see 7% CAGR since 2019, it's impressive, the stability of adjusted EBITDA margin. So when you look at share price, if people think it's volatile, but you see a very high level throughout the period, knowing we had pandemic, several hiccups that we had to face. We continue growing constantly keeping EBITDA in a very high margin. Up here on the right, we see highlights to the share buyback, very successful program, as we mentioned in previous slides, price below BRL 10, return for shareholders. Continue paying dividends. We pay dividends since our IPO, this period more focused on reducing leverage, bringing the dividend payments close to mandatory. And on the slide that we like or the part we like most on the slide, we talked a bit about that.

In 2021, we had CFA of negative BRL 149 million. In closing this year, we got to BRL 613 million. This is a number that we'll highlight because this is the focus of our business where we think we're going to show our value generation for shareholders.

On this slide, we have some news for you, the newest acquisition Unifametro, an institution from Ceará state focus on On-campus Fortaleza where 8,000 students of this brand joined to the widened umbrella, local brands that are recognized, they're well positioned on Northeast and inner state Sao Paulo, we have a strong portfolio in health of Unifametro. This brings differentiated ticket for the group. The brand is well recognized, not only health but also other courses, they have the institutional concept, so grade which is 5 of our Ministry of Education and another business done within the capital allocation framework that we mentioned are EBITDA. So we have 2.6x EV over EBITDA for 2027.

So in addition, this business brings future growth possibilities for medicine seats. So we have through similar -- through certain injections and nice medical drones, this will be fantastic for us. This business has certain differentials that were important to highlight. CapEx is totally realized. The structure is ready to receive the cost to its maturity, and it's in a region that is very strong, great demand, great populational density, great search for medical courses and seats and it's going to add to the On-campus will allow us to work with the margin better than the average.

We're going to bring you some updates for us to talk about the last acquisitions showing that we are strengthening our capital allocation. The previous one were Newton Paiva, Edufor, Nacional de Estudos, very recognized brand in the whole state of Minas Gerais. It's very much focused in health, almost 20% of local market share.

Dentistry, so we have high ticket to the whole portfolio and we have projection of 2025 for 2.2x EV over EBITDA. So Edufor, strong in health and we have an EBITDA of 4.1x EV over EBITDA. So things are going to be more or take longer for maturation within our capital framework. So we've been operating in the same way. As we mentioned, we see opportunities for M&A. We're going to carry them out.

We get to a very important slide for the present and future of the company, something that is very important currently will be increasing more in the forthcoming years. So we're going to highlight -- well, this is part of our culture and our model. We don't actually talk before we do. So we have great initiatives happening here in AI.

So learning model. So it's part of our core, taking the way we share knowledge with our students. The way the quality is attained to the student, AI is broadly used. So more obvious case of service, the whole market moves. We have great results, 100% of our service is digital being supported by the use of AI.

Another case, Martech, an area that we have greatly evolved in the past years. It generates promising to have better results in the future, ability to improve our go-to-market, reaching our process through technologies, AI, the whole vertical is called Martech. It's being giving great contribution to our whole marketing process in personalization of content depending on the behaviors of the users of the digital platforms.

Again, we expect great results from there. Another thing linked to our core employability improvement of our students with the job matching, the matchmaking of actually helping students find the perfect position.

Last story on Forbes, highlighting one of our invested companies, QConcursos' great success case. Our CEO, Caio Moretti here making a statement in the use of this tool for streamlining of the launch of our products in an exponential way.

The ability of launching new products in QConcursos is the whole it takes institution is very boosted by the low-code, no-code tools, highlighting some indicators that we are sudden have been very supported by intensive AI use, drop in our CAC, 17% in 2021 to 2024. Our production costs dropping over 20% using those tools set past. Lastly, student promoters, we have a boost of growth of 7% points growth in the period. Very happy with the AI initiatives. I'm sure they will continue to help the company grow.

Moving to ESG, a very important topic for the company. The past quarter, we had great victory of the organization. Our campaign won the Grand Prix Award in the Cannes Advertising. First of all, aiming increasing diversity in the medical world in Brazil and increasing the awareness of people addressing diversity in the country. Great victory for the whole team in ESG and medical schools.

So it brings great contribution to the society. If you are interested, you can actually use the QR code to watch the movie of the company. Another highlight, 25% more students in our illiteracy program. still our mission of reducing illiteracy around our institutions, we are contributing increasing more with society with programs of reducing illiteracy in adults.

Going back to the results slides, looking at the next quarters, we have intake fulfilled, we see a growth of 16%. We hadn't seen it since 2023. We've been talking about the past quarters that we had intake that were harder, but led to several external factors, and we saw this turning point starting now. We're starting to see the second half. We have the confirmation of those numbers. We're very happy for the results second half, 60% of intake.

We are confident that we're going to have relevant growth in intake as of the results of the third quarter. Important to see that we obviously will continue Semi On-campus leading this growth, both On-campus and digital, digital even suffering a bit of cannibalization due to Semi-on-campus growth. It's isolated, it had a 5% growth year-over-year with this new growth. Good news of intake. We look at second half. As we said, second quarter, we had some specific cost impact and impacted the quarter. When we look ahead, we see various factors diluting very positive outlook for the end of the year.

Very briefly over these factors that lead us to be optimistic first. Intake and retention have been very positive. We don't see growth in delinquency, greater retention in our academic students, great focus of our action in content delivered, retention students. This should lead to better results second half this year.

In the third quarter, contingencies, we saw was one of the great issues second half or second quarter, we saw growth in spending, but we see stabilization happening now second half in comparative base year-over-year, we stop having this line as something that is shortcoming.

Bad debt, it will be very much influenced second half. We saw positive results second half. We had a new program of nonrecognition of non-engaged. This reduces revenue in first half, and we have an improvement in bad debt starting second half 2025, we have full results in 2026. We start being benefit in '25 for this model and fully second half.

And I'm going to have a benefit of bad debt and the lower adhesion to this, as you saw in the last year and actually in the previous intakes in G&A. Overall, we see the main impact was legal and personnel. We had some points above of expenses that we expected. We have spending structuring program taking place in the company, and it should lead to improvements in G&A, improving margin in the second half of this year. We're very positive in terms of delivering our guidance with these numbers.

Moving to final remarks, I'd like to call Eduardo [indiscernible] our new Director of I&R and MA. Very happy to have you, [indiscernible].

[Unknown Executive]

Good morning, everyone. I'd like to comment that I am starting this trajectory at Yduqs, a company that I have acted over as a Board member. I'm very comfortable with the results of the company, a very excited about future prospects of the company. I think it's a company that has a very nice purpose, that is of bringing quality education to so many Brazilians and to say that I hope to contribute a lot with this investor vision within the company. I'm very excited with this opportunity.

I thank Rossano and Edu for this opportunity. Very happy to start this journey. I'm very happy to have you here.

And to close this presentation with very strong cash generation in the past 12 months, above guidance we gave to the market year-end, very much focused on return to shareholders. We saw the free cash flow yield that we see in the past 12 months, the company very focused, very confident the second half is going to be even better than first half, ability to generate cash.

So we have, as we said, a lot of things above ceiling. The new legal framework strengthens our strength within the company, Semi On-campus that has been growing a lot is being regulated now. We had a large overhanging in the financial market. So we eliminated risk. That is very important for companies that deliver quality. As you mentioned, we are a company very much concerned with quality. We think the new legal framework directs us with that. We are well positioned compared to the competition. We are very excited with the intake for the second half. We had 60% -- increased 60% of intake happening renewal rates very high, showing our correct strategy, quality of products, our strategy of care and focus on students 100% of time and another prospect of growth, medicine, the Mais Médicos 3 with preliminary results in the second half, we're sure that it's going to be winner in this process.

[Rossano Marques, executive]

Well, great timing for your arrival, [indiscernible]. To close, I'm going to ask Eduardo to wrap it up.

[Eduardo Menezes, executive]

Thank you, [indiscernible]. Thank you, Rossano. Thank you, Jose and Aquino. I think it's been 7 spectacular years. We had a company that was without complement BRL 2 billion. We move to BRL 5 billion, what we propose to do as a group to evolve M&A, medicine, distance learning, 82% of our EBITDA comes from businesses that did not exist when we look at 2017, a very successful group, Rossano, Aroldo, Marcel, Claudia, Silvio, Aquino, Thamila, well, and others that have been through this group, we are very proud to work here with a lot of people, they are very nice amount 18,000 associates that we have here. So thank you very much. Thank you very much for your trust to be with us and me over this period, and we move on to higher levels, and I'm sure much further than we are here today.

[Rossano Marques, executive]

Thank you, Eduardo. Thank you for 7 years of dedication to the company.

[Operator]

[Operator Instructions] Our first question is from Caio Muscatine from Santander.

[Caio Moscardini, analyst]

Two questions on my side. We see intake second half that seems to be very good. I'd like to understand a bit what about price of this intake. If you could comment on that, it helps a lot. Second question regarding receivables. We see in days of receivable and significant improvement generated because of change in receivables of financings. I'd like to understand whether this is a level that we should see in the next quarters or if we have a greater chance of seeing some improvement on the side of days for receivables. That's it.

[Rossano Marques, executive]

Thank you for your question. Let me start with the second and I can address it here, and then I'll ask Marcel to complement what I said, yes. For receivables, yes, the level of receivables is obtained is a level that is not only stable, but also we see improvements ahead. As you can see, we have a penetration of this that is reducing every intake. This will improve receivables, the change in the model of private finance is a permanent change that will reduce receivables ahead. And we also have in accounts receivable, remember when we made the change in the model, we did not participate the upper class. This will improve and then it will drop and improve actually the level of receivable in the first question of intake. Actually, we're very happy with the intake process.

We've had a number that is above what we expected the market overall is very disciplined regarding ticket costs. Let me ask Marcel to complement.

[Marcel Desco, executive]

I'd just like to add to Rossano in terms of ticket, the market is very well behaved, and we haven't seen any craziness or aggressiveness that is too strong. We have this characteristic in the On-campus prices quite similar to last year of freshman or new entrants and distance learning in our portfolio is quite similar into the causes a bit more to where we see better performance of technologies and coming also in the part of health. Well, this is it. The market is quite well behaved in terms of pricing.

[Operator]

Our next question is from Marcelo Santos, JPMorgan.

[Marcelo Santos, analyst]

I have 2. First broader, we had a new framework of Distance Learning, several rules changing, you had time to analyze the impact. Can you go into how you see the impact? First, how you see that impacting price? You don't have a crystal ball, impact to cost, transfers, not transfer? Second dimension, the market. How should this change the market and the players in your view?

Second question, if you could talk about the competitive environment of medicine for the intake for the second half of the year?

[Eduardo Menezes, executive]

Thank you for your questions. I'm going to ask for help from the experts on both. Just to talk about the framework on the general message, we see the nature of the impact of the framework, very positive for the industry as a whole. It organizes and gives greater clarity. It's good not only for the financial market. There was this overhanging in the industry overall because of the uncertainties and also for students. Today, it's clear for students that they have 3 modalities available.

Actually, it actually official modality, we grew the most in the past quarters, which is semi on-campus. It reinforces quality. We're very comfortable with the quality we deliver and should actually reinforce our competitive position.

I'm going to turn over to Aroldo to talk about how he sees the impact on intake.

[Jose Alves, executive]

Thank you, Marcelo, for your question. Good question. We see this in a very positive and optimistic framework. I'm going to go into details here. First point is that our expansion, I'm going to talk about the first point on Yduqs and the market. At Yduqs, our expansion to partnering centers is more recent. This happened at the end of second quarter last year, this expansion capillarity with our partners and the infrastructure was made the forms of what we have talked about, they don't change when we see the framework. This is important for us.

Now on the second point, well, people talked about small centers. We continue with our premise of having light as possible, center scalable as possible. That's what we've been saying for many years. How we adapt that with the new framework. We think there is a little change because the centers in our model has always been enabled and profitable with the distance learning cases of origin that change relatively little in the current scenario. They were not based. We did not have profitability based on the semi on-campus. This support the centers to make them more profitable. So the adaptation, the semi on-campus, that the current change comes from a product that was not feasible, and it helps the profitability and the results of the centers that we have.

Perhaps the third point I'd like to comment on is on -- To conclude semi on-campus continues to be an opportunity for us. This increase in capillarity is recent, has not yet matured. It's completed 1 year, now a bit over a year. The third quarter, we have this intake that we have that is strong in comparable basis compared to the number of centers, and we see it growing strongly in comparable basis regarding capillarity to us, it's relevant. This is what we wanted. What is it going to be in a comparable basis. And we have, and we see strong intake with the same base.

So we are optimistic considering that we -- first, you mentioned the cost structure regarding infrastructure is given, there's no change with the framework with what we had implemented in our own centers. We're very strong, similar to on-campus and the partnering centers that is more recent. Regarding recurring cost structure OpEx, we have actions to mitigate practically everything. And last notice that we had the mirroring of the new modalities according to the framework. The courses that change that will change already being sold currently. And the next one, so we have this test running for over a month. So great part is mitigated.

As to market a lot has been talked about. People are optimistic regarding what Rossano said, so the uncertainties is over. We had this anxiety as to what was coming, and it's already here. People adapt -- people had to adapt in there own ways. But the fact is that the market sees as something positive, uncertainties are over, how do we mitigate cost and capture as much as possible. The revenue point that Rossano mentioned in his presentation that we're going to have cannibalizations that are positive regarding ticket. People don't talk so much. So distance learning that goes to semi on-campus that goes to ticket or on-campus ticket. So what we see today is that semi on-campus is an opportunity considering our recent expansion.

I don't know if I've answered the question.

[Marcelo Santos, analyst]

Moving to the next point of medicine. I'm going to turn over to Silvio to detail that to reinforce our position as a premium brand in all markets where we operate. This gives us comfort positioning, more competitor [indiscernible] seek offer. They play a role, but our positioning is differentiated that we have for our brands. I'm going to turn over to Silvio, so he can talk about his views on the market.

[Silvio Pessanha Neto, executive]

In line of what Marcelo mentioned, we certainly follow and monitor the market behavior with the new medical seats coming in. Including what we see is the most traditional courses that have a positioning in their marketplaces that is stronger tend to suffer less. So we've had a first half that has been very positive in intake. We have the strategy of actually putting most monthly payment students in the first half. So the balance of annualized seats, we concentrate the first half.

When you ask about second half, we have more dedication to -- or planning the taking of seats of what we have of public financing, FIES. So that's why the curve is a bit slower. But clearly, we see that we don't see any great concerning point regarding increase of seats, especially with the increase of the FIES ceiling, it goes from 10,000 to 13,000 of average ticket, an important lever of strengthening and assurance that we have [ strong ] in the growth of seats in the second half.

As Rossano put it quite well the differentiation of attributes from the viewpoint of quality, future tradition, reputation. This no doubt makes a great difference. The impact in the medicine market are not linear. They are totally different depending on the region, more protected, less protected, even in places that possibly are more challenging, we see that the presence of a stronger unit stands out regarding the others considering applicant seat. So we're monitoring everything. We see how we expand those attributes of differentiation. It doesn't seem to be a great concern at least in the regions and marketplaces where we operate.

[Operator]

Our next question is from Samuel Alves, BTG Pactual.

[Samuel Alves, analyst]

Two questions on our side. First is more specific on contingencies provisions about BRL 50 million, this quarter you described it BRL 14 million related to cash process. When we take it out BRL 37 million per quarter, is the understanding correct that is the new recurring level if there is some seasonality regarding -- so this is the first question on contingency provision.

Second question is a bit more long term, looking ahead, I know it's early to talk about 2026, but I'd like to take this qualitative -- had a view your confidence of the management is very clear on hybrid. Can you grow on-campus, is there a dynamic of stability for next year, considering everything you've mentioned on the new framework, business learning, do you think that it's sort of moving downwards? So there is more growth on premium and hybrid. I'd like to hear you thinking about next year if it is possible to have operational leverage. If not, if the company has to reinforce its faculty because of the framework, trying to understand your minds for next year.

[Unknown Executive]

Let me start with the second. Well, it's always very difficult to forecast intake. It's a fact that it is very exposed to macro conditions. It's hard to predict that. We try -- we've always said that we try to do that with several indicators, very difficult. There is this aspect of trust, consumption, income availability of the population. It depends on several factors, political, social, economic makes this predictability difficult. We try to be fundamental in that. We had difficult intakes, but we saw in short reversing that and we're very happy to see second half coming with an intake above what we expected. A great growth compared to last year in all segments.

Semi on-campus that was stronger. It's even stronger now. Digital and on-campus, single-digit growth as we expected. So we're very confident. So the trend is that this would translate and reflect in 2026. When you look at the scenario of intake second half of 1 year, is a good indicator for the scenario of the following year. But it's hard for us to predict. On on-campus, we had stabilization of intake. You should take that [indiscernible], this was stabilized in the previous years. Our view is that at some point, it would start a trajectory of growth, single digits still, but it should be confirmed, the current data confirm the ability of on-campus to grow on single digits.

We don't see great potential for growth if we don't have anything relevant. We think the on-campus still business that will have growth. And this is something that we see now. We're very well positioned. We have a great footprint in all cities where we are and all capital cities. So we're very well positioned to capture this intake. This should be influenced by the legal framework, but this is an upside that may come up. Part of the direction of the new framework is on-campus, I think -- we think we are the most or best prepared players for this position -- for this move.

So how do we see potential growth in all scenarios? This can generate operational leverage. At the [ moment ] we see that, especially in campuses that are maturing. So this brings an obvious operational leverage. Medicine, we have more the seats and the new units that are not so much [ bringing ] operational leverage for the company. As we said, on-campus, they are the best ones in terms of operational leverage. So the additional students, higher tickets, all of them play directly to our EBITDA. So we're very confident.

So the strength of Yduqs, just reminding you is this diversified portfolio, allowing us to navigate in different scenarios. So you have semesters are better for one. One business unit is more pressured here. The other one is doing better. So this enables us to navigate very well in several scenarios.

Your questions on contingencies, I'm going to turn over to Aquino to answer, he is very much knowledgeable about that.

[Alexandre Aquino, executive]

Marcelo (sic) [ Samuel ], thanks for your question. As Rossano mentioned during the presentation, we are being impacted now by a cycle of labor costs and actually layoffs. And so this started reverting as of 2024 with '23, we had fewer layoffs. So we had fewer legal actions. Well, the labor legal actions in Brazil are long despite the indicators that anticipate the improvement of this line having been improved with lower average tickets through this process of working on root causes so that we could have fewer actions and lower tickets as we get the cases. They have happened.

We're starting to actually reap the benefits, but it takes a while. The level we should have in terms of legal actions last year, first half last year and this year, we believe they're going to be kept until the end of 2026 with the reduction as of 2027. This is basically our projection regarding those numbers.

Thank you. I'd like to take the opportunity to wish Aquino, Parente, [ Aroldo ] success in their new roles.

[Operator]

Next question is from Eduardo Resende from UBS.

[Eduardo Resende, analyst]

Two questions from my side. The first, I'd like to take -- get an update as to how you see dropout in semi on-campus, looking at stronger intake that we had in the first half, if you've seen an increase in dropout second half?

And the second question is on leverage. We've seen that the company has made an acquisition yesterday going to more medical on cash flow. I'd like to hear from you on the leverage of the company, what you consider a healthy level from now on that may allow movements as we've seen yesterday. This is what I have on my side.

[Rossano Marques, executive]

Thank you for your question. I'm going to start with the second and answer the first, I'm going to ask Aroldo to help. Well, leverage, we follow this framework we actually mentioned in our YDUQS Day last year. So our main focus is reducing leverage. We aim at getting to 1x net debt to EBITDA. This is where we're heading to. As we mentioned on our YDUQS Day, we're going to work on M&As. And when we see maybe things that are accretive of strong brands, well positioned in cities that we believe in their potential, we're going to tap into the opportunity. So we see those deals, so a small part of the cash generated, we'll continue acting like that until we get to this net debt level EBITDA once for all. This is our aim. We follow strictly on the framework of capital allocation that we mentioned in the past.

I'm going to turn over to Aroldo to answer the first question.

[Jose Alves, executive]

Yes, we've seen indeed an increase in dropout as expected. Since it's a new product in partnering center, new base. Naturally, we have this experience of launching new products. So we are in this learning curve, both regarding the product that is new of partners, and we are moving to the third cycle, and we see an improvement that is totally projected compared very much when we made the live product [indiscernible] and our projection curve and planning curve followed a higher value, an improvement with learning, improved productivity, and we see this confirmed when we launch a product, it's born with higher dropout rates.

We see an improvement, nothing that is very different from what we had experienced in the launch of new products with the base being matured with the learning from centers with the base maturing, we naturally will see improved dropout and getting to the levels that we see in other products.

[Operator]

Our next question is from Flavio Yoshida from Bank of America.

[Flavio Yoshida, analyst]

Congratulations for your trajectory, Rossano, [indiscernible] for your new responsibilities. My question is regarding cash generation. for the second half of this year. I'd like to understand how you view the semester and which line should help more or give more comfort to you for you to attain the guidance more on this line.

[Unknown Executive]

Cash is the great highlight of our performance so far and all the factors that have been positive over the year are maintained for the second half. As you've seen, we are operating above the ceiling of the guidance when we look at the past 12 months, basically operating the same level, second half of 2024, now in the second half of 2025. Our idea was to operate above the ceiling of the guidance. We're very comfortable above that. Our forecast is to end in BRL 500 million, BRL 600 million and the result pointed to for the second -- first half gives great confidence to be very well positioned in this range. This is the focus of the company since the [ Yduqs ] stage.

We -- great effort. We are actually making specific adjustments, especially in revenue recognition to be more conservative. You have seen the results, reducing volatility because at the end of the day, we are -- make sure that the focus is cash increased every day. All the adjustments we make is to show greater ability to have cash conversion for the company once it's [indiscernible]. As we mentioned before, to execute the capital framework we mentioned the initial focus on leverage reduction. We continue paying dividends, close to the minimum.

We have what we've done before and taking -- tapping into M&As in terms of timeliness that we have, we have strong cash generation leading to leverage lower. We see growth. Our buyback, BRL 300 million is a very strong program if you compare to the rest of the market, reminding you that there was an average price below BRL 10 per share. So it's a program that generated a lot of value for shareholders. We've seen momentum. We see the recent acquisition we made in previous years. They are very accretive results, synergies vis-a-vis our current numbers. So we're very comfortable and this number is what makes us very confident regarding the future of the company.

[Operator]

Our next question is from Mauricio Cepeda from Morgan Stanley.

[Mauricio Cepeda, analyst]

We have questions on regulatory implications. Starting with the interest of the third quarter that you have a stronger intake, the market has a stronger intake as you mentioned. may there be any interest of students benefiting from this regulatory transition, especially in the digital learning. Is there anything that could be this regulatory interest considering that you've mentioned, it's not just price. There's not great aggressiveness now.

Second question also in terms of regulations, if there could be other consequences, the footprint of your centers, the footprint -- the centers that you have around the country be rationalized considering all the changes and minimum scale. If there would be any kind of risk because the Ministry of Education is leaving open the possibility of regulating more courses if you could have, more in position of on-campus with certain bands of certain formats.

[Eduardo Menezes, executive]

Thank you for your question. I'm going to turn it over to Aroldo directly.

[Jose Alves, executive]

So impact on intake. This is a concern that we have from the beginning. We have been following intake, breaking down into modalities, impacted courses, nonimpacted courses by the regulation. What do we see? We do see some impact, but we see the 2 groups for each modality growing. On distance learning, we see growth, those that are impacted, those that are not. Semi on-campus the same. On campus, there is nothing -- no courses are impacted. We still see in the future impact of nursing schools. We have a footprint of on-campus that are -- nursing schools that is well [indiscernible] it's not captured yet, but I do hope that happens once there is interruption in the intake of semi on-campus. What is stronger is what we see on courses impacted, but we see growth in all modalities impacted and not impacted courses.

The second point is regarding possible impact to footprint. I briefly mentioned that in another answer that most of our centers have been designed in a lean way to have semi-on-campus intake growth. So we see that the impact that we may have in some changes is more related to productivity of the center more than actually changes in the regulatory framework, considering that the changes from on-campus system encompass. So we have greater impacts are actually the teaching courses. So we have great offer of courses to provide in partnering hubs and the change in footprint will be very specific.

We have several scenarios and sensitivities of changes in the mix of intake. And we continue, again with this assumption of keeping everything as wide as possible to be protected with possible changes that could have in terms of price or changes in regulation price.

The last point is regarding future risk. We have certain ordinances here. We can have certain regulations that may come up that are specific courses that may place specific restrictions. We don't see anything coming up yet. But what may occur is that some regulation regarding certain infrastructure. The part of infrastructure is embedded in the ordinances that were actually passed. Nothing is being thought about. We're going to have certain regulations as they come naturally, and we'll expect on that on certain modalities as a whole, they have already been launched. What may come up is something that may come in specific regulation of courses. This may come up again that may change some specific courses.

[Operator]

Next question is from Vinicius Figueiredo from Itau BBA.

[Vinicius Figueiredo, analyst]

I'd also like to explore the scenario, the new scenario with the political changes as well. Can you talk a bit about the conversation you have with the centers. It's clear that your own sites or centers have very reduced impact. You mentioned that in some previous answers. But when you talk about third-party centers, especially smaller ones, what is this conversation like? And I think it's interesting to know how representative they are on the center base and student base. Some start feeling a bit more after this. Do you think they're going to start feeling a bit more after this? The changes actually in effect, should we expect a closing in the next cycle?

And then the second is also a follow-up question regarding Semi On-campus intake. If you could talk a bit about how you see the market in the same segment because this is growing quite significantly. I assume it's a migration between segments that is taking place. But if -- the Semi On-campus segment, do you observe that it's a student that is being captured perhaps from more regional school or if it's a change in profile, they want to have this experience, do they sort of pay a bit more? Just for us to try to understand whom you're getting -- gaining the share of.

[Unknown Executive]

Well, thank you for your question and then I'll turn to Aroldo to complement on your point of migration and between segments, if there is an explanation. Actually, see, in the intake of third quarter, strong intake in the 3 segments. Semi On-campus is very strong, leading. Semi On-campus -- it took a bit longer to make this expansion of Semi On-campus in the center. It was a late start. So great leverage for growth. Our Semi On-campus started in line with the guidelines of the new legal framework. We keep this opportunity of growth that is very strong from now on.

And we saw, obviously, a migration that was happening from digital to Semi On-campus. For us it's positive. The ticket is higher from digital. It was absorbing part of the digital demand and the demand dropping to our competitors. Now we are very happy to see Semi On-campus and digital also growing again.

And on stealing, well, there's always competitive forces that we see that it seems to be a consolidated market movement. Growth in intake, we see competitors that have shown results and surveys as well. Well, we see the market is recovering. We have strong intake in the second half. We know we may be -- it may be benefited by the legal framework. As I mentioned, the effective landmark removed these uncertainties from students. So we had greater challenges in intake because of the uncertainties generated, but at the end of uncertainties should actually lead to a new growth in the demand that will certainly not happen in the second half. Let me turn over to Aroldo to complement.

[Jose Alves, executive]

Second question is that, Vinicius, we could add -- what I could add to that is that there are more products on the shelves with new attributes. As always, we're going to have part of cannibalization and part of students that would expect that value being on-campus, and we didn't have that on our products. They had in the competition. So certainly, we follow part -- well, there is part of cannibalization, but it's highly positive. We did not have that on the shelf. This attribute, in great part of the centers, we start having it. Part will come from an upsell of those that had a cheaper product, but if they want to be in the brand and part values more, what, the fact that it is on-campus. This is an important attribute for those we bring the market.

Nothing to do with cannibalization. It's somebody that we could not offer. Competition could. Now we capture part of this market. This is what we see. That is the greatest part. Actually, students that wanted to have this intake as we've been talking about that for a long time, Eduardo mentioned that the Semi On-campus is the on-campus for those that have a bit more financial restrictions, and we start having that on a much more capillary base.

Moving to the first question regarding size of centers, footprint. I'd like to reinstate that we have a base of centers that are small, that is reasonable. The great point here is much more related to the cost structure that we input, the center profitability that they have much more than they're being small or not. The cost structure and profitability structure is totally different between the market players. We follow that very closely.

We've been talking about this for many years. We have this area that we know more about profitability of the center more than the partners themselves. We follow that very closely. We help having profitability, not transferring prices. So after we had the launch of the framework, this has not changed. So we want to keep our centers profitable, and they continue to be. They continue to be. They have not had any impact because intake is very positive. They have positive impact. The intake is good. Digital is good. Semi On-campus is good. We see more profitable centers.

The future, what it will be, we see reduction on distance learning, especially the initial impact, but then it will grow grand. We'll have this migration. The fact is that the centers have been designed to have profitability without Semi On-campus. Semi On-campus is helping.

The conversation with those centers has been on that. They recognize they have -- perhaps they have not all the financials written and they're recorded. They know what's going up. They can see cash generated because they're capturing Semi On-campus with higher ticket. This is what they did not have in the past.

We don't see that as negative. So a lot has been talked about that. And the fact is that we're very austere with our profitability and partners' profitability. We don't want to have structures that are necessary, higher lease or structure of personnel that is bigger than necessary. Now it impacts their profitability, and this is bad for the business as a whole. So we have to be increasingly more austere and partnering of our partners, so to speak, regarding their profitability. And what we see is that, today, it hasn't been a great point of concern, and we see this. And we did a lot of math. We don't see that as negative. Well, Semi On-campus is here and helping.

[Operator]

Our next question is from Gustavo Miele from Goldman Sachs.

[Gustavo Miele, analyst]

I have 2 questions. The first question on Ibmec. Rossano mentioned in the beginning of the presentation a bit interesting perspective. You see increase in the offer of courses within Ibmec moving away from the traditional courses of management, expanding the assortment for other areas. I'd like to know how much this may be a springboard within Ibmec both for ticket and margin. You see healthy dynamics on those 2 variables very much due to pricing power and operational leverage. I'd like to know how much this mix changing moving to 2026 may help an acceleration of margin expansion, first question.

And second, more a bit thinking about M&A environment, more exogenous on this topic. How do you see competitive processes taking this from Metro that you mentioned? What is the valuation of the market as a whole, the great consolidators in this competition for acquisitions if the temperature is higher or lower, thinking about future deals of the company?

[Rossano Marques, executive]

Miele, good questions. First, on Ibmec, we're very happy with what has been happening, the ability of Ibmec to find its growth levers, maturation of new campuses growth, especially in Sao Paulo, which is the highest ticket of ours nationally, strengthening the brand even more, expansion, bringing operational levers. Our thought of Ibmec is actually how can we tap into the strength of the brand, the quality delivery to strengthen the ability of Ibmec to translate those great differentials it has considering other geographies and other areas.

You -- our lever is increasing portfolio of products. Ibmec is very recognized for the courses especially linked to businesses. And the term business is expanding. We've been tapping into technology linked to business. So Ibmec, being a business course, helps to expand to technology courses, obviously with moving towards the business. So we have other marketplaces with an expansion of other courses, so we have an important tapping into courses.

So we diversify. We have several brands for other locations. We have levers. Lifelong -- Ibmec uses a lot of its brands to offer lifelong courses, B2B courses, but we've been working to expand those verticals. So Ibmec [ all enjoys ] and good prospects of growth for the future.

As to M&A, we're [ internally ] frustrated because we cannot find more businesses. We think this market should be more consolidated than it is. So we are very active in the search of opportunities, very conservative in capital allocation. We only actually make deals that are accretive in marketplaces that we like with good regional brands. Think that combine those 3 criteria are not easy to come up.

We've done 2 to 3 deals per year. This seems to be the pace that we'll follow on the next years, not due to lack of diligence of ours seeking those assets. We think this is a move in the market that generates a lot of value. We are a player in operation -- with very efficient operations, and quality operation generates value for any business that comes into this umbrella. And this value may be shared with the selling part or party. We know there are factors that are not objective, not financial that actually do not allow us to have higher number of businesses or deals. So we don't know whether these things will increase in the future.

We're very happy with this deal of Unifametro. We're sure that will generate a lot of value to everyone from Unifametro, our shareholders. Once we close the cycle of the acquisitions, we're very happy with this deal, and we hope to have some more ahead. I hope others hear our speech and will come and talk to us. We are totally open.

[Gustavo Miele, analyst]

Excellent, Rossano. Super clear.

[Operator]

Our next question is from Leandro Bastos from Citibank.

[Leandro Bastos, analyst]

I have 2 brief questions. The first one, going back to the guidance, and you talked about several levers for better margins. I'd like to take this low EBITDA. You see opportunities. You had taxes help the EBITDA. I'd like to know if for this year, we could think about something similar, some -- the EPS guidance, first point.

Second, on medicine, you mentioned seats increasing. If you could give -- shed some light on seats, what happened in the recent intake freshmen and average ticket of medicine? Very important. For how long should this remain in the numbers and the medicine -- the average medicine ticket a bit lower? So those are my points.

[Rossano Marques, executive]

Thanks, Leandro, for your questions. On the guidance, the below-the-line effect, we don't see great positive impact compared to the previous period. Well, it should be below the line, very similar to previous year. We have the negative impact of Selic that we detailed on the presentation.

Speaking of first half, unfortunately, it seems to -- it will continue in the second half, but it's a comparison that is actually less -- well, with a smaller leap when you look at the second half compared to the previous year. Nothing relevant below the line for you to project.

On medicine, I should start with the end, and then I'll ask Silvio to complement. The effect of the mix will continue as the Mais Médicos campuses are maturing. This should take 2 to 3 years to have complete maturing of those campuses.

For freshman ticket, you asked about the dynamics. We don't actually open up this applicant seat. We have greater offer of seats. When you have greater demand, you impact this competitive demand. Our strategy is of differentiation, position ourselves as main brand in each one of the states where we operate, turning that a natural barrier to specific impact on new institutions coming in, offering new seats. They tend to be more milder over the year because the quality is proven over time. The experience we offer to our students is very differentiated, and this is shown in practice. So we believe that we're actually going to reduce the pressure on the market with new seats with the strengthening that is greater of our positioning. Would you like to add, Silvio?

[Silvio Pessanha Neto, executive]

Sure. Precisely that, we have this mix in which we have increased the proportion within the student base of maturing in the Mais Médicos units. They have a ticket that is a bit smaller and who adhere to FIES and ProUni. It was ProUni, social ProUni. So those periods, they lead to this change. And this change or differentiation in the ticket is -- tends to stabilize, as Rossano mentioned, especially with this change in the ceiling, as it's been mentioned, FIES, that it turns this representativeness of FIES more interesting from the standpoint of the ticket.

And also, as Rossano put it quite well, the ratio of applicants' seats is we have a unified model. There is an offset of marketplaces where we have a greater demand or smaller demands as we fill the seats of those that have not been admitted in that marketplace. They migrate, have the opportunity of joining other courses. Our model leads this ratio -- that leads not great changes or variation despite the market being the most challenging that we're living.

Another additional point here mentioned by Rossano, when there is a marketplace where we have higher ticket, above average, this conversion, well, students go to a lower cost course. It's very common for those students to realize that the ticket difference is not worthwhile regarding what they have in terms of service delivery. So they transfer eventually. So those that actually do not renew or they actually move away, they come back and actually go back.

So we never had so many reopenings of registration despite their leaving for a lower ticket. They understand that the difference is not worth it regarding the opportunity they have. Research, practice is very expensive for medical schools. They come back reopening or reinstating their registration following the global ticket, so very much in this rationale that Rossano mentioned, just adding a few points.

[Operator]

The Q&A session is closed. We'd like to turn the floor over to Mr. Rossano Marques Leandro for the final remarks.

[Rossano Marques, executive]

Well, before my final remarks, I'd like to say that at the end of our presentation, there was some flaw in the audio. Eduardo was actually thanking everyone. I'd like to thank Eduardo for the 7 years that it looks, growth, strengthening our relationship with the market, with our students. We're very happy with this history that has been built. The whole team talking to you has been part of it. I wish Eduardo luck that he continues to be kind to us when he's in the Board. He's now taking a seat on the Board of Directors from now on. And thank you, and congratulations, Eduardo.

[Eduardo Menezes, executive]

Thank you, Rossano. Seven years that have been really nice and I'm happy to have made up this winning team. Thank you all very much for your trust. Well, greetings to all of you or hugs to you.

[Rossano Marques, executive]

Well, thank you, Eduardo. Looking ahead, again, our message of strong cash generation. This is the focus of the company. This is a great indicator that shows our path, the future of the company. We're very happy with the results that we've had in terms of intake. This enables the growth of our business. The signs are very positive. The other thing, we're very happy with -- of Unifametro. We had the opportunity of talking about that and the questions, the deal that shows the ability of Yduqs to generate value in this industry. We have several growth levers, and organic growth is certainly one of them that should be consolidating long term. We're positioned for that. We also see several growth levers in all our segments in an organic way. We have been working a lot with the team to identify and put necessary resources to ensure that those levers generate great results for the future.

So with this, I thank you all for your presence. It's been a pleasure to have you all with us. Thank you again, and excellent greetings to all of you.

[Operator]

So the Yduqs video conference is closed. We thank everyone for your participation and wish you all an excellent day.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]