AFYA — Afya Limited

Summary of AFYA Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Revenue: BRL 3.697 billion for 2025, a 12% year-over-year increase.
• Adjusted EBITDA: BRL 1.680 billion, up over 50% year-over-year, with a margin of 45.4%.
• Net Income: BRL 768.4 million, an 18% increase year-over-year; basic EPS reached BRL 8.32, up 19%.
• Operating Cash Flow: BRL 1.548 billion, a 6% increase, with a cash conversion rate of 93.7%.
• Dividend: Announced cash dividend of BRL 307.4 million, representing 40% of net income, payable in April 2026.

2. Strategic Updates and Business Highlights

• Afya maintains its leadership in medical education with 3,755 approved medical seats and over 25,000 medical students, reflecting a 5% growth.
• Continuing education revenue grew 11% year-over-year to BRL 284 million, while medical practice solutions revenue increased by 6% to BRL 171 million.
• The ecosystem now includes 301,000 active users, indicating strong engagement among physicians and medical students.
• Strategic focus on integrating products and services for physicians, enhancing the user experience, and expanding B2B offerings to drive future revenue growth.

3. Forward Guidance and Outlook

• For 2026, revenue is expected to be between BRL 3.950 billion and BRL 4.100 billion, with adjusted EBITDA anticipated between BRL 1.700 billion and BRL 1.800 billion.
• The company does not foresee material impacts from ENAMED on 2026 guidance, anticipating a strong intake cycle.
• CapEx for 2026 is projected to be between BRL 340 million and BRL 380 million, maintaining a healthy capital expenditure ratio of 8.6% to 9.3% of revenue.

4. Bad News, Challenges, or Points of Concern

• Adjusted EBITDA margin for Q4 2025 decreased by 50 basis points year-over-year to 42.6%.
• B2B revenue in medical practice solutions was noted as soft, with challenges in leveraging the unified platform for monetization.
• Concerns regarding the performance of certain campuses under ENAMED, although management expects minimal impact on future intakes due to proactive measures.
• The guidance for 2026 implies a slight decrease in EBITDA margin compared to 2025, attributed to investments in continuing education and medical practice solutions.

5. Notable Q&A Insights

• Management emphasized the integration of products and services for physicians as a key investment area to enhance user experience and engagement.
• Discussions around ENAMED indicated no expected material impact on 2026 guidance, with preparations underway for new evaluation processes.
• M&A remains a priority, targeting the addition of 200 medical seats per year with a focus on institutions generating significant revenue from medicine programs.
• The capital allocation strategy balances investments in growth, shareholder returns through dividends and buybacks, and maintaining a conservative leverage profile.

Overall, Afya demonstrated strong financial performance in 2025, with a clear strategy for growth and shareholder returns, while also addressing potential challenges in the upcoming year.