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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Vasta Platform Limited | NASDAQ:VSTA | NASDAQ | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.52 | 2.10 | 2.70 | 0 | 09:00:00 |
From Oct 2024 to Nov 2024
Vasta Platform Limited (NASDAQ: VSTA) – “Vasta” or the “Company” announces today its financial and operating results for the third quarter of 2024 (3Q24) ended September 30, 2024. Financial results are expressed in Brazilian Reais and are presented in accordance with International Financial Reporting Standards (IFRS).
HIGHLIGHTS
MESSAGE FROM MANAGEMENT
In the third quarter of 2024, we concluded the 2024 sales cycle (4Q23 to 3Q24). Our net revenue during the 2024 cycle has reached R$1,529 million, representing a 6.4% increase compared to the previous sales cycle, mostly due to the conversion of ACV into revenue. Additionally, our complementary solutions have seen an important growth of 20.9% compared to the 2023 sales cycle, with an accelerated increase in both student base and market penetration.
Vasta’s accumulated subscription revenue in the 2024 sales cycle totaled R$1,358 million, a 12.5% increase compared to the previous sales cycle. The Annual Contract Value (“ACV”) bookings expected for the 2024 sales cycle were delivered as expect and slightly higher than previous disclosed. Additionally, this line of revenue represents 88.8% of the total net revenue, a 4.8p.p. increase compared to the 2023 sales cycle, 84.0%. Subscription revenue continues to gain importance in the total revenue of the Company, in line with our strategy. CAGR for the last 5 cycles was a positive 18.4%, showing our resilience and the power of our brands and products.
Another highlight of the 2024 sales cycle has been that Adjusted EBITDA grew by 9.2%, to R$449 million compared to R$411 million in the previous sales cycle, and Adjusted EBITDA Margin increased by 0.8 p.p. to 29.4%. In proportion to net revenue, gross margin increased 230 bps in the 2024 sales cycle (from 61.9% to 64.2%) mainly due to synergy gains, cost efficiency and a better product mix that benefited from premium products expansion. Adjusted G&A expenses were reduced by 80 bps driven by workforce optimization and budgetary discipline, and Commercial expenses increased by 230 bps driven by higher expenses related to business expansion and marketing investments.
Free cashflow (FCF) in the 2024 sales cycle totaled R$146 million, a 0.3% increase from R$145 million for the same period in 2023. The last twelve-month (LTM) FCF/Adjusted EBITDA conversion rate decreased from 35.4% to 32.5%, due to higher investments in marketing for business expansion, and increased expenses relating to the 2023 production owing to a seasonal effect of paper and printing costs. However, we foresee a lower volume of production-related expenses in the following quarters and expect to maintain the improvement in FCF for the year-end.
Moreover, the net debt/LTM adjusted EBITDA was 2.32x as of 3Q24, which represents a decrease of 0.11x from 2.43x, in the same quarter of 2023. In comparison to 2Q24 the net debt/LTM adjusted EBITDA increased slightly from 2.28x in 2Q24. The Company continues to focus on deleveraging and cash generation, which is highlighted by this indicator. In 2024, we implemented some liquidity management actions, which allowed us to extend the maturity profile of our indebtedness and reduce applicable interest rates.
In the B2G segment, one of our main growing avenues, Vasta generated R$ 69 million in revenues in this sales cycle, compared to R$81 million in the previous sales cycle. This is the second year since Vasta started offering its products and services to the public sector, and we remain confident in our strategy. We have renewed the contract signed in the previous year in the State of Pará and the SAEB scores were released showing a significant improvement in the students’ results in that state, moving from the second-to-last place in the National Ranking for High School to sixth place, with more than a 40% improvement in high school students’ scores. This is a remarkable result for us, the State of Pará and mainly for the students who benefited from the best products for recompositing learning and core-skill developments.
Given municipal elections in Brazilian cities in 2024, the signing of new contracts was hindered, but Vasta still has a strong pipeline and remains confident that this line of business will bear fruit in the coming quarters for the Company.
Start-Anglo bilingual school, which is part of our growth strategy, remains in continued expansion. In 3Q24, we entered 2 new contracts, totaling 32 contracts as of this date, and 2 operating units. Furthermore, we have over 260 prospects in negotiation. We believe that the broad geographic presence and strong pipeline underscore the robust potential for further growth and market penetration of Start-Anglo.
Our revenue growth is directly related to the delivery of high-quality solutions that meet the needs of students, parents, educators and partner schools. Great evidence of the evolution of our company and brands is demonstrated in the customer satisfaction assessment index (NPS), which in the last 12 months has grown by more than 30 points.
OPERATING PERFORMANCE
Student base – subscription models
2024
2023
% Y/Y
2022
% Y/Y
Partner schools - Core content
4,744
5,032
(5.7%)
5,274
(4.6%)
Partner schools – Complementary solutions
1,722
1,383
24.5%
1,304
6.1%
Students - Core content
1,432,289
1,539,024
(6.9%)
1,589,224
(3.2%)
Students - Complementary content
483,132
453,552
6.5%
372,559
21.7%
Note: Students enrolled in partner schools
In the 2024 sales cycle, Vasta served 1.4 million students with core content solutions and close to 500,000 students with complementary solutions. This is aligned with the company’s strategy to focus on improving its client base through a better mix of schools and growth in premium education systems (Anglo, PH, Amplia and Fibonacci), brands with higher average ticket, lower defaults, greater adoption of complementary solutions and longer-term relationships. On the other hand, the reduction of our client base was concentrated on the low-end segment, which has a higher number of students on average, and a lower margin.
FINANCIAL PERFORMANCE
Net revenue
Values in R$ ‘000
3Q24
3Q23
% Y/Y
2024 cycle
2023 cycle
% Y/Y
Subscription
205,874
194,841
5.7%
1,357,880
1,207,155
12.5%
Core content
199,262
190,607
4.5%
1,167,082
1,049,358
11.2%
Complementary solutions
6,612
4,234
56.2%
190,798
157,797
20.9%
B2G
-
40,747
(100.0%)
69,031
81,199
(15.0%)
Non-subscription
14,319
22,346
(35.9%)
102,458
148,829
(31.2%)
Total net revenue
220,193
257,933
(14.6%)
1,529,369
1,437,183
6.4%
% ACV
15.2%
15.8%
(0.6p.p.)
100.6%
98.1%
2.5p.p.
% Subscription
93.5%
75.5%
18.0p.p.
88.8%
84.0%
4.8p.p.
Note: n.m.: not meaningful
In 3Q24, Vasta’s net revenue totaled R$220 million, a 14.6% decrease compared to 3Q23, mainly due to the lack of new revenues in the B2G segment in this quarter. Subscription revenue totaled R$ 206 million, a 5.7% increase compared to 3Q23, due to the higher conversion of ACV into revenue.
In the 2024 sales cycle (4Q23 to 3Q24), Vasta’s net revenue totaled R$1,529 million, a 6.4% increase compared to the same period in the prior sales cycle. Subscription revenue grew 12.5% in the 2024 sales cycle. The subscription revenue reached 100.6% of Annual Contract Value (“ACV”) bookings for the 2024 sales cycle.
EBITDA
Values in R$ ‘000
3Q24
3Q23
% Y/Y
2024 cycle
2023 cycle
% Y/Y
Net revenue
220,193
257,933
(14.6%)
1,529,369
1,437,183
6.4%
Cost of goods sold and services
(81,184)
(101,161)
(19.7%)
(547,477)
(547,541)
(0.0%)
General and administrative expenses
(120,689)
(124,500)
(3.1%)
(479,151)
(489,760)
(2.2%)
Commercial expenses
(63,652)
(63,044)
1.0%
(277,618)
(229,173)
21.1%
Other operating (expenses) income
263
7,534
(96.5%)
2,331
(16,874)
(113.8%)
Share of loss equity-accounted investees
(2,691)
(2,878)
(6.5%)
(22,842)
(7,894)
189.3%
Impairment losses on trade receivables
(7,845)
(15,369)
(49.0%)
(60,193)
(55,550)
8.4%
Profit before financial income and taxes
(55,605)
(41,485)
34.0%
144,420
90,391
59.8%
(+) Depreciation and amortization
72,443
70,587
2.6%
276,833
275,791
0.4%
EBITDA
16,838
29,102
(42.1%)
421,253
366,182
15.0%
EBITDA Margin
7.6%
11.3%
(3.6p.p.)
27.5%
25.5%
2.1p.p.
(+) Layoff related to internal restructuring
1,165
115
913.0%
4,775
1,297
268.2%
(+) Share-based compensation plan
3,305
9,755
(66.1%)
9,302
20,369
(54.3%)
(+) M&A adjusting expenses
-
-
0.0%
13,776
23,562
(41.5%)
Adjusted EBITDA
21,308
38,972
(45.3%)
449,106
411,411
9.2%
Adjusted EBITDA Margin
9.7%
15.1%
(5.4p.p.)
29.4%
28.6%
0.8p.p.
Note: n.m.: not meaningful
In the 2024 sales cycle, Adjusted EBITDA grew 9.2% to R$449 million with a margin of 29.4%, representing an increase of 0.8 p.p. in comparison to the prior sales cycle. In 3Q24, Adjusted EBITDA totaled R$21 million, a 45.3% decrease compared to R$39 million in 3Q23, mainly due to a lower net revenue in this quarter. In the 2024 sales cycle, the increase in Adjusted EBITDA and Adjusted EBITDA Margin was mainly driven by gains in operating efficiency, cost savings and a sales mix that benefited from the growth of subscription products, partially offset by higher commercial expenses due to marketing events and campaigns for the next cycle. Share of loss equity-accounted investees relates to a 43.1% minority stake in Educbank Gestão de Pagamentos Educacionais S.A. (“Educbank”), which registered a loss in equity-accounted investees in the amount of R$20 million in the 2024 sales cycle that was mainly due to write-off costs relating to a potential M&A target of Educbank, which ultimately did not materialize.
(%) Net Revenue
3Q24
3Q23
Y/Y (p.p.)
2024 cycle
2023 cycle
Y/Y (p.p.)
Gross margin
63.1%
60.8%
2.4p.p.
64.2%
61.9%
2.3p.p.
Adjusted cash G&A expenses (1)
(21.0%)
(15.3%)
(5.7p.p.)
(12.7%)
(13.5%)
0.8p.p.
Commercial expenses
(28.9%)
(24.4%)
(4.5p.p.)
(18.2%)
(15.9%)
(2.3p.p.)
Impairment on trade receivables
(3.6%)
(6.0%)
2.3p.p.
(3.9%)
(3.9%)
0.0p.p.
Adjusted EBITDA margin
9.7%
15.1%
(5.4p.p.)
29.4%
28.6%
0.8p.p.
(1) Sum of general and administrative expenses, other operating income and profit (loss) of equity-accounted investees, less: depreciation and amortization, layoffs related to internal restructuring, share-based compensation plan and M&A one-off adjusting expenses.
In proportion to net revenue, gross margin increased 230 bps in the 2024 sales cycle (from 62% to 64%) mainly due to synergy gains, costs efficiency and a better product mix that benefited from premium products expansion. Adjusted cash G&A expenses reduced by 80 bps driven by workforce optimization and budgetary discipline, and Commercial expenses increased by 230 bps driven by higher expenses related to business expansion and marketing investments while impairment on trade receivable (PDA) remained stable, even considering a more restrictive credit landscape.
Finance Results
Values in R$ ‘000
3Q24
3Q23
% Y/Y
2024 cycle
2023 cycle
% Y/Y
Finance income
16,836
19,511
(13.7%)
63,241
85,831
(26.3%)
Finance costs
(71,483)
(74,966)
(4.6%)
(276,659)
(307,569)
(10.0%)
Total
(54,647)
(55,455)
(1.5%)
(213,418)
(221,738)
(3.8%)
In 3Q24, finance income totaled R$16.8 million, from R$19.5 million in 3Q23, due to the impact of lower interest rates on financial investments and marketable securities. In the 2024 sales cycle, finance income decreased 26.3% to R$63.2 million from R$ 85.8 million in the prior sales cycle, due to the same reason as noted above and a non-recurring gain of R$10 million resulting from the reversal of interest on tax contingencies.
Finance costs in 3Q24 decreased 4.6% to R$71,5 million, from R$75,0 million in 3Q23, due to the impact of lower interest rates on financial liabilities (mainly bonds, accounts payable on acquisition and contingencies), as noted above. In the 2024 sales cycle finance cost decreased 10% driven mainly by lower interest rates.
Net profit (loss)
Values in R$ ‘000
3Q24
3Q23
% Y/Y
2024 cycle
2023 cycle
% Y/Y
Net (loss) profit
(77,140)
(62,111)
24.2%
(61,401)
(67,053)
(8.4%)
(+) Layoffs related to internal restructuring
1,165
115
n.m.
4,775
1,297
268.2%
(+) Share-based compensation plan
3,305
9,755
(66.1%)
9,302
20,369
(54.3%)
(+) Amortization of intangible assets (1)
40,424
38,940
3.8%
159,326
156,313
1.9%
(-) Income tax contingencies reversal
-
-
n.m.
-
(29,715)
n.m.
(+) M&A adjusting expenses
-
-
n.m.
13,776
23,562
(41.5%)
(-) Tax shield (2)
(15,264)
(16,595)
(8.0%)
(63,641)
(68,524)
(7.1%)
Adjusted net (loss) profit
(47,510)
(29,896)
58.9%
62,137
36,249
71.4%
Adjusted net margin
(21.6%)
(11.6%)
(10.0p.p.)
4.1%
2.5%
1.6p.p.
Note: n.m.: not meaningful; (1) From business combinations. (2) Tax shield (34%) generated by the expenses that are being deducted as net (loss) profit adjustments.
In 3Q24, adjusted net loss totaled R$47 million, a 58.9% increase compared to a net loss of R$30 million in 3Q23. It is worth highlighting that 2Q and 3Q of every year represents about 30% of the total revenue of the year due to seasonality of product deliveries to our customers. In the 2024 sales cycle, adjusted net profit reached R$62 million, a 71.4% increase from an adjusted net profit of R$36 million for the 2023 sales cycle.
The 2023 sales cycle was positively impacted by a gain related to the reversal of tax contingencies recorded in 4Q22, which impacted corporate tax and finance results, but negatively impacted by M&A expenses in the amount of R$ 24 million. The 2024 sales cycle was impacted by the M&A adjusting expenses occurred in 4Q23 as they related to one-off costs associated with the write-off of a potential M&A target of Educbank, which ultimately did not materialize, negatively impacting our Share of Loss of Equity-Accounted Investees in the amount of R$13.8 million.
Accounts receivable and PDA
Values in R$ ‘000
3Q24
3Q23
% Y/Y
2Q24
% Q/Q
Gross accounts receivable
567,339
545,972
3.9%
755,133
(24.9%)
Provision for doubtful accounts (PDA)
(90,214)
(73,390)
22.9%
(93,543)
(3.6%)
Coverage index
15.9%
13.4%
2.5p.p.
12.4%
3.5p.p.
Net accounts receivable
477,125
472,582
1.0%
661,590
(27.9%)
Average days of accounts receivable (1)
112
118
(6)
152
(40)
(1) Balance of net accounts receivable divided by the last-twelve-month net revenue, multiplied by 360.
The average payment term of Vasta’s accounts receivable portfolio was 112 days in the 3Q24, a reduction of 6 days in comparison to 3Q23 (118 days), and a reduction of 40 days in comparison to 2Q24 (152 days).
Free cash flow
Values in R$ ‘000
3Q24
3Q23
% Y/Y
2024 cycle
2023 cycle
% Y/Y
Cash from operating activities (1)
87,881
81,030
8.5%
316,463
309,487
2.3%
(-) Income tax and social contribution paid
-
(279)
n.m.
(672)
(5,361)
(87.5%)
(-) Payment of provision for tax, civil and labor losses
(1,067)
(508)
110%
(1,507)
(1,302)
15.7%
(-) Interest lease liabilities paid
(3,690)
(3,050)
21.0%
(9,799)
(14,264)
(31.3%)
(-) Acquisition of property, plant, and equipment
(2,416)
(8,899)
(72.9%)
(16,599)
(28,788)
(42.3%)
(-) Additions of intangible assets
(19,219)
(1,411)
n.m.
(119,942)
(85,194)
40.8%
(-) Lease liabilities paid
(6,006)
(8,623)
(30.3%)
(22,023)
(29,135)
(24.4%)
Free cash flow (FCF)
55,483
58,260
(4.8%)
145,921
145,444
0.3%
FCF/Adjusted EBITDA
260.4%
149.5%
110.9p.p.
32.5%
35.4%
(2.9p.p.)
LTM FCF/Adjusted EBITDA
32.5%
35.4%
(2.9p.p.)
32.5%
35.4%
(2.9p.p.)
(1) Net (loss) profit less non-cash items less and changes in working capital. Note: n.m.: not meaningful
Free cash flow (FCF) totaled R$55 million 3Q24, a 4.8% decrease from an FCF of R$58 million in 3Q23. In the 2024 sales cycle, FCF totaled R$146 million, a R$1 million increase from R$145 million in 2023 sales cycle. The FCF generated in the sales cycle was offset by the impacts of financial interest cost and Vasta’s second share repurchase program. The last twelve-month (LTM) FCF/Adjusted EBITDA conversion decreased from 35.4% to 32.5%, mainly driven by negative impacts of anticipation of marketing expenses, and increased expenses related to the 2023 production owing to a seasonal effect of paper and printing costs. However, we foresee a lower volume of production-related expenses in the following quarters and expect to maintain improvement in FCF for the year-end.
Financial leverage
Values in R$ ‘000
3Q24
2Q24
1Q24
4Q23
3Q23
Financial debt
764,693
768,459
762,985
791,763
765,350
Accounts payable from business combinations
630,267
618,830
616,247
614,120
601,171
Total debt
1,394,960
1,387,289
1,379,232
1,405,883
1,366,521
Cash and cash equivalents
96,162
50,868
67,214
95,864
106,757
Marketable securities
258,945
272,991
242,799
245,942
261,264
Net debt
1,039,853
1,063,430
1,069,219
1,064,076
998,500
Net debt/LTM adjusted EBITDA
2.32
2.28
2.22
2.36
2.43
As of the end of 3Q24, Vasta had a net debt position of R$1,040 million, a R$23 million decrease compared to 2Q24. The net debt/LTM adjusted EBITDA was 2.32x as of 3Q24, having increased slightly from 2.28x in 2Q24, and decreased from 2.43x in 3Q23.
ESG
Sustainability Report
Last August we disclosed Vasta´s third sustainability report regarding the year of 2023 and it was prepared in accordance with international standards and the implementation of our corporate strategy, challenges, and achievements, while also reaffirming our commitment to transparency and sustainability. These include the publication of its second Greenhouse Gas Inventory, the company's adherence to the UN Global Compact, the dedication of 1,991 thousand hours to the Corporate Volunteer Program, the SOMOS Afro program, an affirmative internship program, and the fact that 29% of the seats on the Board of Directors are occupied by women.
The report complies with the Global Reporting Initiative (GRI) 2021 version and considers other standards recognized in Brazil and abroad, such as the Sustainability Accounting Standards Board (SASB) guidelines for the education sector, the guidelines of the IBC Stakeholder Capitalism Metrics from the World Economic Forum, and the principles of the International Integrated Reporting Council (IIRC).
The document is available at: https://ir.vastaplatform.com/esg/. Information contained in, or accessible through, our website is not incorporated by reference in, and does not constitute a part of, this press release.
In line with the topics identified in the materiality process, every quarter we present Vasta's most material indicators:
Key Indicators
ENVIRONMENT
Water withdrawal¹
SDGs
GRI
Disclosure
Unit
3Q2024
3Q2023
% Y/Y
2Q2024
% Q/Q
3, 11, 12
303-3
Total water withdrawal
m³
3,205
5,290
(39%)
3,039
5%
Municipal water supply1
%
100%
100%
0 p.p.
100%
0 p.p.
Groundwater
%
0%
0%
0 p.p.
0%
0 p.p.
Energy consumption within the organization2
SDGs
GRI
Disclosure
Unit
3Q2024
3Q2023
% Y/Y
2Q2024
% Q/Q
12, 13
302-1
Total energy consumption
GJ
3,699
1,845
100%
3,856
(4%)
Energy from renewable sources2
%
46%
59%
(13 p.p.)
52%
(6 p.p.)
In the 3Q24, we observed a lower water consumption compared to the same period in 2023 due to the reduced demand for operations at the São José dos Campos Distribution Center and remained stable compared to 2Q24. There was also an increase in energy consumption compared to the same period in 2023, due to greater use of air conditioning resulting from the temperature increase that affected much of the country.
SOCIAL
Diversity in workforce by employee category
SDGs
GRI
Disclosure
Unit
3Q2024
3Q2023
% HA
2Q2024
% HA
5
405-1
C-level – Women
%
22%
29%
(7 p.p.)
29%
(7 p.p.)
C-level – Men
%
78%
71%
7 p.p.
71%
7 p.p.
C-level- total4
no.
9
7
29%
7
29%
Leadership (≥ managers) – Women
%
44%
45%
(1 p.p.)
43%
1 p.p.
Total - Leadership (≥ managers) – Men
%
56%
55%
1 p.p.
57%
(1 p.p.)
Leadership (≥ managers) 5 – total
no.
120
144
(17%)
124
(3%)
Academic staff – Women
%
17%
18%
(1 p.p.)
15%
2 p.p.
Academic staff – Men
%
83%
83%
0 p.p.
85%
(2 p.p.)
Academic staff 6 - total
no.
78
80
(3%)
75
4%
Administrative/Operational – Women
%
53%
55%
(2 p.p.)
54%
(1 p.p.)
Administrative/Operational – Male
%
47%
45%
2 p.p.
46%
1 p.p.
Administrative/Operational 7 - total
no.
1,226
1,564
(22%)
1,229
(0%)
Employees – Women
%
50%
53%
(3 p.p.)
51%
(1 p.p.)
Employees – Men
%
50%
47%
3 p.p.
49%
1 p.p.
Employees - total
no.
1,433
1,795
(20%)
1,435
(0%)
Continuing our Diversity and Inclusion actions, in July we held a dialogue with our LGBTQIAPN+ people to discuss their experiences in the job market and in the company. In addition, we published communications encouraging self-declaration of sexual orientation and gender identity, so that more people may feel encouraged to self-identify. This month, we also promoted and encouraged our professionals to take the Ethnic-Racial Diversity course at the Corporate University.
In September 2024, we celebrated the Month of People with Disabilities with a live event involving our professionals with disabilities. This initiative also promoted the UniCo course on Inclusion of People with Disabilities and reinforced the self-declaration campaign.
Another important highlight of September 2024 is that we became signatories of the Movement for Racial Equity (MOVER), a non-profit association made up of more than 50 companies that together employ more than 1.3 million workers. The movement works collaboratively to ensure that Black people have access to more opportunities in the job market.
Social impact* 8
SDGs
GRI
Disclosure
Unit
2S2024
2S2023
1S2024
4, 10
-
Scholars of the Somos Futuro Program
no.
213
232
195
* Indicators presented progressively, referring to the total accumulated since the beginning of the year, which is why we are not presenting the variations compared to previous semesters.
We continue to maintain the Somos Futuro Program via Instituto SOMOS. The initiative enables public school students to attend high school at one of Vasta's partner schools. In this quarter, 213 young people were studying through the program receiving didactic and paradidactic material, online school tutoring, mentoring and access to the entire support network of the program, which includes psychological monitoring, in addition to the scholarship offered by the school.
Health and Safety
SDGs
GRI
Disclosure
Unit
3Q2024
3Q2023
% HA
2Q2024
% HA
3
403-5, 403-9
Units covered by the Risk Management Program (PGR)
%
100%
100%
0 p.p.
100%
0 p.p.
Trained employees
no.
214
781
(73%)
221
(3%)
Average hours of training per employee 9
no.
2.07
1.25
66%
3.00
(31%)
Injury frequency 10
rate
1.16
4.58
(75%)
1.09
6%
High-consequence injuries
no.
-
-
0%
-
0%
Recordable work-related injuries 11
rate
-
-
0%
-
0%
Fatalities resulted from work-related injuries
no.
-
-
0%
-
0%
Fatalities 12
rate
-
-
0%
-
0%
The difference in employees trained between 3Q24 and 3Q23 is due to the fact that in May 2023 we implemented an automatic process to send reminders to employees who had not taken the mandatory courses on occupational health and safety available at our corporate university.
During the period, the main accidents involving employees occurred in internal circulation areas, resulting in falls on staircases, as well as accidents in administrative areas and laboratories involving furniture. Workplace inspections were carried out to identify risk situations and implement preventive plans.
In 3Q24, we promoted health actions, events, and lives, including the "Momento Espaço Saúde" in the offices and blood donation campaigns. We sent out a notice advising employees and students on how to act in emergency situations. We also publicized the procedure for the Mental Health Day and made Mental Health training available at the Corporate University for all employees. Additionally, we held SIPAT (Internal Week for the Prevention of Accidents at Work) at the Distribution Center in São José dos Campos.
GOVERNANCE
Diversity in the Board of Directors (gender)
SDGs
GRI
Disclosure
Unit
3Q2024
3Q2023
% HA
2Q2024
% HA
5
405-1
Members
no.
7
7
0%
7
0%
Women
%
29%
29%
0 p.p.
29%
0 p.p.
Ethical conduct
SDGs
GRI
Disclosure
Unit
3Q2024
3Q2023
% HA
2Q2024
% HA
16
2-25
Cases recorded in our Confidential Ethics Hotline 13
no.
5
20
(75%)
21
(76%)
10
406-1
Grievances regarding discrimination received through our Confidential Ethics Hotline 13
no.
-
1
(100%)
2
(100%)
Confirmed incidents of discrimination 13
no.
-
-
0%
-
0%
5
405-1
Employees who have received training on anti-corruption policies and procedures
%
100%
100%
0.0 p.p.
100%
0 p.p.
Operations assessed for risks related to corruption
%
100%
100%
0.0 p.p.
100%
0 p.p.
Confirmed incidents of corruption
no.
-
-
0%
-
0%
NA: Not available: quarterly disclosure began in the second quarter of 2023. It used to be reported annually in Sustainability Reports.
This quarter, the number of cases recorded in our Confidential Channel was lower than in 3Q23 and 2Q24, due to the vacation period for our students. In addition, we continue to work hard to increase awareness around the Cogna Confidential Channel, encouraging the reporting of any situation related to discrimination, harassment, and deviations from the Code of Conduct.
Compliance*
SDGs
GRI
Disclosure
Unit
3Q2024
3Q2023
% HA
2Q2024
% HA
16
307-1, 419-1
Fines for social and economic noncompliance
R$ thousand
0
0
0%
0
0%
Non-financial sanctions for social and economic non-compliance
no.
0
0
0%
0
0%
Fines for environmental noncompliance
R$ thousand
0
0
0%
0
0%
Non-financial sanctions for environmental non-compliance
no.
0
0
0%
0
0%
* Only cases deemed material, i.e., cases that harm Vasta's image, which lead to a halt in operations, or where the amounts involved are over R$1 million.
Customer data privacy
SDGs
GRI
Disclosure
Unit
3Q2024
3Q2023
% HA
2Q2024
% HA
16
418-1
External complaints substantiated by the organization
no.
4
4
0%
3
33%
Complaints received from regulatory agencies or similar official bodies
no.
-
-
(100%)
-
0%
Cases identified of leakage, theft, or loss of customer data
no.
-
-
0%
-
0%
We have added the reclassification of requests opened by the data subject internally on the Privacy Portal. In this way, it is possible, after analyzing the case, to identify and classify whether the request does in fact refer to the rights of data subjects under the LGPD.
FOOTNOTES:
SDG
Sustainable Development Goal. Indicates goal to which the actions monitored contribute.
GRI
Global Reporting Initiative. Lists the GRI standard indicators related to the data monitored.
ND
Indicator discontinued or not measured in the quarter.
NM
Not meaningful
1
Based on invoices from sanitation concessionaires.
2
Acquired from the free energy market.
3
n.a.
4
Takes into the account the positions of CEO, vice presidents and director reporting directly to the CEO
5
Management, senior management and leadership positions not reporting directly to the CEO
6
Course coordinators, teachers, and tutors.
7
Corporate coordination, specialists, adjuncts, assistants and analysts.
8
Indicators reported on semi-annual basis (2Q and 4Q).
9
Total hours of training/employees trained.
10
Total accidents (with and without leave)/ Total man/hours worked (MHW) x 1,000,000
11
Work-related injury (excluding fatalities) from which the worker cannot recover fully to pre-injury health status within 6 months. Formula: Number of injuries/MHW x 1.000.000.
12
Fatalities/ MHW x 1,000,000.
13
Indicators measured from the first quarter of 2023. It used to be reported annually in Sustainability Reports
CONFERENCE CALL INFORMATION
Vasta will discuss its third quarter 2024 results on November 7, 2024, via a conference call at 5:00 p.m. Eastern Time. To access the call (ID: 3871721), please dial: +1 (888) 660-6819 or +1 (929) 203-1989. A live and archived webcast of the call will be available on the Investor Relations section of the Company’s website at https://ir.vastaplatform.com. Information contained in, or accessible through, our website is not incorporated by reference in, and does not constitute a part of, this press release.
ABOUT VASTA
Vasta is a leading, high-growth education company in Brazil powered by technology, providing end-to-end educational and digital solutions that cater to all needs of private schools operating in the K-12 educational segment, ultimately benefiting all of Vasta’s stakeholders, including students, parents, educators, administrators, and private school owners. Vasta’s mission is to help private K-12 schools to be better and more profitable, supporting their digital transformation. Vasta believes it is uniquely positioned to help schools in Brazil undergo the process of digital transformation and bring their education skill set to the 21st century. Vasta promotes the unified use of technology in K-12 education with enhanced data and actionable insight for educators, increased collaboration among support staff and improvements in production, efficiency and quality. For more information, please visit ir.vastaplatform.com. Information contained in, or accessible through, our website is not incorporated by reference in, and does not constitute a part of, this press release.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate” and “potential,” among others. Forward-looking statements appear in a number of places in this press release and include, but are not limited to, statements regarding our intent, belief or current expectations. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to of various factors, including (i) general economic, financial, political, demographic and business conditions in Brazil, as well as any other countries we may serve in the future and their impact on our business; (ii) fluctuations in interest, inflation and exchange rates in Brazil and any other countries we may serve in the future; (iii) our ability to implement our business strategy and expand our portfolio of products and services; (iv) our ability to adapt to technological changes in the educational sector; (v) the availability of government authorizations on terms and conditions and within periods acceptable to us; (vi) our ability to continue attracting and retaining new partner schools and students; (vii) our ability to maintain the academic quality of our programs; (viii) the availability of qualified personnel and the ability to retain such personnel; (ix) changes in the financial condition of the students enrolling in our programs in general and in the competitive conditions in the education industry; (x) our capitalization and level of indebtedness; (xi) the interests of our controlling shareholder; (xii) changes in government regulations applicable to the education industry in Brazil; (xiii) government interventions in education industry programs, that affect the economic or tax regime, the collection of tuition fees or the regulatory framework applicable to educational institutions; (xiv) cancellations of contracts within the solutions we characterize as subscription arrangements or limitations on our ability to increase the rates we charge for the services we characterize as subscription arrangements; (xv) our ability to compete and conduct our business in the future; (xvi) our ability to anticipate changes in the business, changes in regulation or the materialization of existing and potential new risks; (xvii) the success of operating initiatives, including advertising and promotional efforts and new product, service and concept development by us and our competitors; (xviii) changes in consumer demands and preferences and technological advances, and our ability to innovate to respond to such changes; (xix) changes in labor, distribution and other operating costs; our compliance with, and changes to, government laws, regulations and tax matters that currently apply to us; (xx) the effectiveness of our risk management policies and procedures, including our internal control over financial reporting; (xxi) health crises, including due to pandemics and government measures taken in response thereto; (xxii) other factors that may affect our financial condition, liquidity and results of operations; and (xxiii) other risk factors discussed under “Risk Factors”. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.
NON-GAAP FINANCIAL MEASURES
This press release presents our EBITDA, Adjusted EBITDA and Adjusted net (loss) profit and Free cash flow (FCF), which is information provided for the convenience of investors. EBITDA and Adjusted EBITDA are among the key performance indicators used by us to measure financial operating performance. Our management believes that these Non-GAAP financial measures provide useful information to investors and shareholders. We also use these measures internally to establish budgets and operational goals to manage and monitor our business, evaluate our underlying historical performance and business strategies and to report our results to the board of directors.
We calculate EBITDA as net (loss) profit for the period/year plus income taxes and social contribution plus/minus net finance result plus depreciation and amortization. The EBITDA measure provides useful information to assess our operational performance.
We calculate Adjusted EBITDA as EBITDA plus/minus: (a) income tax and social contribution; (b) net finance result; (c) depreciation and amortization; (d) share-based compensation expenses, mainly due to the grant of additional shares to Somos’ employees in connection with the change of control of Somos to Cogna (for further information refer to note 23 to the audited consolidated financial statements) ; (e) provision for risks of tax, civil and labor losses regarding penalties, related to income tax positions taken by the Predecessor Somos – Anglo and Vasta in connection with a corporate reorganization carried out by the Predecessor Somos – Anglo; (f) Bonus IPO, which refers to bonus paid to certain executives and employees based on restricted share units; and (g) expenses with contractual termination of employees due to organizational restructuring. We understand that such adjustments are relevant and should be considered when calculating our Adjusted EBITDA, which is a practical measure to assess our operational performance that allows us to compare it with other companies that operates in the same segment.
We calculate Adjusted net (loss) profit as the (loss) profit for the period/year as presented in Statement of Profit or Loss and Other Comprehensive Income adjusted by the same Adjusted EBITDA items, however, added by (a) Amortization of intangible assets from Business Combination and (b) Tax shield of 34% generated by the aforementioned adjustments.
We calculate Free cash flow (FCF) as the cash from operating activities as presented in the Statement of Cash Flows less (a) income tax and social contribution paid; (b) tax, civil and labor proceedings paid; (c) interest lease liabilities paid; (d) acquisition of property, plant and equipment; (e) additions to intangible assets; and (f) lease liabilities paid.
We understand that, although Adjusted net (loss) profit, EBITDA, Adjusted EBITDA, and Free cash flow (FCF) are used by investors and securities analysts in their evaluation of companies, these measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results of operations as reported under IFRS. Additionally, our calculations of Adjusted net (loss) profit, Adjusted EBITDA, and Free cash flow (FCF) may be different from the calculation used by other companies, including our competitors in the education services industry, and therefore, our measures may not be comparable to those of other companies.
REVENUE RECOGNITION AND SEASONALITY
Our main deliveries of printed and digital materials to our customers occur in the last quarter of each year (typically in November and December), and in the first quarter of each subsequent year (typically in February and March), and revenue is recognized when the customers obtain control over the materials. In addition, the printed and digital materials we provide in the fourth quarter are used by our customers in the following school year and, therefore, our fourth quarter results reflect the growth in the number of our students from one school year to the next, leading to higher revenue in general in our fourth quarter compared with the preceding quarters in each year. Consequently, in aggregate, the seasonality of our revenues generally produces higher revenues in the first and fourth quarters of our fiscal year. Thus, the numbers for the second quarter and third quarter are usually less relevant. In addition, we generally bill our customers during the first half of each school year (which starts in January), which generally results in a higher cash position in the first half of each year compared to the second half.
A significant part of our expenses is also seasonal. Due to the nature of our business cycle, we need significant working capital, typically in September or October of each year, to cover costs related to production and inventory accumulation, selling and marketing expenses, and delivery of our teaching materials at the end of each year in preparation for the beginning of each school year. As a result, these operating expenses are generally incurred between September and December of each year.
Purchases through our Livro Fácil e-commerce platform are also very intense during the back-to-school period, between November, when school enrollment takes place and families plan to anticipate the purchase of products and services, and February of the following year, when classes are about to start. Thus, e-commerce revenue is mainly concentrated in the first and fourth quarters of the year.
KEY BUSINESS METRICS
Annual Contract Value, or ACV, is a non-accounting managerial metric and represents our partner schools’ commitment to pay for our solutions offerings. We believe it is a meaningful indicator of demand for our solutions. We consider ACV is a helpful metric because it is designed to show amounts that we expect to be recognized as revenue from subscription services for the 12-month period between October 1 of one fiscal year through September 30 of the following fiscal year. We define ACV as the revenue we would expect to recognize from a partner school in each school year, based on the number of students who have contracted our services, or “enrolled students,” that will access our content at such partner school in such school year. We calculate ACV by multiplying the number of enrolled students at each school with the average ticket per student per year; the related number of enrolled students and average ticket per student per year are each calculated in accordance with the terms of each contract with the related school. Although our contracts with our schools are typically for 4-year terms, we record one year of revenue under such contracts as ACV. ACV is calculated based on the sum of actual contracts signed during the sales period and assumes the historical rates of returned goods from customers for the preceding 24-month period. Since the actual rates of returned goods from sales during the period may be different from the historical average rates and the actual volume of merchandise ordered by our customers may be different from the contracted amount, the actual revenue recognized during each period of a sales cycle may be different from the ACV for the respective sales cycle. Our reported ACV is subject to risks associated with, among other things, economic conditions and the markets in which we operate, including risks that our contracts may be canceled or adjusted (including as a result of the COVID-19 pandemic).
FINANCIAL STATEMENTS
Consolidated Statements of Financial Position
Assets
September 30, 2024
December 31, 2023
Current assets
Cash and cash equivalents
96,162
95,864
Marketable securities
258,945
245,942
Trade receivables
477,125
697,512
Inventories
334,815
300,509
Taxes recoverable
20,122
19,041
Income tax and social contribution recoverable
13,477
16,841
Prepayments
84,801
71,870
Other receivables
1,528
2,085
Related parties – other receivables
10,520
7,157
Total current assets
1,297,495
1,456,821
Non-current assets
Judicial deposits
224,210
207,188
Deferred income tax and social contribution
253,834
205,453
Equity accounted investees
54,765
64,484
Other investments and interests in entities
9,879
9,879
Property, plant and equipment
155,406
151,492
Intangible assets and goodwill
5,205,092
5,307,563
Total non-current assets
5,903,186
5,946,059
Total Assets
7,200,681
7,402,880
Consolidated Statements of Financial Position (continued)
Liabilities
September 30, 2024
December 31, 2023
Current liabilities
Bonds
267,471
541,763
Suppliers
141,840
221,291
Reverse factoring
274,239
263,948
Lease liabilities
19,145
17,078
Income tax and social contribution payable
1,005
-
Salaries and social contributions
93,006
104,406
Taxes payable
5,778
7,821
Contractual obligations and deferred income
9,666
32,815
Accounts payable for business combination and acquisition of associates
209,934
216,728
Other liabilities
26,296
26,382
Other liabilities - related parties
24,174
15,060
Total current liabilities
1,072,554
1,447,292
Non-current liabilities
Bonds
497,222
250,000
Lease liabilities
92,809
79,579
Accounts payable for business combination and acquisition of associates
420,333
397,392
Provision for tax, civil and labor losses
731,637
697,990
Other liabilities
2,313
9,836
Total non-current liabilities
1,744,314
1,434,797
Total current and non-current liabilities
2,816,868
2,882,089
Shareholder's Equity
Share capital
4,820,815
4,820,815
Capital reserve
90,079
89,627
Treasury shares
(75,457)
(59,525)
Accumulated losses
(452,551)
(331,559)
Total Shareholder's Equity
4,382,886
4,519,358
Interest of non-controlling shareholders
927
1,433
Total Shareholder's Equity
4,383,813
4,520,791
Total Liabilities and Shareholder's Equity
7,200,681
7,402,880
Consolidated Income Statement
July 01 to September 30,
2024
July 01 to September 30,
2023
September 30,
2024
September 30,
2023
Net revenue from sales and services
220,193
257,933
975,261
932,164
Sales
200,832
242,242
915,810
896,135
Services
19,361
15,691
59,451
36,029
Cost of goods sold and services
(81,184)
(101,161)
(352,034)
(375,464)
Gross profit
139,009
156,772
623,227
556,700
Operating income (expenses)
(191,923)
(195,379)
(623,425)
(590,570)
General and administrative expenses
(120,689)
(124,500)
(383,500)
(369,872)
Commercial expenses
(63,652)
(63,044)
(210,490)
(178,968)
Impairment losses on trade receivables
(7,845)
(15,369)
(31,199)
(26,777)
Other operating income
379
7,534
2,381
18,015
Other operating expenses
(116)
-
(617)
(32,968)
Share of loss equity-accounted investees
(2,691)
(2,878)
(9,719)
(5,532)
Loss before finance result and taxes
(55,605)
(41,485)
(9,917)
(39,402)
Finance result
Finance income
16,836
19,511
46,566
53,612
Finance costs
(71,483)
(74,966)
(205,267)
(233,536)
Loss before income tax and social contribution
(110,252)
(96,940)
(168,618)
(219,326)
Income tax and social contribution
Current
415
(4,762)
(1,375)
(2,299)
Deferred
32,697
39,591
48,624
78,679
33,112
34,829
47,249
76,380
Loss for the period
(77,140)
(62,111)
(121,369)
(142,946)
Allocated to:
Controlling shareholders
(77,142)
(62,389)
(120,992)
(143,896)
Non-controlling shareholders
2
278
(377)
950
Consolidated Statement of Cash Flows
September 30,
2024
2023
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before income tax and social contribution
(168,618)
(219,326)
Adjustments for:
Depreciation and amortization
217,857
205,948
Share of loss profit of equity-accounted investees
9,719
5,532
Impairment losses on trade receivables
31,199
26,777
Provision (reversal) for tax, civil and labor losses, net
222
(10,190)
Provision on accounts payable for business combination
-
23,562
Interest on provision for tax, civil and labor losses
34,607
41,313
Interest on bonds
72,781
91,361
Contractual obligations and right to returned goods
(18,480)
(38,080)
Interest on accounts payable for business combination and acquisition of associates
46,442
52,100
Interest on suppliers
32,331
26,196
Share-based payment expense
7,051
14,335
Interest on lease liabilities
8,467
10,144
Interest from financial investments and marketable securities
(19,924)
(31,065)
Cancellations of right-of-use contracts
(1,951)
(2,480)
Residual value of disposals of property and equipment and intangible assets
1,256
639
252,959
196,766
Changes in
Trade receivables
189,188
150,983
Inventories
(34,306)
(59,186)
Prepayments
(12,931)
(27,551)
Taxes recoverable
1,151
(4,505)
Judicial deposits and escrow accounts
(16,938)
(7,025)
Other receivables
557
(1,072)
Related parties – other receivables
(3,363)
1,759
Suppliers
(101,491)
78,271
Salaries and social charges
(11,400)
8,556
Tax payable
(1,039)
969
Contractual obligations and deferred income
(4,669)
(14,236)
Other liabilities
(7,739)
(20,452)
Other liabilities - related parties
9,115
(54)
Cash from operating activities
259,094
303,223
Payment of interest on leases
(8,298)
(10,136)
Payment of interest on bonds
(95,478)
(118,901)
Payment of interest on business combinations
(3,145)
(8,096)
Income tax and social contribution paid
-
(944)
Payment of provision for tax, civil and labor losses
(1,265)
(1,247)
Net cash from operating activities
150,908
163,899
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment
(13,309)
(18,247)
Additions of intangible assets
(76,075)
(61,425)
Acquisition of subsidiaries net of cash acquired
-
(3,212)
Proceeds from investment in marketable securities
(729,560)
(937,409)
Purchase of investment in marketable securities
736,481
1,087,724
Net cash used in investing activities
(82,463)
67,431
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchase shares on treasury
(22,531)
(5,783)
Payments of loans from related parties
-
(50,885)
Lease liabilities paid
(14,093)
(22,541)
Payments of bonds
(500,000)
-
Issuance of securities with related parties
495,627
-
Payments of accounts payable for business combination
(27,150)
(91,129)
Net cash used in financing activities
(68,147)
(170,338)
NET DECREASE IN CASH AND CASH EQUIVALENTS
298
60,992
Cash and cash equivalents at beginning of period
95,864
45,765
Cash and cash equivalents at end of period
96,162
106,757
NET DECREASE IN CASH AND CASH EQUIVALENTS
298
60,992
View source version on businesswire.com: https://www.businesswire.com/news/home/20241107130407/en/
Investor Relations ir@vastaplatform.com
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