Vasta Platform Limited Q1 FY2025 earnings call

• Net revenue for the 02/2025 cycle increased by 11% to BRL 1,129,000,000, driven by successful conversion of annual contract value. - Subscription revenue saw a 17% increase, making up 90% of total revenue. - Adjusted EBITDA in the 02/2025 sales cycle to date was BRL 420,000,000 with a margin of 37.2%, a 5% increase from the previous cycle. - Free cash flow in the 02/2025 sales cycle was BRL 144 million, 176% higher than the same period in 02/2024. - Continuous development of the Plural platform, with Plural AI to be used in schools starting 02/2026 focusing on inclusion, diversity, and equity in education.

In the first quarter of 2025, Vasta Platform Limited's net revenue was BRL 1,129,000,000, with an organic year-on-year decrease of 6.6%. Subscription revenue increased by 17% to BRL 1,019,000,000, accounting for 90% of the revenue share. Non-subscription revenue dropped by 6% to BRL 69,000,000. B2G net revenue was BRL 41 million, a 40% decrease compared to the 2024 sales cycle. Adjusted EBITDA in the first quarter of 2025 was BRL 121,000,000 with a margin of 28.2%, while in the 02/2025 sales cycle to date, adjusted EBITDA was BRL 420,000,000 with a margin of 37.2%. Free cash flow in the 02/2025 sales cycle totaled BRL 144 million, which was 176% higher than the same period in 02/2024.

• Expect stable margins for 02/2025, with Q1 and Q2 having lower margins due to mix and market spend, but expecting mix to improve in Q2. - B2G has new contracts, including five in Q1, and a heated pipeline for future contracts, expecting growth in B2G.

• Challenges in the credit landscape for non-premium brand business. - Continued difficulty in the credit scenario, especially for schools related to mainstream brands.

Q: How do you see margins for 2025 comparing to 02/2024 and what is the strategy in terms of mix and expectations for the B2G business?

A: Cesar Silva stated they expect stable margins for 02/2025, with Q1 and Q2 having lower margins due to mix and market spend, expecting mix to catch up in Q2. Regarding B2G, the Para contract is partially recognized this year with remaining parts to be performed in Q2 and Q3, and there are five new contracts in Q1 with more to come in Q2, enhancing segment mix.

Q: Do you expect a lower B2G revenue this year or is the seasonality of the Para contract similar to previous years?

A: Cesar Silva mentioned the Para contract has more normal seasonality this year, similar to B2B distribution, with no expected difference in fiscal year 2025, and a heated pipeline in B2G with expected growth.