Cruzeiro do Sul Educacional S.A. (CSED3) Earnings Call Transcript & Summary

Good afternoon, and thank you for holding. Welcome to Cruzeiro do Sul Educacional's conference call today discussing the earnings release of the fourth quarter of 2024. [Operator Instructions] We inform that this conference is being recorded and will be available on the company's IR website at ri.cruzeirodosuleducacional.com.br where you will also find a complete set of materials for our earnings release. You can also download the presentation on the Chat icon also available in English. [Operator Instructions] Note that the information in this presentation and statements that may be made during this conference call relating to Cruzeiro do Sul Educacional's business prospects, projections and operational and financial targets are based on the company's management beliefs and assumptions as well as on currently available information. Forward-looking statements are not a guarantee of performance. They involve risks, uncertainties and assumptions as they refer to future events and hence depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions and other operating factors may affect the future performance of Cruzeiro do Sul Educacional and lead to results that differ materially from those expressed in such forward-looking statements. Here with us today, we have Mr. Renato Padovese, CEO; Felipe Negrao, CFO; and Luis Felipe Bresaola, Investor Relations Officer. I would now like to turn the floor to Mr. Renato Padovese, who will begin the presentation. Please Mr. Renato, you may proceed.

Good afternoon. This is Renato Padovese, Interim CEO and Board member. The year 2024 was marked by relevant advances in the execution of the company's growth strategy with sound deliveries based on growth in the student base in all modalities, revenue maximization with assertiveness in volume and pricing strategies, operational efficiency gains and the expansion through M&A operations. I would like to talk a little about the highlights of the year, starting with the adjusted net earnings, which reached BRL 187 million, an amount that's 72% higher than last year, representing the highest amount ever posted by the company. In addition, I highlight the proposal to pay out additional dividends in the amount of BRL 77 million, totaling BRL 137 million in the year and representing 95% of net accounting earnings. This will be the highest amount ever paid to shareholders. In addition, while revenue grew 12%, reaching the amount of BRL 2.6 billion, adjusted EBITDA expanded by 12% to BRL 766 million with a margin of 29.8%, virtually stable when compared to 2023. We ended the year 2024 with the highest free cash flow in the company's history, totaling BRL 328 million, which represents a 323% increase compared to the year 2023, reflecting a conversion of EBITDA ex IFRS 16 of 65%. The high free cash flow shows the management's focus, not only on improving the results but also on generating cash for shareholders, which reached the amount of BRL 266 million, 10x more than in 2023. We've reached the milestone of 526,000 students enrolled, which represents an expansion of 12% compared to 2023, reinforcing our ability to attract and retain students. In On-Campus undergrad courses, we recorded a 7% growth in student base, driven by the high reenrollment rates and the new course pricing strategy implemented in 2024, resulting in a 2% expansion of the tickets compared to 2023. In Digital undergrad courses, the base grew 15% with emphasis on the increase in the share of hybrid courses, which make up 24% of the base, 2.9 percentage points above 2023, in addition to a 4% growth in the ticket in the period. The ability to retain students has also evolved positively, which reflects the investments made in technology and process automation aimed at facilitating and improving the students' day-to-day experience. We ended 2024 with financial leverage of 1.4x versus 1.6x recorded in 2023, even after the cash disbursement in the amount of BRL 158 million for the acquisition of FAPI, which started to contribute with EBITDA only as of mid-June, in addition to the dividend payout in the amount of BRL 60 million. The cash available at the end of 2024 is sufficient to amortize the total debt maturing in 2025 and almost half of the debt that mature in 2026. Moving on to the next slide. I'm going to talk a little bit about our business units. We remain confident in our business model and in the ability to continue growing sustainably. The implementation of business units by teaching vertical has fulfilled its strategic role, allowing a consistent growth of the student base and a more efficient management of resources. In the Health BU, we added 334 new medical seats in 2024, 180 of which through 3 injunctions at FSG, Ceunsp and Cesuca, all with a score of 5, the maximum score in the Ministry of Education's Evaluation and another 154 seats with the acquisition of FAPI in the metropolitan region of Curitiba. In addition, we are also moving forward with the modernization of our existing units considering the changing dynamics of the market. We believe that the reputation of our brands, the quality of the portfolio of courses and our faculty added to a state-of-the-art infrastructure guarantee the company has a significant competitive edge. We strengthened our partnership with the MARC Institute in Miami, U.S.A., marking the beginning of our journey in medical graduate courses, a strategic market. In dentistry, domestic graduate courses are already a reality, and we have already begun to reap the fruits of this initiative. On the Digital BU, the relationship with the hubs was intensified through 360 management tools, providing partners with more effective control and access to strategic indicators in real time, such as intake and reenrollment. A Hub Academy was created with specific thematic meetings to develop the profile of the partners and for the collection of demands that have the most impact on their end. In addition, Trade Marketing actions were implemented to boost regional intake, and the strategic marketing plan was applied in all BUs with the campaign, the Future is to Have Star. Optimizing the return on investment in media has allowed us to meet the demands of our partners in distant areas, increasing brand exposure and capturing leads and enrollments. In the On-Campus BU, we strengthened our relationship with freshmen through the First Steps project, which integrates new students in the Cruzeiro do Sul Educacional's environment from the first day after enrollment. The project aims to strengthen ties and minimize student anxiety in their higher education journey, reducing dropout rates. We've also advanced in the optimization and standardization of the offering process, always based on efficiency and productivity with quality, contributing not only to the maximization of operational results, but also to the dissemination of best practices among our educational institutions and the focus on the experience of our students in their journey of realizing their life projects. Regarding the advances in digital transformation and the student experience, I highlight the evolution of our digital platform in 2024. The Duda app, which completed 1 year in October '24, has become the main interaction channel, reaching more than 450,000 active users, which represents about 86% of our student base and maintaining a high rating in app stores. This growth reflects the expansion of features that add value to the user and that, in addition to reducing the support structure by 30%, has made Duda one of the most relevant applications in the sector, both in the Apple Store and in Google Play. We have also invested in the modernization of the online shopping journey with the support of the main e-commerce companies in Brazil, which resulted in a significant transformation in user experience. Also in 2024, we made significant progress in partnering with Google AI to develop tools that impact our intake, reenrollment and the student experience on their journey with us, whether in Medical courses, On-Campus or Digital. We believe that this evolution in artificial intelligence can be a game changer in education, and we are ready to take on a leading role in this scenario. I will now turn the floor to Felipe Negrao, our CFO, who will bring more details on the company's financial performance.

Thank you, Renato. On the next slide, I will talk about the operational performance of the On-Campus courses. We registered a growth of 6.6% in the student base, reaching a total of 159,000 students. This result is due to the high retention rates. The reenrollment rate remained at 91% of the eligible base, contributing significantly to the expansion of our base. We also bring the ticket data, which grew 1.8% in the fourth quarter of '24 compared to the same period of the previous year. In the year, ticket growth was also 1.8%. These results reflect the pricing strategy implemented in 2024 and the increase in the share of students in health courses, which went from 51% of the base of On-Campus undergraduate courses in '23 to 53% in 2024. On the next slide, we bring the operational data of digital courses, which ended the period with 367,000 students, a growth of 14.9% compared to the same period of the previous year. This growth was driven by the increase in the reenrollment rate, which advanced 0.4 percentage points compared to the previous year. The average ticket for the quarter grew 1.7% when compared to the same period of the previous year. The evolution of tickets is explained by the increase in the base of students enrolled in higher value-added products, representing an expansion of 2.9 percentage points compared to 4Q '23, combined with the increase in reenrollment. In 2024, the average ticket expanded by 4.2% versus 2023. Going into the financial details, I will comment on the net revenue in the quarter, which reached BRL 663 million, a growth of 11% versus the fourth quarter of '23 as a result of the larger consolidated student base and a higher ticket. In the On-Campus segment, revenue grew 9%, while in health courses, it expanded 13%. In Digital, we had a revenue expansion of around 15%, reaching BRL 228 million as a result of the larger student base. In the year, total net revenue reached BRL 2.6 billion, 12% higher than in the same period of the previous year. On the next slide, we show the gross margin in the quarter, which reached 46% versus 46.7% in the fourth quarter of '23. This drop in gross margin in the period is mainly explained by the increase in costs in the line of revenue share with DL hubs, reflecting the expansion of digital. In the year, we had a margin expansion of 0.9 percentage points. The increase in margin in the period reflects operating leverage as a result of revenue maximization initiatives as well as efficiency gains. On the next page, we bring the adjusted EBITDA for the fourth quarter of '24, which was of BRL 162 million, an increase of 6% with a margin of 24.5% versus 25.5% in the fourth quarter of '23, impacted by the drop in gross cash margin, minus 1.1 percentage points versus 4Q '23 and by the update of delinquency estimates in the quarter. In the fourth quarter of '24, nonrecurring expenses totaled BRL 26.9 million, of which BRL 23.5 million related to the update of the PDA provision curve, a one-off event that I will detail later and BRL 3.4 million from expenses with projects and M&A. In the chart, we show the breakdown of the adjusted EBITDA margin, excluding the effect of updating the delinquency estimates with the objective of making the basis comparable year-over-year. It is important to highlight that in addition to the impacts of gross cash margin, adjusted EBITDA was impacted by the anticipation of marketing expenses for funding in 2025.1 and by the increase in PDA in the period. In 2024, adjusted EBITDA reached BRL 766.3 million, which is 12% higher than in 2023 with a margin of 29.8%, stable versus 2023, mainly impacted by the increase in technology expenses allocated within administrative expenses and by the update in delinquency estimates in the quarter. In 2024, nonrecurring expenses totaled BRL 42.2 million, of which BRL 23.5 million related to the update of the PDA provision curve one-off and BRL 18.7 million arising from expenses with projects and M&A. In the chart below, we show the breakdown of the adjusted EBITDA margin, excluding the effect of updating delinquency estimates with the objective of making the basis comparable year-over-year. It is important to highlight that in addition to the impact of administrative expenses, adjusted EBITDA was impacted by marketing expenses. Moving to the next slide. We show the update in the delinquency estimates made in the fourth quarter of '24. Throughout 2024, in addition, to reviewing its processes, the company updated its receivables portfolio provision model by performing an analysis that considers a 24-month horizon from January '23 to December '24. The work was carried out with the aim of establishing greater adherence to the portfolio profile in the postpandemic period when there was a faster expansion of the digital student base, which went from 62% in 2020 to 69% in 2024, in relation to the total student base. In addition, the company revisited its policy of writing off overdue notes in accounts receivable, reducing the term from 720 to 360 days. Applying the update of the delinquency estimates for 2024, the amount of BRL 39.5 million was recorded, of which BRL 23.5 million referred to the update of the PDA provision curve, one-off, and BRL 6.1 million recurring impact that we would have had in 2024 if the update of delinquency estimates had occurred in 2023. In addition, throughout the year, we extinguished our own financing portfolio and provisioned 100% of the notes receivables from a portion of customers with low probability of payment, resulting in an additional provision of BRL 9.9 million, one-off. In the table, we see the pro forma statement that compares the impact of the results of the fourth quarter of '24 and 2024 based on the update of delinquency estimates used until the third quarter of '24 versus the year 2023, providing greater visibility on the effect of the model update. Moving on with the presentation. We see the company's costs and expenses as a percentage of revenue, net of nonrecurring effect. In the quarter, there was an increase of 4.6 percentage points in cost and expenses with 4.5 percentage points referring to the update of delinquency estimates. Excluding this effect, the increase would be 0.1 percentage points, reflecting the marketing focus for the 2025.1 cycle intake and the increase in the revenue share to DL hubs, which mitigated the effects of the efficiency gain of 3.2 percentage points in other lines. For the year, there was an increase of 0.7 percentage points. Excluding the effect of the updates, there would be a decrease of 0.5 percentage points due to the reduction in the lines of personnel and other costs and an increase in marketing expenses and revenue share to DL hubs. As mentioned in previous reports, the company has been focusing on technology and efficiency projects with the aim of providing a better experience to our students and at the same time, automating processes. In the chart below, we include the analysis of the second half of 2024 versus 2023 in order to demonstrate the evolution of the processes. In the first half of the year, excluding the impact of updates, the gain was of 1.3 percentage points, mainly due to efficiency processes, which generated a gain of 2.6 percentage points and were partially mitigated by the expansion of digital and the anticipation of marketing expenses for the intake for the first half of 2025. Moving on to the next slide. We demonstrate the evolution of the company's adjusted net earnings, which reached BRL 17 million, 51% above the fourth quarter of '23. Adjusted net earnings were impacted by the increase in financial expenses and lower EBITDA as a result of the update of delinquency estimates. In 2024, even with the update in delinquency estimates, adjusted net earnings were BRL 186.5 million, up 72% when compared to the same period of the previous year with an adjusted margin of 7.3%, an increase of 2.6 percentage points versus 2023 as a result of the execution of the revenue maximization strategy and technology projects that contributed to efficiency gains. In the next slide, we demonstrate the average days of receivables in the fourth quarter of '24, which was of 31 days, a reduction versus the same period of the previous year as a result of several factors, including better management of payment methods, greater share of fixed payments and of own financing, among others, improvement of the collection rule, better remuneration of collection offices, greater efforts in the recovery of credits from inactive students, new technology platform and change in the PDA criteria. It is important to note that the reduction in gross accounts receivables and the PDA is due to the write-off of notes starting at 360 days instead of 720 days as practiced in 2023. On the next page, we present the investments paid by the company in the fourth quarter of '24, which reached approximately BRL 35 million, down 46% versus the fourth quarter of '23. In 2024, investments were of BRL 141 million, a 30% reduction. Moving on to the next slide. We demonstrate the progress in cash flow to shareholders' equity in the 4Q '24, which was BRL 8 million compared to negative BRL 91.8 million in the fourth quarter of '23, representing 10% of EBITDA ex IFRS-16 as a reflection of better working capital management and the reduction of CapEx. In 2024, cash flow to shareholders reached the amount of BRL 265.7 million, 10x higher than in 2023, representing 52.2% of EBITDA ex IFRS 16. On the last slide, we present BRL 774 million in net debt, excluding lease liabilities with a financial leverage of 1.4x. The 4.3% increase in net debt was due to the payment of BRL 60 million in dividends and the disbursement of BRL 158 million for the acquisition of FAPI, whose EBITDA contributed little to the company's EBITDA considering the date of acquisition, June 12, '24, and the early stage of maturity of its medical seats. Finally, in February of this year, the Board of Directors approved the second issuance of debentures of Cruzeiro do Sul Educacional in the amount of BRL 300 million to reinforce cash within the scope of the ordinary management of our business. The conditions of charges were 100% of the CDI plus 1.35% per year with a term of 60 months with the first installment due in February 2028. In order to illustrate the company's debt profile, we present the amortization schedule segregated by type of debt in December of '24. With this, I conclude my comments and turn the floor to the operator to start the question-and-answer session. Thank you very much.

[Operator Instructions] Beginning with our first question, Mirela Oliveira, Bank of America.

I have 2. The first is about capital allocation. This year, we saw significant advancement of the payout. Can you talk a little bit about the mindset for growth from now on? If you can talk a little bit about the organic opportunities and inorganic opportunities you foresee? And second, about PDA. After all the adjustments that we saw in the fourth quarter, what is your expectation for this line in 2025 when we look at it as a percentage of revenue?

This is Felipe. So capital allocation, I think it's important for us to look, as you know, the company is a strong cash generator. A lot of the EBITDA has been growing in coming years. We have low leverage already. So looking forward, we see that leverage going down. On one hand, we're deleveraging in coming years because it's not healthy. That's why we even raised funds in the first quarter with BRL 300 million and that closes cash position. And the decision is where to invest that money. So we also have CapEx perspectives that are reduced. We spent a lot in '22 and '23, and this has gone down in '24. And in '25, it will be more in line with what we saw in '24. It's not something that requires a lot of cash. M&A, we're always looking at possible acquisitions. It's a market that's still tough. There are possibilities, but nothing immediate, and we have room for leverage. And even after paying out dividends, we have robust cash for any M&A that may come up. For dividend payout, we have a guidance policy that we discussed with the Board, always aiming at maintaining low financial leverage, looking at the perspective of the maturity of debt, macroeconomic conditions. Of course, we put all of that with the cost of cash, possibilities of M&A growth. And then we determine the dividend payout based on all of that, always maintaining low leverage. As for the PDA, this change has no cash impact. It's only an accounting aspect of how we provision account receivables. This update in the estimates that we made is recurring from now on. So if you want to compare the end of '25 with '24, we would have to add those BRL 6 million from the BRL 40 million, the BRL 6 million recurring amount for 2024 to have it comparable with the end of '25. So if it was simply a change in the accounting criteria, it would worsen in '25 and BRL 6 million. However, in '24, we had a series of initiatives that would alone improve our collections. For example, [indiscernible], we have our own financing that we no longer offer to students, and there are other ongoing initiatives. And in '25, there's a lot of initiatives that we're also taking to improve collections from delinquency. So we believe that we should have good delinquency levels for 2025, even if this change of estimates.

Your next question, Yan Cesquim BTG Pactual.

Just a few questions on our side. First, just a quick follow-up, on Mirela's question. I'd also like to understand about this PDA. If you have this effect of the BRL 6 million that you talked about, and we had a BRL 23 million nonrecurring. If we calculate this, we get a [ PDD ] level for 2024 slightly above 6% of net revenue. So just trying to get to a conclusion, does it make sense for us to think about this level as a recurring -- ideal recurring level for the company? That's my first question. And the second question is about the revenue share with DL hubs that's also grown in the second half of the year. So I'd like to understand how you imagine this revenue share will progress for 2025. And also ask if you have any color to add in terms of funding cycle for this beginning -- or the intake cycle actually for the beginning of this year.

Yan, this is Felipe. So okay, PDA, if I want to compare it with '23, the total to have the same rule of '23, there should be BRL 40 million left. It's BRL 6 million that's recurring, BRL 23 million of the change in estimates and another BRL 10 million to [indiscernible] that we decided to do the 100% write-off. So to compare it with the performance of '23, the total is BRL 40 million. To put it as a comparison basis for 2025, so from now on, that's the BRL 23 million that we need to include and BRL 10 million of the own financing. That would be normal to resume BRL 33 million if we did not have, on one hand, a worsening of the market scenario, but also gains in delinquency. So there's a series of initiatives that we took last year that are still maturing. And we prepared and there's also other initiatives that we're implementing. And my expectation is that you have lower delinquency levels than 2024. That's my expectation, 6%. And the revenue share with DL hubs. Okay. So overall, when we look at it, we see that it has been growing because distance learning has been growing more than the other lines. So overall, there is growth already because of that. That's where we have revenue share with DL Hubs. But if I look at this alone, last year, we also saw growth. If we look at the revenue from digital alone, the revenue share on digital, we also saw growth because we grew more in third-party hubs last year than in our own hubs. Since for our own hubs, we don't pay any revenue share in third parties, we do. In the consolidated net revenue of digital, we see a slight growth, and it's not what's happening this year. This year, we're growing more in our own hubs rather than third-party hubs. Now let me go through the growth. I'll turn the floor to Renato.

Yan, this is Renato. So intake has been going well, both for On-Campus and DL with an expansion of ticket on both segments. But I'd like to highlight the performance of Distance Learning, even considering an uncertain regulatory environment, arduous competition, we are being able to grow consistently. And where we grow more, as Felipe said, it's in our own hubs where we have the better margin. And we'll reduce the cost with this revenue share with DL hubs. Noting that this intake has not -- is not concluded yet, but we're very confident. Just an addendum in reenrollment, our rates are very interesting, especially considering the larger base, student base last year.

Next question, Lucca Marquezini, Itaú BBA.

We have 2. First, about ticket. You mentioned in the earnings release that part of the On-Campus ticket evolution was due to a change in the pricing strategy done in '24. So looking at '25, is there still any adjustments to be made in that sense? Or from now on, this strategy is already rounded and defined? And the second point is about marketing. We saw an increase in marketing expenses compared to -- as a share of revenue. And if you can talk a little bit about your commercial strategy, if we should see any change in this level of marketing expenses, that would be helpful.

Lucca, this is Bresa. In terms of tickets, we've been doing a lot of work and basing it on student base and type of course for pricing. So we've been working a lot on that, especially considering the price pass-through side. That continues. And even for intake now for 2024, we were very granular in terms of strategy. That's a result of the internal initiatives and the tools of the commercial team to work in maximization of revenue, volume and price. So we'll maintain last year's strategy. And as Renato said, intake has been at very satisfactory levels, both for On-Campus and DL, and we're very happy with the beginning of '25.

Lucca, this is Felipe. In terms of marketing, I think there's 2 effects basically. One, connected to what Renato talked about on intake. So we anticipated we advanced marketing expenses last year, and we started intake earlier. So we spent more in marketing last year because of that. And this brought results. It was a right-on strategy, both in terms of ticket and volume. But excluding this impact, we would have had a higher marketing expense anyway. And the best indicator for us to look at it is as a percentage, not of net revenue, but of the number of entering students, the CAC that we call. And since we see a big growth in entering students, the total revenue increases, and we've also been spending more in marketing and our competitors are spending more. And we need to keep up and spend a little bit more as well to have the results that we have that I believe were very satisfactory.

The next question, Guilherme Meneghetti, XP.

We have 2 on our side. First, trying to understand about the On-Campus growth. What is the level of use of the capacity that you have at your company at this time? And what should we expect looking forward? And the second question about the regulation of DL, if you have any updates on your side? Those are my questions.

Guilherme, in terms of the use of our campus, looking at the city of Sao Paulo, which is today where we have the highest volume of students in other regions, we have companies that are larger. But here in Sao Paulo, we're looking a lot at portfolio, maximizing revenue per square meter, the proximity of different campi, how we can split the courses. So this is work that has been ongoing vis-a-vis this expansion of student base in the city of Sao Paulo. We gained a lot of market share here in recent years. So this is an ongoing, continuous work at the company. And for now, we don't have any other type of problem in terms of idle campi. As for the regulatory remark, we don't have any updates. We know that it's still being discussed on the government side, but it should be published in coming days or maybe this month. We can't really define anything. But what we know is that there will be an update and the expectation is that by the end of April, we should have this new regulations for us to be able to work on our planning.

The next question, Caio Moscardini, Santander.

There's 2 questions on my side. You talked about the possibility of increase in revenue per square meter. I'd like to understand it better, how you've been doing that, how this portfolio improvement develops in the campi? How do you adjust that with the demand? And the second question about cash generation in 2025. I'd like to understand if we should expect a conversion of EBITDA into operating cash flow that's higher in '25 compared to '25? And what is your budget for CapEx this year?

Caio, this is Felipe. In terms of revenue, okay, so per square meter, we've been working a lot here along with operations, detailing what's ideal per course so we can get to a level of detail by course, what's profitable, what is not, which courses we should maintain, which ones we shouldn't. It's difficult. So this is work that we can get some granularity today with the other directors to use and optimize the offer. When we have more restrictions in terms of capacity and don't have idle capacity in the campi. We're not worried about a need to expand, but we are able to optimize the use of the space. In terms of cash generation, we cannot provide a guidance. But I would say that in 2024, if you remember, '23, we had a negative generation and some adjustments, especially due to the collective vacation that we started to provide in '23, anticipating a payment from '24 to '23 that generated a high cash consumption that's in '23. In '24, this effect was -- it was not recurring in '23. It was worse because of that cash consumption, worse than the company's normal levels. In '24, slightly higher than normal levels. We had monetization of taxes that was good in '24. We had some tax credits that we were able to convert into cash that helped in cash generation. So I think the recurring level is a lot closer to what we saw in '24 than in '23. For me, it's closer to '24. So we shouldn't really get too different from what we spent in '24. Now again, in '22, '23 due to the pandemic and the technology part that we were investing more than normally in '22 and '23. '24 was already close to the recurring amount and '25 should be in line with '24. That's what we see. If there's no major acquisition or anything like that. It will be around those levels from now on.

The next question from Diego [indiscernible], investor. This question is in writing. These seats authorized in the second half of '24, when do the students start taking classes? Is there a lot of CapEx required to implement that? That's Diego's question.

Diego, thank you for your question. As soon as we receive authorization from the seats and we launched the admission tests last year, so these students are already having lessons. They have -- their semester was a little bit different than usual, but they are already part of our student base. And CapEx, when we went in with the injunctions, we had to work on the CapEx of the first 2 years of the course. So if you look at 2023, there were investments made [ thus ] into the injunctions for medical courses and all of them were the score of 5 in the MEC, the Ministry of Education's assessment. That's what we have.

[Operator Instructions] The question-and-answer session is concluded, and we will turn the floor back to Mr. Renato Padovese for his closing remarks. Please, you may go ahead.

Thank you all very much for attending our earnings conference call. To conclude, I'd like to say that the year 2024 was an important year for the company. In addition to expanding our student base in all segments, we also developed internal initiatives that allowed us or provided us more agility in our current base and future student base. With that said, the year '25 is already showing us that we are on the right path for growth with profitability. Thank you once again.

Cruzeiro do Sul Educacional's earnings conference call for the fourth quarter of '24 is concluded. Their Investor Relations department will remain available to any questions. Thank you very much. Have a great day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]