Ânima Holding S.A. (ANIM3) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to the Q3 Webinar of Results of Anima Education Quarter of 2025. [Operator Instructions] I am Carina Carreira, IR Officer of Anima, and we are going to have Paula Harraca, our CEO; Atila da Cunha, our CFO; and Guilherme Soarez, CEO of Inspirali. This presentation is being recorded, and it will be made available today on our Investors website where you can find all the other materials of these earnings results. At the end of the presentation, we're going to have a Q&A time. [Operator Instructions] Paula, the floor is yours.

Thank you very much, Carina. Good morning, everyone. We are very happy to be sharing with you today the results of our third quarter and the accumulated results of the first 9 months of 2025. You have the numbers in your hands. So perhaps the most important is to understand the story that those numbers tell. We've reached in this third quarter revenue above BRL 1 billion, growing more than 7% regarding Q3 last year, accumulated over BRL 3 billion revenue in the first 9 months of the year, very significant result, very consistent, robust with ticket growth in all the segments of the company. Looking at our profitability, we were able to deliver growth of over 14% of our EBITDA, reaching BRL 303 million and also representing a significant margin. Historical record, the best third quarter that we have delivering over 30% profitability, generating net income growing almost 88%, reaching BRL 38.5 million. Looking at our cash generation that is so important to our business and our deleveraging is cash generation grows 26%, great highlight we call here to our deleveraging that for the first time, since the integration of Laureate, we reached the best deleveraging of the company constantly in an organic fashion over the past 11 quarters, reaching to 2.4 to deepen on these numbers and to bring more details to you. I'm going to call my co-pilot, our dear CFO, Atila Simões, up to you.

Thank you, Paula. Good morning, all investors following us the Anima Educators and all of you following Anima in this journey. Moving on to the next slide, where we can see more -- some of the numbers. We've been able to -- moving into the core segment, a great message here or takeaway message is the growth of the ticket, another cycle of intake smaller cycle. We know it's not so important as the beginning of the year. Even so, we were able to grow intake 5.4% in the 9 months -- we have 7.1%, very important, reflecting our strategic choices, the assertiveness of our brands, the improvement of our offerings and services because without going into price reduction debate, we have been growing our new student base. We grow the base as well as the ticket, and we see significant ticket growth again, and this reflects the quality of our revenue that is shown at the bottom, the growth of 4% as we have been saying every quarter, well, we keep changing or turning the curve. So, we see this quarter showing this again in this mix between better intake, better ticket. We sustain the continuity of the revenue growth. This is what Paula keeps saying about our third wave and sustainable revenue growth. And we, in our core segment are able to increase operating results and sustaining margins. We've always said that what we were able to get in terms of operating results in the core segment will return with margin, and we can sustain those margins. There's been a slight drop, but totally aligned to our strategy, which to us shows consistency in the results. The core segment has had very good performance in this quarter, very solid, but much more important than performance in this quarter is what it means to the future quarters. In the distance learning segment, we had a significant quarter despite all regulatory changes. We kept our strategies and our choices, and we did not go into any kind of debate that could involve price reduction because we have recognized the value of our brands. We understand the quality of the product we deliver. So, we have kept our ticket, and we have been able to grow even a bit more. Moving on to ticket, we had a good performance in the quarter that has driven net revenue on distance learning growth for another reason that to us is very important as well. It grows because we have resumed the growth of our graduate studies. I'd like to thank and congratulate all the team of our graduate studies. We have worked hard in the past quarters, improving our product, our offerings and our processes so that we could resume growth also in this segment that is so important to us, which is long life learning. With that, we also reap important results of margin growth that have been driven due to our better use of our publicity funds. And since the beginning of the year, we have had several projects aiming at optimizing an alignment of our segments, and this has actually driven great productivity to our marketing investment in distance learning. We expand margin, we grow and we keep very consistent in a segment that is impacted by the regulatory changes. But what is most important is that this growth is not something that derives in an unsustainable way. Much on the contrary, it is very much based on our graduate studies, which provides sustainability to this growth. So, I'd like to call my colleague, Guilherme, and turn the floor up to him. Please, Guilherme.

Good morning, Atila, Carina, Paula, everyone. Once again, we are here to share the earnings results of the quarter and the past 9 months of Inspirali. We continue firm in our strategy of growth, sustainability and efficiency, fulfilling our role within the Anima ecosystem, contributing with about 50% of growth presented in the past 9 months, also 50% of the results presented. I'd like to highlight here the growth of continuous medical education, which is an important front of our growth with the arrival of Eu Medico Residente that has performed very important work to prepare for residency, but also prep courses and helping education of organizations. We had it happening about 3 weeks ago. In addition to Eu Medico Residente, we also have the opening of some campuses specific dedicated to continuous education. In October, we opened in Recife and Sao Paulo, 2 campuses that are very impacting that reflect our positioning, the quality of our offerings, not only for education, but serving the local communities as well. I'd like to highlight our student base growth in undergraduate and the continuous ticket growth that leads us to this revenue. I turn back to Atila, and I'll be available for the Q&A session at the end.

Thank you very much, Guilherme. Congratulations to the whole Inspirali team. Very sound results, very consistent that showed the strength of medical education in our ecosystem. All those results together contributed to a growth that is quite important of our EBITDA of 14.4%, driven both by the revenue growth as well as by greater efficiency. It's on our top line. We've grown 7%. Here, we grow 14%. That shows that our business is important. The scale is important. Scale gains are important. Operating leverage is important. We have been able to reap the benefits of such greater operating leverage. This is very clear in the progress of such results. Naturally, we have even greater results in net income. With this, we expand in a significant way our net income, which shows the health of our results, shows, as we will see in the next slide, even having greater financial impact because of the increase of our Selic rate, our interest rates, we can offset this macroeconomic factor that we cannot interfere on. We want to highlight that our business, even in a scenario of higher financial cost has been presenting cash generation results, growth and net income that is growing every quarter. What we can see on the next slide is that we maintain this slide is very important because it shows that our ability to generate cash is actually given in a scenario where we invest more in our schools. We have been investing in technology. We have been growing our services and our offerings where technology has been supporting growth in operating efficiency. We're very happy with our choices, and I'd like to congratulate all the digital transformation team, as you have seen in the management message, we have been recognized in a very important award, the innovation award in the use of AI in our business, very important award that reflects the work, commitment and competence of the digital transformation teams and also the Vice Presidency that has been working hard on these results. We've been working on new campuses. Well, Guilherme talked about the opening of a new campus. Well, if you live in Sao Paulo, you can see it in Bela Center, we have a great campus. We keep on investing in our operations, maintaining CapEx 25% of net revenue, which is our historical performance. We believe we have conditions to have appropriate facilities to our premium profile and also technology always driven our services. I think this is a new chart that we share with you so that you can understand the soundness of the cash generation of the company so that you can understand this chart. It shows the development of net debt in the past 12 months. It compares net debt on the 31st of September or 30th of September 2024 to the 30th of September 2025. We moved from BRL 282 million to BRL 209 million. It's a net reduction of BRL 82 million. It's free cash generation after all financial charges that you've seen that have grown a lot. Even with financial charges that have been growing, we generate free cash of BRL 209 million and BRL 19 million. We had a level before that was quite below in terms of the interest rate or Selic rate. Even with the increase of our interest rates, even investing more in our business with CapEx growth, we generate important volume of cash. This is quite gratifying to see the soundness or solidity of our cash generation. And how have we used it? Well, you can see that we have invested in continuous medical education of Inspirali, BRL 54 million, and they are delivering results. You can see in the results release, the net revenue of continuous medical education growing. We had the acquisition of minority stake at the medical school of Guanambi, Brumado, the UniFG, we invested BRL 30 million in the acquisition of 45% remaining. We also invested in the new. We have explored new boundaries of education at the university that is totally pioneer and innovative, showing our DNA with the opening of community. At the end, Carina will, once again, I'd like to invite you to our Investors Day. This chart is very important to show the soundness of our results and our ability to generate cash, considering a very challenging macroeconomic scenario. Once it improves, this green bar has the ability of becoming even bigger. Our operations will certainly lead us to reap even better and growing results from now onwards. With this, we maintain a very solid cash position, very comfortable liquidity to face such volatile world we live in today. After the work of debt management carried out in the past few times, we have very little commitments for the forthcoming years. We have a very comfortable cash position, and making us reassured to focus on our end activity. This is our purpose. This is what will drive results from now on. Cash management of the company providing its total tranquility in this dimension. Those results show to us a very important achievement. We lower the leverage to 240. It's below 250, the lowest leverage since the acquisition of the Laureate assets in Brazil, quite an impressive result, which is a consequence of the EBITDA growth and cash generation. Even investing in our business, even are facing wind against us coming from the Selic rate will reduce in a significant way the leverage of the company. And I would like now to thank all the educators of our group, those educators that bring the soundness and the consistency of such results. Over 15,000 people whose hearts and minds are dedicated to our greater purpose, transforming lives in the country through education. Moving on to the next and last slide. I'd like to turn back to you, Paula. Thank you all very much, and I wish you all a great Friday.

Thank you very much, Atila. Thank you, Guilherme, Carina. Guys, our strategy is yielding results. Those numbers of consistent growth quarter after quarter show that we are on the right track. This is simplified and is explained in the following way. We are making the right strategic choices. Those choices are being carried out with a lot of discipline, consistency, and commitment by a great team, incredibly competent, committed to making it happen so that we can have our third wave. We keep on committed to excellence, student experience, and academic quality of what we deliver every day, providing this great experience between students and professors. So, we have very high levels. This is beautiful to live all these feelings, and this delivery that is behind that generates those numbers, keeping the focus on efficiency. Students' money is going where there is value generation for them, to the company, in this experience. We're taking very good care of these funds, and we're prepared at full speed with the strategy being carried out to capture all the opportunities that are coming up since we have our regulatory framework in effect. Reinforcing the commitment with education, this pioneer DNA that Anima has always had, thinking about the future of education. We have this major role. And if we had to sum up in a word, this whole story, the word is trust. It is the trust the students have in our value proposal that is increasingly more coherent and consistent, and the trust of our educators, the trust of our senior management team, and I fully admire all of them, our Board of directors, Daniel Castanho, MaurÃcio Nogueira, Marcus Peixoto, [indiscernible] and Marcelo Cardoso. All of them. It's a huge team, a great team. Think about mentors who are every day challenging us, provoking us, supporting, and helping us. I'd like to tell you that Anima has certainly moved on into a new phase. And now, Carina, just to wrap up, we'd like to leave you with this invitation. As Atila said, we'd like to invite you all, as we did last year for the Anima Investors Day for you to get to know in much more detail all our strategies, all our executive team will be there telling you what we have been doing every day and what we have been doing to build the future of our third wave at Anima. Carina, I turn back to you.

Thank you very much. This is it, Paula. We want to see everyone at our Investors Day. Now, let us start our Q&A session. [Operator Instructions] The first question today comes from Flavio Yoshida from Bank of America.

Congratulations on your results. I have 2 questions on my side. First is the competitive environment. We know that it is never smooth. I'd like to understand whether you have felt any greater pressure in the past few months, both in general terms and in some more specific segment. And when we think about price transfers, if you have felt more difficulties in transferring prices. My other question is on the growth margin of Anima Core. You've had a good catch-up. I'd like to understand whether you see more room for improvement from now on.

Well, Flavio, I'm going to start with the last question. We have been very vocal that we're going to continue with our efforts, seeking administrative efficiency to invest in quality and delivering to students. So, we understand that we already have in Anima Core a level of gross margin that is very healthy, and we're going to try to gain on expenses to invest in more quality so that we can drive revenue. And as Paula said, leverage, even more, the third wave of Anima. This is our philosophy. This is what we do on our day-to-day. We work relentlessly seeking efficiency and expenses, and things that do not add value to students, so that we can deliver increasingly better services. This is our commitment. From the standpoint of macroeconomic environment, I'm going to start the answer, but just -- well, I'll turn over to Paula to complement. We have this philosophy that education has no price. It has value. And we are improving what we do. So, what we do start having more value, and we have to charge for that. This is what we seek on our day-to-day, and this is what we have been doing on our day-to-day, and this is what is reflected on our financial statements. We are firm on our strategy, confident and what we deliver to students that choose the universities of our ecosystem. Paulo, feel free to complement.

Thank you, Atila. Well, Flavio, the competitive environment has different challenges, but our strategy of having given power to the front, working with competitive analysis of process of campuses. We're not just looking at the 18. We have campuses. Each one has their competitive challenge. Some have to recover share. Another one is growing a lot. Each one of our business units is actually driven by its competitive environment. We have turned the game. We've opened this virtuous circle where value generation, virtuous cycle goes in this positive cycle, you improve your experience, we're listening to students. Well, we listen to students regularly. In our Executive Committee, we listen to students and professors. We learn from them. So, we adjust the route. And this has created this virtuous circle and our focus is competitive. Our main competitor is what we were yesterday. This is our great focus. Thank you for your question.

The next question is from Marcelo Santos, JPMorgan.

I'd like to ask Atila. First, so you were saying that while you gain in core margin, you should return on the growth. I'd like to ask what about the other divisions? This is more specific to core. How do you see this dynamic, both at Inspirali and distance learning? This is the first question. And the second question is more for Inspirali. What is your situation in terms of M&A appetite? And how do you see opportunities in this space of making acquisitions since you have some cash, so you have the possibility of doing or having some M&As.

Marcelo, thank you very much for your questions. In the other segments, we continue with the same philosophy of gaining efficiency in expenses to invest in cost. However, we have more significant opportunities there of operating leverage. You see the growth in the graduate studies, the results that we have delivered for distance learning. So, you can see the growth in gross margin that is significant. It doesn't mean that we are not investing in quality, but that's where we have operating leverage, delivering a lot of margin gains. Likewise, Inspirali, we had 10% growth of revenue in the quarter, very consistent and robust growth. So, we have ahead of it this avenue that even investing in better quality every quarter, the revenue growth enables operating leverage, bringing significant margin growth, although it is at a very consistent margin at Inspirali gross margin follows a consistent level for many quarters. So, we're very consistent in the delivery of what we have been doing at Inspirali. On the M&A agenda, we should be always attentive to opportunities. You've seen on the chart that we've presented or reducing net debt that we have invested our funds in M&A. We brought a very important operation of Medico Residente to drive continuous medical education at Inspirali, we've acquired the remaining stake of IFG. So, we are always keeping things on our radar. So, the company keeps with its cash position. We keep deleveraging. M&A is an avenue that should be observed as we have been observing in recent times, and we'll move on like that.

Next question comes from Lucas Nagano from Morgan Stanley.

First, on core revenue. The past Anima Day, you talked about some admin commercial strategies to resume growth that is materializing. But looking at 2026, how should this change or continue? Should you continue what you have implemented? Or are you expecting to have improvement in processes, new students, retention pricing? And the second question is on Inspirali ticket. If you can explore the components that influence those 4% growth items. Well, in the first semester, you had seasonality issues. So, in the past 9 months, you have 4%. If you could comment what was this balance of readjustments or in terms of the mix as well?

Thank you, Lucas. On the first question, we continue with the same strategy and news -- new things. This is Kaizen, continuous improvement. So, as we speak, things intake is happening. We work with those continuous time dynamics we have. [Matricola] is a continuous thing. So, all the journey, end-to-end of our students before intake during and so that we have a leap in the experience with technology, all the areas involved. And we have very short-term actions quick on a movement that we believe that we've had. We've always had the experiment your future. So, with a twofold increase in the number of students. So, we have a consistency in our strategy. And it keeps constant. So, we have the strength of the brands. Now we're looking at campuses where we communicate one campus is different from the other. The audience is different. The flagship items or courses are different. So, we redouble our bets on the core, and we work that increasingly more with more granularity, data, and this continuous improvement of our experience and novelties. We always seek new growth items ahead in core, and I'm going to turn over to Guilherme to answer your second question on Inspirali prices.

Thank you, Lucas, for your question. I think you have actually answered your question as you asked it. In 2024, if you remember, we had several calendar challenges because of, well, the federal government for the students that had adhered to FIES, that impacted intake of FIES in 2024 that was normalized in 2025. Considering the inherent discounts to the program, this mix effect ended up having this impact that was marginal to the ticket, but there was a positive impact to the student base when we were able to normalize those new students or new entrants.

Our next question is from Andre Salles from UBS.

I'd like to ask a question. I think we've addressed a bit the M&A topic. If you could explore it a bit more, speaking of cash generation of the company, if it continues at good levels, as you've highlighted, you're reaching a leverage level that you consider more comfortable to possibly accelerate a bit more M&A, seek opportunities that are more relevant. And if I could also ask, where do you see the short, mid-term opportunities for the company in terms of capital allocation, M&A, receivables, capital distribution? And my second question is regarding the regulatory changes. You've been highlighting it as an opportunity. So, we understand that Anima is well-positioned to capture that. The question is actually considering how you see that translating into growth core or distance learning or margin.

Thank you, Andre. Thank you for the question. We go back, we feel that the company is generating cash, is being consistent, has delivered very significant results over the past quarters. We are very confident in our ability to generate cash. We have been able to face the challenge of resuming growth in revenue in all segments, which is also a very important challenge. As Paula and Anima -- as Paula said, Anima is ready, prepared for this third wave. Having said that, our business is naturally a business in which operating leverage delivers results. The business where we have evident synergies and very clear ones, it is a business in which we had in the segment of medicine, several small-sized schools opening undergraduate studies. They will not act isolated. We have the regulatory framework that will drive the resumption of hybrid teaching and also on-campus teaching and less distance learning. We have the macroeconomic scenario. And at some point, we should see the beginning of the cycle in decrease in interest rates. These things bring to the education market, not only for Anima, but the whole education market as an enabling market for M&As. We should see from now on such things happening more frequently. In our specific case, we are very confident and consistent in cash generation at the company. We keep deleveraging. We had a trajectory reducing leverage from 4.10x to 2.4x in an environment of high interest rates. So, we keep very confident and consistent, and we should assess opportunities all the time. We'll keep on assessing opportunities. Our duty is to deliver value to our shareholders, and we'll move on like that. Obviously, aware of all the issues that involve both the economy, the industry, the company, but this protected by great confidence that we have in our business and the potentials that we have ahead. As to the macro changes, I'll turn over to Paula.

Thank you, Andre. Still on this point, Atila, as to our financial health, it prepares to this new growth agenda. As to the regulatory framework, which is one of the few things.

We've lost Paula, I'm afraid.

It's a structuring change of the market, Andre. So, it actually serves what Anima has always believed in the strength of quality educational proposal through this hybrid, more flexibility, providing greater access to people without losing quality. We see this as a great opportunity of taking our hybrid education. Anima has always navigated very well in hybrid education. This is a very big competitive advantage of Anima, and we're going to take this increasingly more to new places in Brazil. So, we have strategies through partners that have been selected, carefully selected. We have shared our strategy with them at full speed. We'll give you more details on that on the Anima Investor Day. Rogerio is our expansion officer, will share with you some of our strategy. The intake is happening. We're doing that for the first semester of '26. We are offering hybrid courses at all units, at all partnering centers that have been criteriaously chosen in strategic locations with the analysis of our competitive intelligence team and market strategy. That's it, Andre. Thank you for your question.

Our next question is from Lucca Marquezini from Itau BBA.

We have two. In the Anima Core student base, we see good intake evolution of average ticket. So, a reduction year-over-year. My question is, when do you think stability in the student base in this segment? This is the first question. Second question is regarding distance learning ticket. In the digital learning, we see a good evolution of ticket. I'd like to understand how much was price transfer -- or was there a mix that helped attain that, please?

Well, Lucca, thank you. Thank you for your question. We naturally cannot provide you guidance. I cannot tell you when or on what day we're going to start growing our base. We work on this every day so that it happens. So, we have numerous work fronts that are happening simultaneously, both in strengthening the brands, strengthening what we deliver in the classroom improvements for students, strengthening our processes and our tools of intelligence and marketing operations. So, several fronts that have enabled us to resume growth in intake. Once we resume this growth and we are able to sustain such growth as we've seen happening again midyear, at some point, we should resume the base growth. When this is going to happen, unfortunately, we cannot tell. We have our assumptions here, and we -- so that it happens before -- you expect before, we expect that it should happen at the first moment and certainly will be the result of the work of all the Anima educators. On the ticket, especially at distance learning, it's substantially price improvement that has driven that. We have a bit of mix, but the bulk of it is actually we're increasing prices. Indeed, both for upper classmen and freshmen because we're improving the product. It's consistent to our strategy. So, we understand that there is a value there, and we understand that it has to be appropriately priced. Paula, I turn over to you to add to it. And this is it.

Thank you, Atila. This improvement, Lucca. Nobody pays more for the same thing. So, we are taking a major leap in the quality of the delivery. What is it? Atila talked about product. Our academic department has made a quantic leap in our matrix with neuroscience with major classes. So, the students have enhanced experience. So, we have on-campus with the brands that we didn't have. So, we have people doing great job in various fronts. So, we see the margin increasing because there has been major synergy of the teams, but also the delivery of a much better product that is the result of the effort of the various fronts. So, we did Pareto analysis. So, we want unlock 80% of value. So, we knew that in distance learning that had to be at the level that Anima delivers. So, we took a major leap this year that was very agile, very fast opening a virtuous circle in this distance learning experience. It's not -- it's an experience of digital learning, and we have another value delivery that is being recognized and acknowledged with this ticket with a price and reflecting this higher value delivery. Thank you.

Next question from Samuel Alves from BTG Pactual.

We have 2 questions on our side. The first is on capital allocation. You've talked a lot about M&A. I'd like to hear you a bit on dividends. The company is generating cash, is able to deleverage. What are you thinking about the agenda of dividends having this new legislation that could actually have some taxes on controllers. Just to understand what you have in mind, if it's going to be a bit the compulsory or mandatory minimal or if you should have changes for 2025 or '26. Second question is, I'd like to hear you a bit on greenfields. What do you think about greenfield growth agenda? How do you think CapEx should behave for next year because of this? If you can have some dilution if you don't follow this agenda of organic growth?

Thank you, Sam, for the question. We have a policy, the distribution of dividends equivalent to 25% of the net income of the fiscal year. This is in effect. There is no other decision that is different from that. We keep on working on this scenario. As to expansion in greenfields, Paula talked quite a bit about the opportunities that arise from the regulatory framework. So, our choice has been to find partners in strategic locations that have been carefully selected that already operated with us as partners in distance learning and that could devote to acting in the new scenario that is hybrid. So as Paula said, I'll turn to Paulo to add to that. So, we are focusing on those partnerships. So, this is an asset-light expansion.

This is it, Atila. You've answered it quite well. Well, Samuel, this possibility with the legal regulatory framework to take our hybrid model to various corners of Brazil is via strategy, strategic partners. They know the territories very well, much better than Anima. They will be much more competent. We work together. We offer what we can do well, our academic project, our experience. So, when you combine the best of all both worlds creates what you see this asset line, it allows you to grow in a lighter way more efficiently. And this leads to this movement that is structuring change in the market. We're going to give you details with all the analysis made by our strategy team on Investors Day. And this is a very important growth that is light, agile and powerful that will lead to growth that is quite important that we are aiming at for the first semester of 2026.

Our next question is from Renan Prata from Citi.

Very briefly, I'd like to understand, I think we talked a lot about the regulatory framework, expansion of hybrid and on-campus. What are you thinking for digital in pure distance learning, but the courses that can still be offered is distance learning. I'd like to understand a bit how it fits in the strategy combined with this new regulatory framework and here a bit of the continuous education. You mentioned on the release that you see some opportunities there. I'd like to hear a bit on those 2 fronts.

Renan, you've asked about digital and continuous education. Digital -- well, the movement that we carried out is coherent with our strategy with what we believe in and it gains strength with the regulatory framework. What is our strategy based on what we believe in and an educational experience that is of quality. This on-campus digital, it is not considering the modality, goes through the experience you deliver to students. Sometimes it can be distance, it can be enriched. We may have synchronous activities, moderation. So, we have worked on our digital product when you see this improvement, this increase in the ticket as a consequence of the improvement in the experience. So, this offer is valid - and we see that there is this area where we do not play. This very super low tier is not our game. The Anima is not low tier. We're working on the premium sectors and it's coherent with our positioning strategy of each one of the brands. And of course, improving our product so that we can work on differentiation of the experience also in the digital modality. Continuous education is where we have huge opportunity. We know there is a market potential that is huge, that growth that has this dynamic that happens with the strength of the institution or the strength of people that are referenced in that field, that specialty or expertise, we're working very clearly where our brands have power have a reputation where we have strategic partners. We have the continuous education team, launching courses that we know have a demand and that have people that are references in those courses, and we are combining that so that we enable this growth curve that you see, and we actually aim at even greater growth. Thank you, Renan, for your question.

We have some questions on our chat. I'll read -- we have time to close our call. There are 2 questions that are related. I'm going to read them together. One is from [indiscernible], the other is Lucca [indiscernible]. Congratulations on the results, seeing strong cash generation, reducing debt. Should we expect dividends for the end of the year? Lucas is similar. What is the strategy looking ahead of capital allocation, considering dividends, repurchase or buyback investments and deleveraging?

Well, thank you for your question. Well, actually, we have a company that is generating cash in a consistent way, which gives us confidence to see the future that is very promising regarding this indicator. Having said that on dividends, as I said previously, the decision of the company today is that we have 25% of net income of every fiscal year is distributed to shareholders. There is no decision that is different from that. And on capital allocation from now on, I believe it is a bit of the previous question. We have to keep on observing the segment as a whole. It should view an environment as a whole that is more enabling to grow through M&As because the drop in distance learning that is to come and resuming on-campus teaching generates an enabling scenario for that in addition, small-sized institutions that open medical courses and naturally, our business since we have very big operating leverage, M&A delivers value. M&As -- well, synergies are very evident and were concerned about the returns to shareholders should look into all those dimensions and diligently follow all the opportunities we've had. M&As in previous levels of higher levels of leverage. We had major M&As, PCE in 2023, 2024, buying the minority stake of UniFG. Now we move on in a very diligent way, looking what the structure is that adds more value in the long-term to our shareholders.

We have another question on the Q&A of from. How are you inserting the ESG and sustainability conduct at high level for the distance learning for Anima learning? Do you expect this work line to grow?

Thank you for the question. I'm suspicious to talk about this topic because we have a very strong strategy on ESG. I wrote a book on the topic, how to turn our businesses better for the world. And today, how do we work with that within Anima. Our academic project in the core, we call it, we have a unit ESG SDGs with sustainable growth. We have signs of happiness. We're bringing well-being, happiness, not as a goal, but as a basis because we believe that a student young person that has a good base can be fulfilled, can grow. We have neuroscience behavior, et cetera, but this base starts in the core for all the carriers precisely because we believe this is building value and principles and anchor regardless the area. So, these things are present in all the curriculums and also both in distance learning, the learning experience that is digital or in the on-campus and hybrid, all of them. The second part of your question, which you talk about SMEs. We recently announced Anima Empresa. It's our Anima business. It grows based on a great expertise that we have with HSM, well, this is really cool. I'm going to go back there. We have our students, professor HSM has learned to help companies resolve their challenges, contemporary ESG being one of them that is very important. So now we've created in this place of Anima Empresa solutions for small and medium enterprises in all universities with capillarity throughout Brazil, putting all researches to the service of companies with fund because we have the Anima Institute, so the companies can use that incentive law that have the possibility of investing, bringing solutions, bringing problems for students to resolve and practices work of consulting and assistance to SMEs through this power of our ecosystem is already taking place in a structured way in this area. It's an important avenue, not only for contributing to revenue, but also real impact generation. I see Anima not only with a learning ecosystem, but as an impact ecosystem of transforming society of the businesses of the work environment in Brazil. Thank you for your question.

We have one more question from Frederico. I'd like to understand better the strategy of early receivables or credit card considering the robust cash level and the cash generation of the company.

Thank you for your question. Over the past years, we've been introducing changes in our policies of receivables, everything we receive on installments, we receive with higher financial care charges compared to our intent cost. In addition, since we have credit cards, we have discounts made by the companies that are the acquirers, we have very low rates or fees that actually lower of what we can have in terms of investing in our funds. So, this is a system that produces some financial result that is positive. So, what can be observed in our financial results is that we've been growing in financial results from that has also helped in this cash generation so that we can understand this is the system of credit card receivables.

A question on the Q&A. With this deleveraging in Q3, I'd like to know how much you see the leverage for the Q4? I know there is no guidance, but just to give me an idea.

I know there is no guidance, but to have an idea here, good. I love it. Thanks for adding that as well, there is no guidance. Just to give you an idea here, we move on, well, our natural seasonality of the business. It's a business in which odd numbers quarters are cash generation rather than the even numbers, they are worse than the odd numbers. And the last one is a bit worse because we have vacations and the 13th wage, and we have the payroll, which are our highest cause, and this will lead us to a small growth of net debt by year-end. We should still have a growth of EBITDA LTM. So, one will not offset the other, but we should have a slight increase in leverage, nothing much different from what we saw last year. Last year, it's important to remind you that we had in the last quarter, the acquisition of Eu Medico Residente. This impacted BRL 54 million in the net debt. When we look at last year, take this into consideration, we should not see anything very different this year.

Well, Atila, perhaps just to add, well, the question is looking at the next quarter, and it's important to look at the snapshot and the movie. As Atila showed previously, a chart that was very significant shows the continuous reduction, consistent reduction of leverage in an organic way even under adverse conditions. We know conditions are given. We cannot change them. We put energy or effort to what we can control, looking at this context. When we have a change in the wind, we know it will change. We don't count on that. We're focusing on our strategy. When this changes, we know that for every 100 basis points for generation today, we unlock BRL 30 million of profit to the company. It's important to say. We look at the journey ahead. Thank you for your question.

Paula, Atila, Guilherme, thank you. Thank you all for taking part of our earnings results call. We end our Q&A session and IR team is available for additional questions. Have a good day, and see you next time. [Statements in English on this transcript were spoken by an interpreter present on the live call.]