Smartfit Escola de Ginástica e Dança S.A. (SMFT3) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the earnings call for Smart Fit for the earnings of the second quarter of 2026. For those of you who don't know me, I'm Matheus Nascimento. I'm the Investor Relations Manager. Before we begin, a message for those that need to listen to the conference in English. Good morning, everyone. [Operator Instructions] The earnings call and the information about the release are on our website and on the CVM platform. Before we proceed, I would like to clarify the possible statements that could be made during this earnings call related to business perspectives in the company, projections, targets, financial targets as well as information in the market represent the assumptions of the company's management as well as information that's currently available to the company. These statements are not a guarantee of performance. They involve risks and uncertainties and assumptions. Now I want to pass the word on to our CEO, Diogo Corona. He's going to begin the presentation. Diogo, please, you may proceed.

Thank you, Matheus. Good morning, everyone. In the second quarter, we continue with our growth strategy, keeping up a strong expansion pace of the network and profitability and consistency that continues to support our investment plan. Before we get into financial details, I want to highlight some points. We ended the quarter with 2,170 gyms and clubs and a base that's higher than 5.3 million students. If we consider this, our system services about 8 million customers. Financially, we went through another growth in our revenue levered by the expansion of our network, evolution of our average ticket and a greater contribution of our asset-light businesses. At the same time, we kept healthy levels of profitability, strong EBITDA conversion and operational cash and a capital structure that's really comfortable. In sequence, we're going to quickly talk about the company's evolution ever since the IPO before we begin covering the earnings in the quarter. In July, we completed 5 years ever since our IPO at Smart Fit. During this period, we expanded our platform significantly. Besides consolidating our leadership in the clubs and fitness club sector, we diversified our sources of revenue and expanded our performance in new business verticals. Ever since 2019, in fact, we tripled our net revenue, expanding our profitability, strengthening cash generation, and we were able to keep discipline in our cash management. Today, we have a more diversified business in our geographies and among different areas, which expands our growth potential and reduces our reliance on any specific market. This evolution also strengthened our financial position and expanding our platform. Our next slide demonstrates how these different businesses reinforce our competitive advantages that have synergies among each other. Our strategy has evolved from an operation that is focused exclusively on clubs and fitness clubs, and we went through a whole platform of fitness and well-being. Today, we have over 2,220 clubs and a studios platform with the BeOn over 310 rooms in full expansion and one of the main well-being players in Latin America, connecting approximately 47,000 units, including the Smart Fit Group brands with millions of users. Each of these verticals sustained by strong brands expands our addressable market and adds on to the others, strengthening our value proposition to customers, corporate partners and franchisees. This integration creates additional opportunities for growth and strengthens our capacity to capture value in different segments in the market. With this, now I want to move on to our operational agenda for the quarter, starting off with the evolution of our clubs platform. Besides the growth in the traditional business, we've also been observing a consistent evolution in the TotalPass, reinforcing our relevance in this ecosystem. In Brazil, we expanded significantly with our participation in the market and our market share. We have about 35% active users from corporate well-being platforms already using TotalPass, an 8 percentage point gain compared to the same period last year. We also kept our leadership in downloads at our stores and clubs for the 6 months consecutively, reinforcing and reflecting the strength of our brand and attractiveness of our platform. In Mexico, we're still market leaders with approximately 80% share among active users and about 75% of the downloads of the segment. At the end of the quarter, our customer base, B2C, went over 2.2 million users, a growth of 70% compared to the previous year. This performance is still going to continue to be sustained by three main pillars: investments in branding, expansion of our network, our commercial network along the HR teams and companies, and an increase in the value perception of this perception of benefits for employees. As a consequence, TotalPass continues to expand its contribution to the group, representing a more relevant part of the gross profit and reinforcing our strategy to build this integrated ecosystem for fitness and well-being. On the next slide, we ended the quarter with 2,170 clubs under operation distributed among 16 countries after we opened up 57 net units in this period. In the past 12 months, we added 352 clubs, keeping up a pace that is really consistent for our expansion and reinforcing our leadership in Latin America. An important point is that this expansion continues to be quite diversified among different geographies. Brazil represents about half of the chain, while Mexico and the other countries continue to increase their share in new openings, reflecting the broad opportunity for growth in this region. Today, approximately 2/3 of our clubs are already considered mature, even after this expansion period that was quite accelerated. This characteristic is specifically important because it demonstrates our capacity to combine growth and profitability as new units mature and start contributing in a growing pace for the company's cash generation. With this, I'm wrapping up my presentation, and I'll pass the floor to our CFO and Investor Relations Director, José Rizzardo Pereira. He will cover the financial results in this quarter.

Thank you so much, Diogo. We ended the second quarter of 2026 with 5.6 million customers at our clubs, representing 8% growth in regards to the same period last year. It's important to remember that this does not include the users of the aggregators, which have access to the clubs and they continue to gain relevance. In our sequential comparison, the base remains stable, reflecting the seasonality of our mature units in Brazil, [indiscernible] in Mexico and in other countries. At the same time, our net revenue on average annualized per club reached BRL 4.5 million, which was really stable in regards to -- in comparison to the second quarter of '25. Amidst the accelerated expansion of this network and a greater weight from the units under maturity, this stability reinforces the capacity the company has to combine growth of customer base, evolution of the tickets and discipline in managing the revenue per unit. Moving on to our financial results. Our net revenue reached BRL 2.2 billion in the second quarter of '26. That was a growth of 22% versus the second quarter of '25 and 4% in regards to the previous quarter. The annual growth was levered by the increase of 19% of the revenue of our own clubs from the Smart Fit brand and the expansion of 47% of the others line, reflecting the evolution of TotalPass Brazil. At our own clubs, the average ticket grew 10% versus the second quarter of '25, with an evolution in all of the regions where we're operating. This performance reflects the combination of the adjustments and initiatives and revenue management that are implemented as well as the greater volume of accesses with aggregators and the evolution of our plan mix. In the last 12 months, the net revenue went over BRL 8 billion, setting a new all-time high record for the company. The gross cash profit added up to BRL 1.1 billion in the quarter, growth of 24% versus the second quarter of '25, once again above the evolution of our revenue. As a result, the gross margin in our cash reached an all-time high of 51.9%, an expansion of 1.1 percentage points in the annual comparison. This evolution was sustained by three main factors: maintenance of the profitability at the mature units, keeping these in solid levels, consistent maturity of the clubs that we opened in the last few years and the increase in the share from the other lines that operate with margins that are structurally higher than the clubs business. And if we exclude the pre-op costs related to the openings, the gross consolidated cash margin reached 52.8% in the second quarter of '26, with an expansion of 1 percentage point compared to the same period in the previous year. In the Smart Fit Club segment, the margin was 49%, reflecting the strong growth of expansion and greater weight from units that are still ramping up, especially in Brazil and in Mexico. At Bio Ritmo and other of our own units and brands, margins went up to 48.6%, expansion of approximately 4.5 percentage points in the annual comparison. The main highlight is still the others segment with a margin that reached 84.7%, which represents a 15 percentage point expansion versus the second quarter of '25, levered mainly by greater contribution from TotalPass Brazil. With this, others started representing 17% of our cash gross profit prior to pre-op costs compared with 12% in the second quarter of '25, contributing to the expansion of the consolidated margin. Moving to Slide 12, where we look at the maturity levels. Mature clubs represented a gross margin of 51% in second quarter '26, with a gross cash profit annualized per unit that's matured of BRL 2.4 million. This is a 13 year consecutively where margins keep at structurally solid levels, demonstrating the resilience and predictability of the model. The units also that we opened in 2024 also had a very healthy performance with a cash gross margin of 55% and a gross profit annualized per unit of approximately BRL 2.5 million. The vintage in 2025 represents an important addition in margins in the first and second quarter, which is consistent with the expected maturity process. Performance from different vintages reinforces the quality of the recent batches with the precise and assertive selection of the commercial spots, real estate and our trust in the profitability of the investments we made. Expenses with sales, general expenses, administrative and pre-op costs added up to BRL 405 million in the second quarter of '26, a growth of 25% versus the second quarter of '25. As a percentage of the net revenue, the expenses represented 18.6%, an expansion of 0.5 percentage points in the annual comparison, plus a significant reduction in regards to 19.5% registered in the first quarter of '26. This growth reflects the investments in structuring and development of the new business besides the effect of the consolidation of TotalPass Mexico, which happened ever since the first quarter of '26. Excluding this effect, the G&A represents -- would represent 10.3% of the net revenue. This dynamic demonstrates that investments in the new verticals coexist with the efficiency gains and leverage operationally in the clubs business. As a result of the combination between growth in revenue, expansion of the gross margin and discipline in managing expenses, the EBITDA reached BRL 712 million in the quarter, the greatest result in a quarter that we've ever registered. This value represents a growth of 24% compared to the second quarter of 2025 and 6% compared to the quarter before. The EBITDA margin reached 32.7%, an expansion of 0.5 percentage points in the comparison annually and 0.7 percentage points compared to the first quarter of '26. If we exclude the pre-op costs, the EBITDA would add up to BRL 740 million, with a margin of 34%. And in the last 12 months, the EBITDA reached approximately BRL 2.6 billion, with a margin of 32.2%. Our net income -- recurring net income reached BRL 204 million in the second quarter, a growth of 8% compared to the same period last year. Solid growth of our EBITDA was partially offset by the increase of financial expenses and a greater effective income tax rate and social contributions in this period. It's worth mentioning that the recurring earnings exclude the non-recurring effects related to acquisitions and financial expenses associated to liability management initiatives that we performed during this quarter. In the last 12 months, the net income that was recurring reached BRL 822 million, with a net margin of 10.2%. Now moving on to the evolution of our debt and investments. Our adjusted net debt increased BRL 417 million in the quarter. Our operational cash generation added up to BRL 529 million, which is equivalent to a conversion of 74% of the EBITDA in this period, reflecting the impact in our working capital and in our taxes. In the last 12 months, cash generation reached BRL 2.4 billion, with a conversion of 92% into EBITDA, reinforcing the high capacity of cash generation in the business. In the quarter, the activities for investments consumed BRL 633 million, reflecting mainly the expansion of the network. The total CapEx added up to BRL 625 million, a growth of 37% versus the second quarter of '25, among which BRL 463 million were intended to expansion. This growth represents the payments related to the units we opened in the first semester, the clubs that are currently under construction and the evolution of our brand mix within the pipeline. Our maintenance CapEx reached BRL 152 million, reflecting the strategy to preserve the quality standard of the units, expanding the equipment offered and keep up with the growth of the mature club base. Besides this, the other activities added up to BRL 313 million to the net debt adjusted in this quarter. Amidst the acceleration of investments and continuity of the strong pace and expansion, leverage remains at healthy levels that are compatible with the cash generation profile of the company. Our capital structure remains diversified among different geographies with approximately 44% of the debt -- net debt in Brazil, 25% in Mexico and 31% in other countries. This diversification really reflects our strategy to fund locally with a relevant part of our investments searching for more efficiency, speed and adherence among cash generation and our debt levels in each operation. We were able to keep up an amortization profile that is really balanced and distributed throughout the next years, preserving financial flexibility so we can really sustain our growth. We are still quite comfortable with our capital structure, and we're confident in our capacity to fund our expansion in a very disciplined manner, combining cash generation operationally as well as access to different credit markets and efficient management of our debt. With this, I'm wrapping up this financial presentation. I'll pass the word to Matheus once again as he coordinates our Q&A session.

Thank you so much. Now we're going to start with our Q&A session. [Operator Instructions] Our first question comes from Luiz Poli Guanais, BTG Pactual analyst.

I think we have two questions on our side. The first one is exploring a little bit of the TotalPass topic. I wanted to hear from you guys about which expansion phase do you believe you're in? And at the same time, while we see an improvement in profitability when we look at the gross margins. But as you mentioned, we still have big investments to expand our platform and gain market share. And still in TotalPass, if you could talk about the initiatives that are more recent to gain share, not only in regards to the payouts, but also how you're -- what you charge from companies, that would be really interesting. And also about the CapEx, a second question here -- sorry, of the P&L. And I would like to know a little bit more about what we can expect, what we can -- looking ahead. Before we move on to Diogo, first -- I cut off here. So the CapEx, if you could talk about a summary of how or what we could expect in the maintenance CapEx evolving over the next quarters. This is the one that you guys mentioned was a factor that really increased in the second quarter. I wanted to understand the dynamics looking up ahead.

This is Diogo. Well, at the moment, TotalPass, it is really going through a lot of growth. So the focus is still growth, growing and gaining share from one quarter to another. We grew about almost 100% and the growth continues to keep up at a really accelerated pace. So this is our main focus. Our focus is not to bring in margins, but to grow. So we've been investing a lot. And remember, Brazil is a continent. So there are differences from region to region. And you need to invest in your products, and that depends on many different factors, including the network you service and the brands you have and your efforts also for sales and local brands. So we always simplify Brazil as a single reality, but we know that we have to get into more granularity from region to region, and we finally reached a scenario that's more sophisticated, right? So we need to understand this game. And this is our moment. And we're at a very strong growth pace, and the company has been prepared more and more for this game. And so I'm really optimistic with this initiative, right? But in regards to the product, it's a scale-based business, right, where your G&A will be diluted as you gain scale, right? So you have more scale for negotiations, and you can also have a greater leverage to reduce or dilute your G&A, right? So this is going to help us a lot as well as we have more financially solid results. So I think it's all very favorable. We're going to grow, and this is also going to help us with our financial aspects as well. So I think it's important to mention we're not providing like crazy subsidies for market share gains, et cetera. So sometimes if you're coming in later on for an aggregated market that's kind of dominant, you have to subsidize things and you have like, sometimes, even a negative contribution margin. But we're not at this stage. We haven't been able -- we haven't had to do this. We're gaining share with a very healthy gain. And we're quite excited. You won't always see this share gain leap. Sometimes you have a share gain leap and then you mess with some strategies that helps you have another leap. So it's not always going to be linear, right? So in the second quarter, this leap is a little smaller, but we have a lot of strategies we can work on to keep up with this growth. And so, Guanais, this is with regards on the maintenance CapEx. When we look at that line and compare the last 12 months, we can see the maintenance CapEx operating very close to 7% of the company's net revenue and a little bit above this level, which is really in line with what we've been discussing in the last earnings call with the company. As the network and our footprint becomes more mature and you have an average age that's higher, naturally, you're going to have recurring maintenance of this network, considering the nominal level of the maintenance CapEx and percentage of the revenue that's closer to this range of 7% to 8%. You could have some seasonality in the expenses with the maintenance CapEx throughout the year, but you can't necessarily do everything you need and want to do at that specific month. So the first quarter was pretty lean. When you consider the maintenance CapEx in the second quarter, we were able to do more than what we had in our pipeline. And besides the recurring maintenance, we've been investing a lot on the expansion of some gyms and reinforcing some weight lifting equipment as well, thinking about the Smart Fit brand and also our high-end brands as we redesign the Bio Ritmo product. Part of the CapEx maintenance investments for the company throughout the year will also be related to these other brands so we can readjust this product.

Our next question is from Rodrigo Gastim, the analyst from Itau.

And so the first one is about TotalPass. I wanted to understand the schedule for these transfers to the partnering gyms. You did this throughout the second quarter, and I wanted to understand this a little more. When we look at the volume of clubs and the schedule for this impact in your P&L, when we see this in our earnings, how should we look at this? What's the best way to consider this, right? So that's the first question about the total cost. And then the second question is we recently just saw an adjustment in your Black plan in Brazil and in Mexico, especially in Mexico. And then I think it's really important to understand if you could share a little more details about this and understand if it's a one-off adjustment when it comes to your dynamic pricing strategy in more premium regions where you have lower competition and there would be more space for this. This is a relevant adjustment in our trackers. It represented more than 10%, or if it's something that you guys think could eventually be applicable to all units. I wanted to understand the strategy from the pricing and which indicator you monitor to gain more comfort and be sure that the returns on the strategy are working well when it comes to competition and share, et cetera. Those are the two questions.

Well, this is Diogo here. And first, on the TotalPass. It's important to have a seasonality dynamic that are going to be more accentuated and that the more TotalPass gain share, right? This is really significant for us to look at. TotalPass is a business that is completely sensitive to seasonality. And when you consider Brazil, TotalPass is greater in Brazil. So the first quarter is a pretty bad quarter for seasonality. And then consequently, that will be the opposite for Smart. And so generally, this is positive for TotalPass, but pretty bad for Smart Fit. And so that's kind of contrary, right? So the more we get shares of TotalPass and aggregators and the margins for Smart Fit, gross margins that mature will have more seasonality, right? So that's going to be an important point. And then the second quarter is a pretty good quarter, and the fourth quarter is also good, right? So then the first and third are pretty bad when you consider the breakage and when you consider the copayments and transfers. So on renegotiation, we've been doing this. There's nothing very specific. And I think it's more like seasonality-based, right? But this is a live agenda. So we're always adjusting this and looking who is out of this range. We adjust the products, adjust the offering, compare with our competitors. And so it's a real live agenda. There's never been something very strong specifically in the second quarter. What we had were a few evolutions. So if you compare -- I mentioned the first and third quarters are worse seasonalities. But we evolved a lot in these negotiations and the offerings of our prices ever since the beginning of the first year all the way here. So we -- it's going to be a live agenda, and we'll have incremental adjustments. And so we wanted to keep you at ease about this change. It's more of a test we really believe it's going to work. And so we see that there are very few stores we actually worked on. We have the statistics and the data to trust that it makes sense, right? But we really want to be very convicted on the demand price curve. And a great way to do so is, sometimes, you have to have some tests. And for example, in Brazil, we had an increase that was very relevant, very strong. And so sometimes you do this for a small store pool, then you can test this sensitivity, right, to pricing. But what we would like at the end is we would have -- we'd like to balance things. And so maximizing our revenue and considering competition as well. If we should do this, where there are not that many competitors, you can lose. So it's the model we always look at. We always have to consider competitors, even if we're just -- we see this is one of the main variables here, right? And in a way that it makes sense, right, and that can be easy to explain and really make sense. If you can balance out these three points and if it makes sense to customers, you don't want to lose share towards competitors, right? And so we really have this fresh in our minds, and it's something we were testing. It's quite recent. It's not something we define we would do in all of them.

Well, just to add on here, Diogo, in both of his answers, [indiscernible] as well. We've already operated in other geographies with two different prices, Black and Mexico is an option. An example of this, we've been operating in the beginning of 2023 and 2024. Diogo mentioned this really well. This is a test that we're going to monitor daily, so we can make decisions without any kind of timing issues, right, here. But when we move on to your question on others, which is the earnings line that you can see, it's important to highlight that, that line, obviously, you have other business units that are really significant and not necessarily will they follow the seasonality of TotalPass Brazil. So three examples here I want to share with you in the sense comparing the first quarter of '26 and the second quarter '26, right? The seasonality in this comparison is more favorable to TotalPass Brazil. However, it's unfavorable to TotalPass Mexico and Fitmaster because then basically, you have the opposite of what's going on in Brazil. You have the second quarter, which tends to have quarters with higher frequency than what you have in the first quarter. So sequentially, these business units are a little more constant and sensitive to frequency, and they should lead to worse results. Then you have the BeOn studios, and you can see that revenue is a lot more connected to frequency and that also impacts the royalties and receivables. And so of course, when you consider periods of lower frequency in use, you would have the seasonality that you're going to then capture on the way back with periods where you have greater usage.

Our next question is from João Soares of Citibank.

First question I wanted to ask you is about TotalPass. We've seen the numbers and we had this sequential spike, and the numbers they measure there, of course, are not in line with the actual numbers, but you can see it went from BRL 4 million to BRL 4.5 million. And you can see this -- I want to know if there's some engagement evolution. It's quite clear here with this road map to gain share, and it's really interesting if you could talk about this perspective here as well. And so sorry about that, but three items on the P&L really call our attention. For the COGS and LatAm and sales expenses, they were below what we expected. And I wanted to understand what the sustainability of -- there's this issue with the dynamic, and we want to understand what's sustainable here and the run rate that would be considered sustainable, of course.

This is Diogo here. First question, and then José can take the second one. About July, there are two points here, right? If you compare July and June, July was actually where the growth was a lot stronger. Actually, June was the month that's seasonally worse. There was a World Cup, and it was a shorter month for TotalPass, right? Then in July, we went back to growing. So there's a seasonal point as well. But besides this, we also gained share. So I think that's like a reflex of our work in the day-to-day. So our products have been better. We're really focusing on products and it's become a lot better known. You need to have good products. You have to have people knowing this product. If not, they're not going to buy it, right? So our work for brand awareness and improving the products as well, right? So today, we can see our product in many regions and our vision is a lot higher than our competitors. And so we've been focusing on making this product better and it's really related, of course to the partners, et cetera. So we've been focusing on making this product better in all regions in Brazil. And I think we're being compensated by this, right? Every time the market grows, that's the result of our work. And we're at this full-time kind of agenda. Really making this product the best possible. And in our view, that's already superior compared to our competitors. There really is this situation where you have the switching costs, et cetera, and so there's a point for this. But today, we can really diagnose our product as superior, and we just think it's a matter of time for us to be present in this market. We're not going to stop or be satisfied with 31%, right? That's not our end game. And I think it was a pretty good month. We know there's a lot to do. We're still an underdog here. They're incumbents, and we're the underdogs. And there's a lot to be done, right? But I think that's a reflex of our work, right?

And then João, just to add on, Diogo brought in a lot of structural strategic points. And it's also really important to give you some context, right, to mention like when it comes to monthly active users. And we know that today, it's a pretty good proxy, right, so that you can monitor this growth. But eventually -- and you can have this movement, right, from one month to another. That won't necessarily reflect what we observe internally. That's not the case with July, right? But that ends up being the only metric that's public where you can monitor this evolution for the active users, right? And so when we talk about July and we think about the second quarter of '26 versus the first quarter of '26, we see this really -- we see that the base for TotalPass in Brazil grew more, nominally more when it comes to the amount of users in the second quarter of '26 than what it grew in the second quarter of '25 compared to the first quarter of '25, right? So even with the World Cup effect, right, with more difficult seasonality and also going from a much bigger base, right? So if you consider that and you have a bigger base, it's always a challenge, right? So once again, I think it's another point that really reinforces what Matheus and Diogo have mentioned to you as well. So when you head to the other questions, I talk about the taxes. And I think you answered part of that in your question. We have more subsidiaries that weren't profitable before. And we have a pretty good problem, let's say, if we price it out in this way. And in the past, we were able to operate as well with less [ IRPJ ], CSLL income tax and social contributions. So each subsidiary, depending on each country, of course, has different fiscal rules. And in the quarter, the main impact of the growth in income tax is concentrated in international subsidiaries and also in the others segment, right? So when we think about the full year, this disperse won't really change, right? It's difficult to set this rate because we have the complexity going on in the fourth quarter, where we can only have the visibility in countries that is, of course, a lot closer to the end of the year. But it should be at about 15% to 20%, with a lot going on throughout the year. And we'll have more visibility about this in the fourth quarter post closing, right, fiscal closing. So if you look at the marketing line, in the second quarter versus the first quarter, it's normally smaller and a nominal investment that we perform in marketing, considering the seasonality of the business. And internally, besides the seasonal issues, we've been trying to really be more sharp in our investments that we perform in marketing at the different business units throughout the year. And also when we look at the annual comparison, '26 has less investments in branding. If you remember, this was one of the biggest points in the first quarter of 2025, where we really accelerated on this line, investing in TotalPass, BeOn, Bio Ritmo and Smart Fit. And now this is not that strong in 2026 as it was in 2025.

Well, in regards to LatAm, is there any other point that you also consider was better in this point, in this aspect?

Well, I think others LatAm is a combination of everything we've been doing. There's nothing structural that changed in the countries. We can still see the mature units performing well. You could have margins up or down, depending on the aging of the stores in that quarter and the composition of the countries. But structurally, there's nothing different among others. And I'm sorry about that. I forgot your question.

Our next question is coming from Lucas Esteves of Santander.

We have two topics here that we would like to cover with you. First, the EBITDA conversion into operational cash generation, and that dropped to 74% in the quarter versus 92% last 12 months. And then that was mainly due to working capital consumption. So how much of this do you guys consider purely seasonal? And how much can remain structurally higher, providing growth in TotalPass and the expansion pace as TotalPass gains share in the revenue and consolidated revenue? How do you view the structural impact in the working capital? And so is there like a relevant difference between the cash cycle of TotalPass that we should incorporate in our estimates here? And you also highlighted that the margins of the mature gyms remains quite resilient, but we look at the net profit, and we can see that it went from BRL 2.5 million to BRL 2.4 million. How can this reflect greater pressure also of the revenue per unit versus a strategic density in the network with greater penetration of TotalPass? How do you imagine this evolving from now on?

Rizzardo here. Thank you, Lucas, for your question. Now if we just purely think about the simple dynamic in the business for aggregators and the clubs business, they're really similar. When you look at this from the clubs business and the receivables, they're basically credit card receivables at a recurring basis. And you'll have this about 30 days. And in these countries, it's a lot smaller when you consider a rearrangement in payment means. And when we look at the cost and expenses, nothing very different when you consider this from a days perspective, right? So you'll have the utilities, water payroll, lease, et cetera, and that's going to be really close to this level, right? So that's why we've always mentioned that when you look at a base, normally you have in a fiscal year, the working capital should be almost neutral. But of course, that's going to depend on the specific quarter you're discussing. And you could have a bit more consumption or a bit more cash generation coming from the working capital. The same perspective can be applied if you look at an aggregator and you see the recurring business of the aggregator. So this aggregator comes in, they'll have two revenue sources. And so what the employees -- and the cycle is pretty much the same. As you can see when you see the main cost line for the aggregator, which is the actual payout to the clubs, this is done in a 30-day cycle. So nothing very different than the cycle of the actual student, right? So with all of this, you have complexity, right? When you consider this from a P&L level and you see the days considering the revenue and the costs. And that's why because you account for the revenue, you'll have a revenue basis and also a cost base that's smaller, right, because you're looking at this in the revenue line, right? So when you think about days of working capital, you'll have the impact where the increase of the penetration of this aggregated should lead to an increment in working capital days. But once again, from the current levels, everything should be more consistent and a real one-off increment in the business in our working capital line for the company. And then when you think about the gross profit of the mature units, you have different mobile parts and a geographic mix that can really explain to this. So when you look at this and you -- let's just go back here, you can see that with the increase of the relevance of TotalPass in Brazil and in Mexico, you'll have a little more seasonality in the clubs business, not necessarily the earnings for the whole country. But of course, the aggregator should offset like the positive month is sometimes a little more challenging for the business of the clubs kind of business as well. So I want to remind you that most of our expansion is providing basically more density. And so as a company strategy, once the company made the decision for cannibalizing part of the results, of course, thinking about the cluster results, but then individually by unit, you can also have an impact. In the second quarter this year, you also had an impact when it comes to Brazil level and Mexico, which is made up of holidays and World Cup, and our estimate is about 1% of the base of customers from both countries, and there's an impact of the second quarter as well, plus Brazil, that comes from this. And if you consider the sequential comparison, the second quarter '26 versus second quarter of '25, there's better usage of the fiscal credits that kind of explains part of this.