Vitru Educação S.A. (VTRU3) Earnings Call Transcript & Summary

Good morning, everyone, and thank you very much for waiting. Welcome to the video conference to announce Vitru Brasil's Q1 2025 results. [Operator Instructions] We would like to inform you that this video conference is being recorded and will be made available at the company's IR website, investors.vitru.com.br, where the complete material from our earnings release is available. You can also download the presentation from the chat icon, also available in English. [Operator Instructions] We would like to highlight that the information contained in this presentation and clarifications during the video conference related to business perspectives, projections, and operational and financial goals of Vitru Brasil are beliefs and premises of the administration of the company, and also, currently available information. These are not guarantees of performance. They involve risks, uncertainties, and assumptions because they are future events that depend on circumstances that may or may not happen. Investors might have to understand that economic conditions, market conditions, and other operational factors can affect the future performance of Vitru Brasil and lead to results that differ from those expressed in such future considerations. Today, we have the presence of the executives of the company, William Matos, CEO of Vitru; Gabriel Lobo, CFO of Vitru; and Maria Carolina, Head of IR and her team. I'll pass the floor now to Mr. William Matos.

Very good morning, everyone. It is also a great satisfaction to be gathered with the market for the presentation of the Q1 2025 results. I have here with me Gabriel Lobo, the CFO of Vitru; Maria Carolina, our Head of IR; and our IR analyst, Luis Felipe. Together, we're going to present the financial and operational results of the first quarter of 2025. Beginning with Slide #4, I would like to open by bringing you the highlights of this first semester. As you can see, the online education graduation grew 11.9% in the first quarter in relation to the previous year, the first quarter of the previous year, making it evident that even in more competitive scenarios, our singularities lead the student to choose our brands, UniCesumar and UNIASSELVI. I usually say that growth in adverse moments is the biggest proof of the solidity of our brand and the product that we deliver. Many may grow in the moment of abundance, but only the best will keep growing when the client truly values each $0.01 and understands that their investment has to bring a return. That is why this indicator says a lot about our delivery and our quality. Moving forward, we're going to go to the consolidated net worth of Vitru that grew 8.2% in comparison with the first quarter of 2024, driven by the strong and consistent growth of the online graduation that grew 7.7%. As we're going to show further ahead, the performance of our continuous education segment is an important avenue for growth. That also was a highlight, recording a growth of almost 24% in the first quarter of 2025 when compared to the first quarter of 2024. The adjusted EBITDA of Vitru reached BRL 202.7 million in this first quarter, growing expressively 18.7% versus the first quarter of 2024, and with the adjusted EBITDA margin reaching 3.3 percentage points more than the first quarter of 2024. This expansion of the margin is associated with our commitment to constantly searching for alternatives to maintaining good levels of operational efficiency while our products continue evolving and delivering quality to our customers. Margin for us is also a consequence of conscious management, understanding the importance of continuing to build a culture of efficiency, and it is on this path that we are going to continue. In the first quarter, our adjusted net profit more than doubled, totaling BRL 90.4 million with a net margin of 16.6%, representing an expansion of almost 10 percentage points when compared to the first quarter of 2024. Looking at the cash flow, we delivered a free cash flow generation of BRL 117 million in the quarter, an increment of 10% when compared to the first quarter of 2024. The cash is our great Northern Star now, with higher interest rates and the strong generation of the quarter. Once again, we reduced our debt. And in April, we had the disclosure of the ENADE 2023, and we are proud to say that Vitru had the highest evolution among the listed companies, being the only listed company with more than 70% of its courses with scores between 3 and 5. These highlights will be detailed throughout the presentation, and they demonstrate our focus and our discipline in the delivery of our strategic plan, associated with the solidity of our businesses. Vitru is prepared to be in the current business environment that requires a lot of experience, adaptability, and consistency. And in this sense, before we move on, I would like to thank our internal team that contributes every day to education, to continue transforming the lives of our students. I'm proud to say that we have the best professionals in the country. Moving forward to the next slide, Slide #5. We observe our base of students at the end of the quarter. We overcame the mark of 900 students in the online education segment. Our total base of students has about 1 million students, a 5.7% growth in comparison to the first quarter of 2024. And here, it is worth highlighting that Vitru has already reached a considerable level as a company. So the current growth rates are in line with our estimates, and much more than that, considering the challenges in the current macro scenario, the growth of our student base confirms that, frequently, students choose our brands when they are searching for a degree and a quality degree. That is why we continue growing and gaining market share, and advancing in our core business. Lastly, over 97% of our student base is represented in the online modality. So, as the biggest company of online higher education in Brazil, we have the conviction that this segment will continue being one of the main access avenues to quality education in such a big continental country like ours. Moving on to the next slide, Slide #6. We highlight on the left-hand side the number of students in the online graduation in 2025. We evolve in line with our extensive presence all over the national territory. We reached 275 different hubs in different places of Brazil, and we assist students in over 1,400 cities in Brazil. We are expanding more and more our presence in different regions of the country, in more advanced studies, and we identify opportunities for both brands in Vitru UNIASSELVI and UniCesumar. We still see opportunities to open a few hubs in a few cities. But now with a more careful and prospective look, our focus will be on having a stronger and stronger and more qualified network with a solid infrastructure to assist all profiles of our students. Here, it is worth highlighting that, according to what is being shown in the media related to the new regulatory framework that is about to be approved, Vitru is going to be a lot of steps ahead of any competition regarding a structured education hub network with classrooms with academic processes. And today, we have approximately 1,200 hubs completely prepared with laboratories, which is something way above any other competitor. And when we talk about semi-presential classes, we will have a very big competitive advantage as we have had in the last few years when we look at online education. Moving on to Slide #7. On the right-hand side, you can see the share of costs, which is similar to the previous period. On the right-hand side, you can see the behavior of the average ticket at the beginning of the year, which is more stable in this period. We see a more competitive and intense scenario in terms of price, but we continue reinforcing our ability to constantly adapt and thoroughly adapt to the strategies of the market, always balancing the volume of student retention and the ticket. We had an increase in the last few years of 3.1%, also demonstrating our strength as a quality player in digital education. We believe that the main path to the success of the strategies of pricing is in paying attention to our products aligned with the retention of our good students. The quality of the students who enter our universities is an indicator of the health of our business, and it guarantees stability throughout time. Now I would like to pass the floor to Gabriel. He's going to continue the presentation, showing us the financial indicators of Vitru.

Thank you very much. Good morning, everyone. Moving on to Slide 8. I would like to start by bringing a few details of the consolidated net worth of the company. In the first quarter, we had a consolidated net worth of BRL 545.8 million, a growth of 8.2% when compared to 2024. We grew in all the segments, which showed that we have a strong portfolio of products, clearly driven by the online graduation, which is our core business. We continue growing in the online graduation, delivering a growth of 7.7% when compared to the first quarter of 2024. This is a very important indicator because it shows our consistency and our capacity to continue delivering a trajectory of revenue growth, even in a moment like this that we are living, and where we have more pressure on the ticket. When we look at the growth, it was driven by our students, either by good retention in the first quarter or a good level of reenrollment of our students. Looking at the on-site medicine segment, we grew 6.1% in this first quarter. The numbers of medicines continue reflecting our competitive singularities, especially when it comes to the structure of the city of Maringa and also the units of Corumba, both with an increase in average ticket. Lastly, we will see another important quarter for continuous education with our technical courses, vocational courses, and postgraduation courses. They are also highlighted with the growth of 23.8%. This segment is an important growth avenue of the company, and we believe that this growth in the segments of continuous education will continue delivering good results further ahead. We will continue searching for opportunities to capture more value in this product, looking at the 3 basic products. In the long term, they will provide continuous education and grow their participation in the total share of the company. Looking at Slide 9, we have a detailing of our gross margin. Since last year, the gross margin of the company reflects a maturing of the hybrid courses. So we had a certain pressure on the gross margin. More recently, we did a few reviews of the internal processes of the company. Explaining this in numbers, in the first quarter, we had a great gross margin. When we talk about the percentage of the net revenue compared to the first quarter of 2024, it had a small reduction of 0.7 percentage points, but it is worth reminding you that we had a change in the contingency line starting from the fourth quarter of last year. When we look at the comparable basis, apples-to-apples, we will have basically a flat gross margin when compared to 2024, which is a great message considering that we had a gross margin above 73% last year. But looking at our adjusted gross profit, we expanded to BRL 394.5 million in 2025. This affected the line of cost of the company, and Vitru revisited and updated the academic model of the UNIASSELVI brand in order to assist and answer the regulatory requirements of the sector in advance. So we had a cost associated with that, with a few reductions of the team and with a few educational alterations, which is something on/off and will not happen in the next few quarters. So we adjust these costs in the common expenditures of the company. We hope to offset the impact of these decisions made in the first quarter in a deferred manner throughout the year, with the potential of gross margin in the future, which is going to be way higher. Moving now to Slide 10. We have the details of the lines of costs and expenses. On the right-hand side, the chart shows the cost and expenses of the company that reached BRL 348 million in this first quarter and a growth of 2.9% when compared to the same period of the previous year. This slight expansion reiterates what William said in his opening, which is related to the discipline for the search for efficiency to leverage our operational activities, trying to grow our revenues rather than our costs and expenses. Talking about the G&A aspect, I would like to bring you a singularity of our business when compared to any competition. Vitru is one of the more concise and light companies in the sector, which makes us incredibly adaptable. We are much more agile when it comes to any kind of adaptation to the moment of the market. And in the not-so-favorable scenario, as we have seen now, that means we are much more agile for any kind of movement internally and in the market with our list of prices. On the right-hand side of the slide, we show that the general and administrative expenses line grew 7.5% when compared to the previous year, especially because of the benefits that we implemented in the second quarter of last year. This line is always stable, which does not show any kind of concern for us. Moving on to the expenses with sales and marketing. The expenditures in the period grew 6% year-over-year. And it's important to say that even in a more challenging competition environment, we were able to capture students in using sales and marketing, including a reduction of 7.7% of our expenses in the company. We're going to continue with our adaptations without reducing in any way our capacity of capturing new students. As we have seen throughout the quarter, we are also trying to search for optimizations for our TAC, especially when we talk about our sales channels. Lastly, obviously not least, I would like to mention the PCLD, which was again a highlight, delivering nominally a reduction of 23% when compared to last year, while in the percentage of the net revenue, there was an increase of 3.3 percentage points for the company. This performance reflects our criteria for retention of students. That was an important decision that we had in January last year, with a healthier base than the previous years. And our focus here is deep in the improvement of internal processes, especially in the area of billing and collecting. As we have seen in previous presentations, we hope that throughout the year, we will have important gains in PCLD, but maybe not in the levels that we presented in this quarter, between 1 and 2 percentage points of reduction throughout 2025. Here, we see the adjusted EBITDA bridge. In the first quarter, we reached almost BRL 203 million. The adjusted EBITDA margin reached 37.1% in the period, a growth of 3 percentage points when compared to the previous year, which is the result of everything that we commented in the last slides, the evolution of the net revenue, combined with the reduction of costs and expenses and PCLD contributing also for this operational leverage. Moving on to Slide 12. We can see that the adjusted net profit of the company in the first quarter reached 90.4%, or more than double that of last year, with a healthy margin of 9.6 percentage points, which also represents an expansion of 156.1%. It is worth mentioning the good performance that we had in the low EBITDA lines, which also contributed to state-of-the-art results in this quarter. This performance was expected. We have been talking to you about the strategic movements and which were the impacts expected for these movements. It is worth reminding that we did a reprofiling of 2 lines of the company last year. We issued the fourth and the fifth debentures. We made a change in the interest accrual model starting from the third quarter, and also the process of reorganization of the company, which is something that we have talked to you about, that will bring gains for the company in the future. The financial results, speaking of each one of these lines, the result was negative in BRL 76 million, but with a reduction of 13.2% when compared to the reports of the first quarter of 2024. This reflects mainly the reduction of the bank spread, a smaller burden of taxes on debentures, even in a scenario with higher interest rates that could apply some pressure on our financial results. Looking at revenue, tax revenue, starting from the fourth quarter of 2024, we started recognizing this project that is now in the organization phase, the project of reorganization of our society of our company that will also allow us to use from further on the tax shield of the financial department of the company that is now 100% in our Vitru holding structure without any operational effect because basically, we carry out the activities in the subsidiaries. This project is already on track, and it's going to be concluded throughout our third quarter with value capture and immediate effect on the results and on the cash. Now on to Slide 13. On the right-hand side of the slide, left-hand side, we can see our cash flow. We have to have a deeper look at our cash flow with higher interest rates. In this quarter, the cash conversion post CapEx was 86%, which is higher than what we delivered in the first quarter of 2024. This reflects an improvement in our working capital and the evolution that we had in the accounts receivable, which has benefited from a better quality of students. We have more and more engaged students, and also an improvement in the negotiation and collecting strategies of the company. We had a great improvement between 2024 and 2025. And also in this quarter, we had a nonrecurring effect, which is the effect of the decisions of the new academic model of UNIASSELVI. The CapEx of the first quarter totaled BRL 18.7 million. It's below last year, but basically is explained by an occasional dislocation of the investments carried out by the company. We don't want to say that this is going to be perpetuated further ahead. It's much more a dislocation between quarters. We're being more diligent in the allocation of capital of the company right now. But our expectation is that the investments will return to the historical level in the next quarters. As William said, we have a great infrastructure of our hubs, and we want to be something different in semi-residential classes. Moving on to Slide 14. We bring here a fundamental indicator, which is the company leverage index. It continues to be very important to note that it is descending. We ended the first quarter with a net debt of BRL 2.2 million. And we closed the period in 2.4x, a reduction of half a turn, 0.5x when compared to the first quarter of 2024. So in a year, we reduced a lot. In December 2024, we have a 3x reduction. We have a descending trajectory driven by better generation of cash, and the reduction of the company's debt, and as a result in growing EBITDA. Currently, it is important to mention that 96% of our gross debt is in long-term, which reflects this consistent work of liability management that we made in the last few quarters. And the strong cash generation, as I said, has contributed, so we can continue in this trajectory of reducing the leverage. This is certainly one of our main strategic goals for 2025. One of our commitments is to preserve this descending trajectory of the debt so that timely, we will have the place and room for new avenues for value generation organically or inorganically and always root for a macro scenario that will bring us the conditions for this trajectory. Brazil has a very high interest rate, but Vitru certainly, when we see the first market sign of a decrease in interest rates, we are going to be the most benefited. The calendar of amortization of the debt is at the bottom of the slide, showing the profile that we have today, practically without any kind of commitments in the short term. To close, I would like to highlight another important milestone that we had throughout this quarter and the beginning of the second quarter, actually, but I think it's something new, and I should let you know, Fit scored AA to the company, highlighting one of the points that was brought by the rating, our financial solidity and our leadership position, our competition differential when we think about the hybrid and online education. I now close the financial results of Vitru, and I pass the floor back to William.

Thank you, Gabriel. And finally, on Slide 15, I have to mention the important evolution of Vitru in the ENADE 2023, which was disclosed in April. The trajectory of our brands and Vitru among the listed companies. Today, we are the group with the biggest evolution in this indicator. With a score of 3, the concept is considered satisfactory by the Ministry of Education. In this sense, Vitru is the company with the biggest evolution in this indicator, being the only one listed with 70% of the courses with scores from 3 to 5. And if we deepen this outlook at the 4 and 5 scores, the proportion of courses by Vitru is 22%. So, 10 percentage points above the second player listed. This is, of course, a reflection of the performance of our brand. And UniCesumar is the brand with the best average ENADE score among all of the brands that belong to the companies listed. In the same sense, we also make it clear here that UNIASSELVI has expressed an increase and improvement in their concepts. The academic model of UNIASSELVI was revisited, and our expectation is of a more expressive improvement in the future measurements of this factor. These results consolidate, reinforce our commitment to academic quality and the excellence in higher education. With that, we finish our presentation, and we move on to the Q&A session.

[Operator Instructions] Let's go to our first question. It's by Lucas Nagano from Morgan Stanley.

We have 2 questions. The first is, could you give us more details on the review of the academic model and what you're thinking about for the changes in the tutoring model? Gabriel talked about the possibility of improving the gross margin. But how does it relate to the number of teachers and the number of students? The other question is, how much room do you still have to continue expanding your hub network? Can you still expand further than these 2,600?

Lucas, thank you very much for your question. I will start answering questions about the academic model. I think you who know Vitru deeply know that we always try to anticipate these needs to continue improving in every type of delivery that we have throughout time in our 2 brands. We have seen predicted changes like the regulatory framework that accelerated this understanding of needing to improve and aligning the delivery that we always do to our students. UNIASELVI, as I said, when I mentioned ENADE scores, we have been improving our results, but certainly, we understood that we needed to have a different hiring model for our professors. We had a very acknowledged model, and it continues with the tutors, but we see at the same time that the Ministry of Education often does not consider the tutor an important pedagogical agent in the process. So, trying to be a little bit more aligned with the needs of the census and improving all our indicators, we made this change. And today, I can say that we have a hiring model with our professors that makes them more connected to our institution. We had a huge number of tutors who had a like connection to our company. And we started hiring a lot of professors today with higher connections with our institution of 24 to 40 hours, which also gives us margin because you have a smaller management and administration cost that will bring us a safe condition in our financial results throughout this year.

Good morning, Lucas, just to complement, I think William explained it very well, but I would like to add an important point. Within the year, considering the natural cost that we brought here with our decisions, we tend to see a marginal gain, thinking about altering the structure and the savings that we will have when we consider the next quarters. For 2026, this is recurring in our gross margin, structural gross margin. And then we believe that UNIASSELVI is going to have an opportunity. I think it's important to make it clear for all of you. We don't open the EBITDA margin or gross margin by brand. But when we look here administratively, we see a gap between the 2 brands. And this gap tends to be closed with time as we approach the models of academic organizations. So this is something that we have studied for a while. The regulatory changes were only a background for this acceleration, and we had a very deep work, very well executed by the academic team, and we're very happy with the results. Including from the standpoint of risk, we don't see right now any risk of academic loss, much on the contrary. We have seen an increase in this relationship between professors and students, and we are aligning with the future perspectives according to the regulatory framework that will be launched. On the expansion of our hub network, Lucas, obviously, when we look at Brazil, and we see 5,500 municipalities, we think that we would like to take our brand to all of the people who would like to have access to quality education. But there are a lot of small municipalities. Over 3,000 municipalities have less than 20,000 people, fewer people, fewer inhabitants. Vitru is present in over 95% of the municipalities that have above 30,000 people. So the entrance in these small municipalities will not happen as fast. And we are looking at a restructuring or reorganization of our hubs, our improvement of our organizational models, the model that is now going to strengthen the semi-residential classes. We have been investing in laboratories, and we are acknowledged because we have the best hubs, and our focus is not on the accelerated opening of hubs. Just to close, Lucas, talking about your last question, the focus here is much more on quality than on quantity. We have to rationalize this portfolio somehow. We have to have well-structured hubs, well-positioned hubs, understanding that the infrastructure is going to be the big thing in the new regulatory framework, and we think this is the education that Brazil needs to have. We see a competitive advantage for Vitru in this sense. We have about 1,200 hubs with well-established laboratories and classrooms, and we continue in this agenda, knowing that if there is an improvement to be made in that hub, we will do it. So the focus is much more on the excellence program on the greater qualification of our network so that this can move on positively. Reminding you that we still have an opportunity in the maturing of these hubs that we have understood that the focus is more on the acceleration in the openings, but more on the qualification of this network further ahead.

Let's move on to our next question by Lucca Marquezini from Itau.

You commented during the presentation that you have seen a much more competitive market, and that would reduce the growth of the average ticket. Could you give us a little bit more detail in the sense of whether it is a more competitive model in a few specific aspects, or with specific courses? And the second question is related to this first one. Thinking about a more competitive market, looking further ahead, how is the company's commercial strategy? Do you intend to increase marketing costs to accelerate this growth in such a competitive market?

Well, I'm going to start here, and then Gabriel can add. I'm certain that the macroeconomic scenario, the difficulties nowadays of this future student, the student who wants to enroll in higher education, will be a little bit more difficult in the year of 2025. So we're very careful on this trade-off between volume and ticket. This is a great challenge that all institutions have. But when we look at this first quarter, we did not have any specific location or a great region. There is a slightly bigger macroeconomic challenge of competition. I think you already had access to the competitors in the last few reports, where there was growth in smaller volumes than expected. But Vitru, having a market intelligence and a very specific work in each one of the courses and hubs, we try to balance that, not losing an important relevant volume for us, even though we have the bigger student database, but trying to understand what is the limit that we could work on in our ticket. And I'm going to take this chance to answer both questions. Of course, there's no intention in increasing our costs and expenditures and marketing because we can balance not a growth like we had in the last few years, but much more focused on the student, which is much more connected to their interest in remaining and studying with us.

Let's go now to our next question. It's by Mirela Oliveira of Bank of America.

Still on restructuring, Gabriel mentioned in the previous question that you don't see a risk of academic loss with the change of the model. We know that the tutor has always had an important role in the development of the students. So, can you talk about this point specifically, how you have mitigated the engagement of the student without the tutor? And along the same lines on regulation, could you talk to us a little bit about what the expectations of change are, and also the timing of the disclosure, especially after the fourth postponement in the launch of the publication?

Mirela, thank you very much for your question. Mirela, first, we have an invitation for you to learn about our pedagogical model of UNIASSELVI in this new structure. But it's important to say, Mirela, that at no point, we lose the role of the tutor. What we changed is the way that the tutor works, much more present with the students and also with a bigger time of availability, and with a nomenclature that is much more connected to what we believe will come in the next regulatory framework. For a while, the Ministry of Education has been explicit in saying that the tutor would not have a role as a pedagogical agent. And we who have such a long experience with this professional know that they are an important professional. So we did a few adjustments, and we had this cost, which was the need to change. And also, we had a very strong hiring effort within a new model within a new nomenclature so that much on the contrary, we could understand that this facilitator teacher, which is one of the nomenclatures that we're using now is going to be much more present during the tutoring of the class, but also in the pre and post class, which is where we saw that students would demand the tutor a lot. And that was our concern, and we also have another brand, UniCesumar, that also showed better market indicators. And we are trying to find the best strategies that are used in the 2 brands. On regulation, we have an expectation here. We have been waiting, but I think it's much clearer now. It is a short-term wait now. We had an event in Brazil and the perspective. And our understanding is that this new instrument will be launched. This new framework will be launched in the next 15 days. As we all know, there's a big change, which is the creation of semi-residential classes. As Gabriel said in one of his speeches, this is very positive for Vitru because we have been the biggest player of digital education, and we've always invested a lot in hybrid courses, in hubs with infrastructure, with laboratories. Certainly, with this new regulatory framework, Vitru is going to be established as the biggest player of semi-residential education in Brazil, with over 1,200 hubs with hubs in the area of engineering, with hubs with courses in the area of health. And I'm sure that after this regulatory framework in the next quarter, we're going to bring you some of these figures. I think it is going to be important for the whole market to get to know them and acknowledge that Vitru is the best and most prepared institution to assist this new regulatory framework and this new modality that is being created in Brazil, especially in over 1,000 municipalities where we are present.

Now let's move on to our next question. It's by Marcio Osako from Bradesco BBI.

Just a question from my part, still on this topic of the adjustment of the academic staff. I would like a few other clarifications about what has been done. This was carried out in the UNIASSELVI brand. So you have fired, dismissed tutors, and hired professors. So was that a change? Was there a reduction in the number of on-site classes that were offered? And what is the reduction in the cost? What is the reduction considering that the cost of the professor is cheaper than the cost of the tutor? That is why you have the savings. That's my question.

Marcio, I would also like to invite you to meet with us so that we can show you our new model. It's important to make clear in this reorganization that there was no reduction in delivery for our students in terms of studying hours. The model that UNIASSELVI has, which is different than UniCesumar, which is a model of monthly entries and monthly disciplines, meeting a week, all remained as it is. But what changes, Marcio, the big change that we see further ahead, as Gabriel said, that makes us safe, which is not the main focus, but the main focus was the improvement of the quality indicators of the UNIASSELVI brand is that we had a big number of tutors spread out throughout the country. Many of our academic models also post-pandemic became a flex model where we had tutoring, which was online assistance. We did change towards a larger number of professors. We hired professors with a workload where they have a bigger connection and presence in the institution. We love the figure that was above 3,000, and we continue with 1,500 professors with more hours. There's a change because many times, this tutor was hired regionally, and they have different costs according to different unions. So there are other gains that we achieved, with management costs behind all of this. For example, training is very important. We continue with a big part of these professors hired. That was not a full change. Today, UNIASSELVI continues with over 3,000 professors and its staff to take care of this academic model, which is a great singularity. Now with the semi-presential model, the tutoring, the mediator professors, they are going to gain a lot of value, especially in the courses that will have face-to-face classes. This is the know-how that UNIASSELVI and UniCesumar have gathered throughout time. Today, the biggest collaborator base of our institutions is focused on our professors.

Our next question is from Samuel Alves from BTG Pactual.

I have 2 questions. The first one is an update regarding the optimization of the tax revenue. I would like you to please give us an update about the collapse of the structures, the 2 companies that are below the holding, so we can take advantage of all the benefits of Prouni. And you mentioned during your presentation that the expectation of CapEx will return to the previous levels. Could you just comment on the investment plan for the budget this year? So if you can open up the figures, that would be great.

The first question is about the income tax. The main instrument we need to pay attention to is that the focus is not only on income tax. We have today a structure that is organizationally not the most efficient. We carry 100% of our debt in a structure that basically is cash with very, very small revenue, and the subsidiaries are the biggest volume of our operations and our tax profit. So we are now in a reorganization of our company. This process is very advanced. Our expectation is to conclude throughout the third quarter so that from the incorporation movement, which is theoretically what should happen from the partnership and company data point, we're going to incorporate some of the IEs in the holding, and then we're going to be able to enjoy the tax shield and the Prouni advantages. There are many elements that make Vitru significantly reduce the payment. You can see in our cash in the first quarter that we still pay substantially higher income tax than any other institution. This has to do with our structure. Reminding you that this Prouni volume is not 100%. This payment is going to be reduced as a result of this company's reorganization. We are going to navigate in the CapEx around BRL 140 million, BRL 150 million. That was a percentage of the revenue that will be in the same order of the same level, the same figure. We had an expectation of investments that was a little bit higher due to internal projects. As we see a scenario with higher income rates and more intensive competition, we have looked at our internal operations with this commitment to reducing our CapEx. That's an important line for us to remain around BRL 140 million to BRL 150 million. We have been very diligent in the approval of these projects, and we will continue pursuing this target.

The Q&A session is wrapped up, and now we would like to pass the floor to the final considerations of the company.

Once again, thank you very much for your participation. We continue in your availability, and we reiterate our commitment to continue doing what we believe in: delivering quality education, a sustainable company, and making a difference in Brazil. Thank you very much, and have a good day.

The video conference on the results of Q1 2025 of Vitru Brasil has wrapped up. The Department of Relations with investors is at your availability to answer any questions or concerns. Thank you very much to the participants, and have a great day.