Afya delivered a strong first half of 2025, with H1 revenue up 15% to BRL 1.856 billion and adjusted EBITDA up 20% to BRL 893 million at a 48.1% margin - its highest first-half margin since the 2019 IPO - driven by gross margin expansion in undergrad and continuing education, Unidom integration, MICE campus maturation, and shared-service SG&A efficiency. Undergraduate momentum was solid: nearly 26,000 medical students (+14%), 3,653 approved seats including the FUNIC acquisition, and undergrad revenue up 16% to BRL 1.642 billion, though the net medical ticket grew only ~3.3% (below inflation) due to higher FIES discounts. Weak spots included a 29% drop in residency-journey students, a 9% decline in medical-practice monthly active users, and softer B2C revenue. Cash generation was robust (operating cash flow BRL 783 million, +15%) and net debt fell to BRL 1.621 billion (0.97x EBITDA), supporting a new buyback of up to 4 million Class A shares through 2026. Management reaffirmed full-year 2025 guidance while flagging OECD Pillar Two taxation - which it is contesting on judicial and legislative fronts over Prouni impacts - as a key watch item, with the effective tax rate expected to converge toward 15% over time.
Related to future events, future financial or operating performance, known and unknown risks, uncertainties, and other factors that may cause Afya's actual results to differ materially from those contemplated by these forward-looking statements. Forward-looking statements in this presentation include, but are not limited to, statements related to the business and financial performance, expectations and guidance for future periods, or expectations regarding the company's strategic product initiatives and its related benefits. These risks include those more fully described in our filings with the Securities and Exchange Commission. The forward-looking statements in this presentation are based on the information available to us at the date hereof. We should not rely on them as a prediction of future events, and we disclaim any obligation to update any forward-looking statements except as required by law. In addition, management may reference non-IFRS financial measures on this call.
These measures are not intended to be considered in isolation or a substitute for the results prepared in accordance with IFRS. This presentation has reconciled these non-IFRS financial measures to the most directly comparable IFRS financial measures. Now, let me turn the call over to Virgilio Gibbon, Afya's CEO.
Thank you, João, and welcome to our Second Quarter and First Half Conference Call for 2025 Results. Starting with slide number three, we are pleased to report that Afya continues to deliver strong operational and financial results. This quarter's performance highlights a high predictability of our business model and the successful execution of our strategy, which consistently combines robust growth, increased profitability, and solid cash generation, Afya's three strategic pillars for long-term value creation. This quarter, once again, was marked by significant revenue growth and gross margin expansion in both our undergrad and continuing education segments, reflecting the steady expansion of our business and our ongoing commitment to operational excellence. We are also pleased to reaffirm that Afya remains on track to meet our full-year 2025 guidance, supported by disciplined execution and strong business fundamentals.
Once again, we delivered strong performance closing the first half of 2025 with a notable growth of 15% in revenues, reaching BRL 1.856 billion. Adjusted EBITDA reached BRL 893 million, expanding 20% year-over-year with an impressive margin of 48.1%, an increase of 228 bps over last year. This margin expansion was primarily driven by the solid results of our undergrad and continuing education segments, supported by cost initiatives and our shared service center, helping to boost efficiency and unlock operational synergy across selling, general, and administrative expenses. In addition, supported by the increase in adjusted EBITDA, our basic EPS climbed to BRL 4.69 recently, representing a 17% increase over the previous year. Even after accounting for the effects of the new tax legislation aligned with the OECD Pillar Two rules, we continue to deliver a higher value to our shareholders.
Moving to our operational updates, we have 3,653 approved seats with the closing of the FUNIC acquisition, which contributed an additional 60 seats to our portfolio. Furthermore, our number of undergrad medical students has reached almost 26,000 students, representing nearly 14% growth compared to the first half of 2024. In addition, the medical school net average ticket, excluding the Unidom acquisition, reached BRL 9,140, over a 3% increase year-over-year. In continuing education, revenue increased almost 8% over last year, reaching BRL 138 million, and in medical practice solutions, we saw over 9% growth in revenues compared to the first half of last year, reaching BRL 84 million. Lastly, our ecosystem reached 302,000 active users, reflecting strong engagement and deep penetration among physicians and medical students across Brazil. Moving to slide number four, where we will discuss the highlights across our three business segments.
Starting with the undergraduate segment, medicine costs continue to show strong performance with a student-based increase of 14%. This growth, in addition to the integration of Unidom and the ramp-up of four MICE medical campuses launched in the third quarter of 2022, contributed to a gross margin expansion for the segment. Additionally, as already mentioned, we completed the acquisition of FUNIC, which added 60 new medical seats to our portfolio, with operations starting the second semester of 2025, further strengthening our academic capacity and presence. The continuing education segment was marked by an increase in graduate journey students, in addition to a gross margin expansion driven by our ongoing operational restructuring, which continues to contribute to improving costs. In the medical practice solutions segment, growth was driven by clinical management payers, an increase of 10% year-over-year.
B2P, business-to-physician revenues, for the first semester also saw a growth of almost 12% compared to the same period of the prior year. On the next slide, I would like to share Afya's new share repurchase program approved by the Board of Directors, with plans to repurchase up to 4 million Class A shares by December 31st, 2026, through open market transactions or privately negotiated deals. This initiative reflects our strong commitment of creating shareholder value and ensuring sustainable business performance. It also reaffirms the strength and the robustness of our balance sheet, while reflecting our disciplined and forward-looking capital allocation strategy aligned with the current economic and political landscape. I will turn the call over to Luis Blanco, Afya's CFO, to provide further insight into the financial and operational metrics. Thank you.
Thank you, Virgilio, and good evening, everyone.
Starting with slide number seven for discussions of key operational metrics by business units, starting with the undergraduate programs. The number of medical students grew almost 14% year-over-year, reaching nearly 26,000 students, while the number of approved medical seats increased 14%, totaling 3,653 seats, considering the FUNIC acquisition. Our medical school net average tickets, excluding the Unidom acquisitions, rose by over 3%, reaching BRL 9,140 at the end of the first semester. As a result, revenue for the undergraduate segment grew over 16%, totaling BRL 1.642 billion. It's worth mentioning that 86% of this revenue comes from the medical medicine programs and 94% from health-related courses, reinforcing our strategic focus and leadership in the sector. On the next page, I will present our continuing education metrics. We approach continuing education through three main journeys.
Starting with the graduate journey, the most relevant within continuing education, it presented a 12% growth, reaching 9,055 students, and other courses and B2B offerings also saw a solid growth of 19% compared to the same period of last year. The residency journey, which includes products focused on the medical residency preparation, ended the quarter with 9,224 students, a 29% decrease year-over-year. Revenue for continuing education rose to BRL 138 million, up from BRL 128 million in the first semester of 2024, representing an 8% growth. This includes a 5% increase in B2B revenue and an impressive 42% increase in B2B. Continuing on the next slide, I'll discuss the medical practice solutions operational metrics. The first graph shows our total active payers, which generate revenues in business to physicians. This semester, we maintained a solid 196,000 paying users, in line with the same period of the prior year.
The second chart highlights our monthly active users, which account for 230,000, a reduction of 9% in comparison to the same period of the prior year. Finally, the third chart presents the revenue for the segment, which grew over 9% year-over-year, reaching BRL 84 million. Of these, BRL 75 million come from B2B, up 12%, and BRL 9 million from B2B, 8% down compared to the same period of the prior year. On the next slide, we present Afya ecosystem. We are proud of the meaningful impacts Afya continues to make across Brazil's healthcare ecosystem. By the end of the second quarter of 2025, 302,000 users were actively engaging with our service and products, reflecting our solid relevance and reach in medical education and medical solutions. Moving forward to page 11, I want to discuss our financial overview for the second quarter and the first half of 2025.
Starting with the next slide, with great satisfaction, I present another strong quarterly performance for Afya. Revenue for the second quarter of 2025 reached BRL 919 million, reflecting a 14% increase over the same quarter of the prior year. For the six-month period, revenue was BRL 1.856 billion, an increase of 15% over the same period of last year. This growth is mainly driven by a 3.2% increase in the net average ticket for medical courses, maturations of medical seats, and acquisitions of Unidom. In the second quarter of 2025, adjusted EBITDA increased 17% to BRL 401 million, with an adjusted EBITDA margin of 43.6%, marking an increase of 110 basis points compared to the second quarter of 2024.
For the six-month period, adjusted EBITDA was BRL 893 million, an increase of over 20% in comparison to the same period of the prior year, with adjusted EBITDA margins of 48.1%, an increase of 220 basis points in the same period. The adjusted EBITDA margin expansion is mainly due to a gross margin expansion within undergraduate and continuing education segments, completion of Unidom integration, the ramp-up of the four MICE medical campus that started operations in the third quarter of 2022, operational restructuring efforts in our continuing education and medical practice solutions segments, and more efficiency in selling, general, and administrative expenses. On the next page, cash flow from operating activities grew 15%, totaling BRL 783 million, driven by our robust operational performance. The operational cash conversion ratio was 88.8% in the second half of 2025.
Net income for the second quarter of 2025 amounted to BRL 177 million, a 9% increase from the same period of 2024. For the six-month period that ended in June 2025, we saw an increase in net income reaching BRL 434 million, representing an increase of 17% year-over-year. Our net income in this quarter reflects not only our strong operational performance but also the impact of the new tax legislation implementing the OECD Pillar Two rules. Our basic EPS reached BRL 1.90 for the quarter, an 8% increase compared to the previous year, and BRL 4.69 per share in the first six months period, a growth of 17%. Now, moving to my two last slides to discuss our cash and net debt positions, I also give you more color on our cost of debt.
These slides present a table detailing our gross debt composition and total cost of debt, covering our primary obligations, the SoftBank transactions, the debentures, other financial liabilities, the IFC financing, and accounts payables to selling shareholders. Afya's capital structure remains solid, with a conservative leverage position and a low cost of debt. Afya's net debt, excluding IFRS 16, divided by the midpoint of the 2025 adjusted EBITDA, was only 0.97 times. On the next page, we can look closely at our net debt variation. As of the second quarter of 2025, our net debt has reduced to BRL 1.621 billion when compared to the end of 2024, a reduction of BRL 194 million, even considering the payment of dividends and acquisitions of FUNIC, reflecting our strong operational performance and capital allocation discipline. This concludes our prepared remarks. We are proud of our strong performance we've delivered this quarter.
Our focus on improving the medical journey through an integrated educational system and medical practice solutions remains strong, helping students to become doctors, supporting ongoing medical learning, and making physicians more accurate and efficient. Looking ahead, we are excited about the opportunities in front of us and confident in our ability to keep creating value in the entire ecosystem. I will now open the conference for the Q&A session. Thank you.