The call in brief

Read the Q1 2026 earnings summary ↗

Afya opened 2026 with 8% revenue growth to BRL 1,013 million, 4% adjusted EBITDA growth to BRL 511 million (a 50.5% margin, down 200 bps), and net income up 2% to BRL 262 million (EPS BRL 2.88), with strong free cash flow of BRL 376 million and 92.5% cash conversion. Growth was led by higher medicine-course tickets (net average ticket up 5% to BRL 9,634), more non-medical health undergrad students, the FUNIC acquisition, and 11% Continuing Education revenue growth to BRL 79 million. Margin compressed on higher costs, payroll and sales/marketing tied to an investment cycle in Continuing Education and Medical Practice Solutions, and net income was partly offset by an OECD Pillar Two tax provision. Medical Practice Solutions remained a soft spot, with active payers down 1% to 201,000 and Whitebook still losing users, though management is investing in AI features and the integrated Afya One platform with payoff expected from 2027. The company reduced net debt by BRL 280 million to BRL 1,151 million, kept leverage at 0.7x, and had its Aaa rating reaffirmed by Moody's with a stable outlook.

What went well
  • Revenue grew 8% YoY to BRL 1,013 million (BRL 1.013 billion)
  • Adjusted EBITDA rose 4% YoY to BRL 511 million, a 50.5% margin
  • Free cash flow of BRL 376 million (up 3% YoY) with 92.5% cash conversion and BRL 1.3 billion cash position
  • Net income up 2% YoY to BRL 262 million; EPS BRL 2.88 (up 3% YoY)
  • Continuing Education revenue up 11% YoY to BRL 79 million (record B2C revenue BRL 74 million, record 57,000 student base); Moody's reaffirmed Aaa rating with stable outlook
What went wrong
  • Adjusted EBITDA margin fell 200 bps YoY to 50.5% on higher costs in Continuing Education and Medical Practice Solutions
  • Net income growth partially offset by a provision for the OECD Pillar Two global minimum tax
  • Medical Practice Solutions active payers declined 1% YoY to 201,000; monthly active users fell 10% YoY to 221,000
  • Whitebook continued to lose payers amid free public LLM competition
  • Continuing Education residency-journey students dropped 20% YoY to 9,744

Management Commentary

Read the Q1 2026 summary ↗
Virgilio Gibbon
CEO, Afya

Thank you, Ana. Welcome to our first conference call of 2026. It is with much satisfaction that Afya starts another year of great operational and financial performance. These quarterly results show the high predictability of our business and success execution of our strategy that once again combines growth with cash generation. Afya three pillars business model. In this presentation, I will cover key strategic topics, including our performance and highlights, successful business execution across our three segments. Finally, Luis Blanco will provide an in-depth look at our financial and operational performance. Now turning to page number three. Let's begin by highlighting our performance achievements. Initially, our revenues increased by 8%, reaching BRL 1.013 billion, accompanied by a growth in adjusted EBITDA of 4% year-over-year, reaching BRL 511 million with a margin of 50.5%.

We also reported a free cash flow of BRL 376 million, reflecting 3% increase compared to the previous year, boosted by the solid operational results of the company with a cash conversion of 92.5% and a solid cash position of BRL 1.3 billion at the end of the first quarter. With this consistent momentum, our net income reached BRL 262 million, marking a 2% growth year-over-year with an EPS of BRL 2.88, a 3% increase compared to the previous year. This growth reflects stronger operational performance, partially offset by an provision related to the OECD Pillar Two global minimum tax. Moving to our operational updates. We have now 3,768 operating medical school seats with an increase of over 6% year-over-year.

Our number of undergrad medical students has reached over 26,000 students, representing over 2% growth compared to the first quarter of 2025. We increased the net average ticket of medical school by almost 5% year-over-year, reaching BRL 9,634. We continue to observe improving performance in the Continuing Education and Medical Practice Solutions segments. In Continuing Education, revenue increased 11% year-over-year, purely organically, reaching BRL 79 million. In Medical Practice Solutions, we saw a 4% growth in revenue compared to the first quarter of 2025, reaching over BRL 43 million. Our ecosystem has 304,000 active users, exemplifies substantial penetration among physicians and medical students in the country. Moving to slide number four, we will discuss our performance across our three business segments.

Start with the undergrad segment. We observed important movements throughout the quarter, such as higher tickets in the medicine course with almost 5% increase year-over-year above 2025 inflation. This growth was accompanied by a stable gross margin across the segment of 69%. In addition, we expanded our health science student base by 5,000 students compared to the first quarter of 2025. The Continuing Education segment delivered record on B2B revenue of BRL 74 million in the first quarter of 2026, supported by a record student base of 57,000 students and reflecting the continued strength of our product offering and engagement across the segment.

The Medical Practice Solutions segment delivered solid performance in the first quarter of 2026, supported by an increase of 6,000 clinical management active payers compared with the first quarter of 2025. B2B revenue grew by 17%, reflecting the continued progress of our product offering and commercial initiatives across the segment. I will now turn the call over to Luis Blanco, Afya's CFO, to provide further insight into the financial operational metrics. Thank you.

Luis Andre Blanco
CFO, Afya

Thank you, Virgilio, and good evening, everyone. Starting with slide number six for discussions of key operational metrics by business unit. Starting with the Undergraduate Programs.

Our medical student base grew by 2% compared with the first quarter of 2025, reaching 26,000 students. While operating medical school seats increased by over 6% year-over-year to 3,768. Our medical school net average ticket increased by 5%, reaching BRL 9,634 in the first quarter of 2026. Revenue for the Undergraduate segment saw an 8% increase, achieving BRL 892 million. 86% of which is related to medicine and 94% from health related courses. On the next page, I'll present our Continuing Education metrics. We approach Continuing Education through three main journeys. Starting with the residency journey, which encompass products focused on the residency preparation.

We saw a 20% decrease, reaching 9,744 students by the end of the period. In the graduate journey, focused on specialization tests and preparations and graduate courses in medicine, the students grew by 15%, reaching 9,855 students. Lastly, our other course B2B offerings increased an impressive 41% over the same three-month period of the prior year. Continuing Education revenue grows to BRL 79 million in the three-month period of 2026, up from BRL 71 million in the three-month period of 2025, reflecting a growth of 11%. This includes a 13% increase in B2B revenue and 14% decline in B2B. Moving to slide number eight, I'll discuss the Medical Practice Solutions operational metrics.

The first graph shows our total active payers, which are the ones that generate revenues in the business division. The number of active payers declined to 201,000, a 1% decline over the same quarter last year. The second graph highlights our monthly active users, which account for 221,000, a reduction of 10% compared to the same period of the prior year. Lastly, in our final graph represents revenue of our Medical Practice Solutions segments, which has expanded by over 4% compared to the same quarter of the last year, reaching BRL 43 million. Of this total, BRL 38 million was generated by B2B, showing an increase of 3%. While B2B contributed to BRL 5 million, 17% increase over the same quarter last year. In the next slide, we presented our Afya ecosystem.

We're pleased to highlight Afya's substantial contributions to the Brazilian healthcare community. By the end of the first quarter of 2026, our ecosystem encompassed 304,000 physicians and medical students using our service and products. Moving forward to page 10, I want to discuss our financial overview for the first quarter of 2026, starting with the next slide. With great satisfaction, I present another strong quarterly performance for Afya. Revenue for the first quarter of 2026 reached BRL 1,013 million, representing an 8% increase compared to the same quarter of last year. The quarter revenue increase has mainly due to higher tickets in med-medicine courses, the increase in non-medical undergraduate students, the acquisitions of FUNIC and advancements of the Continuing Education segment.

In the first quarter of 2026, adjusted EBITDA rose by 4%, reaching BRL 511 million with an adjusted EBITDA margin of 50.5%, a reduction of 200 basis points compared to the first quarter of 2025. The reduction in adjusted EBITDA margin was primarily driven by higher costs and expenses in Continuing Education and Medical Practice Solutions segments, mainly reflecting a lower gross margin compared with the first quarter of 2025 and higher payroll, sales, and marketing expenses associated with the ongoing investment cycle in both segments. Moving to the next slide. The first quarter cash flow from operating activities rose by 0.6%, reaching BRL 473 million. The operating cash flow conversion ratio was 92.5%.

Net income for the first quarter of 2026 totaled BRL 262 million, representing a 2% increase from the same period of 2025. This growth reflects a stronger operation performance, partially offset by an additional taxations provisions related to OECD Pillar Two global minimum taxation. Despite a lower adjusted EBITDA margin driven by higher expenses in Continuing Education and Medical Practice Solutions. Net income growth was sustained, supported by the disciplined execution and the consistency of our business model. Regarding EPS, we achieved BRL 2.88 per share in the three-month period, representing a 3% increase year-over-year. Now moving to my two last slides, I will discuss our cash and net debt position, also giving more color on our cost of debt.

This slide presents a table detailing our gross debt compositions at the end of the 1st quarter of 2026, and the total cost of debt covering our primary obligations. Afya capital structure remains solid, with a conservative leverage positions and the low cost of debt. Afya net debt, excluding IFRS 16 divided by the midpoint of the 2026 adjusted EBITDA guidance was 0.7x. Our financial discipline was also independently recognized. On May 6, Moody's reaffirmed Afya credit rating at Aaa with a stable outlook, reflecting our consistent revenue growth, above industry average margins, solid cash generation and robust liquidity. While also recognizing our strong competitive position and disciplined approach to liability management and capital allocation. On the next page, we can look closely at the net debt variation.

As of the end of the first quarter of 2026, our net debt has reduced to BRL 1,151 million when compared to the end of 2025. A reduction of BRL 280 million. Even considering the repurchase of BRL 70 million in treasury, in the first quarter, reflecting our strong operational performance and capital allocation discipline. This concludes our prepared remarks. We are pleased with the progress achieved during the quarter and with the consistency of our executions across the business segments. Our commitment to advancing student medical journey through an integrated ecosystem of educational and medical grade solutions remains unchanged. Supporting students through their path to became physicians, promoting continual medical learning and enhancing physician decision-making and productivity. Looking ahead, we remain focused on executing our strategy with discipline and capturing the opportunities ahead.

I will now open the conference for the Q&A session. Thank you.

Analyst Q&A

Renata Couto — Director of Investor Relations, Afya
If you would like to ask a question, we want you to confirm if your name in your Zoom account is correct. If not, please exit the call and enter again with the link that I sent on the chat. The first question comes from Lucca Generali Marquezini from Itaú. Lucca, you may now go.
Lucca Marquezini — Analyst, Itaú BBA
Good evening, everyone. Thank you for taking our questions. Two questions from our side. The first one will be, the release mentions that the intake cycle was successful and that the company implemented a 4.6 price increase. Can you please comment on the competitive environment for this intake cycle and on whether it got any worse when compared to the other intake cycles in previous years? That is the first question. The second one, the release also mentions that one of the drivers for net revenue growth was the performance of non-medical undergraduate students. Can you please comment on the strategy on this, on this side and on whether this has changed compared to the last year's as well, please? Thank you.
Virgilio Gibbon — CEO, Afya
Hi, Lucca. This is Virgilio. The first half intake was a very strong intake when we compare to last year. We saw the same level of candidates proceed. On our side here, we are seeing that the recognition of our brand and also the internal process that now we are having an intake and enrollment process fully centralized, that we are calling the National Intake Process. That is also helping us to keep us at 100% occupancy. It was a very healthy intake cycle. Besides that, we already started our second half intake. It's very beginning and the number of leads, it's also better than the same period last year.
In terms of the share of our undergrads revenues, we are seeing a very good trend on other health programs because of Afya's brand is very well connected to the health sector. The last two years, we're also opening some health programs, completing the portfolio for all of our campuses. We are seeing a very strong intake when we compare year-over-year and almost a 20% growth, organically growth coming from other undergrad programs on the health sector. This is a strategy for Afya. We are not only offering medicine on our program, but also increasing the health undergrad programs as a portfolio and strategic portfolio for our ecosystem here. Why is that?
A campus in a small city, just the physician, just the undergrad, just the program, for medicine does not solve the issue on the region. Being, also offering other health problem attached to us as brand connected to our medicine infrastructure, on that campus makes a lot of sense. It's a very low, additional CapEx, strong brand recognition and very strong intake, that we are seeing and good momentum. Okay?
Lucca Marquezini — Analyst, Itaú BBA
Thank you. Thank you.
Renata Couto — Director of Investor Relations, Afya
Of course. The second question comes from Eduardo Resende from UBS.
Eduardo Resende — Analyst, UBS
Good evening, everyone. Thanks for taking my question. Two on my side as well. First, could you provide an update on the Enamed talks? If you could provide an update on the impacts that are expected and the initiatives you are executing to foster student performance in the upcoming exam would be very helpful. The second question is regarding the M&A environment in medical schools. If you could please provide some color on the market environment for new deals in medical school. I mean, what in your view has been the main constraints for new deals? Is it still on valuation or maybe some asymmetries involving Enamed as well? Anything you can share with us in this front would be very helpful. Thank you.
Virgilio Gibbon — CEO, Afya
Hi, Eduardo. I'll take the Enamed here question, and Blanco will help on the M&A side. Regarding our action plan toward Enamed, we are doing a very strong initiative here. First of all, it's how to increase engagement of all students that will be applying for Enamed now in September, in the second half this year. We are also conducting almost 30 mock up tests of all students that will be applying for Enamed and doing action plan for every two weeks. We have measuring the results based on the new model because the Enamed is completely a new model when you compare for the previous one based on the old Enade. Having said that, we are seeing that our student is much more engaged, fully committed to have a much better result.
Also we are drafting our curriculum also to fulfill the type of question, the type of evaluation that is being considering in the Enamed. Our expectation that will be a much better result for our students now in September. Regards the M&A, I'll pass here to Blanco.
Renata Couto — Director of Investor Relations, Afya
Just to add a point on the Enamed question, if I may. A reminder that all the results, the testing results on the second semester is already considered in the guidance that we provided in the beginning of the year, and it's minimal, it's not material. Blanco.
Luis Andre Blanco — CFO, Afya
Hi, Eduardo. It's Blanco speaking. Regarding the M&A environment, first it's very important to highlight that we keep our capital allocational discipline, just focused on M&A that are concentrated in medicine and that generates a good return on capital. Just as a reminder, we have as a target institutions that has more than 60% of the revenue coming for the medicine programs. We look for targets for deals that generates an IRR above 20% on leverage, nominal, kind of internal rate of returns. Having said that, we still keeping our 200 seats per year growth. We look deals that have this profile that I just mentioned.
Sometimes we don't get the right profile. Sometimes we didn't reach a price that make the return on the capital that we seek. We do not pursue a deal just for the growth itself. We pursue deals that have the exact profile and the exact type of return. We keep a very discipline on this.
Renata Couto — Director of Investor Relations, Afya
Eduardo, is it clear?
Eduardo Resende — Analyst, UBS
Thank you.
Renata Couto — Director of Investor Relations, Afya
I think that you're on mute. Moving to the next question. Mirela from Bank of America Merrill Lynch.
Speaker — Analyst, Bank of America Merrill Lynch
Good evening, Blanco, Virgilio, Renata, the IR team. I have a question on Medical Practice Solutions, in the investments on this front. You mentioned in the previous quarter that you plan to invest more heavily on this line. We see that this quarter's number of total payers continue to decline, especially on the Whitebook front. I understand here that there's a timing component to see the results of this investment, so I was just wondering if you guys could give us more color on the expected timing to see some recovery on these lines. Also if you could provide more color on the initiatives that you see as a solution, especially on the Whitebook front.
Renata Couto — Director of Investor Relations, Afya
Hi, Mirela. Your voice buzzed a bit. Can you please repeat your question?
Speaker — Analyst, Bank of America Merrill Lynch
Hi, can you hear me well now?
Renata Couto — Director of Investor Relations, Afya
Now we can.
Speaker — Analyst, Bank of America Merrill Lynch
Okay. My question is on the Medical Practice Solutions and the investments on this line of business. You mentioned in the previous quarter that you plan to invest more heavily on the Medical Practice Solutions. We see that in this quarter, the number of payers continue to decline. I understand that there is a timing component to see some recovery there, especially on the Whitebook. I just wanted more color on the timing that you expect to see recovery on these lines, especially on the Whitebook. Also if you could give us more color on the initiatives that are being done on the Whitebook to face the competition from AI and, you know, the more competitive market on the segment.
Virgilio Gibbon — CEO, Afya
Hi, Mirela. Now was very clear, your question. Regarding the investments, we are already investing more on the MPS here for our products. Not only individually product by product, but also integrating them and creating like a network effect, having our physician not only more engaged, but also generating more insights and information inside within our platform. We still seeing a reduction on payers on Whitebook. On the other hand, we are growing and growing faster on iClinic. That is more engaged physician to our base and also generating much more data on a daily routine on our basis. We are also tracking the physicians that are leaving our base.
They are more young physicians that are not using the platform on a daily routine. We are seeing much more using on their daily routine for more mature and senior physicians that are adopting iClinic, also leveraging the number of prescription that is being made into our platform. We just reached more than 2 million prescription level per month in Afya. That's also very important, most of them coming through iClinic. That's why it's so important to leverage the number of clinics and physicians adopting iClinic. In terms of investment, what we are doing, first of all, AI, it's one of the issues and also an opportunity here. We are launching a lot of features, new features, AI based, the solution is becoming AI first in terms of Whitebook.
Considering the social network effect, because we are embedding prescription within Whitebook. We are also integrating Whitebook with our updates and continuum medical education solutions, and also within iClinic. All of this in a very middle term is to have what we are calling here Afya One platform, where a physician doesn't make sense if they are signing for one solution and another. He is like a membership of the entire platform. This is what we are building here. In terms of cost and investments that we are doing this first semester, one is CapEx related to all of this innovation, integration, creating this beautiful platform.
Second is improving our sales team, most for B2B, that we are now already seeing an important growth year-over-year. That's what we believe that's the greatest opportunity in the mid and long term for the MPS segment.
Luis Andre Blanco — CFO, Afya
And Mirela, Blanco speaking, just adding two more things in what Virgilio just mentioned. Regarding the investment itself, if you notice, our CapEx is most concentrated on this quarter in intangible assets rather than property and equipment. You can see this change of mix if you compare year-over-year. Another point regarding specific about Whitebook, what we are pursuing this year regarding all these investments is to increase the audience within Whitebook. Whitebook, when you compare with the public's LLMs, most of them are provided for free. We are focused this year on Whitebook, on what we call the audience side.
The impact on active payers, and then on the revenues, you won't see a big impact on Whitebook this year, but from 2027 ahead. This year, these investments were focused on audience, on Whitebook.
Speaker — Analyst, Bank of America Merrill Lynch
Perfect. That's super clear. Thank you.
Renata Couto — Director of Investor Relations, Afya
Thank you. Just a reminder, if you want to ask a question, please raise your hand and just confirm that your name's correct in the Zoom tool. We can see that we have two questions here. One, we can see the correct name, and the other one, it doesn't have the correct name. Please, if it's yours, just leave and click in the link that we sent on the chat. The next question comes from Victoria from JP Morgan. Victoria, you may now go.
Speaker — Analyst, JPMorgan
Good evening, Virgilio, Blanco, Renata. Thank you for taking my question. I have one on my side just on the sales and marketing expenses, in this quarter. We saw a year-over-year increase, and I just want to touch bases to see why we saw this increase. If you could please give more color on this line, going forward. Thank you.
Virgilio Gibbon — CEO, Afya
Victoria. Hi, Victoria. It's two main reasons here. First of all, we anticipate the volume of intakes for the first half because of the Enamed. We stand a little bit more on the undergrad and also on health programs. You saw the results. We also have a very strong intake as we also have a bigger offer portfolio in the first half when you compare to last year. Second also for the SPM, where we are improving our sales processes team here. We are also putting more market effort on SPM and also EduCon to strengthen our position on that.
This is, it's not a recurring base, but one time based on this first semester, most of them from the Undergrad and also for this launching of this new approach of many solutions that is being more integrated and how we are offering this new dynamic and products to our physician ecosystem. Okay. Victoria, it's very important that this program and is embedded on our guidance for the year. Okay.
Speaker — Analyst, JPMorgan
Perfect. Thank you so much.
Renata Couto — Director of Investor Relations, Afya
Since we don't have any more questions, we are going to end the call. If you still have a question and please contact the investor relations team, we will be happy to help you. Have a good evening.
Source: Afya Ltd earnings call transcript (2026-05-07). Management commentary and analyst Q&A are reproduced as delivered; speaker roles as stated on the call.

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