Galderma Buys Back Shares Worth CHF 233 Million in the Context of Accelerated Bookbuild Offering
ZUG, Switzerland, May 28, 2025--(BUSINESS WIRE)--Galderma (SIX: GALD), the pure-play dermatology category leader, today announced that it has agreed to repurchase 2.38 million shares at a price of CHF 97.75 per share for a total consideration of CHF 232.5 million in the context of the accelerated bookbuild offering ("ABO") of Galderma shares by Sunshine SwissCo GmbH ("EQT"), Abu Dhabi Investment Authority and Auba Investment Pte. Ltd. launched yesterday evening. The repurchase was made at the same price per share determined by the bookbuilding offering.
The repurchase, which is expected to settle on June 2, is being financed by Galderma's existing liquidity on hand and will not affect the company's ability to deliver on its strategic and financing priorities.
The shares will be held in treasury for future use in connection with Galderma's employee participation plans, business development opportunities and/or treasury management.
"The repurchase of shares announced today is a testament to the confidence of the Executive Committee and the Board of Directors in the performance fundamentals and the attractive shareholder value creation outlook of Galderma. The participation in the offering reflects our continued focus on disciplined capital allocation, commitment to attractive shareholder returns and our confidence in Galderma's strong cash generation and investment grade balance sheet."
FLEMMING ØRNSKOV, M.D., MPH
CHIEF EXECUTIVE OFFICER
GALDERMA
Following the closing of the ABO, the free float in Galderma's shares is expected to increase from 41.8% to 49.8%.
About GaldermaGalderma (SIX: GALD) is the pure-play dermatology category leader, present in approximately 90 countries. We deliver an innovative, science-based portfolio of premium flagship brands and services that span the full spectrum of the fast-growing dermatology market through Injectable Aesthetics, Dermatological Skincare and Therapeutic Dermatology. Since our foundation in 1981, we have dedicated our focus and passion to the human body's largest organ – the skin – meeting individual consumer and patient needs with superior outcomes in partnership with healthcare professionals. Because we understand that the skin we are in shapes our lives, we are advancing dermatology for every skin story. For more information: www.galderma.com.
Forward-looking statements
Certain statements in this announcement are forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "plans", "targets", "aims", " believes", "expects", "anticipates", "intends", "estimates", "will", "may", "continues", "should" and similar expressions. These forward-looking statements reflect, at the time, Galderma's beliefs, intentions and current targets/ aims concerning, among other things, Galderma's results of operations, financial condition, industry, liquidity, prospects, growth and strategies and are subject to change. The estimated financial information is based on management's current expectations and is subject to change. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial consequences of the plans and events described herein. Actual results may differ from those set forth in the forward-looking statements as a result of various factors (including, but not limited to, future global economic conditions, changed market conditions, intense competition in the markets in which Galderma operates, costs of compliance with applicable laws, regulations and standards, diverse political, legal, economic and other conditions affecting Galderma's markets, and other factors beyond the control of Galderma). Neither Galderma nor any of their respective shareholders (as applicable), directors, officers, employees, advisors, or any other person is under any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements, which speak of the date of this announcement. Statements contained in this announcement regarding past trends or events should not be taken as a representation that such trends or events will continue in the future. Some of the information presented herein is based on statements by third parties, and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, reasonableness, accuracy, completeness or correctness of this information or any other information or opinions contained herein, for any purpose whatsoever. Except as required by applicable law, Galderma has no intention or obligation to update, keep updated or revise this announcement or any parts thereof.
View source version on businesswire.com: https://www.businesswire.com/news/home/20250527014109/en/
Contacts
For further information:
Christian Marcoux, M.Sc.Chief Communications Officerchristian.marcoux@galderma.com +41 76 315 26 50
Richard HarbinsonCorporate Communications Directorrichard.harbinson@galderma.com +41 76 210 60 62
Emil IvanovHead of Strategy, Investor Relations, and ESGemil.ivanov@galderma.com +41 21 642 78 12
Jessica CohenInvestor Relations and Strategy Directorjessica.cohen@galderma.com +41 21 642 76 43
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BELO HORIZONTE, Brazil--(BUSINESS WIRE)-- Afya Limited (Nasdaq: AFYA; B3: A2FY34) ('Afya' or the 'Company'), the leading medical education group and medical practice solutions provider in Brazil, reported today its financial and operating results for the three and six-month period, which ended June 30, 2025 (second quarter 2025). Financial results are expressed in Brazilian Reais and are presented in accordance with International Financial Reporting Standards (IFRS). Second-Quarter 2025 Highlights 2Q25 Revenue increased 13.5% YoY to R$919.4 million. Revenue excluding acquisitions increased 8.5%, reaching R$879.0 million. 2Q25 Adjusted EBITDA increased 16.6% YoY reaching R$400.8 million, with an Adjusted EBITDA Margin of 43.6%. Adjusted EBITDA Margin increased 110 bps YoY. 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Once again, we delivered a strong performance, closing the first half of 2025 with a notable increase in Adjusted EBITDA Margin, reaching 48.1%. This margin expansion was primarily driven by the solid results of our Undergraduate segment, supported by cost initiatives and our shared services center, helping to boost efficiency, and unlock operational synergies across selling, general, and administrative expenses. Another important development in the higher education landscape is the recent rollout of ENAMED, Brazil's National Medical Education Performance Exam. This standardized test for final-year medical students, now officially integrated into the regulatory framework, represents a pivotal step in quality assurance and benchmarking across medical schools nationwide. Afya's educational ecosystem is able to support students more effectively in their preparation for ENAMED, while reinforcing its leadership in delivering outcomes-based, high-impact learning across all stages of the medical journey. With the closing of the acquisition of Funic, a campus that will begin its operation in the second half of 2025, we are pleased to reinforce our solid market position by expanding our undergraduate footprint into the metropolitan area of Belo Horizonte, capital of Minas Gerais. This acquisition adds 60 new medical seats, bringing Afya's total number of approved medical seats to 3,653 as of today. In 2Q25, we continued to recognize the impacts of the global minimum tax related to the additional CSLL established by Law No. 15,079/2024. Although the cash disbursement is only expected in July 2026, we have started provisioning this obligation throughout 2025. In response, Afya filed a writ of mandamus with the Brazilian Federal Court seeking to suspend the enforceability of this new charge. In parallel, Afya is demonstrating to the Lower House and the Executive representatives the impacts of this additional taxation on the Prouni. We remain committed to defending the Company's legal and financial interests while maintaining the highest standards of compliance, transparency, and fiscal discipline. In line with our commitment to delivering long-term value to shareholders and reinforcing our confidence in Afya's strategic direction, our Board of Directors approved a new share repurchase program. This initiative authorizes the repurchase of up to 4,000,000 Class A shares. The program is intended to support our stock option plan, future business combinations, and general corporate purposes. We believe this initiative reflects the strength of our balance sheet, the resilience of our business model, and our disciplined capital allocation strategy. As we look to the future, Afya remains steadfast in its purpose: to empower healthcare professionals through an integrated ecosystem that spans education, clinical practice, and continuous development. Our commitment to innovation and excellence drives us to keep enhancing the medical journey at every stage. We are very proud of our business and our achievements so far, and we are excited about our future plans. 1. Key Events in the Quarter On May 7, 2025, Afya Participações announced the closing of its acquisition of 100% of the total share capital of Faculdade Masterclass Ltda. ('FUNIC'), located in Contagem, a city in the metropolitan area of Belo Horizonte, the capital of the State of Minas Gerais. The acquisition contributes 60 medical school seats to Afya. 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Under the share repurchase program, Afya may repurchase up to 4,000,000 of its outstanding Class A common shares, in the open market, based on prevailing market prices, or in privately negotiated transactions, beginning from August 15, 2025 until the earlier of the completion of the repurchase or December 31, 2026, depending upon market conditions. The share purchases may be made from time to time through open market transactions and are subject to market and business conditions, levels of available liquidity, cash requirements for other purposes, regulatory, and other relevant factors. The share repurchase program will take place in accordance with the conditions established by the Board of Directors on August 13, 2025. Afya intends to repurchase the shares for use in its stock option program, consideration in futures business combinations transactions and general corporate purposes. 3. 2025 Guidance The Company is reaffirming its guidance for 2025, as defined in the following table, which considers the successful acceptance of new students for the second semester of 2025: 4. 2Q25 Overview Segment Information The Company has three reportable segments as follows: Undergraduate, which provides educational services through undergraduate courses related to medical school, undergraduate health science and other ex-health undergraduate programs; Continuing education, which provides medical education (including residency preparation programs, specialization test preparation and other medical capabilities), specialization and graduate courses in medicine, delivered through digital and in-person content; and Medical Practice Solutions, which provides clinical decision, clinical management and doctor-patient relationships for physicians and provide access, demand and efficiency for the healthcare players. Key Revenue Drivers – Undergraduate Programs Table 2: Key Revenue Drivers Six months period ended June 30, 2025 2024 % Chg Undergraduate Programs MEDICAL SCHOOL Approved Seats 3,653 3,203 14.0% Operating Seats 1 3,543 3,153 12.4% Total Students (end of period) 25,733 22,661 13.6% Average Total Students 25,806 22,635 14.0% Average Total Students (ex-Acquisitions)* 24,212 22,635 7.0% Revenue (Total - R$ '000) 1,407,348 1,202,599 17.0% Revenue (ex- Acquisitions* - R$ '000) 1,327,745 1,202,599 10.4% Medical School Net Avg. Ticket (ex- Acquisitions* - R$/month) 9,140 8,855 3.2% UNDERGRADUATE HEALTH SCIENCE Total Students (end of period) 25,718 24,252 6.0% Average Total Students 25,926 24,567 5.5% Average Total Students (ex-Acquisitions)* 25,146 24,567 2.4% Revenue (Total - R$ '000) 130,604 120,471 8.4% Revenue (ex- Acquisitions* - R$ '000) 128,468 120,471 6.6% OTHER EX- HEALTH UNDERGRADUATE Total Students (end of period) 33,090 26,816 23.4% Average Total Students 34,043 27,690 22.9% Average Total Students (ex-Acquisitions)* 32,576 27,690 17.6% Revenue (Total - R$ '000) 103,549 91,097 13.7% Revenue (ex- Acquisitions* - R$ '000) 100,103 91,097 9.9% Total Revenue Revenue (Total - R$ '000) 1,641,501 1,414,166 16.1% Revenue (ex- Acquisitions* - R$ '000) 1,556,283 1,414,166 10.0% *For the six months period ended June 30, 2025, "2025 Ex Acquisitions" excludes: UNIDOM (January to June, 2025; Closing of UNIDOM was in July 2024), and FUNIC (May to June, 2025; Closing of FUNIC was in May 2025). (1) The difference between approved and operating seats refers to Cametá, a campus that is still pre-operational. And FUNIC, a campus that started its operations in the second half of 2025. Expand Key Revenue Drivers – Continuing Education Table 3: Key Revenue Drivers Six months period ended June 30, 2025 2024 % Chg Continuing Education Total Students (end of period) 1 Residency Journey - Business to Physicians B2P 9,224 13,058 -29.4% Graduate Journey - Business to Physicians B2P 9,055 8,100 11.8% Other Courses - B2P and B2B Offerings 27,226 22,921 18.8% Total Students (end of period) 45,505 44,079 3.2% Revenue (R$ '000) Business to Physicians - B2P 125,379 118,940 5.4% Business to Business - B2B 12,141 8,566 41.7% Total Revenue 137,520 127,506 7.9% (1) Total Students figure excludes intercompany transactions. Expand Key Revenue – Medical Practice Solutions Table 4: Key Revenue Drivers Six months period ended June 30, 2025 2024 % Chg Medical Practice Solutions Active Payers (end of period) 1 Clinical Decision 159,373 162,313 -1.8% Clinical Management 36,685 33,398 9.8% Total Active Payers (end of period) 196,058 195,711 0.2% Monthly Active Users (MaU) Total Monthly Active Users (MaU) 230,468 253,497 -9.1% Revenue (R$ '000) 2 Business to Physicians - B2P 75,051 67,163 11.7% Business to Business - B2B 8,944 9,691 -7.7% Total Revenue 84,004 76,854 9.3% (1) Total Active Payers figure excludes intercompany transactions. (2) Revenue from 'Shosp', the clinical management software, was reclassified from B2B to B2P. Expand Key Operational Drivers – Users Positively Impacted by Afya The Users Positively Impacted by Afya represents the total number of medical students from the Undergraduate segment, students from the Continuing Education and users from Medical Practice Solutions. For the second quarter of 2025, Afya's ecosystem reached 301,706 users. Table 5: Key Revenue Drivers Six months period ended June 30, 2025 2024 % Chg Users Positively Impacted by Afya 1 Undergraduate (Total Medical School Students - End of Period) 25,733 22,661 13.6% Continuing Education (Total Students - End of Period) 45,505 44,079 3.2% Medical Practice Solutions (Monthly Active Users) 230,468 253,497 -9.1% Ecosystem Outreach 301,706 320,237 -5.8% (1) Ecosystem outreach does not contemplate intercompany figures. Note that there may be overlap in student numbers within the data. Expand Seasonality of Operations Undergraduate tuition revenues are related to the intake process, and monthly tuition fees charged to students and do not significantly fluctuate during each semester. Continuing education revenues are mostly related to: (i) monthly intakes and tuition fees on medical education, which do not have a considerable concentration in any period; (ii) Residency journey product revenues, derived from e-books transferred at a point of time, which are concentrated at in the first and last quarter of the year due to the enrollments. Medical Practice Solutions are comprised mainly of Afya Whitebook and Afya iClinic revenues, which do not have significant fluctuations regarding seasonality. Revenue Revenue for the second quarter of 2025 was R$919.4 million, an increase of 13.5% over the same period in the prior year. For the six-month period ended June 30, 2025, Revenue was R$1,855.8 million, reflecting a 15.0% increase over the same period of last year. Excluding acquisitions, Revenue in the second quarter increased by 8.5% YoY to R$879.0 million. For the six-month period ended June 30, 2025, excluding acquisitions, Revenue was R$1,770.5 million, reflecting a 9.7% increase over the same period of last year. The quarter revenue increase was mainly due to higher tickets in medicine courses, the maturation of medical school seats and the acquisition of Unidom. Table 6: Revenue & Revenue Mix (in thousands of R$) For the three months period ended June 30, For the six months period ended June 30, 2025 2025 Ex Acquisitions* 2024 % Chg % Chg Ex Acquisitions 2025 2025 Ex Acquisitions* 2024 % Chg % Chg Ex Acquisitions Revenue Mix Undergraduate 814,129 773,744 709,647 14.7% 9.0% 1,641,501 1,556,283 1,414,166 16.1% 10.0% Continuing Education 66,417 66,417 62,091 7.0% 7.0% 137,520 137,520 127,506 7.9% 7.9% Medical Practice Solutions 42,320 42,320 40,281 5.1% 5.1% 84,004 84,004 76,854 9.3% 9.3% Inter-segment transactions (3,466) (3,466) (2,129) 62.8% 62.8% (7,265) (7,265) (4,397) 65.2% 65.2% Total Reported Revenue 919,400 879,015 809,890 13.5% 8.5% 1,855,760 1,770,542 1,614,129 15.0% 9.7% *For the three months period ended June 30, 2025, "2025 Ex Acquisitions" excludes: UNIDOM (April to June, 2025; Closing of UNIDOM was in July 2024), and FUNIC (May to June, 2025; Closing of FUNIC was in May 2025). *For the six months period ended June 30, 2025, "2025 Ex Acquisitions" excludes: UNIDOM (January to June, 2025; Closing of UNIDOM was in July 2024), and FUNIC (May to June, 2025; Closing of FUNIC was in May 2025). Expand Adjusted EBITDA Adjusted EBITDA for the second quarter of 2025 increased by 16.6% to R$400.8 million, up from R$343.8 million in the same period of the prior year, with the Adjusted EBITDA Margin rising by 110 basis points to 43.6%. For the six-month period ended June 30, 2025, Adjusted EBITDA was R$892.8 million, an increase of 20.4% over the same period of the prior year, accompanied by an Adjusted EBITDA Margin increase of 220 basis points in the same period. The increase in Adjusted EBITDA Margin was mainly driven by: (a) higher gross margin in the Undergraduate and Continuing Education segments; (b) the continued ramp-up of the four Mais Médicos campuses launched in 3Q22; (c) restructuring initiatives within Continuing Education and Medical Practice Solutions; and (d) improved cost efficiency in Selling, General, and administrative expenses. Table 7: Reconciliation between Adjusted EBITDA and Net Income (in thousands of R$) For the three months period ended June 30, For the six months period ended June 30, 2025 2024 % Chg 2025 2024 % Chg Net income 176,542 162,200 8.8% 433,578 370,499 17.0% Net financial result 94,809 68,551 38.3% 189,803 142,917 32.8% Income taxes expense 17,468 3,091 465.1% 42,250 13,956 202.7% Depreciation and amortization 94,698 84,038 12.7% 186,453 163,307 14.2% Interest received 1 10,210 8,619 18.5% 24,742 21,034 17.6% Income share associate (3,591) (3,028) 18.6% (7,876) (7,200) 9.4% Share-based compensation 5,557 11,799 -52.9% 12,520 20,428 -38.7% Non-recurring expenses: 5,151 8,557 -39.8% 11,344 16,738 -32.2% - Integration of new companies 2 4,819 5,408 -10.9% 10,788 11,278 -4.3% - M&A advisory and due diligence 3 203 1,336 -84.8% 291 1,583 -81.6% - Expansion projects 4 129 1,765 -92.7% 253 2,370 -89.3% - Restructuring expenses 5 - 48 n.a. 12 1,507 -99.2% Adjusted EBITDA 400,844 343,827 16.6% 892,814 741,679 20.4% Adjusted EBITDA Margin 43.6% 42.5% 110 bps 48.1% 45.9% 220 bps (1) Represents the interest received on late payments of monthly tuition fees. (2) Consists of expenses related to the integration of newly acquired companies. (3) Consists of expenses related to professional and consultant fees in connection with due diligence services for our M&A transactions. (4) Consists of expenses related to professional and consultant fees in connection with the opening of new campuses. (5) Consists of expenses related to the employee redundancies in connection with the organizational restructuring of our acquired companies. Expand Net Income Net Income for the second quarter of 2025, totaled R$176.5 million, reflecting an 8.8% increase YoY. Adjusted Net Income reached R$209.4 million, a decrease of 0.4% over the same period in the prior year. For the six-month period, Afya achieved a Net Income of R$433.6 million, 17.0% higher than the same period of 2024, and an Adjusted Net Income of R$503.3 million, which was 9.1% higher than the previous period. This growth was primarily driven by improved operational performance that was partially offset by a higher tax rate compared to the previous year due to the provision of additional CSLL towards OECD's Pillar Two global minimum tax effects. Basic EPS for the six-month period ended June 30, 2025, reached R$4.69. An increase of 16.9% YoY, reflecting the higher Net Income. Cash and Debt Position As of June 30, 2025, Cash and Cash Equivalents totaled R$1,099.1 million, an increase of 20.6% over December 31, 2024. Net Debt, excluding the effect of IFRS 16, reached R$1,621.0 million, compared to December 31, 2024, Afya reduced its Net Debt by R$193.9 million due to solid Cash Flow from Operating Activities, even considering the business combination with FUNIC and the dividends payment. For the six-month period ended June 30, 2025, Afya generated R$783.0 million in Cash Flow from Operating Activities, up from R$683.4 million in the same period of the previous year, an increase of 14.6% YoY, boosted by operational results. The Operating Cash Conversion Ratio reached 88.8%. The following table shows more information regarding the cost of debt for the first half of 2025, considering loans and financing and accounts payable to selling shareholders. Afya's capital structure remains solid, with a conservative leveraging position and a low cost of debt. Afya's Net Debt (excluding the effect of IFRS16) divided by Adjusted EBITDA mid guidance for 2025 would be 0.97x. CAPEX Capital expenditure consists of the purchase of property and equipment and intangible assets, including expenditure mainly related to the expansion and maintenance of Afya's campuses and headquarters, leasehold improvements, and the development of new solutions in the Medical Practice Solutions and content in the Continuing Education. For the six-months period ended June 30, 2025, CAPEX totaled R$ 225.1 million. Excluding the license payment related to the FUNIC acquisition, CAPEX was R$ 125.4 million, representing 6.8% of Afya's revenue for the period. ESG Metrics ESG commitment is an important part of Afya's strategy and permeates the Company's core values. Afya has been advancing year after year on its core pillars and, since 2021, ESG metrics have been disclosed in the Company's quarterly financial results in three key metrics, Governance and Employee Management, Environmental and Social. The 2024 Sustainability Report can be found at: Table 13: ESG Metrics 1, 2 & 3 2Q25 2Q24 2024 2023 # GRI Governance and Employee Management 1 405-1 Number of employees 9,819 10,181 9,717 9,680 2 405-1 Percentage of female employees 60 % 59 % 59 % 58 % 3 405-1 Percentage of female employees in the board of directors 30 % 30 % 30 % 36 % 4 102-24 Percentage of independent member in the board of directors 40 % 40 % 40 % 36 % Environmental 5 Total renewable energy generated by own photovoltaic plants (MWh) 1,205.706 1,322.982 6,329.796 4,510.637 6 302-1 Total energy consumed (MWh) 7,268.970 6,201.555 24,260.662 24,036.608 7 302-1 % of renewable energy consumed from own generation 16.0 % 21.2 % 23.2 % 16.0 % 8 302-1 % of energy consumed from the power grid 36.7 % 37.0 % 34.8 % 60.3 % 9 302-1 % of energy consumed from the free market 47.2 % 41.8 % 42.0 % 23.7 % Social 10 413-1 Number of free clinical consultations offered by Afya 269,624 228,968 846,264 586,611 11 Number of physicians graduated in Afya's campuses 24,102 20,960 22,867 20,197 12 201-4 Number of students with financing and scholarship programs (FIES and PROUNI) 15,044 11,694 12,342 10,584 13 % students with scholarships over total undergraduate students 17.8 % 15.9 % 16.0 % 16.0 % 14 413-1 Hospital, clinics and city halls partnerships 643 560 614 649 (1) Some factors can influence in the adequate proportionality analysis of data over the years, such as: climate changes, COVID-19 pandemic effects, seasonalities, number of employees, number of students, number of active units, among others. (2) Starting in 2Q22, previously disclosed social data were updated to consider: (a) the number of graduated physicians considering all units after its closing, and (b) partnerships related only to medical schools. (3) The number of students with financing and scholarship programs (FIES and PROUNI) in 2023 excludes students from the Unima and FCM Jaboatão acquisition. As of 2Q25, it also includes students from the UNIDOM acquisition. Expand 5. Conference Call and Webcast Information When: August 13, 2025 at 5:00 p.m. EDT. Who: Mr. Virgilio Gibbon, Chief Executive Officer Mr. Luis André Blanco, Chief Financial Officer Webcast: Expand OR Dial-in: Brazil: +55 11 4632 2236 or +55 11 4632 2237 or +55 11 4680 6788 or +55 11 4700 9668 or +55 21 3958 7888. United States: +1 346 248 7799 or +1 360 209 5623 or +1 386 347 5053 or +1 507 473 4847 or +1 564 217 2000 or +1 646 931 3860 or +1 669 444 9171 or +1 669 900 6833 or +1 689 278 1000 or +1 719 359 4580 or +1 929 205 6099 or +1 253 205 0468 or +1 253 215 8782 or +1 301 715 8592 or +1 305 224 1968 or +1 309 205 3325 or +1 312 626 6799 Webinar ID: 995 2743 1135 Other Numbers: 6. About Afya Limited (Nasdaq: AFYA; B3: A2FY34) Afya is a leading medical education group in Brazil based on the number of medical school seats, delivering an end-to-end physician-centric ecosystem that serves and empowers students and physicians to transform their ambitions into rewarding lifelong experiences from the moment they join us as medical students through their medical residency preparation, graduation program, continuing medical education activities and offering medical practice solutions to help doctors enhance their healthcare services through their whole career. For more information, please visit 7. Forward – Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. All statements other than statements of historical fact could be deemed forward-looking, including risks and uncertainties related to statements about our competition; our ability to attract, upsell and retain students; our capacity to increase tuition prices; our ability to anticipate and meet the evolving needs of students and teachers; our capacity to source and successfully integrate acquisitions; as well as general market, political, economic, and business conditions. Additionally, these statements include financial targets such as revenue, share count and IFRS and non-IFRS financial measures including gross margin, operating margin, net income (loss) per diluted share, and free cash flow. These statements are not guarantees of future performance and undue reliance should not be placed on them. The Company assumes no obligation to update any forward-looking statements made in this press release to reflect events or circumstances occurring after its publication, nor to incorporate new information or the occurrence of unanticipated events, except as required by law. The achievement or success of the matters covered by such forward-looking statements involves known and unknown risks, uncertainties and assumptions. If any of these risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from those expressed or implied by the forward-looking statements we make. Readers should not rely upon forward-looking statements as predictions of future events. Forward-looking statements represent management's beliefs and assumptions only as of the date they are made. Further information on these and other factors that could affect the Company's financial results is included in filings made with the United States Securities and Exchange Commission (SEC) from time to time, including the section titled 'Risk Factors' in the most recent annual report on Form 20-F. These documents are available in the SEC Filings section of the investor relations section of our website at: 8. Non-GAAP Financial Measures To supplement the Company's consolidated financial statements, which are prepared and presented in accordance with IFRS accounting standards as issued by the International Accounting Standards Board—IASB, Afya presents Adjusted EBITDA, Operating Cash Conversion Ratio, Adjusted Net Income and Adjusted EPS, which are non-GAAP financial measures, for the convenience of investors. A non-GAAP financial measure is generally defined as one that intends to measure financial performance but excludes or includes amounts that would not be equally adjusted in the most comparable GAAP measure. Afya calculates Adjusted EBITDA as net income plus/minus net financial result, plus income taxes expense, plus depreciation and amortization, plus interest received on late payments of monthly tuition fees, plus share-based compensation, plus/minus income share associate, plus/minus non-recurring expenses/income. Operating Cash Conversion Ratio is calculated as the Cash flow from Operating Activities plus income taxes paid, minus/plus non-recurring expenses/income divided by Adjusted EBITDA. The calculation of Adjusted Net Income is the Net Income plus amortization of customer relationships and trademark, plus share-based compensation, plus/minus non-recurring expenses/income. The calculation of Adjusted EPS is the Adjusted Net Income minus the non-controlling interests divided by the Weighted average number of outstanding shares. The non-GAAP supplemental financial measures are provided with the intend to help investors in assessing the overall performance of Afya's business regarding its core operations, cash generation and profitability. The non-GAAP financial measures described in this release are not substitutes for the IFRS measures. In addition, the calculations of Adjusted EBITDA, Operating Cash Conversion Ratio, Adjusted Net Income and Adjusted EPS are not standardized financial measures and may differ from the calculations used by other companies, including competitors in the education services industry, and therefore, Afya's measures may not be comparable to those of other companies. 9. Investor Relations Contact 10. Financial Tables Unaudited interim condensed consolidated statements of cash flows For the six-month periods ended June 30, 2025 and 2024 (In thousands of Brazilian reais) June 30, 2025 June 30, 2024 (unaudited) (unaudited) Operating activities Income before income taxes 475,828 384,455 Adjustments to reconcile income before income taxes Depreciation and amortization expenses 186,453 163,307 Write-off of property and equipment 536 139 Write-off of intangible assets 81 163 Allowance for expected credit losses 33,053 30,018 Share-based compensation expense 12,520 20,428 Net foreign exchange differences 2,049 (797) Accrued interest 158,613 102,278 Accrued interest on lease liabilities 59,727 53,770 Share of income of associate (7,876) (7,200) Provision (reversal) for legal proceedings 2,656 3,040 Changes in assets and liabilities Trade receivables (111,519) (79,169) Recoverable taxes (16,395) (15,346) Other assets (5,641) 1,667 Trade payables 6,241 11,455 Taxes payable (743) 319 Advances from customers (52,185) (33,237) Labor and social obligations 37,085 44,970 Other liabilities 2,498 3,117 782,981 683,377 Income taxes paid (11,385) (16,208) Net cash flows from operating activities 771,596 667,169 Investing activities Acquisition of property and equipment (81,617) (45,989) Acquisition of intangibles assets (103,455) (91,119) Dividends received 8,803 6,195 Acquisition of subsidiaries, net of cash acquired (81,463) (164,577) Payments of interest from acquisition of subsidiaries and intangibles (14,536) (25,000) Net cash flows used in investing activities (272,268) (320,490) Financing activities Payments of principal of loans and financing (1,543) (11,524) Payments of interest of loans and financing (110,399) (87,933) Payments of principal of lease liabilities (24,222) (19,859) Payments of interest of lease liabilities (58,793) (53,924) Proceeds from exercise of stock options 24,249 5,541 Dividends paid (138,479) (9,399) Net cash flows used in financing activities (309,187) (177,098) Net foreign exchange differences (2,049) 797 Net increase in cash and cash equivalents 188,092 170,378 Cash and cash equivalents at the beginning of the period 911,015 553,030 Cash and cash equivalents at the end of the period 1,099,107 723,408 Expand
