Cogna Educação S.A.

[Interpreted] Good morning, everyone. Thank you for holding this teleconference to discuss the results of our first quarter of '26.

We have here in this call, Federico, our Financial Vice President; Guilherme Melega, our Vice President. This call should last 1 hour, comprising 40 minutes of presentation and then 20 minutes of Q&A.

So I'd like to start on Slide 3. Something very important to us is that this April, we celebrated 6 years of a wonderful story that started with 5 and 6 teachers and 35 students at the Pitagoras in Belo Horizonte.

And the most important part is that 33 out of the 35 students were approved for our SAP. So our history of approval has always been very high, considering the early beginning of our history at Pitagoras.

Now we have more than 25 million students in our educational institutions. And as you know, they have both an education system, technical courses, graduation, post-graduation courses, technology platforms, franchising, and we are very proud of our history.

That is a great motivation for the next 60 years with this view that we understand that Cogna is the only company able to deal with that and foster people from 20 to 100 years old, as we have credits for all ages. So one fact that was very important and that is very happy for us to celebrate the 6 years.

My second comment is regarding the capital of Vasta because we integrate in the operations of SAEB and Cogna. We have both operations working together, reflecting in the development of a vertical that we present to you as the basic education.

So basic education is today Vasta and SAEB altogether, and higher education is the old question. So today, we have 2 verticals of basic education and higher education.

Regarding the integration of Vasta, I'd like to say that the Vasta and SAEB teams are already integrated with a single leadership. Therefore, Guilherme Melega is the leader of joining systems and processes, and part of it is already integrated.

The other part is being integrated so that you have a reference; the RP of Somos is now SAP, which is the RP of Cogna, in the middle of this year. So in the second semester, we will be integrated even from the point of view of systems and RP and considering the B2G that is important and a question that you used to ask about the opportunities with the 2 teams considering that the overlap that we had between Somos and SAEB would be the sales for government and both teams are already integrated and restructured much less in the synergy of costs, but much more in the restructure, seeing the opportunity for growth as we see many opportunities for this segment.

And the last comment before the financial highlights that we presented in this result note, our new division of graduation courses follows the regulation; therefore, now presenting the on-site hybrid and distance learning modalities, and we'll talk more about it later in our presentation. Now going to the results on Page 4.

We understand that this is one positive quarter with all businesses growing double digits in revenue, in the EBITDA as well, and cash integration. The net revenue this quarter grew 32%.

And obviously, it was pushed by the PNLD revenue that is located. And now, even if we gather the revenue of our businesses and the consolidation of Cogna and XNLD, we would have a double-digit growth, a very high growth of about 14%, 15%.

Therefore, with all the business units growing strongly and obviously, the PNLD is growing well. And in the fourth quarter, we mentioned that there was a delay in the invoices of the government, and this revenue would be for the first quarter, and we now have guidance that would be BRL 160 million.

And in the end, we could have BRL 300 million in the first quarter. And this increase is much more than our initial guidance.

And due to the we improved a lot, the market share of the program. And remember that more participation and more share in the program as we purchase materials in the subsequent years.

So an important highlight here of overcoming PNLD, not only for displacement, but because we performed better from the point of view of choosing that from part of the teachers and professors. Talking about the EBITDA, it grew 32%, BRL 120 million more than last year.

We had a loss in cash flow of 2.5%. We'll go through this explanation with Melega Jefferson, talking about it.

But I think we have 2 big items that make the margin decrease. The first one is greater participation of PNLD, which is proportional to the contribution of basic education and PNLD from the point of view of EBITDA to the total EBITDA of Cogna.

With the participation in basic education in the same quarter of last year, which was 33% of EBITDA in this first quarter, it is more than 40%, to be more precise, 41%, and the PNLD is a line of products with a percentage margin that is lower. So as it participates more in the mix of EBITDA of Cogna, it pressures the margin of Cogna, and it is the second part of cotton in higher education.

And in this first quarter, we have this pressure to reduce the margin, especially due to the displacement of expenses in technology, but with more investment in marketing, and Jefferson will also discuss that. But basically, we have this pressure in the margin of higher education, making the margin this quarter decrease 2.5%.

Now one of the big highlights and Fred likes that a lot is that we are looking less to the EBITDA and more to the free cash flow, and now our focus is more on the free cash flow and the profit, we grew 49% comparing the years. It's more than BRL 95 million compared to 2025 compared to that, that was BRL 25 million and the cash generation after CapEx growing 27% BRL 68 million more than the first quarter of '25.

And finally, the free cash flow with a 69% of growth that is BRL 103 million more than the first quarter '25. And remember that in this quarter, we also had the distribution of dividends of BRL 119.5 million paid in February.

Even though we reduced the net debt in BRL 35 million because the cash generation was quite strong from the point of view of leverage, it had grown in the fourth quarter due to the closing of Capital of Vasta, but now it decreased again, to 1.13x of the EBITDA. It is not critical to us, and it's been like this for a while, but this is an indicator that the market follows.

So these are the initial highlights. Just to finish my part.

We've had quite a positive quarter. Jefferson will talk a little bit about income due to the change in the regulation.

And I emphasize that the revenue grew almost 4% despite a different mix, more concentrated on on-site and hybrid than DL. But as we've been saying for the last 5 years, the volume is important, but the most important to us is that the intake compared to the previous year grows, and it grows 4%.

So when we talk about the base of reenrollment, we see a strong base with an increase in the average ticket, showing that we can surpass even inflation. And I think it is a little of the doubt of the market when the government, more than a year ago, had the new regulation, we weren't sure if we could pass the cost increase in the prices to the clients, and the ticket shows that, yes, we can do that.

But Jefferson will talk more about that. Having said that, I'll pass the floor to Guilherme Melega, so that he can discuss the basic education.

Thank you, Roberto. I'll start on Slide 6, talking about the new results that we consolidated from SAEB.

We now open our revenue in the segment of subscription that is the B2B, the B2G, that is the sales of solutions for state and municipalities, PNLD, and the disclosure of the business of franchising of languages, which is the red balloon. And going to the left, the total net revenue of the quarter reached BRL 950 million, of which BRL 462 million of subscription.

So we grew 15.5% in the quarter, followed by the B2G. Again, the B2G is the sales of systems of teaching and recovery of learning, no PNLD, reaching 22% growth year over year.

I emphasize the NBTP that decreased in the fourth quarter compared to the first one, and we performed BRL 307.7 million. The growth is very big compared to the first quarter of '25, with only BRL 6 million.

So now we'll show the impact of this displacement as well. And I also emphasize the growth of our language franchising, which is growing 14.6%.

And then we reached this growth in the quarter. And now this, considering the effect of NBTP and looking only at the other business, we would grow 17%.

When we analyze the ACV, the graph on the right, we reached BRL 1.8 billion, 8.8%. And as we've been seeing in the last cycles, the core growth is a little below the complementary.

The complementary increases its contribution to this total. And this 8.8% as a displacement to the third and fourth quarter, and we expect to reach 2 digits as we've been doing the last 5 commercial cycles.

Now going to Slide #7. I'll talk a little bit about our expenses, and I emphasize the total cost that obviously is impacted by the NBTP.

As we grew more in revenue, we have more due to this NBTP, which makes the total costs as a percentage of revenue grew 11%. This is the effect of the NBTP.

But when we look at the other costs of marketing, operational expenses, and corporate expenses, we see a dilution of this revenue with less costs in all of them. I emphasize here as well, by the way, I mentioned that marketing and sales, when we talk about B2B, the percentage of revenue is absolutely flat.

So we keep the same expense of [indiscernible] revenue in the B2B, when we look at operational revenues, even in absolute values, we have a reduction from BRL 67 million to BRL 62 million. So, besides the benefit of the dilution with more revenue in NBTP, we have effective gains in the reduction of operational expenses.

Now going to the EBITDA. We reached BRL 276 million of EBITDA in the first quarter in basic education, with a growth of 66.4%.

To pay attention, the margin goes from 30% to 29%, which is the impact of the NBTP with a higher consideration in the first quarter and a lower margin, and the impact, even though it was not that big considering the evolution of all the businesses and the growth of subscription and B2G. And we are quite optimistic for this year, not only in the delivery of the rest of the ACV, but we have finished the first measure of the commercial cycle of '27, and we are in the front line compared to the previous years.

We are in the middle of the bet that is quite an important conference to our business, and we are quite optimistic with the interactions we are having. In the B2G, it reflects the benefits of working together with SA with a single team and the same objective, quite clear to everyone, and the joint marketing is reflected in the growth of 22% of this business in the first quarter.

Now I pass the floor to my colleague and friend, Jefferson Octiz, to talk about higher education.

[Interpreted] Thank you, Melega. Good morning, everyone.

Thank you, Roberto Valerio, for the opportunity of making the presentation of the results of Kroton. I'll start on Slide 10 with the operational performance of Kroton.

I would like to emphasize the impact of the recurring changes on the new regulatory framework. So this new regulation is available online and on-site.

So it changes the basis of intake, courses of pedagogy, nursing, and so on are in different categories compared to the previous year. In the case of nursing, the discontinuation of the offer on-site was 420 points.

So we are thrilled with the offers and the possibilities in 53 poles offered for on-site courses of nursing, representing about 44% of the amount of the 120 poles for accreditation now. With this observation of the regulation, we see the first graph with the intake with a reduction of 14.2% reflects of this reduction of 32% in DL, and the presential growing 14% and 4.6% in the hybrid.

Despite the challenges, we are growing the revenue of this intake period, as Roberto mentioned in the beginning, growing 3.5%, a great indication to us that we could keep the operational structure of the period. The second graph shows that the student base had a reduction of 4.6%, resulting from a decrease of 18.2% in DL and growing 8.9% in on-site and 12.6% in hybrid.

Going to the left graph on the right, the average ticket grows 19.4%, emphasizing here the growth in all modalities reflects this change of this mix in our basis. On-site and hybrid, we have a mix of courses with high LTV and DL.

We changed the mix of courses in the basis, considering the migration and classification, for example, Pero and the courses going to the hybrid. In Slide 11, we have a double-digit growth in the net revenue, 10.9%.

And here, we see that the revenue is not reducing in speed. It's growing in all business modalities.

I emphasize particularly the positive growth of the on-site of 15.2% that is quite important to this regulatory change that we can see. And the gross profit reached BRL 997 million with a 10.4% growth compared to the first quarter '25, also highlighting 17% growth on the on-site, followed by 5% in hybrid and 8.5% in DL.

It is important to say that we expect more pressure in the margin of cost due to the pressure in the sector, especially in the hybrid courses that are also courses under maturation, but it's important to say that in the net EBITDA and cash generation, we are positive with the highest ticket. Now going to Slide 12.

We see the analysis of cost and expenses with a growth of 2.1% that is the result of the time of some actions, as Roberto mentioned, mainly in technology, displaced from the first quarter to the second quarter '25, impacting negatively the comparison. Additionally, in the first quarter '26, we have expenses with marketing and sales with an increase that is due to being more careful regarding the potential impact of the number of enrollments.

Therefore, we invested more in marketing, being aware that it will have benefits not only in the first quarter, but also in reinforcing the strength of our brands. And regarding the NOR, we had a growth due to the program, [Pagfacio], that instead of reducing the average ticket, we offered installments.

Therefore, we have this effect of more provisioning in the installments for the students who pay. Now, on the last Slide 13, we have a recurring EBITDA growing almost 4% with a pressure of 2.5%, as explained before.

I thank you all for your attention. Now I pass on the floor to Fred to go on with his presentation.

Thank you, Jefferson. I'll start my presentation by talking about Cogna.

And please remember that I talk about Cogna, which is the 2 big businesses that we have, the ones presented by Melega and Jefferson. So I start the presentation on Slide 15 with the financial performance.

On the left, we have the net revenue. So please note that we grew in revenue in our 2 businesses, and we reached a net revenue in Cogna of BRL 2.46 billion, a 32% growth compared to the first quarter of '25, as explained before by the growth in the NBTP in the basic education.

Now, going to the graph on the right, we have the recurring EBITDA with a strong growth of about 22%, reaching almost BRL 680 million compared to the first quarter last year, when we reached BRL 556 million. In Slide 17, next page, we mentioned before that one of our main indicators and how we measure the company is with the free cash flow and the net profit, and we analyze the revenue and EBITDA, but we now focus on the free cash flow and the EBITDA without the other indicators, showing that we grew in the operational cash flow.

Please remember that the generation of this operational cash is after CapEx, and we grew 27%, reaching BRL 318 million with a growth of about BRL 68 million. As I mentioned before, going from the operational cash to the free cash generation, that is the operational minus CapEx and minus the interest to corporate, we had a growth of about almost 6%, 9%, reaching the first quarter free cash of BRL 252 million with a growth of about BRL 102 million, showing here the resilience of our business, growing in revenue, in EBITDA and in the free cash generation that gets to the reduction of the net debt of the company.

Now on Slide 17, as I mentioned, free cash flow is the next indicator of net income. We had 49% of growth.

And remember that the net income last year was BRL 95 million, and this net income comes and is the result of the growth of the operational result, which was about 25%. And in the first quarter, this net income has an impact on the expenses of tax paid, the current one, and the inferred one, with an impact of about 45% in our net income.

It was an expense and a liability, but I'd like to remember you that we cannot assess our tax payment in only 1 quarter; we need to analyze the whole year, and we had a greater impact on education. And in basic education, because the revenue, the EBITDA of the basic education reached BRL 265 million, and this growth generated 34% of payment and 34% of impact.

Looking ahead, and this is not guidance, we have to look at the year of '26, and our current tax shouldn't be different from the net profit and the tax the current tax payment as it was presented in '24. Now in Slide 18, the debt of the company in one quarter comparing now the first quarter '26 and '25, we reduced our net debt in BRL 52 million, considering that we started with BRL 2.8 million, reaching BRL 2.7 million and the main impacts were in the generation of free cash and the return to the shareholder with the dividend that we paid in February 13, we paid BRL 119 million of shareholders' returns and the other movements that reached BRL 8 million.

Now, in Slide 19, indebtedness. We have one more quarter with the reduction in the leverage.

As I mentioned many times, the leverage is not a problem for us. Our covenants of debt, our net debt divided by the end of the 12 months in 3.5x and the leverage reached in the first quarter '26, 1.13x, compared to the fourth quarter in the previous slide, we had a reduction that was 1.28, and comparing with the first quarter '25, we reduced that it was 1.28, and we reached 1.13.

So that's completely normal. This is what we presented over the last 4 years: this reduction of leverage.

The average cost of debt is in line with the fourth quarter '25. The average cost is CDI plus 1.33%.

We now don't have for the next quarter, big liability management will happen in the first quarter of '26 as our debt is located and we cannot negotiate. And now looking at the amortization schedule for the next years, you can see that in '26 we have no big amortization as in '27.

So, only in '28, but then from now until the beginning of '28, we have a lot of time to renegotiate liabilities, and we can deal with the banks. We still have a good cash.

So it's not a problem to us. And I'll finish this brief presentation of Cogna with a summary of the big businesses, and I'll pass the floor to Roberto Valerio.

Thank you, Fred. Now going to Slide 20, talking about capital allocation and the priorities for this capital allocation, I reinforce that they are still the same priorities, the first focus, the main focus keeps being the reduction of financial expenses, considering the high interest rates.

So, everything we can do to pay the debt in advance, we are doing. We are doing that in '25 and '26, as seen in the slide, main liability management actions.

If we consider all the actions, we have BRL 1.7 billion in negotiations, obviously, with the reduction of the debt cost and lengthening the profile of amortization, we are doing that quite efficiently. So this is the primary focus.

When we talk about financial expenses, we have a return to the shareholders. In '26, we've had about BRL 300 million return and in buyback with BRL 120 million in April '25 and in February '26, almost BRL 120 million in dividends, plus BRL 60 million in repurchase of shares.

So, BRL 300 million in dividends and buyback, along with the sign on the payment of new dividends with the approvals, and even reinforce the information that on May 30, we will pay BRL 28.5 million based on the AGM of April. So this is our second priority.

We don't have an M&A strategy to consume a lot of our cash. We are still focused on generating that with the assets we have.

We understand we have a broad portfolio, very rich with strong brands and the potential to grow. And look, for example, that we are having sales for the government and what we have with the start, leveraging the brands and the assets and the editorial capacity of management that we have.

So our M&A view is very strategic. I can mention 2 cases considering the context with the closing of Vasta Capital, which was an opportunity -- the Vasta tender offer, I'm sorry, was very important.

We use the capital for that. We had an FFD acquisition last year with a good price and a strategically important location for us.

And we also had an acquisition of an OPM that was very small last year, but we understand that it is opening opportunities for us to operate with the premium brands after graduation, like McKenzie, Institute of [indiscernible], and we understand that despite not having a proper asset for the brand, we can generate value working in the segment with partnerships with third parties. So, just to mention the priorities of capital allocation.

Now going to the last slide with the final remarks, the closing remarks. In '21, when we started the turnaround, we talked a lot about [indiscernible] to evolve not only in the core and the teaching system, but in graduation, which shows that we are doing that consistently with consistent growth over the 5 years, growing more than double digits, as well as operating with the new business opportunities.

And I mentioned here, B2G starts, and the platform of producers that is growing. So it's not a thesis to us, proof of the capacity of the company and our teams, and how we can use assets, brand systems, processes, and competencies to create new businesses.

We understand that it opens many opportunities for the future, which makes us very thrilled, regardless of what happens here when they are in one or another segment. The strategy is a diversified portfolio.

And this quarter has shown that even with the regulatory changes in one business, the others are performing well, and a business like the I'm sorry, like the NBTP is not sure, but we gained market share with 85% more revenue than we imagined. So this is proven with a concrete execution.

A second important point is that we are still focused a lot on the student, the client, no matter if it's a student of education and school, or a B2C student in English school or graduation school. We are focusing a lot on improving the NPS and satisfaction, and making the processes simpler and easier.

It is generating a lot of value to us. We'll focus on that.

And I'm talking a lot about culture. This work is very nice here.

The main thing I reinforce we have 60 partners that are people with shares of the company that gather every month to talk about results, culture, and how we can do better and carry out our strategy better. So in the mid and longer term, we bring more capacity of delivery to be used and to change our assets.

That is our thesis to change assets in a platform to a more set of educational services. We don't see ourselves as a graduation company as we were in the past in 2017, '18, more like a publishing house.

We are a service company. We provide B2B, B2C, and B2G services in many different segments.

And it is this strategy that we want to keep up with because it opens opportunities to many growth paths, always focusing on value generation, and little by little patiently and with a lot of focus and ability to deliver and carry out, we are improving all indicators. And the example is this quarter, that from one side to the other of revenue, EBITDA, cash generation, free cash flow leverage, and free debt and net debt, everything has positive results, reinforcing that we are not focusing on one or the other things.

We have a broader view of our business. We know how to operate so that with the net profit and the free cash flow, we can show our capacity of delivery with our team and assets to generate value to the shareholders.

And remember that we are all shareholders of the company. Having that said, I finish the presentation, and we now open the floor for the Q&A session.

[Interpreted] We have 2 here. The first one regarding nursing, because we had a relevant impact on intake.

And how do you see that the approval of 5 units of because our idea is to understand how the road map and operational of the units will be, how it should eventually compensate or offset this impact in '26. So I'd like to understand how you imagine having the intake in the units and how it could help in the results?

And the second point regarding C, if you can comment on the dynamic of the competition that you see for the intake in the first quarter, if there was some worsening competition, need for discounts. If you can comment on that, it will help a lot.

[Interpreted] Lucca, thank you for your questions. I will answer the first one, then if they want to complement, they can.

So, regarding nursing, well, we asked 122 homes to be preapproved for the on-site nursing person. And today, we have 53 out of the 122 approved.

This 53 can intake students, although the cycle for the semester hasn't started yet. Our expectation and what we have discussed with the Ministry of Education is that over the next few weeks, all homes will have the authorization.

In other words, we expect to have the 120 poles operational in the second semester. And remember that they are already prepared.

We've already had classrooms and labs. We would take a lot of students.

They had a big student base. So we didn't have so much to do.

So it means that as soon as we have the authorization, it's much more about having the courses offered on the website and starting the communication, generating leads, and conversions. So you asked a question regarding the road map of implementation.

It's immediate. We don't have any time that is relevant for that.

Regarding the impact in '26, we understand that each one of these will have 100 spots authorized. They are big poles with a lot of enrollments, and we understand that will not be in '26, but we understand that once it stabilizes, we can enroll 100 students during the year, which means that the 120 poles can generate an amount of students that is something like half of what we would have in nursing stake in the poll.

And the question you may ask is, well, if it's half, you will lose revenue. But we understand that maybe a little, but we have the possibility of comparing this revenue to the previous one, the presential on-site tickets are higher than the DL, so our nursing ticket on site would be BRL 399 average.

And I'm sorry, this was the DL, and on-site goes about BRL 1,800. So it's more than double.

So, having half of the students in the on-site modality, but paying more than twice the average ticket, we have the possibility of recovering the revenue over time. But to answer your question directly, the impact in '26 is that we will be able to collect and have a good recovery in the second semester.

But in the first semester, we don't have this revenue. In fact, when we look at the intake revenue, and we say that it grew 4% a year, it is considering that we lost almost 28,000 students in nursing and DL.

If we had students and revenue, the collection time would have grown smarter. So, in other words, we are quite optimistic and positive.

We see that quite positively, I mean, the fact of operating this 120 in the second cycle. Regarding proper magic, we've seen in this first cycle of '26, more pressure, more competition, and in practice, what we see is the number of candidates per spot that is lower.

I reinforce what I've mentioned before, that our more traditional brands, like Nike University, that are traditional and quite interesting brands in the market, don't suffer this pressure. But on the contrary side, we see more difficulties in enrollment, so much so that our business there is different from other players as well.

I think that's it.

We also have 2 questions. The first is about the intake in volume because this is what we have information.

And if you could give a number on how DL was taking into consideration the end of Pedagogy, that decrease of 33% and this trade-up of hybrid in Pedagogy helped the intake. So we knew there was this loss in nursing as well, but just for me to understand the trend of demand in comparable basis.

And the second question is about margin and the component for the future because it seems that the costs in BTP are stronger, but I think the technology and market seem to be something more specific in seasonality in the first quarter, which would suggest a lower decrease in the margin for the next quarter. So I would like to know if it makes sense.

Well, Lucas, the first one regarding the graduation, it's difficult to open the numbers. We don't generally do that.

But directionally speaking, the reduction in the intake of DL is basically focused on pedagogy and nursing. So if you consider the presential and DL compared to what we have today, the impact comes basically from pedagogy and nursing.

But obviously, Pedagogy and nursing, which are now on-site courses, demand the formation of a group of students, and we generate a conversion rate that is smaller. So directionally, we don't open.

But yes, we've recovered. We have a lot of enrollment with a lot of students in pedagogy, but not the same ratio of DL.

We had a net loss in pedagogy students in this transition from DL to on-site. Regarding the margin, Fred, you can answer.

Yes. Lucas, talking about the margin considering the first quarter of '26 and in the comparison looking to the future, our first quarter '26 had an impact of expenses of marketing and marketing costs and sales as well.

And this is the impact that we analyzed, and we have a new dynamic after the regulatory milestone. We had a great investment in the first quarter.

So for the next quarters, we might not have guidance, but it will naturally change. So we'll have a reduction in the sense.

But our strategy to have positive marketing is to bring students from courses with a higher added value. So in fact, looking at our strategy, the strategy worked because we are growing the revenue of intake, and we are mainly growing the courses with more value that are in the presential one.

But to the future, we should have a slight reduction in marketing expenses. And in technology, as your question, we've had an impact in the first quarter that should be smoothed over the year, and there shouldn't be a greater difference than the inflation or something different like it happened in '25.

Yes. Just to emphasize a little more the answer, because I mentioned DL, and I can talk about the hybrid.

So the DL base, we lost a lot because of Pedagogy that migrated, yes, and helped the growth of the hybrid ones. But you might ask, well, but the hybrid didn't grow.

But you cannot forget that in our hybrid, we already had nursing. So we grew, I guess, 4.5% in on-site, considering that you have 0 of nursing, and we are the biggest nursing player in DL.

So we lost 27,000 students in nursing to the hybrid. So I guess it can explain better.

So in other words, we could help in the hybrid, but they have the pressure of not having nursing if we would have as we will have in the second semester. The intake for the hybrid will be greater in the second semester because of the new nursing courses that we are offering.

Yes. And just to explain a little bit more, the migration of Padagogy that happened, we do not offer that anymore.

We don't have that in DL anymore. There was this migration, but the liquidity was negative for us.

It's not a positive liquid. We lost much more than we gained.

And as Roberto mentioned, from 27,000 to 28,000 nursing students didn't have the courses. And now you can infer the number, and it's not for us to do that, but you can, if you want to infer the number.

and see that our hybrid instead of growing 4.6% would grow much more and then more than 2 digits, okay?

The first question would be regarding Kroton. If you could comment on the adoption of AFacio, comparing the first quarter of '26 to '25, was it a component to help ticket or not?

And the second would be the K-12, if you can mention the elements we should consider to think about the year margin of '26 compared to '25? And what are the detractors and the push?

Okay. Fred here.

The first question about higher education and AFacio. Just remember that AFacio, we already offered that for the basis in the summer and winter cycles in '25, we offered that.

So it's the same product, we didn't change it, and we offered it for the whole base in intake. Yes.

Yes, you cannot compare with the student base. Yes, the intake base.

So there was no change in the product. There is no difference in the product.

And it was available when we offered it to the whole base. So to answer your question, yes, it was important.

We kept it here. In the middle of this war of prices in some centers, we kept that in our strategy not to reduce the intake price, and PagAFacio is an installment.

So it's not a fund, it's just an installment. And you can see how we could increase that.

We had a growth in revenue. And as I always mentioned, the strategy is correct.

We just need to analyze PagFacio in the net PDD because looking at the PDD and growing in PagFacio, but also the PDD of PagFaio because it's a percentage of what I'm offering, and we do the PDD taking into consideration that P PDD has drop out as the main factor. When the student drops out, they provision 100% of it.

So it put us in the correct position in the commercial intake strategy, and this effect is already in the EBITDA. So this is how we show that, and we understand that it is correct.

Anything else?

Well, just to add something to this point of PDD and BDP comparing one quarter and the other with the hybrid and more on-site, it's natural that we have more PAM because the delta ticket of 2 or 3 months, which is what we work in installments when it's on-site, is higher. But to reinforce Fred's point, it's nothing different from what we're doing or explaining to you over time.

Okay. Marcelo, let me just explain a little of the margins of basic education because Vasta traditionally operated with 30% of EBITDA, a little higher, a little lower, and we understand this is the level of margin we want to operate in this business in this new configuration with SME and then I look back if we consolidated the results of almost the level of margin and EBITDA would be a little below 30% due to the [Technical Difficulty] [Foreign Language] Okay, Eduardo, thank you.

I would get the receivables. In your question, you gave the correct answer because it is the NBTP.

We acknowledge BRL 300 million this quarter, but it's absolutely in the normal flow of business, and in the receivables, it becomes cash in the second quarter, so the regular business flow. Okay, good, Eduardo.

Now I will get the gross margin of the cross. The first comment is that the gross margin is better understood in the semester, much more than in the quarter, because comparing quarters, remember that a student can enroll as we allocate the hours for the professors and have the physical space rented, we do that for the year and for the semester.

So sometimes we have some displacement here and there. We hire a little before or after, with one more professor or not.

So this is the first information you might consider. And the second, more directional, considering that we cannot give guidance, is that, yes, it's natural that we see some pressure in the gross margins, considering the mix of residential and hybrid on-site and hybrid, and they have a different gross margin than DL.

So the margin of Kroton will face pressure over time, which doesn't mean that we won't work on new alternatives to mitigate that. But the natural flow of the process with this mix would have a reduction in the margin, although you can see that so clearly from one quarter to another.

And it's also important to say that despite this expression of percentage margin, the on-site courses have a greater nominal contribution when we talk about the ticket of the students that we are enrolling now, it's much higher than what we did with DL. So with a different dynamic with different margins, but important nominal growth.

Just regarding the adequation to the regulatory framework, the current cycle of intake is already in line with the new rules, or they will be gradually implemented during this transition period until May next year.

Well, I can talk about it. Well, particularly in '26, we are having this adaptation of the framework until we get to '27.

So we have a period of adaptation, despite the offer is already established the way it is classified. So, both in DL, you cannot have some courses like pedagogy and licensing, or even engineering, being established, this offer for the hybrid.

And then during the year, you have all the need to incorporate all the required premises. So in '27, we'll have all the regulations completely implemented.

And in the second semester in nursing, we'll have this offer classified as an on-site course with all the legislation being strictly --

[Technical Difficulty] Answer the first question the price... Trying to bring a simple explanation here.

Many times, we can repass the prices at a ratio above the inflation. And obviously, when we surpass the inflation, we pressure the dropout.

We are always doing the math to see if we gain on the readjustment. We do not put it on the table regarding the amount of reenrollment.

And historically, we've seen that it's better to speed up the price readjustment, therefore, improving the ticket compared to the losses in the reenrollment. Just for you to know that we also do this math, and we have a number of predictive models, considering we've been doing that for almost 5 years.

So, in other words, the dropout rate is not a problem for us in the first quarter because it's not the last one. The final one, we need to consider the semester, and we look at that with a lot of granularity.

And we are always doing a trade-off between the ticket and the dropout, aiming to have the best revenue and profitability.

Well, with that, we finish the presentation. I thank you once again for your dedication and the performance of all teams, more than 26,000 workers working on stock, and I reinforce that we are quite optimistic regarding the year with a lot of opportunities and challenges we have with many opportunities as well, and we are available to clear any doubts you might have.

Thank you very much, and I will see you at the next conference.