Q3 2020 Vitru Ltd Earnings Call
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For standing by.
And what's the to be true education third quarter results conference call.
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I would now like the hand, the conference over to your Speaker today Mr. Carlos for you does the true CFO.
Keith Please go ahead Sir.
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Thank you operator.
Good morning, everyone.
Sure it's a bit here what do you all from first for me after our IPO here.
Here with me are B, the breath of the for you won't be true.
On the occurring on August the head of exploration and other thing Baby also from the definition Department.
Before we begin I'd.
I liked your mix no debt.
They are the on slide two during todays presentation, our executives will make forward looking statements in the.
The vision my friends and neighbors referenced no I of forever and it's on measure on this call.
There's no way for EPS measures are not the standard you can see there the isolation or at the reconciliation of this no I forget the measure to the most directly comparable I have for other measures.
In the early for me as well with the the end of this presentation.
It's the why couldn't they shouldn't we be for after the webcast.
Which is available in our Investor Relations website at Investor day, the true Dot com of yours.
Of course, you all have the confusion on the takes on all of you know like really.
The move to phase three.
So I do remember we executed the alright view on the U.S. true method more of it and we're very proud of the the true.
And then which was only our for that.
The no life, Adam because GAAP and.
We raised the growth of minor bulk of them I'm sick coming on board and the net the peak of this primary offerings.
The U.S. as we've discussed throughout the day I feel for this basically for M. leap up of the.
And that's you know I'm just the from growth we have delivered full for had.
The big pure for me on other again because of it but we are truly convinced that the can all the great value for shareholders.
The women and.
And the deployment of our views on education skills.
So today, we'll have active discussion on.
Then putting on startups.
The hope, we'll be able channel I'll first give some.
Now moving through the pipe.
[music].
Well the 24th year of the main highlights for the for this quarter.
For the one.
In the last 10th of would leave the by the news for of indications of <unk>.
We work on core and again.
The number one fear of the your conditional education bookings on marketing them to.
We have the growing but stepping back in the markets due.
Two of them and make up the very broad and they'll get the could decide to do that or.
The second part of your on the flight.
Also in October.
The the means having the kitchen relieved the lead the free both of the in that day and I'd be a of the lots of of wishing cycle.
Our average of I'd was 20 felt for some above the markets.
For the highest among the least the for you in Brazil.
As a reminder, I do know the evolution of the students the Walt from the bottom of the indication you measure of the by the I think the.
That's why we believe that the is the best indicator to show the real add to the value would have on the life of a fit.
The third one from here on space. The that's about the take Oh, we pick a in the current the cycle grew 44 cents versus the same period of last year.
And as a reminder, in the first the matter of this you're always take the roof already force them worked the think beautiful most of your.
And also important to on the fourth point is that these increased the you take did not come on at the staff on average the good that's very important our average do you get the increased by 2% so more of the flow through the I can see provision in the group.
And these despite the sizeable number of the new students.
I mean as you know we have a model or academic approach for which the new students can join us throughout.
The first semester.
On the nothing.
So most of them do not provide us with the fall semester of revenue.
Okay. The confirms that would have been kind of thing we have a different market condition and the we delever the different sort of.
Sure for sports here about net revenue.
So with the the grease or even a intake the base and because of our next right I mean based on the kitchen of the graduate which is our main segment our main didn't incur.
The increased by 32% this quarter.
And again, the pure on on organic basis, which shows the the competitive strength of our bid of model.
Finally, a objective for the increase in the beauty of as well and the won't have the grief or even for the wouldn't not for the low bid the beat of either the third quarter of last year before we the method of age for their PJ point of being the fourth quarter of last year.
I will come back to this I've been there at all.
Well no basics.
As you can see according to the data that I just mentioned the will lead the by the new fabrication.
The from the still education undergrad the market. The number of you grew by roughly 90 per cent get your things done on 16, why are we grew by 42% and standard.
Once again for your didn't on are going to be the for these are the markets that had been expanding a lot and in our opinion, we I think we would spend the people for been opposed.
Oh the school Vsan every day.
And within the drawing an appealing markets, we had growth you're going to happen in the market. Our current <unk> share if it's the lead the surface.
<unk> increased by one point of microphone for it went from 10.8% until the end of in 18% to 12.3% left here.
And the the gain of 1.5 0.1 of the strongest gain the share among all the players in Brazil.
And the other important to mention on that the we gained share through all of the country you can sit here and the implied in the sharp.
Our net.
That the we expanded our net you're throwing the five we got the aim for them.
And.
Okay of course to highlight here the growth in the southeast and the puppies, we extended the losses between 18 on <unk>.
Uh Huh, it's one of the.
The 1.4 for went through for if that's a this one per cent increased the Philips because GAAP hope I didn't know where does that around 40% off for the whole market.
Oh here on the right about Oh, I get the and part of it not only we grew a lot of the also expanded our air tragedy, which is now 27 per cent above the market Wong of the before twice the number of open them on the no it isn't for kind of stand for something.
And again the highest among them is the players in the country.
So it's basically means that we present the edit the value for our clients, which are the more than 240000 Boes per day or diesel of the kitchen didn't hold true the.
They're hired the kitchen true on yourself.
Now on page seven.
Oh, we provide of your ugly of the growth enough to the base.
We have almost 300000 student nice there for several of them on the road in do you still get from core.
If we focus on the to the biggest of the sort of <unk> owns the rhetoric.
We get the or maybe the that makes them you can see that we had to keep the 34% since 2006 and 60.
And the we sold one thing the substantial growth instead of the base of our visual education on the Red basis.
For our 578 exponential hubs mature overtime.
And finally at the have shown before already take.
That's about 20 point true cycling the in the second for met the second cycle of the year.
Was the 40% higher Dennis the taste in the fleet beautiful left here.
At the end of growth in the first half of this year West Africa.
So.
It's both of the last the intake second was sort of interesting true to see on one of them. It is true that the current economic right. It does affect the willingness of some of our force.
Effectively and growth in one of the reported but on the other hand, we have seen a lot of the student who embrace the pool would go for don't campus quarter, but now are the finding more and more to go to the still the case for.
Particularly the hybrid mortgage debt at the one offer by us.
This trend has just been afforded by the written third we go on but the by the insight above the increased interest among for induced on occasion.
So this the.
Together with the cultural changes brought the bites on Dentek.
About.
Looking for a home and volume from home L for them for Uh Huh.
This represents a huge mark the pension going forward for.
And finally adjusted to remind that the net make it simple.
Lastly, you're already the war more new students from a newcomer joining the east of the kitchen <unk> Dan on campus for it is poised for base the whole basis of through the <unk> Board of education for the do each.
The into your some of them.
I want the page eight we show the increase in the.
Just on the kisch on based on any of the number of hubs. The between September My team in September 20.
Oh, yeah through all of the concrete will have grown a lot of.
You bet on the South region, which is the first weekend, where where we were based on greed.
Yes, Hi, Gordon told for Cats, and the sell the reason and then growing a lot for all the country.
I am, particularly in the southeast, which we grew the hunger and 30% for.
Joe fell from 2.8 on it.
Despite the compliance flexing our second the most important reason in the country.
And the number of hubs the Openspan overtime, we expect the along on the left for your and kind of and even the that's true must extend the by almost 40% of the number of hubs.
On page nine we focused on.
Our thing on the most important driver for our organic growth well see the maturation of our nation's hubs.
As I said it would have no five talking of seven eight expansion of UBS.
Which are still ramping up.
And your growth rate this growth potential we calculate the this so called theoretical maturation of index.
We just basically the number of peanuts currently on the road.
The hubs.
By the by the future of number of student interest income once they reach maturity for you would you after the usually after seven or eight years operations for.
The the overall index, it's curve at the <unk>, which.
Which means that the old, especially on how has the capacity to increase there are two of them they fruitful.
And on the importance of highlights the your debt. This means that take into account all based on have opened at the given point of time, but for example, if you take the only the to tell the and the team cohort.
Which indicates the if you're in the sharp went from 34000.
September 19 to 40 to 46000 students.
This cohort the Mcritchie index of this cohort went from 36% left the your true now 48%.
So the easiest the beauty of them all of the the maturation curve of this cohort is quite consistent and quite predictable and it represents a orphans growth every day at the limit that is accused of risk.
Because all the <unk> are already open all the hub Oh.
We have already that the the warfare the quantum of the partnering the hub our debt and leave the the uptake on the brand equity, California sales is already working on a fever dozens of given the regional city. So the of this potential growth NUKEM.
The come from and the.
The expansion of this I'll be happy.
So on price them.
We show here the expansion of.
In in the diesel the <unk> under GAAP rate, despite the chance of figure for the fish of real aim to each other and net revenue not only from the in the quarter, but also in the nine months for your throughout the or.
The year.
And on the right part of the of light we show again the increase in average ticket.
Ritual of three right per month for student and it's important to bear in mind that they get the finish of sits on nullity hearing the dynamics of the average because of throughout the year. So we should always make sure you're on your comparisons for both ticket and not the compare with the free this quarter.
Finally, as you can see a bunch of fit the rigs. This was virtually stable this quarter. Despite the effects of because of it 19th on Dentek.
Which had effect of our retention rate in the purpose for the purpose.
Two questions.
Here I think it's important highlights for things.
First.
We have been growing a lot of you know and the.
The dropout.
The rig is as we all know much higher among new students then amongst younger.
So because we create a lot of the intake of left for years and especially the these years ago.
We have.
He from phase of new commenting on beef and.
And the second the Fourq on a remark here is that the we do not provide discounts to finish the this at the renewed their enrollment with us.
So in the balance between students of the retention.
The retention rate and the average ticket we usually for Fourq from on thing our disciplined in the management of our average the good.
Now moving to page 11.
Oh, we can't see that debt the growth or no.
Yes.
Average perspective first.
The first the growth in net revenue led by the expansion of the stuff gets on the growth rate as we head of Justice good second.
Second I mean for Thats, increasing gross margin and gross profit line.
By the end of scale it come from focus on personal cost as well as increased the stabilization for all the three segments.
Third the expansion that will get the busy.
Although market for working for running affected by changes in the P.D. policy, which I would think you know soon.
But before that's on page 12.
To provide the bridge with the May for a range of the net revenue between like the <unk> and 20.
As you can see the growth in the couple of the that much revenue was driven by the strong increase in our based on getting the Red second of.
Such growth, what's the sort of a a bit by the reduction in both looking at the patients and on campus segment asked the David on the mix of age so.
On page 13.
There was a nice growth in the Red we reported.
Both for the quarter ended nine per month cured the.
Despite the pandemic.
But there was the worst on revenue with the ink on thing of the patient left the year that we didn't have the easier. So for example.
Left here, especially in the first half of last year, we benefited from some public of bidding contracts, which he Portuguese are they see the from.
The of here with the from them this type of revenue for the.
Basically disappeared and the governments, we focus on there but it.
Regarding our legacy on campus segment you'd have been declining overtime in line with our view for the for the whole sector.
And with no basically link the two quarters not offer you.
Okay through the still the case on such a law dental care and second of as far as ever and the.
We do believe that it's the right of huh for others.
We reduce or even for.
Hello.
On page 14, finally, the breach about the need for research on that just the BG between 19 and 20.
I believe there are three highlights a end of life.
For for one of the continuous increase in our operational leverage and the expansion of our growth from Oregon.
As you can see the cost of sort of <unk> and the June they were basically flat both in the third quarter and the lack of matured of this year compared to the of superior of last year, and we will shed more light on the dish with Metlife.
The second point here to highlight on the speech on the selling expenses.
As a reminder, most of the especially the are related to the taking profit which means that they are incurred to attract new students.
In both the third quarter of the <unk> of the easier and it made the most beautiful easier there was increased incentive [laughter] of roughly 2% of net revenue in the grid.
Turia for that for.
The if you ever we are at the peak of debt the ratio of automation between intake.
And the revenue figure.
And the second point of view that the hub deeply and the 400 role in the selling price.
And some true that's used to go to the hub for example.
To conclude the enrollment or the bid the lender to choose you wrote himself. So now with the pandemic would have to rely a bit more on the still media animal and the the cost in the still Amelia five.
Finally on the PD.
The last year and the preparation for our IPO, we adopted in the fourth quarter of last year, It's true for policy for the two.
Population of the B.
And you can see in the chart in the board on right.
They are one of the substantial free the chart in the fourth quarter of left for your which compensated there's very little for the charge in the third quarter of last year. So the means that we have the very low PD compared from basis this quarter, but why do you think the temporary issue.
For example, if we weren't the normalized the P. Eight in the third quarter of.
For the last year by using for example, the average speed gain of 19, which was tough on 6% of net revenue and the.
Good to hear of the sharp on.
Our adjusted EBITDA would have grown this quarter, but it's kind of overtime.
And that's why we're providing goodness of increased the huge increase in the just the <unk> for the fourth quarter of of easier.
Hello.
Based on the thing we come back to the games brought the buyer operational leverage.
The couple of surface as reported in our adjusted EBITDA calculation would you slightly reflecting data for you optimization of the personal cost and increased f. for can be spend the vision through all of the calmly through all the for settlement at the that we and the true secondly, we operate.
The makes [laughter] has reported that the thing that would go to the the calculation for basically flat year on year Importantly, we were able to leverage our leaner structure.
And at the front of piece of revenue during the expenses were 140 basis points lower than the same period of unless you do.
This performance illustrates our compete with the focus on maintaining a lean and the new structure, which is important for our VSOE and on Giteau suffused orientation, that's very important the key differentiator of speech revenue in the field.
Oh basic things.
The talking to be the more interest what would be the both net income and cash flow.
Before net income.
This temporary increase of PD that I've just explained coupled with the onetime income tax effects of a 11.7 billion on right, which was related to the restructuring of our first of from stem impacted our adjusted net income in the quarter.
By contrast, when you look at the full year the year to date the grid.
Adjusted net income was up four to seven force, that's driven by the significant expansion in our diesel and the kitchen undergrad second.
Cash flow from operations on the rights he put substantially in the third quarter.
67% to fit the 2.4 on being a REIT.
And I said for the growth as well on the nine month period of the your once again the degree the was driven by the outstanding performance of our dish or the <unk> on the West Texas back by the continued on its been in the <unk> fuel from anyone.
And finally regarding the huge improvement in cash flow from the fortune for operations music.
Music for Fame not only by this increase the higher cash flow from operations that I just mentioned, but also the higher level of PD in third quarter revenue.
The third quarter of last year as proof of explained which is a non cash expense.
So now let's move to page 17, just talking more about the seasonality, which matters a lot.
I'm going to provide you with more Becker on April in order for you.
True to help you to build the our model going for.
Revenue and the takes are not the sea Buda equally among for for first starting with intake.
Oh of course is our cooker around the separate most of it models, which are the fed enable students to the ROE at any time through all the semester.
Still we usually experienced a higher number of new enrollments in the first and third quarters of each year, which.
Which corresponds to the beginning of the convinced the method.
Okay.
On top of debt, we typically have a higher number of enrollments in the first semester of the year than in the second thing about the.
On this ramp can the scene on the REIT starts right side of the slide.
And the result of what I just mentioned, we usually the core higher revenue in the second and fourth quarter of of each year.
However, this year on the specifically, especially in the second quarter of is here to the minutes. The it was not at the parent and the second day of complementing.
I mean, our net revenue should have been slightly higher in the second quarter of the easier.
You can see the strength of more clearly on the sharp add to the left of slide.
And finally on the importance of highlights that irrelevant portion of our expenses.
Our off for the mill for example, with the higher selling and marketing expenses related to the first semester, which had the hiring tick.
Especially in December January and February.
So finally about Gardner for on basically 18.
Adjusted as the first release of our after our IPO, we exceptionally provide guidance in this life on the net revenue.
Adjusted EBITDA margin for the full year of stuff in China.
As you can see.
Our guidance for net revenue of intimates revenue Shelby between stuck on that then it's not going into any of you know right.
While the annual adjusted EBITDA for the margin should be between 26.8 interest sampling true, which represents an important growth of worked on left here. That's on your on the chart on the left.
And here on the chart on the right we show the and the effect of the changes in our PV policy in the quarterly adjusted for the member.
Again, we had a very low people from from basis and third quarter of last year, but on the other hand is very high PDP. This the for for so we still have a huge increase in our debt the be the numbers in the fourth quarter of the easier compare to the fourth quarter last year and and there for this number or the men.
Regarding the second semester of 19 and training here on the right.
From the shorting the right from the.
Right the more normalized vision of the adjusted the gate growth.
So before we conclude this presentation some highlights on the for the aegis on page 19 on.
I'm very happy to report that these year effect of two weeks ago or last week exactly we knew there was the most of our interest in the section 30, and we reached the highest rate since we started to be measured by great place to work, we put the standpoint, the net for years.
It's very important for us and we truly believe the as an education company. The for the second of Oriental ease of use a key driver in the key a real competitive advantage for us.
Also we are very engaged with the corporate social responsibility somehow.
Some highlights are for.
The first national of fit on the symposium in Brazil, the for the fourth or buying of I guess.
Which is good among other things the importance of inclusion of disappeared people ended the case on process.
Jim.
The how to teach out of different for it which what's greed of after the outbreak of the pandemic.
The reach we offer free online training for public school teachers, averaging more than 800, sorry 84000 per.
Features from nationwide.
So the answer the first part of the moving and we're now ready to take your questions. Operator. Please open the line the.
As a reminder to ask the question you will need the press star one on your telephone.
To withdraw your question press, the pound or hash key.
Please standby well the compiled the Q and a roster.
Our first question comes from.
The credit Suisse. Your line is now open.
Oh Hello, Good morning, Thank you for the for the.
The presentation and for the states for making this question so the.
I think the focus is very clear, but the just true remaining questions from the birds My wife is.
So we saw that there was a kind of a.
Of depreciation that was above last year, not only the quarter, but also the year you can explain what it would be the white goods the risk.
Kind of change in the level of the appreciation in general and secondly above the symbols, we saw that the kind of but since two of the three no estimate it was kind of like Cleveland excuse for 10 days Invincibles, we could completely late the true true how the school or are the collectibles every day relation.
On to the cool the rises or anything like that thank you.
Think of the pay the for a quick after the fourth.
For for gutted the provision.
I mean, there are true thing here, but the precision and the motivation to these your index.
The first one is that there.
There was the reduction in the second amortization of the with your because there are some good the real I think it's in our intangibles that are going on.
For instance, a Democrat and.
And some are even fusion behavior. That's that's the one thing the other day the other things of that on the we have been queasy overtime as well, our investment or Capex and intangibles as well because we are a tech the neighborhood companies, but we agree that the losses and technology and no debt for health systems.
For our third on for a partner for our two sort of et cetera.
So the degree of overtime.
Overtime is that once the here and now they are thought to be amortized as well.
Regarding the British on that a little bit, but we also increased the amount of capex. During the first semester of because you're not this quarter of in the first the method because your because we opened several on hubs or the beginning of this year.
As a reminder, we opened a hub belonged to ourselves when we want to establish our presence in the new markets.
ER or true really have the flagship.
To be to be used at the reference in the given the recent the we opened.
More hubs than the normal into one of the year and day consume the higher capex, which on all of the proceeding as well.
Regarding the doable.
Yes, we do have a copy of the controlled.
On a receivables went for.
The here.
For us it is true that there was increase in receivables.
Eight of its comparing to the left here, but the at the end of this was the uptake quite well controlled compared to what we've done so as the answer I think that the we have been able to deliver a different management of receivables, which reflected in our cash flow from operations.
Okay, great. Thank you for taking for the the response. Thank you so much.
Thanks, the better.
Our next question comes from Pedro Mariano with Bank of America. Your line is now open.
Hey, guys morning, Congrats for the reserves when we introduced the sort of yeah I have two questions. The first I was wondering if you could lead to provide some additional color on the cloud the average accretion and specifically for the city pressure on the undergrad the certification before the end of the big cycle.
Right. So any color would be great if you're you possible.
On the second question is regarding the personal cost I mean do you expect from the spots line, it's going to the to dilute the surface of the joke revenues next year.
And if yes, what should be the main drivers.
For do the expected the Sam it's a great what would be the.
The question. Thank you.
Thank the bedroom so.
You said what correcting the your question for credit, but we shouldn't the People's the site.
Yeah, it's the typically for the Commissioner Greg.
Okay. So for the the intake process, what we have seen the that indeed, the on the average ticket for the intake was.
The more it slightly it's slightly higher than what we thought one year ago. So the wasn't in the second growth of around 1.7 on two person on the average tickets for dozens of course after they go overtime. So if the border to highlight here that.
The contribution of the new student if not true.
For the full semester, so what we would do measure of here as well if the one what would be the ticket of both a guy in the second semester. So.
The one would be the recurrent average ticket debt he or she will have and if the current average ticket grew Dave.
On this semester compared to two of the one you're on a go by again around 2%.
Total did this just to show that the.
The overall increase of ticket was the only a matter of increased the tickets for the senior but also its life increase in the intake ticket as well the second question.
The cost reduction.
You're right, we do expect further.
Looking for a further improvement in the margin coming for on a reduction income and these income.
I think the most of what the reason or two rigs on first of all of the continue on the gain of the game that we will have.
This is a a business of Capex, we do have a net benefits of scale as we grow bigger and the this is going to keep taking place throughout the next most all of your day.
Secondly for the peak with sometimes taken for granted.
He is the mix between new student.
Here are the.
Again as I mentioned before we are these the unit we are at the peak of this ratio between the UK and then review of senior piece.
As for the next year or do a racial with touch and go down which means that we will have a net your expansion of it just the margin coming from on that for a number of rigs on the first one is that.
Selling expenses and the said are concentrated to attract new student.
The overtime the the amounts of money of divided by net recognizable though in this line.
The second one is BD the.
On the PD.
Anthropologie are more on the grid the much higher ammonia newcomer then amongst the yard.
So because we are at the peak of the free.
We shall experience on the one would be just a reduction in Pee Dee Ann dropout overtime.
And the third one is that we typically increased ticket.
Higher the above inflation for seniors overtime. So ask the percentage of the record we have seen a free the though we also actual has increased the net revenue.
So with all the specter of pickup truck count we show a expect indeed, a continued increase in the book and the the marketing for the next year.
Yes, the very good I kind of think it very much.
Thank you.
Our next question comes from the Suzanna salary with each other.
Line is now open.
Hi, guys good morning.
That's the question.
Looking ahead, the first of all I know I was simple things on shifting from continuing education lots of net back on for some time as well for for Sally and for the <unk>.
From the this is getting a bit I'm all for the I've, maybe net and lots of had some nice momentum with revenue generation.
That's the B. Our first question. The second question, maybe for them the telephone our debt on top of Videohub.
Well just like no interest line on each of the didn't plan on its going a bolt on below what the you were expecting for day of on top of.
No no no club thanks.
Thanks.
Thanks for that so for.
I was talking about the the ramp up of the hub.
The fans of console.
The the ramp up of the hub for whats the rigs in this and I didn't hear what we saw this debt there wasn't a acceleration in the ramp up of of the 2018 and 19 at 18 for medical horse.
But the 2020 cohort.
But it's lower than what we thought of basically because of those hope we're open.
And then after once a month of the.
The execution of down because of the on deck.
So that's why we had to increase our investments in marketing the based on either but it is true that the from Dentek effect that more the new hub, the and the other exponential hubs.
Yeah, so that could have the repeat your first question. The good I can hardly hear what sort of thing.
Sorry about that I like.
Well the first one was the late because it comes from the indication of balance and lots of good bye.
For the next two years.
If you can hold the exit as expected well at the end and lot of kind of what that means no relationship will keep on net income is also.
Nice to see from the field.
Okay, because you know the occasion the.
The two indication.
He was here that's in the sales is split into two main sub segment of the first one of the bigger one but for the graduate of course, but.
But there are also other business such as what could be the quantify the they said.
The graduate for <unk>.
Uh huh.
And these new York and but it was.
Good day.
Just epic of it because the whole selling process of the of the threat of importance was heavily reliant on the on on a per se.
Ill.
Offline media and people in sales people and we think the hub selling the step of red the important so that was.
For the reduction in the intake in the second quarter.
Quarter of the year EPS dependent but the trends what the already we've worked at the for the run rate now is ready the very positive and growing them up in the.
That's the most effective knowing the birth of timber.
The focus of the profit for debt, it's very profit and we changed.
Changed a little bit the taking profit for the what's important for which are now much more closer to what we do in the undergrad focused on heavily reliant on digital media. So now now ready for the Oregon affecting a lot of new people. So we show for the increase in the second month.
For for next year, a huge growth for next year.
The the other the other businesses.
It will depend on on the bid on the government because at least from from time to time, the Dupont space. If the book of business last.
That's the year end till the end of 18 busier it was basically disappeared.
So, but the trend that we see it your debt again now that the the I'd say that the government realized the benefits of this application, but some of these much cheaper than on campus quarter. So we do believe that EPS for next year there'll be increased interest all of this.
On a client.
He in promoting more fish the corpus mm booking in the kitchen.
The the into a question for them.
[noise] again, ladies and gentlemen that is star then one.
Question at this time.
Our next question comes from the scars with Goldman Sachs. Your line is now on.
Yes, hi, Thanks for taking my question I was just wondering if you could come from in the little bit about the dropout rate because of the poor undergraduate distance learning.
Of course is what happened to the <unk>.
So on this quarter and how you expect it to shape up into the into your end and in the new year.
Thank you for your non.
In fact, the dropout rate.
This quarter, what virtually in line of what we do but we had a one year before.
Which made us very very heavily because we are again in the middle of the the largest syndication quite of it you know how the year.
We had an impact on increasing for up all in the us in the second quarter.
Water and even in the fourth quarter as though just as the result of the kind of compete.
Because the the true there I.
The number of color and.
Two of the they lost the income I love the jobs because of the dropped out now in the third quarter. What we have seen the the level of things for me was stable compared to last year.
So the did I get that do the it's very important it if they were originally.
Yes, I think the affected by the number of new for them that we are increasing or for.
The more and more over time. So it's also important to bear in mind that we had a retention rate debt. If we stop growing no oh for different <unk> net for increased.
The country, they're easy to increase it would take for it but the before to keep growing and the month any update controlled retention rate, which again at the fed.
We have the could have had even better with the some of it if we offer discounts in the renewal process of sooner would you prefer not to do and that's why all the average ticket increased this quarter otherwise could have the quick.
Great. That's helpful. Thank you and then a follow up question and to the extent that you were able to get any data on that or are you seeing actual trends for the students.
Have any information on how much of your growth was being helped my students even switching from the from on campus maybe from its competitors over the way, which we didn't you hoping you can see it but I guess, either the CLO tranches of requests and it wasn't relevant not only on.
No I can't.
I guess the it is beginning to be more revenue. We don't have a free worked for the data on debt, but we do have.
Directionally the with the students.
We do feel that the interest has increased the amount of certain preparation.
Debt that's yeah, if the who'd have thought about going to the on campus and now.
First because of let's say, we look for income and second because of changing mindset or we are elimination of credit. This again.
On a different learning.
We do see the dairies increased not part of the population of all of the pitch a for a quick the.
That ER on moving their decision.
From on campus true to the digital and.
And the there is just what the just come from the last week.
It doesn't affect the least they're fine on the 50 wave report the they released into each of the whole non conforming debt confirming that the.
There's more and more of heightened creep in the interest for each of the patient a much more than the interest about on cash. So it is let's say.
Nice to assume that the he's a big part of the population that will overtime.
Change during the season or the purpose of the season from on campus and then on wouldn't grow with other condition of kitchens, especially because we offer this hybrid model, especially because of the offered as most of which provides the sense of community the sense of belonging that's the the the person the that he or she likes the kit.
When going forward on on kept the button.
Now we do we do all for the sense of belonging but instead of repeating five the the week.
If we go to leave your class the tutor walk away from the basketball court combined the flexibility and affordability of the on line with the staff of belonging of the on campus.
Great. Thank you.
Thanks for your money.
I would now like the hand, the conference over to your Speaker today Mr. Carlos for you guys for closing remarks.
So that's not true wrap up.
With some key takeaways on page 23, but.
But we had a very fond of the quarter and is very good night the month number.
We have positioned us well for future growth.
I mean, our strategy is based on this disruptive model the student centric hybrid model, which appetite flexibility affordability and the the trunk relationship with all stakeholders.
Yes, and no debt for him.
So this is proving to be efficient overtime do for each of the lever consistent growth across all key metrics.
We delivered the growth that we discussed in the IPO profit.
And we remain focused on delivering more long term value for shareholders by keep expanding top and bottom line.
No you're romance and for the base hadn't Chris I lost Martin Pranger aren't moving sustained by the proportion of levers that I have just explained.
And we believe that we can be.
Order on the momentum of the hubs.
As the mature and we could turn to spend the overview.
And see the chicks that at the year on made from a from on campus the diesel the kitchen.
So we're very excited about the future and we believe that we are on the right path.
To say to maximize our growth of things take very much for being here with the DSIC real pleasure look for to meeting with you all over the next month when the the fundamentals and to provide more financial and be the peak either next quarter. Meanwhile, our investment or something.
For a few of available to answer any questions that you may have.
Think of in the right.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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