Q4 2020 Afya Ltd Earnings Call
Assa has over delivered outstanding results things the ideal our performance reflects our severe strategy great dedication commitment of our team members and the resilience of our business model, especially doing a year of a worldwide pandemic.
Since 2017 our net revenue has grown almost six times since our guidance for first-half 2021 is higher than $2,000 years next month. We are not only growing fan or just a bit. Have grown almost eight times and increase 13 percentage points in March in the same. And there is more opportunity operating cash of 391002029 times higher than 2017 reaffirming our Thai Pot of strong with high profitability and cash generation in reinforcing. Once again, or Firepower to continue consolidating medical seats, even after achieving the 1,000 dead guy in a PO besides all this incredible growth and profitability figures. We have been created the largest medical system Brazil with more than two hundred thousand Physicians dead.
Medical student using one of our products. You also have more than 430 partnership with Costco and clinicals in Brazil answers Focus continues to be provided a life long learning experience for positions. And so we have doctors to transform Brazil's Healthcare.
Oh, let's take a deeper. Look in 2020 achievements on page number 5.
Through the year is successful in securing our strategy continue to be the market leader of medical school system will soon as we have completed 9:00 positions since we became Public Law and 851 medicos. It's in less than 2 years for approx 85% of our three-year Target share doing our IPO importantly. We had a solid track record of integrate acquired company and delivery cost efficient and synergies that can be seen the miles extensions. We are delivering this acquisition set us up to deliver continued strong results in the months and years to come or a medical education business remains and will continue to be the Cornerstone of our business the shore and mediator. We have become extremely patient as a buried in medical school if you continue to see opportunities in this area
In the beginning of the year, we have to adapt to that needed to stay focused and provided the high quality education experience that our students had come to expect from us while at the same time is including our long-term strategic plan with the epidemic outbreak. We are fortunate that as a business we are able to help using our campuses as Fascination locations dead and by providing free cost at this time to assist hospitals medical schools decisions and Earth to face the difficult times.
Because it nineteen ten Supply something.
Able to shoot it has gone to acceleration for a long-term plan and started to unfold our digital services rendered as we've answered by the condemning. The medical community is based on having braved the components of health care. We discussed in the past. The digital assets were appealing to us, but that we can add more services to medical students and professions and maximize our product off before our digital strategy with the condition of I clean Mash point and medical. These are decisions enable us to deepen our relationship with our students as well as put our brand in front of many new doctors nurses and other medical personnel and students in his are competitive positions and our capacity. Would you remain having a beer leading capital structure provided really to adapt to the dynamic environment? We are very keen and we maintain our focus on generating value giving our strong freakish. Yep.
We remain committed to our long-term cancel priorities the balance approach invest in the business and return the strong cash flow investors all I'd give me a call back with you members and employees say in management through this volatile environment.
Our quality and is a question was also rewarded this year after was ranked as the winner in the location section in the app connect off of 360 survey and also have won the golden stone stone in the extra category. This award is the evaluated by vegetable and recognize Echoes operation aspects such as complexity of the transactions Innovation price and wage to close this first part you start to report metrics in the Discerning release after the engagement on this team is generate an incredible impact on society. What makes our teams very proud even more committed to our better than
Well, the next stage of resent the recent acquisition that we just concluded this week.
Solution for medical imaging geology biology and medical education for the health care solution is divided into sex life and health education business. The problem are tended icon viewer is a powerful Diagnostics tool designed to attempt decisions health professionals hospitals and hospitals if certified biodiesel Brazilian health agency and has over twenty four thousand downloads across 180 countries.
You automatically much brother is a high-performance browsing for structure that allows remote Diagnostics and sharing medical image to any location anywhere anytime both products operate as a small in education helped solutions. They have a platform for health education package a real wizard category human and animal Anatomy models in another country. You extends using photorealistic event is a complete solution teachers and students to access content remotely without losing the quality of fiction the help.
Today at 10 is used by more than 50 univers in multiple health problems.
Austin and model business with this product. Basically Harbor will enhance our constant technology firm expectation biller allowing us to strap our presents in a Hospital and Clinics and to integrate the solution to our platform providing better service for dishes and students invite you all to get more details of those the positions in the presentations of a life, you know, or higher website moving to the next stage will discuss our main highlights of 2020.
Stanley Ford talk line 2020 just net revenue increase 61% reaching 1.2 billion are both still due to the maturation wage and consolidation of acquired companies or medical student based. Was that 67% during this period in 2020. We managed to combine a high top line growth with profitability mainly due to the operational level and successful integration of acquired, on average. We gain more than ten percentage points is the largest integrated positions are very adjustable. Was that 69% with 220 basis-point extension during the seal adjust letting them up 72% at the end of the four quadrants. We had approximately 1 billion in cash on our balance sheet and the cash converter for 2027 years.
We also announced that position only 50 Monte freezing our medicos. It's based in 166 and the authorization to operate them adding a hundred twelve days to have the final proof of address and close this deal in the second one. We woke up the next Slide Rule the Day of how answers consumer education and digital offering is serving the entire mass culture.
I want a long-term objectives to be the one stop shop for physicians in Brazil and we have already managed to achieve decisions in all stages of their career started off. In fact medical students. The first glance with meds of in first class technology-based education after they graduate from a generous position. They have two alternatives to continue their career versus the medical residents a competitive past due to the lack of residence programs supplying with them and platform help the students to prepare for residents them with a total $6 Thirty plan to maximise the approval rates and individual box.
The second is a specialization products in which they have theoretical and practical class of sixty different Specialties offered by Ethernet or the digital Health service rep. We are offering based on our strategic pillars calls and Technology clinical decision to clinical management to telemedicine electronic prescription and doctor-patient relationship with Mexico hybridization mean hands of the medical education courses and Technology pillar by offered their solution to students decisions ought to have Imaging studies and Diagnostics through Atlanta Hub and attended I come from
In terms of clinical decision to be brought together that made and Metformin the two leads.
Please on the segment helping more than 200,000 that's going to help professionals to take daily accurate decisions minimizing medical errors in medical inflation management tools and elements that a more experienced Physicians. We have a clinic and listen. I'm ready to help Physicians to manage their training and all Financial processing patients and health insurance.
Last we are not only serving more than two hundred thousand doctors with proudest meehan's their friends, but we are also offering tools that can connect them to patients briefing allowing us to create a huge ecosystem for healthcare system. We still have many opportunities to grow the digital search as we are still degrees and stretch the same between these health tax positions cross selling the products and logging in their client or M. And if a client remains very strong and we will help us to strengthen even more and like wage and improve our penetration only strategic dealer.
Will be the next page will discuss our guidance achievements and the guidance for first half of 2016.
Guidance for the second half mm painting besides all the uncertainties in the pandemic environment in terms of adjusted net revenue. We deliver 605 medium here to medium of the top of the guidance a great achievement for the semester and for closing twenty-twenty our adjustable DiMaggio was also achieved 45.5% on a guidance of 45.57%
We also issuing the guidance for the first half of 2021 suspected net revenue is between 740 to 780 million hands off presenting a bro of up to 43% agree and adjusted ebitda. Margin between $46 to 48% that represents a grow up to 45% year-over-year not just all the figures does not include any position that can be concluding during the first half of this year. I don't know turn off all over to lease that will detail of financial results. Thank you.
Thank you and good morning. Everyone moving to the next page to discuss the financial highlights of 2020. I'm very proud that we are able to continue to growth with four great profitability and cash generation this year. I will now pass through the highlights of our financial results of 2020.
55% 1893 per agencies medical students. What's up, 67% reaching the base of eleven thousand and thirty students reflecting medical seats moderation and acquisitions.
I just
Revenue for the year was up 61% year-on-year to 1.2 didn't react reflecting Acquisitions Medical School moderation and ticket price increase due to the maturation of Readjustment.
Excluding the condition of community of San Lucas that image has the net revenue grew by 20% year-over-year reaching 856 million reacts. The increase was primarily driven by organic Revenue growth mailing to to the maturation Mass medical school seeds and Bulbs increase in the average ticket.
We also have a great ability growth coming from the cost efficiency and energy extracted from magazines. And yesterday was our systems reaching 563 million reais with adjustable margin expanding 220 tips, excluding the acquisition. Stephanie should be four months that just the B. What's up 40% rating 467
I just didn't nothing comes what's up, 71% year-over-year. 388 r e p f have a great increase of 55% 18 and fifty cents per share.
Moving on to the next page for discussions of key operating metrics by business unit starting with d one.
Average monthly tuition fee increases 90% compared to 2019 reaching 7995 reais, excluding Acquisitions. This reflects a combination of new students enrolling with a higher Vision rate combined with the students are graduating. We for lower tuition talking about the revenue mix 74% of our combined tuition fees are the ribbon from medical school down from 69% in the same period of the prior year in terms of total tuition fees retreated 1.2 billion reais e 2794 reais and increase off 53% year-over-year.
Test tube YouTube we had almost a hundred and twenty five thousand active users at the corner end with includes $170,000 comes from whitebook, excluding whitebook. We saw a 40% increase in active students in X specialization busy. We saw an increase of 163% year-over-year failing to to the consolidation of unity Dental.
No.
Turning to the next page. I'll discuss our digital student base and student student engagement in the first graph of the page. We can see the evolution of monthly active users in our platforms.
We saw a decrease medcel monthly active users in the second semester due to the consumption of the COVID-19 free courses in the platform. There are still some students with the course active. But many of them has already finished the course.
Users of whitebook, which has 163,000 1.5% lower than the third quarter 2028 Assurance on the right. You can see the trend in our current consumption contact that users are confirming included podcasts learning assessment skills as well medical weapons. We saw a 24% increase from the first quarter 2020. That means that our students are more engaged with wage assets that we are providing to them.
According to the next slide. I'll discuss in more details the net revenue and growth.
We saw a 61% increase in revenues year-over-year of which 55% of the increase is coming from the consolidation of dog named Lenny acquired conference on the right side of the page will show the 2020 adjusted to be done During the period adjustable increases 1662 563 reacts with 220 basis points expansions Mars. Why don't you percent of the increase is coming from home in plenty of diseases.
The other 58% is coming from extracted from acquired companies that we integrated in our shared service increases on Medical City location to 100% off and implementation of the curry plant in integrated curriculum moving next to a discussion of cash flow.
Cash equivalents and were 11% higher than ads 2019 reflecting the strong cash flow generation that we have in the year and the proceeds that comes from our follow-on process. The majority of these funds is invested in low-risk Brazilian, COK. Oynama Native Instruments.
total was $160 and 2020 up from $583 reais month in 2019 cash flow generation remained strong 27% to 391 month which resulted in a cash conversion ratio of 76% compared to 100% in the same period of 2019 East decrease in Cash Converters, year-over-year is mainly due to the consolidation of metal business and our students read negotiations are overdue balance due to the fact
The call back to be seated so he can presents our ESG program that we will start to report this quarter. Thank you moving out to the left slide on this presentation education helped fillers for your business are also crucial issues for people who are being in such Economic Development. This character is inherent to the company makes our own Nation distributed throughout the country you referred to possibly back for local communities will be in regions that have lack of positions. The healthcare system is in need of investment and law does not have access to Quality Health Service before original presents. We managed to attract medical and Health Professions 3-volt regions to make investments that on the local Health Club besides providing free consultation for low-income population the first step to consolidate answer as a sustainable competence. What is the sign the UN Global compact a programme developing germ?
To engage companies in the adoption of Social and environmental policy. We are also concerned our human resource policies with social inclusion employees wage equality and people develop what and half of our employees are women's 55% of our management positions belong to women and in our board of directors wage are available members, but then that will guarantee at least 3% of disabled employees inactive in the environmental scenario. We are running a project to stall suck in all of our accounts all the energy use it will be generated by our own facilities. We currently have four campuses running their own solar panels and addition and the Bureau of the implementation ESG commitment is part of our strategy permeates our Corvettes. We have any Adventure year after year on the team.
For now on ESG cuz you'll be disclosing the company's quantities. I will now open the concert for the Q&A session. Thank you all.
Hello everyone. You're not going to open the line for questions. If you want to ask a question, please raise your hands, and if you're connected by phone, please press nine months raise your head. The first question is from my cell samples from JP Morgan drawings open.
Well, thank you for for taking the trash can actually have I wanted to focus a bit on the business unit to can you hear me hear me off? I think I wanted to focus on business unit to the first question was would be if you could please discuss a bit the initiative to accelerate penetration of the services of these services and do you two now that you are putting together an ecosystem? What do you think to do during this year to to accelerate that and II phones light 8 where you discuss the Strategic positioning off there seems to be a big gap phone on on the column for health care cuz systems we have a suit, but that's the only thing what are your plans to sneak attack the the healthcare system if you do you have anything on the shelf that you're planning to deploy. Thank you.
Do you can you check this one?
So hey my cellphone and hi everyone. Hope everyone is doing fine with good health. And so to to address your question is my cell. Yes, we have several initiatives actually to accelerate, uh, what we've been doing where the Digital Services uh, but the main one, uh is that we are actually building, uh, one single data Lake of information that we can use to wash perform better with a different Services. Uh, so that's sad, you know, all of this information that we are collecting with all the the Digital Services we can of course, uh, use uh to uh, adjust all of these business together and accelerate them. So some initiatives on the commercial side we've been doing already. So we yep,
Uh a pack of a services with a benefits for everyone that is using the digital service. So it here a doctor in a using Eye Clinic if you're using a white book, if you're using ugh services that we've been offering or medcel or even you know, our graduate programs, uh, there are several discounts and and offers is specifically for all of them. So, uh in general these are the the two main pillars of one is how to use better off base salary to use of these uh of Digital Services on the one side, you know, and we will use that as one single, uh, data Lake, uh-huh. Every other business and also on the commercial side also doing several activities to to perform that
So do that to the second question. Can you just repeat that please my cell sure on flight eight where you you have that slides showing strategic position and comparative advantages there like four filers 1234 on top and the four is Healthcare consistent in there. You have actually that from suit, but there's still a big void so long do you plan to do more in that pillar or Healthcare consistent and patience? And what are your main ideas here?
Okay, thank you. So in terms of the the strategy we are focusing on empowering the doctors with our services, right? So, this is the main idea with a digital services with the pillars that we have. We have six pillars today that we focus as as data. So we want one is the content and technology for medical education. We have clinical decision support electronic medical records and Clinic management, telemedicine digital prescription and patient engagement. All of those Services. They help us to perform better. So did the strategy is pretty much to reach the most number of doctors and Empower them with with our services. So today is Thursday. We stated in opposed to three hundred thousand doctors are using some of our services at the end when in the filler for example that the the patient engagement and in
where there is uh as you go through
So. Come as a service, that's where we get to the patient. Right? So this is a a different game. It's a different story, but we truly believe that our position as an educational company, uh, focus on helping doctors and Physicians to perform better. We will get to the point where we will be having a Marketplace that you know patients will be able to schedule their consultations and then Circle back to to you know to the ecosystem so we are not there yet, but the focus is as I mentioned on the pillars that we are planning to through to add Services once again a d empowering the doctors.
Okay, it's Louis speaking. If I could add some some points here on what you just said this 60,000 have different kind of maturation of services in in each one of of these pillars three of them the the content and technology for medical education the clinical decisions off the practice management and and the front medical reference. We have three of them these three of them being more mature. So, what we can see on on on these three free repairs that we will made some phone 12 Acquisitions to fulfil these this kind of service that uh, We've we've made this this is the case of medicine I when we bring the the financial skills of managing,
The receivables off the the positions to aggregate inside off I Clinic is that the case of Metcalf that we announced yesterday that brings us the the the the the image solutions for for for credit for practical classes for to to to address that so in these repeaters as the Armature we're off to see uh specifically adding off specific service on that on the elements and and digital prescriptions. We are a kind of uh, the the middle of the way we see opportunities on on making more ugh more Acquisitions on the ads to fulfill them kind of service that we want to provide each side of these pillars. And as you mentioned the the doctor-patient see patients relationship, we are just in the beginning of the journey we have just wage.
Doctoral on that. We see that the importance to to bring demand for all these disposition community that we want so long, uh in dispute. Are you going to you're going to see a movement that will be more uh-oh boost or strategic? Of course. We are evaluating the the the effects that providing this kind of service, but we want to build the six pillars, uh with service and this last three that Dimensions they they are suck Ur So you can expect uga's issues to be more relevant on on the street.
Perfect. Thank you very much.
Enjoyed it.
Okay. Now we have Jeep so good. You can go.
Hey guys. Good morning. Can you hear me?
Thanks a lot. Thanks for taking our questions. You have to
Mentioned the ongoing commercial efforts within the space just like to better understand in the short-term within which apps you think are the clearest opportunity in terms of bundling and Cosell and in this sense how we're going to approach the marketing of medical Harbor. This is the first question and also moving to the traditional Compass operations. Could you please give us an update on the status of the message? Cuz two campuses that are actually wanted and also if there's anything else method on your MMA pipeline, that's the correct. Thank you very much.
Ser bro, thank you for the questions in terms of the commercial efforts and what we've been doing in and bundling the services off the first one we are we're actually the the idea is not to put apps together. So they the services that we offer let's say why and also I clean it they run off a separate today. What we've been what we are doing is doing we're creating this bundle offers. So that's a very clear one. We've been doing this all right off and and and it's working in terms of that profile. You know, we have we have a hundred and tenth close to a hundred and ten thousand subscribers for whitebook off and I couldn't interesting growing, you know, although there are differences between the audiences but you know, there's a uh-huh an opportunity there in terms of working with recruiter busy and putting these Services together medsurg.
For example, which is the recent acquisition. This is a service that it's uh, it was in the pipeline actually for a clinic and we will add that to the to to the eye clinic off. So that's something that we will integrate. Uh, it's very recent acquisition, but we will integrate that as a service to be provider for positions within the eye clinic product and for medical Harbor, your last question is we are going to use it, you know curriculum, you know on a on a on the red business that's a pretty important something that we were looking for a solution for that purpose and on the b2c side, you know for other businesses as medcel or it's something that we are going to also I mean it's off of the the product roadmap here to add more of that Digital Imaging services and in eye clinic and white book as well, you know, we are going to invite
more and more
The educational content with something that we've been doing already Eye Clinic offers an educational content whitebook, you know, when you're doing as a physician a diagnosis, we are starting to add more of educational content and then we use we're going to use that medical Harbor there and uh, of course, I mean on the B2B Thursday since you know, there are more than fifty clients on need to be for medical Harbor the idea is to keep that growing and expand, uh that as a service that we offer to to the to the corporate Market, especially on uh-uh medication institutions.
This is Rudell take your second question about my Matrix campuses. We started the two first month Medicals off last year. We have a hundred percent of a coupon see on this first cohort seats moderation. We are ready with two additional boxes waiting for the final.
Go ahead from the minister of education. So we're waiting for the the last visiting we expecting to have the final to reservation by the end of the first half and the last eight of the total seven that we have. We expect for the the second half of this year about m&a. We have mapped out for em, and the pipeline four thousand seats that we are analyzing and five hundred of them. We have having a very close conversation wage and can be something released to the market during this first and second half of this year.
That's great Reserve. Thank you very much guys.
So the next question.
American spelling on Titans lines open
Hi, good morning. Everyone. Can you hear me now? Yes, perfect. Nice. Thanks for taking my question. So I have two questions the first one related to the guidance office. If you are considering any negative impact from potential mandatory discounts on the guidance, and if so what level of mandatory discounts are you expecting and the second question is related to David E. A margin that deteriorated during the fourth quarter. You mentioned one of the reasons being attained in the methodology of allowance for doubtful accounts in the fourth quarter of 2019. And I would like to better understand that if you can please explain what has changed and if we should expect any delinquency methodologies change once upon the situation normalize
those would be the
Questions. Thank you.
Hi Chi, it's Louis speaking. Thank you for two questions. The first one regarding the the postponement of the recognitions as every everyone notes in Brazil have uh critical situation in the the complete. Uh so much more for consoles with the these these increase of the cobit case, uh were shut it down for a practical classes again at the beginning else easier, but how we can see that as that. We are very comfortable that if any impacts that should occur in our revenues of fact, he's just a master if if we need to to perform this Revenue recognition, these Revenue recognition postponements is inside of our God.
So we are very confident to deliver these these guidance that we provide for the first half of 2021 regarding the month. The change on on Provisions are on the combat that Provisions we've made the change in our methodology on the fourth quarter of 2019. We met made these these distinct to improve the the methodology and these change on the methodologies May dancing the forequarter of 2019. The the the the PJD was really low. So, uh, it was just a a uh movement. Uh, that's why when we compare this this loss that we have on the 2020 is the fourth quarter dead.
Nineteen we have these increase not because of the increase in e2020 but uh in 2019 was exceptionally low this this this faith is change of the methodology. So, uh, we don't expect these this Gap, uh-uh should uh-uh change on 2061 because no love 2020 we keep uh, provisioning our our our receivables in the same way. Okay. It's just something here on the first part for the the guidance of the expectation net revenues Louis talk about some postponing risk, uh, and you also asked about the discounts, uh, this semester. We have the decision from the Supreme Court wage.
every law that
Will stablish something about the discount has to be decided on the federal level. It's not on the state level. So the risk much lower right. Now what we are having the same education sector is passing through is some student by student decision when they go to the court and they have some temporary Victory establish some discounts for that but will be marginally and this also in our range for our Top Line in the first half. Okay, and about the the David Moss Arjun, uh-huh. If I may add here some also the impact on margin, uh,
It's not only because of the PDA levels that's because of different methodologies for the 2019. But also we are combining many a position with different materials. It's some of these assets they still operate in a lower margin than our average for the more mature campuses. We still have senior distract from that page. Also. We are new alive our corporate, uh, uh expenses after IPO that was that increased a lot during 2019. So we had 12 months off of corporate, uh, new people that we hire after I feel that also increase our G&A expenses to 2020, but we are not expecting this additional staff for 2021 and okay.
That's perfect. Thank you, please thank you. You have a good weekend.
Thank you.
Next question is probably waiting for your vehicle. Your name is open.
Hello, can you hear me guys? I'm sorry. So good afternoon. Thank you for calling and hope everyone is safe to questions on our end here just one thousand eight on the medical education institutes. Be more specific. Can you guys give us some some color of what has been happening in this landscape as a household? We have we have seen in the market wage some sort of deceleration in the windows liminis announcement. Could we attribute that to you? No longer diligences or more complex negotiations or some kind of suck when it comes to to to valuation just do just to get a sense here. What should we expect going forward? Uh, I know that the regime has already answered something similar in in the past question. My second question would be on the guidance to just if you guys could help us here with something you guys have been delivering several days in the health Tech business wage.
And as far as I understand all those those those apps will be maintained operating as as independent apis. You probably need some kind of integration between them.
And that obviously can tell you some kind of investment seen developers and and and and Technology folks. So just to understand if we didn't have this effect. Could you guys give us a sense of how much would your margins increase for the first half of 21 or is there or are you guys allocating part of this these Investments on Earth Cafe? Thanks.
I've been used to I don't think the first question about them and they for medical education here. We are not seeing this slow pace of Acquisitions. Actually. We're just waiting for approval for only 50 Watts was our last announcement on that. Uh, that's an antitrust process. We have an operation in most cities. So do you still have some weeks to go but expect to have the closing by by me? So in our pipeline is just lack of moderation and final negotiation for some except for us some opportunities, but we are not seeing a uh, at least on our side here. We are not being so the rhythm of the the new announcement is slower than we had in 2020.
Yeah, yes and and into dance if he needs is the graduation part of the business is very important for for us. We we want to do to keep the excisions even further the 1008 goals that we've uh promise to the market be delivered till now 8051 seats, uh, and we're pretty sure that we're going to surpass this this goal uh-uh this year. Okay so long, uh, and after each we're going to keep uh-oh eighteen opportunity and doing them and they or on this site's the the graduation visas is still important for Thursday, uh, most part of our business is very important for us is about the guidance. Uh, we did did not uh open these we just dead
Open don't keep more callers on the guidance between the the different segments. But what I can I can tell you that uh, this operation that we are bringing to is after digital have different stages of operations of their business the for instance am speaking the the the the the two largest one The Fat Matt business is a business that has escalated for uh off a good a good a good a good size. We have almost a hundred and ten users that pays the office space for for pregnant every month. So they are paying users in the other side. We have eye clinic with something about 13,000 pay off.
Users so, uh, of course.
When we we put these this kind of uh of size of the business what we have on on Batman that it generates cash by itself. All the authors sides. The eye clinic is just on the beginning of the journey and they are there. Uh, we have a a burning cash on that regarding the the questions, uh-huh out carpet Ceramics, we evaluate, uh the project and we have a uh, a put that the the the the the Investments that she can be translated to Carfax as as a Catholic. So we are doing that on all of the digital digital business, but we keep uh, the consistency on Iraq having these uh, these allocations between capex and Opex, uh, in in a in in the right way, of course when we are escalating this is kind of dead.
Just we have to put more money on this garbage to that to develop the the product itself to increase the the experience that our physicians as with this project.
Super Clear, Virginia. Thanks. Thanks a lot for the collar on on both freeze.
or anything
Do you want to ask a question? You just raise your head or less question is sold already scooped are your lines open?
Hello everyone. Can you hear me? Yes. Okay. So my first question is regarding the business unit 1 a.m. For the courses that are not medicine-related how has been the intake cycle so far considering the postponing of ending and the this code cycle has been for the piers the company Spears. And other than that looking at the business you need to if you could comment a little bit on the further monetization of them little Services if you look at that map, for example, uh, you had a growing active subscriber base, although the monthly active users at least in the core has been declining if you could comment a little bit on that as well. Thank you.
Hi Lucas about your question of be one of other programs. We just closed the first half intake Choice other programs different from health programs is around 5% of our undergrad and net revenues and we beat our goals for this month in terms of intake and renewal. What we can say is that our student base will be flat year-over-year considering other health and other programs, uh ex Mets. So it was a uh, strong Challenger here the intake was one to 3% below last year, but the renewal rates was a little bit better so we could keep our ex meds in student-based flat theory. That was a
very good result
Sina the the external scenario the second question. Would you like to take from there? You know sure talking first. Let me let me answer your first choice and talk about the money position look at uh, actually we have uh, significant days, uh free paid free subscribers. Do we focus more on converting those three to pay so rather than adding, uh, a lot of new people to the uh to the business. So that's that's one of the reasons and to the to the monetization of Digital Services the idea now again, just coming to the to the point that I mentioned previously is dead adding more and more of these doctors to the platforms. We've been seen on the B2B side lot of traction dead.
Winter great and give access in some way to Industries like the pharmaceutical industry where we can create, I can't imagine, you know on the strategy. We have the payment portal we have the services as well. So we have a significant number of positions within our ecosystem and it is it is very important mean we see a combination of activities that we can do in terms of a producing, or allow is access to these interest Industries to to our ecosystem to participate actively in and help us to produce more and more contracts that it's updated that it's engaging and then helps again Physicians to become better physicians in the future. So we will move uh to the Dead
To explore the B2B efforts that in the future, but for now again, we're monetizing, uh through the The Physician but the activities on the B2B front they started with it seeing traction and and that's where we're we're going to uh, uh, put some more efforts in the in the near future, but it took the products and we we are starting to the to create a portfolio that could help industries, uh on the factor to work with us. And and this is on the pipeline.
And and Luca if I may ask appoints to reinforce the point of what we see that the the our our goals in the the short-term is a penetration. We want to increase penetration of our after digital Solutions. We've been all these two hundred thousand thousand students and M positions that we have in our page. We want to increase this penetration of all these solutions that we we have and the solutions that we're going to have wage the the the execution of the the six pillars a strategy and then when when we increase this penetration in the the shortly after it we're going to I'm going to uh move in the next space to explore opportunities with with being all the other players on the healthcare scope dead.
What you can expect these it is.
He's he's short term for maintaining a 2001 one is increasing penetration of this product. Okay. So here is that this month higher part the largest part of revenue from the channels that was related to the market about the segment is 21 billion the size of the health digital segment and 14 billion. So this year is going to start to see better product more features more conditions using it, but you only going to say this segment should become a bigger part of the business when we go ahead and freeze our reach of the project. Okay, which be quiet and just finish it starting on first few. We are going to release results off a little bit more about the digital. So we are going to not be charged more about the one view to we are going to say about undergrad it, and then a traditional so you guys have birth
Feeling on where we are going. Okay.
Okay, very clear. Thank you.
So my sample your next your eyes open.
Hi, thanks for the follow up. I just wanted to ask a bit about a question that the issues made about the margin on the guidance. So the margin of the guidance is 46 to 48% unless you've had forty seven point four. So at the midpoint you think it assumes a small decline on the margin. Could you just please explain where the main factor of helping and hurting margins that would result in this small decline, please?
What what do we have for my cell as we we are growing 50% year-over-year. We have we have two different types of uh institutions that we have and different mix of uh, help text that we've we've uh with with me. So Thursday, we have institutions. Uh, so Lucas and unique event that were acquire, uh to re uh, 2020 that gave us a lower margin stand our our portfolio in these in these Health Tech scope. We have eye clinic that has a negative baby. So, uh, as we are growing we we are comparing different mix of uh of uh, even we are dead.
About just one year of between this this this this too cute periods. So it's a question of combination of Assets in different maturation. So only have the authority salut cuz that's they are very large assets many other health programs besides Michael undergrad program. So you still have a lot of space there to stretch synergies and efficiency to push the contribution margin power off two examples average. So so that's that's that's the reason
Thank you for choosing this.
Mark a Davis struggling to host on May 6th or 9 a.m. Eastern time. We're going to discuss a lot about our initial strategy strategy behind also are for business that the undergrad business. We are also going to have an extra tax collector. So you guys can know what we are moving to and I see that you got that you don't have other questions. So I want to thank you all to purchase page if you have any thoughts and squeeze you all know where to reach me. I'm available. Okay. Have a nice day.
Thank you, bye-bye. Bye.