Q2 2022 Vitru Ltd Earnings Call
The conference will begin shortly. To raise your hand during Q&A, you can dial star 1-1.
Good evening, ladies and gentlemen, and welcome to vTREU's second quarter 2022 earnings conference call. All participants are in listen-only mode now. Later on, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this call is being recorded and will be available on vTREU's IR website. Now I'd like to introduce your host for today's conference call, Mr. Carlos Fritos, vTREU's CFO . Please, you may begin.
Thank you, Opere. And good afternoon, everyone. Thanks for joining us again. It's a real pleasure to be here with you all for the release of our second quarter 2022 numbers.
Here with me I have Pedro Graza and Winona Matos, our co-CEOs, Maria Karolima-Gonzalves, the head of our IR department, and Raquel Cusaki, Ruth-Philippe da Silva and Elio Crespo Jr. from our In-Vet relations team.
A live presentation will be part of today's webcast which is available as usual and now with IR website at investors.vitro.com.br
So I trust you all have this presentation in front of you.
And before we begin, I'd like to make note that as detailed in slide 2 of the presentation
safe harbor is in fact for this call.
So now I invite you all to go to page 4 of this presentation.
in which we have the main highlights for this quarter. And clearly, this quarter the most important highlights were linked to the closing of the business combination with Una Sevemar, which we closed on the 20th of May. We created with this the leading player, the largest player in the Brazilian digital education space.
So both institutions were already growing a lot organically and now with the two combined we are now the number one player in Brazil in digital education for higher education space.
We also updated our governance with the appointment of new members of our board of directors, including two people from the Matu family, the ones that created and managed InSevamore for 30 years.
So Professor Wilson Matus is now our Vice Chairman for the board. And the definition of the new officers structure with the new celebrity that I'm going to show you a bit later.
We also had the issuance of the ventures for 1.95 binary eyes in May of this year to finance a part of the transaction.
And of course, we kicked off the integration process that we have been preparing for in the last 9-10 months See the signing of the deal in August of last year
aiming at ensuring a smooth as possible process and to capture substantial synergies as we have already presented you all in the past.
So in terms of financial indicators, the summary for this quarter is page 5.
Here we have the indicators both on organic and consolidated basis.
So
here throughout the presentation and in the release material as a whole, we are going to provide you information with only virtual stand-alone before the combination and a consolidated basis as well, consolidated in Unsélemare between May 20th and June 30th, so the 42 days of Unsélemare so that you can have as much information, as transparent as possible so that you can make your appropriate analysis.
So here, net revenue this quarter increased around 75%.
compared to the second quarter of last year.
And the consolidated overall net revenue was up 85% this quarter. And this is with 42 days of Unidos del Mar. The organic growth was 33% for net revenue and digital location undergrad rate for Unia Selvi.
and 26% for Unia Selvi as a whole on organic basis. So strong growth in the top line. Just at BDA increased more than 100%, 108% this quarter with a margin reaching 38%. Margin on organic basis was 34% this quarter and a growth in the BDA of 28% when TikTok got to vTroux before Furthermore.
In terms of adjusted cash flow from operations, a strong increase as well, almost 97.2 this quarter with a nice cash conversion of 83% as well.
And in terms of adjusted net income, it was up 168% with CEDAMAR, reaching 63%. 33 million reais. So here in cash flow and net income we don't have the organic numbers because things start to be mixed between CEDAMAR and UNION SEVY. But whenever we can we want to show you the organic and the overall numbers with and without UNION SEVY.
On page 6 you have our C-level team, which includes executives who came from both Unce and Omar in the form of V2 before the build combination.
So, since the signing of the deal, it was quite clear to us that we were going to combine two winning companies with…
similar and unique cultures and that we all would benefit from this smooth integration process.
bring together these two leading teams.
That's why for example we decided to, as I mentioned before, to have
two co-CEOs co-leading the company, Feder Veras, a former CEO of Vitru, and Rui Namatos, which was the former head of digital education at Unitellumar. The idea here is to not have a takeover of one culture over the other. We have to blend and put together these two winning entities. So with that, we have a stronger and faster integration between the two.
aiming at creating value for the students and for our stakeholders. So here is the team, the C-level team. We are basically with people from more or less heads coming from the model, heads coming from a former teacher, still two positions to be filled, including the heads of people and management. So we wanted to have a person from outside to lead the HR, exactly to have this message.
that we are not using or forcing one culture over the other. The idea here is to have somebody from outside to lead the HR department of the company.
And for integration, before the closing we had an in-depth analysis of opportunities in terms of cost and expenses synergies.
between timing and closing.
Part of it was already captured and part will be captured throughout this year. We had several commercial initiatives that are not respecting the specific brand.
and several projects, each of them read a given action plan with an owner, with a list of deliverables, a set of productizations and regular follow-ups. So we are really on the integration mode with our mindset, so on integration that is the number one priority for everybody here at Vichur.
On page 7, this is just as a reminder the main levers of synergies that we are pursuing. This was shown to you in May when we closed the transaction.
So for example, in terms of OPEX we have optimization of payroll costs.
Gain of scale as a whole in contracts for example. We have improved collection practice for Una Selvi and retention practice as well for, sorry, within Cevuar that is going to be useful for Una Selvi.
And for us, it was very clear that we have identified...
to create a clear opportunity regarding the exchange of best practices.
When we talk about retention and customer experience and even a collection process,
Our son-in-law has done a better job. Thank you. Here is the phone number for you. Our son-in-law has done a better job. Sorry. Our son-in-law has done a better job.
Sorry guys, the computer here is going crazy.
So as I was saying, when you talk about the collection process and user experience as a whole for Una Stelvi, it's a benchmark for Una Stelvi. And when you talk about pricing,
Throughout the last years, I guess that UNIA have done a quite nice job regarding every ticket and pricing, which is going to be very useful for all of the work going forward.
So we also have this type of cross knowledge going on throughout the company.
And of course, stressors are opening up new hubs, the cross-selling and new courses are being opened within Zummar and within UNY
Now, on page 8, just a quick reminder of what we've delivered in the last two years. So now we are going to complete two years after our IPO.
in September next month.
So within these two years, I guess we have delivered on our plan in terms of ramp up of current hubs, opened up new hubs, the new courses that were offered, and of course the inorganic groups. I'm going to go into details of each of these.
in the next pages.
For page 9
You see the maturation curve, both for you and yourself, and now for you into the mud.
This is the most important driver for organic growth, the maturation of the current hubs. We have a maturation index.
on average 43% of the potential of the hubs of both UNYHELV and UNCTADUAR.
So you see here the curve is very stable for Luna Selva in Unsédemart. The dark blue area here which are the older hubs.
They have a different profile than the case of UNIA Selfie. Because UNIA Selfies are more or less stable over time, because they are in full capacity.
But in the case of the one who had 36 hubs that are still maturing. They were opened at the end of 2016.
So they are not yet fully mature, that's why they are growing over time.
But the message here is that we have an important...
driver for the potential of expression hubs which is growth with limited execution risk.
On page 10, the expansion of the digital education on the graduate students and the number of hubs per region, major, major growth with the deal with Saint-Domingue. So you see here throughout the country we are growing 100% in some regions, 360% in the southeast for example.
And when you see the number of hubs...
We went from 800 hubs one year ago to now more than 2,000 hubs throughout Brazil, including more than one third of them in the Southeast.
So as we have been always saying, the Southeast is the next frontier for our growth.
I'm going to open a lot of Ooni.self hubs there with...
partners of CevumR that are there in cities in which you don't have both brands.
On page 10, the new courses, this is not new to you, we have nursing already in operation for one year now in Uniceldimar. Nursing starting now this year at Uniceldimar.
and in the future...
We will have a law and psychology which is also going to be very important to sustain tickets and to expand the overall market for digital education in the country.
In Phase 12, the usual slide that we bring showing the...
public information and public indicators to show that our technology and our customer experience is different.
And on the left part we have our apps ranked as the two best apps
both on average by Apple Store and Play Store.
this rank provided and the grace given by our customers.
And on the right part of the slide, the latest numbers for Herk Lamyaki, in which both grants are the best grades, the best numbers within all the listed players in Brazil.
On page 13, the Geograth footprint, as I always said, is very complementary on the Geograth perspective. We have now more than 700 cities with only one grand presence. So now we are already...
opening some hubs in some of the cities with the other brands. We are planning a lot of the expansion, so for next year, we are going to have more hubs open than usual, accelerating this growth throughout Brazil.
So now, on page 14.
The growth was once again led by this allocation on the red segment in which we reached 741,000 students in June of this year, being the number one player in the country. A growth of 140%.
being around 90% organically with only a cell phone. And total 811,000 students in both brands. When you see the intake and average tickets.
You see different profiles here. Only ourselves we already discussed this number grew 29% in intake this first quarter, the first semester of this year compared to the same period of last year.
while Ounya Selvi had a very strong growth, much stronger than Ounya Selvi. On the other hand, in terms of tickets, Ounya Selvi increased average tickets up 13%.
And it's important to highlight that most of this increase in the case of Unia Stealth is not linked to the mix effect. I mean there is a mix effect that accounts for around 2 points of this 13 point.
But most of the increase is a real apple to apple increase in every ticket in Kiedro Hunia Stave. In K Institute Thammar!
There was a very, very strong growth in intake. So I don't know, the average ticket of seniors is usually higher than the average ticket of newcomers. Otherwise, at the end, there was a decline of 2% in the average ticket of only seniors.
So for this year we shall still see a growth in the case of every ticket of Unia Seljic, we shall still see a likely slight decrease in the tickets of Cézumod because of its growth, a very strong growth that Cézumod had in the intake. And going forward, we will see a growth in the case of every ticket of Cézumod.
Over the video term we are going to use the expertise of UNIA in pricing and in tickets to improve over time the average ticket of UNIA.
On page 15, net revenue, gross profit and adjusted MBA for the company.
So 85% growth in its revenue.
78% growth in gross profit and 108% growth in adjusted FBA. So now we're going to go in details in each of these ratios.
Page 16.
16-17, the sources of growth in net revenue, it was boosted both by digital education and the grad segment as a whole.
You can see here on page 16 for example that in cable V2 there was a 46
increase in revenue in digital education undergrads, a 33% increase quarter on quarter, but also of course the contribution of UNSISAMAR. UNSISAMAR as a whole accounted for almost 100 million reais in new revenues for vitro in this 42 days of consolidation.
mostly coming from digital education undergraduate.
When you see the breakdown on page 18, so on a quarterly and on a semi-annual basis, no big news here, most of the revenue of V2 was already coming from this application. And here we provide a breakdown.
of the revenue of Unce de Mar within this for today, which is more or less the breakdown that Unce de Mar has on a yearly basis. So it's more or less 6%...
coming from digital education undergraduate, around 23% coming from medical education.
and 16% coming from other on-campus courses.
Most of it comes from health courses.
So in total around three-fourths, so 75% of the revenue of the on-campus students of S comes from health, being medical or other health courses.
On page 19...
Here is more details on the breakdown of the intake and the base as a whole.
So here are the first two pie charts. It is the intake over time of Una Stelbi for example. And the two pies in the bottom part of the slide. The breakdown of the base as a whole of the opportunity.
So here a couple of messages
And the first one is that we are increasing slow level steadily the weight of
digital educational health courses.
For example, it was 24% of intake last year, now it's 25%. It is 22% of the base.
So over time the base is going to increase and for Unia and Unsilen Servomar It's only 19% so we already Launched some new courses now in the second half of this year now in July We launched at Servomar
some health courses that were already available within Unia cells and that we didn't have in the portfolio oflocation of 371West
So over time we shall have a slightly bigger weight of health quarters not only at UNICEF but also at C
And also important to show here on the left, the overall growth in that regime as a whole. So 33% organically for on the ASEAN and overall 75% with CEDAMAR, this with 42 days of UNCAEDAMAR.
That reinforces the resilience and the differentiation and the scale that we have been able to achieve with both brands.
And the scale in this business is important. The scale is important to generate cash flow, to invest in technology, to provide better services for our students, and at the end to keep creating value for students, for the shareholders, and for all the stakeholders.
On page 20, it's backshotted on medical education, the medical business, which now is more than 1800 students.
246 in medical education, one of the best medical colleges of all town, you know people are union.
It's a high demand course which accounts for 42 days with 22 million reais.
with every ticket of more than 10,000 REIs, a very resilient revenue stream.
and still maturing over time.
I'm on page 21, the other two segments.
On campus as a whole, which includes medical education, but here we have the highlight of the X medical on campus numbers.
So a decline in the organic numbers for only a selvin, which is saying...
normal and aligned to our vision that this is a segment that we expect to decline over time. But of course with the condition of Sesumor, this increased by 100% given the strong health courses of Unsé de Márc.
And on the continuous education side, this is a business that on organic basis was more or less stable over time. A slight increase on the quarterly number of waitings on the left. This was as I said before in the previous quarter. This was affected by the reduction throughout last year in the average length of graduate courses. So most of this shift is over, so we expect the returns to grow going forward. Thank you for watching!
but in the first, I'd say, six months of this year.
We had the shift in the size and the length.
of the courses. So this is a business that did not grow much in the first six months of this year.
So now, when you see about the BDA on page 22 and 23, on page 22, just a quick snapshot, we had an increase of 28%.
on organic basis and 108% on a full basis. With a gain margin, organic gain of 0.6 points.
for Vitru without CEDAMAR and a 4.2 points gain in margin, including on CEDAMAR during 42 days. So we already told you in the past that for a number of reasons, only CEDAMAR has a higher margin than the former Vitru.
So last year for example, Vitru had an ABD margin of around 29%.
while last year Cinémars had a margin of around 39%.
So 10 points of difference for a number of reasons. So with the combination of both entities, our...
Weighted average margin is a bit higher now closer to 34 points.
38 points in the score and 34 points in the semester.
On page 24...
Cost of service, of course. On our bank basis, we had more as stable costs at a percentage of net revenue for V2 before Cédemarc, even despite the resumption of classes meetings.
both at HUD and in Kenton.
And with the
basically because of the high relevance of the on-campus segment for UNSIS. So the on-campus segment has a lower gross margin, so the overall number is slightly lower, so cost of service increased a little bit as a percentage of net revenue with the model. For G&A, we are more than stable over time.
around 7% of net revenue.
So with this deal with San Juan we are more or less maintaining our infrastructure at around 7% of net revenue one of the lowest numbers in the industry.
Sorry on page 25
semi-expenses, a PDA, we have lower caps, lower PDA expenses as well. So on the left quarter of the slide.
We have a slight organic increase for Unia Selvi and Vitro, around 20%.
But at lower tax, basically because we had a higher intake than this number, so the cost of activation cost... Ok.
For Unia Selvi it was around 5.5% lower the first intake of this year compared to the first intake of last year.
And in the case of Once in a while, the marketing and selling expenses as a whole for Once in a while are much lower as a percentage of revenue than in the case of Only Usself. And that's because the hub...
of Unsittemore are much more active in the sale process.
because they have a higher percentage of the revenue share that we have. So in the case of Unia Selvi, this number on average today is around 23%, 24% of the net revenue of the digital education undergrad segment.
In the case of Onyestey-Dumov is around 30%.
So, Unsemar has a higher repassie, a higher revenue share and, on the other hand, the hub owner, the partner is more responsible than in the case of only a cell before the intake process.
And on the PDA part, here on the right part of the slide...
We have a slightly lower organic PGA in the case of only a small reduction, which I guess is a nice achievement because of the current market conditions. And in the case of only a small reduction, which I guess is a nice achievement because of the current market conditions.
As I mentioned before, they have superior collection and retention procedures and processes and methodology as a whole.
So they have quite low PDA expenses at the present stage of net revenue. At the end, on a full consolidated basis,
This quarter our PDA went down from 16.8.
Left ear.
to around 16.2% on organic basis this quarter only on the SELZEN and 12.5% of net revenue when it's taking truck out onto the model.
And last but not least, on page 26, we have solid growth in adjustment income and adjusted cash flow from operations for the business combination. A growth of 169% in adjustment income this quarter given the contribution of CEDAWAR.
a very nice cash flow generation from operations of 73% toavthir b Findlay Collective
So there was a strong increase this quarter and in the semester with less than half of the quarter. So Unce-A-Marque is a big cash flow generator. And this cash flow generation is an important pillar as well in our overall financing strategy, in our leverage process over time.
So now that's it and now I'd like to open for questions.
Certainly, ladies and gentlemen, if you have a question at this time, please press star then 1-1 on your telephone. Once again, that's star, 1-1 to ask a question. One moment for our first question.
And our first question comes from the line of Vitor Tamay from Goldman Sachs.
Good afternoon everyone and thank you for taking our questions. We have two questions from our side. The first one is if you could give us some initial color on how you are seeing competition and pricing trends in the current intake cycle so far. And the second question from our side, if we may, would be if you see any room for further reduction
in the length of continuing education programs over the long term, given that that seems to be a start-up of trends in global education. Thank you.
Hi Vito, thanks for the questions, quite good questions. For the continued education part, I mean, continued education in our case, most of the business today is formed by graduate courses.
So in graduate courses we don't expect further reduction in the length of graduate courses as a whole. At the end it is, I'll say, on a pedagogical perspective, it's not likely that there will be further reduction in the overall length of graduate courses, I mean for regulated courses.
graduate course as we offer.
what will happen and that we are already working a lot on that.
Some growth, not yet. Nothing outstanding to be shown, but we are slightly steadily growing in technical courses, in other courses as a preparation for the first job and the free courses as we call it. So this is also part of consumer location and once we have more scale in this business, we are going to show some numbers of our debt.
So going forward, consumer location will be a kind of a blend.
of Gregory Quartus with other quartus as a whole for the market. So far it is in real life much more concentrated in Gregory Quartus and as I told you we don't expect for the reduction in the average length of this quartus.
now.
So the first question about competition.
What we are seeing in the first month of this intake cycle...
It's nothing very different from what we saw in the first half of this year.
So it is a competitive market.
We are seeing that in the case of the intake of O'Neill sales, we are growing the same levels as we've been growing the last years, a bit more than 20%.
And more than that, in Quina Cédomar, Cédomar has been growing more than UNIA SELSI. On the other hand, as we saw in the first semester of this year, the tickets of UNIA Cédomar, because of this strong rule, has been growing more than just UNIA SELSI.
they are more or less
2, 3, 5% lower than what we saw last year, as we saw in the first semester of this year. So on the other hand, in the case of O'Neill-Stellery, we are still seeing the growth and we have been seeing in the last, say, semesters.
So nothing different from what we saw in the first half of this year. Over time as I said, we are going to –
work more on the pricing.
on the pricing and positioning of ONES CEDEMAR.
Aiming at improving ticket oversight.
We don't expect this to have major changes in the second semester of this year. We realize a big chunk of the intake is over or most of it is being accomplished now in the case of Oles Nesedoumar. So we shall see the same trends that we saw in the first semester of this year. But it is a competitive market. It has always been.
and in this market we have been able to differentiate ourselves either in terms of faster growth and slash org in terms of tickets.
Thank you very much.
Thank you.
Thank you. Our next question comes from the line up.
Fred Mendez from Bank of America. Your
Hello, good evening everyone and thanks for the call. I have two questions here. The first one is about the average. You can increase very strong above inflation, 12.5 year over a year. If you can just give us an idea, if it's possible, about what is the impact for more premium course versus what is the impact of actual price increase here, this will be the first one. And then the second one, it has been circulating news of potential sale of the medicine business just wondering.
have a debt that we know that we can generate cash load to serve the debt, but we are actively working in alternatives to accelerate the leverage.
And we have three options. The first one is to go to the market to have a follow-up. Not an option today. It may be not an option in a few months, but not today. We must have the market open.
Second one is to have a private
capital increase and we have been approached by a number of players that wanted to find a check and inject money to participate in the growth of VITU. And the third one can be the sale of part of the business, namely, matching odds.
with part of the whole segment.
Nothing substantial here and nothing further here.
But again, we have been approached by a number of players over time, interested in our medical business.
All right.
So we have been approached and this is a possibility that we can execute in the future. Nothing fewer right now, so this is nothing more than a rumor right now.
Your first question was about the increase in tickets. So we increased almost 13%, 12.8% increase in tickets of O'Neill Selvey this semester. As I said, most of this effect is not due to mixed effects of the equipment courses. So as we have in the presentation, the breakdown of intake at O'Neill Selvey.
In the first half of last year, the first half of this year, there was a slight increase in the overall health courses, for example, which have a average ticket of a bit more than 400, right?
So we have an average.
tickets of around 200 A.D. more than 400 in health and a bit around 250 more for the non-premium courses.
So when we isolate...
the mix effect, the change in health course for example, this number of 13% goes down to around 11%.
11 at 11 a half percent.
So it is not the most important driver. The driver here was real price and strategy on SKU by SKU based on the Apple for Apple comparison. So we increased tickets for seniors in the beginning of this year.
We increased tickets for newcomers. Our average price for intake in the first semester of this year was also close to 10%.
higher than what we had in the first semester of last year.
So these numbers are a function of our strategy to maximize profitability and to lever on our comparative advantage and our hybrid model of Unia Sales in which we provide a nice service for our customers. Perfect Carlos, super clear. Thank you very much.
Thank you, Fred.
Thank you. Our next question comes to the line of Jan Sesquim from BTGE. Your question, please.
Good evening, Pedro, William, Carlos. Good evening, everyone. There are two questions on our side. The first one is regarding the NISER-DAMAR. Looking at NISER-DAMAR's standalone numbers, we do see like a strong growth in intakes, but slightly more aggressive prices. And should we see these pricing strategies going forward in NISER-DAMAR's operation, or should we see something more close to what we see?
in Luna Salvi with better pricing dynamics. And the second one is if you could give us more color on the 28 million non-recurring costs.
related to restructuring and M&A expenses? Are you improving in unisex Mars infrastructure hiring new teachers or is this mostly related to
Have a nice day.
That's it. Thank you.
grabbeianly.
So the
We're struggling with M&A costs for this quarter. It was a different quarter, around 28-29 million areas of this cost. Most of it is related to M&A.
So, mainly the fee that we pay to our advisor in the acquisition.
So it will be to present.
that we present.
two thirds of the number.
And the integration itself is the difference is that with integration is about around 6 million REIs more or less in the quarter, so around 2 million REIs per month that we expand in the second quarter of this year.
For the intake of UNICEF-OMAR going forward...
I'm using the short term meaning this.
a current quarter and just got a semester.
We shall expect the same trend.
But once in a while, so a stronger growth than only a selfie
Add lower tickets.
So this is the trend that was already put in place.
Before the combination, as a reminder, before the closing of transactions, we discussed opportunities for cost and expensive synergies.
But we could not discuss strategies for pricing etc. We were very strict in our clean team approach that we shall not discuss strategic issues before the closing. So the strategy for the intake in the second semester was already given basically. So what we shall expect for the second semester is more or less what we saw in the fourth semester, strong growth in the case of UNTERMA.
Slightly lower tickets. And going forward, I mean starting next year...
We are going to work to...
to improve tickets as a whole within Unsiedemar.
trying to have something closer but not equal to what we have in the case of Unia Sel. We have been growing constantly over time.
between 20% and 30% each period, each intake, with a growth in average tickets.
Closer to inflation, sometimes higher, sometimes lower, usually slightly lower than inflation. This is the approach of only a salary in the last two years more or less. Over time we are going to work closely and try to...
to push up a little bit the tickets of Unsullammar. It's not going to be easy because it's a very competitive market. But Unsullammar had a quite good product. The quality of the different learning products of Unsullammar is quite unique. So we're going to lever on that.
All right, pretty clear. Thank you.
Thank you.
And as a reminder, if you have a question, please press star 1 1.
Our next question comes from the line of Mauricio Cepeda from Credit Suisse.
Hi everyone, thank you for the space here and the call. So I have some questions, the first one is more operating about the retention versus the ticket. I saw that O'Neill Selvy had a good performance on tickets as you were saying.
But I saw also that the retention rate was a little bit worse than what I saw previously. And the contrary for UNICEF Zuma, the ticket did not perform well, and there was an impact from the newcomers, but retention rate was pretty good. So I would ask exactly what may be happening to create such differences in performance.
The second question about the adjustments to the EBITDA, you mentioned a little bit about the M&A.
But there is also some adjustments about stock options. I see that they saw that particularly stock options were a little bit higher than the usual levels. So my question would be from all these adjustments, I understand that M&A would be like 2 million per quarter, as you say, but from these other adjustments, if there would be any kind of recurrent expenses or anything that may reflect.
negatively in the following quarters. And about the operating performance, I understood that the operating margin was better if we exclude these effects, but is it exclusively because Una Sizoumara has a better margin or it has any relation to actions on synergies that may have been taken before or by the time of consolidation. Thank you.
Let's start with the third question, regarding the growth margin and margins as a whole. The business of the market has a higher overall EVGA margin than the case of UNIA-CELSI. We do have some...
synergies in these 42 days.
But most of the images that we are going to see in the second semester of this year.
We do have some speakers here.
But I guess that there will be more positive surprises going forward. But it was already part of the team in the second quarter of this year.
For the adjustment we defined...
For the IPO, I mean two years ago, how we are going to report adjusted BDA. For example, stock options. In our stock options plan, it is a non-cash settlement plan.
So that's why we defined in the past that this was going to be excluded from the justice BDA release. The special increase for this quarter was basically because of the consolidation of open-situ mud. The way we calculate the expenses, we have a bigger company now, so when we do the calculation with the blackened shows etc., we have a higher value for this option.
And the value of these options, the difference, the increasing value over time is recognized in the P&L and adjusted when we release the just FBA numbers. But those are the type of adjustments that we defined two years ago that we are maintaining this state.
the increasing value over time is recognized in the P&L and adjusted when we release the adjusted FBA numbers. So those are the type of adjustments that we defined two years ago, and we are maintaining this definition.
Regarding tension.
There is an important difference here in the case of O'Neill's selfie compared to O'Neill's zoomer. The retention of only the zoomer increased.
this quarter and for example, compared to what we had last year. And we included in our website a spreadsheet with some numbers, even some historical numbers for Una de Mar, so that you can all have as much information as possible so that you can compare and understand the sources of the numbers.
So it is true that in San Omar the overall retention increased, which is not the case in the case of unia selvi. And one important driver here was the health forces.
The health courses in which only a 7th year is increasing. Health is very nice. You have a large market, you have much higher tickets. The down part of health course is this learning is that
the dropout
out, ratio is higher.
especially in the first semester or first year.
So in our health courses we have two meetings per week for example. And we know that some newcomers in the first semester, they have difficulties to adapt to this model.
So that's why most of the dropouts take place in the first semester. That's true for all of the learning. And it's especially true in the case of health courses. So we are still increasing the weight of health courses in our overall days over time. So dropout is bigger in the first semester.
And when you see about tickets, I guess you are fully right that we should always analyze this with a triangle perspective. We have overall tickets, overall retention and overall student days.
So our student base is growing over time. So we have a strong intake, a slightly higher dropout, but at the end a very solid ticket. And at the end match revenue, increasing more than 20% on our organic base. So we don't give discounts.
to the renewal process of seniors. We don't. So we notice some peers do it. So it is our trade-off between maintaining the seniors or maintaining every ticket. And that is an unstable equilibrium.
Not easy, but we usually prefer to maintain a health ticket.
even at the expense of higher dropouts.
And of course in the first...
half of the year, or first semester of the course. This is very dramatic. And Unia Stelzi is going to benefit from the overall user experience and retention process and overall hand holding that is provided by Unia Stelzi to each student. So this customer experience, this customer centricity, I guess is a quite nice benchmark.
for UNYASELV and UNYASELV going forward is going to benefit from this knowledge of CEDAMAR.
Very clear. Thank you Carlos.
Thanks, good luck.
Thank you. This does conclude the question and answer session of today's program. I'm going to hand the program back to Carlos Ritos for any further remarks.
So thank you all for the interest in Vitru. We are very honored and very proud that this is the first release of Unice de Mar, together with Vitru, a new company, and anyway we are available for further questions. Thank you and good evening.
Thank you, ladies and gentlemen, for your participation at today's conference. This does conclude the program. You may now disconnect. Good day.
The conference will begin shortly. To raise your hand during Q&A, you can dial star 11. Music Conference dial and PIN, and press pound when finished. The conference will begin shortly. To raise your hand during Q&A, you can dial star 11. Music Fi Atomic I'll see you next time.