Q4 2024 Vasta Platform Ltd Earnings Call
Before we begin I would like to read a forward looking statement.
Operator: Before we begin, I would like to read a forward-looking statement. During today's presentation, our executives will make forward-looking statements. Forward-looking statements generally relate to future events or future financial or operating performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those contemplated by these forward-looking statements. Forward-looking statements in this presentation include, but are not limited to, statements related to our business and financial performance, expectations for future periods, our expectations regarding our strategic product initiatives and their related benefit and our expectations regarding the market. Forward-looking statements are based on our management's beliefs and or assumptions and on information currently available to our management.
During today's presentation, our executives will make forward looking statements forward looking statements generally relate to future events or future financial or operating performance and involve known and unknown risks uncertainties and other factors that may cause our actual results to differ materially from there.
Those contemplated by these forward looking statements.
Forward looking statements. In this presentation include but are not limited to statements related to our business and financial performance expectations for future periods, our expectations regarding our strategic product initiatives and their related benefits and our expectations regarding the market.
Forward looking statements are based on our management's beliefs and assumptions and on information currently available to our management.
Operator: This list includes those set forth in the press release that we are issuing today, as well as those more fully described in our filings with the Securities and Exchange Commission. The forward-looking statements in this presentation are based on the information available to us as of today.
These risks include those set forth in the.
A press release that we are issuing today as well as those more fully described in our filings with the Securities and Exchange Commission.
The forward looking statements in this presentation are based on the information available to US as of today, you should not rely on them as predictions of the future events and we disclaim any obligation to update any forward looking statements exactly as required by law. In addition management may reference non I guess.
Operator: You should not rely on them as predictions of the future events, and we disclaim any obligation to update any forward-looking statements, except as required by law. In addition, management may reference non-IFRS financial measures on this call. The non-IFRS financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with IFRS.
Our S financial measures on this call.
The non I guess far as financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with I F. R. S.
César Silva: I would now like to turn the call over to Cesar Silva, CFO. Please go ahead.
Speaker Change: I would now like to turn the call over to seize our Silva CFO. Please go ahead.
Okay.
Good evening, everyone and thank you for joining us in this conference call to discuss its locked up a lot for them.
César Silva: Good evening, everyone, and thank you for joining us in this conference call to discuss Vasta Platform's fourth quarter of 2024.
Speaker Change: 2024 hours.
César Silva: I'm Cesar Silva, Vasta's CFO, and today we have the presence of Guilherme Melega, Vasta's CEO, who will be joining me on the call.
Speaker Change: So that's to Barbassa CFO until they have to present itself.
Speaker Change: Lots of steel.
Speaker Change: Joining me on the call, let me know and I'll hand over the floor to get our medigap.
Guilherme Melega: Let me now hand over the floor to Guilherme Melega, our CEO, to make his opening statement. Thank you, Cesar. Thank you all for participating in our earnings release call. I'd like to cover slide number three with some highlights of the 2024 fiscal year. I'm pleased to share our progress and achievements we have made. 2024 has been marked by significant milestones across our business reflecting our unwavering commitment to delivering value to our customers, students, shareholders, and stakeholders. In 2024 fiscal year, our net revenue increased by 13% to reach R$1,674,000,000. This growth was primarily driven by the successful conversion of our annual contract value, ACV, into revenue and achieved $1,462,000,000.
Speaker Change: The C O to make his opening.
Speaker Change: Thank you Sandra and thank you all for participating in our earnings release call.
Speaker Change: I'd like to go over slide number three with some.
Speaker Change: Highlights of the 2020 for fiscal year.
Speaker Change: I'm pleased to share our progress and achievements we have made two.
Speaker Change: 2024 has been marked by significant milestones across our business.
Speaker Change: Reflecting our unwavering commitment to delivering value to our customers students shareholders and stakeholders.
Speaker Change: 2020 for fiscal year, our net.
Speaker Change: Our net revenue increased by 13% to reach 1.674 billion.
Speaker Change: This growth was primarily driven by the successful conversion of our annual contract value.
Speaker Change: Into revenue and achieving $1.462 billion.
Guilherme Melega: A 14% increase compared to 2020. It is worth mentioning the good performance of our B2G business unit and the continuity of our complementary solution expansion with a 20% growth over 2021. Our focus on operational efficiency and cost savings has yielded results. The adjusted ABTDA for 2024 fiscal year grew by 13% to R$580 million. with a margin of 30.4 percent. These gains were driven by a favorable sales mix, benefiting from the growth of our subscription product. Our cash flow generation has achieved R$215 million, a 14% increase from 2022. The last 12 months, free cash flow to adjusted EBITDA conversion rate improved from 41.8% to 42.4%, reflecting our sustained efficiency measures.
Speaker Change: 14% increase compared to 2023.
It is worth mentioning the good performance of our <unk> business unit and they continue to you of our complementary solution expansion with a 20% growth over 2023.
Speaker Change: Our focus on operational efficiency and cost savings.
Speaker Change: You would results the adjusted EBITDA for 2020 for fiscal year grew by 13% to 580 million rack.
Speaker Change: With a margin of 34%.
Speaker Change: These gains were driven by a favorable sales mix benefiting from the growth of our subscription products.
Our cash flow generation has achieving 215 million reais.
Speaker Change: 2% increase from 2023.
Speaker Change: Last 12 months free cash flow to adjusted EBITDA conversion rate improving from 41, 8% to 42, 4%, reflecting our sustained efficiency measures.
Speaker Change: Besides the resulting financial area I would like to highlight some commercial and strategic achievements from this year.
Guilherme Melega: Besides the results in the financial area, I would like to highlight some commercial and strategic achievements from this year. Our B2G segment continues to be a significant growth avenue, generating R$105 million in revenue for the year, a 29% increase compared to 2020. We remain confident on our strategy to positively impact public education, as evidenced by the improved, in 2023, TAEBI scores for the State of Paraguay. The Start a New Bilingual School franchise launched in 2023 has also shown impressive progress. We ended the year with 40 signed contracts and 7 operational units. with a strong pipeline of over 350 processes.
Speaker Change: Our <unk> segment continues to be a significant growth Avenue generating $105 million in rent rise.
Speaker Change: Revenue for the yourself too for the year.
Speaker Change: Now, 29% increase compared to 2023.
We remain confident on our strategy to positively impact public education.
Speaker Change: As Dan said by the improvement in 2023, Diane D scores for the state of Florida.
They started a new bilingual school franchise launching in 2023 has also shown impressive progress.
Speaker Change: We ended the year with 40 signed contracts and seven operational units with a strong pipeline of over 350 prospects.
Guilherme Melega: This group will reinforce the value generation capacity of our brand and our strategic expansion into new revenues.
Roof reinforce the value generation capacity of our brand and our strategic expansion into new revenue streams.
Capacity of our brand and our strategic expansion into new revenue strengths.
Guilherme Melega: Our technology platform, Plural, has reached a new stage of development. Starting in 2025, it features an intelligent assistant powered by AWS, named Blue. This assistance will provide personalized learning experience for students and streamline activities for teachers. enhancing the overall educational experience.
Speaker Change: This assistant will provide personalized learning experience for students and streamline activities for teachers, enhancing their overall educational experience.
César Silva: I will now turn back to Cesar Silva, who will talk about the financial results of the quarter in the 2024 fiscal year. Thank you, Melega. In this slide, we present the composition of VASTA's network. On the left side, you can observe the organic year-on-year growth in total net revenue for the fourth quarter, which increased by 26.1%. reaching R$16.9 million. Vasta Subscription Revenue achieved in fourth quarter of 2024 $619 million, a 20% increase comparing to the same quarter of 2023. This increase included some additional revenue anticipated from the first quarter of 2025, due to earlier orders coming from our partner schools in the commercial cycle.
Speaker Change: I will now turn back to Cesar Silva to talk about the financial results of the Quartan in 2024 fiscal year. Thank you, Melega. In this light, before, we present the composition of Vasta's net revenue.
César Silva: On the left side, you can observe the organically unknown year growth in total net revenue for the fourth quarter, which included by 26.1%, which in 69.9 million reais.
Vasta Scriptural Revenue Activating Fort Quarty of 2024 4
César Silva: 619 million at 1% increase comparing to the same quarter of 2023. This increase included some additional evidence that stated from the first quarter of 2025. Lucca, earlier orders coming from our partner exclusive in the commercial cycle.
César Silva: Non-subscription revenue increased 12% to R$44 million. And in the government segment, in this quarter we generated R$36 million.
César Silva: No sub-sculption revenue, increase at 12% to 44 million, and in the government segment in
César Silva: Moving to the right side of the slide, we analyze the net revenue for the 2024 fiscal year. We achieved an organic net revenue growth of 12.6% in this fiscal year, amounting to $1 billion. The main factors for this exceptional performance were First, the subscription revenue has increased 14%, reaching R$1,462,000,000, and continues to be the major contributor to our total revenue, representing 87% of the revenue. Non-subscription revenue, as expected, dropped 16% to R$107 million. In the net revenue of B2G, achieved R$105 million, an increase of 29% compared with 2023 fiscal year and represents 6% of our overall revenue.
César Silva: Moving to the right side of the slide, we analyze the match where everyone for the 2024 fiscal year.
César Silva: We achieve our own worth, but we are very convinced we are having a growth of 12.6% in this fiscal year. Amongst the two, 1 billion six hundred seven four million reais. The main factors for this exceptional performance were...
César Silva: First, this corruption revenue has increased at 14%, reaching 1,462 million reais, and continues to be the major contributor to our total revenue, representing 87% of the revenue share.
Also the corruption revenue as expected drop it at the 16% to 100% of the median pay.
César Silva: and the natural revenue of VichotG activated 155 million reais and includes of 29% comparing with 2020-26. So here it represents 6% of our overall revenue.
César Silva: Moving to slide number 5, in this quarter, our GSTP pay amounted to R$299 million, with a margin of 42.8%. an increase of almost 25% from R$240 million in the fourth quarter of 2016. managed to do to a higher revenue volume in this crisis in all lines of revenue as presented. On the right side, we see that adjusted VTA in 2024 fiscal year increased by almost 13% and reached $508 million. with a margin of 30.4%.
César Silva: Moving to slide number five in this quarter, our Joseph Day amounted to 299 million with a margin of 42.8%
César Silva: and Equator for more 25% from 200% for the medium-high in the 4th quarter of 2023.
César Silva: Many to do to do to where higher have an involvement in these classes in online self-reliance as presented before.
César Silva: On the right side, we see that the Justice BDA in 2024 fiscal year increased by almost 13% and which is 5008 million. With a margin of 1.3% per state, 3.4%
César Silva: Let's now move on to the next slide, explain the breakdown of the adjusted bidimension. Slide number six, become served at the APJ margin, achieved 3.4% in 2010. 0.1 percentage points higher than 2013. Firstly, our gross margin achieved 61%, a decrease of 0.6 percentage points from the 61.6%. Center in 2020, showing stability in this percentage. Provisions for adult accounts achieved 3.2% in relation to net revenue and have an improvement of 0.6% when compared to 2020. Despite showing improvement in this indicator, the year was viewed in a very challenging and expressive credit landscape for non-premium brands, and we still foresee some challenges in the credit scenario for the next year.
César Silva: Let's now move on to the next live express breakdown of the Adjusted Vidae Martin.
César Silva: In slide number six, we come served at the APT Emerging, Achievement, Third on 4%, in 2004, 0.1%
César Silva: Firstly, our growth margin achieved 61%, a decrease of 0.6% from the 6-1.6% percent in 2020, showing stability in this crisis percentage.
César Silva: Provisions for doubt on accounts activate 2.2% in relation to the natural revenue and have improved of 0.6% of the supply, so in comparison to 2022.
César Silva: The site's surely important in this case, the year was built in a very challenging, head-experative, correct-landscape for non-fremal brains. Business, and you're still forcing some challenges in the quite scenario for the next month.
César Silva: As a percentage of net revenue, our commercial expense increased by 0.3 percentage points, driven by higher expenses related to the business expansion of the commercial cycle of 2020. Adjusted GNA expenses improved by 0.5 percentage points, mainly driven by workforce optimization and budget strategies.
César Silva: As a percent of some natural revenue, our commission are increasing by 0.2 percentage points, including by higher expensive related to the business pension of the commercial stock of 2025.
César Silva: Adjusted DNA Expenses, Inc. 5.0.5% at each point, mainly driven by workforce optimization and budget
César Silva: Moving to slide number 7, we show the adjustment process. In the third quarter of 2024, adjusted net profit totaled R$114 million, an 18.9% increase compared to adjusted net profit of R$96 million in the same quarter of 2024. On the right side of the slide, in 2004, adjusted net profit reached $8 million. There has been an increase of 34.6% from adjusted net profit of $6 million in 2008.
César Silva: Moving to the right number set, Simon, we show the adjusted adjustment in the project.
César Silva: On the right side of this slide in 2004, I just had an approach to which it's 8 million. There has been an increase of 34.6% from an adjusted net drop of 6 million in 2023.
César Silva: Moving to slide number 8, we show the free cash flow evolution. In this fourth quarter of 2024, the free cash flow totaled R$69 million, representing a relevant increase compared to R$-0.1 thousand in the fourth quarter of 2020. On the right side of the slide, in the 2024 fiscal year, our free cash flow reached $215 million, an increase of 14.2% above 2020. Squarter benefited from a different payment. and with our customers that generated a higher collection different from previous. Our last 12 months free cash flow to adjusted BDA conversion rate increased from 41.8% to 42.4%. As we have mentioned in the last quarter, we achieved a double-digit growth in the free cash flow and consequently improved our commercial revenue.
César Silva: Moving to design number 8, we show the free card full evolution.
César Silva: In this fourth quarter of 2024, the free cash flow totaled R$69 million, representing a relevant increase compared to R$-0.1 thousand in the fourth quarter of 2023.
César Silva: On the right side of this lag in the 2024 fiscal year, our free cash flow reaches 215 million increase of 14.2% above 2023.
César Silva: He's quarter-benefit from a different statement, and with our customers that generated a higher collection of different from previous years.
César Silva: Our last government, Lucas flow, to adjust at the BDA, conversion rate increases from 41.8% to 42.4%
César Silva: in 2023. And as we have mentioned in the last quarter, we activate a double gist growth in the free cash flow and in consequential employer to improve it our commercial ways.
César Silva: Moving to slide 9, we show the provision for adult for account. Total expense with PDA in the fourth quarter of 2024 totaled R$22 million, representing 3.1% of net revenue compared to an expense of R$29 million in the comparable quarter. Moving to the right side, the PGA for 2024 amounted to $53 million, comparing to $56 million in 2020. Provision for adult accounts represents 3.2% of the net worth. and improvement of 0.6 percentage points in comparison to 2020.
César Silva: Moving to slide 9, we show the provision for doubt for counts.
Moving to the right side, the PGA for 2024 amounted 53 million comparing to $6 56 media in 2023.
César Silva: Provision for doubtful accounts represented three 2% of the net revenue.
César Silva: An improvement of 0.6 percentage points in comparison to 2023.
César Silva: As explained before, we still foresee some difficulties in the credit scenario, mainly for the schools related to mainstream programs. Moving to the next slide, we observe the average payment in terms of VASTAs, accounts with civil portfolio. was 186 days in the fourth quarter of 2024, which is seven days higher than the comparable quarter and in line with the business model seasonality. Besides, consider revenue generating the B2G business and not receive it yet.
César Silva: As explained before it was too far see some difference in the growth scenario, mainly for these calls related to mainstream brands.
César Silva: Moving to the next slides, we observed the average payment terms of fastest accounts receivable portfolio.
César Silva: 186 days in the FERC part of 2024, which is seven days higher than the comparable quarter and in line with the business model seasonality. Besides consider revenue revenue generating the BTG business and not received yet.
Moving to slide 11.
César Silva: Moving to slide 11, let's take a closer look on the net-debt movement. As of the fourth quarter of 2024, Vasta had a net exposition of R$ 1.3 billion, a R$ 37 million decrease from the previous quarter. Pre-cash flow was higher than financial interest cost, and this made possible the reduction in the total net debt in this project.
Let's take a closer look on the net debt movement.
As of the fourth quarter of 2020 for Boston had a net debt position of $1 billion 3 million.
César Silva: Third 7 million decrease from the previous question.
César Silva: Free cash flow was higher than financial interest cost and just make possible the reduction in the total net debt being requested.
César Silva: Moving to the right staff the slide the net debt position decreased by $61 million since last year.
César Silva: Moving to the right side of the slide, the net debt position decreased by 6.1 million since last year. This decrease was driven also by the free cash flow generated in 2024, which was partially offset by financial interest costs and the second by debt.
Kris: This is kris.
Kris: Greece was driven also by the free cash flow generating 2024, which was partially offset by some financial interest cost in the second buyback program.
César Silva: I will conclude my part of this presentation with slide 12, explaining some more detail about our net-debt composition, which represents 1 billion, 3 million reais at the end of the quarter. The amount is composed by debentures issued to the company, current company, accounts payable for business combinations, mainly related to offer level acquisitions, and almost 200 million reais cash that the company In the lower left part of the slide, we can see that in the fourth quarter, the NetDev tool last 12 months adjusted the PTA rate. has decreased 0.35 times from the last quarter, showing a relevant downward, and now it stands at 1.97 times.
Speaker Change: I will conclude my part of this presentation with slide 12 explain in some more detail about our net debt composition, which represents $1 billion 3 million.
Speaker Change: At the end of the quarter the modest composite by debentures issued to the combined company filings company account payable for our business combinations, mainly related charter like organization in almost almost 200 million is cash that the company owns.
Speaker Change: In the lower left part of the slides, we can see that in the fourth quarter. The net debt to last 12 months adjusted EBITDA ratio.
Speaker Change: Has the acquisition 0.35 times.
Speaker Change: In the last quarter, showing a hail event downwards, and notwithstanding that 197 times and with the life changing for us our commitment to continuing generate free cash flow and deliver HDR content.
César Silva: And we'd like to enforce our commitment to continuing to generate free cash flow and deliver it to the community.
Guilherme Melega: With that being said, I pass the word to our CEO, Guilherme Melega. Thank you, Cesar. I will give you some exciting updates about StartSanglu on slide 13. Start Anglo-Bilingual School, our franchise, launched in 2023, which combines bilingualism and academic excellence, keeps the pace of signing new contracts every month. And we have already signed 40 contracts as of this day. and we have over 350 prospects in negotiation. This strong pipeline underscores the robust potential for further growth and market penetration of startups.
Speaker Change: That being said I pass the word to our CEO Guillaume in Madagascar.
Speaker Change: Thank you Sir.
Speaker Change: I will give you some exciting updates about starts to <unk> on slide 13.
Speaker Change: Andrew bilingual school of franchise launched new 2023, which combines bilingualism and academic excellence keeps the pace.
Speaker Change: Signing new contracts every month, and we have already signed 40 contracts.
Speaker Change: These days.
Speaker Change: And we have over 350 prospects in negotiation this.
Speaker Change: It is a strong pipeline underscore the robust potential for further growth and market penetration of south Antelope in.
Guilherme Melega: In 2024, we concluded the revitalization project of the Lycée Compte. And besides creating an operating unit with more than 1,000 students' capacity, we'll preserve the entire historical architecture design, and we already started our flagship operation in San Francisco. This year we have five new units in operation. The Liceu Pasteur Complex, our flagship in São Paulo. Jardim Marajoara, Granja Julieta, both in the city of São Paulo. Piracicaba, and Luiz Eduardo Magalhães. And together with São José do Rio Preto and Alphaville, we will achieve the total of seven units running and providing a high-quality education service for our students.
Speaker Change: In 2024, we concluded the revitalization project of the lease so complex.
Speaker Change: And besides creating an operating unit with more than 1000 instruments capacity.
Speaker Change: We will preserve the entire historical architecture design and we already started our flagship operation some Paul.
Speaker Change: Yes.
Speaker Change: This year, we have five new units in operation.
Speaker Change: The surplus they are complex our flagship in Sao Paulo, <unk> Gelato Grainger Juliet.
Speaker Change: <unk> in the Cedar of some Paulo.
Speaker Change: <unk> and visit a lot of the Mega lengths and together with <unk> to offer really brew achieved the total of seven units running and providing a high quality education service for our students.
Guilherme Melega: After launching this important avenue of growth in 2023, we already can see solid results and looking forward to see the next.
Speaker Change: After launching this important avenue of growth in 2023, we already can see solid results and looking forward to see the next few years.
Operator: Having said that, I finish our presentation and invite you all to the Q&A session. At this time, I would like to remind everyone, in order to ask a question, press star, then the number 1 on your telephone keypad. We will pause for just a moment to compile the Q&A roster.
Speaker Change: Having said that I finish our presentation and invite you all to the Q&A session.
At this time I would like to remind everyone in order to ask a question Chris the number one on your telephone keypad, we will pause for just a moment to compile the Q&A roster.
Lucca Marquezini: Your first question comes from the line of Lucca Marquezini with ETEL. Please go ahead. Hey, good evening, everyone, and thank you for taking our question. So we saw a significant decrease in PDA expenses as a percentage of net revenue in the quarter. So can you please comment on the initiative that led to this decrease? And also, if we should consider this level as recurring for the next month, please.
Speaker Change: Your first question comes from the line of flu.
Lee: Mike This is Lee with <unk>. Please go ahead.
Speaker Change: Hey, good evening, everyone and thank you for taking our question.
Speaker Change: So we saw <unk> decrease in <unk> expenses as a percentage of net revenue in the quarter. So can you. Please comment the initiatives. The latch business has decreased and also increase you consider just level as recurring for the next months lease.
Speaker Change: Okay.
César Silva: Thank you, Lucca, for your question. We can observe in this quarter a reduction of the PGA, achieving the 3.2%. However, despite having improved this indicator, we foresee a little difficulty in the next month. So we cannot provide a guide for this number, but we expect it to be higher than this 3.2%. Probably the historical figure is closest to the forthcoming provision.
Luca: Thank you Luca prior question.
Luca: We come serving this quarter a reduction of the PGA.
Given the three 2%.
Luca: However, despite.
Having improving.
Luca: Improving these data we first our CLO a little difficult in the next months.
Luca: We cannot provide a guidance for a good number but we expect that some things.
Luca: <unk> hired 33, 2%.
Luca: Probably the historical figure is closest to the forthcoming.
Luca: The provision.
Luca: Thank you very much.
César Silva: Thank you very much.
Luca: Your next question comes from the line of Marcelo Santos with Jpmorgan. Please go ahead.
Marcelo Santos: Your next question comes from the line of Marcelo Santos with JP Morgan. Please go ahead. Good evening, Melega, Cesar, thanks for the opportunity for asking questions. I have two on my side. The first one I wanted to ask about the ACV. It may be missed, but I couldn't find. But I saw that you increase the core students by some, I think, 12 percent and the complementary students by 22 is much more than you increased previous year. So could you give us a range or? Maybe a better view on what that could be, if possible.
Marcelo Santos: Good evening and thanks for the opportunity for us to questions I have two on my side.
Marcelo Santos: One I wanted to ask about the ACC.
Speaker Change: An expert, but I couldnt find but I saw that you increased the core students by some I think 12% in the complementary students by 'twenty two it's much more than an increase produce a year or so.
Marcelo Santos: Could you give us a range or.
Marcelo Santos: Maybe a better view on what that could be possible and the second question is regarding the margin outlook for 2025, I mean in 2020 for the margin. The EBITDA adjusted EBITDA margin was mostly relatively flattish I think 10 basis points up what could we expect for the coming year. Thank you very much.
Guilherme Melega: And the second question is regarding the margin outlook for 2025. I mean, in 2024, the margin was EBITDA. Just the EBITDA margin was mostly relatively flattish. I think 10 basis points up. What could we expect for the coming year?
Guilherme Melega: Thank you very much. Hi, Marcelo, thanks for your question. Let me give you some color about ACV. ACV growth in the fourth quarter was 20%, but considering the fiscal year of 2024, we recorded a 14% increase. This is, we expect similar level for 2025. We are increasing market share. We. and Premier Learning System. Regarding margins, we are operating on the target of 30%. Every year, we expect to have slight improvements due to the fast growth and dilution that it brings and the better sales mix. So, we are already performing on our target level and you can expect slight increases.
Marcelo Santos: Okay.
Marcelo Santos: Hi, Marcelo Thanks for your question, let me give you some color about HCV.
Marcelo Santos: <unk> growth in the fourth quarter was 20%, but considering the fiscal year of 2024, we.
Marcelo Santos: Recorded a 14% increase this.
We expect similar level for 2025.
We are increasing market share.
Marcelo Santos: <unk> price increase and complementary products keep moving fast so the same growth in 2004 is expected for 2005, keeping the same strategy of growing in complementary products and pre.
Marcelo Santos: New learning systems.
Marcelo Santos: Regarding margins, we are operating on the target of 30%.
Marcelo Santos: Every year, we expect to have dry creek improvements due to the fast growth in dilution on that.
That it brings and the better sales mix.
Marcelo Santos: So we are already.
Marcelo Santos: Performing on our target level and you can expect slightly increase.
Marcelo Santos: Thank you and just last one.
Guilherme Melega: Thank you.
Guilherme Melega: So just one follow up. On the first, sorry, my phone didn't work so well. So you said ACV growth was 20% in the fourth quarter. It was 14% up in 2024. And then I couldn't hear you said we should expect the same number for 2025. That would be 14 or 20? No, the 14. The same level of 2025-2024 fiscal year. Ah, okay. And you said something about price. Sorry. Do you mind repeating? Sorry about that. Sure, I said that we had a high single-digit price increase, so we expect to gain market share with the volume growth, and the remaining part of the ACV growth comes from the complementary products that grew 20%.
The work on the <unk> I'm, sorry by phone billing works also you said ACG growth was 20% in the fourth quarter. It was 40% up in 2024, and then I think you said, we should expect the same number for P&C to ensure that that would be <unk>.
Marcelo Santos: Okay.
Marcelo Santos: The 14th the same level of 2025 24 year.
Marcelo Santos: <unk> okay.
Marcelo Santos: And you said that you said some tables, sorry, do you mind repeating sorry about that.
Marcelo Santos: Sure I said that we had.
Marcelo Santos: High single digit price increase so we expect to gain market share with the volume growth.
Marcelo Santos: And the remaining parts of the ACB growth comes from the complimentary products that grew 20%.
Marcelo Santos: Okay perfect. Thank you very much.
Guilherme Melega: Perfect, thank you very much.
Mirela Oliveira: Your next question comes from the line of Mirela Oliveira with Bank of America. Please go ahead. Good evening, Cesar Melega and everyone. Thank you for... questions. I have one on DNA. We understand that this line it's virtually flat during the year, but when we exclude the effects of the contingencies reversal, we see a 20% year-on-year growth in the fourth quarter.
Marin Lazaro: Your next question comes from the line of Marin Lazaro with Bank of America. Please go ahead.
Marin Lazaro: Good evening hasn't Milligan, Andrew and thank you for this space just.
Marin Lazaro: To my questions I have one on G&A.
Marin Lazaro: We understand that this line, it's virtually flat during the year, but when we exclude the effects of the contingency reversal, we see a 20% year on year growth.
Speaker Change: Fourth quarter could you give.
César Silva: Could you please give us some color on what happened there, if we should expect higher DNA going forward, or if it's just a one-time? Hi Mirela, thanks for your question. When we see SG&A, when you see the G&A as a percentage of sales, we actually see pretty flat, our G&A around 27-28% in terms of G&A. We did have a slight increase in the commercial expenses following the growth of revenues. In terms of percentage, sales percentage, we grew on commercial expenses from 16.6% to 16.9%. But besides that, G&A remained flattish.
Speaker Change: Give us some color on what happened there if we should expect higher G&A going forward.
Speaker Change: Just one.
Speaker Change: Onetime.
Speaker Change: Excellent.
In high Mirella. Thanks for your question when we see SG&A.
Speaker Change: When you see the G&A as a percentage of sales.
Speaker Change: We actually see pretty flat, where G&A around <unk>.
Speaker Change: 27, 28% of our.
In terms of G&A, we did have.
Speaker Change: July inquiry in the commercial expenses following the growth of our revenues.
Speaker Change: In terms of percentage sales percentage, we grew on commercial expenses from 16, 6% to 16, 9%.
Speaker Change: Besides that the GMA remainder of <unk>.
Speaker Change: Flattish.
Okay. Thank you.
Speaker Change: Your next question comes from the line of Lukas Lugano with Morgan Stanley. Please go ahead.
Lucas Nagano: Your next question comes from the line of Lucas Nagano with Morgan Stanley. Please go ahead. Hey Melega, Cesar, thanks for taking our questions. We have two questions. The first is related to B2G. Do you expect the contract with Pará to be similar as last year, as I think it was around 70 or 80 million reais? And also if you could provide some color on the pipeline of other projects in B2G. And the second question is about StartAngulo. Roughly, how much revenue do you expect to generate in 2025, if it's material or not yet? Thank you.
Speaker Change: Hey, Matt.
Lukas Lugano: So there thanks for taking our questions. We have two questions. The first is related to <unk> do you expect the contract with flat out to be similar.
Lukas Lugano: Last year I think it was around seven years or $80 million and also can you. If you could provide some color on the pipeline of other projects in BTG and the second question is about starts and glue.
Lukas Lugano: Roughly how much revenue do you expect to generate 23 to five years.
Material or not yet thank you.
Lukas Lugano: Okay.
Guilherme Melega: Hi Lucas, thanks for your question. Give you some color about B2G. So we renewed the Pará contract, which is around 80 million. So this is, so far, the current contract that we are operating. We have a very heated pipeline in B2G. The prospection is lowered a little bit in January and February, as the schools and the is engaged in the back to school season. But now we do expect to have March and April, a very heated season. Keep in mind that this year is SAEBI year, so we do have an examination of SAEBI in October.
Hi, Lucas Thanks for your question.
Lukas Lugano: Giving you some color about BTG, so we renew the <unk> contract, which is around 80 million.
So business.
Lukas Lugano: So far the current contract that we are operating we.
Lukas Lugano: We have a very heated pipeline in <unk>.
Lukas Lugano: With respect <unk> is always a little bit in January and February.
The.
Lukas Lugano: As the schools and the government there is.
Lukas Lugano: As engagement in the back to school season, but now.
Lukas Lugano: We do expect to have March and April very heated season.
Lukas Lugano: Keep in mind that this year is <unk> year. So we do have an examination of SAB in October.
Guilherme Melega: And due to the results in Pará, we are bringing lots of discussions to the table, and we expect to have new contracts soon in the pipeline.
Lukas Lugano: And due to the results and bought off we are bringing lots of discussions to the table and we expect to have.
Lukas Lugano: Have a new contract soon in the pipeline.
Guilherme Melega: Regarding Start Ângulo, Start Ângulo is a reality. We have around 1,000 students enrolled in our seven schools. 500 students out of the 1,000 are proprietary students, students in Miceu, Pasteur, and São José do Rio Preto, the two flagships that we have. The remaining 500 students are franchise students. So, in terms of revenues, we have around R$25 million of the entire operation of StartAnglo. It's not yet that significant, but in terms of growth for the coming cycle, and also in Q4, when we make the shipments for the teaching materials for the new opening units in 2025, that can generate a significant increase in this business year.
Lukas Lugano: Regarding stock ongoing starts envelope.
Lukas Lugano: A reality, we have around 1000 students enrolled in our seven schools 500.
Lukas Lugano: Students out of the 1000 are appropriate Terry students as children in the sale plus there and some of those other who prior to the two flagships that we have the remaining 500 insurance are.
Lukas Lugano: Franchise children's.
Lukas Lugano: So in terms of revenues.
Lukas Lugano: We have around.
Lukas Lugano: 25 million Reais of the entire operation of <unk> <unk>.
Lukas Lugano: The nordea that significative, but in terms of growth for the coming cycle and also in Q4 when we.
Lukas Lugano: We make the shipments for the pizza matures for the debt.
Lukas Lugano: New opening units in 2025 that can generate.
Lukas Lugano: A significant increase in this business unit.
Lukas Lugano: Yeah.
Lukas Lugano: Okay very clear thank you.
Lucas Nagano: Okay, very clear, thank you.
Guilherme Melega: I will now turn the call back to Guilherme Melega for closing remarks. Thank you all to participate in the VASTA Q4 conference call. 2024 was a very important year for us. Not only we grew our operation as we already delivered significant results in B2G with the contract that we secured, and start angle also grew fast. This keeps us confident that 2025 will have a very interesting year and significant for all our stakeholders. Thank you all for supporting VASTA. Looking forward to see you back in the next call.
I will now turn the call back to you remember rigor for closing remarks.
Lukas Lugano: Okay.
Speaker Change: Thank you all to participate in the last Q.
Lukas Lugano: Q4 conference call.
Lukas Lugano: 2024 was a very important year for us.
Lukas Lugano: Not only we grew our operation.
Lukas Lugano: We.
Lukas Lugano: Already delivered significant results in <unk> with the contracts that we secured and start <unk> also grew fast this keeps us confident that 2025.
Lukas Lugano: We'll have a very interesting year and significant for all our stakeholders. Thank you all for supporting Waskow looking forward to see you back in the next call.
Operator: Ladies and gentlemen, that concludes today's call. Thank you and have a great day.
Speaker Change: Ladies and gentlemen that concludes today's call. Thank you and have a great got it.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: [music].
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Speaker Change: Sure.