Afya Limited's Audit Firm Shift Signals Unwavering Commitment to Transparency and Growth

In a move that underscores its dedication to financial rigor and operational excellence, Afya Limited announced on June 2, 2025, the replacement of Ernst & Young with KPMG as its independent auditor. This strategic decision, approved by the board and audit committee, positions Afya as a leader in transparency amid a dynamic higher education landscape. The shift is not merely a procedural change but a bold statement of confidence in its financial health and future trajectory.

The Audit Change: A Proactive Move for Enhanced Governance

The transition to KPMG, effective immediately for the second-quarter review, reflects Afya's proactive approach to maintaining the highest standards of financial accountability. While the company provided no explicit “red flags” necessitating the change—such as prior audit disputes or regulatory issues—the decision aligns with its broader strategy to bolster stakeholder trust. For investors, this move signals that Afya is continuously refining its governance framework to meet evolving demands, a critical advantage in an industry increasingly scrutinized for transparency.

Financial Fortitude Fuels Confidence

Afya's Q1 2025 results provide the bedrock for this confidence. Net revenue surged 16.4% year-over-year to R$936.4 million, driven by record occupancy in its medical schools and successful campus integrations like the Unidom acquisition. The company's Adjusted EBITDA margin expanded to 52.5%, a 300-basis-point improvement over 2024, highlighting operational efficiency. With cash reserves climbing 26.8% to R$1.15 billion, Afya's liquidity position is enviable, enabling disciplined capital allocation for growth initiatives like its Funic acquisition.

Operational Stability Through Execution

The audit change is further justified by Afya's track record of execution. Its undergraduate segment, the core of its ecosystem, now boasts 100% occupancy in integrated campuses, with medical seats increasing 12.2% year-over-year. The turnaround of Unidom—a campus revitalized from sub-60% to near-full occupancy within two semesters—demonstrates operational scalability. Meanwhile, its Medical Practice Solutions division, a key ancillary revenue stream, saw B2P revenue grow 14%, fueled by software innovations like “Shosp.”

ESG Leadership and Regulatory Resilience

Afya's commitment to transparency extends beyond financials. Its ESG metrics, including 212,549 free clinical consultations provided and a 19.5% renewable energy adoption rate, align with global sustainability standards. Regulatory wins, such as Moody's AAA.br credit rating upgrade and IFC-aligned interest rate reductions, further cement its reputation as a financially disciplined operator. Even its legal challenge against Brazil's new OECD-inspired CSLL tax—while creating near-term uncertainty—reflects a proactive stance to protect shareholder value.

A Compelling Investment Case

Combined, these factors paint a compelling picture of Afya as a high-growth, low-risk investment. Its reaffirmed 2025 guidance (R$3.67–3.77 billion in net revenue) and a dividend payout of R$129.8 million (20% of 2024 net income) underscore its ability to balance growth with shareholder returns. The KPMG audit change, far from a cause for concern, is a catalyst for renewed investor confidence in a company already demonstrating unmatched financial and operational strength.

Conclusion: Act Now on Afya's Clear Signal

For investors seeking exposure to a sector primed for growth—higher education in Brazil's booming healthcare economy—Afya Limited offers a rare combination of proven execution, robust liquidity, and now, enhanced governance. The audit firm shift is not an end but a beginning: a signal that Afya is positioning itself for sustained leadership. With its stock trading at historically attractive valuations and its ecosystem expanding through strategic acquisitions, the time to act is now.

Afya's story isn't just about numbers—it's about building a future where financial transparency and operational excellence drive lasting value. This is a company ready to capitalize on its momentum, and investors who act swiftly stand to benefit.