Afya Limited: Strong Q3 and 9M 2024 Financial Results Drive Growth and Expansion

Afya Limited, a leading medical education group and medical practice solutions provider in Brazil, reported impressive financial results for the third quarter and nine months of 2024, demonstrating robust growth and expansion. The company's strong performance can be attributed to strategic acquisitions, organic growth, and effective cost management strategies.

Afya Limited's Q3 2024 financial highlights include a 16.3% YoY increase in Net Revenue to R$841.2 million, with Net Revenue excluding acquisitions growing 11.8% to R$808.8 million. This growth was supported by a 25.0% YoY increase in Adjusted EBITDA, reaching R$347.9 million, and an Adjusted EBITDA Margin of 41.4%, up 290 bps YoY. Net Income increased 26.4% YoY to R$124.1 million, and Adjusted Net Income grew 28.8% YoY to R$165.4 million. Adjusted EPS growth was 29.9% in the same period.

For the nine months of 2024, Afya Limited's financial highlights include a 14.4% YoY increase in Net Revenue to R$2,455.3 million, with Net Revenue excluding acquisitions growing 12.9% to R$2,422.9 million. Adjusted EBITDA increased 24.3% YoY to R$1,089.6 million, with an Adjusted EBITDA Margin of 44.4%, up 350 bps YoY. Net Income increased 63.0% YoY to R$494.6 million, and Adjusted Net Income grew 46.9% YoY to R$626.7 million. Adjusted EPS growth was 48.7% in the same period.

Afya Limited's strong financial performance can be attributed to several factors, including the integration of acquired institutions like UNIDOM, which added 300 medical seats and strengthened the company's presence in Salvador. The acquisition of UNIDOM contributed to a 25.0% YoY increase in Adjusted EBITDA and a 41.4% Adjusted EBITDA Margin. Organic growth also played a significant role in Afya's financial performance, with Adjusted EBITDA excluding acquisitions growing 18.2% in Q3 and 22.1% in 9M 2024.

Afya Limited's strategic acquisitions have significantly contributed to its expansion of medical seats and access to quality medical education. The acquisition of Unidom added 300 medical seats, strengthening Afya's presence in Salvador. Additionally, Afya received authorization from Brazil's Ministry of Education to increase 80 medical seats at UNIMA and reconsider 10 medical seats at Unigranrio in Rio de Janeiro, bringing its total approved seats across all campuses to 3,593.

Afya Limited's strong cash generation and operating cash conversion ratio further bolstered its financial position. The company generated R$836.9 million in cash, with an operating cash conversion ratio of 109.7%. This indicates that Afya efficiently converted its operating activities into cash, surpassing its net income. The robust cash position enables Afya to invest in strategic initiatives, such as acquisitions and expansions, while maintaining financial flexibility.

In conclusion, Afya Limited's impressive Q3 and 9M 2024 financial results demonstrate the company's strong growth and expansion, driven by strategic acquisitions, organic growth, and effective cost management strategies. The company's robust performance, coupled with its solid cash position and operating cash conversion ratio, positions Afya Limited well for continued success in the medical education and medical practice solutions market.