What Management Said
Read the full Q4 2025 transcript ↗It demonstrates how our strategy continues to position Afya for sustainable growth as it continues to transform medical education across Brazil. We've achieved our seventh consecutive year of meeting or exceeding guidance since second half of 2018. This track record reinforce the strength of our business model, the quality of our execution, and the commitment of our teams. Our revenue for the 12-month period grew 12% year-over-year, reached BRL 3,697,000,000 followed by adjusted EBITDA growth of over 50% year-over-year, reaching BRL 1,680,000,000.
Adjusted EBITDA margin for the same period reached 45.4%, an increase of 130 basis points over last year. We also reported a solid cash flow from operating activities, ending the 12-month period with BRL 1,548,000,000 over 6% higher than last year, with a cash conversion of 93.7%. This achievement underscores our disciplined capital allocation on buyback programs, M&A, and an efficient capital structure. Our number of undergrad medical student has reached more than 25,000 students, represent a 5% growth compared to the same period last year.
Furthermore, our medical schools net average strictly excluding acquisition increased by 3% in the 12-month period. In the continuing education segment, we continue to see solid results, presenting a revenue growth of 11% year-over-year, reaching BRL 284 million. For medical practice solutions, we ended the year with an increase in revenue of 6% year-over-year, reaching BRL 171 million in the 12th-month period. In the next slide, starting with the undergrad segment, we delivered a record gross margin of 63.9%, reflecting the strength of our academic model and solid operational discipline.
What went well
- FY2025 revenue grew 12% YoY to BRL 3,697,000,000, in line with the midpoint guidance and 5x the 2019 IPO-year level
- FY2025 adjusted EBITDA reached BRL 1,680,000,000 (margin 45.4%, +130 bps YoY), surpassing the BRL 1.67bn mid guidance; seventh consecutive year meeting or exceeding guidance
- FY2025 net income of BRL 768.4M (+18% YoY) and record basic EPS of BRL 8.32 (+19% YoY); Q4 EPS BRL 1.91 (+15%)
- Operating cash flow of BRL 1,548,000,000 (+6%) with 93.7% cash conversion; free cash flow of BRL 1,056,000,000 and 13.3% FCF yield
- Record gross margins (undergrad 63.9%, corporate 64.5%), leverage cut to 0.8x net debt/EBITDA, and a BRL 307.4M dividend (BRL 3.45/share, 40% of net income) announced
What went wrong
- Q4 adjusted EBITDA margin fell 50 bps YoY to 42.6% (Q4 adjusted EBITDA BRL 389M, +6%)
- Residency journey student base was 21% lower than 2024 (though over 30% above Q3 2025)
- Medical practice solutions monthly active users fell to 220,000 from 238,000 a year earlier
- B2B revenue was soft versus Q4 2024, which had booked a large one-time revenue chunk not repeated in 2025
- 2026 guidance implies an EBITDA margin of roughly 43.5% at midpoint, ~190 bps below 2025's 45.4%
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Revenue | FY2026 | BRL 3.95 billion to BRL 4.1 billion |
| Adjusted EBITDA | FY2026 | BRL 1.7 billion to BRL 1.8 billion |
| Implied adjusted EBITDA margin | FY2026 | approx. 43.5% at midpoint (~190 bps reduction) |
| Implied net revenue growth | FY2026 | approx. 9% at midpoint (undergrad single digit, CE and MPS double digit) |
| M&A capacity target | per year | ~200 medical seats/year at IRR of at least 20% nominal unleveraged |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| Q4 2025 revenue | +8% | BRL 913M, growth across segments |
| FY2025 revenue | +12% | BRL 3,697,000,000, driven by undergrad tickets and seat maturation |
| Undergrad revenue (FY) | +13% | BRL 2,789M vs BRL 2,478M; higher medicine tickets, seat maturation, FUNIC start, full-year consolidation of UNIT Alagoas (acquired July 2024) |
| FY2025 adjusted EBITDA | +15% | BRL 1,680,000,000; higher undergrad and continuing-education gross margins, restructuring in CE and MPS, and SG&A efficiency |
| FY2025 net income | +18% | BRL 768M; stronger operations plus deferred tax asset recognition, partially offset by OECD Pillar Two global minimum tax |
| Continuing education revenue (FY) | +11% | BRL 284M vs BRL 255M; 9% B2P growth and 48% B2B growth, higher graduate-journey participation |
| Medical practice solutions revenue (FY) | +6% | BRL 171M; more favorable product mix and higher average ticket |
| Medical students | +5% | more than 25,000 students; 3,755 approved medical seats |
| Net debt | reduced by BRL 445M | BRL 1,369,000,000 at year-end even after FUNIC acquisition, dividends and buybacks; leverage cut from 1.2x to 0.8x |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Physician-lifecycle ecosystem integration and monetization | — | Three-year program to integrate CE and MPS products for the same physician persona into a unified membership-style platform, growing audience (301,000 users) to sustain low undergrad customer-acquisition cost | — |
| Incremental investment in CE and MPS | — | Investment program launched in Q4 2025 (higher intangible CapEx, reinforced product and sales teams) driving the ~190 bps 2026 margin reduction | — |
| Capital allocation framework | — | Balances M&A (~200 seats/yr, IRR >=20%), share buyback (~1/3 of FCF, 4M shares ~BRL 300M) and dividends (40% of net income); FCF over BRL 1bn funds all three | — |
| Organic and inorganic seat expansion | — | Acquired 60 seats (Afya Contagem) and secured 102 additional authorized seats (Bragança 100, Pato Branco 2); M&A strategy unchanged | — |
| ENAMED / PROFIMED regulation | — | No ENAMED impact expected in 2026 (near-100% intake occupancy); new ENAMED expected September with 12 mock-test simulations planned; PROFIMED still under Senate discussion, nothing approved | — |
| Shareholder returns | — | Added cash dividends alongside buybacks; EPS CAGR 37% and FCF CAGR 32% since 2021; dividend yield 4.76% | — |
Q&A Summary
Can you give tangible examples of the planned CE and medical-practice-solutions investments, and where the money goes?
Virgilio: the spend integrates the many products serving the same physician into one unified, membership-style platform tying learning tools to the clinical systems used in physicians' clinics; heavy on product enhancement and technology, aiming to grow audience nationwide over the next three years.
B2B revenue in medical practice solutions was soft this year, what is missing to drive it higher, is it technology or market readiness?
Virgilio: Q4 2024 had a large revenue chunk not repeated; B2B is held back by the lack of a unified platform to serve all contracts, and the investment program will improve the B2B experience and add more channels to monetize B2B within the ecosystem.
Update on ENAMED and PROFIMED, potential litigation, and impacts from sanctions on underperforming or newly opened schools?
Virgilio: no ENAMED impact expected in 2026 as intake is nearly 100% occupied; penalties on affected campuses will be close to zero, the new ENAMED is expected in September, and Afya is running 12 mock-test simulations to reverse grades and penalties for 2027. Renata: PROFIMED is still under Senate discussion with nothing approved.
How do you now view M&A for growth given undergrad schools are nearing maturation?
Blanco: the inorganic view is unchanged; Afya targets ~200 seats of capacity per year at institutions with over 60% of revenue from medicine programs, delivering at least a 20% nominal unleveraged IRR.
Operating expenses rose only 1% YoY versus roughly 10% previously, and intangible CapEx increased sharply; why?
Blanco: the CE/MPS investment program began in Q4 2025, driving the intangible-CapEx acceleration; OpEx met the full-year plan with some seasonality, and further detail can be shared after the call.
The 2026 guidance implies an EBITDA margin below 2025's 45.4%; what drives the decrease?
Blanco: about a 190 bps reduction at midpoint, reflecting the CE and MPS expansion investment program plus a mix effect as CE and MPS grow faster than the higher-margin undergrad segment.
How do you rank capital-allocation priorities (M&A, non-higher-ed investment, buyback, dividends) for the next 3-5 years, given they may compete?
Blanco: flexibility comes from over BRL 1bn of FCF; M&A stays at ~200 seats/year at 20% IRR, while a mix of buyback (when shares are undervalued) and dividends maximizes shareholder value; leverage was cut from 1.2x to 0.8x in 2025.
How is the cash flow being deployed across these uses?
Virgilio: of the ~BRL 1bn FCF, roughly one-third funded buybacks (4M shares, ~BRL 300M); dividends were 40% of net income (~30% of FCF); the remainder funds product/platform investment and future acquisitions while keeping the undergrad business resilient at ~100% seat occupancy.
The guidance midpoint implies ~9% net-revenue growth; can you break it down by segment and volume versus price?
Virgilio: no per-segment guidance is given, but undergrad should grow single digits (ticket near inflation plus small volume as medicine programs are mostly mature) while MPS and CE grow double digits; margin reduction stems from the investment program reinforcing product and sales teams in CE and MPS.
More on Afya Ltd
Reported 2026-03-12 · figures from the Afya Ltd Q4 2025 earnings call.
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