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    AFYA
    Earnings call· Jun 2026(Q2 FY26)

    Afya Q2 FY26 earnings call AFYA

    Aug 13, 2026 Source

    Executive summary

    Afya Q2 FY26 — Solid H1 Performance Driven by Medical Education Growth and Shareholder Returns

    Afya delivered solid first-half 2026 results, driven by strong medical education growth and a commitment to shareholder returns, with BRL 448 million returned to shareholders. While adjusted EBITDA margins faced pressure from strategic investments in continued education and medical practice solutions, the company maintained healthy profitability and strong cash generation, enabling both internal product enhancements and capital returns.

    Highlights

    5

    • Revenue grew 7% year-over-year to BRL 1.985 billion for H1 2026.

    • Net income increased 7% year-over-year to BRL 463 million for H1 2026.

    • Basic EPS climbed 9% year-over-year to BRL 5.10 for H1 2026.

    • BRL 448 million was returned to shareholders in H1 2026, representing 106% of free cash flow to equity.

    • Undergraduate medical student base grew 3% to over 26,000 students, with net average ticket up almost 4% to BRL 9,443.

    Concerns

    4

    • Adjusted EBITDA margin contracted 190 basis points year-over-year to 46.2% for H1 2026 due to lower gross profit from continued education and higher sales & marketing expenses.

    • Medical Practice Solutions B2B revenue declined 25% year-over-year in H1 2026.

    • Monthly active users in Medical Practice Solutions decreased 8% year-over-year to 212,000.

    • Competitive pressure from AI tools impacted active payers in Medical Practice Solutions, leading to reduced ticket prices.

    Guidance & targets

    4
    CategoryTargetConfidence
    Adjusted EBITDA
    BRL 1.7 billion - BRL 1.8 billion
    high materiality
    High
    Capital expenditure
    BRL 340 million - BRL 380 million
    medium materiality
    High
    Effective tax rate
    around 10%
    low materiality
    Medium
    Continued Education revenue growth
    close to a high 1-digit growth
    medium materiality
    Medium

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Undergraduate
    Revenue for the undergraduate segment in H1 2026. 85% of this revenue comes from medical programs and 93% from health-related courses. Health science courses delivered 13% growth.
    Medical student base: >26,000 studentsMedical student base growth: 3% YoYOperating medical school seats: 3,768Operating medical school seats growth: >6% YoYMedical school net average ticket: BRL 9,443Medical school net average ticket growth: almost 4% YoYRevenue from medical programs: 85%Revenue from health-related courses: 93%Health science course growth: 13%
    		BRL 1,762 million>7%——
    Continued Education
    Revenue for the Continued Education segment in H1 2026. The segment experienced a lower revenue growth rhythm due to a different product mix with more lower-duration, lower-ticket programs, impacting Q2 which also faces seasonality. Management provided conflicting figures for H1 2026 B2B revenue growth, stating 8% YoY growth in prepared remarks by Virgilio Gibbon, and later a 25% YoY decline by Luis Blanco, tied to BRL 9 million in revenue.
    Total student base growth: 23% (H1 2026)Residency journey students: 9,244Graduate journey students: 10,213Graduate journey students growth: 13%Other B2P and B2B students: 36,780Other B2P and B2B students growth: 35% YoYB2P revenue: BRL 135 million (H1 2026)B2P revenue growth: 8% YoYB2P revenue % of segment: 94%B2B revenue: BRL 9 million (H1 2026)B2B revenue growth: -25% YoY (H1 2026)
    		BRL 144 million5%——
    Medical Practice Solutions
    Revenue for the Medical Practice Solutions segment in H1 2026. The segment saw pushbacks in active payers due to competition from AI tools, leading to reduced ticket prices. Clinical management systems (iClinic) are growing faster, but not enough to offset declines in other areas like Whitebook.
    Total active payers: ~201,000Clinical management active payers: >50,000Clinical management active payers growth: 20%Monthly active users: 212,000Monthly active users growth: -8% YoYB2B revenue growth (H1 2026): 5% YoYB2P growth (semester by semester): 1.1%
    		BRL 85 million2%——

    Operational metrics

    17
    Adjusted EBITDA margin contraction
    190YoY
    H1 2026

    Contraction in Adjusted EBITDA margin primarily reflects lower gross profit contribution from continued education, driven by higher sales and marketing expenses associated with investment cycle.

    Operating cash conversion
    87.8broadly in line with prior year
    H1 2026

    Reflects the strength of cash generation.

    Ecosystem users
    295,000
    end Q2 2026

    Reflecting continued meaningful penetration among physicians and medical students across the country.

    Gross debt
    BRL 2.4 billionvs BRL 2.7 billion as of June 2025
    June 2026

    Afya maintained a solid capital structure and conservative leverage profile.

    Average debt duration
    3.7 yearsvs 1.9 years
    June 2026

    Extended maturity profile in the period.

    Average cost of debt
    15.1~106% of CDI
    per year

    Average cost of debt for the period.

    Net debt
    BRL 1,394 millionvirtually unchanged from end of 2025
    June 2026

    Despite returning BRL 448 million to shareholders, reflecting strong cash generation.

    Net debt (ex-IFRS 16) to Adjusted EBITDA guidance midpoint
    0.8
    June 2026

    Leverage ratio based on the midpoint of 2026 adjusted EBITDA guidance.

    LTM Free cash flow to equity yield
    11
    LTM

    Calculated on market capitalization as of June 30, 2026.

    Total equity return at constant valuation multiple
    24
    LTM

    Composed of 13% basic EPS growth and other factors.

    Undergraduate health volume growth (H2 intake)
    >18organically
    H2 intake

    Expected organic volume growth for health programs in the second half intake, with current intake more than 20% above last year at the same period.

    M&A IRR threshold
    20minimal nominal unlevered
    N/A

    Minimum internal rate of return required for M&A opportunities.

    Continued Education revenue
    BRL 138 million
    H1 2025

    Baseline revenue for comparison with H1 2026 Continued Education revenue.

    Tax provision
    BRL 109 million
    end 2025

    Provision amount at the end of 2025 before new clarifications under Pillar Two.

    Tax disbursed (2025 taxes)
    BRL 8-9 million
    July 2026

    Amount disbursed for 2025 taxes, which was lower than the provision due to Pillar Two clarifications.

    Positive tax effect (Pillar Two)
    ~BRL 20 million
    H1 2026

    Positive effect on tax provisions due to new clarifications under Pillar Two regulations.

    H1 CapEx vs FY guidance
    30
    H1 2026

    CapEx for the first half of 2026 as a percentage of the full-year guidance.

    Industry KPIs

    6
    MetricValueDetails
    EPSBRL 5.10BRL
    RevenueBRL 1.985 billionBRL
    Net incomeBRL 463 millionBRL
    Operating margin46.2%
    Adjusted EBITDA ebitaBRL 918 millionBRL
    Share buyback capital returnBRL 448 millionBRL

    Risks & headwinds

    3
    Adjusted EBITDA margin contraction due to investment cycleH1 2026

    190 bps contraction in H1 2026 Adjusted EBITDA margin

    Mitigation: Strategic investments in continued education and medical practice solutions to drive future growth and audience expansion.

    Competitive pressure from AI tools in Medical Practice SolutionsCurrent

    8% YoY decrease in Monthly Active Users; B2B revenue declined 25% YoY in H1 2026; reduced ticket prices

    Mitigation: Increasing functionalities, embedding AI features, and improving physician engagement in solutions like iClinic and Whitebook; focusing on audience growth first, then revenue recovery.

    Seasonality and product mix impact on Continued Education revenue growthQ2 2026

    Lower rhythm of revenue growth in Q2 2026 due to product mix with lower duration/ticket programs

    Mitigation: Expects to maintain close to high single-digit growth for H2 2026 and meet full-year guidance.

    What to watch in Q3 FY26

    5

    Continued Education revenue growth

    H2 FY26
    Current5% YoY (H1 2026), lower rhythm in Q2 due to product mix
    TargetClose to high 1-digit growth for H2

    Why it matters

    Indicates whether strategic investments and product mix adjustments are stabilizing growth in this segment.

    Having said that, we are seeing -- keeping at least close to a high 1-digit growth for the second half here.

    Q&A highlights

    5

    Asked about H2 intake, pricing capacity, and details on MPS revenue decline and expected return on investment.

    Management expects 100% occupancy for H2 intake, no price changes for medicine programs, and strong health sector intake (20% above last year). MPS saw pushbacks due to AI competition, leading to reduced ticket prices but increased functionalities. Clinical management (iClinic) is growing faster, but not enough to offset Whitebook decline. Investments are ongoing to increase functionalities and audience.

    “we are growing organically more than 18% in volume in health we're expecting to be above that for the second half.”

    asked by Marcelo Santos · answered by Virgilio Deloy Gibbon

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Focus on Medical Education

    Afya continues to solidify its leadership in medical education, with 85% of undergraduate revenue derived from medical programs and 93% from health-related courses. The company's health science course portfolio demonstrated robust growth of 13%, contributing to the diversification of its health-related undergraduate offerings and reinforcing its strategic market position.

    02

    Investment Cycle in Continued Education and MPS

    The company is actively engaged in an investment cycle across its continued education and medical practice solutions segments. This involves increased sales and marketing expenses and a significant acceleration in intangible capital expenditures, aimed at enhancing product functionalities, integrating AI features, and improving physician engagement within its solutions. These investments are expected to drive future revenue recovery and audience growth.

    03

    Disciplined Capital Allocation Framework

    Afya maintains a rigorous capital allocation framework, prioritizing shareholder returns when potential M&A opportunities do not meet its minimum 20% nominal unlevered internal rate of return (IRR) threshold. This disciplined approach resulted in returning BRL 448 million to shareholders in the first half of 2026, exceeding 100% of its free cash flow to equity, while maintaining a conservative net debt to EBITDA ratio of 0.8x.

    04

    Impact of EnMed Injunction

    A recent injunction suspended previous EnMed restrictions, allowing institutions to fill previously prohibited medical seats. However, due to the advanced stage of the intake process and timing constraints, some of these additional seats will remain unfulfilled, resulting in no material positive or negative impact on H2 2026 results. The injunction specifically addresses results from the prior year, with new EnMed results expected in December 2026 to inform the 2027 intake cycle.

    05

    Taxation Clarifications and Outlook

    New clarifications under Pillar Two regulations led to a positive impact of approximately BRL 20 million on tax provisions in H1 2026, reducing the amount disbursed for 2025 taxes. The company anticipates an effective tax rate of around 10% for the full year 2026, consistent with the prior year, reflecting the evolving regulatory landscape.

    AI-generated summary of the company’s earnings call. Not investment advice.