Afya Limited Announces Fourth Quarter and Full-Year 2024 Financial Results

Impressive Adjusted EBITDA Margin Expansion

Expressive Cash Generation

First Dividend Announcement

Nova Lima, Brazil, March 13, 2025 – Afya Limited (Nasdaq: AFYA; B3: A2FY34) (“Afya” or the “Company”), the leading medical education group and medical practice solutions provider in Brazil, reported today its financial and operating results for the fourth quarter and full-year period ended December 31, 2024. Financial results are expressed in Brazilian Reais and are presented in accordance with International Financial Reporting Standards (IFRS).

Fourth Quarter 2024 Highlights

Full Year 2024 Highlights

Message from Management

We proudly present another year of strong operational and financial performance, reflecting the differentials of our business model and the successful execution of our strategy. We closed the year with significant growth in net revenue and adjusted EBITDA delivering the guidance for 2024. These results underscore the strength of our ecosystem, which integrates Medical Education and Medical Practice Solutions to support the entire physician journey, from undergraduate studies to professional practice.

Our margin expansion was primally driven by the integration of UNIMA and FCM Jaboatão, completed in 4Q23, the continued ramp-up of the four Mais Médicos campuses launched in 3Q22, the operational restructuring in Continuing Education and Medical Practice Solutions, the acquisition of Unidom, and our efforts to control Selling, General and Administrative expenses.

Furthermore, this year we maintained and reinforced our strategy to consolidate our leadership in providing access to quality medical education in Brazil. This was achieved through the acquisition of Unidom, which added 300 new medical school seats in Salvador, the approval of 80 additional seats at UNIMA Alagoas and 40 at Guanambi, and the reconsideration of 10 seats at Unigranrio in Rio de Janeiro. We also expanded our footprint by signing the acquisition of FUNIC, which will add 60 medical school seats in Contagem, a strategic location in the metropolitan area of Belo Horizonte. With these additions, we will reach 3,653 approved medical school seats.

We believe that sustainable growth is achieved through operational efficiency and academic excellence. In this regard, we successfully carried out a highly competitive student intake keeping the discipline of tuition adjustment above inflation, for new medical students, reflecting the strength of Afya’s brand and its reputation within the medical and health community. Additionally, we reinforced our Continuing Education and Medical Practice Solutions strategy by launching five new specialization campuses in 2024 and consolidating our Medical Practice Solutions offerings.

Financially, we maintained robust cash ensuring liquidity to sustain our strategic investments and growth initiatives. Because of our strong cash generation, we are really pleased to announce that we will return part of it as dividends to our investors while maintaining our organic and inorganic growth plans. The Board of Directors has approved a cash dividend payout of 20% of 2024 net income, reflecting our confidence in Afya’s sustainable results.

These outstanding results enabled another year of guidance achievement and reflect Afya’s consistent growth and operational excellence. This consistency added to another strong intake cycle, pave the foundation for our 2025 guidance: Net Revenue is expected to range between R$ 3,670 million and R$3,770 million, while Adjusted EBITDA is anticipated to be between R$1,620 million and R$1,720 million, excluding any acquisition that may be concluded after the issuance of the guidance. Once again, we are guiding another strong round ahead and proving AFYA´s resilience and ability to keep delivering solid results with a high predictability.

We also take immense pride in the significant social impact generated by Afya’s investments in medical education. This commitment led us to calculate our Social Return on Investment (SROI) using robust, globally recognized methodologies. According to our SROI study, every R$1 we invested resulted in R$3.58 in social benefits for the population of the municipalities analyzed. This reflects reduced mortality, increased life expectancy, and positive economic impacts such as wage growth and local financial activity.

We reaffirm our mission of transforming healthcare through education and technology, offering innovative solutions for developing and training physicians across Brazil. And that is why we are very excited to welcome Dr. Gustavo Meirelles as the Chief Medical Officer (CMO) of Afya. One of his top priorities will be driving innovation, evolving our products, and strengthening relationships within the health industry. With over 25 years of experience as a radiologist, healthcare executive, and entrepreneur, Dr. Meirelles has a proven track record in leadership, research, and consultancy, focusing on transformative changes in healthcare.

We appreciate the trust of our employees, students, partners, and shareholders. Together, we will continue driving the future of the medical journey in Brazil.

The aggregate purchase price is R$100 million, and the Net Debt will be deducted at closing. The price and payment conditions are R$60 million to be paid in cash at the closing date, and R$40 million to be paid in three annual installments adjusted by the Brazilian interbank interest rates (CDI).

Furthermore, there is a potential for 60 additional seats. If approved by the Ministry of Education (MEC) within 36 months from the closing date, it will result in an additional payment of R$1 million per granted seat, limited to 60 seats.

Afya expects an EV/EBITDA of 3.3x at full maturity and post synergies in 2030 with expected Net Revenue of R$52.4 million, of which 100% will come from medicine. With the acquisition, Afya will achieve 3,653 total approved seats.

The Company’s financial results reaffirmed the resiliency and predictability of Afya’s business model.

The guidance for FY2025 is defined in the following table:

Segment Information

The Company has three reportable segments as follows:

Undergrad, which provides educational services through undergraduate courses related to medical school, undergraduate health science and other ex-health undergraduate programs;

Continuing education, which provides medical education (including residency preparation programs, specialization test preparation and other medical capabilities), specialization and graduate courses in medicine, delivered through digital and in-person content; and

Medical Practice Solutions, which provides clinical decision, clinical management and doctor-patient relationships for physicians and provide access, demand and efficiency for the healthcare players.

Key Revenue Drivers – Undergraduate Programs

Key Revenue Drivers – Continuing Education

Key Revenue – Medical Practice Solutions

Key Operational Drivers – Users Positively Impacted by Afya

The Users Positively Impacted by Afya represents the total number of medical students from the Undergrad segment, students from the Continuing Education and users from Medical Practice Solutions. For the fourth quarter of 2024, Afya’s ecosystem reached 313,119 users.

Seasonality of Operations

Undergrad tuition revenues are related to the intake process, and monthly tuition fees charged to students and do not significantly fluctuate during each semester.

Continuing education revenues are mostly related to: (i) monthly intakes and tuition fees on medical education, which do not have a considerable concentration in any period; (ii) Residence journey product revenues, derived from e-books transferred at a point of time, which are concentrated at in the first and last quarter of the year due to the enrollments.

Medical Practice Solutions are comprised mainly of Afya Whitebook and Afya iClinic revenues, which do not have significant fluctuations regarding seasonality.

Net Revenue

Net Revenue for the fourth quarter of 2024 was R$849.0 million, an increase of 16.3% over the same period in the prior year. Excluding acquisitions, Net Revenue in the fourth quarter increased 12.0% YoY to R$817.8 million. For the twelve-month period ending December 31, 2024, Net Revenue was R$3,304.3 million, reflecting a 14.9% increase over last year. Excluding acquisitions, Net Revenue in the twelve-month period increased by 12.7% YoY to R$3,240.7 million.

The yearly revenue increase was mainly due to higher tickets in medicine courses, the maturation of medical school seats, the addition of 40 seats at Guanambi and 80 seats at UNIMA, the reconsideration of 10 seats at Unigranrio (Rio de Janeiro), the acquisition of Unidom, and the advancement of Medical Practice Solutions and Continuing Education segments. It is worth mentioning that as seen in table two, for undergrad programs, the organic growth came from medical courses growing 13.0% YoY, and for health science increased organically 14.1% YoY.

Adjusted EBITDA

Adjusted EBITDA for the fourth quarter of 2024, increased by 26.7% to R$366.0 million, up from R$288.9 million in the same period of the prior year, with the Adjusted EBITDA Margin rising by 350 basis points to 43.1%. For the twelve-month period ending December 31, 2024, Adjusted EBITDA was R$1,455.6 million, an increase of 24.9% over the same period of the prior year, accompanied by an Adjusted EBITDA Margin increase of 360 basis points in the same period.

The increase in Adjusted EBITDA Margin was mainly driven by: (a) higher gross margin in the Undergrad segment; (b) the full integration of UNIMA and FCM Jaboatão, concluded in November 2023; (c) the continued ramp-up of the four Mais Médicos campuses launched in 3Q22; (d) restructuring initiatives within Continuing Education and Medical Practice Solutions; and (e) improved cost efficiency in Selling, General, and Administrative expenses.

Adjusted Net Income

Net Income for the fourth quarter of 2024, totaled R$154.3 million, reflecting a 51.4% increase YoY. Adjusted Net Income reached R$193.6 million, up 17.7% from the same period in the prior year. For the twelve-month period, Afya achieved a Net Income of R$648.9 million, marking a 60.1% increase compared to the same period in 2023, while Adjusted Net Income rose 38.8% to R$820.3 million. This growth was primarily driven by: (a) improved operational performance, and (b) a lower effective tax rate compared to the previous year.

Adjusted EPS reached R$8.91 per share for the full-year ended December 31, 2024, an increase of 39.9% YoY, supported by higher Net Income and a disciplined capital allocation strategy.

Cash and Debt Position

As of December 31, 2024, Afya’s Cash and Cash Equivalents totaled R$911.0 million, reflecting a 64.7% increase compared to December 31, 2023. Net Debt, excluding IFRS 16 impacts, reached R$1,814.9 million, in line with the same period of the previous year, despite the R$660.0 million acquisition of Unidom and the R$157.2 million earn-out payment regarding the additional seats in Guanambi and UNIMA.

For the twelve-month period ended December 31, 2024, Afya generated R$1,453.2 million in Cash Flow from Operating Activities, up from R$1,088.8 million in the same period of the previous year, an increase of 33.5% YoY, boosted by solid operational results. The Operating Cash Conversion Ratio reached 102.2%.

The table below provides additional details on the cost of debt for 2024, considering loans and financing and accounts payable to selling shareholders. Afya’s capital structure remains solid, with a conservative leveraging position

and a low cost of debt. Afya’s Net Debt (excluding the effect of IFRS16) divided by the 2024 Adjusted EBITDA is 1.2x.

The holders of the convertible (SoftBank) shall have the right to redeem all or any of the outstanding convertible for cash, the Company’s common shares or a combination thereof (at the Company’s election, subject to certain conditions) with a 5% premium on or after the five-year anniversary of the original issuance date (April ,2026). The 5% premium is deemed as part of the effective interest rate and recognized on a pro-rata basis to date of the five-year anniversary of the original issuance date. The Company recognized a premium provision of R$17.0 million in the 2024 fiscal year.

CAPEX

Capital expenditures consist of the purchase of property and equipment and intangible assets, including expenditures mainly related to the expansion and maintenance of Afya’s campuses and headquarters, leasehold improvements, and the development of new solutions in the Medical Practice Solutions and content in the Continuing Education.

For the twelve-month period ending December 31, 2024, CAPEX was R$392.6 million. Excluding the one-off effect in the first quarter of R$49.6 million regarding the earn-out of Guanambi, due to the expansion of 40 seats in January 2024, and the earn-out of UNIMA of R$107.6 million, due to the expansion of 80 seats in July 2024 the CAPEX/Net Revenue ratio would be 7.1%.

ESG Metrics

ESG commitment is an important part of Afya’s strategy and permeates the Company’s core values. Afya has been advancing year after year on its core pillars and, since 2021, ESG metrics have been disclosed in the Company’s quarterly financial results in three key metrics, Governance and Employee Management, Environmental and Social.

The 2023 Sustainability Report can be found at: https://ir.afya.com.br/annual-report/

6.             Conference Call and Webcast Information

When: March 13, 2025 at 5:00 p.m. EST.

Webcast: https://afya.zoom.us/j/98748269632

OR

Dial-in:

Brazil: +55 11 4700 9668 or +55 21 3958 7888 or +55 11 4632 2236 or +55 11 4632 2237 or +55 11 4680 6788

United States: +1 929 205 6099 or +1 253 205 0468 or +1 253 215 8782 or +1 301 715 8592 or +1 305 224 1968 or +1 309 205 3325 or +1 312 626 6799 or +1 346 248 7799 or +1 360 209 5623 or +1 386 347 5053 or +1 507 473 4847 or +1 564 217 2000 or +1 646 931 3860 or +1 669 444 9171 or +1 669 900 6833 or +1 689 278 1000 or +1 719 359 4580

Webinar ID: 987 4826 9632

Other Numbers: https://afya.zoom.us/u/aekRMRWgAp

7.             About Afya Limited (Nasdaq: AFYA; B3: A2FY34)

Afya is a leading medical education group in Brazil based on the number of medical school seats, delivering an end-to-end physician-centric ecosystem that serves and empowers students and physicians to transform their ambitions into rewarding lifelong experiences from the moment they join us as medical students through their medical residency preparation, graduation program, continuing medical education activities and offering medical practice solutions to help doctors enhance their healthcare services through their whole career. For more information, please visit www.afya.com.br.

8.             Forward – Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. All statements other than statements of historical fact could be deemed forward-looking, including risks and uncertainties related to statements about our competition; our ability to attract, upsell and retain students; our capacity to increase tuition prices; our ability to anticipate and meet the evolving needs of students and teachers; our capacity to source and successfully integrate acquisitions; as well as general market, political, economic, and business conditions. Additionally, these statements include financial targets such as revenue, share count and IFRS and non-IFRS financial measures including gross margin, operating margin, net income (loss) per diluted share, and free cash flow. These statements are not guarantees of future performance and undue reliance should not be placed on them.

The Company assumes no obligation to update any forward-looking statements made in this press release to reflect events or circumstances occurring after its publication, nor to incorporate new information or the occurrence of unanticipated events, except as required by law. The achievement or success of the matters covered by such forward-looking statements involves known and unknown risks, uncertainties and assumptions. If any of these risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from those expressed or implied by the forward-looking statements we make.

Readers should not rely upon forward-looking statements as predictions of future events. Forward-looking statements represent management’s beliefs and assumptions only as of the date they are made. Further information on these and other factors that could affect the Company’s financial results is included in filings made with the United States Securities and Exchange Commission (SEC) from time to time, including the section titled “Risk Factors” in the most recent annual report on Form 20-F. These documents are available in the SEC Filings section of the investor relations section of our website at: https://ir.afya.com.br/.

9.             Non-GAAP Financial Measures

To supplement the Company's consolidated financial statements, which are prepared and presented in accordance with IFRS accounting standards as issued by the International Accounting Standards Board—IASB, Afya presents Adjusted EBITDA, Operating Cash Conversion Ratio, Adjusted Net Income and Adjusted EPS, which are non-GAAP financial measures, for the convenience of investors. A non-GAAP financial measure is generally defined as one that intends to measure financial performance but excludes or includes amounts that would not be equally adjusted in the most comparable GAAP measure.

Afya calculates Adjusted EBITDA as net income plus/minus net financial result, plus income taxes expense, plus depreciation and amortization, plus interest received on late payments of monthly tuition fees, plus share-based compensation, plus/minus income share associate, plus/minus non-recurring expenses/income. Operating Cash Conversion Ratio is calculated as the Cash flow from Operating Activities plus income taxes paid, minus/plus non-recurring expenses/income divided by Adjusted EBITDA. The calculation of Adjusted Net Income is the Net Income plus amortization of customer relationships and trademark, plus share-based compensation, plus/minus non-recurring expenses/income. The calculation of Adjusted EPS is the Adjusted Net Income minus the non-controlling interests divided by the Weighted average number of outstanding shares.

The non-GAAP supplemental financial measures are provided with the intend to help investors in assessing the overall performance of Afya’s business regarding its core operations, cash generation and profitability. The non-GAAP financial measures described in this release are not substitutes for the IFRS measures. In addition, the calculations of Adjusted EBITDA, Operating Cash Conversion Ratio, Adjusted Net Income and Adjusted EPS are not standardized financial measures and may differ from the calculations used by other companies, including competitors in the education services industry, and therefore, Afya’s measures may not be comparable to those of other companies.

10.          Investor Relations Contact

E-mail: ir@afya.com.br

11.          Financial Tables

Consolidated statements of income and comprehensive income

For the years ended December 31, 2024, 2023 and 2022

(In thousands of Brazilian reais, except for earnings per share information)

Consolidated statements of financial position

As of December 31, 2024 and 2023

(In thousands of Brazilian reais)

Consolidated statements of cash flows

For the years ended December 31, 2024, 2023 and 2022

(In thousands of Brazilian reais)