Release Date: August 13, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript .

Positive Points

• Afya Ltd ( NASDAQ:AFYA ) delivered solid first-half 2026 results with revenue growth of 7% year-over-year to R$1,985 million and net income up 7% to R$463 million.

• The company maintained strong cash generation with an operating cash conversion of 87.8% and free cash flow to equity of R$423 million in the first half of 2026.

• Afya Ltd ( NASDAQ:AFYA ) returned R$448 million to shareholders through dividends and share repurchases, representing 106% of free cash flow to equity, reflecting a disciplined capital allocation strategy.

• The undergraduate segment showed robust growth, with medical school net average ticket up 4% and health science courses growing 13% year-over-year, driven by strong student base momentum.

• The company successfully extended its debt maturity profile from 1.9 years to 3.7 years and reduced gross debt to R$2.4 billion, maintaining a conservative leverage of 0.8 times net debt to EBITDA.

• Afya Ltd ( NASDAQ:AFYA ) benefited from a favorable legal injunction that lifted restrictions on medical seats, allowing the company to potentially fill additional authorized seats in the second half.

• The company saw strong growth in continuing education student base (up 23%) and clinical management active payers (up 20%), indicating expanding ecosystem penetration.

Negative Points

• Adjusted EBITDA margin contracted by 190 basis points year-over-year to 46.2% in the first half of 2026, reflecting higher sales and market expenses from investment cycles.

• The continuing education segment experienced a revenue growth slowdown to 5% year-over-year, impacted by a product mix shift toward lower-ticket, short-term programs and a 25% decline in B2B revenue.

• Medical Practice Solutions revenue growth was modest at 2% year-over-year, with total active payers remaining stable and monthly active users declining 8%, due to competitive pressures from AI tools.

• The company faced regulatory uncertainty with the NMED restrictions, which initially limited seat occupancy, and despite the recent injunction, some additional seats may remain unfulfilled due to timing.

• Capex execution was slower than expected in the first half, running at 30% of the full-year guidance, with an anticipated acceleration in the second half, which could pressure cash flow.

• The effective tax rate for 2026 is expected to be around 10%, but the company recognized a one-time positive tax effect of R$20 million from Pillar 2 clarifications, which may not recur.

• The company's investment cycle in continuing education and medical practice solutions has not yet translated into significant revenue growth, with B2B revenue in continuing education declining 25% year-over-year.

Q & A Highlights

Q: Regarding the recent injunction that suspended NMED restrictions, are you now allowed to fill all authorized seats, and will this remain valid for future years? Also, why was the income tax expense this quarter so low compared to previous quarters? A: Virgilio Gibbon (CEO) confirmed that after the decision last week, all previously prohibited seats were returned to the institutions. However, since the intake process is already advanced, some of these additional seats may remain unfulfilled, though this will not impact results either positively or negatively. He clarified that the injunction is only related to last year's results, and new Enamad results expected in early December will be considered for the 2027 intake cycle. Luis Blanco (CFO) explained that new clarifications under Pillar 2 recommendations allowed the company to reduce provisional tax amounts, resulting in a positive effect of approximately R$20 million. He expects the effective tax rate for 2026 to be around 10%, similar to last year.

Q: Can you discuss the competitive intake in the second half and the capacity to increase prices? Also, regarding Medical Practice Solutions, when should we see the increased investments start showing results on the revenue side? A: Virgilio Gibbon (CEO) stated that the company is aiming for 100% occupancy fulfillment in the second half, with no price changes or discounts for medicine programs. Health programs are seeing very strong intake, currently more than 20% above last year at the same period, with expectations of over 18% organic volume growth. Luis Blanco (CFO) explained that MPS is experiencing pushbacks in active payers on WhiteBook due to competition from AI tools, leading to reduced tickets and increased functionalities. While the clinical management system (iClinic) is growing faster, it's not sufficient to offset the WhiteBook decline. The investment cycle includes increased Capex in intangibles and team expansion, with the strategy to first increase audience and functionalities before recovering revenues.

Q: If we annualize the first half EBITDA, it gets to roughly R$1.8 billion, which is the top of your guidance range. Should we expect second-half EBITDA to come in below the first half, or are you just being conservative? Also, how do you plan to balance dividend distribution versus a more active M&A approach? A: Luis Blanco (CFO) confirmed the company is focused on delivering the guidance of R$1.7 billion to R$1.8 billion. Regarding capital allocation, he emphasized that Afya has made 22 business combinations since the IPO and maintains strict thresholds, requiring at least 20% minimal nominal IRR and concentration in medicine. When opportunities don't meet these criteria, the company returns capital to shareholders through buybacks and dividends. He noted the company has 1.4 million shares remaining in the current buyback program to execute by year-end. Virgilio Gibbon (CEO) added that the company maintains a good M&A pipeline but will only pursue deals meeting their thresholds, while continuing to invest in product enhancements and AI features.

Q: Regarding the continuing education segment, we saw a decline in net revenue. Can you comment on the competitive environment and expectations for the second half? A: Virgilio Gibbon (CEO) explained that while student numbers are growing, revenue growth has slowed due to a different product mix with more lower-duration, lower-ticket programs. This impacted mainly the second quarter, which also faces seasonality in prep courses. He expects to maintain at least high single-digit growth for the second half and does not foresee any decline from current levels. The company remains confident in reaching its 2026 guidance based on first-half results across all three segments.

Q: We saw Capex running at 30% of your full-year guidance. How do you see Capex accelerating in the second half, and can you provide a breakdown between PPE and intangibles? A: Luis Blanco (CFO) confirmed the company expects to fulfill the guidance of R$340 million to R$380 million for the year, with expected acceleration in the second half. In the first semester, Capex for properties and equipment was down year-over-year, but there was high acceleration in intangibles, mostly concentrated on the investment plan for continuing education and medical practice solutions. While the company doesn't provide a breakdown between property and license Capex, a definite acceleration is expected in the second half.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .