Cogna Q3 2026 Earnings Call - Seasonal PNLD and Election-Year B2G Drags Mask a 15% Nine-Month Revenue Gain

Conference Moderator: For those listening to the conference call in English, you can mute the original audio in Portuguese by clicking "Mute Original Audio." Please note that this conference call is being recorded and will be made available on the company’s IR website, www.ri.cogna.com.br, where the complete materials from our earnings release are also available. You can also download the presentation using the chat icon, including the English version. During the company’s presentation, all participants’ microphones will be muted. Afterward, we will begin the question-and-answer session. To ask a question, click the Q&A icon at the bottom bar of your Zoom screen and type your question to join the queue. When your name is called, a prompt to enable your microphone will appear on the screen. You must then enable your microphone to ask your questions. We ask that all questions are made at once.

Before proceeding, we would like to clarify that any statements made during this conference call regarding Cogna’s business outlook, projections, and operational and financial goals constitute the beliefs and assumptions of the company’s management, as well as information currently available to Cogna. Forward-looking statements are not guarantees of performance and involve risks, uncertainties, and assumptions, as they refer to future events and therefore depend on circumstances that may or may not occur. Investors and analysts should understand that general economic conditions, industry conditions, and other operational factors may affect Cogna’s future results and may lead to results that differ materially from those expressed in such forward-looking statements. I would like now to turn the floor over to Mr. Roberto Valério, CEO of Cogna, who will begin the presentation. Please, Mr. Roberto, you may proceed. Thank you very much.

Roberto Valério, Chief Executive Officer (CEO), Cogna Educação: Good morning, everyone, and thank you for joining the conference call to discuss our third quarter 2026 results. As always, joining me on this call are Frederico Villa, our Chief Financial Officer, Guilherme Mélega, our Vice President of K-12 Education, Jeferson Ortiz, Vice President of Higher Education, and Rodrigo Cavalcanti, our Vice President of Growth. As we’ve done before, this call is expected to last about one hour, consisting of a 20-minute presentation followed by a 40-minute Q&A session, so we can have more time for discussion. Having said that, I would like to begin talking a little bit about the specificity of this third quarter. The third quarter of 2026, it was impacted by some seasonal effects that we consider unfavorable that impacted our revenue.

The seasonal effects, I will explain them a little bit better, and they impact specifically the third quarter, but they do not alter our trajectory of growth and revenue, EBITDA, and post-CapEx generation of revenue, and also free cash generation that are being accumulated throughout the year. I will explore that a little bit. Just to make it clear, the impact on this semester, this quarter, I would like to highlight three lines of success that had unfavorable results. One is the PNLD. The second one is the sales to government, like secretariats of education in municipalities and states, and in a small way, also the higher education. Continuing each one of them. The main important point about the PNLD, we had in the third quarter some differences in the calendar for purchase and repurchase as when we compare to last year’s.

So you know that this calendar is controlled by the Ministry of Education, who defines the moments where the purchases will be made. Sometimes they delay the calendar a bit. I would like to begin highlighting that the line of the PNLD, so the business PNLD, has a strong growth throughout the year. When we look at the nine months in 2026, so the PNLD in revenues is growing more than 280%. So it’s a business in growth year-over-year. However, the third quarter, specifically speaking, the revenue dropped 75% year-over-year, which makes very clear that it’s not a topic of performance in this line of business, but it’s related to seasonal. In the third quarter of last year, there was a bigger repurchase that was a little bit delayed due to the cycles of orders from the Ministry of Education.

When we compare to this year, we see this difference. So in nominal terms, it’s like BRL 70 million approximately. This is the main point. Just like to tell you about the PNLD, year-over-year, it’s not losing pace. The other line of business, which is the B2G, so lines and solutions to governments in the municipalities and the states, it was impacted, as everyone knows, due to the electoral calendar. The third quarter was a third quarter where the public servants and the secretariats of education are obviously working for their candidates, like governors, federal deputies, and so on. Obviously, it slows down, like the public notices and pedagogical solutions and purchases. But that doesn’t mean that the processes are not happening.

And like with all the pedagogical and technical aspects, but under the perspective of revenue was a quarter that we were expecting would be a little bit slow. We have experienced for more than four years on B2G. We’ve lived like another moment of elections, like two years ago, and we were expecting this quarter to be a little bit slower, and we knew that it would be compensated by the fourth quarter. This was the second item. The third item in the higher education, as you remember, that the third quarter of 2025 was a quarter that we grew a lot in volume of enrollment, new enrollment, and also the revenue of Because it was the last window of opportunity that the students had to enroll before the change in the regulation.

At that time, we had a high growth in volume for when we compare year-over-year, it was a little bit harmed because the level of offering, especially on the EAD, was a little bit smaller. When we put the three, B2G, PNLD, and higher education in face of the changes in the regulation, and we saw the revenue falling a little bit, like 5.2%, reaching BRL 1,444.3 million. Obviously, if the revenue is smaller, the effect on EBITDA is therefore a consequence. That’s why there was a reduction in 24% in the quarter, likewise impacting the overall revenue.

It is important to highlight that even though we had a decrease in the third quarter in the revenue and the EBITDA, when it comes to cash flow, it was a very strong quarter because we were compared with the first quarter, especially the cash flow, even though it is a little bit smaller than in the previous year. I would like to highlight that in a slide in a bit. It is important to say that we have BRL 102 million instead of using what was for the growth of revenue and the cash flow in books and also educational systems. I am talking about our own capital, BRL 100 million. Therefore, the generation of free cash is a little bit smaller.

The last highlight point, independently from the overall results on the EBITDA, there was positive cash generation, including decreasing the net debt in BRL 239 million if compared to the previous quarters and reaching a leverage of 0.14 in EBITDA. Here in our next slide number 4, I highlight the numbers of the previous four months of the year, and I think that the best way of looking to the company. We have to look at the whole picture because the third quarter is impacted by this unfavorable situation. You can see here that the revenue in the previous nine months is still growing, like 15%, the EBITDA growing 3.9%, and cash flow 15% after CapEx, and plus 31% in the generation post-CapEx. We have a highlight looking at the previous nine months.

We reduced our net debt in almost BRL 13 million, and I will explore that a little bit later. We also had the distribution of dividends and one small acquisition, and we used the capital to reduce the withdrawn cash, but I will explore that. I just want to highlight that even though third quarter was unfavorable under the perspective of revenue, the cash generation is still strong within nine months. Now moving on to slide number 5, just a little bit more of a flavor in the revenue. It is clear when we look at breaking down the revenues in basic education and higher education, you see that basic education decreasing 18.6% in revenue. Obviously, we have the B2G and PNLD in the quarter, but growing almost 40% over the year and the nine months accumulated. It is quite an important growth in our revenue.

Higher education, the previous quarter, there is a little bit of a decrease of 0.6%, and the nine accumulated months growing 5.5%. This is important to mention because due to the effect of the smaller collection during the first cycle and the second one, it is understandable that we had a decrease on the revenue. It is still a little bit too soon, but our expectation is that starting next year, the first quarter of 2027, especially the cycle of and we will have a better means to compare the cycle one 2026 and 2027, and including the regulatory framework, we can look at the growth of higher education over the same basis due to the comparison of 2026, 2025 is polluted due to the change in regulation. Moving on to slide number 6, and now exploring the EBITDA.

I think that this is a consequence of the impacts on the revenue that I’ve commented. The EBITDA on the third quarter of 2025, it was BRL 52 million positive, and then this third quarter in 2026 was BRL 47 million negative due to the impact of the PNLD and the B2G. However, when we look at the accumulated nine months, it grows from BRL 263 million to BRL 303 million. Therefore, it’s growing 15% year-over-year when we look at the whole picture, not only at the specific quarter. Higher education on the third quarter, it’s always moving down 0.7%, but growing 1.6% over the nine months. Reminding you that we’ve been talking about it for quite a long time now, and it’s natural that with the new mix, with more on-site students, we have a pressure on margin on higher education, and you can observe that throughout the semesters.

Moving on to the slide number seven and talking about net profit and cash. The net profit, it’s impacted by decrease in the revenue and the impact on the EBITDA impacts the profit over the quarter as much as the nine months that decrease from BRL 583 million to BRL 433 million. But it’s important to mention that the cash generation operational post-CapEx and GCL. See here, it’s important to mention that the risco sacado, we’ve talked about that in interaction over the past few months, and we understand that with the high interest rates and with the generation of cash and the cash that we have, it makes more sense to use what we have to finance the cash flow of growth for the business in books and educational systems.

Over the nine months, we have BRL 139 million from our own capital instead of using the risco sacado, and especially on the third quarter, it was BRL 102 million. If we add, using the same base for comparison of 2025, if we add BRL 102 million to the BRL 264 million of cash generation on the quarter, we would have reached BRL 366 million. The same base of comparison used BRL 300 million of last year, which would represent a growth of 202%, a growth of GCL instead of a decrease of 12%. Just like to make sure that this was done intentionally so we can reduce our expenses because the risk is higher than our risk of capital. The same thing with the nine accumulated months. The nine months, we are growing and generation of free cash at 36.1%.

To remain on the same basis, we would go back to the BRL 139 million of capital that we used instead of risco sacado. The generation of free cash would have been BRL 907 million, which means that the generation of free cash instead of 301% would be 55%. With this and this slide, it’s clear that the third quarter, it’s very atypical with the seasonality that I’ve explained to you that impacted the revenue, brings obviously the results down, but the overall results is quite positive as we were showing in the previous quarters. As last highlight over the leverage of the debt cost, we’ve reduced the leverage in 1.11 to 1.4.

Once again, another decrease on the cost from 150 to 90 to 155, reminding you that we had from the first to the second quarter, from 133 to 159 due to the acquisition of Educbank. We incorporated Educbank, and there were some lines more expensive than the average of our debt. We have made some liability management, like small ones, during these weeks over the past three months that allowed us to decrease our cost of the debt. Just to explain, not everyone followed the effect of the acquisition of Educbank over the second quarter. Having said that, I think that the question that always comes up is, what is the strategy to use the allocation of capital?

Slide number 8, we reinforce the points, our strategy, especially looking at the expectations of the market in relation to the interest that we do not have such a positive perspective of decrease. This was our strategy already, and we reinforce our strategy to reduce our financial expenses and the reduction of our debts. We will do that using capital to reduce the risco sacado. It is a more expensive credit line, but in relation to the net debt and also our expenses, creating an impact. We had a reduction of BRL 300 million in one year and BRL 119 of our capital instead of the risco sacado. As a second priority, we have a return to the shareholders, and this year, we paid almost BRL 150 million in the distribution of dividends.

Also, we disclosed a new program of repurchase of stocks, and we understand that post-election and with the decrease of our stock price, instead of using our capital to other projects, we tend to use in different projects in basic education and higher education, and also new businesses. We understand that at this moment, at this price, it would make more sense to use the capital to repurchase part of our stock. That is why we opened this program of repurchase. The last point, we do not have any plan of a new M&A that would consume too much cash, but we are always paying attention to small M&As of some hundreds of millions. That would make sense, as it was the acquisition of a medical school last year and Educbank recently.

M&As that are still on our radar, but are not a priority. In fact, we want to reduce our expenses, and now repurchasing our stocks. Having said that, this is my opening remarks, and we open for questions. Now we will begin our Q&A session, reminding you that to ask questions, you have to click on the icon Q&A at the bottom of your Zoom screen and write your questions to get on queue. Once we announce, you have an observation, like to activate a microphone, and then you have to activate your microphone to ask your questions. Kindly, we request that all questions are made at once. Let us go to our first question. It is from Vinícius Figueiredo from Itaú. We will turn on your audio so you can ask your questions. Vinícius, please, you may proceed. Good morning, everyone.

Vinícius Figueiredo, Analyst, Itaú: I want to explore a little bit, especially the dynamic of the SG&A. You’ve detailed on the link and the initial remarks. However, I want to understand a little bit better, because the other companies had an important growth in the expense part, and you’ve detailed at the beginning that it came from a bigger students more present and the cost of utilities and facilities, and also some other points that were a little bit more evident. So if you could just give a little bit more information about the recurrence and the increment of expenses. Is this a kind of an adjustment that is one of a kind, that you can adapt better the infrastructure to this new reality of the regulatory framework? But also, if this is recurrent for the future results.

If you could also talk a little bit about the dynamic of the macro scenario that has been quite challenging, and the volume that represents. So how are you thinking about the expenses that how difficult or how easy some costs like to actually make some additional adjustments in order to compensate this increment? These are the points that I would like to ask. Hello, Vinícius. Thank you very much for your questions. If Jeferson has anything to add on the SG&A, and Rodrigo in the volume, they will do so. SG&A, I think that here, we have an effect, and you’ve been following the increase of the number of on-site students, not only due to the regulatory framework change, but we saw some cycles growing a little bit more than the online education.

Roberto Valério, Chief Executive Officer (CEO), Cogna Educação: Even though the course is on-site, as the health courses that we have a part in labs that are important to be present. As these courses become more representative in our portfolio and become a little bit more mature, it’s natural that we have more expenses with cleaning and safety. And we usually talk about, oh, this utility costs, but we also have costs applied to the labs and our technical team in the labs. As we use more the labs, we have more expenses associated. I would say that this year, we had an increase a little bit bigger in SG&A than the ratio that we can see ahead, because we had more costs applied to health.

But therefore, as the percentage of the net revenue wouldn’t continue to growth, but it will continue growing nominally due to the growth of the revenue and the base of on-site and semi-on-site students. In relation to this trade-off between volume and price adjustments, I would separate between new students and other students. You’ve been following, and we’ve done this in the mid-year cycle. We did it again for the cycle 2027, and we’ve been trying to make some readjustments and increase the prices. And I can give you an example, like pedagogy and business administration courses, are some of the courses that we are trying to increase the prices for the newcomers.

So obviously, it’s not a growth of 56%, but we try to increase between 15% and 20%, and we follow the reaction if everyone follows us and getting ready for adjustment in courses that are yet to come. I think that this is a process, like an ongoing process, and what we see, the other players also increasing prices, and we saw that happening in the second cycle of 2026. We see that happening in the first cycle of 2027, but obviously, as the prices under the perspective of the new enrollment dropped, but they increase, and we have overall positive results. But when it comes to the readjustment of veterans, we can actually pass that over the inflation rate, especially because our index of default is much better. You can see that our dropout is much better, and we can repass these prices to the students.

I hope I’ve answered your questions. Thank you. Thank you very much, Roberto. Our next question is from Samuel Alves from BTG Pactual. Samuel, you may proceed. Good morning, Valério. Good morning, everyone on the board. The questions on our end. When it talks about expenses, if you could talk a little bit about the operational expenses on basic education. You even talked about it in the press release that it reflect temporal effects over the quarters with an increase of expenses with technology and outsourced services. I just want to understand a little bit about the recurrence of expenses, if we had any factor that will move forward. And the second question is, in the segment of basic education, related to B2G. We ended up having a little bit of volatility due to the election. How do you see the year?

Samuel Alves, Analyst, BTG Pactual: You mentioned that the revenue for B2G will continue growing as it was for the 2026, if we compare to 2025, but talking about the segment itself. Thank you. Thank you very much, Samuel, for your questions. As we have to apply that to basic education, Guilherme Mélega will answer. Thank you, Samuel. I’ll begin with the operational expenses, and we had a very atypical quarter in terms of concentration of expenses, both in technology and outsourced services. We saw a quarter that accumulated expenses in relation to the average of the quarter. What we expect is a fourth quarter lighter in SG&A, and then we can keep the percentiles in this account. There is nothing that have increased incrementally our expenses.

Guilherme Mélega, Vice President of K-12 Education, Cogna Educação: In relation to the B2G, we observed the third quarter, there was a warmed up in terms of negotiation, prospections, intentions, but not anything concrete. The public entities were focusing on the electoral process and waiting for the scenario in their own states and in the country. What we saw was a lot of prospection, but nothing really materialized. What we see now in the fourth quarter is a materialization of those business. Our expectation for this quarter semester that we call our solutions, like the recovery learning and educational systems, and first quarter for the 2027, really good. Our expectations in the B2G did not change. Only timing changed a little bit. As a complement, Samuel, what we have in our pipeline, Guilherme Mélega, it’s quite good, it’s quite positive, which gives us an optimistic view.

To answer your question directly, if we believe that B2G will continue growing, we understand that, yes, indeed. The pipeline makes us believe that what is coming is quite positive. Very clear. Thank you very much. Thank you, Samuel Alves. Our next question is from Vitória Antonello from J.P. Morgan. Vitória, please, you may proceed. Hello, everyone. Thank you very much for the opportunity of asking this question. I have one question related to the PDD of the higher education. We saw the 39% year-over-year. How should we see this, the PDD, from now onward? How do you see the penetration of the taxes, the tariffs on your business? And also, the repurchase of BRL 42 million in stock. What is the pace that you expect for this repurchase? That’s it. Thank you very much, Vitória, for your questions.

Frederico Villa, Chief Financial Officer (CFO), Cogna Educação: I will pass to Fred. Good morning, everyone. Thank you for your questions. I will begin with the PDD. As I always say, what you see here in our numbers is much more a reflection of the generation of operational cash and the reduction of the default. You can see that in our generation of operational cash, and the reflection is in the PDD. We have a smaller condition of doubtful debts. And then we want to reduce and increase the cash, and also the effects of seasonality in our business. The cost of odd quarters are for negotiation, or we have more cash, and therefore we have reverse in the debts. It was positive.

When we look at the fourth quarter, and this is not a guidance, it’s just simply, they are applied for the past four months, our PDD should be slightly bigger compared to the third quarter, which is natural. That naturally, the debt that may become with a little bit of a default, but the scenario that we observe is slightly positive of that metric that we use. Using last year was around 40%, and in relation to improvement on the decrease, this number should be a little bit better for 2026 and also for next year. Second question. The buyback. We understand that the buyback, we’ve launched it, and we understand that it’s the best allocation of capital and brings better return for our shareholders. Our program is for one year, and the pace, it depends on the price.

We understand that the price does not reflect the numbers that we are delivering, just like the quarter was a typical seasonal. However, the rhythm is going to be dictated by the market, but with this price, the pace should be a little bit stronger. Thank you. Thank you very much. Thank you, Vitória. Our next question comes from Gustavo Tiseo from XP. Gustavo, please, the floor is yours. Good morning, everyone. We have the questions. First, I would like to explore one point that you’ve touched on the first question related to the G&A of Kroton. When it comes to the repasses that increased, but it was clear that in the basic education, this is a one-off and it should increase, but the higher education, some things are recurrent. Quite possibly, they would suffer a little bit of pressure along this line.

Gustavo Tiseo, Analyst, XP: Otherwise, what is not recurrent, then we will have a greater dilution or points on the revenue. The second point that I want to explore is the cost of nursing. Recently, you’ve opened one of the few that have the nursing courses, but it’s just to understand how is the ramp-up, and what’s the perspective in terms of if prices have changed from what is on-site, and according to the competitors of it, the price is two, three times what you had in the semi on-site. Hello, Gustavo. Thank you very much for your questions. I will split this with Jeferson. Maybe Rodrigo can talk about the nursing courses. We have a small portion of the SG&A of higher education, which is non-recurrent, but the rest is increase in the SG&A expenses due to the mix of the on-site.

Frederico Villa, Chief Financial Officer (CFO), Cogna Educação: It’s different from the basic education that we have a seasonality and a concentration in the semester that shouldn’t be recurrent, but here, it’s a little bit more recurrent than one-offs. It’s important to mention that we’ve been growing our portfolio of on-site course, not only the campus, but also in other places, our nursing courses. The repasse to the pole is following this line. As we enroll more students for the nursing courses, this line grows as the revenue grows as well. It should have an uptick of the percentile of the net revenue, but it’s a line that will continuously grow nominally because of the new mix of the on-site. When it comes to the nursing, I think Jeferson can talk a little bit about volume, how the volume, and Rodrigo may talk about the prices. Okay? Thank you, Gustavo.

Jeferson Ortiz, Vice President of Higher Education, Cogna Educação: Under the perspective of nursing, essentially the performance at mid-year, we had a very short interval for enrollment. We had the acquisition of 113 universities within this model that was granted by the Ministry of Education, and we opened more than half the number of classrooms that we understand as a very positive scenario. In this very short interval, we have an operation that it’s quite different from the other operations when we talk about college operations. This is extremely important to mention because we have this virtuous cycle, not only in the units, the partners’ units that we formed classrooms, and we have this cycle for 2027, and we can operate from its beginning. This is extremely positive in the point of view of maturity for the commercial team and for managers and coordinators.

We are quite optimistic in relation to the nursing courses within our partner poles. We are waiting the Ministry of Education in the planning for visitation so we can be accredited for other courses in 2027. We have high expectations from the Ministry of Education in 2027 to accredit us, and then we become eligible to operate within the operation that we had, semi on-site, but we’re also moving forward for the accreditation of the units where we see higher potential. Nursing, basically, this is the information we have. Gustavo, back to you. Thank you, Jeferson. Just one more point to add to Gustavo, reminding Gustavo that we had 400 poles that we had the expectation with the fast track. The Ministry of Education divided them in three thirds.

Rodrigo Cavalcanti, Vice President of Growth, Cogna Educação: They did one first third, and we are ready for this other two, and we install the labs. That is why it is important what Jeferson said, because we want the Ministry to visit us at the beginning of the year, what we already have, so we can receive the authorization for the next cycles. We do have the infrastructure. We are just waiting for the authorization to continue operating. And when it comes to pricing, now we are aiming 1.8 more like the reference we had on-site than EAD. So on-site, the expenses are much bigger. But the places where we have the nursing courses, some of the instructors already had nursing courses, and the price now is around 1.8, like the reference of the EAD. Perfect. Thank you very much. Thank you very much, Gustavo. Our next question comes from Caio from Santander. Caio, the floor is yours. Hello.

Caio, Analyst, Santander: Hello. Thank you very much. We have two questions as well on the basic education, is when we look at the performance of the PNLD in terms of market share, very similar to what happened in the last cycle. But I want to understand a little bit of the granularity of the performance and understand how was the performance of Portuguese and math, especially because we know the main subjects that have a higher percentage and helps over the performance of the cycle. And when it comes to subscription side, the ACV of the cycle was around 10% of growth in the last cycle, and maybe a little bit below what we were expecting, around 12%, 13%. But I want to understand how Educbank will help you to increase the performance of the ACV, and if this is what you have as a goal for 2027.

Guilherme Mélega, Vice President of K-12 Education, Cogna Educação: Thank you, Caio. This is Guilherme speaking. I will get your questions. In relation to the PNLD, the cycle follows our expectations and keeping up with our market share level. But when it comes to granularity of the subject specifically, what we are going to do is just announce it publicly, our market share for each different subject, and then it will become very clear the performance applied to each different subject. We believe that this is the best way to provide the transparency to everyone when it comes to the PNLD. When it comes to the ACV, we performed a double digit of 10%. Our pace in terms of reconstructing the ACV for next year, it remains the same. It is still in the double-digit level, and Educbank comes to complement our portfolio.

We strongly believe that there is a lot of synergy in terms of joint offerings from Educbank and ACV. For the time being, we are still designing it and setting up a go-to-market a little bit more integrated, but we expect a lot of benefits. Educbank is already a business with 1.5 of TPV reaching around BRL 115 million revenue. And for the past few years, the revenue grew 50%. So Educbank per se is a good business and continues growing, and it will bring a lot of synergy and integrate offering. We do not have guidance, but we divide our expectations in term of synergy among the two businesses. Thank you. Thank you, Caio. Our next question is from Mauricio from Morgan Stanley. Mauricio, the floor is yours. Good morning, everyone. Thank you very much. We also have two questions.

Mauricio, Analyst, Morgan Stanley: First is applied what you were talking about the semester that you have more expenses, and I believe that it came as expenses because this is happening in the pole. Maybe I could think that with more on-site students, you would have impacts both in costs as in expenses, and we’ve been monitoring in terms of the new regulations. My question is, in terms of like costs and expenses, this new regulatory scenario for 2027 with the transition period ending, what is going to happen? Our second question is related to the delta. The delta related to the first semester of 2026, and two deltas called our attention. First one is the on-site courses. There was an increase, and there was this major drop of 29%. The second delta is the tickets here for EAD.

We have the mix, but it was actually much stronger in the first semester in terms of a ticket, and now it slowed down. These are our questions. Thank you. Well, hello. I will answer your questions when it comes back to the pole, and then Fred also will add some comments. I think that you are right when it comes to the request to this new, do the transfer of, but this line of SG&A, not only we have the transfer to the pole, but we have the operational costs and the SG&A of the safety and utilities, cleaning. Everything follows this line. It’s not only the pole, but also our own units. Reminding you that we’re expanding the on-site courses in both channels. Just like to make clear what follows along this line, and I will pass it to Fred. Hello.

Frederico Villa, Chief Financial Officer (CFO), Cogna Educação: Addressing your question and complementing what Roberto said, not only looking at the SG&A, but looking at the cost. If you look at page 13 in our statement, we have the cost through quarter-over-quarter. You see the costs. We have part that is the payroll cost with teachers. We have an increment in our on-site presence. Given the new regulatory framework, if we are growing more in on-site, therefore, we have an increment in cost applied to teachers. This line grew year-over-year 26%. As for the other expenses, we had a growth in 5.5 basis points, and the effects were what Roberto said. On-site, we have the facilities because we have more students on-site. When we look forward, we believe that our growth factor is to have more students on-site.

Therefore, I do not have this relation, costs and expenses, which should keep it stable, slightly worse, but it should not improve that much. This is how we see it. If you want to add. Mauricio, thank you very much for your question. I believe that the recurrence, of course, yes, indeed, it’s always necessary as we increase the on-site presence, we have to redimension the team, especially cleaning team within our unit. We have to redimension, and then in 2027, we do not see it as growing, but there is a recurrence when we compare the costs. When we look at the semi on-site, I just want to point out something that may call your attention, but the nursing courses is the biggest impact in terms of volume in the semi on-site.

Jeferson Ortiz, Vice President of Higher Education, Cogna Educação: Last year, we captured comparable numbers to 28,000 nursing students, and when we bring that to comparable figures, you will see that our performance is not bad when we compare to the third quarter of 2025. As Roberto Valério mentioned, there was an anticipation in the number of enrollments and also the regulatory framework. We understand that our performance is quite consistent. Let me see if I understood it well. When it comes to the on-site, it could still increase when it comes to the costs with a stable revenue or small decrease. Is that it? Yes, that is precisely that. Thank you very much. Thank you, Mauricio. Our next question is from Flavio Yoshida from Bank of America. Flavio, you may proceed. Good morning, everyone. I do have two questions. First one is the PNLD.

Flavio Yoshida, Analyst, Bank of America: We had an expectation of normalization in the fourth quarter, but we read some news of budget restrictions and some contracts that had not been celebrated. I want to understand if this should become normalized in the fourth quarter, or we are going to postpone it for next year. The second question, it is related to the distribution of dividends. I believe that the company had this trajectory of leverage. I want to understand which level you feel more comfortable to adopt a better and more robust distribution of dividends. Hello, Flavio. This is Guilherme. I will get you a question from the PNLD. I will remind you how things, in fact, the purchase of the year cycle was formed on the fourth quarter, and basically, most of the purchase was formed the second and third quarter of this year.

Guilherme Mélega, Vice President of K-12 Education, Cogna Educação: Most of our accumulated revenue for the PNLD, around BRL 450 million, is part of the purchase of the previous cycle. We do not expect the same for next year. The process of PNLD was within our historical background. Everything happened in due time, and we received the orders, and everything follows the pace very close to normal. I make sure here that we are undergoing a phase that we cannot say what is going to be paid for next semester, because the withdrawal are from the post office. We see that everything is dictated by the government till the end of this year. What I can tell you is that it is following a normal flow, and our flow for production is quite normal, but it will depend on how things will happen on the fourth quarter. Just complementing.

Roberto Valério, Chief Executive Officer (CEO), Cogna Educação: In fact, we do have a very positive expectation than what we had last year, but the government is the government, so we do not have any guarantee, but as Malik had said, under the perspective of at least signaling is quite positive. When it comes to the dividend, Fred, would you like to say a few words? Okay, I will begin talking about the dividend. The main thing for us is our discipline in capital allocation. A few months ago, our capital allocation was the reduction of debt, and it was not the reduction of debt because of our leverage, which was one of the questions. We are very close to our optimum leverage. We have delivered this semester 0.4, and what we were doing and talking to the market was the reduction of the debt.

Frederico Villa, Chief Financial Officer (CFO), Cogna Educação: There was a capital cost of CDI plus two, plus 99 in relation to our debt, which is 1.55, including the Educbank. About a month ago, our preference was to allocate capital in the reduction of the. What we did was, in the second quarter, we had a reduction of approximately BRL 36 million, and now in the third quarter, we have reduced the risco sacado in approximately BRL 102 million. This is in our release, our cash flow. You can see that we are not increasing our line of detached risk. It reduced in relation to the second quarter in BRL 128 million, and this was very close to the amount we paid. Then we open a window because in relation to the last two months, we understand that capital allocation due to the price of the stock that does not reflect the price that we believe.

We open up this window of buyback. However, dividend is something that continues to have a new policy for the dividends. It is a topic that still, for us, to discuss what is the best capital allocation. At this moment, we do not review no new policies for the dividends, but this is 25% of our net profit. This discussion is still placed for future discussions. Just complementing, Flávio, under the strategic point of view and discussions with the board, on top of dividend policy, it is part of the discussions at the board meetings. As Flávio mentioned, after the elections and the decrease in the stock price, we understand that it is much better now and it makes more sense to buy back the stocks to take advantage of this opportunity than to place a new policy for the dividends.

Roberto Valério, Chief Executive Officer (CEO), Cogna Educação: Reinforcing what Fred just said, it is a topic under discussion, and we understand that buyback makes more sense due to the decrease in the price. Thank you. Thank you very much. Thank you, Flávio. Our next question is from Renan Prata from Citibank. Renan, the floor is yours. Good morning, everyone. Thank you. We also have two questions. First, I want to check a little bit about, I want to understand, the dynamic of the recruitment and enrollment for the first semester of 2027. I want to understand a little bit better, what is the appetite for the big tariffs, something that happened in 2025, and we need to understand how this is going to behave. You talked about the impact with the new elections and this transition cycle, and with all the expenses of the SG&A a little bit higher.

Renan Prata, Analyst, Citibank: I know that you have talked about the expenses of the SG&A that should not grow now in relation as a percentile of the revenue, but do you see any impact, any deflation, any elevation of cost, or how is it now? Hello, Renan. Thank you very much for your questions. Rodrigo, would you like to talk about the cycle? The question that came first, how is that going to behave in the future? In relation to the riff of tariffs, there was a little bit more stability. We do not see any changes in the Selic rate hike. In relation to the cycle, we just begun about a month that we are operating with 10% of the cycle already executed. What we observe, that we have comparable basis, like year-over-year.

Rodrigo Cavalcanti, Vice President of Growth, Cogna Educação: And it is a base that has been organized in the organization of the modalities on-site and online studies, so we can see a more organic variation in relation to the previous year. Renan, this is Fred here. Just want to add something related to the Selic rate hike, which is the stability, but it showed that it was not the right strategy, because we see that we do have the pari passu, but we have a correction of 60%-65% of the base. As we receive and the students do not abandon the courses, I revert what was forecasted. I see that I’ve been receiving, so pay and pass, and I have this reduction for doubtful debtors, because the cash is coming. We can see that.

Frederico Villa, Chief Financial Officer (CFO), Cogna Educação: We see very clearly in the pay to attend and the receivables of the students that are paying, as I mentioned in the first question that was asked by Itaú, which is the reduction of our default. The effect is on our cash, that the company is still generating cash, operational and net. As related to the regulatory framework, I think that we can separate this in two parts. The first one is the impact under the perspective of infrastructure to have the labs and the capacity to offer the semi-presential and on-site courses. We are ready. We do not have any additional costs, so additional investments have already been made. Reminding you that we have investments for the maturation of the courses. Odontology. I will give another example, like nursing. Veterinarian, they are already in the second year.

We have to make investments as the courses mature in the labs. In the terms of changing the regulation, there is nothing we can do, because what we have is already enough. However, there is another aspect, which is this mix of on-site, and that might increase, and we will need, therefore, more teachers, and the payroll will increase. What you can expect is an increase in the workload for the teachers, and therefore, the payroll will increase. For the next quarters and years, as the mix becomes less EAD and more on-site. This is something that we all know. Since the change in the regulatory framework, we’ve been talking about it. Our expectation is that we have a pressure, but not necessarily a reduction in terms of the nominal results, be it gross profit or EBITDA. You can expect that.

I believe that this is it. Thank you. The Q&A session is finished. Now, we’d like to pass the floor back to the final considerations from the company. I would like to thank you all once again to be here for the results of the third quarter, and I thank our team, our 25,000 employees that every day deliver quality for our students and clients. Once again, thank you very much for a quarter. Let’s move on to the fourth quarter. If you have any questions, you can get in touch with our team for any questions. Thank you very much, and until next quarter. The teleconference now, in relation to the results of the third quarter of Cogna Educação, is finished. The Department of Relations with Investors is ready to answer any questions you may have.

Conference Moderator: Thank you all very much for participating. Have a great afternoon.