Healthcare
Afya Limited Announces Second-Quarter and First-Half 2026 Financial Results
BELO HORIZONTE, Brazil, August 13, 2026--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 three and six-month period, which ended June 30, 2026 (second quarter 2026). Financial results are expressed in Brazilian Reais and are presented in accordance with International Financial Reporting Standards ("IFRS").
About this update from Afya Limited
R$448 Million Returned to Shareholders 106% of 1H26 FCFE Distributed Through Dividends and Share Repurchases BELO HORIZONTE, Brazil, August 13, 2026 --( BUSINESS WIRE )-- 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 three and six-month period, which ended June 30, 2026 (second quarter 2026). Financial results are expressed in Brazilian Reais and are presented in accordance with International Financial Reporting Standards ("IFRS"). Second Quarter 2026 Highlights First-Half 2026 Highlights Message from Management During the first half of 2026, Afya continued to execute its strategy with discipline, delivering revenue growth while advancing the investment cycle outlined for the year. The resilience of our Medical Education business supported another quarter of profitable growth and strong cash generation. In Undergraduate, Revenue reached R$1,762.2 million in the first half of 2026, a 7.4% year-on-year increase, driven by our Medical School and Health Sciences undergraduate programs. Revenue from Medical Schools totaled R$1,499.4 million in the first half, a 6.5% increase year-on-year, supported by a 3.9% increase in Medical School net average ticket and the continued expansion of our medical student base, which expanded 2.7% year-over-year from 25,733 to 26,421 students. Revenue was further supported by the continued expansion of our Health Sciences student base, which grew 18.0% year-over-year from 25,718 to 30,350 students, reflecting the diversification of our health-related undergraduate portfolio and the strength of Afya's brand within the health segment. In Continuing Education, Revenue reached R$143.9 million in the first half, a 4.6% increase year-on-year, driven by a higher intake in short-term programs that carry a lower average ticket per student. The total base reached 56,237, a 23.6% year-on-year increase. In Medical Practice Solutions, Revenue reached R$85.3 million in the first half, a 1.5% increase year-on-year. Clinical Management active payers grew 20.4% year-on-year to 50,499, reflecting the continued execution of the product investment cycle in our 2026 strategy. Our capital allocation discipline remains grounded in value creation. We continuously evaluate acquisition opportunities and deploy capital only when transactions meet our strategic and financial return thresholds. When opportunities do not satisfy these criteria, we return excess capital to shareholders through dividends and our share repurchase program. Supported by our strong cash generation, this approach resulted in R$447.9 million returned to shareholders in the first half of 2026, of which R$314.9 million was distributed as dividends, equivalent to 40% of Afya's 2025 consolidated net income, and R$133.0 million was deployed in share repurchases, representing 2.7 million shares or approximately 3% of total shares outstanding under our current buyback program. This amount represents 106% of 1H26 Free Cash Flow to Equity, while Net Debt excluding IFRS16 remained broadly stable compared to December 2025. This discipline, combined with our earnings trajectory, translates into a compelling return profile: our last twelve months free cash flow to equity yield of 11% and EPS growth of 13% combine to imply a 24% potential annual equity return at a constant valuation multiple. Looking ahead, we remain confident in the strength of our strategy and the quality of our platform. We will keep investing in our ecosystem, supporting physicians at every stage of their careers, and creating sustainable value for students, physicians and shareholders. 1. Key Events in the Quarter 2. Subsequent Events 3. 2026 Guidance The Company is reaffirming its 2026 guidance, which assumes the successful acceptance of new students for the second semester of 2026. The guidance for 2026 is defined in the following table: 4. 2Q26 Overview Segment Information The Company has three reportable segments as follows: Undergraduate, previously denominated 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 provides 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 Undergraduate segment, students from Continuing Education and users from Medical Practice Solutions. For the second quarter of 2026, Afya's ecosystem reached 294,816 users. Revenue Revenue totaled R$972.1 million in the second quarter of 2026, increasing 5.7% year over year. Excluding acquisitions, Revenue reached R$969.3 million, representing 5.4% organic growth. For the first half of 2026, Revenue totaled R$1,984.8 million, up 7.0% year over year. Excluding acquisitions, Revenue reached R$1,977.6 million, representing 6.6% organic growth. Revenue growth in the quarter was primarily driven by the continued strength of our Medical Schools, supported by higher net average tickets and the ongoing maturation of operating medical school seats, and the continued expansion of the Health Sciences student base by 18.0%, which together increased organically by 6.6% year over year. Adjusted EBITDA Adjusted EBITDA reached R$406.5 million in the second quarter of 2026, an increase of 1.4% year over year, while Adjusted EBITDA Margin was 41.8%, down 180 basis points from the prior-year period. For the first half of 2026, Adjusted EBITDA totaled R$918.0 million, up 2.8% year over year, with an Adjusted EBITDA Margin of 46.2%, down 190 basis points. The decrease in Adjusted EBITDA Margin primarily reflects a lower gross profit contribution from Continuing Education, driven by a less favorable revenue mix, as well as higher payroll, sales, and marketing expenses associated with the investment cycle across Continuing Education and Medical Practice Solutions. Net Income Net Income for the second quarter of 2026 totaled R$201.3 million, an increase of 14.0% year over year. For the first half of 2026, Net Income reached R$463.1 million, up 6.8% from the same period of 2025. The increase reflects continued operating performance and a tax impact resulting from the implementation of the OECD Pillar Two rules in Brazil. Basic EPS reached R$ 2.22 for the second quarter of 2026, an increase of 16.7% year over year, and R$5.10 for the six-month period ended June 30, 2026, an increase of 8.6% YoY. The EPS growth is higher than net income, reflecting our capital allocation strategy. Cash and Debt Position As of June 30, 2026, Cash and Cash Equivalents totaled R$1,006.5 million, a decrease of 10.6% over December 31, 2025. Net Debt, excluding the effect of IFRS 16, reached R$1,394.0 million, increasing by R$24.5 million from year-end 2025, despite returning R$447.9 million to shareholders through dividends and share repurchases during the first half of 2026. For the six-month period ended June 30, 2026, Afya generated R$805.6 million in Cash Flow from Operating Activities, up from R$783.0 million in the same period of the previous year, an increase of 2.9% YoY. The Operating Cash Conversion Ratio reached 87.8%. The following table provides more information on the cost of debt for the first half of 2026, including loans and financing, as well as 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 Adjusted EBITDA mid guidance for 2026 would be 0.8x. CAPEX Capital expenditure consists primarily of investments in property and equipment and intangible assets, including the expansion and maintenance of Afya's campuses and headquarters, leasehold improvements, and the development of new solutions in the Medical Practice Solutions and educational content in Continuing Education. For the first half of 2026, Capex totaled R$120.0 million, representing 6.0% of Revenue for the period and remaining aligned with the Company's 2026 investment plan. 5. Conference Call and Webcast Information OR Dial-in: Brazil: +55 21 3958 7888 or +55 11 4632 2236 or +55 11 4632 2237 or +55 11 4680 6788 or +55 11 4700 9668. United States: +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 or +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. Webinar ID: 982 7161 8661 Other Numbers: https://afya.zoom.us/u/aRK0ROGaH 6. 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 . 7. 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/ . 8. 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 and Operating Cash Conversion Ratio 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. Free Cash Flow to Equity is calculated as the change in Net Debt ex-IFRS 16 between the beginning of the current period and the end of the current period, plus cash paid for acquisitions of subsidiaries or business combinations, plus dividends paid to the Company's shareholders, plus cash used in treasury share repurchases. 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 and Operating Cash Conversion Ratio 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. 9. Investor Relations Contact E-mail: [email protected] 10. Financial Tables Unaudited interim condensed consolidated statements of financial position As of June 30, 2026 and December 31, 2025 (In thousands of Brazilian reais) Unaudited interim condensed consolidated statements of income and comprehensive income For the three and six-month periods ended June 30, 2026 and 2025 (In thousands of Brazilian reais, except for earnings per share information) Unaudited interim condensed consolidated statements of cash flows For the six-month periods ended June 30, 2026 and 2025 (In thousands of Brazilian reais) Reconciliation between Change in Net Debt Position and Free Cash Flow to Equity View source version on businesswire.com: https://www.businesswire.com/news/home/20260813136104/en/ Contacts Investor Relations Contact E-mail: [email protected]