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Arco(ARCE) - 2023 Q1 - Quarterly Report
ARCEArco(ARCE)2023-03-30 20:11
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Revenue Growth - Arco reported a 44% increase in revenues for 2022, totaling R1,775million,anda501,775 million, and a 50% increase in adjusted EBITDA to R648 million[1][2] - For Q4 2022, net revenue was R679.3million,a47.4679.3 million, a 47.4% YoY increase, with Core solutions at R447.0 million (+39.1% YoY) and Supplemental solutions at R232.3million(+66.4232.3 million (+66.4% YoY)[3][5] - Revenue for the twelve months ended December 2022 was R1,775,427 thousand, up from R1,232,074thousandinthepreviousyear,markinganincreaseofapproximately44.21,232,074 thousand in the previous year, marking an increase of approximately 44.2%[38] - Net revenue for the three-month period ended December 2022 was R679,331 thousand, a 47.4% increase from R460,834thousandinthesameperiodof2021[43]EBITDAandProfitability−AdjustedEBITDAforQ42022wasR460,834 thousand in the same period of 2021[43] EBITDA and Profitability - Adjusted EBITDA for Q4 2022 was R353.2 million, reflecting a 57.4% YoY growth, with an adjusted EBITDA margin of 52.0%[11] - Adjusted EBITDA for the three-month period ended December 2022 was R353,190thousand,representingamarginof47.1353,190 thousand, representing a margin of 47.1%, compared to R224,403 thousand and a margin of 46.3% in the same period of 2021[42] - Total revenue for the twelve months ended December 2022 was R1,775,427thousand,withanadjustedEBITDAmarginof32.31,775,427 thousand, with an adjusted EBITDA margin of 32.3%, up from 26.3% in the previous year[42] - Free cash flow for the three-month period ended December 2022 was (R142,140) thousand, an improvement from (R256,950)thousandinthesameperiodof2021[47]ExpensesandCosts−GeneralandadministrativeexpensesdecreasedtoR256,950) thousand in the same period of 2021[47] Expenses and Costs - General and administrative expenses decreased to R68.5 million in Q4 2022, representing 10.1% of net revenue, down from 15.2% in Q4 2021[9] - Selling expenses in Q4 2022 totaled R148.5million,a27.4148.5 million, a 27.4% YoY increase, driven by higher investments in commercial activities[8] - Cash gross margin for Q4 2022 was 78.1%, down from 83.8% in Q4 2021, impacted by increased costs in the supply chain[7] - The total depreciation and amortization for the twelve months ended December 2022 was R277,458 thousand, compared to R194,885thousandinthepreviousyear[40]AssetsandLiabilities−Totalintangibleassetsdecreasedby0.6194,885 thousand in the previous year[40] Assets and Liabilities - Total intangible assets decreased by 0.6% to R3,184.0 million compared to R3,257.4millioninthepreviousyear[13]−TotalcurrentliabilitiesincreasedfromR3,257.4 million in the previous year[13] - Total current liabilities increased from R1,393,211 thousand in December 2021 to R1,533,589thousandinDecember2022,anincreaseofapproximately10.11,533,589 thousand in December 2022, an increase of approximately 10.1%[37] - Non-current liabilities decreased from R2,721,674 thousand in December 2021 to R2,322,389thousandinDecember2022,areductionofabout14.72,322,389 thousand in December 2022, a reduction of about 14.7%[37] - Cash and cash equivalents increased slightly from R211,143 thousand in December 2021 to R216,360thousandinDecember2022,anincreaseofabout2216,360 thousand in December 2022, an increase of about 2%[36] Cash Flow - Cash from operations for 4Q22 was -R42.8 million, an improvement from -R138.4millionin4Q21,whileforthefullyear2022,itwasR138.4 million in 4Q21, while for the full year 2022, it was R341.3 million compared to R138.2millionin2021[16]−CashfromoperationsforthetwelvemonthsendedDecember2022wasR138.2 million in 2021[16] - Cash from operations for the twelve months ended December 2022 was R341,269 thousand, a significant increase from R138,166thousandinthepreviousyear[40]−ThecompanyreportedacashfromoperationsofR138,166 thousand in the previous year[40] - The company reported a cash from operations of R341,378 thousand for the three-month period ended December 2022, compared to R206,290thousandinthesameperiodof2021[45]StudentMetricsandMarketPosition−TheannualACVfor2023isconfirmedatR206,290 thousand in the same period of 2021[45] Student Metrics and Market Position - The annual ACV for 2023 is confirmed at R1,930 million, representing a 24% YoY growth, serving 8,000 schools and over 2.6 million students[2][11] - The number of students served increased by 15% to 2.6 million for the 2023 school year, with a 33% increase in students approved for universities through SISU[21] - Retention rates remained consistent, with a 3 percentage point increase in the number of Core students using at least one Supplemental content solution, rising to 18% from approximately 15% in the previous year[19] Tax and Corporate Structure - The effective tax rate for 2022 was 13.1%, down from 17.8% in 2021, with ongoing corporate restructuring expected to capture additional tax benefits[12] - The effective current income tax rate for the twelve-month period ended December 2022 was 34.0%[49] Intangible Assets and Goodwill - The amortization of intangible assets in Q4 2022 was R97.6million,reflectinga35.697.6 million, reflecting a 35.6% increase year-over-year[14] - Goodwill remained stable at R1,950.9 million, unchanged from the previous quarter[13] - Customer relationships intangible assets decreased by 3.8% to R237.0millioncomparedtoR237.0 million compared to R274.7 million in the previous year[13] - The amortization of goodwill increased by 76.7% to R56.4millioninQ42022comparedtoR56.4 million in Q4 2022 compared to R32.0 million in Q4 2021[14] ESG and Social Impact - Arco's 2022 ESG report highlighted a 423% increase in the number of students impacted by the Arco Institute[21]