Vitru Ltd (VTRU) 2020 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Vitru Education third quarter results conference call. (Operator Instructions) As a reminder, this call will be recorded. (Operator Instructions)

I would now like to hand the conference over to your speaker today, Mr. Carlos Freitas, Vitru's CFO. Thank you. Please go ahead, sir.

Thank you, operator, and good morning, everyone. It's a pleasure to be here with you all for our first release after our IPO. Here with me are Pedro Graça, the CEO of Vitru; Maria Carolina Gonçalves, the Head of Investor Relations; and [Paulo Pambini] also from Investor Relations Department.

Before we begin, I'd like to make note that as detailed on Slide 2, during today's presentation, our executives will make forward-looking statements. In addition, management may reference non-IFRS financial measures on this call. These non-IFRS measures are not intended to be considered in the isolation or as a reconciliation of these non-IFRS measures to the most directly comparable IFRS measures in our earnings release as well as in the end of this presentation.

A slide presentation will be part of today's webcast, which is available in our Investor Relations website at investors.vitru.com.br. Of course, you all have the presentation in front of you. And now I invite you to move to Page 3.

So as you remember, we executed our IPO in the U.S. 2 months ago, more or less. And we are very proud of this achievement, which was only our first step in our life as a listed company. We raised a gross amount of BRL 96 million and the net proceeds of this primary offering will be used as we discussed throughout the IPO process, basically for M&A purposes.

And as you know, this strong growth we have delivered so far has been purely on an organic basis, but we are truly convinced that it can also create value for our shareholders through M&A and the deployment of our digital education skills. So today, we have active discussions with 10 acquisition targets, and we hope we'll be able to announce our first deals soon.

Now moving to Page 5. I'd like to report here the main highlights for this quarter. First one is that in the last census released by the Ministry of Education in Brazil, we were confirmed, again, as the #1 pure player in digital education in post secondary market in Brazil. We have been growing much better than our market, and this makes us very proud, and I'll get back to this a bit later.

The second point here on the slide is that also in October, the Ministry of Education released the latest results of the [IDD] of the last evaluation cycle. Our average IDD was 27% above the market and the highest amongst the listed players in Brazil. As a reminder, as you know, the evolution of the student throughout the post secondary education is measured by the IDD. And that's why we believe that is the best indicator to show the real added value we have on the life of a student.

Third one here on the space is about intake. Our intake in the current cycle grew 40% versus the same period of last year. And as a reminder, in the first semester of this year, our intake grew 30% versus same period of last year. And also important on fourth point is that this increase in intake did not come at the expense of average ticket rate. That's very important.

Our average ticket increased by 2%, so more or less close to the IDD evaluation in the period. And this, despite the sizable number of new students. I mean, as you know, we have a modular academic approach through which a new student can join us throughout the first semester -- or the semester intake. So most of them do not provide us with a full semester of revenues. So it confirms that we have been saying. We have a different market position, and we deliver a different product.

The sixth point here about net revenue. So with this increase in intake, base and tickets, our net revenue in Digital Education Undergraduate, which is our main segment, our main business, increased by 32% this quarter. And again, this is purely on an organic basis, which shows the compelling strength of our business model.

Finally, adjusted EBITDA increased in the period as well and would have increased even further or not for the low PDA base in the third quarter of last year before we implemented a stricter PDA policy in the fourth quarter of last year. And I'll come back to this a bit later as well.

So now on Page 6. As you can see, according to the data that I just mentioned released by the Ministry of Education. The private Digital Education Undergrad market in Brazil grew by roughly 19% CAGR since 2016, while we grew by 42% in the same period. Once again, purely on organic basis. So this is a market that has been expanding a lot, and in our opinion, we will expand even further in a post-COVID scenario.

And within this growing and appealing markets, we have grown even faster than our markets. Our current market share in this latest census increased by 1.5%. So it went from 10.8% in '18 to 12.3% last year. And this gain of 1.5 points was the strongest gain in share among all players in Brazil. And also important to mention that we gained share throughout the country. You can see here in the slide in the short or in the map, that we expanded our map share throughout 5 regions in Brazil. And also important to highlight here, the growth in the southeast, we expanded a lot between '18 and '19. It's -- from 1.4% to 2.2%. This 1% increase is a lot because the whole southeast, as you know, represents around 40% of the whole market.

And here on the right, about IDD and quality, not only we grew a lot, but also expanded our average IDD, which is now 27% above the market. One year before, it was 11% above the market, now it is 27%. And again, the highest among listed players in the country.

So it basically means that we improved the added value for our clients, which are the more than 240,000 post secondary digital education students, who trust their higher education through [Unasel].

Now on Page 7, we provide here a glimpse of the growth in our student base. We have almost 300,000 students, 97% of them enrolled in digital education courses. If we focus on the student base of Digital Education Undergraduate, which is our main business, as I mentioned, you can see that we have a CAGR of 34% since 2016. And we shall maintain this substantial growth in the student base of our Digital Education Undergrad basis as our 578 extension hubs mature over time.

And finally, as I have shown before, our intake in this 2020.2 cycle, I mean the second semester, second cycle of the year, was 40% higher than the intake in the same period of last year. And the growth in the first half of this year was 30%.

So -- and this process in the last, I'd say, intake cycle was pretty interesting to see. On one hand, it is true that the current economic crisis does affect the willingness of some of our prospects to effectively enroll in one of our quarters. But on the other hand, we have seen a lot of the students who, in principle, will go for the on-campus courses, but now are deciding more and more to go to digital education, particularly a hybrid model, such as the one offered by us.

This trend has just been confirmed by the recent surveys conducted by different sites about increased interest among corporates in digital education. So this fact, together with the cultural changes brought by the pandemic about working from home and buying from home and of course, study from home. This represents a huge market potential going forward for us.

And finally, just as a reminder that the latest census, last year already, there were more new students and newcomers joining Vitru Education courses than on campus. So it is poised to outpace the whole basis of students in post secondary education in Brazil in 2 years from now.

Now moving to Page 8, we show the increase in our digital education base are adding the number of hubs between September '19 and September '20.

Again, throughout the country, we have grown a lot. Even in the south region, which is the first region where we were based and created, growing 12% in the south region and then growing a lot throughout the country. Again, particularly in the southeast, which we grew 130% from 12,000 to 28,000. It is poised to become, quite soon, our second most important region in the country. And the number of hubs also expanding over time, we expanded a lot in the last years. And even in the last 12 months, we expanded by almost 40%, the number of hubs.

On Page 9, we focus on, in our opinion, the most important driver for our organic growth, which is the maturation of our expansion hubs. As I said, we have now 578 expansion hubs, which are still ramping up. And to illustrate this growth potential, we calculated this so-called theoretical maturation index, which is basically the number of students currently enrolled in the hubs, divided by the future number of students in the same hubs once they reach maturity, which is after -- usually, after 7 or 8 years of operations.

So the overall index is currently at 31%, which means that those expansion hubs have the capacity to increase their client base threefold and also important to highlight here that this index takes into account all expansion hubs opened at a given point in time. But for example, if we take only the 2018 cohorts, which, as you can see here in the chart, went from 34,000 in September '19 to 46,000 units. This cohort, the maturation index of this cohort went from 36% last year to now 48%.

So this is the beauty of the model. The maturation curve of this cohort is quite consistent and quite predictable, and it represents an important growth avenue at a limited execution risk. Because all those hubs are already opened, all those hubs, we have already the partner, the contract with the partner, the hubs are there in place. The -- I'd say, the brand equity of Unasel is already working in our favor there in the given region or city. So this potential growth will come from the expansion of the hub.

So on Page 10, we show here the expansion in the Digital Education Undergraduate, despite the change of this year. First, substantial growth in tuition and net revenue, not only in the quarter, but also in the 9-month period throughout the year. And on the right part of the slide, we show again the increase in every ticket, reaching BRL 263 per month for students. And it's important to bear in mind that there is a substantial seasonality in the dynamics of the average ticket throughout the year. So we should always make year-on-year comparisons about tickets and not compare with the previous quarters.

Finally, as you can see, about retention rates. This was virtually stable this quarter despite the effects of the COVID-19 pandemic, which had affected our retention rate in the previous quarters -- in previous 2 quarters, in fact.

Here, I think it's important to highlight 2 things. First, we have been growing a lot, as you know. And the dropout rate is as we all know much higher amongst the students than among seniors. So because we increased a lot the intake in the last years, especially this year as well. We have a huge frontage of newcomers in our base.

And the second important remark here is that we do not provide discounts to senior students as they renew their enrollment with us. So in the balance between student base, retention rates and average ticket, we usually prefer to maintain our discipline in the management of our average ticket.

Now moving to Page 11. We can see that -- we can see growth in our business in every perspectives. First, growth in net revenue, led by the expansion in Digital Education Undergraduate, as we have just discussed. Second, an important increase in gross margin and gross profit, led by the the end of scale, a constant focus on personnel costs as well as increased digitalization throughout the 3 segments. And third, expansion in our adjusted EBITDA, although margins were temporarily affected by changes in the PDA policy, which I will explain in a few minutes.

But before that, on Page 12, we provide the bridge with the main valuation of the net revenue between '19 and '20. As you can see, the growth in the consolidated net revenue was driven by the strong increase in our Digital Education Undergrad segment. Such growth was diluted a bit by the reductions in both consumer education and on-campus segment as detailed on the next page.

So on Page 13, there was a nice growth in graduate courses, both in the quarter and the 9-month period despite the pandemic. But there were some revenues in continuing education last year that we didn't have this year. So for example, last year, especially in the first half of last year, we benefited from some property bidding contracts, which importantly is our (inaudible). This year, with the pandemic, this type of revenue for us, basically disappeared as the government will focus their budget.

Regarding our legacy on-campus segment, it has been declining over time, in line with our view for the whole sector. And it's now basically linked us to courses not offered in our case through digital education, such as law, dental care and psychology, for example. And we do believe that it's relevant for us to reduce even further.

So now on Page 14. Finally, the bridge about the main valuation of adjusted EBITDA between '19 and '20. I believe there are 3 highlights in the slide. First one, the continuous increase in our operational leverage and the expansion of our gross margins. As you can see, the cost of service and the G&A were basically flat, both in the third quarter and in the 9-month period of this year compared to the same period of last year. And we will shed more light on these issues in the next slide.

The second point here to highlight on this page are the selling expenses. As a reminder, most of these expenses are related to the intaking process, which means that they are incurred to attract new students. In both third quarter of this year and the 9-month period of this year, there was an increase in selling expenses of roughly 2% of net revenue in the period.

Two reasons for that. First, this year, we are at the peak of that ratio that I mentioned between intake and renewed seniors; and the second point is that the hubs do play an important role in the selling process. And some students used to go to hub, for example, to conclude their enrollment or they visit there to enroll themselves. So now with the pandemic, we had to rely a bit more on digital media and increase the cost in digital media.

Finally, the PDA. Last year, as a preparation for our IPO, we adopted in the fourth quarter of last year, a stricter policy for the population of PDA. As you can see in the chart in the bottom right, there was a substantial PDA charged in the fourth quarter of last year, which compensated the very low PDA charge in the third quarter of last year.

So it means that we had a very low PDA comparison basis this quarter, but it's simply a temporary issue. And for example, if we were to normalize the PDA in the third quarter of last year by using, for example, the average PDA of '19, which was 12.6% of net revenue, as you can see here in the chart, our adjusted EBITDA would have grown this quarter by 31%. And that's why we are providing guidance of an increase -- a huge increase in the adjusted EBITDA for the fourth quarter of this year.

So now on Page 15, we come back to the gains brought by operational leverage. The cost of services, as reported in our adjusted EBITDA calculation reduced slightly, reflecting gains of sale, optimizations and personnel costs, and an increased effort in digitalization through our company throughout the 4 segments that we -- the 3 segments that we operate.

G&A expenses, as reported in our gross EBITDA calculation were basically flat year-on-year. Importantly, we were able to leverage our leaner structure. And as a percentage of revenue, G&A expenses were 140 basis points lower than the same period over last year. This performance illustrates our continued focus on maintaining a lean admin structure, which is important for our digital and agile strategic orientation. That's very important, a key differentiator of future (inaudible).

On Page 16, to talk a bit more -- let's talk a bit about net income and cash flow. So first, net income. This temporary increase in PDA that I've just explained, coupled with a onetime income tax effect of BRL 11.7 million, which was related to the restructuring of our first stock option plan, impacted our adjusted net income in the quarter. By concept, when we look at the full year, the year-to-date figures, adjusted net income was up 47%, driven by the significant expansion in our Digital Education Undergrad segment.

Cash flow from operations on the right improved substantially in the third quarter, 57% to BRL 52.4 million, and [accepted the] growth as well in the 9-month period of this year. Once again, this increase was driven by the outstanding performance of our Digital Education Undergrad segment, backed by a continued discipline in receivables management.

And finally, regarding the huge improvement in cash flow conversion from operations. This explains not only by this increase with higher cash flow from operations that I just mentioned, but also the higher level of PDA in the third quarter versus the third quarter of last year, as previously explained, which is a noncash expense.

So now let's move to Page 17 to talk more about the seasonality, which matters a lot. I'm going to provide you with more background info in order for you to help you to build your model going forward. Revenues and intakes are not distributed equally among quarters.

So first starting with intake. Our courses are structured around separate monthly modules, which as I said, enables students to enroll at any time throughout the semester. Still, we usually experience a higher number of enrollments in the first and third quarters of each year, which corresponds at the beginning of the academic semester in Brazil. On top of that, we typically have a higher number of enrollments in the first semester of the year than in the second semester. And this trend can be seen on the right side of the slide.

As a result of what I just mentioned, we usually record higher revenue in the second and fourth quarters of each year. However, this year specifically, especially in the second quarter of this year, seasonality was not as apparent, reflecting the impact of COVID-19. I mean our net revenue should have been slightly higher in the second quarter of this year. You can see the trends more clearly on the chart at the left of the slide.

And finally, also important to highlight that a relevant portion of our expenses are all seasonal. For example, we see higher selling and marketing expenses related to the first semester, which had a higher intake, especially in December, January and February.

So finally, about guidance on Page 18. Since this is the first release of our -- after our IPO, we exceptionally provide guidance in this slide on net revenue and adjusted EBITDA margins for the full year of 2020. As you can see, our guidance for net revenue -- in our net revenue shall be between BRL 510 million and BRL 520 million, while the annual adjusted EBITDA margin shall be between 26.8% and 27.2%, which represent an important growth compared to last year. This is shown here on the chart on the left. And here on the chart on the right, we show again the impact of the changes in our PDA policy in the quarterly adjusted EBITDA numbers.

Again, we had a very low PDA comparison basis in third quarter of last year. But on the other hand, a very high PDA basis in the fourth quarter. So we shall have a huge increase in our adjusted EBITDA numbers in the fourth quarter of this year compared to the fourth quarter of last year. And therefore, these numbers -- the numbers regarding the second semester of '19 and '20 here on the right, in the chart in the right, provides a more normalized vision of the adjusted EBITDA growth.

So before we conclude this presentation, some highlights on ESG issues on Page 19. I'm very happy to report that this year, in fact, 2 weeks ago or last week, in fact, we knew the results of our employee satisfaction survey, and we reached the highest rate since we started to be measured by Great Place To Work.

We improved 10 points in the last 4 years, and this is very important for us, and we truly believe that as an education company, the satisfaction of our employees is a key driver and a key -- a real competitive advantage for us.

Also, we are very engaged with corporate social responsibility. Some highlights are, first, the First National Autism Symposium in Brazil, which was sponsored by us, which discuss, among other things, the importance of improving autistic people in the education process and the How to Teach at a Distance Project, which was created after the outbreak of the pandemic. Through which we offer free online training for public school teachers, reaching more than 800 -- sorry, 84,000 teachers nationwide.

So this ends the first part of this meeting, and we're now ready to take your questions. Operator, please open the line, please.

(Operator Instructions) Our first question comes from Mauricio Cepeda with Credit Suisse.

So I think the presentation is very clear. But just 2 remaining questions and very small items. So we saw that there was a kind of a depreciation that was above last year, not only in the quarter but also in the year, if you can explain a little bit why there is this kind of change in the level of depreciation in general?

And secondly, about receivables. We saw that there was a kind of -- since you are accretive in our estimate that was kind of an increase in circa 10 days in the receivables. Is this something related to how this could -- are the collectibles, if there is any relation to the COVID crisis or anything like that?

Thank you, Cepeda, for your questions. First, regarding depreciation, I mean, there are 2 things here about depreciation and amortization this year, in fact. The first one is that there was a reduction in fact in amortization this year because there are some goodwill items in our intangibles that are finishing to be amortized. Some are even finishing this year. That's one thing.

The other thing is that on the -- we have been increasing over time as well, our investment, our CapEx in intangibles as well because we are a tech-enabled company, so we do invest a lot in technology, in our platforms, in our systems for our students for our hub partners, for our tutors, et cetera. So this increase over time in that 1, 2 years. And now these are start to be amortized as well.

Regarding the verification a little bit. We also increased the amount of CapEx in the first semester of this year, not this quarter, but the first semester of this year because we opened several own hubs in the beginning of this year. And as a reminder, we opened a hub belonging to ourselves when we want to establish our presence in a new market or to really have a flagship hub to be used as a reference in that given region. So we opened more hubs than normal in the beginning of this year, and they consumed higher CapEx, which are now depreciating as well.

Regarding receivables, yes, we do have a, I'd say, controlled receivables environment here. There was -- it is true that there was an increase in receivables a little bit compared to last year. But this -- at the end, this was, I'd say, quite well controlled compared to what it could have been. So at the end, I think that we have been able to deliver a different management of receivables, which reflected in our cash flow from operations.

Next question comes from Pedro Mariani with Bank of America.

Congrats for the results. I have 2 questions. But first, I was wondering if you could please provide some additional color on how the average tuition, specifically for the freshman in the Undergrad Digital Education platform during the intake cycle, right? So any color will be great here, if possible?

And the second question is regarding the personnel costs. I mean, do you expect this cost line to continue to dilute as a percentage of revenues next year? And if yes, what should be the main drivers for this expected performance to pay? So these are the questions.

Thank you, Pedro. So if I got it correctly, your first question was about tuition in the intake process, right?

Yes. Specifically for the freshman, okay?

Okay. So the intake process, what we have seen is that, indeed, the average ticket for the intake was more or less, slightly higher than what we saw 1 year ago. So it was in fact an increase of around 1.7%, 2%, the average ticket for the newcomers as they go over time.

So it is important to highlight here that the contribution of a new student is not full for the full semester. So what we do measure here as well, is what will be the ticket of those guys in the second semester? So what would be the recurrent average ticket that he or she will have?

And this recurrent average ticket grew this semester compared to the 1-year ago by, again, around 2%. So this is to show that the overall increase in ticket was not only a matter of increase in ticket for the seniors, but also a slight increase in the intake ticket as well.

The second question was about cost reductions. You're right, we do expect further reductions or further improvement in margins coming from a reduction in costs. And this will come, I think the most important reason -- or 2 reasons. First one is that the continued gain of scale that we will have. This is a business of scale. We do have benefits of scale as we grow bigger, and this is going to keep taking place throughout the next months or years.

The second [thing], which is sometimes taken for granted, is the mix between new student and seniors. Again, as I mentioned before, we -- this year, we are at the peak of this ratio between the intake and the renewed senior base. As for next year, this ratio will start to go down, which means that we have a natural expansion in adjusted EBITDA margins coming from that for a number of reasons. The first one is that selling expenses, as I said, are concentrated to attract new students. So over time, the amount of money divided by net revenue will go down in this line.

The second one is PDA because PDA and dropout are more concentrated and much higher among newcomers than among seniors. So because we are at the peak of this risk, we shall experience on a normal basis, a reduction in PDA and dropout over time.

And the third one is that we typically increase tickets higher -- above inflation for seniors over time. So as the percentage, the relative weight of senior increase as well, we also actually have an increase in net revenue.

So with all these factors taken into account, we shall expect, indeed, a continued increase in about -- just with the margins in the next years.

Our next question comes from Susana Salaru with Itaú.

We have 2 questions. Looking ahead, the first, we'd like to know how is evolving the initiative on continuing education? What should we expect going forward in terms of cross-selling and from the students that are not to graduate this year? And what to expect for next year in terms of revenue generation? That would be our first question.

The second question is related to the developments or the ramp-up of the new hub. We just would like to know if it's in line with the business plan, or it's going above or below what you were expecting for the [hub] for the new hubs this year?

Thanks, Susana. So first, I want to talk about the ramp-up of the hub, the same question. So the ramp-up of the hub was very tedious in this year. What we saw is that there was an acceleration in the ramp-up of the 2019 and '18 for cohorts. But the 2020 cohort, it was slower than what we thought, basically because those hubs were opened and then after 1 or 2 months, they had to shut down because of the pandemic. So -- and that's why we had to increase our investment in marketing with digital media, but it is true that the pandemic affected more the new hub than the other extension hubs.

Susana, could you please repeat your first question because I could hardly hear what you're saying.

Sorry about that. Our question in the first one was related to the continuing education development. How should we expect for next year if it's evolving as expected? And what kind of revenue generation should we see for next year in terms of -- versus this year in terms of growth.

Okay. So continuing education. Continuing education here at [Unasel] is split in 2 main subsegments. And the first one, the bigger one, therefore, is graduate courses, but there are also other businesses such as the bidding contract that I said.

The graduate courses grew this year. And -- but it was impacted just after COVID because the whole selling process of the graduate courses was heavily reliant on, I'd say, off-line media and people and salespeople within the hubs selling this type of revenue courses. So there was an important reduction in the intake in the second quarter of this year after the pandemic.

But this trend was already reversed. So the run rate now has read very positive and growing a lot in the last months, in fact, now in October, September. So the prospect for that is very positive. And we changed a little bit the intaking process for the graduate courses, which are now much more closer to what we do in the undergrad courses. So heavily reliant on digital media.

So now our graduate courses are, again, attracting a lot of new people. So we showcase an increase in the segment for next year, a huge increase for next year. The other businesses, it will depend on the -- basically on the programs because we -- from time to time, we do participate in some property biddings last year and 2018. This year, it was basically disappeared.

So -- but the trend that we see is that, again, now that -- I'd say that the governments realize the benefit of digital education that's going to be much cheaper than on-campus courses. So we do believe that as for next year, there will be an increased interest of these clients in promoting more digital courses in continuing education. Does that answer your question, Susana?

(Operator Instructions) Our next question comes from Irma Sgarz with Goldman Sachs.

I was just wondering if you could comment a little bit about the dropout rate, specifically for undergraduate, distance learning courses? What happened to this, this quarter and how you expect it to shape up into year-end and the new year?

Thank you, Irma. In fact, the drop out rate this quarter was fortunately in line with what we had 1 year before, which made us very, very happy because we are, again, in the middle of this -- the largest sanitation process in 100 years.

We had an impact -- an increase in dropout in the second quarter and even in the first quarter as well, just as a result of COVID, because it is true that a number of our student base lost their income and lost their jobs, so they dropped out. Now in the third quarter, what we have seen that the level of retention rate was stable compared to last year. So this is, I guess, that this is very important. It is -- the retention rate is, again, affected by the number of new students that we are increasing -- attracting more and more over time.

So it's also important to bear in mind that we have a retention rate that if we stopped growing now, our retention rate will naturally increase. It's going to be very easy to increase retention rate. But looking forward to keep growing and maintaining a, I would say, controlled retention rates, which, again, as I said, we could have had even better retention rate if we offer discounts in the renewal process of seniors, which we prefer not to do, and that's why our average ticket increased this quarter. Otherwise, it could have decreased.

Great. That's helpful. And then a follow-up question. To the extent that you're able to get any data on that or you're seeing actual trends for students, do you have any information on how much of your growth was being helped by students even switching from on-campus maybe even at competitors? Obviously, where it's within your company, you can see it. But I guess these are called transfer requests. Was that relevant at all or not yet?

It is beginning to be more relevant. We don't have, I would say, perfect data on that, but we do have interaction with the students. And we do feel that the interest has increased among certain population that is -- that could have thought about going to the on-campus.

And now, first, because of, I'd say, reduction income. And second, because of change in mindset or elimination of prejudice against distance learning, we do see that there is an increased part of the population of our [education] prospects that are moving their decision from on-campus to digital.

And this was just confirmed at the last week education sector released their final 50 wave report they released to the whole market, confirming that there is more and more -- a higher increase in the interest for digital education much more than the interest about on-campus.

So it is, I'd say, nice to assume that there is a big part of the population that will, over time, change their decision or their potential decision from on-campus and then enroll with us in digital education, especially because we offer this hybrid model.

Especially because we offer this model, which provides a sense of community, the sense of belonging, the person that he or she would like to get when going forward on an on-campus option. Now we do offer this sense of belonging, but instead of meeting 5 days a week, you meet with your colleagues, your class, your tutor, once a week. So it's the best of both worlds, combining the flexibility and affordability of the online with the sense of belonging of the on-campus.

I would now like to hand the conference over to your speaker today, Mr. Carlos Freitas, for closing remarks.

So now to wrap up with some key takeaways on Page 20, please. So we had a very solid quarter and a very good 9 months numbers, which have positioned us well for future growth. I mean, our strategy is based on this disruptive model and still eccentric hybrid model, which emphasizes flexibility, affordability and the a strong partnership with all stakeholders engaged in our platforms. So this is proving to be efficient over time, this is proving to deliver consistent growth across all key metrics.

We delivered the growth prospects that we discussed in the IPO process, and we remain focused on delivering more long-term value for our shareholders by keep expanding top and bottom line. Enrollment and student base had increased a lot. Margin trends are improving, sustained by the operational levers that I just explained. And we believe that we can build further on the momentum of the hubs as they mature, and we continue to expand our base.

And see this shift that, as Irma mentioned, from on-campus to digital education. We are very excited about the future, and we believe that we are on the right path to, say, to maximize our growth potential.

Thank you very much for being here with us, a real pleasure. We look forward to meeting with you over the next months, when the pandemic allow us, and to provide more financial and business update in the next quarter.

Meanwhile, our Investor Relations teams are -- is available to answer any questions that you may have. Thank you again. Bye-bye.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.