Afya Ltd (NASDAQ:AFYA) stock fell 7.58% (As on May 24, 11:26:28 AM UTC-4, Source: Google Finance) after the company reported Adjusted Net Revenue for the first quarter of 2022 of R$567.7 million, an increase of 41.0% over the same period of the prior year, mainly due to the maturation of medical seats, an increase in the average ticket of Medical programs and consolidation of acquisitions of medical schools and digital services. Adjusted Net Revenue also includes an impact of R$ 1.4 million due to the remaining net temporary discounts in tuition fees granted by individual and collective legal proceedings and public civil proceedings related to COVID-19, that are expected to end during the second quarter. Excluding acquisitions, Adjusted Net Revenue in the first quarter increased 10.6% YoY to R$445.3 million, mainly due to the expansion of Undergrad and the Continuing Education recovery, which ended the first quarter with a 23.7% increase in net revenue, mainly due to the interruption of the effects of the COVID-19 pandemic. The growth in Adjusted Net Revenue was partially offset by Digital Services revenue, which decreased 23.9%, due to a lower performance of Medcel in the 1Q22, which was caused by higher competition in the Residency Preparatory market. Adjusted EBITDA for the three-month period ended March 31, 2022 increased 30.4% to R$ 270.8 million, up from R$ 207.7 million in the same period of the prior year, while the Adjusted EBITDA Margin decreased 390 basis points to 47.7%

AFYA in the first quarter of FY 22 has reported the adjusted earnings per share of $1.42, beating the analysts’ estimates for the adjusted earnings per share of 30 cents. Adjusted Net Income for the first quarter of 2022 was R$ 167.2 million, an increase of 4.5% over the same period of the prior year. or the three-month period ended March 31, 2022, Afya reported Adjusted Cash Flow from Operations of R$293.6 million, up from R$194.1 million in the same period of the previous year, an increase of 51.3% YoY, boosted by the solid operational result. Cash and cash equivalents on March 31, 2022 were R$ 789.4 million, a decrease of 18.2% over the same period in 2021. For the first quarter of 2022, CAPEX went from R$32.9 million to R$76.8 million, an increase of 133.2% over the same period of the prior year, due to higher expenditures related to intangible assets, mainly explained by the R$24.4 million earn-out related to the 28 additional seats of Centro Universitário São Lucas, in Ji-Parana, that was approved in March, 2022.

2022 Adjusted Net Revenue is expected to be between R$2,280.0 million – R$2,360.0 million. 2022 Adjusted EBITDA is expected to be between R$935.0 million – R$1,015 million