Cogna Educacao SA
BOVESPA:COGN3
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Cogna Educacao SA
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Thank you. Good morning, everyone, and thank you for participating in this teleconference to discuss Cogna results for the first quarter '24. As usual, I have here Frederico Villa, our Financial Vice President; Guilherme Melega from Vasta; and Eduardo Honzak, Director of Relations with Investors and Corporate Fundings. We'll have 1 hour in this call. We'll try to have the presentation in 30 minutes to leave 30 for the Q&A.Well, good morning, everyone. Going on, I would like to start with the Slide #3, the administration message. I think the main points of the quarter are the net revenue of Cogna that is growing double digits as the previous quarters, emphasizing all business units, Kroton, Vasta and Saber growing as well in double digits in a consistent way. The recurrent EBITDA of the company grows for the 12th quarter consecutively with almost 10% growth, 9.5% compared to the first quarter '23, reaching BRL 495 million. The operational cash flow after CapEx is positive in BRL 9.4 million. We are quite happy with this indicator. It shows our cash generation because we can operate the whole company and have all the CapEx investment as expected. Our estimate here is something close to BRL 400 million, BRL 420 million in CapEx, investing in technology and infrastructure and content. Also we pay all the debt services, and we still have some cash -- some positive cash in almost BRL 10 million.As the first quarter highlights, the portfolio, as we've been saying, the diversification of Cogna products is our strength. And most of all, the 3 business lines showing a lot of resilience, Kroton with a growth of 14.7%, growing in distance education and presencial, which is important because this is something that we didn't have for some time. Vasta, also growing consistently, and especially the strength of our new [indiscernible] sales to government with a first contracted B2G of BRL 69 million in this first quarter, besides Saber, with a growth of more than 45% of net revenue being pushed both for the PNLD and educational solutions that we are selling, especially to city halls.In this context, especially in cash generation, our leverage has decreased [ some points ], it's 1.79x the EBITDA. This is the sixth consecutive quarter. And we have continuous liability and management actions. Fred, the CFO, will talk more about what we did and what is about to come with some positive perspectives and many banks searching for us and possibilities to enlarge the -- reduce the cost of debt and enlarge the deadline.Before going to the next slide, the cash generation after CapEx, despite the drop of 7.4%, we have BRL 50 million referring to the PNLD that was to be received in January, and the federal government just paid in the last days of the fourth quarter. If we consider that in the cash generation of the first quarter, we would have BRL 206 million in GCO, which would be 15% growth versus the first quarter '23. So despite the GCO being lower than the first quarter of '23, it's not a point of concern to us because we know that was due to time, and we are pretty sure about our ability to deliver the '24 guidance, both the EBITDA and the cash generation.With that, I will go to Slide 5 to talk a little bit about Kroton. So the capture growth of 14.7%, which is 53 more students than the corresponding cycle last year, with emphasis to the growth in presencial 14.1%, and distance education 14.2%, so both lines growing. We try to anticipate the enrollment in this quarter. We invested more in marketing. I would explore more of that later on. We invested more in marketing because we understand that captures in the beginning of the year make the students' experience to be better. Therefore, both from the point of view of non-payment and engagement, it increases our enrollment.I emphasize that in the general macroeconomic scenario, this first quarter was quite positive. We had January and February as months with a lot of demand. Looking to the other sectors, we see that retail and some sectors as car sales, especially the used ones that we follow here to feel the market, was also good. So I believe we have efficiency in operation. But also a scenario that seems more positive for Kroton in the beginning of this year less highlighting capture is the revenue of [ Safra ]. That is an indication that we've had for many years. Obviously, volume is important, but most important is that the capture has more revenue in [ Safra ]. And this period, we have more than 30% of growth in the revenue year compared to the other year, with more capture and more enrollment, considering with having less underpayment and more engagement. The total base of students grew strongly 12%, especially in KrotonMed, that is one of our measurements, and at EAD, that is the other measure. So it's quite important to have this growth. And you remember that we are saying that EAD has a lot of operational leverage. And KrotonMed, in fact, has a positive margin. So growing the base in this segment is positive.Now, talking about the ticket, we can send [ inflation ] to the veterans, and the mix of capture, especially in EAD this cycle is more concentrated in EAD courses that we call the hybrid ones or premium ones, that are the engineering and health courses, with a high average ticket with more presencial and physical labs. So the positive here is in the sense.And going to Slide #6 to talk about the financial performance, our revenue grew 12.5%, especially pushed by KrotonMed and EAD, with a small drop in the presencial of 4%. Remember that despite growing the basis of presencial, keeping it stable after many years without growth, the students graduated. They have higher tickets than the newcomers. So that's why the revenue has this negative effect than the basis that was stable, growing 0.2%. As I said, this revenue is not only accelerated by the amount of students, but due to inflation as well. And it's quite strong, especially because we could anticipate enrollment for the first quarter, the new ones.From the point of view of gross profit, I emphasize an important gain in the gross margin. And this is a question that we receive constantly about the space to gaining gross margin. And we understand that because of the leverage of EAD, so we have a bigger part than the variable. So if it's growing margin, we will gain on that. And you see that in our release with the opening of the primary margin per business line, and you can see the gain, the margin in EAD and medicine.So from the point of view of efficiency, KrotonMed and digital learning have a lot of opportunities here. We believe it is in the perspective -- in this perspective to the future, the effects will keep here in the next quarters.I would like to emphasize a little about marketing because we were anticipating that we were speeding up the expenses, or at least anticipating the marketing expenses, due to 2 reasons. First, because we wanted to anticipate and we could have strong growth in capturing the first semester, but also because we are consolidating Anhanguera brand as a national brand, which is in Slide 7. And here, we bring some information for you to see how this strategy is working. And this first graph shows the evolution of the search share per brand, organic search, okay? So if your brand is more known, better known with more awareness and more interest of the audience, there are more people searching for the brand in Google. And this graph shows that in '21, there was 10% of organic search in our brands, then 12.5% in '23 -- in '22, and 14% in '23. And we started in '22 with the strategy of consolidating the Anhanguera brand.So we are growing, and we have the numbers identified with the peers. So you have the numbers. Some gain market share. But the second one gaining -- gains half of us. We grew 3.9%, almost 4% in the second year, grew 1.9%. So just to highlight the current cycle, you can see in the next graph with the orange bar, the growth of search in Google per cycle, but especially in this cycle, 24.1%. We are growing 31.5%, and the average is 15% of the competitors. So the interest of the market by Anhanguera brand grew twice as the market average, which shows the investments we are doing on the brand makes sense. And the results are present here. It's not a sample search. This is concrete data on Internet search.With that, the last slide of Kroton, just to reinforce that we have gained in efficiency in online, but we are gaining in gross margin 70.5% and operational expenses 2.5%. PCLD also efficiency in [ 1.6% ]; corporate expenses [ 0.5% ]. But I would say it's stable. And knowing that we had this space for margin and efficiency gain, we knew we had space for more marketing. We used this space. We decreased a little the EBITDA margin this quarter. But I would like to make it clear that it is part of the strategy. And I even mentioned in many meetings here in the last call for the fourth quarter that this is our strategy to build the brand and also to bring new students. So we have important results in line, except marketing due to this strategy.With that, I finished Kroton. So I would like to pass on the floor to Guilherme Melega to talk about Vasta.
Thank you, Roberto. Going on in Slide 10, talking about the net revenue of Vasta, starting on the graph on the left, I emphasize the growth of our net revenue, 14.4%, emphasizing B2G that we acknowledged BRL 69 million in the revenue in the first quarter. Talking about cycle, the growth of the cycle of revenue is 12%. Besides the contribution of B2G, we also acknowledge 9% of growth in ACV, emphasizing complementary solutions that grew a lot in the level of 21%. In line with the transparency that we've always had, we are reducing here our estimate of ACV bookings and growth for this year from 16% to 12% due to the first quarter of the complementary requests of the schools that we saw as softer market in general and less students in our partner schools. With that, we are informing the new estimate of growth of ACV in 12%.Now, in Slide 11, we have costs and expenses. In total, we have costs growing 7.4% in the quarter. Remember that the revenues grew 14%. Therefore, our costs are growing below our revenue gain, generating efficiency. I will emphasize here the percentage on the right, our costs representing a drop of 7% due to the reduction of paper, the pressure for paper and graphic costs here, and also a series of initiatives to reduce costs, mainly the logistics optimization in the return to class.Another important point to emphasize is the expense contention that we had administratively, keeping the flat in absolute values and receiving a decrease in percentage of 1.5%. Therefore, we have an important space to invest in our growth and invest in '25. So you see that the marketing expense -- selling and marketing expenses had [ 3.2% ], in line with our strategy and ensuring a good start in our ACV in '25.In Slide 12, the result of growing revenue when cost grew later -- slower. So we had 28% of EBITDA and the year ending cycle BRL 394 million, 22% growth in the same period last year. I emphasize here the margin growth that in the cycle grew from 35.6% to 38.9%, [ 3% ] in the margin growth. It's important to our business and to our profitability.In Slide 13, I would like to emphasize other aspects of our business. We have a growth avenue that is quite important, that is Start Anglo bilingual schools, that is our franchising of bilingual schools that we launched last year, so -- that we have. It's exactly one year since we launched our bilingual franchising. We have 2 operating units in [indiscernible] and our first unit that is franchising, overcoming our expectations with 190 students. The target was 120, which reinforces our confidence in our business model. And we are here to launch the Liceu Pasteur in Sao Paulo that will be launched in '25 with a flagship of about 1,000 students here in Sao Paulo.I also emphasize the acceleration of contract signing. We have 2 contracts signed in 10 units of [ the federation ], which is important to us. And most importantly, we have more than 230 ongoing negotiations. So we reinforced our trust in starts that Start. That will soon be an important business line to our Company, close to our core business and our competence to generate good academic results.Lastly, in Slide 14, I would like to emphasize the launch of Plurall IA. That is the artificial intelligence in our platform, serving to our servers. And we also launched that with an intelligent assistant to professors and educators. And we have this assistant integrated content of the platform that the teacher can have consultations and classes and exercises and homework, and generate videos or material -- visual -- audiovisual material for classrooms. So this is an artificial intelligence with the content that the teachers use the same for the student so that they can study and clear the doubts with generative artificial intelligence. We believe it's a logical breakthrough that will create a lot of big bond with our teachers and students, and it will be offered to all the network.With that, I pass on the floor to Fred to go on with the results of Saber.
Thank you, Malega. Thank you all to participate here. I'll start the presentation in Slide 16, talking about Saber. Just to remind you, the investors that Saber is the business of the [ direct books ] Red Balloon and other businesses. So I emphasize here the net revenue in the first quarter of '24 with a growth in revenue of 47%, reaching in the first Q a revenue of BRL 193 million. This growth comes from the sales of the national program of direct books with a growth of 55%. Additionally, an increase in the sales in our program Acerta Brasil with a growth of 137%.Considering this growth in the revenue, we also had a growth here in our EBITDA. And this growth was 40% -- about 40%, and we reached here a recurrent EBITDA of BRL 47.6 million. However, despite having a slight retraction in the margin of the company, this retraction of about 1.2% was due to the cost of paper and printing that were still related to the amount that we had in our stocks in '23, and regarding the concentration of revenue in products of lower brands. However, our expectation is that this margin recovery is present in the next quarters, in line with the margin in '23.Just to finish the presentation of Saber and go into the other part of the presentation, talking about Cogna, that is the concentration of some of the big business, I emphasize the financial results here in the graph with -- in the left, a strong growth in the net revenue of 15.7%, reaching BRL 1.538 billion. I emphasize, as mentioned before, a growth in our 3 business units. Just to remind you, Kroton growing 12.5% in net revenue; Saber 46% growth; and Vasta, a growth of 14.4%, showing how strong our businesses are.And mentioning the recurring EBITDA and margin, we had here the 13th consecutive semester of EBITDA growth reaching 9.5%, and this recurring EBITDA reached BRL 496 million. The marketing strategy for Kroton and the price of the stocks, as I mentioned in the presentation of Saber, impacted our margin, our consolidated margin decreasing [ 1.8% ]. But as I mentioned before, our expectation is that in the next quarters, we would have a margin that would go back to what it is and what we had in '23.Now, in Slide 19, that is the operating cash generation, we had a slight reduction in the operational cash in the first quarter of '24 compared to '23. We mentioned before that we had an anticipation in the operational cash toward the fourth Q of '23 of about BRL 50 million, and somehow it impacted the previous quarter, but also this one. If we didn't receive in anticipation in the fourth quarter of '23, we would have BRL 50 million more. So we would reach BRL 260 million in total. So we had anticipating marketing to strengthen our [ after cycle ] to bring the best student base.Additionally, in the graph in 19, on the right, we have the operating cash generation after [ capital ] and debt service positive in BRL 9.4 million with a growth compared to the first Q last year of about BRL 56 million, which is quite positive to analyze that after the services and debt.In slide 20, I showed the net profit and the margin, so the net profit is adjusted. So our adjusted net profit -- I mean, the difference between the adjusted net profit and the adjusted net margin, we have only one adjustment, that is the amortization of our tangibles. That is quite clear, and it's shown in Page 21. We have here a decrease in the net profit of about BRL 67 million. This increase here -- we had an increase in the operational results of the company of about BRL 12 million, but we had some effects like the one-off sale, the transaction that we had with Eleva of about [ BRL 60 million ]. Our net profit, as I mentioned, last year, we had a net profit that was positive of BRL 54 million with a loss of [ BRL8.5 million ]. But this effect, as I mentioned, of [ BRL 60 million ] of one-off -- just to remind you that last year, we had a reversion of contingency of opening values that in the first quarter of '23 was positive in about BRL 75 million, and we didn't have this effect in the first Q of '24.In Slide 21, talking about leverage and indebtedness, we see the positive trajectory of how the company is leveraging. So we have the leverage on the net debt of the company over the EBITDA of the last 12 months. So in the first quarter of '23, we had a leverage of 2.1x. And in the first quarter of '24, our leverage reached 1.79x, a reduction of [ 0.30% ] in the leverage. And this leverage is mainly due to the strong cash generation and the growth of our business mainly in EBITDA. In April, I emphasized that in April '24, the company carried out the full optional early redemption of about BRL 170 million to reduce the net and gross debt, and this debt has a cost of CDI of 2.75%. So the company is in this process of renegotiating the liability management. So in April '24, we also started offering the public distribution of the -- the issue of shares of about 1.8% with capital cost lower than the prepaid debt. And the goal of this operation is to lower the debt and additionally to reduce the fees.And in the last slide, Slide 22, it deals with the previous one because the company has a cash position in March 31, '24 of '24 of BRL 1.72 billion and gross debt of [ BRL 4 billion ], and this net debt is [ shown of ] BRL 3.275 billion. The amortization schedule is in the other slide. The company has a lot of cash, and we are in a different process that today, our credit is better than the previous years. And we aim to see this liability management process bringing the reduction of debt and along with the cash in every quarter.Lastly, I would like to emphasize, just for information, that we adopted the IFRS 16 in 2019, and we recognized our lease. Then we have given an important information to the investors and analysts that in the first quarter of '24, our amount of lease to be paid and rent to be paid is BRL 2.8 billion, of which BRL 1.6 billion in rent obligations and BRL1.2 billion in renewals. That is the right of the company to have the renegotiations and to renew automatically the contracts. This information is important because, as I mentioned many times, our contracts are contracts that have nothing to do with IFRS 16. We had the term of the contract plus the renewal. So we give visibility here to show that the renewal is the right. I have no obligation. I have the right. And if I do that, I have BRL 1 billion more in renewal, so BRL1.2 billion. If I don't take this right, I don't need to pay for this BRL 2 billion in the long term.With that, I finish my brief presentation and pass on the floor to Roberto Valerio.
Thank you, Fred. I think that we started '24 as we finished '23. I focused in our 6 pillars that we ca'' the 6 strategic pillars. Obviously, growth is one of them. There is no revenue, there is no growth. So that's why I reinforce that revenue growth in the 3 business units make us confident that the business is healthy with a high potential for growth. And I would like to reinforce the point that we are quite optimistic with the ability to deliver growth in the 3 business units, I mean, Kroton, Vasta and Saber.Experience is another pillar. And an example of that is the anticipated moment to give a better experience for our students and in a better [indiscernible]. And we have a lot of initiatives with clients like [indiscernible] with all the process of attending schools and returning to schools, as Melega mentioned. And the students and teachers are the example that we gave good help in online education. And the B2C initiative is important to improve the NPS of our -- experience of our students, that is growing and evolving with all the development and to evolve the systems. Efficiency, obviously, searching for efficiency and gaining performance and improving the margin is still our focus, and the cash generation. The operating cash is positive, and it shows that we can generate efficiency and make all that CapEx investment thinking about the growth of the company in the long run as paying all the services of the debt and deleverage the company. So this is an important pillar and is part of the company forever, and we'll keep focusing on that. People and culture reinforce, what I say, that we have this team spirit present and customer centricity. It's important, we need to do well with the students and schools and government and all the development of talent and diversity.We have the [indiscernible] award for many years. And this is the second year that we are [ GPTW ] specifically in [indiscernible] of women. Innovation is part of what we are trying to do more and more. So an example is the partnership for post graduation with McKenzie, as we mentioned, and [indiscernible] the bilingual franchising and the B2G initiatives as the info product platform of co-creators -- of book creators, I'm sorry. That is a smaller operation that is growing every month in [ the DMV ], and I'm pretty sure that in the future will be a very important initiative.And obviously, we couldn't forget the ESG as one of the pillars. Remember that we are the first company to be part of the ISEB3, the only company with the [indiscernible] Seal from the government that we understand is very important, especially to all the serious initiatives to governance and internal controls that we have here. So just to reinforce this point, we are still with the same strategy that we had for the last 3 years. We are all here, especially those here in the company. We have 70 partners in the company who want not only to deliver the guidance for '24, but also to generate value to the shareholders because we are the shareholders of the company, and we want the company to generate more value.Having that said, I will open the floor for the Q&A session. Thank you very much.
[Operator instructions] The first question is from Lucca Marquezini from sell side.
Regarding the expenses with marketing and sales, that we see a relevant increase in the quarter that you mentioned would be strategic, but looking to the future, the thought is, thinking about the movement of consolidating Anhanguera brand, how much of this work was carried out and how much should be done? How many quarters to see a higher level? And when you see not a normalization but a drop in this level, please?
Lucca, thank you for your question. We understand that there is still one more quarter, that is the second one, with all the [ funds ] that we purchased and all the agenda of investments in the brand. So in the second quarter, you see a little bit more marketing. But starting in the second quarter, the marketing expenses will decrease. So it's not permanent. Obviously, building a brand and awareness is something that is never stopping. If we take the graph that I showed with the participation of search and the total search, we have 14% of all the search today. But obviously, if I can have 17%, 20%, 30% of search, it is a better awareness for the brand and will search for that. It's important to make it clear, Lucca, as I said, that everything we do in marketing is quite well calculated. A great part of the investment we have, I would say, basically, what we do is to invest in digital media that we can manage quite well. I reinforce the point that we are a world benchmark, even to Google. Our case is presented in many of the events, not only here but also abroad. And even in the new book of Philip Porter, we are there present as a case of efficiency in the digital marketing. So I reinforce that despite the volume of marketing and investment is higher, from the point of view of effects, it's good, and it's well thought and administered. So the [indiscernible] a small growth in the year, very small. But we have one of the [indiscernible], one of them that is positioned with the lower cost in the market. So it is just to reinforce that it's not an expense that we don't know what we are doing. We know quite well what we're investing on, and we can regulate to gain on efficiency. But to answer your question, [indiscernible] for us to finish this first flight, as we say here, in marketing. But in the second semester, we have much less expenses in marketing. This is the plan, and this is the budget.
Let's go to the next question from Jessica Mehler, a sell-side analyst.
If you can go deeper on the competitive -- mainly because Roberto mentioned you are seeing a positive macro environment at the beginning of the year. But when we look at the growth of the ticket in the on-campus segment, we see like a flat growth. I would like to understand how it should be look to the future taking into consideration that you have a strategy to increase the mix of premium courses in the segment. I'd like to understand how you see this strategy.
Well, Jessica, thank you for your question. So I'll start with a structural explanation because I think it's important to say that the entering ticket is [indiscernible] by the competition dynamics of the market. So our strategy is to be competitive, but obviously not to be the first mover for price reduction. As all peers, we have assessment in prices that is dynamic. We use [ robots ] to have that more efficiently. So maybe in one campus, the course is growing, and in the other unit, it's decreasing. So this is the first point. What I feel in the last cycles is that the competition for prices is more organizing. It's less aggressive. I think we've seen that in this first quarter. But what I think is that there will be some -- there was more demand on the market. We saw a lot of demand in January and February, a lot of conversions from -- especially in onsite search. It's growing and it shows that families have more money. They are choosing more onsite courses. And the first option in general is presencial. When they can pay, they choose for that. I would say that this growth in the presencial would be due to the availability of money in the market and people searching more for the courses. But these courses are competitive, so it's more difficult to pass on ticket. We can grow the amount, but the tickets are competitive.Then just for a direct response on the average ticket not grow so much in presencial, it's that we have a natural effect that the graduates, they leave the student base with a higher ticket than when they come. So when we say that our presencial graduation basis is stable or growing 0.2%, it means that part of the students that are graduating, we are recomposing, but the ones leaving, the veterans, they have a ticket of over 5 years of inflation. So their ticket is higher than the entry ticket. So sometimes it makes your understanding a little difficult. So our expectation is that we can rebase the same way we are doing with the presencial because of this dynamic. So I gave you a structural explanation for you to understand why tickets are not growing despite the volume is growing. I think if the demand in presencial keeps this way, over time, we can adjust the prices.And then, the last point to emphasize, despite your question is in the presencial, in online education, it's important that the capture has more revenue. Obviously, the average ticket here is growing. It's good due to the mix. And online has more engineering and healthcare courses with higher tickets. But the important point is that the revenue growth -- because as the costs are basically fixed, growing revenue is growing margin.I hope I could answer your question.
The next question is from Rafael [indiscernible].
Thank you for taking my question. Well, I have 2 questions here. The first is to understand a little about the digital ticket because you have a strong growth in the digital ticket. And I'd like to understand how much of that -- of this increase in the ticket is sustainable. If there is the risk of having [ a bend ] in this number, if there is seasonality impact and if it impacted [indiscernible] ticket. And the second question is about Vasta, about the B2G, that it was the biggest responsible of the revenue growth. But we have some difficulties in understanding that. We would like to understand a little about the seasonality of this account and the potential risk of increasing the [ PLD ] that it can bring.
Rafael, thank you for your question. First I will answer the ticket and Melega] will mention the B2G. Well, the online ticket in the cycle had a positive growth of more than 10%. I think it is much more related to this growth that we see in the interest for courses like presencial. The mix of the online courses has a lot of participation of the more presencial courses. So I would say that there is no difficulty in believing that the growth would be in double digits all the quarters. It's difficult to foresee the interest of presencial courses or online courses that are more hybrid. [indiscernible] in the year. As I said, the first quarter was very good. So I would say that yes, and I believe the tickets can keep growing, but online courses at the level of 10%, it would be quite optimistic.And now, I pass on the floor to Melega to talk about B2G.
Thank you, Roberto. Rafael, let me talk about the B2G. So, as mentioned in the presentation, we started with the acknowledgement of BRL 69 million regarding [indiscernible]. So we [indiscernible] this first quarter, we supplied [indiscernible] as always there, and we made the services of this contract available. So that's why we acknowledged the revenue. There may be other requests in this contract in a lower scale over the next quarter. But what we expect, meaning we are in a funnel with all the states, we hope that in the second Q can sign the contract and perform in the second semester. So thinking about [ seasonability ], I can give the expectation for this year, that is, this acknowledgment in the first quarter and the expectation [indiscernible] more relevant acknowledgement of revenue in B2G in the second semester. Remember that in 2023, as we didn't have a better number, we would say 20% growth in our B2G business. So we take the expectation of BRL 95 million for the year. And we would say, [indiscernible] we acknowledge BRL 69 million. So you may expect other certifications happening in the second semester.Regarding the B2G, it is a business that we believe there is no risk in B2G because the hiring is only if we have the benefit of budget. So we don't hire if we don't have the benefit of budget. [indiscernible] and when there is the purchase order or the service order, if we consider the private market, that would be this -- the request for purchase and then we keep this budget to the government. So this is a business that [ after performing ], we don't have B2G.
Now the next question is from Lucas Nagano from Morgan Stanley.
I have 2 questions. So the first one is about the market, and I think it was quite clear, the budget for the year. But thinking about the trends, do you think that the sector as a whole is more aggressive in market? And it could imply a level of expenses that is extraordinarily higher for the next years?And the second is about the Kroton ticket, and because it grew 4%, so how were the -- how is the process in this increase? How is it in medicine, if there was an impact for the mix or Mais Medicos or FIES?
Well, Lucas, thank you for your questions. I'll take -- I guess no. The marketing expenses shouldn't be greater than it is in our long-term, although it is not this way. So we don't see as a percentage of net growth above what we have. Especially, these opportunities of efficiency that come from investment that is more and more digital. I understand competitors are also working for this movement for the digital world. So the gains in efficiency are much greater than the competition. [indiscernible]. This is my understanding. I can talk about my peers, just for you to know. In our model, we don't foresee having more expenses in marketing. And average ticket in KrotonMed is important because KrotonMed is a more premium unit. So we have the ability to re-pass inflation in an important way. So it's not only inflation, but we can also give more than inflation. So that's why they have a better ticket performance. And there's also the mix of presencial courses with higher activity. So I think this is the dynamics of KrotonMed with the ability of being even above the inflation for some years. I don't see why not keeping visibility over the next few years.
Now, let's go to the next question from Leandro from Citigroup.
The first question has to do with marketing. So what if we think about the total margin for the year and the expectation of deceleration of marketing for the second semester, can we imagine stronger margins? How would be the first quarter? If you can talk a little bit about it, I think it would be interesting. This is the first question.And the second, I'd like to know about [ PMD ]. So we've seen that there was a slight increase. So if you can discuss a little about the strategy for the program, how it's working and how it's used, it would be good to understand that.
So Leandro, I'll answer the first one about Kroton and Fred will comment the second one. Our expectation for Kroton margin, taking into account the effect of the market in the first quarter, it's a positive, stable margin. I can't give you a specific number, but it's not negative. Our expectation is to gain margin, not just efficiency, in an operation like this comes over time. But as we have the primary margin, if we gain efficiency of the operation, expenses, everything is sufficient to compensate the expenses with marketing. And our expectation is to gain in margin in '24 compared to '23. Now, I'll pass on the floor to Fred.
Okay. Thank you for the question talking about [ PMD ]. As I mentioned before, we still have the program of late enrolment. But in the past, this difference was only paid after the student graduated. This program is a program that now the student will pay during the course. So what happened in the first quarter is that we had an increase in late enrollment in this program later with an increase in our receivables. But the EBITDA is diluted because the student pays during overtime. So our [ PDD ] reflects this effect. We have a [ PDD ] that is about 70% to 75% of the total program. So to us, it's nothing strange. It's natural to our business.
Now the next question from Mirela Oliveira from Bank of America.
In fact, I would like to follow up on marketing because in '23 in the fourth quarter, we see an anticipation that this expense helping in the first semester with new students. And I would like to understand if this strategy will follow this year and how it deals with this dilution that we'll see in the second semester for some impact for the next cycle for '25, considering there will be less expenses in the second semester.And the second question regarding guidance, considering the pressure from [indiscernible], so why we'll have some space to deliver the top guidance? Is it possible [indiscernible] what would be necessary to reach this [ 2.40 ]?
Mirela, thank you for the questions regarding marketing. No, we don't see any greater expense in marketing. So it's important to remember that the second semester, the cycle, from the point of view of students, it's lower. We generally say that from the total of students, 60% coming in first semester, [indiscernible]. So the expense is naturally lower, the amount of students is lower. We always take into account [indiscernible] as the reference. And we know that in the second semester, we will spend less in marketing because naturally, considering the efficiency, the nominal volume will be lower [indiscernible] this is the experience that we've had other years.I hope I could answer the marketing. And regarding the guidance, I'll pass on the floor to Fred to comment.
Okay. Mirela, thank you for your question. Your question is, if with the increase of expenses with marketing, what are the lines that we need look ahead? We may have this compensation. The growth of revenue, you see the strong growth in revenue, and payments are still in line with some improvement. So looking to the future, we might have some positive effect on PCLD and corporate expenses as a whole. And regarding courses [indiscernible], if we look to the future [indiscernible] positive effects to compensate [indiscernible]. This is due to the fact that Roberto mentioned. And we've mentioned some [indiscernible] effect of displacement. I had an anticipation, so the relation of the marketing courses, where the revenue is not changing, remembering that our cap is better than [indiscernible]. So this is a little bit of the update, but this is something that we see as a displacement. So just to complement, Mirela, yes, we still trust our guidance both for EBITDA and caps. And it's important to say that what drivers result is [indiscernible] it is the pace of revenue growth. With the revenue growing this way, the decrease is natural with the fixed cost. So in the first quarter, we grew 15.7% of revenue with a lot of fixed costs that will be diluted over time. We invested more in the first quarter, and we think that we won't do that in the second [indiscernible]. There are many opportunities in the B2G that we expect to perform in the second semester. And I think there are many things happening that we are discussing with the market that makes us trust that the result of the first quarter is quite well, especially in the top line, and we are completely aware that we gave the guidance of EBITDA and cash.
The next question from [indiscernible].
[Foreign Language] Would it be worse over time? As we know, the dropouts are very high for [indiscernible] student is in the basis. So anything you can share with us about the profile of the student, if you see that this is a student that you in fact know? So thank you very much if you can share that.
Okay [ Kyle ], thank you for question. We are convinced not due to perception, but also by numbers. Generally, when we analyze the dropouts and re-enrolments, we see the students almost with the daily entry. So I would say that the first back in October and the first and second of January [indiscernible] January, beginning of February with more enrollments than in April. We see, for example, [indiscernible] non-payment and participation in tests and exams and in the virtual environment of learning much higher. So we know in practice that yes, they do have better quality. I think we are improving the rates of re-enrollments. That's why our student base is growing.We grew 12%, so it's nothing new. We know the effect of the anticipated enrollment and we know it has a positive effect as we are improving the enrollment. Without the strategy of anticipation, we understand that it can even be better for our enrollment rate. So just for you to understand, we have the enrollment rate 2% better than the corresponding cycle last year. So we know that our base today is 2% healthier than last year in the same period due to the same series of actions and effects that we have. But obviously, having the best students -- we know that the students -- in January and February, they made decisions, they made everything at the proper time. This is not the last-time decision, no, so we can be sure to bring some value.
The Q&A session is over. So now, I'd like to pass on the floor to the final considerations of the company.
Well, I would like to thank once again all the Cogna team, almost 25,000 employees working daily. To our students and clients, thank you very much, congratulations. The result belongs to us. And I would like to reinforce that the team is here to clear the doubts of the analysts or investors. Thank you very much and have a nice day.
The results teleconference regarding the results of the first quarter of Cogna is now over. The Department of Relations with Investors is available to answer any other questions or doubts. Thank you all and have a nice afternoon.